## Facts

- National Satellite Sports, Inc. (NSS) held the exclusive license to distribute a pay-per-view boxing match to commercial establishments in Ohio.
- Time Warner Entertainment Co., L.P. (Time Warner) was authorized to distribute the same event only to residential subscribers.
- Eliadis, Inc., operating a bar (Melody Lane Lounge), ordered and displayed the event using Time Warner’s residential pay-per-view service after the bar was mistakenly coded as a residential account.
- Time Warner received the event signal by satellite and transmitted it to the bar while charging the residential rate.
- NSS claimed Time Warner’s transmission to a commercial establishment violated 47 U.S.C. § 605 and caused NSS lost licensing revenue.

## Issues

1. Whether a prior related case precluded NSS from litigating standing or liability under 47 U.S.C. § 605.
2. Whether NSS qualified as a “person aggrieved” with statutory standing to sue under 47 U.S.C. § 605(e)(3).
3. Whether Time Warner violated the first sentence of 47 U.S.C. § 605(a) by an unauthorized transmission to a commercial establishment without proof of “interception.”
4. Whether the statutory damages, attorneys’ fees, and costs awarded were authorized and supported.

## Decision

- The Sixth Circuit affirmed the district court’s summary judgment for NSS.
- The prior case did not collaterally estop NSS because any standing discussion there was not necessary to the earlier judgment.
- NSS had standing as a “person aggrieved” because it held exclusive commercial distribution rights and was directly harmed by the unauthorized commercial exhibition.
- Time Warner violated § 605(a) by transmitting the event to a commercial customer outside the scope of its residential-only authorization; interception was not required under the first sentence of § 605(a).
- The statutory damages award, along with attorneys’ fees and costs, fell within the statutory range and was upheld.

## Legal Principles

- Issue preclusion applies only to issues actually decided and necessary to the prior judgment; alternative or secondary grounds are not necessarily preclusive.
- The statutory definition of “person aggrieved” in § 605(d)(6) is nonexclusive; an exclusive commercial licensee may sue under § 605(e)(3) when unauthorized exhibition harms its rights.
- The first sentence of § 605(a) reaches unauthorized divulgence or publication of covered communications and does not require proof that the defendant unlawfully intercepted the communication.
- A distributor exceeds its authorization under § 605(a) when it transmits a protected event to a commercial establishment despite being licensed only for residential distribution.
- Statutory damages, fees, and costs under § 605(e)(3) are permissible when within the statutory range and supported by evidence of the plaintiff’s losses and enforcement costs.

## Conclusion

The court held that an exclusive commercial licensee may sue as a “person aggrieved” under § 605 and that a cable operator violates § 605(a) by transmitting a pay-per-view event to a commercial establishment outside the scope of its residential-only authority, even without proof of interception; the judgment and damages award for the licensee were affirmed.


National Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d 900 (6th Cir. 2001)