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J&J Sports Productions, Inc. v. Akc Restaurant, Inc.

United States District Court, D. Maryland

April 3, 2015

J&J SPORTS PRODUCTIONS, INC.,
v.
AKC RESTAURANT, INC

MEMORANDUM OPINION

DEBORAH K. CHASANOW, District Judge.

Presently pending and ready for resolution in this case involving alleged violations of the Communications Act of 1934 is a motion for default judgment filed by Plaintiff J & J Sports Productions, Inc. (ECF No. 9). The court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, the motion will be granted in part and denied in part.

I. Background

On September 16, 2014, Plaintiff J & J Sports Productions, Inc. commenced this action against Defendant AKC Restaurant, Inc. alleging violations of the Communications Act of 1934, as amended 47 U.S.C. § 553 (unauthorized reception of cable services) and 605 (unauthorized publication or use of communications), and the common law tort of conversion. The complaint recites that Plaintiff "paid for and was thereafter granted the exclusive nationwide television distribution rights to the Floyd Mayweather, Jr. v. Miguel Cotto, WBA World Light Middleweight Championship Fight Program [, ] which telecast nationwide on Saturday, May 5, 2012 ["the Broadcast"] (this included all under-card bouts and fight commentary encompassed in the television broadcast of the event)." (ECF No. 1 ¶ 8). Plaintiff then entered into sublicensing agreements with commercial establishments, such as bars and restaurants, which purchased the rights to exhibit the Broadcast for their patrons. ( Id. ¶ 9). Plaintiff alleges that, "[w]ith full knowledge that [the Broadcast] was not to be intercepted, received and exhibited by entities unauthorized to do so, ... [Defendant] did unlawfully publish, divulge and exhibit [the Broadcast]... willfully and for the purposes of direct or indirect commercial advantage or private financial gain." ( Id. ¶ 11).

Service of process was effected on Defendant on September 18, 2014. (ECF No. 5). When Defendant failed to respond within the requisite time period, Plaintiff moved for entry of default. (ECF No. 6). The clerk entered default on November 4, 2014. (ECF No. 7). On January 15, 2015, Plaintiff filed the pending motion for default judgment. (ECF No. 9). Plaintiff supplemented its motion on January 27, 2015. (ECF Nos. 10 & 11). To date, Defendant has taken no action in the case.

II. Standard of Review

Under Fed.R.Civ.P. 55(a), "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default." A defendant's default does not automatically entitle the plaintiff to entry of a default judgment; rather, that decision is left to the discretion of the court. See Lewis v. Lynn, 236 F.3d 766, 767 (5th Cir. 2001). The Fourth Circuit has a "strong policy" that "cases be decided on their merits, " Dow v. Jones, 232 F.Supp.2d 491, 494 (D.Md. 2002) ( citing United States v. Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993)), but default judgment may be appropriate where a party is unresponsive, see S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 421 (D.Md. 2005) ( citing Jackson v. Beech, 636 F.2d 831, 836 (D.C.Cir. 1980)).

"Upon [entry of] default, the well-pled allegations in a complaint as to liability are taken as true, but the allegations as to damages are not." Lawbaugh, 359 F.Supp.2d at 422. Fed.R.Civ.P. 54(c) limits the type of judgment that may be entered based on a party's default: "A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings." Thus, where a complaint specifies the amount of damages sought, the plaintiff is limited to entry of a default judgment in that amount. "[C]ourts have generally held that a default judgment cannot award additional damages... because the defendant could not reasonably have expected that his damages would exceed that amount." In re Genesys Data Technologies, Inc., 204 F.3d 124, 132 (4th Cir. 2000). While the court may hold a hearing to consider evidence as to damages, it is not required to do so; it may rely instead on "detailed affidavits or documentary evidence to determine the appropriate sum." Adkins v. Teseo, 180 F.Supp.2d 15, 17 (D.D.C. 2001) ( citing United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir. 1979)).

III. Analysis

J & J seeks to enforce both "sections 605 and 553 of 47 U.S.C., which are provisions of the Federal Cable Act that address different modalities of so-called cable theft.'" J & J Sports Prods., Inc. v. Mayreal II, LLC, 849 F.Supp.2d 586, 588 (D.Md. 2012). Section 553 prohibits the unauthorized interception or receipt of certain cable communications, while section 605 proscribes the unauthorized interception or receipt of certain "radio" communications, including at least "digital satellite television transmission, " Mayreal II, 849 F.Supp.2d at 588 n.3. In its complaint, J & J does not specify how Defendant intercepted the program, but that omission is not fatal. "The complaint need not specify the prescise method of interception, as pleading in the alternative is permitted." Joe Hand Promotions, Inc. v. Md. Food & Entm't, LLC, Civ. No. CCB-11-3272, 2012 WL 5879127, at *4 (D.Md. Nov. 19, 2012). Instead, Plaintiff need only allege, as it does here, that a business entity "intercepted and displayed the Program at its establishment, without authorization from [J & J], on a particular date and at a particular time." Id. Taking those factual allegations as true, J & J has established a violation of either § 553 or § 605.

In the complaint, Plaintiff seeks statutory damages of $100, 000 related to the violation of § 605, $50, 000 for the violation of § 553, and unspecified compensatory damages for the alleged conversion. In the motion for default judgment, Plaintiff seeks the same amount of damages under §§ 605 and 553, plus $1, 500 in compensatory damages on the conversion count, which it did not specify in the complaint. ( See ECF No. 9, at 2). As explained in numerous prior opinions from judges in this district, however, "[g]enerally, [] plaintiffs cannot recover under both statutes for the same conduct and courts allow for recovery under § 605 as it provides for the greater recovery." J & J Sports Prods., Inc. v. Quattrocche, Civ. Action No. WMN-09-CV-3420, 2010 WL 2302353, at *1 (D.Md. June 7, 2010) ( citing J & J Sports Prods., Inc. v. 291 Bar & Lounge, LLC, 648 F.Supp.2d 469 (E.D.N.Y. 2009)). "Courts have similarly not allowed recovery for claims of conversion, as they would not exceed those under §§ 553 or 605 and would result in double recovery." J & J Sports Prods., Inc. v. Castro Corp., Civ. Action No. 11-cv-00188-AW, 2011 WL 5244440, at *3 (D.Md. Nov. 1, 2011) ( citing J & J Sports Prods., Inc. v. J.R.'Z Neighborhood Sports Grille, Inc ., Civ. No. 2:09-03141, 2010 WL 1838432, at *2 (D.S.C. 2010)). Moreover, Judge Blake's recent analysis on the conversion claim in a nearly identical case brought by J & J applies here:

Even were it otherwise, J & J's conversion claim would fail for the alternative reason that its initial complaint does not state sufficient facts to sustain judgments even when those facts are admitted to be true. Historically, the common law tort of conversion protected only tangible property. See UBS Fin. Servs. Inc. v. Thompson, 217 Md.App. 500 (2014). Although Maryland courts later recognized conversion of "intangible property rights that are merged or incorporated into a transferable document, " they "refuse... to extend the tort further, to cover situations in which the relevant document itself has not been transferred." Id. ( quoting Allied Inv. Corp. v. Jasen, 354 Md. 547 (1999). Even if intangible property such as a television program transmitted via satellite or cable could be converted under Maryland law, J & J's complaint contains no allegation that tangible documents evidencing its property interest in the program were transferred to Rumors. See Joe Hand Promotions[, Inc. v. Bougie, Inc., Civ. No. 109-00590, 2010 WL 1790973, at *4 (E.D.Va. April 12, 2010)]. Rumors could not, by its default, admit facts never alleged in the complaint, which leaves an inadequate basis for judgment on the conversion claim.

J & J Sports Prods., Inc. v. Rumors Inc., Civ. No. CCB-14-2046, 2014 WL 6675646, at *2 ...


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