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J & J Sports Productions, Inc. v. Seafood Palace Buffet, Inc.

United States District Court, D. Maryland

May 31, 2018

J & J SPORTS PRODUCTIONS, INC., Plaintiff,
v.
SEAFOOD PALACE BUFFET, INC., et al., Defendants.

          REPORT AND RECOMMENDATION

          Timothy J. Sullivan United States Magistrate Judge.

         This Report and Recommendation addresses the Motion for Default Judgment (“Motion”) filed by Plaintiff J & J Sports Productions, Inc. against Defendants Seafood Palace Buffet, Inc., et al. (ECF No. 17.) On February 12, 2018, in accordance with 28 U.S.C. § 636 and Local Rule 301, Judge Chuang referred this case to me for a report and recommendation on Plaintiff's Motion. (ECF No. 18.) Having considered the submissions of the parties (ECF Nos. 17, 19 & 21), I find that a hearing is unnecessary in this case. See Fed. R. Civ. P. 55(b)(2); Loc. R. 105.6. For the reasons set forth below, I respectfully recommend that Plaintiff's Motion for Default Judgment be granted in part and denied in part.

         I. FACTUAL AND PROCEDURAL HISTORY

         On August 22, 2017, Plaintiff commenced this action against Defendants Seafood Palace Buffet, Inc., Anna Zheng, Meng Wang, and Cynthia Salley Rawls, 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. (ECF No. 1.) The Complaint states that Plaintiff held “the exclusive nationwide commercial distribution (closed-circuit) rights to . . . the ‘Mayhem, ' Floyd Mayweather, Jr. v. Marcos Rene Maidana, II, WBC World Lightweight Championship Fight Program” (hereinafter, the “Program”), which was broadcast on September 13, 2014. (Id. ¶ 15.) Plaintiff entered into agreements with various commercial establishments that permitted the businesses to exhibit the Program for their patrons. (Id. ¶ 16.) Defendants did not enter into such an agreement with Plaintiff to exhibit the Program.[1](See Id. ¶ 17.) Defendants acted to “unlawfully intercept, receive, publish, divulge, display [and] exhibit the Program at the time of its transmission at their commercial establishment.” (Id. ¶ 18.) Service of process was effected on Defendants. (ECF No. 5, 8, 9 & 11.) Defendants did not file an answer or responsive pleading within the requisite time period. Plaintiff moved for entry of default as to each of the Defendants on November 15, 2017. (ECF Nos. 12, 13, 14 & 15.) The Clerk's Entry of Default as to each of the Defendants was entered on January 16, 2018. (ECF No. 16.) Thereafter, Plaintiff filed the instant Motion (ECF No. 17).

         II. LEGAL ANALYSIS

         A. Standard for Entry of Default Judgment

         In determining whether to award a default judgment, the Court accepts as true the well-pleaded factual allegations in the complaint as to liability. See Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780-81 (4th Cir. 2001); United States ex rel. Durrett-Sheppard Steel Co. v. SEF Stainless Steel, Inc., No. RDB-11-2410, 2012 WL 2446151, at *1 (D. Md. June 26, 2012). Nonetheless, the Court must consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law. United States v. Redden, No. WDQ-09-2688, 2010 WL 2651607, at *2 (D. Md. June 30, 2012) (citing Ryan, 253 F.3d at 790). Although the Fourth Circuit has a “strong policy that cases be decided on the merits, ” United States v. Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993), default judgment “is appropriate when the adversary process has been halted because of an essentially unresponsive party.” S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md. 2005). If the Court determines that liability is established, the Court must then determine the appropriate amount of damages. CGI Finance, Inc., v. Johnson, No. ELH-12-1985, 2013 WL 1192353, at *1 (D. Md. March 21, 2013). The Court does not accept factual allegations regarding damages as true, but rather must make an independent determination regarding such allegations. Durrett-Sheppard Steel Co., 2012 WL 2446151, at *1.

         Rule 55 of the Federal Rules of Civil Procedure provides that “[i]f, after entry of default, the Plaintiff's Complaint does not specify a ‘sum certain' amount of damages, the court may enter a default judgment against the defendant pursuant to Fed.R.Civ.P. 55(b)(2).” A plaintiff's assertion of a sum in a complaint does not make the sum “certain” unless the plaintiff claims liquidated damages; otherwise, the complaint must be supported by affidavit or documentary evidence. United States v. Redden, No. WDQ-09-2688, 2010 WL 2651607, at *2 (D. Md. June 30, 2012). Rule 55(b)(2) provides that “the court may conduct hearings or make referrals . . . when, to enter or effectuate judgment, it needs to . . . determine the amount of damages.” The Court is not required to conduct an evidentiary hearing to determine damages, however; it may rely instead on affidavits or documentary evidence in the record to determine the appropriate sum. See, e.g., Mongue v. Portofino Ristorante, 751 F.Supp.2d 789, 795 (D. Md. 2010).

         B. Liability

         Plaintiff's Complaint seeks damages under two statutes, 47 U.S.C. § 605 and 47 U.S.C. § 553. As Plaintiff concedes, however (see ECF No. 17-6 at 5), courts in this district have previously held that plaintiffs cannot recover under both statues for the same conduct, and generally allow for recovery under § 605 as it provides for the greater recovery. See J & J Sports Productions, Inc. v. Royster, et al., No. RWT-11-1597, 2014 WL 992779, at *3 (D. Md. Mar. 13, 2014); J & J Sports Productions, Inc. v. Frank Little Enterprises, LLC, No. DKC-12-0997, 2012 WL 6019366, at *2 (D. Md. Nov. 30, 2012).

         Taking as true the well-pleaded allegations of the Complaint (ECF No. 1), Defendants' liability is readily established in this case. To prove a violation of § 605(a), Plaintiff must show that Defendants, without authorization, received and divulged the Program. See That's Entm't, Inc. v. J.P.T., Inc., 843 F.Supp. 995, 999 (D. Md. 1993). Plaintiff entered into a contract that granted it the right to distribute the Program. (ECF No. 1 ¶ 15.) Defendants unlawfully exhibited the Program to the patrons at their establishment. (Id. ¶ 18). Accordingly, I find that Plaintiff has stated a claim for relief under 47 U.S.C. § 605 (Count I). Because Plaintiff cannot recover under both Count I and Count II of the Complaint, I recommend that Plaintiff's Motion for Default Judgment be granted as to Count I (47 U.S.C. § 605) and denied as to Count II (47 U.S.C. § 553).

         C. Damages

         1. Statutory damages

         Having determined that Plaintiff has established liability, it is now appropriate to determine the damages to which Plaintiff is entitled. Plaintiff acknowledges that it “cannot recover under both statutes for the same conduct, ” and elects to recover under only 47 U.S.C. § 605. (ECF No. 17-6 at 5.) Specifically, Plaintiff requests statutory damages pursuant to § 605(e)(3)(C)(i)(II). (Id.) Judge Nickerson set forth the relevant considerations in the statutory damages analysis under 47 U.S.C. ยง ...


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