J & J Sports Productions, Inc. v. Vega

Filing 36

MEMORANDUM OPINION AND ORDER granting in part and denying in part 34 Motion to Amend/Correct, Third Amended Answer may be filed by no later than August 4, 2016; See order for specifics. Signed by Honorable Timothy L. Brooks on August 2, 2016. (rg)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
FAYETTEVILLE DIVISION

J & J SPORTS PRODUCTIONS, INC.
V.

PLAINTIFF

CASE NO. 5:15-CV-5199

EDWARD VEGA, individually and
d/b/a SPRINGDALE CIVIC CENTER

DEFENDANT

MEMORANDUM OPINION AND ORDER
Currently before the Court are Defendant Edward Vega’s Motion to Amend Answer
(Doc. 34) and Plaintiff J & J Sports Productions, Inc.’s (“J&J”) Opposition (Doc. 35). For
the reasons given below, Mr. Vega’s Motion is GRANTED IN PART AND DENIED IN
PART.
I. BACKGROUND
J&J alleges in its Complaint (Doc. 1) that Mr. Vega knowingly intercepted and
published without authorization a televised fight between Floyd Mayweather, Jr. and Saul
Alvarez to which J&J had exclusive nationwide commercial distribution rights. Id. at ¶ 14.
The Complaint asserts three counts against Mr. Vega: violation of 47 U.S.C. § 605,
violation of 47 U.S.C. § 553, and a state-law claim for conversion. Mr. Vega filed his
Answer (Doc. 10) to the Complaint on December 7, 2015, his Amended Answer (Doc. 15)
on January 6, 2016, and his Second Amended Answer (Doc. 29) on March 2, 2016. He
now seeks leave to file a proposed Third Amended Answer (Doc. 34-2), in order to plead
several new affirmative defenses. Specifically, his proposed Third Amended Answer puts
forward four affirmative defenses: (1) that Mr. Vega is not the proper defendant, but rather
that the Springdale Civic Center (“SCC”) is; (2) that the SCC was authorized to receive
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the signal for the fight program; (3) that the fight program was received via an internet
signal rather than a satellite television or cable television signal; and (4) that the fight
program’s display at the SCC was time-delayed rather than intercepted. The first of these
four affirmative defenses was asserted in the Second Amended Answer, see Doc. 29,
¶ 33, but the latter three appear to be newly proposed. J&J opposes Mr. Vega’s Motion,
which has been fully briefed and is now ripe for decision.
II. LEGAL STANDARD
Since Mr. Vega has already amended his responsive pleading before, he may do
so again “only with the opposing party’s written consent or the court’s leave.” Fed. R. Civ.
P. 15(a)(2). Here, as noted above, J&J does not consent to the proposed amendment.
Therefore, Mr. Vega’s proposed Third Amended Answer may be filed only with the court’s
leave, which should be “freely give[n] . . . when justice so requires.” Id. However, “[a]
district court may appropriately deny leave to amend where there are compelling reasons
such as undue delay, bad-faith, or dilatory motive, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the non-moving party, or futility of
the amendment.” Moses.com Sec., Inc. v. Comprehensive Software Sys., Inc., 406 F.3d
1052, 1065 (8th Cir. 2005) (internal quotation marks omitted). Generally, though, delay
is insufficient to justify denying leave, absent prejudice to the opposing party. See id. As
for futility, “a motion to amend should be denied on the merits only if it asserts clearly
frivolous claims or defenses,” and “[l]ikelihood of success on the new claim or defenses
is not a consideration for denying leave to amend unless the claim is clearly frivolous.”
Becker v. Univ. of Neb. at Omaha, 191 F.3d 904, 906 (8th Cir. 1999).

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A party opposing amendment on the grounds of prejudice or futility bears the
burden of demonstrating unfair prejudice or establishing futility. Concrete Washout Sys.,
Inc. v. Double D Hook-N-Go Containers, Inc., 2009 WL 2840515, at *2, *3 (D. Neb. Aug.
28, 2009) (citing Roberson v. Hayti Police Dep’t, 241 F.3d 992, 995 (8th Cir. 2001);
Sokolski v. Trans Union Corp., 178 F.R.D. 393, 396 (E.D.N.Y. 1998)). Ultimately, the
decision whether to grant leave to amend a pleading “is left to the sound discretion of the
district court,” and will be overruled on appeal only if such discretion is abused. Bell v.
Allstate Life Ins. Co., 160 F.3d 452, 454 (8th Cir. 1998).
III. DISCUSSION
J&J opposes Mr. Vega’s Motion on the grounds that it is brought after undue delay,
that granting it would prejudice J&J, and that Mr. Vega’s newly-proposed affirmative
defenses would be futile. The Court notes, as an initial matter, that J&J only makes these
arguments with any specificity as to two of Mr. Vega’s proposed defenses: the third
affirmative defense that the fight program was received via an internet signal rather than
a satellite television or cable television signal, and the fourth affirmative defense that the
fight program’s display at the SCC was time-delayed rather than intercepted. See Doc.
35, p. 9 & n.7. J&J argues that since Mr. Vega’s Motion did not advance any specific
arguments in support of the first and second proposed affirmative defenses, Mr. Vega
should not be permitted to file them. But this misstates the burden, which is J&J’s—not
Mr. Vega’s. See Section II supra. Since J&J has made no attempt at meeting its burden
with regard to Mr. Vega’s first two proposed affirmative defenses, Mr. Vega’s Motion will
be granted as to those two defenses, and Mr. Vega will be permitted to plead them.

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Turning to J&J’s arguments against Mr. Vega’s third and fourth affirmative
defenses, J&J’s only argument for a finding of prejudice is that if either of these proposed
affirmative defenses is meritorious, then “it would essentially leave [J&J] without a
remedy.” (Doc. 35). But of course the very nature of any meritorious defense is to
preclude relief, at least to some extent. The proper question here is not whether prejudice
exists, but whether such prejudice is “undue.” See Bell, 160 F.3d at 454. Currently, the
discovery deadline is three-and-a-half months away, the dispositive motions deadline is
four months away, and the trial is eight-and-a-half months away. See Doc. 27, pp. 1–3.
To whatever extent Mr. Vega’s proposed amendments may require additional discovery
or legal research by J&J, there is ample time remaining for such efforts.
Therefore, the Court finds that permitting Mr. Vega to plead his proposed third and
fourth affirmative defenses would not unduly prejudice J&J. And as noted above in
Section II of this Order, undue delay is an insufficient basis for denying leave in the
absence of any undue prejudice.

The Court turns, then, to J&J’s sole remaining

argument—that Mr. Vega’s proposed third and fourth affirmative defenses are futile. For
analytical ease, the Court will deal first with Mr. Vega’s proposed fourth affirmative
defense, and then with his third.
Mr. Vega’s proposed fourth affirmative defense states:
The subject TV program was displayed at a time delay at the subject
establishment. Thus, there was no interception and no signal piracy
violation. Furthermore, the plaintiff does not have standing because it was
not a simultaneous (live) exhibition and the plaintiff’s licensing rights only
apply to live exhibitions.
See Doc. 34-2, p. 4. This defense appears actually to be two defenses, then: that there
was no interception, and that J&J lacks standing.

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In response, J&J cites only Nat’l Satellite Sports, Inc. v. Garcia, 2003 WL
21448375, at *3 n.2 (N.D. Tex. June 18, 2003), and J & J Sports Prods. Inc. v. Mosqueda,
2013 WL 2558516, at *3 (D. Ariz. June 11, 2013), for the proposition that “[a] tape-delayed
broadcast without authorization is still a violation of the [Federal Communications Act].”
While that is indeed what those two cases say, neither of those opinions appears to
involve any dispute as to whether the scope of those particular plaintiffs’ licensing
agreements covered the exhibitions that were at issue. See Garcia, 2003 WL 21448375,
at *1 (“Garcia did not pay the required license fee, and National did not authorize her to
intercept, receive, or transmit the communication of the Event.”); Mosqueda, 2013 WL
2558516, at *3 (“It is not disputed that Plaintiff had exclusive commercial distribution rights
over the Program and that a license for Adrian’s Restaurant would have cost $1,800.
Defendant has produced no evidence to refute that the Program was broadcast at
Adrian’s Restaurant without authorization.”). Thus, neither of those cases appears to
conclusively foreclose Mr. Vega’s standing defense on its face. Since J&J has not
provided any other argument or authority in opposition to Mr. Vega’s standing defense,
J&J has not met its burden of establishing that defense’s futility. 1
However, the cases cited by J&J do meet its burden of establishing the futility of
Mr. Vega’s “no interception” defense. As explained in Kingvision Pay Per View, Ltd. v.
Julian Corp., which was cited for this proposition in Garcia, 47 U.S.C. § 605 does not
merely prohibit interception, but also unauthorized divulgence or publication of covered

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The Court’s discussion here of Mr. Vega’s proposed “standing” defense should not be
interpreted by the parties as establishing any law of the case, beyond the bare ruling that
this defense does not presently appear “clearly frivolous” to the Court. This narrow ruling
does not preclude the Court from finding, at some later point in this case, that this defense
is or is not sufficient to preclude liability on the part of Mr. Vega as to any of J&J’s claims.
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communications. 1996 WL 496600, at *2 (N.D. Ill. Aug. 29, 1996). This Court concurs in
that reading of the statute, as the plain text of both Section 605 and Section 553 prohibits
far more than mere interception.

See 47 U.S.C. § 605(a) (“[N]o person receiving,

assisting in receiving, transmitting, or assisting in transmitting, any interstate or foreign
communication by wire or radio shall divulge or publish the existence, contents,
substance, purport, effect, or meaning thereof, except through authorized channels of
transmission or reception . . . .” (emphasis added)); 47 U.S.C. § 553(a)(1) (“No person
shall . . . receive or assist in . . . receiving any communications service offered over a
cable system, unless specifically authorized to do so by a cable operator or as may
otherwise be specifically authorized by law.” (emphasis added)). J&J’s Complaint does
not merely allege that Mr. Vega intercepted the fight program; rather, it alleges that he
intercepted, received, published, exhibited, divulged, or displayed the fight program. See
Doc. 1, ¶¶ 17, 24. In other words, even if Mr. Vega were to prove that he did not intercept
the fight program, such proof would be insufficient to defeat J&J’s statutory claims.
Accordingly, Mr. Vega’s proposed “no interception” defense is futile.
The Court turns now to Mr. Vega’s proposed third affirmative defense, which states
that the fight program “was received via an internet signal (not a satellite TV signal or
cable TV signal), and thus defendants cannot be liable for [J&J]’s claims.” (Doc. 34-2, p.
3). Mr. Vega cites some cases that can perhaps be read as endorsing his argument that
the federal statutes under which J&J’s claims are brought do not apply to communications
that are received over the Internet. See, e.g., Joe Hand Promotions, Inc. v. Michael Cusi,
et al., 2014 WL 1921760, at *3 n.4 (S.D. Cal. May 14, 2014) (“The Court has no
confidence in this assumption [that the type of internet service determines whether liability

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exists under Sections 553 and 605] and is generally [s]keptical that feeds received over
the internet from a third party violate Sections 553 or 605.” (emphasis in original)). The
Court has read all of the cases cited by Mr. Vega, and can only conclude that to whatever
extent they endorse Mr. Vega’s argument on this point, this Court respectfully disagrees
with them. The Court notes furthermore that none of them are binding precedent or from
within the Eighth Circuit.
A straightforward reading of the statutes’ pertinent text leads this Court to conclude
that it is irrelevant whether the signal in this case was sent over the Internet. The statutes
here say nothing one way or the other about the Internet; rather, they are explicitly
concerned with whether unauthorized communications were sent or received “by wire or
radio,” 47 U.S.C. § 605(a), or “over a cable system,” 47 U.S.C. § 553(a)(1). J&J will bear
the burden of proving these elements of its statutory claims are satisfied. Maybe J&J will
meet that burden or maybe it won’t, but it will make no difference to this Court in either
event whether the wires, radio waves, or cable system in question interacted with or were
part of the Internet. Cf. United States v. Napier, 787 F.3d 333, 346–47 (6th Cir. 2015)
(finding that electronic communications sent over the Internet “were transmitted through
interstate wires”); In re DoubleClick Inc. Privacy Litig., 154 F. Supp. 2d 497, 508 (S.D.N.Y.
2001) (“Internet access” is one type of “service which provides to users thereof the ability
to send or receive wire or electronic communications.”) Thus, since Mr. Vega’s proposed
third affirmative defense would ultimately make no difference in this case, it is futile and
Mr. Vega will not be granted leave to plead it.

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IV. CONCLUSION
IT IS THEREFORE ORDERED that Defendant Edward Vega’s Motion to Amend
Answer (Doc. 34) is GRANTED IN PART AND DENIED IN PART as follows: Mr. Vega
may file his Third Amended Answer, except that it shall not include the following language
that was proposed by Mr. Vega at Doc. 34-2, pp. 3–4:
The subject TV program was received via an internet signal (not a satellite
TV signal or cable TV signal), and thus defendants cannot be liable for
plaintiff’s claims. See, e.g., Joe Hand Promotions, Inc. v. Cusi, 2014 U.S.
Dist. LEXIS 66474 (S.D. Cal. May 14, 2014).
FOURTH AFFIRMATIVE DEFENSE
The subject TV program was displayed at a time delay at the subject
establishment. Thus, there was no interception and no signal piracy
violation.
Mr. Vega’s Third Amended Answer may be filed by no later than August 4, 2016.
IT IS SO ORDERED on this 2nd day of August, 2016.

__/s/ Timothy L. Brooks_____________
TIMOTHY L. BROOKS
UNITED STATES DISTRICT JUDGE

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