Fair Market Value, and Little More, Awarded for Boxing Pay Per View Piracy

Adding to this site’s archived posts addressing combat sports piracy, reasons for judgement were released recently by the US District Court, W.D. Arkansas, Fayetteville Division, assessing damages following the commercial piracy of Floyd Mayweather, Jr. vs. Saul Alvarez.

In the recent case (J & J Sports Productions, Inc v. Lara) the Defendant displayed the boxing pay per view program at a club without purchasing commercial sub licencing rights from the Plaintiff.

The Plaintiff obtained default judgement but the damages sought were significantly undercut by the Court.  The Court awarded $1,000 in statutory damages and a further $2,200 for the common law tort of conversion.  The Plaintiff’s request for $30,000 in enhanced damages was rejected.  In finding an assessment of $3,200 in total damages was appropriate Chief District Judge PK Holmes, III provided the following reasons:

Since default judgment will be entered against the Club, the Court must determine the appropriate amount of damages to award. For the violation of § 605, the Court awards $1,000 in statutory damages to Plaintiff. A section of the Plaintiff’s brief in support of its motion for summary judgment adequately explains the reason for these damages:

A party aggrieved under section 605 may, at its discretion, recover either actual or statutory damages. 47 U.S.C. § 605(e)(3)(C). Plaintiff elects to recover statutory damages. Plaintiff requests statutory damages pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II). The amount of statutory damages to which Plaintiff is entitled for each violation of this section shall be not less than $1,000.00 nor more than $10,000.00. Id.

(Doc. 22, p. 9). The Court defers to Plaintiff’s election to collect statutory damages, and finds that $1,000 is an appropriate amount to award in this case. Plaintiff has further requested $30,000 in enhanced statutory damages. (Doc. 22, p. 9). In calculating damages, the Plaintiff argues that “particularly important to the issue of enhanced statutory damages, the establishment required a $5.00 cover charge for entry.” (Doc. 22, p. 12). In support of this argument, the Plaintiff cites to the report of the private investigator. That report reveals that at its peak, attendance reached 12 persons in the Club on the night in question. This evidence does not support a claim for enhanced damages. The Court finds that $1,000 in statutory damages is sufficient for the violation, and in addition to the conversion damages discussed below, this award will effectively deter both this particular defendant and other similarly situated defendants in the future.

For the conversion, the Court awards $2,200 in compensatory damages to Plaintiff. “[T]he proper measure of damages [for a conversion claim] is the fair market value of the property at the time and place of conversion.” Durham v. Smith, 374 S.W.3d 799, 805 (Ark. Ct. App. 2010). However, “the circumstances of a case may require a different standard, including a measure of the expenses incurred as a result of the conversion.” McQuillan v. Mercedes-Benz Credit Corp., 961 S.W.2d 729, 733 (Ark. 1998) (citing First Nat’l Bank of Brinkley, Ark. v. Frey, 668 S.W.2d 533, 535 (Ark. 1984)). Relying on the affidavit of Joseph M. Gagliardi, the President of J & J Sports, Plaintiff asserts that the fair market value of the Program is $6,200 because that is the “commercial sublicense fee” for the Club. (Doc. 21, Ex. 1, p. 3). That affidavit references the “rate card” and states that this is “based on the capacity of the establishment.” (Id. citing Doc. 21, Ex. 2, p. 17). A review of that rate card shows that there is “A NON-REFUNDABLE MINIMUM GUARANTEE OF $2,200 Plus $20.00 Per Person Above 100.” (Id.). Presumably the higher $6,200 figure comes from the rate card where it states that for a minimum seating of 200 to 300 people, the rate is $6,200. (Id.). The report of the private investigator revealed that the capacity of the Club was 287, but that the actual attendance never reached more than 12 people. (Doc. 21, Ex. 1).

While the President of J & J Productions submitted one interpretation of the rate card in his affidavit, a plain reading of the rate card would also support the conclusion that the Club could have given a non-refundable minimum guarantee of $2,200 plus $20.00 per person above 100. Under that reading of the rate card, with a total attendance of 12 persons, $2,200 would be the total amount owed by the Club. Either because an ambiguity in the rate card should be construed against its drafter, or because $2,200 is closer to a reasonable rate for 12 people to watch the Program than $6,200, the Court concludes that $2,200 will be the fair market value of the Program showed at the Club. The Court finds the fair market value of the converted property to be the appropriate means to determine compensatory damages for conversion in this case. Under this measure, the Plaintiff is entitled to, and will be awarded, $2,200 in compensatory damages, which represents the fair market value of a commercial license for the Program at the time of the conduct alleged.

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