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In the United States District Court for the Northern District of Ohio Western Division Case: 3:13-cv-00951-VKA Doc #: 46 Filed: 09/18/14 1 of 16. PageID #: <pageID> IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO WESTERN DIVISION Joe Hand Promotions, Inc., : Case No. 3:13CV951 : Plaintiff, : : v. : : KSD, Inc., et al., : : MEMORANDUM AND ORDER Defendants. : I. INTRODUCTION The parties have consented to the undersigned Magistrate entering final judgment in this anti-piracy case under the Federal Communications Act of 1934, as codified in 47 U.S.C. § 605; the Cable Communications Policy Act of 1984, as codified in 47 U.S.C. § 553, and a state law prohibition against conversion. Pending are cross Motions for Summary Judgment (Docket Nos. 20 & 30), Defendants’ Motion to Dismiss and Opposition to Summary Judgment (Docket No. 30), Plaintiff’s Reply Brief in Support of Summary Judgment (Docket No. 32), Defendants’ Supplemental Brief Opposing Summary Judgment and Seeking Dismissal (Docket No. 36) and Plaintiff’s Supplemental Brief in Support of Summary Judgment and Opposing Dismissal (Docket No. 39). For the reasons that follow, the Magistrate denies Defendants’ Motion to Dismiss, and the cross-Motions for Summary Judgment. Case: 3:13-cv-00951-VKA Doc #: 46 Filed: 09/18/14 2 of 16. PageID #: <pageID> II. PARTIES Plaintiff Joe Hand Promotions, Inc. (“Plaintiff”), is a Pennsylvania corporation with its principal place of business in Feasterville, Pennsylvania (Docket No. 1, pp. 2-3 of 7). Joe Hand Promotions, Inc., is a closed- circuit distributor of sports and entertainment programming (Docket No. 20, Attachment, p. 1 of 9). As part of Plaintiff’s business, it acquires commercial distribution rights to television programming and then sub-licenses that programming, for a fee, to commercial establishments so that they can exhibit the programming to their patrons (Docket No. 1, p. 3 of 7). To achieve this, Plaintiff spends money to market, advertise, promote and deliver its programming to its customers (Docket No. 1, p. 3 of 7). Defendant KSD, Inc. (“Defendant KSD”), is a corporation under the laws of the State of Ohio that owns and operates the Six Pack Bar & Grill (Docket No. 30, Attachment 1, p. 17 of 48). Defendant Kypros Diacou (“Defendant Diacou”), is the sole shareholder of KSD, Inc. (Docket No. 40, Attachment 1, p. 17 of 48). For ease of discussion, Defendant KSD and Defendant Diacou will be collectively referred to as “Defendants.” III. FACTUAL AND PROCEDURAL BACKGROUNDS Zuffa, LLC d/b/a the Ultimate Fighting Championship®, a Nevada corporation, owns the content of a television event titled UFC 129: Georges St. Pierre v. Jake Shields (hereinafter “the UFC event”), which was broadcast on April 30, 2011. Pursuant to an agreement with Zuffa, Plaintiff acquired exclusive commercial distribution rights to the UFC event via closed circuit television to commercial outlets. Zuffa authorized Plaintiff to sell licenses to commercial establishments allowing them to show the UFC event to their patrons based on the size of the establishment. The parties do not contend that there was any sub-licensing agreement between Plaintiff and Defendants. 2 Case: 3:13-cv-00951-VKA Doc #: 46 Filed: 09/18/14 3 of 16. PageID #: <pageID> According to President, Joe Hand Jr., Plaintiff began to experience serious erosion in the sale of their proprietary programming to commercial customers throughout the United States through piracy of their broadcasts by unauthorized and unlicensed establishments (Docket No. 20, Attachment 1, p. 2 of 9). To combat the erosion of its business, Plaintiff maintains a piracy program comprised of investigators tasked with building cases for enforcement actions against signal pirates who unlawfully show their content (Docket No. 20, Attachment 1, p. 2 of 9). As part of that piracy program, Investigator Ernesto A. Tatad of M.B. Scurto & Associates, Inc., allegedly visited Defendants’ Six Pack Bar & Grill on Saturday, April 30, 2011 (Docket No. 20, Attachment 2). According to Mr. Tatad’s affidavit, he entered the Six Pack Bar & Grill at approximately 10:19 p.m. and stayed for approximately 73 minutes (Docket No. 20, Attachment 2). During his time inside the Six Pack Bar & Grill, Mr. Tatad’s affidavit states that he observed the UFC event being played on seven televisions, specifically an undercard fight between Jose Aldo and Mark Hominick (Docket No. 20, Attachment 2). Defendants dispute Mr. Tatad’s observations. By sworn affidavit, Defendant Diacou asserts that he was not present at the Six Pack Bar & Grill until approximately 1 a.m. on the morning of May 1, 2011 (Docket No. 30, Attachment 2, p. 2 of 2). Defendant Diacou’s affidavit also reflects that he undertook his own investigation and that the UFC event at issue was not broadcast at the Six Pack Bar & Grill on the evening of April 30, 2011, but that from time to time, they do show free UFC fights (Docket No. 30, Attachment 2, p. 2 of 2). Costas Christides, a Six Pack Bar & Grill patron also submitted an affidavit claiming that he was present in the Six Pack Bar & Grill on April 30, 2011, from 10 p.m. until 12:30 a.m. and that the Jose v. Mark Hominick fight was not broadcast (Docket No. 30, Attachment 3). On April 26, 2013, Plaintiff filed a Complaint for damages against both Defendant KSD, Inc., and its alleged alter ego Kypros Diacou, in the Northern District of Ohio, Western Division (Docket No. 1). The 3 Case: 3:13-cv-00951-VKA Doc #: 46 Filed: 09/18/14 4 of 16. PageID #: <pageID> Complaint alleges violations of 47 U.S.C. § 605 (Count 1), 47 U.S.C. § 553 (Count 2), and asserts a state law conversion claim (Count 3) (Docket No. 1). Defendants responded to the Complaint, generally denying the allegations and asserting affirmative defenses that: (1) Plaintiff has failed to state a claim upon which relief may be granted; (2) Plaintiff’s claims are barred by the doctrines of latches and waiver; and (3) Plaintiff’s claims are barred by the doctrine of unclean hands (Docket No. 6). On February 18, 2014, Plaintiff filed a Motion for Summary Judgment on Counts 1 and 2, but not on its state law conversion claim (Docket No. 20). On April 18, 2014, Defendants filed their omnibus pleading opposing Plaintiff’s Motion for Summary Judgment, seeking to dismiss the complaint and for summary judgment as to Defendant Diacou (Docket No. 30). On June 25, 2014, this Court issued a Memorandum and Order denying Defendants’ Motion to Dismiss pending Plaintiff’s submission of the contract granting it the requisite proprietary rights to maintain its claims (Docket No. 33). The Court also stayed the Motions for Summary Judgment pending any amendments to the pleadings and completion of any additional discovery (Docket No. 33). On July 2, 2014, Plaintiff filed a redacted version of the agreement (Docket No. 35, Attachment 1). On July 15, 2014, Defendants filed a Supplemental Brief in Opposition to Plaintiff’s Motion for Summary Judgment and Seeking Dismissal (Docket No. 36). On July 29, 2014, Plaintiff filed a Supplemental Brief in Support of Summary Judgment and Opposing Dismissal (Docket No. 39). On August 15, 2014, this Court ordered Plaintiff to file the relevant un-redacted Licensing Agreement within ten days of the Court’s order (Docket No. 41). On August 27, 2014, Plaintiff filed, under seal, the agreement affording it the proprietary rights to maintain its claims, which is also subject to a stipulated protective order (Docket Nos. 44 & 45). IV. ANALYSIS A. DEFENDANT’S MOTION TO DISMISS 4 Case: 3:13-cv-00951-VKA Doc #: 46 Filed: 09/18/14 5 of 16. PageID #: <pageID> On June 25, 2014, this Court denied Defendants’ Motion to Dismiss for failure to join an indispensable third party, pending Plaintiff’s submission of the agreement granting it the proprietary rights it seeks to enforce in this action (Docket No. 33). On August 27, 2014, Plaintiff filed an un-redacted copy of its agreement with Zuffa, Inc., which the Court has reviewed (Docket No. 44). For the reasons that follow, the undersigned Magistrate finds that Plaintiff has the requisite proprietary rights to maintain its claims under 47 U.S.C. § 605 and §553. Accordingly, Defendants’ Motion to Dismiss is denied. 1. STATUTORY STANDING “[A] plaintiff must possess both constitutional and statutory standing in order for a federal court to have jurisdiction.” Loren v. Blue Cross & Blue Shield of Mich., 505 F.3d 598, 606 (6th Cir. 2007)(quoting Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541 (1986)(internal quotations omitted)). The party invoking federal jurisdiction bears the burden of establishing standing. Loren, 505 F.3d at 607 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)). “Where a plaintiff lacks statutory standing to sue, her claim should be dismissed for failure to state a claim upon which relief can be granted.” Roberts v. Hamer, 655 F.3d 578, 581 (6th Cir. 2011)(citing Traverse Bar Area Intermediate Sch. Dist. v. Mich. Dep’t of Educ., 615 F.3d 622, 626 (6th Cir. 2010)). The language of both 47 U.S.C. § 605 and § 553 authorizes “any person aggrieved” by a violation of subsection (a) of their respective statutes to bring a civil action in federal court for injunctive relief, damages, and costs. 47 U.S.C. §§ 605(e)(3)(A), 553(c)(1) (West 2014). To have standing as “any person aggrieved” under § 605, one must be a person with proprietary rights in the intercepted communication by wire or radio, including wholesale or retail distributors of satellite cable programming.” 47 U.S.C. § 605(d)(6) (West 2014). Although § 553 does not specifically define “any person aggrieved,” the language of § 553(a)(1) suggestss that in order to be a person aggrieved under the statute, one must be a cable operator or someone otherwise 5 Case: 3:13-cv-00951-VKA Doc #: 46 Filed: 09/18/14 6 of 16.
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