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In this case two very important issues arose –
- Whether a forfeited limited liability company can be sued ?
- Whether summons can be served to a former resident agent, and whether the same constitutes an effective service of summons to a limited liability company which has been forfeited?
The court concluded that if the summons has been served to the house of the resident agent of the limited liability company within one year from the date of the forfeiture, then the same indeed constitutes to be an effective service of summons to the company, on the basis of the judicial precedents.
J&J company entered into agreements with commercial entities. In this manner, the company distributed the sporting event programming between these commercial entities, by giving them limited sublicensing rights. For the boxing match between Many Pacquiao and Ricky Hatton, on May 2nd 2009, the company J&J alleged that the defendants i.e. Tammy P. Royster and John R. Royster had indulged in an unlawful activity of intercepting a broadcast without any legal permit, and then after that, having illegally broadcasted it without having the right to do so. The company enjoyed a nationwide exclusive distribution right on the fight that was held on May 2nd, 2009, and the company claimed that it had not awarded any such rights to the Roysters to broadcast the fight. Instead, the Roysters intercepted the broadcast, while they were trading as an entity named Marygolds or Marygold Family Event Centre, and they broadcasted the fight to as many as five televisions in Maryland. One of the persons who attended that broadcast at the Marygold Family Event Centre claimed that the capacity of the venue was as many as 200 persons, and at the time she attended there, there were 62 persons present.
The company J&J filed a case, but the motion was denied by the Court at the first instance on the ground that the plaintiff company had failed to submit the proper documentation to support the claim. The plaintiff filed a second motion, with more thorough documentation and supporting documents. This time, the court sent notice to the defendants, but neither of the defendants replied or presented themselves. After the absence of the defendants, the plaintiffs moved before the court for a default decision, of which the defendants were notified duly.
Whether the defendants had violated the 47 U.S.C. §605?
Since the plaintiff had moved for a default judgment, the court pondered over whether the allegations as to damages were true or not.
The Court through precedents had established that at the time of default judgement, the Court would grant damages/recovery under only one of the statutes under which such damages have been claimed. This approach of the Maryland Courts forced the plaintiff to further seek damages only under the 47 U.S.C. §605. The plaintiff moved forward seeking recovery under this section since it allowed the plaintiff to seek a larger amount in recovery as compared to the other provision. However, as opposed to the claim made by the plaintiff, the Court awarded $2,480 as statutory damages to the plaintiff, and $9,900 as enhanced damages, against the amount of $100,000 claimed by J&J as enhanced damages from the defendants. The plaintiff was also left with the option to file a new motion before the court to obtain the attorney’s fees and costs.
The Court’s assessment for the damages to be awarded to the plaintiff was triggered by the non-appearance of the defendants before the Court. After their continuous absence and non-responsiveness to the notices of the Court, the plaintiff moved the Court for a default judgment. The Court had already set a precedent in another case concerning J&J where it had held that the Court would only allow damages under one statute if the case such as this one was presented before the Court. The plaintiff moved under 47 U.S.C. §605, since it allowed for a greater amount of damages. Another reason why the court allowed for recovery only under one statute was that the offences under the two statures were essentially the same, and thus, allowing recovery under both the statutes would have been nothing less than ‘double recovery’ from the defendants. The Court pondered over damages under three heads – statutory damages, enhanced damages, and other fees related to Attorney’s costs and other costs so incurred. When awarding the plaintiff with statutory charges, the court assessed the cost it would have taken for the defendants to broadcast the match lawfully, which was $2000, but the actual profit gained by the defendants was as much as $2480, which the court seemed appropriate to award. But the court refrained from awarding exorbitantly high damages and awarded only four times the statutory damages to the plaintiffs.
The Court granted the plaintiff’s request for a default judgment against the defendants Tammy P. Royster and John R. Royster, where the total damages which were supposed to be paid by the defendants to the plaintiffs was in total the sum of $12,400.