More than 100 restaurants in Maryland have faced lawsuits since 2009 because of disputes over the broadcasting of pay-per-view sporting events, according to an investigation by the News4 I-Team.
More than 75 percent of those restaurants are in Prince George’s County, Baltimore or the Silver Spring area, the I-Team’s review found. The lawsuits have been filed against small, locally owned restaurants, risking the closure of businesses with small budgets to hire attorneys to defend themselves.
The suits reviewed by the I-Team seek tens of thousand dollars in penalties, alleging the restaurants violated federal law by illegally broadcasting pay-per-view sporting events, including high-profile boxing matches featuring Floyd Mayweather and Manny Pacquiao.
The restaurants are accused of showing the fights on TV screens in front of patrons without paying the licensing fees to do so. Commercial licensing fees, which are significantly higher than residential licensing fees, often cost thousands of dollars, restaurant owners said.
The lawsuits were filed by attorneys representing J&J Sports Productions, a California company that owns broadcast rights for many high-profile pay-per-view events. Court filings submitted by J&J Sports Productions show the company deploys investigators who visit bars and restaurants during fight nights. Those investigators submit affidavits, and in some cases undercover videos, as evidence that local restaurants broadcast pay-per-view events without paying the necessary fees.
The suits are filed in federal court in Maryland and can lead to financial settlements between J&J Sports Productions and the small restaurants. Several restaurant owners interviewed by the I-Team said the suits were financially crippling to their businesses, requiring large cash payments for defense attorneys or to settle the suits.
Derrick Williams, owner of Infuse Restaurant in Temple Hills, said he is being sued by J&J Sports, accused of unlawfully broadcasting a September 2013 Floyd Mayweather fight inside the restaurant. Williams said he was notified about the suit by the U.S. District Court in Greenbelt.
“I’m being sued for $50,000. The lawsuit jumped out at me. The dollar figure jumped out even more," he said.
Williams said he is unsure how he will respond to the suit, because of the likely cost.
“I don’t know what to do. I can’t afford an attorney. I can’t afford anything but to continue to run the restaurant," he said.
Williams said he did show the fight he is accused of broadcasting inside his restaurant. In court filings, attorneys for J&J Sports Productions submitted an affidavit from an undercover investigator, who said she witnessed the pay-per-view fight being shown on multiple TV screens inside Infuse.
Managers of Emily’s Restaurant, a takeout restaurant in Hyattsville, said they were also sued by J&J Sports Productions. According to J&J’s court filings, restaurant operators unlawfully broadcast a 2011 Sebastian Lujan pay-per-view fight. A restaurant manager told the I-Team the suit could cost him $150,000. He denied broadcasting the fight in question, but J&J’s lawsuit includes an affidavit from an undercover investigator alleging he witnessed the fight from a front window.
Attorneys for some of the restaurants told the I-Team the settlement costs or legal fees can knock some of the small businesses out of operation. They said it’s unclear whether the restaurants were actually broadcasting a fight to a crowd, even if the pay-per-view event is being shown on a TV inside the restaurant.
Matthew Pare, a California attorney who said he has defended dozens of businesses sued by J&J Sports Productions, said federal lawsuits are a challenge for small restaurants to defend.
“The laws have been used to essentially force defendants into substantial settlements even if there was not an intentional violation," he said.
J&J Sports Productions owner Joe Gagliardi said pay-per-view piracy is a decades-old crime that is specifically prohibited under federal law. Gagliardi said he files suit to protect his financial investment and those of the customers who pay the proper rights fees for the events. Gagliardi said many of the restaurants against which he’s filed suit argue they did not actually broadcast the events.
“They come up with numerous excuses," he said. “People will deny that they showed the fight. It’s unbelievable.”
Pare said some violations by businesses are likely accidental.
[Satellite companies] often set up commercial establishments incorrectly with a residential account," he said. "When that happens, many small business owners do not even realize that they are doing anything wrong when they show a pay-per-view fight because they are just relying upon the signal provider to set it up correctly.”