Joe Hand Promotions, Inc. v. Aguilar

          REPORT AND RECOMMENDATION

          Timothy J. Sullivan United States Magistrate Judge

         This Report and Recommendation addresses the Motion for Default Judgment (“Motion”) filed by Plaintiff Joe Hand Promotions, Inc. against Defendants Maria Aguilar and Sofia & Gicelle, Inc., doing business as Fast Eddie's Restaurant Billiard & Sports Bar. (ECF No. 19.) On August 9, 2019, 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. 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 February 15, 2019, Plaintiff commenced this action against Defendants, 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 Copyright Act, 17 U.S.C. § 501. (ECF No. 1.) The Complaint states that Plaintiff held “the exclusive rights of distribution and public performance as to commercial establishments for the Mayweather vs McGregor Match, including all undercard marches and the entire television Broadcast, ” which was broadcast on August 26, 2017 (the “Program”). (Id. ¶ 6.) In addition, Plaintiff was the copyright owner of the Program. (Id. ¶ 41.) Plaintiff entered into agreements with various commercial establishments that permitted the businesses to exhibit the Program for their patrons. (Id. ¶ 23.) Defendants did not enter into such an agreement with Plaintiff to exhibit the Program at their business, Fast Eddie's Restaurant Billiard & Sport Bar (the “Establishment”).^[1] (Id. ¶ 14.) Without Plaintiff's authorization and “with full knowledge that the [Program] was not to be received and exhibited by entities unauthorized to do so, ” Defendants displayed the Program at the Establishment “willfully and for purposes of direct or indirect commercial advantage or private financial gain.” (Id. ¶¶ 26-28.) Service of process was effected on Defendants. (ECF Nos. 9 & 10.) Defendants did not file an answer or responsive pleading within the requisite time period. Plaintiff moved for entry of default on May 30, 2019. (ECF No. 13.) The Clerk's Entry of Default as to each of the Defendants was entered on June 3, 2019. (ECF Nos. 15 & 16.) Thereafter, Plaintiff filed the instant Motion (ECF No. 19).

         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 for Defendants' violation of the Communications Act, 47 U.S.C. § 605 and 47 U.S.C. § 553. As Plaintiff concedes, however (see ECF No. 19-5 at 9), courts in this district have previously held that plaintiffs cannot recover under both statutes 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 held the exclusive rights for the distribution of the Program at commercial establishments. (ECF No. 1 ¶ 6.) Defendants did not obtain Plaintiff's authorization to broadcast the program at the Establishment. (Id. ¶¶ 26-28.) Defendants unlawfully exhibited the Program to the patrons at the Establishment. (Id.) In addition, Plaintiff's investigator observed that the Establishment was charging a $30 cover charge at the time of the Program and that there were approximately 60 patrons in the Establishment. (ECF No. 19-2 at 5-6.) 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).

         In Count III, Plaintiff claims that Defendants are liable for copyright infringement. (ECF No. 1 ¶¶ 40-49.) “To establish copyright infringement liability, a plaintiff must prove two elements: (1) ownership of the copyright; and (2) copying of original constituent elements by the defendant.” Malibu Media, LLC v. Redacted, No. DKC-15-0750, 2016 WL 3668034, at *2 (D. Md. July 11, 2016) (citing 17 U.S.C. § 501(a) and Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991)). “[T]he Copyright Act does not require that the infringer know that he is infringing or that his conduct amount to a willful violation of the copyright owner's rights.” CoStar Grp., Inc. v. LoopNet, Inc., 373 F.3d 544, 549 (4th Cir. 2004) (noting that while copyright infringement is a strict liability tort, “it nonetheless requires conduct by a person who causes in some meaningful way an infringement”).

         Accepting the well-pleaded allegations of the Complaint as true, I find that Plaintiff has established Defendants' liability for copyright infringement. Plaintiff owned a valid copyright in the Program because it held the exclusive right to distribute and perform the Program in commercial establishments.^[2] (ECF No. 1 ¶ 42.) Defendants did not “obtain[] the proper authority or license from Plaintiff to publicly exhibit” the Program. (Id. ¶ 43.) In violation of Plaintiff's rights, Defendants publicly displayed the Program at the Establishment on August 26, 2017. (Id. ¶ 44.) ...