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J&J Sports Productions, Inc. v. EL Tapatio, Inc.

United States District Court, D. Maryland, Southern Division

June 6, 2018

J&J SPORTS PRODUCTIONS, INC., Plaintiff,
v.
EL TAPATIO, INC., et al., Defendants.

          REPORT AND RECOMMENDATION

          CHARLES B. DAY UNITED STATES MAGISTRATE JUDGE.

         This Report and Recommendation addresses Plaintiff's Motion for Default Judgment (ECF No. 13) (the “Motion”). Plaintiff J&J Sports Productions, Inc. (“Plaintiff”) filed a complaint against Defendants El Tapatio, Inc., Beronica Navarro, and Ruben Navarro Mendez (collectively “Defendants”), alleging Defendants violated several federal statutes, including The Communications Act of 1934 and The Cable & Television Consumer Protection and Competition Act of 1992. ECF No. 1. Pursuant to 28 U.S.C. Section 636 and Local Rules 301 and 302, the Honorable Theodore D. Chuang referred this matter to the undersigned for the making of a Report and Recommendation concerning default judgment and/or damages. For the reasons stated herein, I recommend the Court GRANT Plaintiff's Motion and award Plaintiff $8, 200.

         I. Factual Background

         On June 30, 2017, Plaintiff commenced this action against Defendants, alleging that Defendants violated provisions of the Sections 605 of the Federal Communications Act of 1934 and 553 of The Cable & Television Consumer Protection and Competition Act of 1992. ECF No.1, pp. 2-7; 47 U.S.C. § 553; 47 U.S.C. § 605. The Complaint states that Plaintiff, an international distributor of sports and entertainment programming, held “the exclusive nationwide commercial distribution (closed-circuit) right to the ‘Honor Glory' Saul Alvarez v. Erislandy Lara Championship Fight Program” (the “Program”), which telecast nationwide on July 12, 2014. ECF No. 1 ¶ 15. Plaintiff entered into various sublicensing agreements with commercial entities that permitted the businesses to “publicly exhibit the Program within their respective commercial establishments in the hospitality industry.” Id. at ¶ 16.

         Patrick Hsu, an investigator employed by Plaintiff, declared in a sworn affidavit that on July 12, 2014, he entered the establishment of El Tapatio, Inc. (t/a El Tapatio Mexican Restaurant) and observed the establishment showing the Program on four television screens. ECF No. 13-9. Mr. Hsu stated that the capacity of the establishment was approximately 100 people, with the establishment being at capacity at the time he was present. Id. Mr. Hsu also declared that he paid a cover charge of ten (10) dollars to enter the establishment. Id.

         Based on Mr. Hsu's investigation, Plaintiff alleges that Defendants violated provisions of the Sections 605 and 553 when it showed the Program without authorization. ECF No.1, pp. 2- 7; 47 U.S.C. § 553; 47 U.S.C. § 605. Because Defendants did not file an answer to Plaintiff's Complaint, Plaintiff moved for and the Clerk entered a default on January 16, 2018. ECF No. 12; see Fed. R. Civ. P. 55(a). Plaintiff now seeks judgment by default to be entered in its favor and against Defendants for the sum of Thirty-Eight Thousand, One Hundred and Ninety-Four Dollars, $38, 194.00, along with costs and post-judgment interest. ECF No. 13.

         II. Legal Background

         Rule 55 of the Federal Rules of Civil Procedure governs entries of default and default judgments. Rule 55(a) provides that “[w]hen a party . . . has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.” Fed.R.Civ.P. 55(a). In considering a motion for 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 (4th Cir. 2001) (citation omitted); see also Fed. R. Civ. P 8(b)(6) (“An allegation - other than one relating to the amount of damages - is admitted if a responsive pleading is required and the allegation is not denied.”). However, the entry of “default is not treated as an absolute confession by the defendant of his liability and of the plaintiff's right to recover.” Ryan, 253 F.3d at 780 (citations omitted). The Court “must, therefore, determine whether the well-pleaded allegations in [the] complaint support the relief sought.” Id.; 10A Wright, Miller & Kane, Federal Practice and Procedure § 2688.1 (4th ed. 2017) (“Liability is not deemed established simply because of the default. . . [and] the court, in its discretion, may require some proof of the facts that must be established in order to determine liability.”).

         The Fourth Circuit has repeatedly expressed a “strong policy that cases be decided on the merits.” See, e.g., United States v. Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993); Colleton Prepatory Acad., Inc. v. Hoover Univ., Inc., 616 F.3d 413, 417 (4th Cir. 2010). However, default judgment “may be 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).

         Still, “acceptance of [the] undisputed facts does not necessarily entitle [the non-defaulting party] to the relief sought.” Ryan, 253 F.3d at 780-81. If the plaintiff establishes liability, the Court then turns to the determination of damages. CGI Finance, Inc. v. Johnson, No. ELH-12-1895, 2013 WL 1192353, at *1 (D. Md. Mar. 21, 2013). In determining damages, the Court cannot accept Plaintiff's factual allegations as true and must make an independent determination. See Lawbaugh, 359 F.Supp.2d at 422. Rule 54(c) of the Federal Rules of Civil Procedure limits the type and amount of damages that may be entered as a result of a party's default, stating that a “default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed.R.Civ.P. 54(c). While the Court may conduct an evidentiary hearing to determine damages, it is not required to do so “if the record supports the damages requested.” Monge v. Portofino Ristorante, 751 F.Supp.2d 789, 795 (D. Md. 2010) (citing Pentech Fin. Servs., Inc. v. Old Dominion Saw Works, Inc., No. 6:09cv00004, 2009 WL 1872535, at *2). The Court may rely instead on affidavits or documentary evidence of record to determine the appropriate sum. See, e.g., Monge, 751 F.Supp.2d at 795 (citing cases in which damages were awarded after a default judgment and without a hearing, based on affidavits, printouts, invoices, or other documentary evidence).

         III. Discussion

         A. Defendants are Liable for Violating Either Section 553 or Section 605.

         In the Complaint and in its Motion, Plaintiff 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. MayrealII, LLC, 849 F.Supp.2d 586, 588 (D. Md. 2012). Section 605 prohibits the “unauthorized interception or receipt of certain ‘radio' communications, including at least ‘digital satellite television transmission, '” while section 553 prohibits the “unauthorized interception or receipt of certain cable communications.'” J&J Sports Prods., Inc. v. Intipuqueno, LLC, No. DKC-15-1325, 2016 WL 1752894, at *2 (D. Md. May 3, 2016) (citing MayrealII, LLC, 849 F.Supp.2d at 588).

         In its Complaint, Plaintiff does not specify how Defendants intercepted the Program. That omission is not fatal as “[t]he complaint need not specify the precise method of interception, as pleading in the alternative is permitted” at this stage. Joe Hand Promotions, Inc. v. Md. Food & Entm't, LLC, Civil No. CCB-11-3272, 2012 WL 5879127, at *4 (D. Md. Nov. 19, 2012). Instead, Plaintiff can prove that Defendants violated either Section 553 or Section 605 by showing that Defendants “intercepted and ...


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