J&J Sports Productions Inc v. Daniel Ramsey ( 2018 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 17-3604
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J&J SPORTS PRODUCTIONS, INC.,
Appellant
v.
DANIEL RAMSEY,
a/k/a DANIEL SMITH RAMSEY,
d/b/a TREAURES BANQUET HALL;
TREASURES 5549, LLC, AN UNKNOWN BUSINESS ENTITY,
d/b/a TREASURES BANQUET HALL
______________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
(D.C. Civ. No. 2-17-cv-1942)
District Judge: Honorable Mark A. Kearney
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Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
October 2, 2018
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Before: SHWARTZ, ROTH, and FISHER, Circuit Judges.
(Filed: December 11, 2018)
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OPINION*
______________
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7
does not constitute binding precedent.
SHWARTZ, Circuit Judge.
Plaintiff J&J Sports Productions, Inc. (“J&J”) appeals the District Court’s orders
denying its motions for default judgment against Defendant Daniel Ramsey and to alter
or amend that judgment. Because the Court did not abuse its discretion in denying these
motions, we will affirm.
I
J&J had the exclusive licensing rights to broadcast the May 2, 2015 boxing match
between Floyd Mayweather and Manny Pacquiao and the accompanying undercard
matches occurring at the MGM Grand Garden Arena in Las Vegas, Nevada. J&J
distributes sporting event programming by entering into agreements with commercial
entities for limited sublicensing rights. J&J did not enter into such an agreement with
either Defendants Treasures 5549, LLC, or Ramsey.
Treasures 5549 owns and operates Treasures Banquet Hall (the “Banquet Hall”) in
Philadelphia, Pennsylvania. Using his personal email address and own name, Ramsey
applied for and held amusement and commercial activity licenses from the City of
Philadelphia Department of Licenses & Inspections for Treasures 5549.
The Banquet Hall advertised on Facebook that it would broadcast the fight and
provide drink specials and free food. On fight night, the Banquet Hall admitted over 200
patrons, each paying a $20 entrance fee, and broadcasted J&J’s licensed program.
J&J filed a complaint against Defendants in the United States District Court for
the Eastern District of Pennsylvania, alleging violations of 47 U.S.C. §§ 553 and 605 for
the unauthorized broadcast of J&J’s licensed program. Defendants were served with the
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complaint but did not respond. As a result, J&J requested and the Clerk of the Court
entered default against them. J&J then sought the entry of default judgment, and the
District Court held a hearing. The Court entered default judgment for J&J against
Treasures 5549, awarding $20,674.11 in damages under 47 U.S.C. § 605(e)(3)(C)(i) and
attorney’s fees and costs because “no one, including Treasures 5549, LLC, paid J&J for
the right to show the May 2, 2015 pay-per-view telecast.” J&J Sports Prods., Inc. v.
Ramsey, Civ. No. 17-1942, 2017 WL 4287200, at *2, *4 (E.D. Pa. Sept. 27, 2017). As to
Ramsey, the Court found that “J&J adduced no evidence of Mr. Ramsey ordering the
telecast, advertising the telecast or his presence in the Treasures Banquet Hall for the
showing,” and that the evidence it produced concerning his association with Treasures
5549 was insufficient to establish individual liability. Id. at *4.
J&J moved to alter or amend judgment pursuant to Federal Rule of Civil
Procedure 59(e), which the District Court denied. The Court held that J&J failed to meet
the standard required for such a motion and said that, contrary to J&J’s argument, the
Court had not required proof of actual knowledge to hold Ramsey individually liable.
The Court also held that the amusement and business licenses on which J&J relied “do
not reflect Mr. Ramsey’s official capacity,” or include “allegations of an officer role,”
and thus do not establish “Ramsey’s right and ability to supervise paired with a direct
financial benefit.” App. 5.
J&J appeals.
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II1
A
We review orders granting or denying default judgment motions and Rule 59(e)
motions to alter or amend judgment for abuse of discretion. Jorden v. Nat’l Guard
Bureau, 877 F.2d 245, 250-51 (3d Cir. 1989) (citations omitted) (default judgment);
Cureton v. Nat’l Collegiate Athletic Ass’n, 252 F.3d 267, 272 (3d Cir. 2001) (Rule 59(e)
motion). An abuse of discretion occurs “as a result of an errant conclusion of law, an
improper application of law to fact, or a clearly erroneous finding of fact.” McDowell v.
Phila. Hous. Auth., 423 F.3d 233, 238 (3d Cir. 2005) (citing Chiang v. Veneman, 385
F.3d 256, 264 (3d Cir. 2004)).
B
J&J argues that the District Court erred in denying its request for default judgment
against Ramsey and its motion to alter or amend that judgment because it wrongly
applied a heightened standard for individual liability. J&J also argues that the Court
erred in finding insufficient evidence upon which to hold Ramsey individually liable for
commercial piracy because the business documents in his name establish control over the
Banquet Hall’s employees and activities and direct financial benefit in its increased
profits.
1
The District Court had jurisdiction pursuant to 28 U.S.C. § 1331. We have
jurisdiction pursuant to 28 U.S.C. § 1291.
4
Before granting default judgment, a district court may consider whether “the
unchallenged facts constitute a legitimate cause of action, since a party in default does
not admit mere conclusions of law.” Broadcast Music, Inc. v. Spring Mount Area
Bavarian Resort, Ltd., 555 F. Supp. 2d 537, 541 (E.D. Pa. 2008) (citations omitted); see
10A Charles Alan Wright, Arthur R. Miller, et al., Federal Practice & Procedure § 2685
(4th ed. 2018).2
J&J claims Ramsey is liable for violating the commercial piracy statutes, 47
U.S.C. §§ 553 and 605.3 The Communications Act, § 605, holds any person or individual
liable for the unauthorized interception and publication of airborne satellite cable
transmissions for non-private viewing. 47 U.S.C. § 605(a), (b), (d)(1); TKR Cable Co. v.
Cable City Corp., 267 F.3d 196, 207 (3d Cir. 2001). Similarly, under the Cable Act,
§ 553, “[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.” 47 U.S.C. § 553(a)(1).
2
In addition, “[t]hree factors control whether a default judgment should be
granted: (1) prejudice to the plaintiff if default is denied, (2) whether the defendant
appears to have a litigable defense, and (3) whether defendant’s delay is due to culpable
conduct.” Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000).
3
Because courts have adopted the same test for personal liability under both
statutes, we need not differentiate between personal liability under §§ 553 or 605. See,
e.g., J&J Sports Prods., Inc. v. Crazy Willy’s Bar, Lounge & Rest., Inc., No. 17-CV-
1192, 2018 WL 3629595, at *3 (E.D.N.Y. July 31, 2018); J&J Sports Prods., Inc. v. BOB
Lounge, LLC, No. 17-11350, 2018 WL 300362, at *4 (E.D. Mich. Jan. 5, 2018); Joe
Hand Promotions, Inc. v. Bush, SA-16-CA-174-FB, 2017 WL 7052329, at *2 (W.D. Tex.
Oct. 27, 2017); J&J Sports Prods., Inc. v. Ribeiro, 562 F. Supp. 2d 498, 501 (S.D.N.Y.
2008).
5
A plaintiff must satisfy three elements to establish a defendant’s liability under
these statutes: (1) interception of a satellite transmission or broadcast, (2) lack of
authorization, and (3) publication. See 47 U.S.C. §§ 553(a), 605(a). Here, J&J seeks to
impose liability on both Treasures 5549 and an individual associated with Treasures
5549. To hold such an individual liable, J&J must prove that the individual:
(1) has the right and ability to supervise the violative activity, although he
need not actually be supervising, because he need not know of the violative
activity, and (2) has a direct financial interest in the violation, i.e., financial
benefits, even if not proportional or precisely calculable, that directly flow
from the violative activity.
Joe Hand Promotions, Inc. v. Yakubets, 3 F. Supp. 3d 261, 296 (E.D. Pa. 2014) (adopting
test for individual vicarious liability under the Copyright Act set forth in Softel, Inc. v.
Dragon Medical & Scientific Communications, Inc., 118 F.3d 955, 971 (2d Cir. 1997));
see also Joe Hand Promotions, Inc. v. Tickle, No. 4:12-cv-01874, 2016 WL 393797, at
*13 (E.D. Pa. Feb. 2, 2016) (applying Yakubets test); J&J Sports Prods., Inc. v. Chauca,
Civ. No. 14-6891, 2015 WL 7568389, at *5 (E.D. Pa. Nov. 25, 2015) (same). Thus,
individual liability under § 553 “does not require actual knowledge or supervision.” J&J
Sports Prods., Inc. v. Cruz, Civ. No. 14-2496, 2015 WL 2376290, at *4 (E.D. Pa. May
18, 2015).
Here, the District Court applied the test described above, did not require proof of
actual knowledge, and correctly concluded that J&J did not adduce facts to impose
individual liability on Ramsey. Ramsey, 2017 WL 4287200, at *2, *4 (citing Cruz, 2015
WL 2376051, at *5 (citing Yakubets, 3 F. Supp. 3d at 277)); see also App. 4 (reiterating
Yakubets test in the order denying Plaintiff’s motion to alter or amend judgment)). First,
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although J&J alleged in its complaint that “Ramsey is a managing member of Treasures
5549, LLC,” App. 85, and presented a document showing that Treasures is an LLC,
Ramsey’s name is not on that document,4 and there is no evidence or allegation that he
has an ownership interest in Treasures 5549. In any event, an ownership interest or right
in an LLC as a managing member alone is insufficient to establish liability. See Joe
Hand Promotions, Inc. v. Murray, No. 5:15-cv-5631, 2016 WL 3903205, at *4-5 (E.D.
Pa. July 18, 2016) (holding that an individual could not be found liable where plaintiff
alleged only that she was a managing member of the LLC that owned and operated the
pirating business). Second, the fact that Ramsey applied for and received the amusement
and business licenses is insufficient to show he had the right to control or supervise the
activities at the Banquet Hall. See Yakubets, 3 F. Supp. 3d at 297, 300, 301 (holding
liquor license was sufficient to establish individual liability where it identified the
individual as the president, secretary/treasurer, director, stockholder, and
manager/steward of the pirating business). Here, Ramsey’s name merely appears on
these licenses, and there is nothing in the record to show the licenses imposed any
particular obligations on him. Contra Tickle, 2016 WL 393797, at *13 (holding liquor
license sufficient to establish individual liability where individual was registrant on the
4
In its default judgment opinion, the District Court asserted, without citation, that
Ramsey also filed the LLC registration papers for Treasures 5549. Ramsey, 2017 WL
4287200, at *1. J&J repeated this statement in its briefs, citing the Court’s opinion. See
Appellant’s Br. at 14; Dkt. No. 34-1 at 4. There is no support in the record for this
assertion. J&J has provided only the Pennsylvania Business Entity Filing History for
Treasures 5549, which does not list Ramsey’s name, and alleged in the unverified
complaint only that “Ramsey is a managing member of Treasures 5549, LLC,” App. 85.
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license and the license obligated him to supervise the activities of the business). Third, as
the District Court noted, J&J relies predominately on its allegations in the complaint
made on information and belief. These allegations are distinguishable from the factually-
supported statements on which the Cruz court relied where the defendant answered the
complaint, admitting that she was once the legal operator of the pirating business and the
business entity filing history explicitly listed her as an officer. 2015 WL 2376290, at *4.
Thus, given the lack of evidence to show Ramsey had the right and ability to
supervise activities at Treasures 5549 and the Banquet Hall, the District Court properly
concluded that Ramsey cannot be held individually liable for the piracy violations.
Therefore, it did not abuse its discretion in denying default judgment as to Ramsey.
C
We reach the same conclusion concerning the District Court’s order denying J&J’s
motion to alter or amend the default judgment. Pursuant to Rule 59(e), three
circumstances warrant altering or amending a judgment: “(1) an intervening change in the
controlling law; (2) the availability of new evidence that was not available when the court
granted the motion for summary judgment; or (3) the need to correct a clear error of law
or fact or to prevent manifest injustice.” Max’s Seafood Café ex rel. Lou-Ann, Inc. v.
Quinteros, 176 F.3d 669, 677 (3d Cir. 1999) (citing N. River Ins. Co. v. CIGNA
Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995)). Because none of these
circumstances is met and the District Court correctly declined to find Ramsey
individually liable, there was no reason for it to alter or amend its ruling denying J&J’s
motion for default judgment against Ramsey.
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III
For the foregoing reasons, we will affirm.
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