ENTRY AND ORDER AWARDING DEFAULT JUDGMENT AGAINST DEFENDANT MIXX ULTRA LOUNGE LLC

SUSAN J. DLOTT, Chief District Judge.

This case involves the alleged piracy of a televised pay-per-view championship boxing match by a downtown Cincinnati nightclub. Plaintiff J & J Sports Productions, Inc. is a commercial distributor of televised sporting events. J & J had exclusive national television distribution rights to the Mayweather-Ortiz championship fight program (the "Program"), which took place on September 17, 2011. J & J had sublicensing agreements with entities such as hotels, bars, and restaurants that granted these entities the right to show the Program to patrons within their establishments.

J & J claims that the Defendants Deborah Fisher, Jo Regina Lamar, and Mixx Ultra Lounge did not pay for the right to show the Program but unlawfully intercepted and showed the Program to their patrons in violation of federal law. J & J now moves for default judgment against the Defendants and seek damages in the amount of $151,650 (comprised of willful and statutory damages of $100,000 under 47 U.S.C. § 605, willful and statutory damages of $50,000 under 47 U.S.C. § 553, attorney's fees of $1,300, and costs of $350). For the following reasons, the Court will GRANT Plaintiff's motion for default judgment. However, Plaintiff is not entitled to the maximum allowable damages under both 47 U.S.C. § 605 and 47 U.S.C. § 553. For the reasons stated below, the Court will award damages in the amount of $2,150.

I. BACKGROUND

J & J sells proprietary sports programming. The television signals for these pay-per-view programs are sometimes stolen by unauthorized users, known as "signal pirates." In response, J&J hires law enforcement personnel to investigate and canvass suspected establishments to determine whether they are illegally broadcasting programs for which they paid no licensing fee.

On September 17, 2011, investigator Paul Jason Hall observed the Mayweather-Ortiz pay-per-view Program being shown at Mixx Ultra Lounge. Hall Affidavit, Doc. 8-1, Page ID 35. Mixx did not have a lawful license to show the Program. Hall observed the Program being shown on three televisions in the club, and he estimated that the capacity of the club was approximately 400 people. During the time he was at the club, Hall counted the number of patrons three times. The head counts were 19, 22, and 25.

Plaintiff filed suit against Defendants Deborah Fisher, Jo Regina Lamar, and Mixx Ultra Lounge LLC on October 12, 2012 asserting claims for violation of the Federal Communications Act, 47 U.S.C. § 605; violation of the Cable & Television Consumer Protection and Competition Act, 47 U.S.C. § 553, and conversion. Defendants were served with summons and the complaint via certified mail on November 1, 2012. See Doc. 5. Defendants failed to answer or other response to the complaint in a timely manner. Upon Plaintiff's motion, the Clerk entered default against Defendants on November 28, 2012. See Doc. 7. Thereafter, Plaintiff filed the pending motion for default judgment seeking judgment on both of the statutory claims but not on the claim for conversion.

Plaintiff's attorney, Jeffery Koberg, submitted an affidavit in conjunction with the motion for default in which he states that he had spent 5.2 hours on this litigation and that his standard hourly rate is $250 per hour. Accordingly, as of the time he filed the motion for default judgment, Koberg's fees were $1,300, and Plaintiff had incurred filing fees of $350. Koberg Affidavit, Doc. 8-2 at Page ID 41.

The Court held a hearing on the motion for default judgment on August 14, 2013. Present at the hearing were Koberg and an individual who appeared on behalf of Mixx Ultra Lounge, Julian Rogers. The matter is now ripe for resolution.

II. LEGAL STANDARD

Plaintiff's Motion for Default Judgment is governed by Rule 55(b) of the Federal Rules of Civil Procedure, which provides in relevant part:

Fed. R. Civ. P. 55(b).

The sequence of procedural steps required of one seeking judgment by default "begin[s] with the entry of a default by the clerk upon the plaintiff's request." United Coin Meter Co. v. Seaboard Coastline R.R., 705 F.2d 839, 844 (6th Cir. 1983) (quoting Meehan v. Snow, 652 F.2d 274, 276 (2d Cir. 1981)). "Then, pursuant to Rule 55(c), the defendant has an opportunity to seek to have the entry set aside. If that motion is not made or is unsuccessful, and if no hearing is needed to ascertain damages, judgment by default may be entered by the court or, if the defendant has not appeared, by the clerk." Id.

"Once a default is entered, well-pleaded allegations in the plaintiff's complaint, except those pertaining to the amount of damages, are taken as true." McIntosh v. Check Resolution Service, Inc., No. 10-14895, 2011 WL 1595150, at *3 (E.D. Mich. April 27, 2011) (citing Alfa Corp. v. Alfa Mortgage, Inc., 560 F.Supp.2d 1166, 1174 (M.D. Ala. 2008)); see also Trice v. Lake & Country Real Estate, No. 86-1205, 1987 WL 38852, at *2 (6th Cir. Oct. 29, 1987) (quoting Dundee Cement Co. v. Howard Pipe & Concrete Prods., 722 F.2d 1319, 1323 (7th Cir. 1983) ("Upon default, the well-pleaded allegations of a complaint relating to liability are taken as true.")). Nevertheless, the court must assess whether the factual allegations are legally sufficient to state the alleged cause of action. McIntosh, 2011 WL 1595150, at *3 (citing In re Indus. Diamonds Antitrust Litig., 119 F.Supp.2d 418, 420 (S.D.N.Y. 2000)).

III. ANALYSIS

The Cable & Television Consumer Protection and Competition Act, 47 U.S.C. § 553(a)(1), makes it illegal to intercept or receive without authorization any communications service offered over a cable system. Under § 553(c)(3)(A), a party may recover actual damages or, in the alternative, an award of statutory damages for all violations involved in the action in an amount not less than $250 but not greater than $10,000. 47 U.S.C. § 553(c)(3)(A)(i) and (ii). Because there is no mens rea or scienter element for a violation of § 553, intent is immaterial to liability. Joe Hand Promotions, Inc. v. Easterling, No. 4:08cv1259, 2009 WL 1767579, at *4 (N.D. Ohio June 22, 2009). However, where the court finds that the violation was committed willfully and for purpose of commercial advantage or private financial gain, the court, in its discretion, may increase the award of damages, either actual or statutory, by an amount not more than $50,000. 47 U.S.C. § 553(c)(3)(B). Section 553 also provides for an award of costs and reasonable attorney's fees. 47 U.S.C. § 553(c)(2)(C).

The Federal Communications Act, 47 U.S.C. § 605(a), prohibits the unauthorized interception of radio communications. That section has been read as outlawing satellite signal piracy. Cablevision of Michigan, Inc. v. Sports Palace, Inc., No. 93-1737, 1994 WL 245584, at *3 (6th Cir. June 6, 1994). Section 605 permits the aggrieved party to recover actual damages or statutory damages of not less than $1,000 or more than $10,000 for each violation. 47 U.S.C. § 605(e)(3) (C)(i)(I) and (II). Section 605 is likewise a strict liability statute. See Easterling, 2009 WL 1767579 at *4. Similar to § 553, where the court finds that the violation was committed willfully and for purpose of commercial advantage or private financial gain, the court, in its discretion, may increase the award of actual or statutory damages by an amount not to exceed $100,000. 47 U.S.C. § 605(e)(3)(C)(ii). Section 605 also permits an award of costs and reasonable attorney's fees. 47 U.S.C. § 605(e)(3)(B)(iii). Courts have found that § 605 applies to cases where the end-user offender obtained a proprietary broadcast by way of a satellite (rather than cable) television programming system. Section 553, by comparison, was designed to provide a remedial scheme for unauthorized reception of cable communications.

Since Defendants' default is deemed an admission of the well-pleaded allegations in Plaintiff's complaint, Defendants have admitted misappropriating Plaintiff's licensed exhibition of the Program. However, Plaintiff's complaint fails to allege facts sufficient to impose individual liability against Deborah Fisher and Jo Regina Lamar. Individual liability under the statutes requires that the individual authorize the underlying violation. "Put differently, the complaint must establish that the individual had a `right and ability to supervise' the violations, as well as an obvious and direct financial interest in the misconduct." J&J Sports Productions, Inc. v. 291 Bar & Lounge, LLC, 648 F.Supp.2d 468, 473 (E.D.N.Y. 2009).

Although J & J alleges that Fisher and Lamar are "the principals, partners, alter ego, officers, directors, shareholders, employees, agents, and/or other representatives of MIXX ULTRA LOUNGE, . . . and who have direct control over the actions and omissions of said Establishment" (Compl. ¶ 7), this general statement of ownership is insufficient to satisfy the threshold for a finding of individual liability under the statute. J & J does not allege that either Fisher or Lamar were present the night of the violation, nor does it allege that either or both of them authorized or supervised the violation. Courts which have addressed this issue of a lack of basic pleading have sided against individual liability. Circuito Cerrado, Inc. v. Pizzeria Y Pupuseria Santa Rosita, 804 F.Supp.2d 108, 113 (E.D.N.Y. 2011); 291 Bar & Lounge, 648 F. Supp. 2d at 473 (finding that "plaintiff has made no allegation that [the individual defendant] was present for the violation, that he authorized or controlled it, or that he reaped commercial profit from it.") Because J & J's only allegation against Fisher and Lamar is one of ownership of the violating entity, the Court will not impose individual liability against them.

It is well established that courts will not award damages under both § 605 and § 553 in cases based on facts like these. See Joe Hand Promotions, Inc. v. RPM Management Co. LLC, 2011 WL 5389425, at *2 (S.D. Ohio Nov. 7, 2011); Joe Hand Promotions, Inc. v. Streshly 655 F.Supp.2d 1136, 1137 (S.D. Cal. 2009). In this case, the Court finds that actual damages are too difficult to ascertain and that statutory damages under § 553 are appropriate. The amount of damages to be awarded pursuant to § 553 rests in the sound discretion of the court. Here, the Court finds that damages in the amount of $250, the statutory minimum, is appropriate.

Courts have the discretion to increase an award beyond the statutory range if it finds the violation "was committed willfully and for purposes of direct or indirect commercial advantage or private gain" or reduce the award of damages "[i]n any case where the court finds that the violator was not aware and had no reason to believe that his acts constituted a violation" of the law. 47 U.S.C. § 553(c)(3)(B) and (C). J & J contends that Defendants' violation was willfull and for commercial or financial gain. However, courts have found that this requirement is not satisfied where there was no evidence of a cover charge, no evidence that the program was advertised or that food or drink prices were increased, and where there were far fewer customers than the venue's capacity. See, e.g., J & J Sports Production, Inc. v. Lukes, No. 1:10-CV-535, 2010 WL 4105663, at *3 (N.D. Ohio Oct. 18, 2010) (noting that at the time of broadcast, the bar's capacity was sixty but only twenty-two patrons were present, there was no cover charge, and the bar had one television); Joe Hand Promotions, Inc. v. Easterling, No. 4:08-CV-1259, 2009 WL 1767579, at *6 (N.D. Ohio June 22, 2009) (evidence of willful exhibition for financial gain insufficient where there were at most seventy-two patrons present in a bar which held up to 120 customers, there was no cover charge, and there was no evidence that the event was advertised or that food prices were increased). In this case, the allegations of the complaint are insufficient to support a finding that Mixx Ultra Lounge committed the violation willfully and for purposes of direct or indirect commercial advantage: there is no allegation that the Lounge charged a cover, raised food or drink prices, or advertised the event and there were no more than twenty-five people in the club (which was estimated by Plaintiff's investigator to accommodate 400 patrons). Accordingly, the Court will not award enhanced damages pursuant to 47 U.S.C. § 553(c)(3)(B).

Finally, the Court will award costs of $350 plus attorney's fees in the amount of $1,550, which accounts for counsel's time as of the date of the filing of the motion for default judgment plus an additional hour for his time spent at the hearing on the motion.

IV. CONCLUSION

For the foregoing reasons, the Court GRANTS Plaintiff's Motion for Default Judgment.

DEFAULT JUDGMENT is HEREBY ENTERED in favor of Plaintiff on Count II of its Complaint, violation of 47 U.S.C. § 553, against Defendant Mixx Ultra Lounge LLC. Plaintiff is AWARDED statutory damages in the amount of $250 pursuant to 47 U.S.C. § 553(c)(3)(A)(ii) plus attorney's fees of $1,550 and costs of $350 pursuant to 47 U.S.C. § 553(c)(2)(C). Plaintiff additionally is AWARDED post-judgment interest at the applicable federal statutory rate from the date of this judgment.

IT IS SO ORDERED.