Joint Stock Company "Channel One Russia Worldwide" v. Russian TV Company Inc.

Background

The plaintiff sued defendants for violating section 605(a) of the Federal Communications Act by illegally rebroadcasting the plaintiff’s television programming. After discovery, the parties agreed to a shortened trial addressing those claims, and the plaintiff agreed that the result would resolve its remaining claims, including copyright claims.

The court previously found that defendants violated the Federal Communications Act. It later entered a permanent injunction barring defendants from broadcasting or distributing the plaintiff’s programming without prior authorization. The court also awarded the plaintiff $1,149,000 in statutory damages, while leaving the amount of attorneys’ fees and costs for later proceedings.

Sanctions and requested stay

An executive order and related Treasury Department regulations blocked certain property connected to designated Russian persons and restricted transactions involving that property. The regulations also restricted enforcement of judgments against blocked property. The plaintiff was added to the Treasury Department’s list of specially designated and blocked persons on May 8, 2022.

Defendants asked the court to stay, meaning temporarily delay, entry of the money judgment until either the plaintiff was no longer subject to the sanctions or the Treasury Department’s Office of Foreign Assets Control authorized payment. Defendants argued that entering a large unpaid judgment could harm their standing with stakeholders, lenders, creditors, and business partners and would require additional accounting work.

Court’s analysis

The court denied the requested stay because entering the judgment while staying its enforcement was the preferable approach. Entry of judgment would allow the appellate process to begin. The court found that defendants had not shown unfair prejudice from entry of the judgment because their liability was already subject to appellate review and the sanctions could later be lifted or modified through a license or another development.

The court also concluded that defendants’ potential accounting burden was not enough to justify delaying entry of judgment. That burden would exist while the liability remained in place, whether or not a formal judgment had been entered. The court found that any prejudice to defendants was outweighed by the parties’ interest in beginning the appeal and obtaining a final determination of liability.

The court considered the interests of the judiciary, nonparties, and the public neutral. It explained that either approach would defer to the federal sanctions policy reflected in the Treasury Department’s regulations. The court also noted that the plaintiff’s attorneys’ fees and costs would be determined later and that payment of those amounts would be subject to the sanctions regulations and any required authorization.

Ruling

Judge Lorna G. Schofield DENIED defendants’ motion to stay entry of the money judgment. The Clerk of Court was directed to close the motion. The plaintiff was directed to file a proposed judgment by January 19, 2024, and defendants could file objections by January 26, 2024. The parties were also directed to notify the court if the plaintiff was no longer subject to the sanctions or if any party obtained a specific Office of Foreign Assets Control license authorizing payment to the plaintiff.