The Latest UFC PPV Piracy Prosecutions Result in Modest Damages

Update November 10, 2014 – the second decision discussed below, Joe Hand Promotions v. Lorenzana, survived a motion to alter the judgement amount. Joe Hand argued that the damages were too low and would not serve the goals of deterrence.  Judge Davila disagreed and found a penalty twice the amount of the PPV licence was fair deterrence for a small business and fair compensation for the Plaintiff.  In reaching this decision the Court provided the following comments:

Plaintiff believes the amount of damages awarded is insufficient to compensate it and to deter signal piracy, either in general or as to this specific defendant. The court disagrees. The amount awarded compensates Plaintiff for the amount of its loss — the $950 cost of the license — and was scaled to the minimal facts presented to justify anything more than that.

As to deterrence, Plaintiff recognizes that specific deterrence was considered in determining the damages amount and requires no additional discussion. For general deterrence, it simply does not follow that a total award which exceeds the cost of purchasing a license creates some “perverse incentive” to break the law. Lawful conduct would still be less expensive than unlawful conduct — by half the price when all is said and done. Furthermore, $2,150 is a sizable amount not only for Defendant, but also for the other small businesses who are routinely sued in this court for this particular type of conduct. Thus, to the extent general deterrence is a recognizable goal for damages under § 553, it was adequately fulfilled here. No error has been shown.

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In my ongoing efforts to highlight legal action taken against those accused of unlawfully accessing MMA Pay Per View products, reasons for judgement were released this week in two separate prosecutions addressing such claims.  Both resulted in modest damage assessments in the face of a lack of evidence of commercial advantage by the Defendants.

In the first case (Joe Hand Promotions v. Plummer) the Defendant pub owner was sued for unlawfully exhibiting UFC 142 without purchasing a commercial exhibition licence.  The Defendant failed to respond to the suit and default judgement was obtained.  Joe Hand sought maximum statutory damages of $10,000 along with enhanced damages of a further $100,000.  The Court found damages in a far more modest range were appropriate given “the small size of the crowd viewing the Program, and the fact that Defendant is not a repeat offender

The Court awarded statutory damages of $3,000, attorney fees of $3,373 and outright dismissed the claim for enhanced damages.

In the second case (Joe Hand Promotions v. Lorenzana) the Defendant was sued for unlawfully exhibiting UFC 155 in a commercial establishment without paying for commercial licencing fees.  Again default judgment was obtained and the Plaintiff sought significant statutory and enhanced damages.  In finding total damages of just over $2,000 were more appropriate the Court provided the following reasons:

As to Plaintiff’s request under § 553(c)(3)(B), enhanced damages of no more than $50,000 may be warranted if the court finds “that the violation was committed willfully and for purposes of commercial advantage or private financial gain.” The Ninth Circuit has not set forth controlling factors for the determination of when enhanced damages are appropriate in this context, but various factors specific to this unique line of cases have been considered by district courts. These include the “use of cover charge, increase in food price during programming, presence of advertisement, number of patrons, number of televisions used, and impact of the offender’s conduct on the claimant.” Concepcion, 2011 U.S. Dist. LEXIS 60607, at *10. Enhanced damages have also been awarded when the defendant has violated sections 605 or 553 on previous occasions. See J & J Sports Prods., Inc. v. Paniagua, No. 10-CV-05141-LHK, 2011 U.S. Dist. LEXIS 33940, at *5-6, 2011 WL 996257 (N.D. Cal. Mar 21, 2011).

In this case, Defendant did not charge a cover to patrons nor is there any evidence that Defendant increased prices or required food or drink purchases during the Event. The relevant numbers are similarly unimpressive for the purpose of enhanced damages; two television sets displayed the Event to 8 people. None of these facts suggest that commercial or private financial gain was Defendant’s motivation in displaying the Event.[3] In fact, what Tate described is more likely than not just a normal evening at the Castroville Inn.[4]

Plaintiff points out that Defendant was found to have violated § 605 in another action, J & J Sports Productions, Inc. v. Lorenzana, Case No. 5:13-cv-05554 BLF, and provides a supplemental declaration in support of its request for enhanced damages. But while other courts have awarded enhanced damages under similar circumstances, this court is not persuaded that a significant “repeat offender” enhancement is appropriate here. Defendant’s conduct in Plaintiff’s two actions is more accurately described as “simultaneous offense” — the two illegal interceptions occurred in the same month (December, 2012), the two lawsuits were filed in the same month (December, 2013), and Defendant was served with process for both lawsuits on the same date and at the same time (February 10, 2014, at 6:40 p.m.). This is therefore not a case where the same defendant, having been previously notified of impermissible activity, disregards that notice and offends again. Moreover, Defendant’s conduct here had much less impact on Plaintiff than the conduct described in the other case, which involved a well-known boxer and an event displayed to 50 people at the Castroville Inn. Accordingly, the court finds that Plaintiff is entitled to $950 in enhanced damages — the value of the commercial license to air the program. This amount properly accounts for the broadcast’s minimal impact on Plaintiff.

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