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J & J Sports Productions, Inc. v. El-Corona

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

July 19, 2016

J & J Sports Productions, Inc., Plaintiff,
v.
El-Corona, a South Carolina nonprofit corporation, d/b/a Taqueria Abierto, d/b/a Tropicana Discotheque, a/k/a El Tropicana and Elsie Acosta, a/k/a Elsie Acosta Sanchez, Defendants.

          J&J Sports Productions Inc, Plaintiff, represented by Leonard R. Jordan, Jr., Jordan Law Firm.

          ORDER AND OPINION

          MARGARET B. SEYMOUR, Senior District Judge.

         On April 11, 2016, Plaintiff J & J Sports Productions, Inc. ("J & J Sports"), filed an action in this court against Defendants El-Corona and Elsie Acosta, collectively doing business as Taqueria Abierto and/or Tropicana Discotheque and/or El Tropicana ("El-Corona"). Plaintiff alleges that it owned the exclusive television distribution rights for a boxing match, and that Defendants exhibited the fight at a commercial establishment without paying a licensing fee to Plaintiff. Plaintiff has asserted 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. Neither Defendant filed an answer or otherwise responded to Plaintiff's complaint. On June 13, 2016, in response to Plaintiff's request, the clerk entered default as to both Defendants. On June 29, 2016, Plaintiff filed a motion for default judgment.

         FACTS

         The following facts are alleged in Plaintiff's complaint (ECF No. 1), and due to Defendants' default, are accepted as true: Defendant Elsie Acosta ("Acosta") is the owner, chief executive, member, principal, alter ego, manager, agent, and/or representative of El-Corona. Id. at 2. Defendant had dominion, supervisory control, oversight, and management authority over El-Corona. Id. at 3. J & J Sports Productions, Inc., a California corporation, purchased the exclusive television distribution rights to "Manny Pacquio v. Timothy Bradley, II WBO Welterweight Championship Fight Program" ("Championship Fight"), which took place on April 12, 2014. Id. at 3. Defendants, or their agents, unlawfully intercepted, received, published, divulged, and exhibited the Championship Fight at the time of its transmission with full knowledge that they were unauthorized to do so. Id. at 4. This interception was done willfully and for the purposes of commercial advantage or financial gain. Id. Defendants were present during and participated in this misconduct. Id.

         The following facts are set forth in a sworn affidavit of private investigator, John Taylor (ECF No. 10-4): John Taylor paid a $30.00 cover charge and entered El-Corona on April 13, 2014, at 12:26 am. Id. Inside El-Corona, Taylor observed the third round of the Championship Fight being shown unlawfully on an 84" projection. Id. Taylor states that the approximate capacity of the establishment was between 125-150 persons and at the time of his appearance, he counted approximately 114 persons in El-Corona. According to a sworn affidavit by Plaintiff's president, Joseph Gagliardi, based on a capacity of not more than 150 persons, it would have cost $3, 200 for El-Corona to purchase the rights to exhibit the Championship Fight. ECF No. 10-3 at 3.

         DISCUSSION

         A. Liability

         Under 47 U.S.C. § 605(a), "no person receiving... any interstate or foreign communication by wire or radio shall divulge or publish the existence, contents, substance, purport, effect, or meaning thereof, except through authorized channels of transmission or reception... to any person other than the addressee, his agent, or attorney." Any person aggrieved by such a violation may bring a civil action to obtain an injunction and to recover damages, costs, and attorney fees. 47 U.S.C. § 605(e)(3). The aggrieved party may recover actual damages or statutory damages between $1, 000 and $10, 000 for each violation. 47 U.S.C. § 605(e)(3)(C)(i). Furthermore, if the court finds that "the violation was committed willfully and for purposes of direct or indirect commercial advantage or private financial gain, " the court may increase the damages by an amount not more than $100, 000 for each violation. 47 U.S.C. § 605(e)(3)(C)(ii).

         Under 47 U.S.C. § 553(a)(1), "[n]o 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). Any person aggrieved by such a violation may bring a civil action to obtain an injunction and to recover damages, costs, and attorney fees. 47 U.S.C. § 553(c). The aggrieved party may recover actual damages or statutory damages between $250 and $10, 000 for all violations involved in the action. 47 U.S.C. § 553(c)(3)(A). Furthermore, if the court finds that "the violation was committed willfully and for purposes of commercial advantage or private financial gain, " the court may increase the damages by an amount not more than $50, 000. 47 U.S.C. § 553(c)(3)(B).

         The Seventh Circuit has held that § 605 and § 553 employ mutually exclusive categories, specifically that a "communications service offered over a cable system" is not a "radio communication." United States v. Norris, 88 F.3d 462, 469 (7th Cir. 1996). In other words, a person who steals cable services at the point of delivery is liable only under § 553, even if the signals were transmitted by radio at some earlier point. On the other hand, the Second Circuit has disagreed and held that some cable transmissions may also constitute "radio communications" under § 605. International Cablevision, Inc. v. Sykes, 75 F.3d 123, 133 (2d Cir. 1996). The Fourth Circuit has not considered the question, but consistent with other courts in the District of South Carolina, this court finds that the reasoning of Norris to be more persuasive. See Columbia Cable TV Co., Inc. v. McCary, 954 F.Supp. 124 (D.S.C. 1996).

         As a result, Defendants are liable under § 605 only if they exhibited radio communications without authorization and liable under § 553 only if they received cable communications without authorization. Plaintiff admits that it has not determined how Defendants received the Program, whether through radio or cable, but argues that there is no way to make such a determination without the benefit of discovery. ECF No. 9-1 at 4. Having been denied the benefit of discovery, Plaintiff requests to proceed under § 605. Id. The court finds this to be a reasonable solution. The court finds that Defendants violated 47 U.S.C. § 605 by exhibiting interstate radio communications without authorization to customers at a commercial establishment. Furthermore, based on Plaintiff's well-pleaded allegations, the court finds that the violation was committed willfully and for the purposes of commercial advantage or financial gain.

         Plaintiff has indicated its choice to proceed under § 605, and in the event that a judgment is granted under said statute, withdraw its other causes of action. ECF No. 10-1 at n.1. ...


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