Potential defenses in J& J Sports Productions Satellite Piracy Cases – Cable operator “authorized broadcast.”

Introduction

This blog discusses one case dealing with alleged theft of pay per view boxing fights distributed by J&J Sports Productions, Inc.  These cases can be very difficult to defend against, but here is a case brief dealing with a federal court of appeals (5th circuit) decision reversing summary judgement in favor of JJ, the Plaintiff in the case.  If you need help defending against charges of sports broadcasting piracy call us at the number above or below.

The case is J&J Sports Prods., Inc. v. Mandell Family Ventures, L.L.C., 751 F.3d 346, 347 (5th Cir. 2014).

Background Facts

According to the language of the decision:

“This case concerns the live  broadcast of the Floyd “Money” Mayweather, Jr. v. Ricky Hatton WBC Welterweight Championship Fight (the “fight”) on December 8, 2007. The rights to  broadcast the fight were held by various entities, including Time Warner Cable (“TWC”) and  J& J. TWC was granted the rights to  broadcast the fight by means of pay-per-view to only those venues “not accessible to the public in general.” The agreement granting TWC these rights contemplated that TWC might inadvertently  broadcast the event to “commercial subscribers” and provided for a liquidated-damages fee to be paid by TWC under such circumstances. Conversely,  J& J was granted the rights to  broadcast the fight to only “commercial closed-circuit television exhibition outlets.” Greenville Avenue Pizza Company (“GAPC”) is a restaurant in Dallas, Texas, which is owned by the Defendants. At all times relevant to this case, GAPC received commercial cable television services from TWC pursuant to a “Commercial Services Agreement.” On December 8, 2007, GAPC purchased the pay-per-view  broadcast of the fight from TWC for $54.95 and displayed the fight in its restaurant during business hours. GAPC did not advertise the fight or charge an entry fee or any other fee to view the fight. Representatives of both GAPC and TWC attest that TWC authorized GAPC's receipt of the  broadcast. A representative of TWC described the authorization as an inadvertent error on its part. On December 7, 2010,  J& J initiated this action against the Defendants, alleging that they violated §553 and 605 by receiving and displaying the fight without first paying a licensing fee to  J& J. At the conclusion of discovery,  J& J filed a motion for summary judgment, which the district court granted, awarding  J&J statutory damages of $350 and costs and attorney's fees of $26,780.30. Defendants timely appealed.

 Federal Appeals Court rules there is a question of fact regarding whether or not the broadcast was “authorized” by a cable operator.

A.  Section 503 safe harbor – the court discussed exemption for liability 

Whether § 553's Safe Harbor Applies – Section 553(a)(1) imposes civil and criminal liability for “intercepting or receiving any communications service offered over a cable system.” 47 U.S.C. § 553(a)(1) (2006). But it includes an essential exclusion, often referred to as a “safe harbor,” that precludes the imposition of liability on the majority of cable recipients—customers of cable providers. This exclusion constrains the reach of the statute by exempting from liability those individuals who receive authorization from a cable operator: ‘No 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.'

B.  Defendants contentions

According to the court documents:

“The Defendants maintain that they fall within this safe harbor. To support their argument, they provided evidence that GAPC:

(1) was a paying commercial customer of TWC;

(2) paid a separate fee for the pay-per-view broadcast of the fight;

and

(3) was authorized by TWC, a cable operator, to receive the broadcast of the fight.

J&J, however, contends that the Defendants' conduct falls outside the safe harbor because, as the license holder for the closed-circuit broadcast of the fight, it did not authorize the Defendants' receipt of the broadcast.   The district court appeared to accept J&J's contention, holding that J&J only had to prove:

“(1) that the Event was Shown in Greenville Avenue Pizza

and

(2) that J&J Sports did not authorize such exhibition of the Event.”

C.  Court ruling

The court after hearing both sides of the argument reached its decision:

“We conclude that this ruling misconstrues § 553(a)(1). The text of the statute unambiguously states that liability extends only to the receipt of cable services  not authorized by a cable operator. Therefore, in order for a cable customer to ensure that it is not criminally or civilly liable under § 553(a)(1), it need only receive authorization from a cable operator for the cable services it receives. J& J's argument, in essence, is that a cable customer who receives such authorization may still face liability under § 553 unless it takes the additional step of ensuring that the cable operator itself is licensed to distribute the various  broadcasts that the customer views. Interpreting the safe harbor in this highly restrictive manner finds no support in the text of the statute. The statute does not hinge liability on the cable customer taking additional steps or the cable operator being licensed to distribute a  broadcast: The exclusion from liability simply applies to those who receive authorization from a cable operator.  See  J&J Prods., Inc. v. Schmalz, 745 F.Supp.2d 844, 851 (S.D.Ohio 2010) Moreover, applying the safe-harbor provision in the manner  J& J advocates would  expand liability under the statute to ends not encompassed by the text, holding liable cable customers who unknowingly receive  broadcasts that the cable company was not licensed to distribute, even though they were authorized by the cable operator to receive the  broadcast.  We interpret the statute in accordance with its plain language: liability under § 553(a)(1) does not extend to those who are “specifically authorized … by a cable operator ” to receive a broadcast. 47 U.S.C. § 553(a)(1).”

Does J&J Sports file lawsuits? 2017 Updates.

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Statute of limitations

This can be a very tricky issue.  Some federal courts look to analagous cable theft laws and borrower their statute of limitations (note 605 and 553 statutes do not explicitly contain a SOL) and some state laws provide a two year statute of limitations.  However, other courts (like New York in the second District) look to the copyright law statute of limitations which is three years.  In fact, in one New York Federal Case the court discussed this:

“But NSS argues, and the Court concludes, that there is a federal statute of limitations that provides a closer analogy and is otherwise preferable, to wit, the three-year statute of limitations applicable to actions brought under the Copyright Act, 17 U.S.C. § 507(b).   Like the anti-piracy provisions of the Communications Act, the Copyright Act protects proprietary rights transmitted through modern media.  See  UMG Recordings, Inc. v. MP3.Com, Inc., 92 F.Supp.2d 349 (S.D.N.Y.2000).  Both statutes, moreover, have a similar remedial structure, providing a prevailing plaintiff with the choice of either actual or statutory damages, the possibility of a discretionary increase in statutory damages based on the culpability of the wrongdoer's conduct, and an award of costs and attorneys' fees,  see 17 U.S.C. §§ 504–505; 47 U.S.C. §§ 553(c), 605(e). Moreover, borrowing the period of limitations from the Copyright Act has the further substantial benefit of nationwide uniformity in implementing an act of inherently nationwide application. As the Fifth Circuit explained in  Prostar: “[C]able companies engage in multi-state activities and [if a state statute of limitations were applied] would consequently be required to make fifty separate decisions in their efforts to investigate and pursue cable piracy.  A single federal standard would eliminate these practical difficulties, facilitating resolution of the national problems addressed by the [Communications Act].” 239 F.3d at 676–77.   See also,  Kingvision Pay Per View, Ltd. v. Boom Town Saloon, 98 F.Supp.2d 958, 963 (N.D.Ill.2000) (“[C]auses of action under the Cable Act are multistate in nature: they involve communications in interstate commerce that can lead to violations taking place in multiple states, with the prospect of potential forum shopping if multiple state statutes of limitations were to apply.”). Accordingly, the Court concludes that the three year statute of limitations borrowed from the Copyright Act applies to plaintiff's instant claims. None of NSS' remaining claims is barred by this limitation”

See Nat'l Satellite Sports, Inc. v. Time Warner Entm't Co., L.P., 255 F. Supp. 2d 307, 313–14 (S.D.N.Y. 2003).

Contact a satellite / cable piracy attorney

If you receive a legal demand letter from a law firm accusing your business of violating federal law contact us at (877) 276-5084.   We can help you examine your legal rights and potential defenses.