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J&J Sports Productions, Inc. v. Kuo, et al., USDC W.D. Texas

In a default judgment case under the federal Communications Act of 1934, 47 U.S.C. § 605, the United States District Court for the Western District of Texas awarded statutory damages for a restaurant’s unauthorized interception and exhibition of a pay-per-view satellite broadcast. Upon the defendants’ default under Rule 55 of the Federal Rules of Civil Procedure, the court awarded the plaintiff broadcaster $8,077.65 in statutory damages, $1,000 in enhanced statutory damages for the willfulness of defendants’ actions, and attorneys’ fees and costs in the amount of $1,150.

The case before the court involved the defendants’ descrambling of a pay-per-view satellite signal of the February 26, 2006, Mosley/Vargas boxing match broadcast by the plaintiff. The court held that plaintiff’s allegations, taken as true, were sufficient to establish defendants’ violation of 47 U.S.C. § 605(a), prohibiting the unauthorized publication or use of communications. Explaining that courts award statutory damages between $1,000 and $10,000 for each violation of Section 605(a) either as a flat sum or based on the number of patrons at the establishment at the time of the unlicensed exhibition, the court chose to employ the second method, awarding a total of $8,077.65 in statutory damages as the multiple of the residential pay-per-view rate of $54.95 and the number of patrons who were at the restaurant at the time of the exhibition.

Although Section 605 also allows for an enhancement of statutory damages by up to $100,000, the court awarded enhanced damages of $1,000, finding, on the one hand, that the defendants’ willfulness was “self-evident” because “[s]ignals do not descramble spontaneously,” but, on the other hand, that defendants did not extract a cover charge from their patrons to view the match, charge a premium for the food and drink served during the match, or repeatedly engage in the unlawful interception of broadcast signals. The court found that awarding the full amount “would operate to destroy [the defendants] rather than deter them from future violations of section 605,” and that the amount of $1,000 “is sufficient to ensure that [the defendants] have entirely disgorged their profits derived from illegally intercepting and broadcasting [the boxing match].” Finally, the court awarded $1,150 in attorneys’ fees and costs, noting that “[a]n award of costs, including attorney’s fees, is mandatory under section 605.”