Posts Tagged ‘piracy’

Reasons for judgement were published recently by the US District Court, W.D. Arkansas, Texarkana Division granting default judgement for the commercial piracy of UFC 165.

In the recent case (Joe Hand Promotions, Inc. v. Moore) the Defendant operated a commercial establishment and aired UFC 165 without paying the commercial sub licencing fees to the Plaintiff.  The cost would have been $950. The Plaintiff paid for a private investigator to attend and noted between 7 and 11 patrons present during the airing of the event.

The Court found statutory damages for the cost of the program were appropriate and enhanced damages at triple that amount were warranted given that the piracy was intentional.  In assessing total damages at $3,800 District Judge Susan Hickey provided the following reasons:

The undisputed evidence in this case demonstrates that Moore violated 47 U.S.C. § 605. The cost to King of Wings Bar & Grill for the sublicensing agreement would have been $950.00. The Court finds that the amount Moore should have paid for a sublicensing agreement is the proper amount of statutory damages. See J & J Sports Prods., Inc. v. Brewster “2” Café, LLC, 2014 WL 4956501, at *5 (E.D. Ark. Oct. 2, 2014).

The facts also demonstrate that the violation was committed willfully and for the purposes of financial gain. The violation was willful because “intentional acts are required to pirate a closed-circuit broadcast; the unscrambled airwaves or cable transmission do not just happen.” J & J Sports Prods., Inc. v. Diaz De Leon, 2012 WL 79877, at *3 (W.D. Ark. Jan. 11, 2012) (quoting Joe Hand Promotions, Inc. v. Cat’s Bar, Inc., 2009 WL 700125, at *3 (C.D. Ill. 2009)). Commercial advantage or financial gain can be reasonably inferred from the facts. Given that King of Wings Bar & Grill is a commercial establishment, it may be reasonably inferred that Moore’s actions in airing the Program were for purposes of direct or indirect commercial advantage by drawing customers into the business. See id.

Because the Court has found that the violations were willful, Plaintiff is entitled to enhanced damages. The purpose of these enhanced damages is to punish violations and simultaneously deter future piracy. Brewster “2” Café, LLC, 2014 WL 4956501 at *5. Moore would have no incentive to cease the violation if the penalty were merely the amount that he should have paid for a sublicensing agreement. See Entertainment by J & J, Inc. v. Al-Waha Enterprises, Inc., 219 F. Supp. 2d 769, 776 (S.D. Tex. 2002). In awarding enhanced damages, Courts generally award anywhere from three to six times the statutory damages award. Joe Hand Productions, Inc. v. Feil, 2013 WL 2936389 (D. Minn. June 14, 2013).

The Court finds that the appropriate amount of enhanced damages is three times the award of statutory damages, or $2,850.00. These damages are appropriate given that there is no evidence that King of Wings was filled to capacity, and Joe Hand has not shown that Moore has a history of showing pirated events. See Brewster “2” Café, LLC, 2014 WL 4956501 at *6. These damages are sufficient to deter future signal piracy, while not so harsh as to seriously impair the viability of Moore’s business.

Adding to this site’s archived posts addressing combat sports piracy, reasons for judgement were released recently by the US District Court, ND Texas, Dallas Division, awarding damages of $20,000 for the commercial piracy of UFC 162.

In the recent case (Joe Hand Promotions, Inc. v. 2 Tacos Bar and Grill) the Defendant displayed UFC 162 without paying the Plaintiff the commercial sub licencing fee which would have been $1,300.  The Plaintiff sued and obtained default judgement.  Joe Hand sought $60,000 in total damages but the Court refused finding $20,000 sufficient in the circumstances. In reaching this assessment Chief District Judge Barbara M. G. Lynn provided the following reasons:

The uncontroverted evidence indicates that there were 70 patrons at 2 Tacos at the time of the violation. ECF No. 15-5 at 1. Plaintiff’s rate card for the Event further indicates that for a maximum occupancy of 165 people, the capacity of 2 Tacos, it would have cost $1,300 to legally broadcast the Event. ECF No. 15-4 at 1. The Court finds it reasonable, therefore, to award base statutory damages in the amount of $5,000. See Beck, 2013 WL 5592333, at *2 (“[T]o adequately deter piracy, the cost of piracy must be significantly higher than the cost of buying a license.”).

The Court concludes that 2 Tacos and Hinojosa acted willfully. Given “the limited methods of intercepting closed circuit broadcasting of pay-per-view events and the low probability that a commercial establishment could intercept such a broadcast merely by chance,” courts have held that conduct such as that of 2 Tacos and Hinojosa in this case to be willful and for the purposes of commercial advantage. E.g., Al-Waha Enters., 219 F. Supp. 2d at 777 (citing cases); Beck, 2013 WL 5592333 (“[I]t is obvious that commercial establishments show sports programs to draw business, not out of charity.”). However, the Court notes that there was no cover charge imposed to attend the Event, and Plaintiff does not allege that 2 Tacos was a repeat offender in broadcasting the Event. Taking those facts into consideration, therefore, the Court in its discretion will only award total damages of $15,000, or three times the base award amount. Al-Waha, 219 F. Supp. 2d at 766 (awarding treble damages in a similar case); Beck, 2013 WL 5592333 (same); see also Alima, 2014 WL 1632158, at *5 (awarding four times the base statutory damages in additional damages when a cover was charged to view the unauthorized broadcast). Plaintiff is thus entitled to a statutory damages pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II) from 2 Tacos and Hinojosa, jointly and severally, in the amount of $5,000 and additional damages pursuant to 47 U.S.C. § 605(e)(3)(C)(ii) from 2 Tacos and Hinojosa, jointly and severally, in the amount of $15,000. Plaintiff is entitled to total damages in the amount of $20,000.

In the latest UFC piracy prosecution, a default judgement request of $60,000 was rejected and the Court assessed damages at $8,242.

In the recent case (Joe Hand Promotions, Inc. v. Meunier) the Defendant displayed UFC 173 at a commercial establishment without paying the commercial sub-licencing fee to the Plaintiff.  The fee would have been $1,600.

Some 50 patrons were present at the time.  The Plaintiff sued asking for $60,000 in statutory and enhanced damages.   The US District Court, N.D. New York rejected this request as disproportionate.  Instead the court awarded statutory damages of $2,747.50.  The Court arrived at this figure by taking the number of patrons and multiplying that number by the cost each of them would have paid to individually order the program on a residential basis.  The Court then took this figure and doubled it as enhanced damages.  In finding this was a fair disposition District Judge Lawrence Kahn provided the following reasons:

…courts in this circuit rarely grant the maximum allowable damages…Instead, several courts have used the following formula for calculating damages: they multiply the number of patrons who viewed the event by $54.95, which has been used as the estimated residential fee for a pay-per-view broadcast… As Plaintiff alleges that at least fifty patrons were present for UFC 173… the Court multiplies that number by $54.95 to calculate statutory damages, which amount to $2,747.50. This amount is sufficient to compensate Plaintiff for its lost revenue—Plaintiff would have charged Defendant $1,600 to purchase and display UFC 173 for its patrons…and it is in line with the statutory damages that other courts have awarded under similar circumstances…

In order to determine the proper amount of enhanced damages in such cases, courts generally consider the following factors: “allegations of: (1) repeated violations over an extended period of time; (2) substantial unlawful monetary gains; (3) significant actual damages to plaintiff; (4) defendant’s advertising for the intended broadcast of the event; and (5) defendant’s charging a cover charge or charging premiums for food and drinks.”… Here, Defendants benefitted from a ten dollar cover charge…they advertised for the event… and they received substantial monetary gains by not paying the required licensing fee and presumably by selling drinks to patrons watching the event.

Under similar circumstances, other courts in this circuit have assessed enhanced damages equal to two times the amount of statutory damages, which effectively amounts to an award of treble damages….In this case, the Court finds that an enhanced damages award of twice the statutory damages is sufficient to compensate Plaintiff and to deter Defendants from future violations.

Adding to this site’s archived posts addressing combat sports piracy, reasons for judgement were released recently by the US District Court, SD West Virginia, Charleston Division, assessing damages for the commercial piracy of UFC 170.

In the recent case (Joe Hand Promotions, Inc. v. Harrison) the Defendant displayed UFC 170 in a commercial establishment without paying commercial sub licencing fees to the Plaintiff.  The cost would have been $1,300.

The Plaintiff obtained default judgement and requested $60,000 in damages although the Court rejected this request as being disproportionate.

In assessing statutory damages at $5,000 and enhanced damages at $10,000 District Judge Thomas E. Johnston provided the following reasons:

In this case, awarding a per-patron rate of $100 for each of the seven patrons present during the Broadcast is insufficient, as Joe Hand’s provable losses are at least $1300, the amount of the sublicense fee. Similarly, the Court finds that a statutory damages award limited to the equivalent of the sublicense fee would have little deterrent effect on future piracy. The Court finds statutory damages in the amount of $5000 is just compensation for Defendants’ violation of Section 605. This amount takes into account what appear to be repeated violations of the statute on the part of Defendants, as indicated by Club Infinity’s Facebook advertisements. However, given that Club Infinity does not appear to have acquired substantial monetary gain through its illegal activity, the Court finds that awarding the statutory maximum of damages is excessive and would create an unjustified disparity with similar cases…

Enhanced penalties often bear a relation to the amount of the statutory award. See, e.g., Lawhon, 2016 WL 160730, at *2 (awarding enhanced damages equal to three times the statutory damages); Joe Hand Promotions, Inc. v. Upstate Recreation, No. 6:13-2467-TMC, 2015 WL 685461, at *9 (D.S.C. Feb. 18, 2015) (awarding two-and-one-half times the statutory award in enhanced damages); J & J Sports Prods., Inc. v. Romenski, 845 F. Supp. 2d 703, 708 (W.D.N.C. 2012) (awarding total damages equal to treble the sublicense fee). When determining additional damages, other courts have considered factors such as: “(1) repeated violations over an extended period of time; (2) substantial unlawful monetary gains; (3) significant actual damages to plaintiff;

(4) defendant’s advertising for the intended broadcast of the event; and (5) defendant’s charging a cover charge or charging premiums for food and drinks.” Wing Spot, 920 F. Supp. 2d at 668 (quoting Kingvision Pay-Per-View Ltd. v. Rodriguez, No. 02 CIV. 7972 (SHS), 2003 WL 548891, at *1 (S.D.N.Y. Feb. 24, 2003)).

Joe Hand points out by affidavit that these factors are somewhat limited in their utility. (See Aff. of Joe Hand Jr., President, at ¶ 14.) While that may be true, the Court has no evidence that the circumstances of this case deviate from the norm, save perhaps for evidence suggesting that Club Infinity had some history of intercepting Joe Hand’s satellite broadcasts in a similarly illegal manner. Joe Hand points to no other aggravating factor that would warrant an exceptional enhanced damages award. And if the Court focuses its attention on the five factors delineated above, only the first, as mentioned earlier, is particularly noteworthy. The other factors are neutral or even weigh against an increased award of enhanced damages. With regard to the fifth factor, for example, Mr. Shifflett attests that he was not charged a cover fee at Club Infinity on the night of the Broadcast. (Shifflett Aff. at 1.) The Court also notes that any attempt on the part of Club Infinity to attract patrons by displaying the Broadcast appears to have been unsuccessful. Apart from Club Infinity’s staff, Mr. Shifflett observed only seven patrons present that night. Thus, although enhanced damages are appropriate whether Defendants’ conduct resulted in great financial gain or not, the Court finds that $50,000 is excessive. Consistent with the deterrence goals of § 605, and as a means of penalizing Club Infinity’s repeated violations, the Court awards enhanced damages equal to two times the statutory damages, or $10,000. This results in total damages of $15,000 against Defendants.

Adding to this site’s archived posts addressing combat sports piracy, reasons for judgement were released recently by the US District Court, ED California, assessing damages for the commercial piracy of UFC 173.

In the recent case (Joe Hand Promotions, Inc v. Ahmadi) the Defendant displayed UFC 173 in a commercial establishment without paying the commercial sub licencing fees.  The Plaintiff sued and obtained default judgement.  The Plaintiff sought maximum statutory damages of $110,000 but the Court rejected this request and instead awarded damages totaling $6,000 Magistrate Judge Deborah Barnes provided the following reasons:

Under the Federal Communications Act, a plaintiff may elect to seek either actual or statutory damages…. The statute provides for statutory damages for each violation of not less than $1,000 and not more than $10,000, as the court considers just… Plaintiff seeks the maximum award of $10,000. The statute also authorizes enhanced damages of not more than $100,000 if the court finds the violation was “committed willfully and for purpose of direct or indirect commercial advantage or private financial gain.” ….. “[T]he mere assertion that Defendant acted willfully is insufficient to justify enhanced damages.” Kingvision Pay-Per-View, Ltd. v. Backman, 102 F.Supp.2d 1196, 1198 (N.D. Cal. 2000).

Here, plaintiff seeks $100,000 in enhanced statutory damages. Plaintiff argues that the requested amount is justified primarily because of the need to deter broadcast piracy in light of the harm done to plaintiff’s business as a result of such activities. In determining whether enhanced statutory damages are appropriate, courts usually consider “repeated violations over an extended period of time; substantial unlawful monetary gains; significant actual damages to plaintiff; defendant’s advertising for the intended broadcast of the event; defendant’s charging a cover charge or charging premiums for food and drinks.” Kingvision Pay-Per-View, Ltd. v. Gutierrez, 544 F.Supp.2d 1179, 1185 (D. Colo. 2008) (quotation omitted).

Plaintiff has submitted an affidavit from its investigator stating that during the airing of the program at defendant’s establishment the investigator observed a maximum of 26 patrons inside the establishment and that there was no cover charge to enter the establishment. (ECF No. 14-3 at 2.) Plaintiff has come forward with no evidence of any promotion by defendant that the fight would be shown at the establishment, that a special premium on food or drink was being charged at the establishment on the night of the program, or that the establishment was doing any greater level of business on the night the program was shown than at any other time. As acknowledged by plaintiff, there are “no egregious circumstanced noted” in this action. (Pl.’s MDJ (ECF No. 14-1) at 11.) Moreover, plaintiff has presented no evidence to the court suggesting that the defendant is a repeat broadcast piracy offender.[3]

In light of this record, the undersigned finds plaintiff’s argument in support of enhanced statutory damages to be unpersuasive and not supported by the weight of authority in this area. Accordingly, the undersigned will recommend that judgment be entered against the defaulted defendant, and that plaintiff be awarded $6,000 in statutory damages, with no award for enhanced statutory damages, pursuant to 47 U.S.C. § 605(e)(3)(C)(i & ii). See J & J Sports Productions Inc. v. Ocampo, Case No. 1:16-cv-0559 LJO JLT, 2016 WL 6246490, at *6 (E.D. Cal. Oct. 26, 2016) (“Because there is insufficient evidence to demonstrate the piracy was done for purposes of commercial or private gain, enhanced damages are not recommended.”); J & J Sports Productions, Inc. v. Bolano, Case No. 5:14-cv-3939-BLF, 2015 WL 4512322, at *4 (N.D. Cal. July 24, 2015) (“In sum, it is Plaintiff’s burden to establish willfulness and Plaintiff has offered no evidence nor conducted any analysis of the specific facts in this case on this point sufficient to warrant an award of enhanced damages. As such, Plaintiff has failed to demonstrate entitlement to enhanced damages and the Court declines to award such damages here.”); J & J Sports Productions, Inc. v. Lorenzana, Case No. 13-cv-5554 BLF (JCS), 2014 WL 3044566, at *4 (N.D. Cal. May 13, 2014) (“There is also insufficient evidence that Defendant displayed the Program for a `commercial advantage’ or for `financial gain,’ which is required for an award of enhanced damages.”).

While reasons for judgement reveal litigation strategies when Joe Hand Promotions sues commercial establishments for UFC pay per view piracy details of cases that settle out of court are rarely revealed.  Recent reasons for judgement, however, detail a settlement agreement Joe Hand Promotions accepted after a Defendant defaulted on payments.

In the recent case (Joe Hand Promotions, Inc. v. Alzaghari) the Defendant displayed a Pay Per View program in their commercial establishment without paying the commercial sub licencing fee.  They were sued for damages but prior to trial the parties reached a settlement for $5,000 to be paid in installments with an agreement that the amount would increase in the event of default.  The Defendant failed to make the agreed payments and the Plaintiff succeeded in securing judgement for $13,000.  In doing so District Judge Graham Mullen provided the following reasons:

1. That the Defendants and Plaintiff were represented by counsel during the mediation that took place on July 18, 2016.

2. That a settlement agreement was executed and entered into by both Defendants’ and Plaintiff’s counsel on behalf of their respective clients.

3. That a true and correct copy of the agreement was attached as Exhibit A to the Plaintiff’s motion to enforce mediated settlement agreement [DE30].

4. That the terms of the agreement called for $5,000 in payments to be made in the following manner:

a. $1,000 payment from Defendant to Plaintiff by August 8, 2016;

b. $1,000 payment from Defendant to Plaintiff, by August 29, 2016; and

c. $3,000 payment from Defendant to Plaintiff by January 18, 2016.

5. That the terms of the agreement called for a confession of judgment in the amount of $13,000 to be executed by the Defendants in favor of the Plaintiff in case of any default in the payments by the Defendant.

6. That the first two payments were not made by the Defendants to the Plaintiff as set out above.

7. That a $13,000 confession of judgment was not executed by the Defendants as agreed to in the settlement agreement.

The Court makes the following conclusions of law:

1. That the agreement attached as Exhibit A to the Plaintiff’s motion to enforce mediated settlement agreement is valid and enforceable against the Defendants.

2. That the Defendant has defaulted in their obligations to pay as agreed above and to execute a $13,000 confession of judgment in favor of the Plaintiff.

IT IS ORDERED:

1. That the Plaintiff’s motion to enforce settlement agreement is GRANTED.

2. That the Court will entered a judgment in the instant case for $13,000 in favor of the Plaintiff and against all defendants, jointly and severally, as a result of the default.

Adding to this site’s archived posts addressing combat sports piracy, reasons for judgement were released recently by the US District Court, E.D. New York, finding that federal piracy statutes can be used in a piracy prosecution involving internet streaming.

In the recent case (Joe Hand Promotions, Inc v. Maupin) the UFC’s parent Company (Zuffa) along with their commercial distributor (Joe Hand Promotions) sued the Defendants alleging they displayed UFC 163 at a commercial establishment without paying the commercial sub-licencing fees.

As is typical in such prosecutions the Plaintiffs relied on federal legislation imposing potentially steep penalties for radio communication and cable theft.

The Defendants brought a motion to dismiss the claims noting that the federal legislation does not apply to internet streaming.  District Judge Arthur Spatt disagreed and provided a broad interpretation of the legislation allowing the prosecution to continue.  In finding the legislation can apply to internet piracy the Court provided the following reasons:

The question presented is whether an initial broadcast (not a rebroadcast)—that was received over the internet without proper license or permission and publicly exhibited—violates Sections 553 and 605. It appears that no court in the Second Circuit has directly answered this question, and the parties have not cited any such decisions in their papers…

Courts in other circuits have analyzed and answered this question, with varying results…

This Court agrees with the courts that have allowed plaintiffs to proceed under a theory of liability that contemplates interception of communications via the internet. First, the language of the statutes does not preclude communications sent via the internet. Various courts, including courts in the Second Circuit consider communication sent over the internet to be communication sent via wire…

Furthermore, this interpretation is in line with the purpose of the statute—to prevent theft of cable and satellite programming…

The Plaintiffs here have alleged that the Defendants circumvented their licensing structure by streaming the Telecast from the UFC’s website and paying a residential rate instead of a commercial one, thereby illegally intercepting and exhibiting the Telecast. The Defendants allegedly did this using internet access provided by their cable provider. Courts have found that commercial defendants could be liable where they only paid the residential rate for a pay-per-view program…

Accordingly, the Court finds that the type of interception and exhibition at issue here can provide a basis for liability under the FCA, and that the Plaintiff has alleged facts that plausibly allege that the Defendants violated Sections 553 and 605.

Adding to this site’s archived posts addressing combat sports piracy, reasons for judgement were released recently by the US District Court, D. Arizona, assessing damages at $1,000 for the commercial piracy of UFC 172.

In the recent case (Joe Hand Promotions, Inc v. Sizemore) the Defendants displayed UFC 172 in a commercial establishment without paying the Plaintiff commercial sublicencing fees (which in this case would have been between $750-$850).

The Plaintiff sued and obtained summary judgement although the Court declined to award the more substantial damages the Plaintiff sought.  In finding minimum statutory damages being appropriate District Judge Douglas Rayes provided the following reasons:

There is no evidence that Defendants charged patrons a cover to enter Sleepy Dog Brewery. (Doc. 47-2, ¶ 28.) Between 24 and 39 patrons were present, but there is no indication that the patrons actually were viewing the Program, nor is there evidence that Defendants advertised the Program or charged a premium for food and drinks. (Id., ¶ 27.) Based on Sleepy Dog Brewery’s occupancy capacity, it would have cost Defendants between $750 and $850 to broadcast the Program lawfully. (Doc. 42 at 37.) Given the lack of evidence that Defendants achieved “commercial advantage or private financial gain” from broadcasting the Program, the Court awards Plaintiff $1,000 in statutory damages and denies its request for enhanced damages. See Innovative Sports Mgmt., 2014 WL 1790943, at *3 (awarding statutory minimum and denying enhanced damages because there was no evidence that the defendants displayed the program for commercial advantage or private gain).

IT IS ORDERED that Plaintiff’s Motion for Summary Judgment, (Doc. 41), is GRANTED. Pursuant to § 605(e)(3)(C)(i)(II), Plaintiff is awarded $1,000 in statutory damages. The Clerk shall enter judgment accordingly.

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.

Adding to this site’s archived posts addressing UFC Pay Per View piracy, reasons for judgement were released recently by the US District Court, D. Arizona, upholding a $23,000 default judgement following the commercial piracy of UFC 157.

In the recent case (Joe Hand Promotions, Inc. v. Manzo) the Defendant displayed UFC 157 at their restaurant without purchasing a commercial sub licence from the Plaintiff.  The Plaintiff sued and obtained default judgement in the sum of $23,000.  The Defendant moved to set aside the judgement but the request was denied with the Court finding their failure to reply to the lawsuit initially was ‘inexcusable’.

In upholding the $23,000 award Senior District Judge John Sedwick provided the following reasons:

Here, Manzo claims that he is legally sophisticated in that he is aware of the need to respond to a complaint from his experience with being sued in the past.[21] In fact, Manzo states that he has been sued by the same plaintiff in this case, and in the past he hired a lawyer and responded to the complaint. He tells the court that if he had “realized that [th]is action was commenced, [he] would have appeared and defended.”[22] But the record refutes this claim. Defendants’ own evidence shows that they were put on actual notice of this action when the process server left copies of the complaint with Manzo’s office manager. Further, Plaintiff’s application for a clerk’s default was served on Defendants by mail, as was its application for a default judgment. Defendants do not claim that they failed to receive these documents. Defendants fail to offer any explanation for why it took them over a year after Plaintiff’s motion for a default judgment to appear in this case. Because Defendants understood the consequences of inaction and they offer no good faith explanation for their behavior, the court must assume they acted in bad faith to delay potential liability. This culpable conduct renders their inaction inexcusable.[23]