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Joe Hand Promotions, Inc. v. Upstate Recreation

United States District Court, D. South Carolina, Greenville Division

January 28, 2015

Joe Hand Promotions, Inc., Plaintiff,
v.
Upstate Recreation d/b/a Leeg's Nightclub and Chris Ruegsegger, Defendants. [1]

For Joe Hand Promotions Inc, Plaintiff: Leonard R Jordan, Jr, LEAD ATTORNEY, Jordan Law Firm, Columbia, SC.

Chris Ruegsegger, Defendant, Pro se, Inman, SC.

REPORT AND RECOMMENDATION OF MAGISTRATE JUDGE

Jacquelyn D. Austin, United States Magistrate Judge.

This matter is before the Court on a motion for summary judgment filed by Plaintiff against Defendant Chris Ruegsegger [Doc. 37]; a motion for default judgment filed by Plaintiff against Defendant Upstate Recreation d/b/a Leeg's Nightclub [Doc. 40]; and a motion to dismiss filed by Defendant Chris Ruegsegger [Doc. 42]. Pursuant to the provisions of 28 U.S.C. § 636(b) and Local Civil Rule 73.02(B)(2)(e), D.S.C., this magistrate judge is authorized to review all pre-trial matters in cases involving litigation by individuals proceeding pro se and to submit findings and recommendations to the District Court.[2]

Plaintiff filed this case on September 11, 2013, asserting claims under the Communications Act, 47 U.S.C. § 605, and the Cable Communications Policy Act, 47 U.S.C. § 553, as well as a state law claim for conversion. [ Id.] Plaintiff filed a motion for summary judgment against Defendant Chris Ruegsegger (" Ruegsegger") on March 6, 2014. [Doc. 37.] On March 17, 2014, pursuant to Roseboro v. Garrison, 528 F.2d 309 (4th Cir. 1975), Ruegsegger was advised to respond to the motion and of the possible consequences if he failed to adequately respond. [Doc. 38.] Ruegsegger filed a response in opposition on March 18, 2014 [Doc. 41], and Plaintiff filed a reply on March 28, 2014 [Doc. 45].

Defendant Upstate Recreation d/b/a Leeg's Nightclub (" Upstate Recreation") was served on October 28, 2013 [Doc. 19] but failed to file an answer or otherwise respond to the Complaint. The Clerk's Entry of Default was filed as to Upstate Recreation on January 22, 2014. [Doc. 35.] Plaintiff filed a motion for default judgment on March 7, 2014 [Doc. 40], and Upstate Recreation failed to respond to the motion for default judgment.

Ruegsegger filed a motion to dismiss[3] on March 18, 2014 [Doc. 42], to which Plaintiff filed a response in opposition on April 4, 2014 [Doc. 46]. Accordingly, the motions are ripe for review.

BACKGROUND[4]

Plaintiff is a Pennsylvania corporation with its principal place of business in Feasterville, Pennsylvania. [Doc. 1¶ 5.] Upstate Recreation is a South Carolina eleemosynary incorporation that does (or did) business as Leeg's Nightclub at 3500 Wade Hampton Boulevard, Taylors, South Carolina 29687.[5] [ Id.¶ 6.] Ruegsegger is the sole owner of Upstate Recreation. [Doc. 5¶ 15.] By contract, Plaintiff paid for and was granted the exclusive nationwide television distribution rights to Ultimate Fighting Championship 135: Jon Jones v. Quinton Jackson, including all under-card bouts and fight commentary encompassed in the television broadcast of the main event, which aired on September 24, 2011 ('the Program"). [Doc. 1¶ 19; Doc. 37-6¶ 3.] Pursuant to individual contracts, Plaintiff entered into subsequent sublicensing agreements, granting limited sublicensing rights, specifically the rights to publicly exhibit the Program to customers within commercial establishments, with various persons and entities throughout North America, including persons and entities in South Carolina. [Doc. 1¶ 20.] Plaintiff expended substantial monies marketing, advertising, promoting, administering, and transmitting the Program. [ Id.¶ 21.] Plaintiff did not sublicense the Program to Defendants. [Doc. 37-6¶ 3.]

On September 24, 2011, an investigator for Plaintiff, Shane Southern (" Southern"), visited Leeg's Nightclub, [6] during which time Southern's affidavit indicates that a television in Leeg's Nightclub displayed the Program. [Doc. 37-4 at 1.] Southern describes the bartender who served him and the number of televisions and other distinguishing features of the establishment. [ Id.] He also describes the name and attire of the fight participants in a preliminary bout of the Program. [ Id.] Southern avers that he counted the number of patrons three separate times, and the headcounts were ten, eighteen, and twelve, and that Leeg's Nightclub has a capacity of 300 people. [ Id.] Based on this 300-person capacity, the cost of a sublicense for the Program would have been $2, 250. [ Id.; Doc. 37-6 at 3¶ 8; 26.]

Based on these observations, Plaintiff's Complaint alleges that Defendants and/or their agents, servants, workmen, and employees unlawfully intercepted, received, published, divulged, and exhibited the Program and that such interception, receipt, publication, divulgence, and exhibition was done willfully and for purposes of direct or indirect commercial advantage or private financial gain. [Doc. 1 ¶ ¶ 22, 23.] Plaintiff further alleges that Ruegsegger had the right and ability to supervise the alleged misconduct and had an obvious and direct financial interest. [ Id. ¶ ¶ 24, 25.]

DISCUSSION

Section 553 prohibits the unauthorized interception or receipt of cable programming, while § 605 prohibits the use of equipment for the purpose of unauthorized decryption of satellite cable programming. See 47 U.S.C. § 553; 47 U.S.C. § 605. Section 553 provides, in relevant part,

No person shall intercept or receive or assist in intercepting or receiving any communications service offered over a cable system, unless specifically authorized to do so by a cable operator or as may otherwise be specifically authorized by law.

47 U.S.C. § 553(a)(1). Statutory damages under § 553 range from $250 to $10, 000 for all violations with a maximum $50, 000 enhancement for willfulness. 47 U.S.C. § § 553(c)(3)(A)(ii), 553(c)(3)(B). Additionally, § 553 allows for an award of attorney's fees and costs. 47 U.S.C. § 553(c)(2)(C). Section 605 provides, in relevant part,

No person not being authorized by the sender shall intercept any radio communication and divulge or publish the existence, contents, substance, purport, effect, or meaning of such intercepted communication to any person. No person not being entitled thereto shall receive or assist in receiving any interstate or foreign communication by radio and use such communication (or any information therein contained) for his own benefit or for the benefit of another not entitled thereto. No person having received any intercepted radio communication or having become acquainted with the contents, substance, purport, effect, or meaning of such communication (or any part thereof) knowing that such communication was intercepted, shall divulge or publish the existence, contents, substance, purport, effect, or meaning of such communication (or any part thereof) or use such communication (or any information therein contained) for his own benefit or for the benefit of another not entitled thereto.

47 U.S.C. § 605(a). Statutory damages under § 605 range from $1, 000 to $10, 000 with a $100, 000 maximum enhancement for willfulness. 47 U.S.C. § § 605(e)(3)(C)(i)(II), 605(e)(3)(C) (ii). Additionally, § 605 provides for a mandatory award of attorney's fees and costs. 47 U.S.C. § 605(e)(3)(B)(iii). Both § 553 and § 605 permit any aggrieved party to bring suit against the violator in federal court.[7] See 47 U.S.C. § 553(c)(1); 47 U.S.C. § 605(e)(3)(A). Further, both are strict liability statutes. See J & J Sports Prods., Inc. v. Delgado, No. CIV. 2:10-2517 WBS KJN, 2012 WL 371630, at *3 (E.D. Cal. Feb. 3, 2012).

" Conversion is defined as the unauthorized assumption in the exercise of the right of ownership over goods or personal chattels belonging to another to the exclusion of the owner's rights." Moseley v. Oswald, 376 S.C. 251, 656 S.E.2d 380, 382 (S.C. 2008) (citation omitted). To prove the tort of conversion, " the plaintiff must establish either title to or right to the possession of the personal property." Id.; see also Gignilliat v. Gignilliat, Savitz & Bettis, L.L.P., 385 S.C. 452, 684 S.E.2d 756, ...


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