Piracy of Cotto v. Alvarez Leads to $49,825 Judgement

In a judgement on the steeper side of commercial piracy awards reasons for judgment were recently released by the US District Court,  W.D. Texas, San Antonio Division, awarding over $49,000 following piracy of a boxing pay per view program.

In the recent case (Joe Hand Promotions, Inc. v. AIH Alamo Ice House) the Defendant establishment displayed Miguel Cotto v. Canelo Alvarez telecast (“the Program”) on November 21, 2015  without paying the Plaintiff appropriate sub-licencing fees.  The establishment had a capacity of 370 people and the licence would have cost $8,200.

The Plaintiff sued several defendants.  Prior to trial one defendant settled for $15,000.  The Plaintiff received judgement against remaining defendants and the court ordered statutory damages of $10,000, enhanced damages of $30,000 and legal fees of $9,825.  The Court also ordered that the defendants cannot reduce their liability by the $15,000 already paid by the co-defendant.  In reaching this decision District Judge Xavier Rodriguez provided the following reasons:

…Here, the establishment in question had a capacity of 370 people. Docket no. 35-8. To purchase viewing rights and legally broadcast the Program for this number of people, Defendants would have been required to pay $8,200. Docket no. 35-4 at 1. When calculating the amount of statutory damages, “[t]he Court finds it reasonable to treble what would have been the cost had Defendant followed the law.” Joe Hand Promotions, Inc. v. Garcia, 546 F. Supp. 2d 383, 386 (W.D. Tex. 2008). This figure includes monetary savings resulting from the violation of the Communications Act, “as well as any profits made from food and drink sales associated with customers who stayed and watched the fight.” Id. Therefore, because the amount Defendants would have paid had they legally purchased the rights to the Event was $8,200, the trebling of this amount would be $24,600. The statute caps damages under this section at $10,000. 47 U.S.C. § 605(e)(3)(C)(i). Accordingly, Plaintiff is awarded $10,000 under this section.

Section 605(e)(3)(C)(ii) allows for enhanced damages when the statute is violated “willfully for the purposes of direct and indirect commercial advantage or private gain.” 47 U.S.C. § 605(e)(3)(C)(ii). The Court previously found that Defendants “willfully intercepted or received communication of the Program or assisted in such actions by unauthorized transmission or receipt.” Docket no. 36 at 7. Further, “[b]ased on the limited methods of intercepting closed circuit broadcasting . . . and the low probability that a commercial establishment could intercept such a broadcast merely by chance, however, courts have held [such] conduct . . . to be willful and for the purposes of direct or indirect commercial advantage or private financial gain.” Entm’t by J&J, Inc. v. Al-Waha Enters., Inc., 219 F. Supp. 2d 769, 776 (S.D. Tex. 2002). The Court must balance the need to punish illegal piracy with the need to keep damages at a level that will not cause an insurmountable financial burden. See id. at 775-76 (reviewing multiple calculation methods and factors courts consider when assessing statutory damages under § 605). The Court finds damages for a willful violation in the amount of $30,000 appropriate based on the venue and willful actions by Defendants.

The statute allows an aggrieved party who prevails to recover full costs and reasonable attorney’s fees. 47 U.S.C. § 605(e)(3)(B)(iii). Plaintiff submitted the affidavit of Jamie King to establish the reasonable and necessary attorney’s fees. Docket no. 35-15 at 3. Based upon the affidavit and the time spent preparing this case, the Court awards reasonable attorney’s fees in the amount of $9,825. The Court declines to award attorney’s fees and costs for future appeals.

As to the question of individual Defendants’ liability, the Court follows other courts’ reasoning and finds the remaining Defendants—Alamo Ice House, Jaime Luis Gonzales, Raymond Fuchs, and Charles Robison—are jointly and severally liable for the entirety of damages awarded. See Cmty. Television Sys., Inc. v. Caruso,284 F.3d 430, 436 (2d Cir. 2002) (“[W]e think section 605 is sensibly construed to create joint and several liability among those found liable for a single award of damages attributable to the purchase and installation of a single descrambler device.”).

The Court also finds the remaining Defendants are not entitled to an offset as to damages based on Plaintiff’s previous settlement with Defendant Kieschnick. Under Texas’s one satisfaction rule, “a plaintiff is entitled to only one recovery for any damages suffered.” Coastal Agricultural Supply, Inc. v. JP Morgan Chase Bank, N.A., 759 F.3d 498, 508 (5th Cir. 2014). A “nonsettling defendant may claim credit based on the damages for which all the tortfeasors are jointly liable,” but not for punitive damages. Id. at 508-09. For the one satisfaction rule to apply, however, there must be a “single, indivisible injury.” Id. at 509. Plaintiff demonstrates that the settlement amount paid by Kieschnick was paid for “in consideration of a release, among other considerations, that covered more than that which is before this court,” including Cause No. 5:16-CV-1238-FB in the United States District Court for the Western District of Texas, “other past claims, if any, including those unknown, and other negotiated consideration outside the claims and defenses specifically plead in this case.” Docket no. 38 at 4. Accordingly, the Court finds the one satisfaction rule does not apply to Kieschnick’s settlement agreement, and the remaining Defendants are liable for the entirety of the damages awarded in this Order.

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