(CN) - A Dallas restaurant did not steal the pay-per-view broadcast of a boxing match between Floyd Mayweather and Ricky Hatton, the 5th Circuit ruled.
On the night of the fight, Dec. 8, 2007, Greenville Avenue Pizza Co. paid Time Warner Cable $54.95 for the pay-per-view broadcast.
It did not advertise the fight and did not charge customers an entry fee.
J&J Sports Productions nevertheless filed suit against the restaurant's owners, Mandell Family Ventures, under the Federal Communications Act, claiming that Mandell owed it a licensing fee.
A representative for Time Warner Cable, which is not a party to the lawsuit, said the restaurant's authorized receipt of the broadcast was an inadvertent error on its part.
Ultimately, a federal judge granted J&J summary judgment and awarded $350 in statutory damages, plus more than $26,000 in attorneys' fees.
A three-judge panel of the 5th Circuit reversed Friday, saying that a "safe harbor" provision under Section 553(a)(1) exempts customers from civil and criminal liability when they are given authorization from a cable operator.
"The text of the statute unambiguously states that liability extends only to the receipt of cable services not authorized by a cable operator," Judge Catharina Haynes wrote for the New Orleans-based panel. "Therefore, in order for a cable customer to ensure that it is not criminally or civilly liable under §553(a)(1), it need only receive authorization from a cable operator for the cable services it receives."
J&J failed to show that an authorized customer is still liable unless it takes the additional step of making sure the cable operator itself is properly licensed, according to the 12-page opinion.
The lower court "misconstrued" the safe harbor provision, Haynes added.
"Interpreting the safe harbor in this highly restrictive manner finds no support in the text of the statute," the opinion states. "The statute does not hinge liability on the cable customer taking additional steps or the cable operator being licensed to distribute a broadcast: the exclusion from liability simply applies to those who receive authorization from a cable operator."
Haynes also disagreed with J&J's contention that Time Warner Cable did not authorize the broadcast of the fight because HBO distributed it. J&J said that a business-class service agreement then banned customers from showing premium channels, including HBO, in public areas.
"This language does not unambiguously encompass this situation because the fight was not shown on a traditional HBO subscription channel, but was delivered via a pay-per-view broadcast that the Defendants requested and purchased separately from TWC," the opinion states. "Additionally, other language in the service agreement suggests that TWC obligated itself to ensure that the services it distributed to the defendants were authorized and made pursuant to the proper license."
Summary judgment is also not appropriate under Section 605 of the communications act, the court found. Here the pay-per-view was originally broadcast to Time Warner via radio, which then rebroadcast it via cable to its customers.
It is undisputed in this case that the communications transferred to the restaurant were by cable, Haynes wrote. She refused to expand the section to include all things "incidental" to radio transmission.
"'While this interpretation has been adopted by the 2nd Circuit, we agree with the 3rd and 7th Circuits that it "'unacceptably blurs the line between radio and wire communications,' which are separately defined terms that both refer to instrumentalities incidental to transmission of the communication," the opinion states.
J&J has not returned a request for comment.