Case 1:17-cv-00564-TSE-TCB Document 25 Filed 10/04/17 Page 1 of 24 PageID# 149
`
`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`Alexandria Division
`
`ZUFFA, LLC d/b/a ULTIMATE
`FIGHTING CHAMPIONSHIP,
`Plaintiff,
`
`V.
`
`Civil No.
`
`l:17-cv-564
`
`KHURRAM MALIK, et al..
`Defendants.
`
`REPORT AND RECOMMENDATION
`
`THIS MATTER comes before the Court on Plaintiff's Motion
`
`for Default Judgment {Dkt. 16). After a representative for
`
`Defendants failed to respond to Plaintiff s motion or to appear
`
`at the hearing on September 15, 2017,
`
`the undersigned took
`
`Plaintiffs motion under advisement.^
`
`I.
`
`INTRODUCTION
`
`A. Background
`
`Plaintiff Zuffa, LLC,
`
`('"Plaintiff" or ''Zuffa")
`
`is a Nevada
`
`limited liability company and is the owner of the UFC 205
`
`Broadcast
`
`(''UFC Broadcast")
`
`that aired on November 12, 2016.
`
`(Compl.
`
`SISI 5-6.) Defendants are Khurram Malik ("Malik") and
`
`Fuzion Cafe LLC ("Fuzion")
`
`(collectively "Defendants"). Fuzion
`
`("Compl."),
`(Dkt. 1)
`includes the Complaint
`1. The record before the Court
`Plaintiff's Motion for Default Judgment
`(Dkt. 16)
`("Mot. Default J."),
`the
`Affidavit of Wm. Hunter Campbell
`(Dkt. 16-1)
`("Campbell Aff."),
`the Affidavit
`of Joe Hand, Jr.
`(Dkt. 16-2)
`("Hand Aff."),
`the Affidavit of Christopher J.
`Hufnagel
`(Dkt. 16-3)
`("Hufnagel Aff."), Plaintiff's Memorandum of Law in
`Support of Default Judgment
`(Dkt. 17)
`("Mem. Supp."), and all attachments and
`exhibits submitted with those filings.
`
`

`

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`is a Virginia limited liability company doing business at 6400A
`
`Commerce Street,
`
`in Springfield, Virginia.
`
`(gg; 1% 8-11.) Malik
`
`is an officer, director, shareholder, principal, manager, or
`
`member of Fuzion, receives financial benefit from Fuzion’s
`
`operations, and has close control over the internal operating
`
`and employment practices of Fuzion.
`
`(gg; ii 8, 12—13.)
`
`On May 17, 2017, Plaintiff filed this action against
`
`Defendants under the Communications Act of 1934 (“Communications
`
`Act”), as amended, 47 U.S.C. §§ 151 gt segL, and the Copyright
`
`Act of 1976 (“Copyright Act”), as amended, 17 U.S.C. §§ 101 et
`
`
`seq.
`
`(Id.
`
`fl 1.) Plaintiff alleges that Defendants unlawfully
`
`intercepted and unlawfully exhibited the UFC Broadcast,
`
`therefore Violating the Communications Act §§ 633 and 705, 47
`
`U.S.C. §§ 553 and 605.
`
`($9; flfl 18-28, 32—37; Mem. Supp. at 1.)
`
`Plaintiff also alleges that Defendants infringed its copyright
`
`by exhibiting the UFC Broadcast for commercial gain,
`
`therefore
`
`violating the Copyright Act § 501, 17 U.S.C. § 501.
`
`(Compl.
`
`flfl
`
`38—44; Mem. Supp. at 1.) Plaintiff now seeks statutory damages,
`
`enhanced damages, and attorneys'
`
`fees and costs.
`
`(Compl. $1 30—
`
`31, 37, 47; Mot. Default J. at 1—2; Campbell Aff.
`
`fl 2; Mem.
`
`Supp. at 12-24.)
`
`B. Jurisdiction and Vénue
`
`Before the Court can render default judgment, it must have
`
`both subject matter and personal jurisdiction over the
`
`

`

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`defaulting party.
`
`The Court has subject matter jurisdiction over this action,
`
`pursuant to 28 U.S.C. §§ 1331 and 1338(a), because this dispute
`
`arises under the federal legislation of the Communications Act,
`
`as amended, 47 U.S.C. §§ 151 et segL, and the Copyright Act, as
`
`amended, 17 U.S.C. §§ 101 gt seg;
`
`(Compl.
`
`fl 1.)
`
`The Court has personal jurisdiction over Defendants in this
`
`case. Fuzion maintains sufficient contacts for personal
`
`jurisdiction as a Virginia limited liability company with its
`
`principal place of business in Virginia, and by being involved
`
`in activities giving rise to this action which took place in
`
`Virginia.
`
`(lg; $1 4, 9.) Malik maintains sufficient contacts for
`
`personal jurisdiction as a resident of Virginia and by managing
`
`Fuzion, which physically operates in Virginia.
`
`(gg; $1 4, 7—10.)
`
`Pursuant to 28 U.S.C. §§ 1391(b) and 1400(a), venue is
`
`proper in this judicial district because Defendants reside or
`
`may be found in this District.
`
`(lg; 1% 2, 9, 12, 14.)
`
`C. Service of Process
`
`As a general rule, a defendant must be served with the
`
`summons and complaint filed with the court for service to be
`
`proper. Federal Rule of Civil Procedure 4(e) provides specific
`
`ways to properly serve an individual within a judicial district.
`
`Both Defendants were properly served in this case.
`
`On June 14, 2017, Plaintiff’s private process server
`
`3
`
`

`

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`personally affixed a copy of the summons, complaint, civil cover
`
`sheet, corporate disclosure statement, and court’s notice and
`
`report to the front door of Malik’s usual place of abode located
`
`at 2264 York Drive, Apt. 411,
`
`in Woodbridge, Virginia.
`
`(Proof
`
`Serv.
`
`(Dkt. 8).) This process was in accordance with Virginia
`
`Rule of Civil Procedure § 8.01-296(2), and therefore service was
`
`proper under Federal Rule of Civil Procedure 4(e)(1) with
`
`regards to Malik.
`
`On June 19, 2017, Plaintiff's private process server
`
`personally served Fuzion’s registered agent Afsan Khan at 6400
`
`Commerce Street, Unit A,
`
`in Springfield, Virginia, with a copy
`
`of the Summons and Amended Complaint and informed him of the
`
`contents therein.
`
`(Proof Serv.
`
`(Dkt. 9).) Therefore, service was
`
`proper under Federal Rule of Civil Procedure 4(e)(2)(C) with
`
`regards to Fuzion.
`
`D. Grounds for Default Judgment
`
`Federal Rule of Civil Procedure 55 provides for the entry
`
`of default judgment when “a party against whom a judgment for
`
`affirmative relief is sought has failed to plead or otherwise
`
`defend." Defendants have not appeared, answered, or otherwise
`
`filed any responsive pleadings in this case. On August 21, 2017,
`
`U.S. District Judge T. 8. Ellis ordered Plaintiff to seek an
`
`entry of default.
`
`(Order
`
`(Dkt. 12).) On August 28, 2017,
`
`the
`
`Clerk of the Court entered default pursuant to Plaintiff’s
`
`

`

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`
`Request for Entry of Default
`
`(Dkt. 13) and Federal Rule of Civil
`
`Procedure 55(a).
`
`(Entry Default
`
`(Dkt. 15).) On September 1,
`
`2017, Plaintiff filed its Motion for Default Judgment
`
`(Dkt. 16).
`
`II . FINDINGS
`
`Based on the Complaint
`
`(Dkt. l),
`
`the Motion for Default
`
`Judgment
`
`(Dkt. 16),
`
`the Affidavit of Wm. Hunter Campbell
`
`(Dkt.
`
`16-1),
`
`the Affidavit of Joe Hand, Jr.,
`
`(Dkt. 16-2),
`
`the
`
`Affidavit of Christopher J. Hufnagel
`
`(Dkt. 16-3), and
`
`Plaintiff's Memorandum of Law in Support of Motion for Default
`
`Judgment
`
`(Dkt. 17),
`
`the undersigned Magistrate Judge makes the
`
`following findings.
`
`Plaintiff Zuffa is a Nevada limited liability company with
`
`its principal place of business located at 2960 West Sahara
`
`Avenue,
`
`in Las Vegas, Nevada.
`
`(Compl.
`
`fl 5.) Plaintiff is the
`
`owner of the copyright to the UFC Broadcast, which was scheduled
`
`for airing via closed circuit television and via encrypted
`
`satellite signal on November 12, 2016.
`
`(lg; 11 6, 19; Campbell
`
`Aff.
`
`fl 3.) Plaintiff allowed various commercial establishments
`
`in Virginia to lawfully exhibit the UFC Broadcast by providing
`
`such establishments a license in exchange for a fee.
`
`(Compl.
`
`fl
`
`21; Campbell Aff.
`
`flfi 3-4.) Either Plaintiff or its exclusive
`
`commercial distributer, Joe Hand Promotions, Inc., would issue
`
`the licenses.
`
`(Compl. 1 21; Campbell Aff.
`
`fl 4; Hand Aff.
`
`fi 3.)
`
`Plaintiff and its distributor maintained a list of
`
`

`

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`establishments that it had authorized to exhibit the UFC
`
`Broadcast.
`
`(Campbell Aff.
`
`fl 6; Hand Aff.
`
`fl 4, Ex. A.) Non-
`
`commercial residential or private viewers were able to
`
`individually purchase pay-per—view viewing options through
`
`Plaintiff or its authorized online platforms.
`
`(Compl. l 22.) The
`
`individual purchases contained language stating that the
`
`“unauthorized reproduction or distribution of the copyrighted
`
`work is illegal.” (lg; fl 23.) The individual purchases were
`
`greatly discounted from the prices for commercial exhibition
`
`licenses.
`
`(lg; fl 22.)
`
`Various ways exist for an establishment to exhibit a
`
`broadcast, such as the UFC Broadcast, without receiving a
`
`license.
`
`(lg; i 26; Campbell Aff. l 11.) An establishment may
`
`intentionally misrepresent itself as a residential property to
`
`purchase a pay-per-view version of a broadcast at a residential
`
`price.
`
`(Campbell Aff.
`
`fi ll(a).) An establishment may order a
`
`broadcast for its residence and then move its residential
`
`receiver to the commercial location.
`
`(id; 1 11(b).) An
`
`establishment may employ technologies to transfer a broadcast
`
`from personal cable, broadband, satellite and similar systems
`
`onto computers, and the computers can then exhibit the broadcast
`
`at the commercial location.
`
`(gg; fl ll(c).) An establishment may
`
`also stream or share a broadcast via broadband.
`
`(lg; fl ll(d).)
`
`Defendant Fuzion is a Virginia limited liability company,
`
`

`

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`and Defendant Malik is an officer, director, shareholder,
`
`principal, manager, or member of Fuzion,
`
`receives financial
`
`benefit from Fuzion’s operations, and has close control over the
`
`internal operating and employment practices of Fuzion.
`
`(Compl.
`
`flfl 8-13.) Fuzion maintains a physical establishment at 6400A
`
`Commerce Street,
`
`in Springfield, Virginia.
`
`(lg; 11 8—11.) The
`
`establishment has an estimated capacity of 51—100 people.
`
`(gg; 1
`
`14; Campbell Aff.
`
`fl 8, Ex. A.) A license to exhibit the UFC
`
`Broadcast at Fuzion would have cost $2,250.00.
`
`(Hand Aff.
`
`fl 6.)
`
`Neither Fuzion nor Malik had paid for or received a commercial
`
`license from Plaintiff or its distributor.
`
`(Campbell Aff. 11 7,
`
`9; Hand Aff.
`
`fl 5.) On November 9, 2016, prior to the airing of
`
`the UFC Broadcast, Fuzion’s Facebook.com page advertised that it
`
`would be showing the UFC Broadcast at its establishment.
`
`(Campbell Aff.
`
`fl 10, Ex. D.)
`
`On November 12, 2016,
`
`the UFC Broadcast originated via
`
`satellite uplink, was re-transmitted to cable systems, and
`
`reached satellite companies via satellite signal,
`
`thus allowing
`
`authorized viewers to receive the UFC Broadcast.
`
`(Compl. 1 20.)
`
`Plaintiff retained independent auditors to canvas and identify
`
`establishments that unlawfully exhibited the UFC Broadcast on
`
`the night of November 12, 2016.
`
`(Campbell Aff.
`
`fl 5.) Plaintiff
`
`provided the auditors with the list of approved establishments
`
`that had properly received licenses to exhibit the UFC
`
`

`

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`Broadcast.
`
`(Id; fl 6.) Because it did not receive a license,
`
`Fuzion was not on the list.
`
`(Id; 1 7; Hand Aff. I 5.) One
`
`auditor visited Fuzion’s establishment at 6400A Commerce Street,
`
`in Springfield, Virginia, at approximately 10:20 p.m.
`
`(Campbell
`
`Aff.
`
`fl 8, Ex. A.) The auditor did not pay a cover charge to
`
`enter.
`
`(Id; Ex. A.) Once inside,
`
`the auditor observed one
`
`projector screen exhibiting the UFC Broadcast.
`
`(Id; 1 8, Exs. A,
`
`C.) The auditor took a picture of the outside of Fuzion’s
`
`establishment and recorded a video of the exhibition of the UFC
`
`Broadcast inside the establishment.
`
`(Id; fl 8; Exs. B—C.)
`
`III. EVALUATION OF PLAINTIFF’S COMPLAINT
`
`Where a defendant has defaulted,
`
`the facts set forth in the
`
`plaintiff’s complaint are deemed admitted. Before entering
`
`default judgment, however,
`
`the Court must evaluate a plaintiff’s
`
`complaint to ensure that the complaint properly states a claim.
`
`GlobalSantaFe Corp. v. Globalsantafe.com, 250 F. Supp. 2d 610,
`
`612 n.3 (E.D. Va. 2003). As such, it is appropriate to evaluate
`
`Plaintiff’s claims against the standards of Federal Rule of
`
`Civil Procedure 12(b)(6). First,
`
`the Court will evaluate
`
`Plaintiff’s claims under the Communications Act. Second,
`
`the
`
`Court will evaluate Plaintiff’s claim under the Copyright Act.
`
`A. Communications Act
`
`Plaintiff first alleges unauthorized reception of cable
`
`services by Fuzion in violation of 47 U.S.C. § 553 (“Section
`
`

`

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`553”).
`
`(Compl.
`
`flfl 1, 34—36.) Plaintiff is suing as a “person
`
`aggrieved” by a violation of Section 553, which provides that
`
`“[n]o person shall intercept or receive or assist in
`
`intercepting or receiving any 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)(l); see also id; § 553(c)(1).
`
`Plaintiff has sufficiently established that Fuzion intercepted
`
`and/or received the interstate cable communication of the UFC
`
`Broadcast.
`
`(Compl.
`
`1% 24—26; Mem. Supp. at 4.) Additionally,
`
`Fuzion did not pay Plaintiff or its distributor for a license to
`
`exhibit the UFC Broadcast, and therefore Fuzion was not
`
`authorized to receive the UFC Broadcast.
`
`(Compl.
`
`fi 24; Campbell
`
`Aff. ll 7, 9; Hand Aff.
`
`fl 5; Mem. Supp. at 3.) Furthermore,
`
`Plaintiff has established that the closed-circuit UFC Broadcast
`
`could not have been intercepted innocently or accidentally.
`
`(Compl. l 26; Campbell Aff. 1 11.) Therefore, Plaintiff has
`
`sufficiently stated a claim under Section 553 against Fuzion.
`
`Plaintiff also alleges unauthorized publication or use of
`
`radio and satellite communications by Fuzion in violation of 47
`
`U.S.C. § 605 (“Section 605”).
`
`(Compl. ll 1, 28—29; Mem. Supp. at
`
`12.) Plaintiff is suing as a “person aggrieved” by a violation
`
`of Section 605, which defines a “person aggrieved” to include
`
`“any person with proprietary rights in the intercepted
`
`

`

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`communication.” 47 U.S.C. § 605(d)(6). Plaintiff owned and
`
`maintained proprietary rights in the UFC Broadcast.
`
`(Compl. ii
`
`6, 19; Campbell Aff.
`
`fl 3; Mem. Supp. at 7.)
`
`Section 605 further provides for the following:
`
`No person not being authorized by the sender shall
`intercept any radio communication and divulge or
`publish the ... contents ... of such intercepted
`communication to any person. No person not being
`entitled thereto shall receive or assist in receiving
`
`any interstate ... communication by radio and use such
`communication ... for his own benefit or for the
`benefit of another not entitled thereto.
`
`47 U.S.C. § 605(a). Satellite communications qualify as radio
`
`communications under Section 605. See Joe Hand Promotions,
`
`Inc.
`
`v. Wing Spot Chicken & Waffles, Inc., 920 F. Supp. 2d 659, 666
`
`(E.D. Va. 2013). Here, Plaintiff has established that Fuzion
`
`intercepted, without authorization,
`
`the satellite communication
`
`of the UFC Broadcast.
`
`(Compl.
`
`flfl 24—26; Campbell Aff.
`
`fl 9; Mem.
`
`Supp. at 4.)
`
`Fuzion then divulged that communication to patrons
`
`at its establishment at 6400A Commerce Street,
`
`in Springfield,
`
`Virginia.
`
`(Compl.
`
`flfl 24—25; Campbell Aff.
`
`fl 9; Mem. Supp. at 4.)
`
`Therefore, Plaintiff has sufficiently stated a claim under
`
`Section 605 against Fuzion.
`
`Plaintiff also seeks to hold Malik individually liable for
`
`the unauthorized interception and publication of the UFC
`
`Broadcast under Sections 553 and 605.
`
`(Compl. if 30, 37; Mot.
`
`Default J. at l; Mem. Supp. at 23-24.) The undersigned has not
`
`10
`
`

`

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`found, nor has Plaintiff provided, any cases in this District
`
`that have held an owner individually liable for his or her
`
`business’s violations of Section 553 or 605. However, other
`
`district courts within the Fourth Circuit have considered such
`
`liability under a theory of vicarious liability. See, e.g., Joe
`
`Hand Promotions Inc. v. Nichols, No. 2:14—cv—28727, 2017 WL
`
`3216593, at *2 (S.D. W. Va. July 28, 2017); Joe Hand Promotions
`
`Inc. v. Harrison, No. 2:14—cv—28688, 2016 WL 6988501, at *2
`
`(S.D. W. Va. Nov. 28, 2016); Joe Hand Promotions,
`
`Inc. v. Double
`
`Down Entm’t, LLC, No. 0:11—cv-02438—MBS, 2014 WL 994382, at *3—4
`
`(D.S.C. Mar. 13, 2014); Joe Hand Promotions,
`
`Inc. v. Md. Food &
`
`Entm’t, LLC, No. CCB—11—3272, 2012 WL 5879127, at *2 n.3 (D. Md.
`
`Nov. 19, 2012); J & J Sports Prods.,
`
`Inc. v. MayrealII, LLC, 849
`
`F. Supp. 2d 586, 589 n.5 (D. Md. 2012).
`
`For vicarious liability to exist under Sections 553 and
`
`605, an individual defendant must possess the right and ability
`
`to supervise the unauthorized conduct, and the defendant must
`
`have an obvious and direct financial interest in the outcome of
`
`the unauthorized conduct. See, e.g., Nichols, 2017 WL 3216593,
`
`at *2. Here, Plaintiff has established that Malik is responsible
`
`for the operation, management, and supervision of Fuzion.
`
`(Compl. 11 8, 11, 13.) Plaintiff has also established by
`
`affidavit that the UFC Broadcast was advertised and exhibited to
`
`attract customers to Fuzion, presumably increasing its general
`
`11
`
`

`

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`business and profits.
`
`(Campbell Aff. 11 8, 10, Exs. A, C-D.)
`
`Furthermore, Plaintiff has established that Malik has a direct
`
`financial interest in Fuzion, and therefore a direct financial
`
`interest in the infringing of the UFC Broadcast.
`
`(Compl. 1 12.)
`
`Consequently, Plaintiff has supported its Section 553 and
`
`Section 605 claims against Malik individually.
`
`B. Copyright Act
`
`Plaintiff alleges that Fuzion infringed on Plaintiff’s
`
`copyrighted property in violation of the Copyright Act, as
`
`amended, 17 U.S.C. §§ 101 gt Egg. To establish a case of
`
`copyright infringement, plaintiffs must show (1) ownership of
`
`the allegedly infringed material; and (2)
`
`that the alleged
`
`infringers violated at least one exclusive right granted to the
`
`
`copyright holders. See 17 U.S.C. §§ 106, 501(a); see also Feist
`
`Publ’ns,
`
`Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991).
`
`Here, Plaintiff owns the UFC Broadcast and licenses the
`
`Broadcast for exhibition by others.
`
`(Compl.
`
`1% 6, 19, 21;
`
`Campbell Aff. 11 3—4.) Furthermore, Fuzion exhibited the UFC
`
`Broadcast at its establishment despite not having a license or
`
`permission to do so.
`
`(Compl.
`
`fi 24; Campbell Aff. 11 7—8, Ex. A;
`
`Hand Aff.
`
`fl 5.) Pursuant to 17 U.S.C. § 106(5), a copyright
`
`holder has the exclusive right to display the copyrighted work
`
`publicly. Therefore, Plaintiff has shown ownership and the
`
`violation of an exclusive right, and thus Plaintiff has
`
`12
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`

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`established all of the elements necessary for a copyright
`
`infringement claim against Fuzion.
`
`Plaintiff also seeks to hold Malik vicariously liable for
`
`the infringing activities of Fuzion.
`
`(Compl. i 46; Mot. Default
`
`J. at l; Mem. Supp. at 21-24.) An individual can be found to
`
`have infringed a copyright based on the acts of another. See
`
`Metro-Goldwyn—Mayer Studios Inc. v. Grokster, Ltd., 545 U.S.
`
`913, 930 (2005)
`
`(recognizing secondary liability under the
`
`Copyright Act). For vicarious liability to exist, a defendant
`
`must possess the right and ability to supervise the infringing
`
`conduct, and the defendant must have an obvious and direct
`
`financial interest in the exploitation of copyrighted material.
`
`See EMI April Music,
`
`Inc. v. White, 618 F. Supp. 2d 497, 507
`
`(E.D. Va. 2009). Here, Plaintiff has established that Malik is
`
`responsible for the operation, management, and supervision of
`
`Fuzion.
`
`(Compl.
`
`flfi 8, 11, 13.) Plaintiff has also established by
`
`affidavit that Fuzion advertised and exhibited the UFC Broadcast
`
`to attract customers, presumably increasing its general business
`
`and profits.
`
`(Campbell Aff.
`
`flfl 8, 10, Exs. A, C-D.) Furthermore,
`
`Plaintiff has established that Malik has a direct financial
`
`interest in Fuzion, and therefore a direct financial interest in
`
`the infringing of the UFC Broadcast.
`
`(Compl.
`
`fl 12.)
`
`Consequently, Plaintiff has supported its copyright infringement
`
`claim against Malik individually.
`
`13
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`IV. REQUESTED RELIEF
`
`Plaintiff alleges that Defendants violated both the
`
`Communications Act and the Copyright Act through the
`
`unauthorized exhibition of the UFC Broadcast, and Plaintiff
`
`moves the Court to enter default judgment against Defendants and
`
`award it damages.
`
`With regards to the Communications Act, Plaintiff cannot
`
`recover under both Sections 553 and 605, despite having proven a
`
`violation of both sections. See Wing Spot Chicken & Waffles, 920
`
`F. Supp. 2d at 666. Acknowledging the limitation on double
`
`recovery, Plaintiff has elected to recover under Section 605 and
`
`seeks statutory damages, enhanced statutory damages due to
`
`willfulness, and attorneys’
`
`fees and costs.
`
`(Mem. Supp. at 10,
`
`23-24.) As a “person aggrieved” by a violation of Section 605,
`
`Plaintiff may be granted injunctive relief and/or damages, and
`
`must be granted reasonable attorneys’
`
`fees and costs. 47 U.S.C.
`
`§ 605(e)(3)(B)(i)—(iii). The Court may award either actual
`
`damages suffered as a result of the violation and any profits
`
`attributable to the violation, or statutory damages of not less
`
`than $1,000.00 and not more than $10,000.00. lg; §
`
`605(e)(3)(C)(i)(I)—(II).
`
`With regards to Defendants’ violation of the Copyright Act,
`
`Plaintiff seeks statutory damages and attorneys’ fees and costs.
`
`14
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`(Mem. Supp. at 24.)2 In a case of copyright infringement,
`
`the
`
`copyright owner may elect to recover actual damages and profits
`
`or may elect “an award of statutory damages for all
`
`infringements involved in the action.” 17 U.S.C. § 504(c)(1).
`
`Statutory damages may total “with respect to any one work ... a
`
`sum of not less than $750 or more than $30,000 as the court
`
`considers just.” lg; Upon a finding of willful infringement,
`
`the
`
`Court “may increase the award of statutory damages to a sum of
`
`not more than $150,000.” $9; § 504(c)(2). The Copyright Act also
`
`authorizes recovery of full costs and an award of reasonable
`
`attorneys’
`
`fees to the prevailing party in a Copyright Action.
`
`
`Id. § 505.
`
`The undersigned considers Plaintiff’s request for Section
`
`605 statutory damages, Section 605 enhanced statutory damages,
`
`Copyright Act statutory damages, and attorneys’ fees and costs
`
`in turn below.
`
`2. Plaintiff phrases its request for statutory damages under the Copyright
`Act as first seeking statutory damages and then seeking enhanced statutory
`damages for willfulness.
`(Mot. Default J. at 1-2; Mem. Supp. at 16-21.) This
`is parallel language to how Plaintiff requests damages under Section 605.
`(Mot. Default J. at 1—2; Mem. Supp. at 12-16.) However, courts in this
`District have considered and awarded statutory damages under the Copyright
`Act as one type of damages, not
`two, even when unlawful acts are willful.
`See, e.g., EMI April Music, 618 F. Supp. 2d at 508—09 (awarding a total
`amount of Copyright Act statutory damages without allocating some as mere
`statutory damages and some as enhanced statutory damages for willfulness).
`This is different than how courts in this District have awarded damages under
`Section 605. See, e.g., Wing Spot Chicken & Waffles, 920 F. Supp. 2d at 666-
`69 (first awarding Section 605 “statutory damages”;
`then awarding Section 605
`“willful damages"). Therefore,
`the undersigned considers Plaintiff’s request
`for statutory damages to be for a total of $15,000.00 in statutory damages,
`not $5,000.00 for statutory damages and $10,000.00 for enhanced statutory
`damages.
`
`15
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`

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`A. Section 605 Statutory Damages
`
`In moving for a default judgment, Plaintiff seeks statutory
`
`damages in the amount of $5,000.00 pursuant to 47 U.S.C. §
`
`605(e)(3)(C)(i)(II).
`
`(Mot. Default J. at 1-2; Mem. Supp. at 23-
`
`24.) Courts in this District have employed two general
`
`approaches to calculating Section 605 statutory damages: either
`
`by utilizing a flat damage amount usually based on the unpaid
`
`licensing fee, or by basing the damages calculation on the
`
`number of patrons in an establishment during the unauthorized
`
`broadcast. See Wing Spot Chicken & Waffles, 920 F. Supp. 2d at
`
`667 (summarizing various cases’ calculations of Section 605
`
`damages); see also, e.g., J & J Sports Prods.,
`
`Inc. v. Lesly
`
`Rest. Inc., No. 1:16cv620, 2016 WL 6138429, at *5 (E.D. Va.
`
`Sept. 28, 2016)
`
`[hereinafter Lesly Rest. II]
`
`(awarding $3,000.00
`
`in statutory damages, which was equal to the approximate number
`
`of patrons present during exhibition multiplied by $100.00); J &
`
`J Sports Prods.,
`
`Inc. v. Lesly Rest., Inc., No. 1:15-cv—01537,
`
`2016 WL 8679238, at *5 (E.D. Va. Aug. 19, 2016)
`
`[hereinafter
`
`Lesly Rest.
`
`I]
`
`(awarding $2,200.00 in statutory damages, which
`
`was equal to the unpaid sublicense fee).
`
`Here, Plaintiff has stated that the licensing fee that
`
`Defendants would have paid to lawfully exhibit the UFC Broadcast
`
`at their establishment amounted to $2,250.00.
`
`(Hand Aff.
`
`fl 6.)
`
`Plaintiff has not submitted specific data regarding the number
`
`16
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`of patrons in the establishment during the UFC Broadcast, and
`
`has only submitted the establishment’s potential occupancy of
`
`51—100 occupants.
`
`(Compl.
`
`fl 14; Campbell Aff. i 8, Ex. A.)
`
`Therefore,
`
`the undersigned finds that an award of $2,250.00,
`
`the
`
`equivalent to the unpaid licensing fee,
`
`is appropriate as
`
`statutory damages in this case.
`
`B. Section 605 Enhanced Statutory Damages
`
`Plaintiff also seeks enhanced damages for willfulness in
`
`the amount of $10,000.00 pursuant to 47 U.S.C. §
`
`605(e)(3)(C)(ii).
`
`(Mot. Default J. at 1—2; Mem. Supp. at 23-24.)
`
`If the Court finds that a defendant’s violation was willful and
`
`for “purposes of direct or indirect commercial advantage or
`
`private financial gain” the Court may increase the amount of
`
`actual or statutory damages by an amount of not more than
`
`$100,000.00. 47 U.S.C. § 605(e)(3)(C)(ii).
`
`To evaluate whether enhanced damages are appropriate,
`
`courts “have considered ‘factors such as 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.’” Wing
`
`Spot Chicken & Waffles, 920 F. Supp. 2d at 668 (quoting
`
`Kingvision Pay—Per—View Ltd. v. Villalobos, 554 F. Supp. 2d 375,
`
`17
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`

`

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`383 (E.D.N.Y. 2008)). Courts have also considered “the number of
`
`patrons who viewed the unlawful broadcast,
`
`the establishment's
`
`proximity to a population center, and the effect the damage
`
`award might have on the defendant's ability to remain in
`
`
`
`business.” Joe Hand Promotions, Inc. v. Citibars, Inc., No.
`
`2:11cv58, 2012 WL 503212, at *6 (E.D. Va. Feb. 8, 2012).
`
`Additionally, courts routinely decline to award the maximum in
`
`
`enhanced damages and generally award significantly less. J & J
`
`Sports Prods.,
`
`Inc. v. Brutti's LLC, No. 2:14CV269, 2014 WL
`
`7363823, at *9 (E.D. Va. Dec. 23, 2014). However,
`
`the enhanced
`
`damages awarded in this District against non—repeat offenders
`
`vary greatly. See, e.g., id; (citing cases awarding $6,000.00,
`
`$12,000.00, $27,000.00, and $100,000.00, and ultimately awarding
`
`$25,000.00).
`
`To support its request for $10,000.00 in enhanced damages
`
`for willfulness, Plaintiff argues that signal piracy is per se
`
`intentional because it cannot occur without the intentional
`
`modification of electronic equipment,
`
`the removal of devices
`
`designed to prevent unauthorized exhibition, or other willful
`
`acts.
`
`(Mem. Supp. at 14.) Plaintiff states that signal piracy
`
`harms its business through both the loss of licensing proceeds
`
`and the inherent loss of product value when its programs become
`
`more widely disseminated than intended.
`
`(Campbell Aff. 11 12—13;
`
`Mem. Supp. at 14.) Further, Plaintiff asserts that it has
`
`18
`
`

`

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`
`expended significant sums of money to combat piracy of its
`
`programs, such as the UFC Broadcast,
`
`in order to deter further
`
`signal piracy.
`
`(Campbell Aff. i 13; Mem. Supp. at 14—15.)
`
`Defendants’ violation of Section 605,
`
`taking place in a
`
`commercial establishment rather than a residence, was committed
`
`for purposes of direct or indirect commercial advantage. The
`
`pleadings make clear that such interception cannot be done
`
`accidentally or innocently. An award of some enhanced damages is
`
`therefore appropriate as a deterrent. The maximum allowable
`
`enhanced damages award is inappropriate when the evidence before
`
`the Court suggests that Defendants’ commercial gain resulting
`
`from the unauthorized broadcast was likely not significant.
`
`Here, Fuzion had advertised its exhibition of the UFC
`
`Broadcast on their Facebook.com page.
`
`(Campbell Aff. l 10, Ex.
`
`D.) Fuzion’s establishment is located in Springfield, Virginia,
`
`a generally populous area.
`
`(Compl.
`
`1% 8-11.) However, Plaintiff
`
`has not provided any evidence of Fuzion’s repeated violations of
`
`Section 605. Further, while Plaintiff speculates that Fuzion
`
`received some financial benefit from exhibiting the UFC
`
`Broadcast, Plaintiff provides no specific information on such
`
`benefits.
`
`(Mem. Supp. at 4.) Plaintiff's independent auditor did
`
`not pay a cover charge to enter Fuzion’s establishment, and no
`
`evidence exists that Fuzion charged other patrons a cover
`
`charge.
`
`(Campbell Aff. l 10, Ex. A.) No evidence exists that
`
`19
`
`

`

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`
`Fuzion charged a premium for food or drink.
`
`The undersigned finds that Fuzion’s actions were willful
`
`and done for direct or indirect commercial advantage and that
`
`Plaintiff is thus entitled to enhanced damages in the amount of
`
`$10,000.00, as requested by Plaintiff. This award represents an
`
`amount in the middle of the spectrum of enhanced damages
`
`
`recently awarded by this Court under similar facts. See Lesly
`
`Rest. II, 2016 WL 6138429, at *6 (awarding $10,000.00 in
`
`enhanced statutory damages); Lesley Rest. I, 2016 WL 8679238, at
`
`*6 (awarding $10,000.00 in enhanced statutory damages); Brutti’s
`
`Egg, 2014 WL 7363823, at *9 (awarding $25,000.00 in enhanced
`
`
`statutory damages); Joe Hand Promotions,
`Inc. v. Sliders Sports
`
`Lounge, LLC, No. 2:14cv20, 2014 WL 4444251, at *6 (E.D. Va.
`
`Sept. 9, 2014)
`
`(awarding $15,000.00 in enhanced statutory
`
`damages); J & J Sports Prods.,
`
`Inc v. After Six Prods., Inc.,
`
`No. 3:13—CV—591, 2014 WL 644400, at *5 (E.D. Va. Feb. 19, 2014)
`
`(awarding $15,000.00 in enhanced statutory damages);
`
`Innovative
`
`Sports Mgmt.,
`
`Inc. v. Adriana, Inc., No. 1:13cv1279, 2014 WL
`
`1491339, at *6 (E.D. Va. Feb. 3, 2014)
`
`(awarding $5,000.00 in
`
`enhanced statutory damages). The combination of $2,250.00 in
`
`statutory damages and $10,000.00 in