United States District Court, District of Columbia
CHRISTOPHER R. COOPER United States District Judge.
2, 2015, Floyd “Money” Mayweather, Jr. and Manny
“Pac-Man” Pacquiao squared off in a boxing match
billed as “The Fight of the Century.”
Unfortunately for the tens of millions of viewers around the
world, it proved to be anything but. Among the likely
disappointed were approximately 120 patrons at the Cloud
Restaurant & Lounge in Washington, D.C., which aired the
fight despite having no right to do so. Plaintiff J & J
Sports Productions, Inc. (“J & J”) had
exclusive rights to contract with bars, restaurants, and
other establishments who sought to broadcast the match. J
& J filed suit against the Cloud Lounge's owner,
Defendant Tesfit Kiflu, seeking damages under the Federal
Communications Act (“FCA”) for its lost revenue
as well as enhanced damages for Mr. Kiflu's ostensibly
willful violation of the law.
Mayweather won a judges' decision in his fight by using
what commentators called a highly defensive strategy. Here,
Kiflu has employed no defense at all. Despite receiving
service of process indicating that he should get ready to
rumble, Kiflu declined to enter the ring. He failed to answer
the suit against him and now J & J seeks a default
judgment-the law's version of a technical knockout. The
Court will issue a split decision. It will award J & J
the amount Kiflu would have had to pay to broadcast the fight
legally, as well as some attorneys' fees, but it will not
award enhanced damages because J & J has not proffered
sufficient evidence to justify them.
prohibits unauthorized interception, receipt, publication, or
use of certain types of communications, including the type of
encrypted satellite signals at issue in this case.
See 47 U.S.C. § 605(a). The Act creates a private
right of action by “[a]ny person aggrieved by any
violation” of the relevant prohibition. Id.
§ 605(e)(3)(A). It authorizes a court to award between
$1, 000 and $10, 000 in statutory damages for each violation,
“as the court considers just.” Id.
§ 605(e)(3)(C)(i)(II). Further, it permits a court
“in its discretion” to award up to $100, 000 in
enhanced damages “[i]n any case in which the court
finds that the violation was committed willfully and for
purposes of direct or indirect commercial advantage or
private financial gain[.]” Id. §
605(e)(3)(C)(ii). The FCA also allows a court to award
attorneys' fees and costs to a prevailing plaintiff.
Id. § 605(e)(3)(B)(iii).
J obtained exclusive rights to distribute broadcasts of the
Mayweather-Pacquaio bout, allowing it to charge bars,
restaurants, and other establishments that sought to show the
fight. See Mot. Default J. Ex. 3 (“J & J
Contract”), ECF No. 11-4, at 3-9. The cost for showing
the fight depended on the establishment's capacity.
Id. at 1 (“Rate Card”). J & J
disseminated the program to establishments with which it had
contracted via closed circuit television and encrypted
satellites signals. The Cloud Lounge did not contract with J
& J to show the fight. But, according to an
investigator's affidavit, it showed the program to its
patrons anyway. See Compl. Ex. A (“Martin
Affidavit”), ECF No. 1-1. Per the affidavit, the lounge
was at capacity- approximately 120 people-such that it
refused to allow more patrons to enter. Id. at 2-3.
judgment requires a one-two punch. See, e.g.,
Amaya v Logo Enters., LLC, 251 F.Supp.3d 196, 199
(D.D.C. 2017). First, a plaintiff must request that the Clerk
of the Court enter a default against an opposing party who
has “failed to plead or otherwise defend[.]”
Fed.R.Civ.P. 55(a). An entry of default “establishes
the defaulting party's liability for the well-pleaded
allegations of the complaint.” Boland v. Elite
Terrazzo Flooring, Inc., 763 F.Supp.2d 64, 67 (D.D.C.
2011). Second, the plaintiff must petition the court for a
default judgment against the defaulting party. Fed.R.Civ.P.
55(b)(2). This process ensures that an absentee defendant
cannot escape liability simply by refusing to participate in
judicial proceedings. See Amaya, 251 F.Supp.3d at
entry of default establishes liability, a court has
substantial discretion in determining the appropriate award
for the plaintiff. It must do so through an independent
assessment of the alleged damages. A court may hold a hearing
or can base its evaluation on “detailed affidavits or
documentary evidence” submitted by the plaintiff in
support of its claims. Boland v. Providence Constr.
Corp., 304 F.R.D. 31, 36 (D.D.C. 2014) (quoting
Fanning v. Permanent Sol. Indus, Inc., 257 F.R.D. 4,
7 (D.D.C. 2009)). The court is not required to hold a hearing
“as long as it ensures that there is a basis for the
damages specified in the default judgment.” Elite
Terrazzo Flooring, Inc., 763 F.Supp.2d at 67.
Court will first assess Kiflu's liability and then
evaluate the appropriate damages.
J has submitted an affidavit that puts forth sufficient facts
to demonstrate that the Cloud Lounge broadcast the fight.
See Martin Affidavit at 2-4. J & J had exclusive
rights to distribute the fight, see J & J
Contract, and Cloud did not contract with J & J,
see Compl. ¶¶ 12- 13. There is thus no
doubt that there was a violation of the FCA.
whether Kiflu is personally liable for that violation
presents a slightly thornier question. It appears that no
court in this circuit has ever held a business's
proprietor liable for § 605 violations by that business.
See Report & Recommendation as appended to J
& J Sports Prods., Inc. v. Micherie, LLC, No.
17-CV-1150 (KBJ), 2018 WL 4629301, at *4-6 (D.D.C. Sept. 27,
2018). Elsewhere, however, “a large body of cases-and,
indeed, what appears to be the great weight of
authority-suggests that an individual corporate officer may
be held liable for a corporation's infringing acts under
the FCA[.]” Joe Hand Promotions, Inc. v.
Wright, 963 F.Supp.2d 26, 28 (D.D.C. 2013) (collecting
cases). To establish such liability, courts have held, a
plaintiff must show “that the individual had a
‘right and ability to supervise' the violations, as
well as an obvious and direct financial interest in the
misconduct.” Id. (quoting Circuito
Cerrado, Inc. v. Pizzeria y Pupuseria Santa Rosita,
Inc., 804 F.Supp.2d 108, 112-13 (E.D.N.Y. 2011)). Courts
often refer to this inquiry as the “benefit and control
test, ” which asks whether an individual both
controlled the violation and benefited from it. See
Id. While some courts have questioned this test, see
id. (collecting cases), and no court in this circuit
appears to have decided the matter one way or the other, this
Court chooses to apply it here. The Court sees little reason
to prevent a plaintiff harmed by corporate violations of
§ 605 from seeking recovery from an individual who