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Joe Hand Promotions, Inc. v. Yakubets
Citations: 3 F. Supp. 3d 261; 2014 WL 960787Docket: Civil Action No. 12-4583
Court: District Court, E.D. Pennsylvania; March 11, 2014; Federal District Court
Joe Hand Promotions, Inc. filed a Renewed Motion for Default Judgment against Cafe Nostalgie and Victor Yakubets, seeking statutory and enhanced damages for the unlawful interception of cable programming under 47 U.S.C. § 553(a)(1), as well as vicarious liability against Yakubets and permission to seek attorneys’ fees and costs. The Court acknowledges Joe Hand's entitlement to damages but notes the necessity to resolve several unresolved issues regarding liability and damage calculation that have not been consistently addressed by the Third Circuit or other district courts. The Court emphasizes the complexities in evaluating unopposed motions for default judgment, highlighting the risk of inadvertently endorsing the plaintiff's legal theories without sufficient scrutiny. This situation could lead to the creation of unfavorable legal precedents and inconsistencies in the application of the law, particularly when dealing with default judgments that may not withstand appellate review. The Court identifies key questions that require resolution, including how to measure statutory damages under 47 U.S.C. § 553(c)(3)(A)(ii) and what a plaintiff must prove to establish that a defendant's violation was willful and for commercial gain, as specified under § 553(c)(3)(B). These queries reflect a broader concern about the predictability and uniformity of legal standards in similar cases. Vicarious liability may arise in cases of violations under 47 U.S.C. 553, particularly in relation to how individuals or entities can be held accountable for unauthorized interceptions. To successfully plead vicarious liability, specific allegations must be made regarding the defendant's ability to supervise the infringing activities. In this context, if a defendant is found vicariously liable, they may also be jointly and severally liable. In the case of Joe Hand, an international distributor of sports programming, he asserted legal action against Café Nostalgie for broadcasting the boxing match 'The Big Challenge' without a sublicense. The match was intercepted and displayed on multiple televisions at the restaurant on the night of August 21, 2010, constituting a violation of either 47 U.S.C. 553 or 605. Joe Hand claimed both Café Nostalgie and its president, Victor Yakubets, were liable; however, they failed to respond to the complaint, resulting in a default judgment against them. The court determined that Joe Hand could only proceed under 47 U.S.C. 553 because he did not specify how the match was intercepted (via satellite or cable). As a result, claims under both statutes could not be pursued simultaneously at the default judgment stage. The court clarified that 605 pertains to satellite transmission interceptions, while 553 governs cable transmissions, emphasizing that a defendant cannot violate both with the same act. The court also rejected the notion of awarding damages under both statutes simultaneously, as the legal framework dictates that a plaintiff could not claim damages under 605 without first substantiating a violation of 553. Additionally, while costs and attorneys’ fees are mandatory under 605, the court retains discretion under 553. The presumption that Section 553 applies in the absence of evidence of satellite interception is grounded in the principle that a plaintiff must prove their case by a preponderance of the evidence. Insufficient evidence regarding a particular wrong precludes relief, even if a violation of Section 605 or 553 is suggested by the facts. Plaintiffs typically prefer Section 605 due to its higher damage range per violation; however, they often fail to demonstrate a necessary element of 605, specifically the existence of satellite transmission. Consequently, if a plaintiff cannot show evidence warranting greater damages under 605, they should be limited to claims under 553. Practical considerations also favor proceeding under 553, as cable signals are harder to detect than satellite dishes. In a cited case, an investigator determined that the defendant lacked a satellite dish, implying that any signal interception likely occurred through cable, thus violating Section 553. The court denied Joe Hand’s Motion for Default Judgment regarding Section 605, inviting a renewed motion under Section 553, which Joe Hand subsequently filed without requesting a hearing on damages. The process for obtaining a default judgment is outlined under Federal Rule of Civil Procedure 55, requiring the plaintiff to show the defendant's failure to respond, followed by an application for default judgment, contingent on the legitimacy of the unchallenged facts as a cause of action. At the motion to dismiss stage, courts accept as true the well-pleaded factual allegations in a plaintiff's complaint, excluding those related to damages. Courts also consider reasonable inferences drawn from the complaint while disregarding conclusory allegations and legal conclusions. If a plaintiff establishes a cause of action, the court must then assess damages, which cannot be awarded solely based on pleadings unless they are liquidated. Default judgments are generally disfavored due to the lack of adversarial argument, which is essential for informed judicial decisions. The court evaluates three factors before granting a default judgment: (1) potential prejudice to the plaintiff if default is denied, (2) the defendant's ability to present a litigable defense, and (3) whether the defendant's delay is due to culpable conduct. Considerable and indefinite delays can demonstrate prejudice. Additionally, the court may presume that a non-responsive defendant lacks a meritorious defense, as it is not the court's duty to construct arguments for the parties. A defendant's failure to engage in litigation may qualify as culpable conduct for default judgment considerations. The district court's evaluation of these factors is subject to abuse of discretion review but tends to be favorable to the plaintiff when a defendant has not responded. Default judgments are typically appropriate until a defendant moves to set them aside. Prejudice suffered by a non-defaulting party can be addressed under Rule 60(b), allowing the court to impose terms upon reopening a judgment. Section 553(a) of Title 47 U.S. Code prohibits the interception or reception of communications services over cable systems unless authorized. It allows any person aggrieved by a violation to bring a civil action and establishes criminal penalties for noncompliance. In this case, Café Nostalgie intercepted a match broadcast over cable and satellite, and due to insufficient evidence to determine the method, the court presumed it was through cable. Joe Hand, the plaintiff, is entitled to both statutory and enhanced damages for Café Nostalgie’s violation. The court applies a copyright law test to establish vicarious liability against Mr. Yakubets, albeit to a limited extent. Joe Hand can also seek attorneys’ fees and costs. The court's conclusions are based on factual allegations in the complaint and supporting documentary evidence, with no factors suggesting against default judgment. Under 47 U.S.C. 553, a plaintiff can choose between actual damages or statutory damages. Actual damages can include the violator's gross revenue, while statutory damages range from $250 to $10,000. Defendants face strict liability for violations. Enhanced damages may be awarded if a violation is found to be willful and for commercial gain, with a maximum increase of $50,000. Joe Hand seeks damages that both compensate and deter further violations, but the statute does not specify factors for damage calculations, nor has the Third Circuit provided a formula for such assessments. The court's discretion regarding statutory damages under 47 U.S.C. § 553(c)(3)(A)(ii) is clarified, emphasizing that deterrence should not factor into the calculation of statutory damages. Joe Hand contends that deterrence is relevant because § 553 aims to minimize signal piracy, suggesting that damages should surpass the probable licensing fee to effectively deter future violations. However, the court disagrees, asserting that while deterrence is a general concern of § 553, the statutory damages provision should strictly reflect the estimated value of the services stolen, independent of deterrent goals. This position aligns with the First Circuit's view that statutory damages should be a reasonable estimate of actual damages, rather than a penalty. Key reasons for this interpretation include: 1. The statute’s language indicates that statutory damages are an alternative to actual damages without an emphasis on deterrence. 2. The overall structure of § 553 supports addressing deterrence through enhanced damages for willful violations rather than through the statutory damages provision. Additionally, the existence of separate provisions for injunctions and enhanced damages highlights Congress's intent to address deterrence distinctly. The potential for criminal penalties under § 553(b) also serves as a deterrent without the need to incorporate deterrence into statutory damages. The plaintiff's claims focus on speculative harm and deterrence, which are more applicable to enhanced damages rather than statutory damages. Joe Hand's argument regarding deterrence is flawed, as it inaccurately equates violations of the relevant statutes with theft of service. While Congress enacted 47 U.S.C. § 553 to address cable piracy, the statute distinguishes penalties based on the violator's mental state. Willful violations can incur criminal penalties and enhanced damages, whereas actual and statutory damages can be awarded without any proof of intent or even negligence. Courts may reduce damages to a minimum of $100 if the violator was unaware of the violation, indicating that § 553 does not equate violations with piracy or theft. The rationale for deterrence is less applicable to negligent conduct compared to willful misconduct, and courts have noted that applying deterrence to statutory damages can result in illogical outcomes, especially since statutory damages are capped at $10,000. Consequently, those who cause the most harm may not receive adequate deterrent penalties. Following the Naranjo-Burdulis precedent, courts should determine statutory damages based solely on actual damages estimates, promoting predictability and transparency. The only opposing case, Comcast of Illinois X, LLC v. Toguchi, argues that the statute's language indicates separate methods for calculating damages, but this view misinterprets the statute's intent, which is to provide a simpler alternative for proving damages rather than allowing recovery beyond actual damages. The aggrieved party must demonstrate the violator’s gross revenues using the best available evidence, while the violator is responsible for proving any deductible expenses and any profits or revenues that are unrelated to the violation. Courts are authorized to estimate, rather than compute, actual damages, which supports the statutory damages cap of $10,000 for all violations in a single action. However, the Toguchi court’s approach to damages analysis lacks clarity, as it did not adequately justify its conclusion for the awarded amount. Many courts exhibit similar tendencies, often applying factors without thorough explanation or consistency with established rationale, resulting in arbitrary statutory damages figures. When assessing statutory damages, key considerations include what the defendant would have paid for a lawful license, which can be determined through a rate card or by estimating per-patron charges. Courts should also consider any additional profits directly linked to the violation, although this can be challenging if such profits are speculative. The document recommends awarding $1,400 in statutory damages, combining $1,100 for actual losses and $300 for potential additional profits from food and beverage sales attributed to the violation. The Court will determine statutory damages based on the cost of a commercial license due to a lack of evidence regarding the Defendant's profits from the unlawful exhibition of the Program. Factors for estimating potential profits include the establishment's size, number of patrons, screen visibility, cover charges, and additional spending by patrons who attended due to the interception. In this case, the rate card establishes that the sublicense fee for Café Nostalgie, with a maximum capacity of 100, would be $500. Mr. Szlezak's estimates indicate there were 44 to 48 patrons during a two-hour period, and the Program was displayed on four televisions throughout the bar, although there was no evidence of a cover charge or advertising. The absence of data on Café Nostalgie's prices and typical Saturday night attendance complicates profit estimations. While the Defendants defaulted, Joe Hand missed opportunities to gather this evidence. Given these circumstances, the Court will assume that half of the patrons attended specifically for the show and spent $20 each, and the other half spent an additional $10 due to extended stay, resulting in estimated total profits of $720. Generous allowances for damages have been determined despite a lack of evidence, with courts typically awarding only the sublicense fee from the rate card in cases without demonstrated damages. Café Nostalgie’s failure to provide expense evidence may adversely affect its position compared to Joe Hand, which is also unable to pursue discovery. The estimates for damages are viewed as reasonable, as Joe Hand has not contested them. The incident occurred on a Saturday with 48 individuals present, leading to a less significant inference than if it had been on a busier night. However, the presence of multiple televisions playing the Match suggests patrons were likely there to watch it. As a result, the Court awards Joe Hand $500, plus an estimated $720 in profits, totaling $1,220 in statutory damages. Regarding enhanced damages under 47 U.S.C. 553(c)(3)(B), which allows for increased damages up to $50,000 for willful violations aimed at commercial advantage, the Court has discretion to impose such damages if the conditions are met. The interpretation of "willfully" is context-dependent and generally refers to actions beyond mere negligence, though its precise definition remains unclear in this context. Courts have previously suggested that "willful" conduct involves intent along with knowledge or reckless disregard for violating the statute. The act of acquiring and installing unauthorized devices is often considered willful because it requires deliberate illegal actions. Nonetheless, a distinction between willful and non-willful violations must be maintained for the term "willful" to retain meaning. The court clarified that the statute prohibits conduct that is not "willful," emphasizing that a non-willful violation might occur when an adult gives a descrambler to an elderly parent who is unaware of the legal implications, despite being unlawfully receiving cable transmissions. Willfulness typically involves the defendant having specific intent, including knowledge or reckless disregard for the legality of their actions. Under Supreme Court precedent, particularly concerning the Fair Labor Standards Act (FLSA), willfulness requires that the defendant acted intentionally and either knew or displayed reckless disregard for whether their conduct was prohibited. Plaintiffs must demonstrate that the Port Authority was aware of or recklessly disregarded its violations of the FLSA. This standard is stricter than mere negligence, which only requires a lack of reasonable belief in compliance. Additionally, existing legal interpretations do not support a lax definition of "willfulness" in any context, indicating that actual knowledge or reckless disregard is necessary for establishing willfulness under the statute. The court noted that interpreting willfulness to include mere intent would lead to inconsistencies in statutory provisions and that the statute's criminal penalties for willful violations reinforce the need for a higher standard than negligence. Violating subsection (a)(1) for commercial advantage or personal gain results in fines or imprisonment. If the court finds the violation was willful and for financial gain, it may increase damages. A stringent standard, requiring intentionality plus recklessness, is applied in criminal contexts. Legislative history supports that "willfully" necessitates both intentional signal interception and knowledge or reckless disregard of its unlawfulness. Courts recognize that willfulness can be proven through circumstantial evidence. In assessing willfulness, juries may consider various circumstances, including the defendant's malice and the nature of the offense. A civil case interpretation aligns with this understanding, defining willfulness as a disregard for legal requirements. In cases of default judgment, proving willfulness requires factual specificity regarding the interception method, yet the presumption of willfulness may apply due to the default and the nature of the act. Allegations of unauthorized interception can suffice under federal rules, allowing willfulness to be inferred from well-pleaded facts, particularly in the context of cable distribution systems. A defendant's default alone does not imply willfulness in the context of cable programming violations; it merely allows for the admission of well-pleaded factual allegations. The nature of cable programming and the mechanisms for intercepting it, combined with the general knowledge of individuals, may support an inference of willfulness. Courts have noted that signals do not unscramble themselves, and television sets do not connect to cable systems without deliberate action. Joe Hand, Jr., President of Joe Hand Promotions, asserts that his programming cannot be intercepted accidentally and outlines methods of unlawful interception, including unauthorized cable boxes, misrepresenting a commercial property as residential, and splicing connections. While courts have generally viewed accidental interception as unlikely, they acknowledge that it is not impossible, necessitating case-by-case evaluations. The consensus is that to receive closed-circuit broadcasts, defendants must have engaged in deliberate acts, such as using unauthorized decoders. The inference of intentionality arises from the nature of the technology involved, which supports allegations of intentional misconduct. However, determining whether defendants also had knowledge or acted recklessly regarding the violation requires further factual analysis, as existing case law presents challenges in this area. A defendant who intentionally intercepts cable programming is presumed to know the illegality of their actions, suggesting a recklessness in disregarding the law. The court establishes that such intentional interception qualifies as theft, supporting a presumption of willfulness necessary for pleading and default judgment. In this case, Joe Hand alleges that the unauthorized interception at Cafe Nostalgie was willful, given the improbability of accidental interception across multiple televisions displaying the Match. To qualify for enhanced damages, it must be shown that the violation was committed for commercial advantage or private financial gain, per 47 U.S.C. § 558(c)(8)(B). Although appellate courts have not extensively defined this requirement, it seems applicable in a wide range of situations, as indicated by precedents. The Complaint indicates that Cafe Nostalgie operates as a commercial venue with amenities designed to attract patrons, which supports the inference that the interception was for financial gain. The court finds that the intercepted programming was displayed to entice customers, thereby confirming the intent for commercial advantage. Additionally, the court notes that various methods exist for determining enhanced damages, with some courts applying multipliers to statutory damages while others utilize multifactor tests that consider deterrent needs and other factors. The court acknowledges the potential harm to a defendant's business when significant damages are assessed but emphasizes deterrence as the primary goal of enhanced damages under 47 U.S.C. § 553. The statute's provisions, including factors such as willfulness and commercial gain, highlight the need for penalties to deter cable piracy, a significant issue affecting the cable industry. Legislative history indicates that Congress aimed to impose strict penalties to combat theft of cable services, which not only deprives the industry of revenue but also unfairly burdens paying subscribers. Enhanced damages serve to warn potential violators that compliance is less costly than violation. The court suggests that if profits from violations are already awarded under actual or statutory damages, there is no need to re-evaluate those profits when considering enhanced damages. Additionally, the "commercial advantage or private financial gain" aspect reinforces the need for deterrence by addressing how defendants profited from their violations. Willful violations of § 553 can lead to criminal penalties, underscoring the statute's focus on deterrence. A defendant may face significant penalties under 47 U.S.C. 553 for violations involving commercial advantage or private gain, with fines reaching up to $50,000 and/or two years' imprisonment for the first offense, and up to $100,000 and/or five years for subsequent offenses. Courts are encouraged to apply multipliers to statutory damages to enhance deterrence, with awards typically ranging from three to six times the initial statutory damages. This approach not only reinforces Congress's intent to deter cable theft but also addresses the challenges of detecting unauthorized broadcasts and the resulting widespread financial losses. The primary factor for specific deterrence is whether the defendant has a history of repeat violations, although other factors may also be considered. In this case, there is no evidence that Cafe Nostalgie or Victor Yakubets are repeat offenders. The court finds a minimum multiplier of three appropriate, resulting in treble statutory damages totaling $3,660. Additionally, the document discusses the criteria for establishing individual vicarious liability under 47 U.S.C. 553, requiring proof that the individual had the right and ability to supervise the violations and a significant financial interest in the activities. Mr. Yakubets is argued by Joe Hand to meet the criteria for individual liability due to his supervisory role and significant financial interest in the violations of 47 U.S.C. § 553. However, courts have expressed skepticism regarding the applicability of this standard, particularly in determining both its relevance and method of application. While it is clear that individuals can be jointly liable with their corporations, their corporate status does not absolve them of personal responsibility for torts committed. The Third Circuit in Zubik v. Zubik established that a corporate officer is personally liable for a corporation's torts if they participated in or directed the wrongful act, but not if they were uninvolved. Joe Hand's argument for Mr. Yakubets relies on vicarious liability, as there is uncertainty about his direct involvement in the violations. The standard for vicarious liability, originating from Softel, necessitates proof of a "right and ability to supervise" coupled with a direct financial interest in the infringing conduct. In Softel, mere status as a corporate officer and shareholder was deemed insufficient to establish a direct financial interest, which raises questions about applying this standard in the context of § 553 violations. Several district courts have expressed skepticism about extending the test for vicarious liability under the Copyright Act to 47 U.S.C. § 553, citing a lack of common legislative history and significant differences between the statutes. However, the Court argues that these concerns do not hinder borrowing the Softel test for two main reasons. First, the Supreme Court has acknowledged that while the Copyright Act does not explicitly impose liability for infringement by others, doctrines of secondary liability, including vicarious liability, are established legal principles derived from common law. This means that parties who have not directly engaged in infringing activities can still be held liable under certain circumstances, as seen in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd. and Sony Corp. of Am. v. Universal City Studios, Inc. Second, the Court notes that the Copyright Act and § 553 are structurally similar, both providing for various forms of damages. Consequently, the Softel standard will be applied to assess vicarious liability under § 553. The Softel standard requires that the defendant have the right or ability to supervise or authorize the infringing behavior, but does not necessitate actual supervision, authorization, or knowledge of the infringement. Courts have previously held parties liable under this standard even if they were unaware of the infringing actions, as illustrated in the Shapiro case. The ruling in **Shapiro v. H.L. Green Co.** established that liability for copyright infringement can be imposed even without actual knowledge of infringement if a party fails to control the primary infringer. The concept of "direct financial interest" is complex; in **Softel**, the court determined that being a president and shareholder of an infringing corporation did not sufficiently demonstrate a direct financial interest, as the connection was considered too indirect. In contrast, **Shapiro** found that a corporation's contractual claim to a percentage of an infringer's gross receipts constituted a clear financial stake, justifying vicarious liability. The Ninth Circuit emphasized that the key element is whether a causal link exists between the infringing activity and any financial gain for the defendant, regardless of the amount. Financial benefit can arise when infringing materials attract customers, but simply receiving regular payments from an infringer does not establish such a benefit. In situations where defendants are only salaried officers of a company, they may not meet the "direct financial benefit" criterion unless their compensation is tied to the company’s profits, particularly related to infringing activities. To hold an individual or business vicariously liable under copyright law, two conditions must be met: they must have the right and ability to supervise the infringing activity, regardless of actual supervision or knowledge, and they must possess a direct financial interest in the infringement that results in financial benefits linked to the violating activity. The case of **Joe Hand** illustrates the challenges in establishing these requirements, particularly with potentially ambiguous allegations regarding individual defendants like Mr. Yakubets, who is identified as an officer of the infringing establishment. Defendant Victor Yakubets is identified on the liquor license for Cafe Nostalgie and allegedly had the authority to oversee the establishment’s activities, including the unlawful interception of a program owned by the plaintiff on August 21, 2010. The plaintiff asserts that Yakubets directed employees to unlawfully broadcast the program, and his role as an officer of Cafe Nostalgie, along with his financial interest in its operations, supports claims of vicarious liability. Evidence includes Yakubets’ positions as President, Secretary/Treasurer, Director, Stockholder, and Manager/Steward on the liquor license, with only one other individual, Yana Vselubsky, listed as a Stockholder. The document discusses the legal standards for pleading vicarious liability, referencing case law which suggests that mere ownership may not suffice for a default judgment. Courts applying the "Softel standard" have generally accepted such allegations, while others have required more substantial factual support, specifically evidence of both a right and ability to supervise and a financial interest in the unlawful actions to avoid conclusory claims. The text highlights a division in judicial interpretation regarding the necessity of both types of allegations to move forward with the case. The court in Mayrealll clarified that the plaintiff failed to present factual evidence demonstrating that Mr. Parker or Mr. Garcia possessed personal knowledge or control over the alleged illegal interception of the Program. There were no claims that the defendants were present at the nightclub during the Program's display, authorized its interception, or profited from it through advertising or cover charges. The only specific allegations against them were their names appearing on Mayreal’s liquor license and Parker being the resident agent. The plaintiff's conclusory assertions regarding their roles as officers, directors, shareholders, employees, or agents were insufficient, as the Softel standard does not necessitate actual knowledge or control. The court emphasized that general ownership statements do not meet the requirements for individual liability, as seen in J. J. Sports Prods. Inc. v. Fisher, where vague titles alone did not establish supervisory control or financial interest. The reasoning applied to Mr. Yakubets, whose claim of directing unlawful interception at Cafe Nostalgie was similarly deemed conclusory without factual support showing his presence or authorization during the violation. Although the complaint asserted Yakubets had supervisory rights and financial interests related to Cafe Nostalgie's activities, it lacked specific factual content to substantiate these claims. Joe Hand's complaint includes allegations supported by a liquor license that allow for a reasonable inference of the individual defendants' involvement in violations. The court dismissed similar evidence in the Mayreall case, finding that the mere presence of individuals on a liquor license was insufficient. In contrast, the liquor license for Cafe Nostalgie specifies Mr. Yakubets's multiple roles, which strengthens the inference that he had a direct financial interest in the violative conduct. The court noted that while being a stockholder alone may not suffice to establish liability, Mr. Yakubets's various positions imply control over the establishment's financial decisions. The court emphasized that the combination of control and direct financial benefit, while not explicitly detailed in the allegations, can be reasonably inferred based on judicial experience and common sense. Joe Hand's complaint is deemed sufficient to withstand a motion to dismiss, as it presents a plausible claim against the individual defendants. However, the court cautioned that mere conclusory allegations without factual support generally do not suffice for vicarious liability, particularly at the default judgment stage. The specifics regarding Mr. Yakubets's role in the liquor license augment the otherwise vague allegations and support the inference of his supervisory capacity and financial benefit. Regarding the nature and extent of vicarious liability, the court clarified that Joe Hand cannot hold Cafe Nostalgie liable for the total award. While courts typically allow joint and several liability in copyright cases, vicarious liability does not extend to cover all damages. Under 17 U.S.C. § 504, a defendant may be liable only for actual damages, not for profits attributable to infringement. Infringement of copyright is classified as a tort, leading to the principle that all defendants involved are jointly and severally liable for damages. However, liability for profits derived from infringement is several, meaning one defendant is not accountable for the profits of another. In the case of MCA, Inc. v. Wilson, the court distinguishes between actual damages, which may justify joint liability, and profits or enhanced damages, which do not warrant such liability. Mr. Yakubets is found jointly and severally liable for a $500 license fee, representing actual damages, but lacks sufficient evidence to establish his liability for profits or enhanced damages due to lack of supervision or authorization of the infringement. Consequently, Mr. Yakubets is only liable for the $500, while Cafe Nostalgie is severally liable for the remaining damages. Furthermore, the court notes that an award for attorneys’ fees and costs under 47 U.S.C. 553 is discretionary. Joe Hand must justify the reasonableness of Mr. Riley’s fees and address the legal issue regarding fee adjustments in the context of a default judgment. The court grants Joe Hand's Motion for Default Judgment, awarding a total of $4,880 in damages: $500 in actual damages, $720 in profits, and treble statutory damages as enhanced damages. An order consistent with this ruling will be issued. On March 11, 2014, the court granted Joe Hand Promotions, Inc.’s renewed motion for default judgment against Café Nostalgie for violations of 47 U.S.C. § 553(a)(1). Café Nostalgie was found liable for a total of $4,880, which includes $1,220 in statutory damages and $3,660 in enhanced damages, the latter being treble the statutory amount. Victor Yakubets was jointly and severally liable for $500 of the damages, while Café Nostalgie was severally liable for the remaining $4,300. The judgment favored Joe Hand against both Café Nostalgie and Yakubets, and the case was marked closed by the Clerk of Court. Joe Hand was permitted to file a motion for attorneys’ fees and costs by March 28, 2014, addressing the reasonableness of the fees and the applicability of a legal rule regarding fee reductions in default judgment cases. The order emphasized that interception of cable communications without authorization is prohibited under 47 U.S.C. § 553(a)(1). The document referenced various cases from the Northern District of California that established a presumption regarding the applicable statute at the default judgment stage, particularly when there is no evidence of the means of interception. Additionally, it noted that investigative efforts by a plaintiff could be rewarded, while denying the motion for default judgment concerning the tort of conversion due to reliance on California law alone. Joe Hand has withdrawn its conversion claim in the Renewed Motion. The court may take judicial notice of facts that are not reasonably disputed, such as the liquor license from the Pennsylvania Liquor Control Board, accessible through their License Search System. The ability to notice facts depends on the specific circumstances and the stage of the case. A motion for default judgment cannot be granted unless the clerk has entered default under Federal Rule of Civil Procedure 55(a). There is a distinction between "default" and "default judgment," with the former requiring a clerk's entry and the latter requiring court authorization. If a plaintiff's claim is for a sum certain or one that can be computed, they may apply for default judgment through the clerk. However, a claim is not considered a sum certain if there is any doubt about the amount owed due to the defendant's default. Upon default, the court assesses unchallenged facts to determine legal obligations and the extent of recovery. A decree pro confesso is not automatically granted as per the bill but must be made by the court based on the truth of the bill's statements. The distinction between a defendant's default and a finding of liability is critical, particularly following recent Supreme Court rulings. Rule 55(b)(2) allows for various inquiries beyond determining damages, and the court is not obligated to conduct an evidentiary hearing if damages can be ascertained from affidavits or other evidence. The court may hold a hearing to determine damages or validate claims when necessary, as indicated by relevant case law. Delays in obtaining satisfaction on a claim usually do not demonstrate significant prejudice that would justify preventing the opening of a default judgment in favor of a defendant who has appeared. However, different standards apply when considering default judgments against absent defendants. The Third Circuit has developed factors for evaluating whether a default judgment should be set aside, emphasizing that absent defendants cannot appeal such judgments, thus necessitating a different analysis. In cases involving default judgments against absent defendants, the favored outcome is to deny the default judgment when a plaintiff has a valid cause of action, which preserves the opportunity for a fair proceeding. The analysis often leans against the defaulting party due to their absence, raising questions about the factors’ relevance in one-sided proceedings. A Third Circuit panel noted that while certain tests for default judgments differ from those for overturning them, courts generally exercise discretion based on a broader set of factors. In the current case, since the defaults for the defendants were entered on January 23, 2013, and no response has been received from them regarding Joe Hand's motions, the court concludes that the likelihood of a response is minimal, leading to sufficient demonstrated prejudice for Joe Hand. The court also confirms its federal question jurisdiction and acknowledges that Joe Hand has adequately stated a claim. Entitlement to statutory and enhanced damages under 47 U.S.C. § 553 is addressed, alongside Victor Yakubets's vicarious liability. Cafe Nostalgie and Mr. Yakubets's non-responsiveness is presumed to stem from culpable conduct, but either party can move to set aside the default judgment. The court has discretion to reduce damages to a minimum of $100 if a violator was unaware and had no reason to believe their actions constituted a violation. While the Third Circuit has not established a specific formula for calculating damages under § 605, courts have cited analogous cases under both § 553 and § 605, noting that case law interpretation may overlap due to similar statutory aims. Joe Hand Promotions, Inc. has not clearly differentiated between statutory and enhanced damages in its submissions, often referencing cases related to § 605. The court acknowledges that some cases apply deterrence reasoning under enhanced damages without sufficient argument for its application to statutory damages. Awards often consider factors such as the cost of lawful acquisition, the challenge of detecting unlawful activities, and the need for deterrence against future violations. In specific cases, some defendants were unaware of their violations, but it is implied that they may still have had reason to doubt the legality of their actions. The Court declined to reduce damages from $250 to $100, noting that a defendant could reasonably believe their actions might violate statutory provisions. Courts have established that violations occur when a defendant, having purchased programming through a provider, subsequently exhibits it in a commercial setting without authorization. Issues arise in calculating damages, particularly when a plaintiff does not issue a rate card, complicating post hoc licensing evaluations. Statutory damages allow for discretion, enabling courts to estimate damages based on factors like the number of patrons present during unlawful signal interception, or by comparing illegal premium service charges against basic service costs. The distinction between actual and statutory damages is critical, as statutory damages relax proof standards while aiming to achieve similar objectives. Courts face challenges in estimating actual damages due to necessary assumptions regarding the value of intercepted programming. A statutory damages award of $5,000 was deemed appropriate based on the number of patrons (25-30), absence of a cover charge, and the use of a single television for the broadcast. In contrast, another case with fewer patrons and two televisions led to a recommended statutory damages amount of $2,700, reflecting the limited impact of the defendants' actions. One court previously awarded damages beyond the typical range, illustrating variability in statutory damage awards. An assumption is made that each patron at the Accused Premises spent an average of $250 on food and drink during the intercepted Event, leading to a total estimated revenue of $12,500 from 50 patrons. Under 47 U.S.C. 605(e)(3)(C)(i)(II), courts have awarded statutory damages exceeding actual damages to deter similar misconduct, with one instance citing an award of double the actual damages deemed appropriate. Various cases illustrate the courts’ tendency to impose significant statutory damages, often exceeding standard license fees to ensure deterrence. For instance, one court tripled a rate card amount and then applied an enhanced damages analysis. The excerpt references several cases where courts awarded specific amounts based on unauthorized access to services, with figures ranging from $1,200 to $2,200 for statutory damages. Courts typically calculate damages using either the number of patrons present during the infringement or a fixed amount based on the provider's rate card, favoring the latter approach when applicable. In Inc. v. Endzone Sports Bar, LLC, the court determined that the plaintiffs' sublicensing fee, which is based on venue capacity, does not support an award calculated per customer. Case law relevant to enhanced damages is referenced, indicating that Joe Hand could potentially recover costs under 47 U.S.C. § 553(c)(2)(C), which permits recovery of full costs, including reasonable attorneys' fees, for the prevailing party. The excerpt outlines that in criminal law, the term “willfully” generally indicates intentional or knowing actions, often characterized by a bad purpose or disregard for the law. It also clarifies that while civil and criminal standards may differ, civil standards can be equally stringent. The statute allows for criminal liability without requiring proof of intent for commercial gain, contrasting sections of 47 U.S.C. § 553. The House Report clarifies that manufacturers or sellers are not liable if their equipment is legally intended for purposes other than unauthorized cable reception, provided there is no intent or knowledge that it would be misused. However, the context of the referenced discussion differs from the current case, suggesting that Congress intended the term "willfully" to mean intentional conduct. Paragraph (3)(C) allows a court to reduce damages to a minimum of $100 in civil actions if the violator did not willfully or knowingly commit a violation due to lack of awareness that their actions were unlawful. However, "willfully" is interpreted as requiring intentional conduct along with knowledge or reckless disregard for the law. A defendant's knowledge of the law's existence is irrelevant; what matters is whether they knew their actions were unlawful. Case law indicates that if a defendant knows their actions violate the law, the basis of that knowledge is insignificant. For instance, in United States v. Gardner, the defendant's knowledge of illegal sales established his intent to violate the law. Courts have noted that inferring willfulness from a defendant's default may be problematic due to the ambiguity surrounding defaults. While some courts have allowed such inferences, especially when a defendant invokes the Fifth Amendment, others have cautioned against assuming willfulness solely based on default. Numerous cases have accepted allegations of willfulness as admitted, even when they lack sufficient proof. Willful actions typically involve intentional modifications or misrepresentations to unlawfully obtain services, underscoring the necessity of deliberate conduct in establishing violations. Double Play, a commercial bar, purchased a pay-per-view fight program from Comcast. The owner, Mr. Hernandez, lacked prior bar management experience and was unaware of the need for a special license to show such fights. After a bartender expressed interest in airing the fight, Mr. Hernandez instructed the bartender to contact Comcast, which failed to inform him about the requirement for a commercial license. Throughout the process, Double Play identified itself as a Comcast commercial customer. Mr. Hernandez claimed that had he known he was acting improperly, he would not have opted to show the fight. When the rights holder, J. J, sought enhanced damages, the court ruled that there was no evidence of willful violation for commercial advantage. It determined that Mr. Hernandez's actions did not demonstrate willfulness because he was uncertain about the legality of his decision and did not actively seek clarification. While the court acknowledged that his conduct was negligent, it was not deemed intentional or reckless. The court declined to reduce damages under statutory provisions, leaving J. J with statutory damages. The court referenced case law which indicates that the act of piracy generally shows intent, as accessing encrypted signals is not likely accidental. The failure to respond in a related case was seen as an admission of willful violation. However, given the limited means of intercepting pay-per-view broadcasts, courts have found such conduct to be willful. The court noted that Congress may have intended to allow a good faith defense for genuinely uninformed defendants, although such situations are rare. This holding is specific to the context of the relevant statute. Bare allegations and a defendant's default do not inherently imply willfulness. The sufficiency of Joe Hand's argument in varying circumstances remains uncertain. The district court's calculation of damages at $4,500 is supported by evidence, falls within statutory limits, and is not deemed clearly erroneous. There are no definitive rules governing a court's discretion to award enhanced damages under the relevant statutes. Arbitrary damage amounts may arise when courts do not provide explicit reasoning or criteria, especially in nonadversarial default judgment cases. Various cases have established multi-factor tests for determining enhanced damages, emphasizing factors such as whether the defendant is a repeat violator. Courts often use a multiplier of three for first-time violations, awarding enhanced damages that are three times the lawful exhibition cost. Congress has recognized both willful and nonwillful violations, allowing for strict liability and enhanced damages for willful violations while also providing exceptions for those unaware of their violations. In Entm't by J. J Inc. v. Al-Waha Enters. Inc., the court examined the application of statutory damages under the Communications Act, specifically focusing on the differing methodologies used by various courts. It referenced Joe Hand Promotions, Inc. v. Parlavecchio, which awarded enhanced damages by trebling statutory damages, a method the court found problematic. The court noted a divergence from the Kingvision Pay-Per-View, LTD. v. Lardo case, criticizing its approach to statutory damages under a specific provision. It highlighted that the Softel case did not establish a new standard but influenced how courts interpret vicarious liability, identified as the "Softel test." The court referenced multiple cases expressing skepticism about extending vicarious liability to broadcast piracy, including J. J Sports Prods. Inc. v. Sharp, where the court opted to adhere to binding circuit precedent over the Softel standard. A significant point made was in Comcast of Illinois X v. Multi-Vision Electronics, where the Eighth Circuit established a standard for individual liability based on the lack of distinction between an individual's actions and those of their corporation, differing from the benefit-and-control test associated with vicarious liability. This standard emphasizes a personal liability approach, aligning with precedents in the Third Circuit, rather than endorsing a broad vicarious liability theory. A corporate officer may be held personally liable for torts he directly commits and cannot avoid liability by claiming corporate protection. The Sharp court indicated that under the Softel standard, Mr. Sharp could not be held personally liable. Copyright infringement liability includes either actual damages and infringer profits or statutory damages, with the copyright owner entitled to recover actual damages and infringer profits. To establish infringer profits, the owner must present gross revenue, while the infringer must prove deductible expenses. Statutory damages range from $750 to $30,000, with potential increases to $150,000 for willful infringement or decreases to $200 for infringers unaware of their actions constituting infringement. Individual liability under the Cable Act requires proof that the individual authorized the violations, as seen in various case precedents. The plaintiff must demonstrate that the individual defendant authorized or supervised the infringement; failing to do so weakens the case for individual liability. Some courts express concerns about the implications of multiple defendants meeting the supervisory standard without clarifying why such a scenario may be problematic. The excerpt addresses the legal principles concerning the liability of individual owners of closely held corporations in cases under sections 553 and 605. It highlights that courts have blurred the distinction between the corporations and their owners, as seen in various cases like J. J Sports Prods. Inc. v. Ribeiro and DIRECTV, Inc. v. Cibulka. It notes that a lack of specific allegations against individual defendants, such as their presence during a violation or their authorization of the violation, has led to courts ruling against imposing individual liability. For instance, in J. J Sports Prods. Inc. v. Fisher, the court declined to hold individuals liable based solely on their ownership status. The excerpt further emphasizes that mere ownership does not imply supervisory control or financial interest, referencing cases that support this view. In contrast, the plaintiff in the current case has alleged that defendants exercised control over the entity and benefited financially from unlawful activities, which may justify individual liability. The court indicates it will not require amendments to the complaint despite formalistic objections, as necessary claims are sufficiently articulated, including specific identification of defendants in official documents such as liquor licenses. The excerpt concludes by noting that courts have accepted these principles even when allegations are based on information and belief, especially when facts are primarily within the defendants' knowledge. Plaintiff alleges that Tracy Blais had supervisory authority and control over the bar's activities on July 3, 2010, and benefited financially from its operations. This claim, although made on information and belief, is considered admitted based on legal precedents. Courts have accepted similar allegations based on "information and belief" without requiring further substantiation. Additionally, Sandra D. Gayaram is identified as the owner of Imperial Lounge Sports Bar, and this allegation is also treated as admitted. Records from the New York State Liquor Authority indicate that Gayaram is the principal of Imperial Lounge Sports Bar, which supports the inference that she had supervisory control and received financial benefits from its operations since May 28, 2005.