Case 3:11-cv-00006-RGJ-KLH Document 34 Filed 03/22/12 Page 1 of 12 PageID #: 294
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`UNITED STATES DISTRICT COURT
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`WESTERN DISTRICT OF LOUISIANA
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`MONROE DIVISION
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`ZUFFA, LLC, d/b/a THE ULTIMATE
`FIGHTING CHAMPIONSHIP (UFC)
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`CIVIL ACTION NO. 11-0006
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`VERSUS
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`WILLIAM JOSEPH TRAPPEY, III,
`ET AL.
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`JUDGE ROBERT G. JAMES
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`MAG. JUDGE KAREN L. HAYES
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`RULING
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`Plaintiff Zuffa, LLC d/b/a the Ultimate Fighting Championship (“Zuffa”) brought this
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`action against Defendants William Joseph Trappey, III (“Trappey”) and Bart James Babineaux
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`(“Babineaux”) individually, and as officers, directors, shareholders and/or principals of Monago
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`Investments, LLC, d/b/a Monagos Field House a/k/a Fieldhouse Bar & Grill; and against Monago
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`Investments, LLC, d/b/a Monagos Field House a/k/a Fieldhouse Bar & Grill (“Monago”).
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`Plaintiff alleges that Defendants are liable under the Federal Communications Act (“FCA”) for
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`the unauthorized receipt and exhibition of a pay-per-view program; and under the United States
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`Copyright Act for copyright infringement. Pending before the Court is Plaintiff’s Motion for
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`Summary Judgment [Doc. No. 23] on its FCA claim. For the following reasons, Plaintiff’s
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`Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART.
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`I.
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`FACTS AND PROCEDURAL HISTORY
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`Zuffa is the registered copyright holder of the June 12, 2010 pay-per-view program
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`entitled UFC # 115 (the “Broadcast”). [Doc. No. 25, Ex. A]. Commercial establishments had to
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`pay Zuffa a licensing fee to air the Broadcast.
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`UFC stands for Ultimate Fighting Championship.
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`Trappey and Babineaux are principals of Monago and operate the Fieldhouse. Trappey
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`purchased the Broadcast at his home through a residential cable box from Comcast, the local
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`cable provider. Trappey then brought the residential cable box to the Fieldhouse and used it to
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`replace the commercial cable box there. [Affid. of Trappey, Doc. No. 30-1; Affid. of Babineaux,
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`Doc. No. 30-2]. Consequently, on June 12, 2010, the Fieldhouse aired the Broadcast after it was
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`purchased under a residential account. [Id.; Defs.’ Stmt. of Mat. Facts, Doc. No. 30-3, ¶¶ 10, 17-
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`18]. 2
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`Zuffa had hired auditors to visit establishments that had not paid commercial licensing
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`fees for the Broadcast to determine if it was being unlawfully aired. [Affid. of Epstein, Doc. No.
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`25, ¶¶ 5-6]. On June 12, 2010, one of the auditors visited the Fieldhouse where he observed the
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`Broadcast playing before an audience of approximately fifty-five to sixty-two patrons. [Doc. No.
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`25, Ex. C]. The auditor recorded a video showing the Broadcast playing on a large projection
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`screen and posters advertising the Broadcast posted on the wall. [Id., Ex. D]. Neither Trappey,
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`Babineaux, nor the Fieldhouse had authorization from Zuffa to air the Broadcast. [Id., ¶¶ 3, 6, 7].
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`On January 4, 2011, Zuffa filed a Complaint against Defendants Trappey, Babineaux and
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`Monago (collectively, “Defendants”) alleging violations of the FCA under 47 U.S.C. § 605
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`(Count I) and 47 U.S.C. § 553 (Count II), as well as copyright infringement under 17 U.S.C. §
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`501 (Count III). [Doc. No. 1]. In its Complaint, Zuffa seeks statutory penalties, attorney’s fees,
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`interest, and costs. Defendants filed their Answer on May 23, 2011. [Doc. No. 9].
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`In its Motion for Summary Judgment, Zuffa points out that the local cable provider,
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`Comcast, was only able to distribute the Broadcast to residential customers because Zuffa and its
`promoter had the exclusive rights to distribute the Broadcast to commercial establishments.
`[Doc. No. 23-2, p. 11].
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`On January 6, 2012, Zuffa moved for summary judgment on the grounds that Defendants
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`Trappey and Babineaux are personally liable under 47 U.S.C. § 553 for the Fieldhouse’s
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`unauthorized exhibition of the Broadcast. On January 24, 2012, Defendants filed an Opposition.
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`[Doc. No. 30]. Zuffa filed a Reply [Doc. No. 31] on February 7, 2012.
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`II.
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`LAW AND ANALYSIS
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`A.
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`Summary Judgment Standard
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`Summary judgment “shall [be] grant[ed] ... if the movant shows that there is no genuine
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`dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED.
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`R. CIV. P. 56(a). The moving party bears the initial burden of informing the court of the basis for
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`its motion by identifying portions of the record which highlight the absence of genuine issues of
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`material fact. Topalian v. Ehrmann, 954 F.2d 1125, 1132 (5th Cir.1992). A fact is “material” if
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`proof of its existence or nonexistence would affect the outcome of the lawsuit under applicable
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`law in the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a
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`material fact is “genuine” if the evidence is such that a reasonable fact finder could render a
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`verdict for the nonmoving party. Id.
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`If the moving party can meet the initial burden, the burden then shifts to the nonmoving
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`party to establish the existence of a genuine issue of material fact for trial. Norman v. Apache
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`Corp., 19 F.3d 1017, 1023 (5th Cir.1994). The nonmoving party must show more than “some
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`metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
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`Corp., 475 U.S. 574, 586 (1986). In evaluating the evidence tendered by the parties, the Court
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`must accept the evidence of the nonmovant as credible and draw all justifiable inferences in its
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`favor. Anderson, 477 U.S. at 255.
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`B.
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`Defendants’ Challenges to Zuffa’s Pleadings
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`In their Opposition, Defendants challenge Zuffa’s pleadings by questioning Zuffa’s rights
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`to the Broadcast and pointing out defects in two affidavits accompanying its Motion for
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`Summary Judgment. [Doc. No. 30, pp. 3-4].
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`First, Defendants challenge Zuffa’s right to bring an action under 47 U.S.C. § 553 of the
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`FCA because Zuffa did not copyright the Broadcast until two months after it aired. Defendants
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`admit that Zuffa is a copyright holder of the Broadcast, but contend that Zuffa is not an aggrieved
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`person under the FCA because the Broadcast aired before Zuffa registered its copyright with the
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`United States Copyright Office.
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`The FCA prohibits a person from intercepting or receiving a communications service
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`unless authorized by the cable provider. 47 U.S.C. § 553(a)(1). “Any person aggrieved by any
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`violation of subsection (a)(1) may bring a civil action in a United States district court . . . .” 47
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`U.S.C. § 553(c)(1) (emphasis added). The FCA does not define “any person aggrieved.”
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`The copyright owner has the exclusive rights to distribute copies of the copyrighted work.
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`17 U.S.C. § 106(3). The Copyright Act provides that copyright registration is permissive and not
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`a precondition for copyright protection. 17 U.S.C. § 408(a). Copyright registration is a
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`prerequisite for a party to institute a civil action for infringement. 17 U.S.C. § 411. If a
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`certificate of registration is made before or within five years after the first publication of the
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`work, such certificate “shall constitute prima facie evidence of the validity of the copyright and
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`the facts stated in the certificate.” 17 U.S.C. § 410(c). Accordingly, the Court finds that Zuffa is
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`a “person aggrieved” within the meaning of the FCA because Zuffa was a copyright holder and
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`its registration of that copyright comports with the requirements of the Copyright Act.
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`Second, Defendants attack the unsworn affidavit of Zuffa’s attorney, Julie Cohen
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`Lonstein (“Lonstein”) [Doc. No. 24], pointing out that, because it is unsworn, the affidavit and
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`its accompanying exhibits are defective summary judgment evidence. An unsworn affidavit is
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`incompetent to raise a fact issue at summary judgment. Nissho-Iwai Am. Corp. v. Kline, 845
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`F.2d 1300, 1306 (5th Cir. 1988). “A statutory exception to this rule exists under 28 U.S.C. §
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`1746, which permits unsworn declarations to substitute for an affiant’s oath if the statement
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`contained therein is made ‘under penalty of perjury’ and verified as ‘true and correct.’” Id.
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`Lonstein’s unsworn affidavit does not conform to the statutory exception. Thus, the affidavit, as
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`it stands, would allow Lonstein “to circumvent the penalties for perjury in signing onto
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`intentional falsehoods.” Id. Consequently, the Court finds that Lonstein’s affidavit and its
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`attached exhibits are incompetent summary judgment evidence, and the Court will not consider
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`them.
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`Finally, Defendants challenge the affidavit of Joe Hand, Jr. (“Hand”), president of the
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`promotion company for Zuffa’s programs. Defendants claim that Hand’s affidavit is also
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`defective because the document states that it was executed in Pennsylvania, yet the notary seal
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`states that the notary (Lonstein) is a Notary Public in New York. [Doc. No. 27]. An affidavit is
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`“[a] voluntary declaration of facts written down and sworn to by the declarant before an officer
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`authorized to administer oaths.” BLACK’S LAW DICTIONARY 66 (9th ed. 2009). Zuffa’s Reply
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`fails to address the notarial defect pointed out by Defendants. [Doc. No. 31]. Thus, the Court
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`finds that Hand’s affidavit and its attached exhibits are also incompetent summary judgment
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`The full text of the statutory exception’s declaration is, "I declare (or certify, verify, or
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`state) under penalty of perjury that the foregoing is true and correct. Executed on (date).
`(Signature)" 28 U.S.C. § 1746.
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`evidence because it is unclear whether Lonstein was authorized to administer an oath to Hand in
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`Pennsylvania. Therefore, the Court will not consider this evidence either.
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`C.
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`Liability under the FCA
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`Zuffa brought suit under §§ 553(c) and 605(e)(3) of the FCA. Each section provides a
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`private right of action to aggrieved parties whose proprietary broadcasts are intercepted by
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`unauthorized parties.
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`1.
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`Zuffa’s Pursuit of Dual Causes of Action Under 47 U.S.C. §§ 553 and
`605
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`Apparently recognizing that courts do not allow recovery under both §§ 553 and 605,
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`Zuffa moves for summary judgment under § 553 alone, which pertains to cable broadcasts. 4
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`[Doc. No. 23]. See J & J Sports Prods. v. Tellez, 11-cv-2823, 2011 U.S. Dist. LEXIS 146464, at
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`*2 n.1 (E.D.N.Y. Dec. 20, 2011) (“Where a litigant seeks damages under both of these sections
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`for a single incident . . . he or she may only recover under one.”) (citing Int’l Cablevision, Inc. v.
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`Sykes, 997 F.2d 998, 1009 (2d Cir. 1993)); Setanta Sports N. Am. Ltd. v. Giannakopoulos, No.
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`H-07-2318, 2008 U.S. Dist. LEXIS 50716, at *3 (S.D. Tex. June 25, 2008) (recognizing that
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`recovery under both §§ 553 and 605 is not permitted). Because Zuffa does not move for
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`summary judgment under § 605, which pertains to satellite broadcasts, the Court gives Zuffa
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`“No person shall intercept or receive or assist in intercepting or receiving any
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`communications service offered over a cable system, unless specifically authorized to do so by a
`cable operator or as may otherwise be specifically authorized by law . . . .” 47 U.S.C. § 553(a)(1)
`(emphasis added).
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`“No person not being entitled thereto shall receive or assist in receiving any interstate or
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`foreign communication by radio and use such communication (or any information therein
`contained) for his own benefit or for the benefit of another not entitled thereto.” 47 U.S.C. §
`605(a) (emphasis added).
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`notice of its intent to sua sponte dismiss its claim under 47 U.S.C. § 605. If Zuffa opposes the
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`Court’s dismissal of this claim it shall file a memorandum in opposition by March 30, 2012.
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`2.
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`Defendants’ Liability Under § 553
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`Zuffa asserts that Defendants are liable as a matter of law under § 553. [Doc. No. 23-2,
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`pp. 9-11]. In order to establish liability for a violation of § 553, Zuffa must show that, “(a) the
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`event was shown in Defendants’ Establishment and (b) that such exhibition . . . was not
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`authorized.” J&J Sports Prods., Inc. v. Q Café, 3:10-cv-02006-L, 2012 U.S. Dist. LEXIS 8700,
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`at *8–9 (N.D. Tex. Jan. 25, 2012) (citing King Vision Pay-Per-View, Ltd. v. Lake Alice Bar, 168
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`F.3d 347, 349 (9th Cir. 1999)).
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`The affidavit of Zuffa’s auditor, James Gill (“Gill”), establishes that the Broadcast aired
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`at the Fieldhouse on June 12, 2010. Gill’s video supports his affidavit. [Doc. No. 25, Ex. C, D].
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`The affidavit of Ike Epstein (“Epstein”), Zuffa’s executive vice president and general counsel,
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`further establishes that the Broadcast was legally available to commercial establishments only
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`through an agreement with Zuffa or its promoter and that Defendants did not enter into such an
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`agreement with either party. [Doc. No. 25, ¶¶ 3-9]. Zuffa’s records listing the commercial
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`licenses issued for the Broadcast show that no license was issued to Defendants. [Id., Ex. B].
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`Defendants, through their Statements of Material Facts and affidavits, admit that the
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`Broadcast aired at the Fieldhouse and that it was purchased through a residential account, rather
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`than a commercial account. [Doc. Nos. 30-1; 30-2; 30-3]. In their Opposition, Defendants focus
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`on the absence of intent in the actions of Trappey and Babineaux. [Doc. No. 30, pp. 4-5].
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`However, a party’s intent is relevant to determining damages under § 553, not liability. See Int’l
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`Cablevision, 997 F.2d at 1004 (holding that 47 U.S.C. § 553 does not provide a good faith defense
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`against liability). The Court finds that Defendants are liable under 47 U.S.C. § 553 because they
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`aired the Broadcast at the Fieldhouse on June 12, 2010, without authorization. Accordingly,
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`Zuffa’s Motion for Summary Judgment is GRANTED on this claim.
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`3.
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`Vicarious Liability of Trappey and Babineaux
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`Next, Zuffa seeks a finding that Trappey and Babineaux are vicariously liable for the
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`Fieldhouse’s exhibition of the Broadcast. In order to establish vicarious liability, Zuffa must
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`show that Trappey and Babineaux “(a) had a right and ability to supervise the infringing activities,
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`and (b) an obvious and direct financial interest in the exploitation.” Q Café, 2012 U.S. Dist.
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`LEXIS 8700, at *11 (citing Softel, Inc. v. Dragon Med. & Sci. Commc’ns, 118 F.3d 955, 971 (2d
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`Cir. 1997)) (citations omitted).
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`Trappey and Babineaux admit that they had close control over the internal operating
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`procedures of the Fieldhouse and that, on June 12, 2010, they had some supervisory capacity over
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`the events occurring at the Fieldhouse. [Defs.’ Ans. to Compl., Doc. No. 9, ¶¶ I, K]. They also
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`admit that they are “officers, directors, shareholders, and/or principals of [t]he Fieldhouse” and
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`that they held a financial interest in the Fieldhouse on June 12, 2010. [Id. at ¶ H; Doc. No. 23-1, ¶
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`14; Doc. No. 30-3, ¶ 14]. They deny, however, that they enjoyed a financial benefit from the
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`showing of the Broadcast, arguing instead that any financial benefit that accrued was for the
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`Zuffa directs the Court to case law applying the Copyright Act’s standard for vicarious
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`liability to the § 553 violations here. [Doc. No. 23-2, p. 12]. Although the FCA and the
`Copyright Act are distinct, the Fifth Circuit has found them analogous. See Prostar v. Massachi,
`239 F.3d 669, 677 (5th Cir. 2001) (“We conclude that the Copyright Act provides the appropriate
`federal-law analogue to [plaintiff’s] FCA claims . . . . The Copyright Act and the FCA both
`protect proprietary rights in the context of cable transmissions.”). Thus, the Court will apply the
`Copyright Act’s standard for vicarious liability for the purpose of determining vicarious liability
`for a violation of § 553.
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`Fieldhouse alone. [Doc. No. 9, ¶ J].
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` By admitting that they are “officers, directors, shareholders, and/or principals” of the
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`Fieldhouse, Trappey and Babineaux concede the requisite control and financial interest necessary
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`to establish their vicarious liability for the Fieldhouse’s showing of the Broadcast. See Setanta
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`Sports, 2008 U.S. Dist. LEXIS 50716, at *9 (citing J&J Sports Prods., Inc. v. Benson, No 06-
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`1119, 2007 U.S. Dist. LEXIS 21779, at *7 (S.D.N.Y. Mar. 27, 2007) (finding undisputed
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`allegation that individual defendants were sole proprietor and officer, director, shareholder, and/or
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`principal of defendant establishments sufficient to establish requisite control and financial
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`interest)); cf. Burdick v. Koerner, 988 F. Supp. 1206, 1210 (E.D. Wis. Jan. 5, 1998) (corporate
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`infringement does not result in liability to member of the board of directors if member’s duties
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`were merely administrative and there is no evidence that she exercised significant control over
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`operations or participated in decisions leading to infringement). The Court finds that Defendants
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`Trappey and Babineaux are vicariously liable under 47 U.S.C. § 553 for the Fieldhouse’s showing
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`of the Broadcast. Accordingly, Zuffa’s Motion for Summary Judgment is GRANTED on this
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`claim.
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`D.
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`Willfulness
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`Zuffa contends that the acts of displaying advertisements for the Broadcast and airing the
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`Broadcast on a residential cable box at the Fieldhouse are sufficient evidence for the court to find
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`that Trappey and Babineaux willfully violated § 553. [Doc. No. 23-2, pp. 11-12]. Defendants
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`maintain that Zuffa does not provide sufficient evidence to show that Trappey and Babineaux
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`were aware of separate pay-per-view rates for commercial and residential consumers. Defendants
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`also maintain that Trappey substituted the residential cable box for the Fieldhouse’s commercial
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`cable box because he believed that the Fieldhouse’s cable box was faulty. [Doc. No. 30, pp. 4-5;
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`Doc. No. 30-1, pp. 2-3].
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`Under § 553, an aggrieved person may recover statutory damages in the range of $250 to
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`$10,000. 47 U.S.C. § 553(c)(3)(A)(ii). If Defendants willfully violated § 553 for commercial
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`gain, the Court has discretion to increase damages by $50,000, or to decrease damages to as little
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`as $100 if Defendants’ violation was unwitting. 47 U.S.C. §§ 553(c)(3)(B)-(C).
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`“According to the Supreme Court, willfulness is defined as ‘disregard for the governing
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`statute and an indifference for its requirements.’” J&J Sports Prods. v. Garcia, No. H-08-1675
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`2009 WL 2567891, *4 (S.D. Tex. Aug. 14, 2009) (quoting Trans World Airlines, Inc. v. Thurston,
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`469 U.S. 111, 126-27 (1985)) (internal citations omitted). To determine willfulness for
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`commercial gain, some courts have looked for evidence of a cover charge, increased prices for
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`food and drinks, an increased number of patrons attending the establishment, and advertisements.
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`See J&J Sports Productions, Inc. v. Canedo, No. C 09-01488 PJH, 2009 WL 4572740, *10 (N.D.
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`Cal. Dec. 1, 2009) (citations omitted).
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`Here, Zuffa’s auditor, Gill, avers that the Fieldhouse did not collect a cover charge. [Doc.
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`No. 25, pp. 17-19]. Zuffa’s pleadings do not address increased prices for food and drinks nor
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`whether the number of patrons that Gill observed deviated from regular attendance figures.
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`Trappey, in his affidavit, acknowledges that posters advertising the Broadcast were present inside
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`the Fieldhouse, but avers that “they were put up by a beer distributor to promote their alcohol
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`products and were neither requested nor used by [t]he Fieldhouse to promote the [Broadcast].”
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`[Doc. No. 30-1, p. 3]. Zuffa does not address Trappey’s explanation for the presence of the
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`advertisements in its Reply to Defendants’ Opposition to Plaintiff’s Motion for Summary
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`Judgment. [Doc. No. 31]. The Court does not find the advertisements alone to be sufficient
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`summary judgment evidence to determine whether Trappey’s and Babineaux’s actions constituted
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`willful violations of § 553.
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`Therefore, the Court finds that there is a genuine issue of material fact as to whether
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`Defendants’ violation of § 553 was willful and for commercial gain. Although it may be possible
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`to construe willfulness from the pleadings, the pleadings do not indicate that Zuffa has taken
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`depositions or made an effort to develop the factual issues of the case. Because Defendants have
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`challenged the allegation that their conduct was willful and Zuffa has not taken steps to reach
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`Defendants’ state of mind, there is a genuine fact issue as to intent. See Garden City Boxing Club,
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`Inc. v. Stone, 285 F. Supp. 2d 447, 453 (D. Del. 2003) (finding that, where no depositions had
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`been taken, the plaintiff's motion for summary judgment seeking relief for willful violations of §§
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`553 and 605 was prematurely filed because it was “based on mere allegations of intentional
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`conduct, absent any evidence of defendants’ state of mind.”). Accordingly, Zuffa’s Motion for
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`Summary Judgment is DENIED as to its claim that Trappey’s and Babineaux’s violation of 47
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`U.S.C. § 553 was willful and for commercial gain. This claim is reserved for trial.
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`E.
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`Statutory Damages
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`Finally, in its Motion for Summary Judgment, Zuffa requests permission to submit
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`authorities to the Court to suggest an appropriate amount for statutory damages for a violation of
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`47 U.S.C. § 553. Zuffa’s request to submit the brief, limited to a non-willful violation of 47
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`U.S.C. § 553, is GRANTED.
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`F.
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`Zuffa’s Copyright Claim
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`In Count III of the Complaint [Doc. No. 1, ¶¶ 32–41], Zuffa alleges that Defendants
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`violated the Copyright Act, 17 U.S.C. § 501, and requests statutory damages pursuant to 17
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`U.S.C. §§ 504-505. Because Zuffa’s Motion for Summary Judgment does not address the alleged
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`Copyright Act violation, the Court ORDERS Zuffa to inform the Court, in writing, of its intent to
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`either pursue the copyright claim or to move for its dismissal.
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`III.
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`CONCLUSION
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`For the foregoing reasons, Zuffa’s Motion for Summary Judgment [Doc. No. 23] is
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`GRANTED IN PART and DENIED IN PART. The Motion is GRANTED as to Zuffa’s claims
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`that Defendants are liable for a violation of 47 U.S.C. § 553 and that Defendants Trappey and
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`Babineaux are vicariously liable for the same. The Motion is DENIED as to Zuffa’s claim that
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`Trappey’s and Babineaux’s violation of 47 U.S.C. § 553 was willful and for commercial gain.
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`This claim is reserved for trial.
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`Additionally, by March 30, 2012, the Court ORDERS Zuffa to submit a brief to the Court
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`addressing (1) damages for a non-willful violation of 47 U.S.C. § 553; and (2) its intent to pursue
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`or seek dismissal of the copyright claim alleged in Count III of its Complaint.
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`Finally, the Court gives Zuffa notice of its intent to sua sponte dismiss Zuffa’s claim
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`against Defendants under 47 U.S.C. § 605. If Zuffa opposes the Court’s intended dismissal of this
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`claim, it shall file a memorandum in opposition by March 30, 2012.
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`MONROE, LOUISIANA, this 22 day of March, 2012.
`nd
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