G & G Closed Circuit Events, LLC v. Brews & Brats, Inc

Background

G & G Closed Circuit Events, LLC, the exclusive licensor of rights to exhibit certain closed-circuit and pay-per-view sports programming, sued Brews & Brats, Inc. and other defendants. The complaint alleged that defendants showed a boxing match at a commercial establishment without a license. G & G asserted claims under sections 553 and 605 of the Federal Communications Act, conversion, and California’s unfair-competition law.

G & G sought a default judgment. On March 10, 2023, the court awarded $1,000 in statutory damages and $1,200 in conversion damages. It did not award enhanced statutory damages.

Motion to Alter or Amend the Judgment

G & G moved under Federal Rule of Civil Procedure 59(e) to alter or amend the judgment. That rule permits such relief based on newly discovered evidence, clear error or a manifestly unjust decision, or an intervening change in controlling law. G & G argued that the court had committed clear error.

Statutory Damages

G & G argued that the $1,000 statutory award was $200 less than the commercial licensing fee and therefore gave defendants an improper windfall. G & G also argued that the award did not sufficiently deter future misconduct. The court rejected those arguments, noting that the $1,000 statutory award, together with the $1,200 conversion award representing the program’s cost, was an appropriate sanction that deterred misconduct without being destructive.

Enhanced Statutory Damages

G & G argued that enhanced damages were warranted because defendants acted willfully and sought to profit from showing the program. The court explained that enhanced damages are discretionary and require a finding that the violation was committed willfully and for direct or indirect commercial advantage or private financial gain.

The court found that G & G’s evidence did not establish that threshold requirement. The affidavit relied on general assertions that signal piracy is necessarily willful and speculation about ways establishments might profit, but it provided no case-specific evidence of willfulness or the method of interception. The court also explained that the evidence concerning advertising, cover charges, repeat-offender status, the location of the broadcast, attendance, and possible profit were factors considered in determining damages, not substitutes for the required finding of willful conduct for commercial advantage or financial gain.

Disposition

The court held that G & G had not shown clear error in the $1,000 statutory damages award or in the denial of enhanced statutory damages. Judge Susan Illston denied the motion to alter or amend the judgment. The court also vacated the scheduled hearing because it found the matter suitable for resolution without oral argument.