J & J Sports Productions, Inc. v. Aranda

Filing 50

FINDINGS and RECOMMENDATIONS Granting Plaintiff's Motion for Sanctions (Doc. 4). Referred to Judge Ishii; Objections to F&R due within fifteen (15) days of service of this recommendation, any party may file written objections to these findings and recommendations with the Court and serve a copy on all parties. signed by Magistrate Judge Barbara A. McAuliffe on 1/27/2015. (Herman, H)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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J&J SPORTS PRODUCTIONS, INC.,

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Plaintiff,

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v.
RUBEN GARCIA ARANDA d/b/a EL
CACHANILLA POOL HOUSE,
Defendant.

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Case No.: 1:12-cv-1508-AWI-BAM
FINDINGS AND RECOMMENDATIONS
GRANTING PLAINTIFF’S MOTION FOR
SANCTIONS

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INTRODUCTION
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Pending before the Court is Plaintiff J&J Sports Production, Inc.’s (“Plaintiff”) renewed

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motion for default judgment against Defendant Ruben Garcia Aranda a/k/a/ Ruben Garcia d/b/a El
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Cachanilla Pool House (“Defendant”). (Doc. 47). The motion was referred to this Court pursuant to

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28 U.S.C. § 636(b)(1)(B) and Local Rule 302. The Court deemed the matter suitable for decision
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without oral argument pursuant to Local Rule 230(g), and vacated the hearing scheduled for January
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23, 2015. (Doc. 49). Having considered the moving papers, and the Court’s file, the Court GRANTS
Plaintiff’s motion for default judgment IN PART and judgment will be entered in the amount of

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$4,200.00 against Defendant.
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BACKGROUND

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Plaintiff, a distributor of sports and entertainment programming, alleges that it owns

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commercial distribution rights to broadcast the closed-circuit program Star Power: Floyd Mayweather,

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Jr. v. Victor Ortiz, WBO Welterweight Championship Fight Program (“the Program”), telecast

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nationwide on September 17, 2011. See Compl. ¶ 14. The Program included the main event between

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Floyd Mayweather, Jr. and Victor Ortiz, along with undercard bouts, televised replay, and color

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commentary. Id. Plaintiff alleges that the Program was unlawfully intercepted and exhibited by

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Defendant at his commercial establishment, El Cachanilla Pool House (“El Cachanilla”), located at

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1501 Tulare Street in Fresno, California. Id. ¶ 17. The interception and exhibition of the Program was

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allegedly done willfully and for purposes of direct and/or indirect commercial advantage and/or

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private financial gain. Id. ¶ 18.

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On September 13, 2012, Plaintiff filed this action alleging violations of the Federal

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Communications Act of 1934, as amended, 47 U.S.C. § 605 and 47 U.S.C. § 553, as well as of

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violations of California law against conversion and California Business and Professions Code §17200.

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The Summons and Complaint were served upon Defendant Ruben Garcia by personal service on

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November 25, 2012. (Doc. 7). True and correct copies of the Proof of Service were filed with this

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Court on December 7, 2012. On December 19, 2012, after Defendant failed to file an answer, Plaintiff

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requested an entry of default against Defendant, which was entered by the clerk on January 16, 2013.

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(Doc. 9). On March 26, 2013, Plaintiff filed a Motion for Default Judgment against Defendant. (Doc.

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11). Defendant failed to file an opposition to the motion and the Court took the matter under

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submission and vacated the hearing scheduled for May 3, 2013.

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On May 3, 2013, Defendant, proceeding without counsel, appeared in person at the vacated

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hearing. Shortly thereafter, Defendant filed a letter with the Court stating that “he never showed the

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Mayweather v. Ortiz fight” at his establishment. (Doc. 16). The Court considered Defendant’s letter

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an opposition to the Clerk’s default and allowed this case to proceed. (Doc. 19). Plaintiff then

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reached settlement on November 25, 2013, but this settlement was ultimately withdrawn on December

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18, 2013. (Doc. 28).

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Since appearing at an Order to Show Cause hearing on March 27, 2014, Defendant has failed

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to participate in this case, including failing to appear at a hearing on Plaintiff’s motion for terminating

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sanctions. (Doc. 43).

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participate in this action, this Court granted Plaintiff’s Motion for Terminating Sanctions and entered

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default against Plaintiff. (Docs. 40, 44).

Consequently, on July 14, 2014, after repeated failures of Defendant to

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On December 1, 2014, Plaintiff filed the instant motion for default judgment. (Doc. 47).

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Defendant did not file an opposition to the renewed motion for entry of default judgment. Plaintiff’s

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motion requests that the Court enter default judgment against Defendant for damages in the amount of

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$25,300.00 ($6,600 for statutory damages pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II); $16,500 for

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enhanced damages pursuant to 47 U.S.C. § 605(e)(3)(C)(ii); and $2,200 for conversion). (Doc. 47-2).

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LEGAL STANDARD

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Where a defendant has failed to respond to the complaint, the court presumes that all well-

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pleaded factual allegations relating to liability are true. See Geddes v. United Financial Group, 559

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F.2d 557, 560 (9th Cir. 1977); Televideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir.

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1987). Therefore, when determining liability, a defendant’s default functions as an admission of the

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plaintiff’s well-pleaded allegations of fact. See Panning v. Lavine, 572 F.2d 1386 (9th Cir. 1978).

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While factual allegations concerning liability are deemed admitted upon a defendant’s default, the

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court does not presume that any factual allegations relating to the amount of damages suffered are

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true. See Geddes, 559 F.2d at 560; TeleVideo Sys., Inc., 826 F.2d at 917-18. The Court must ensure

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that the amount of damages awarded is reasonable and demonstrated by the evidence. Fed. R. Civ. P.

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55(b)(2)(C); Geddes, 559 F.2d at 560; TeleVideo Sys., Inc., 826 F.2d at 917-18.

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With the entry of default in the case at hand, this Court may accept the factual allegations of

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Plaintiff’s complaint as true to assess liability. The complaint alleges that Defendant and/or his

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employees, with knowledge that the boxing program was not to be intercepted, unlawfully exhibited

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the Program at the establishment. The complaint is sufficiently plead, indicating the substantive merit

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of Plaintiff’s claim, i.e., unauthorized exhibition of the Program. Defendant’s failure to contest this

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action demonstrates absence of a dispute as to material facts. There is no evidence the default resulted

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from excusable neglect since Defendant has appeared but has subsequently failed to prosecute this
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matter despite numerous warnings from the Court. Accordingly, the only issue remaining is an award

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of damages.
ANALYSIS

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The Federal Communications Act of 1934, 47 U.S.C. § 605 et seq. prohibits commercial

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establishments from intercepting and broadcasting satellite cable programming without a license. It

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provides a private right of action in federal court. Plaintiffs may request that courts award actual or

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statutory damages between $1,000 and $10,000 for each violation of section 605. 47 U.S.C. §

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605(e)(3)(C)(I). Damages of up to $100,000 may be awarded for willful violations. 47 U.S.C. §

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605(e)(3)(C)(ii).

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A.

Statutory Damages pursuant to 47 U.S.C. 605(e)(3)(i)(II)

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Under 47 U.S.C. § 605(e)(3), the Court may award statutory damages between $1,000 and

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$10,000 for a violation of the Act. Plaintiff seeks $6,600 in statutory damages against Defendant in

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order to deter future violations. (Doc. 47-1 at 11).

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Plaintiff presents the following evidence in support of its request for damages. Defendant’s

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establishment is a small commercial pool hall with two pool tables and a maximum capacity 100

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persons. On September 17, 2011, Lawrence K. Brookter, an investigator from Brookter Investigation

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Services observed the Program airing at Defendant’s commercial establishment. (Doc. 47-3); (See

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Declaration of Affiant Lawrence Brookter (“Brookter Decl.”), Doc. 47-3). Mr. Brookter reportedly

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entered El Cachanilla Pool House at approximately 8:14 p.m. on September 11, 2011 without paying a

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cover charge. (Brookter Decl. at 2). Upon arrival, Mr. Brookter saw the Program broadcasting inside

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the pool hall on a 20-inch Vizio Television. Mr. Brookter states that the maximum occupancy of El

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Cachanilla is approximately 100 people, and he counted twenty to twenty-five people in the pool hall

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at the time of the Program. While El Cachanilla does serve food, it does not appear to be a dining

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establishment. Mr. Brookter notes that no alcohol was being served and El Cachanilla is primarily

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“just a pool hall with two pool tables.” Id. at 2.

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approximately 8:35 p.m., approximately 25 people were present. Mr. Brookter indicated that some of

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those present were eating and others were watching the fight. Id. Finally, Mr. Brookter noted that El

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Cachnilla is “in a crime ridden section of downtown Fresno infested with drug addicts and
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When Mr. Brookter exited the establishment at

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prostitution.” (Doc. 47-3). Photographs of the establishment depict an older, poorly maintained

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building. (Doc. 47-3, exhibits).

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The Court should not award the statutory maximum damages award “in the absence of unusual

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or particularly egregious circumstances under which a defendant broadcast the fight.” Don King

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Productions/Kingvision v. Maldonado, 1998 U.S. Dist. LEXIS 20165, 1998 WL 879683 (N.D. Cal.

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December 11, 1998)(No. C-97-3530 WHO MED), citing Joe Hand Promotions v. Burg’s Lounge, 955

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F.Supp. 42, 44 (E.D. Pa. 1997). Here, while El Cachanilla has a maximum capacity of 100 persons,

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the largest number present while the Program was displayed is 25. Mr. Brookter indicated that only

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some of those 25 patrons were watching the Program, and those who were watching were viewing the

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Program on a tiny 20 inch television displayed behind a counter. Nothing in the record even mildly

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suggests that Defendant experienced any significant “commercial advantage or private financial gain”

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as a result of its airing the Program.

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Absent evidence of commercial advantage or financial gain, district courts have awarded the

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statutory minimum where the defendants were first-time offenders in establishments of similar or

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larger size. See Joe Hand Promotions, Inc. v. Williams, 2011 U.S. Dist. LEXIS 138247 (E.D. Cal.

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Nov. 30, 2011) (providing an expansive review of California statutory and enhanced statutory damage

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awards); see also, e.g., J & J Sports Productions, Inc. v. Cardoze, 2010 U.S. Dist. LEXIS 74606, 2010

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WL 2757106 (N.D. Cal. July 9, 2010) (No. C 09-05683 WHA) (setting statutory damages of $1000

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and enhanced damages of $250 in bar and grill with capacity of 150 people, and seven television sets

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where 37 to 45 people were present while bout was broadcast); J & J Sports Productions, Inc. v.

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Rodriguez, 2010 U.S. Dist. LEXIS 20288, 2010 WL 796942 (E.D. Cal. March 5, 2010) (No. CIV S-

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08-1140 JAM DAD) (setting statutory damages of $1000 and enhancements of $4000 for taqueria

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with seating capacity of 30 and 16 to 20 patrons during showing of bout); J & J Sports Productions,

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Inc. v. Gamino, No. 1:11-cv-1056-AWI-BAM, 2012 U.S. Dist. LEXIS 36047, 2012 WL 913743 at * 5

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(E.D. Cal. March 16, 2012) (recommending statutory damages of $1,000 where restaurant sat 75

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people and 12 persons were present during the Program’s broadcast).

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The Court will not recommend Plaintiff’s request of $6,600—three times the licensing fee—in

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statutory damages be awarded against Defendant. While Plaintiff’s memorandum refers to several out
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of state decisions awarding substantially more than Plaintiff’s request of $6,600 (Doc. 47-1 at 13),

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those decisions are not binding on this Court. Here Plaintiff argues that it has “suffered damage to [its]

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goodwill and reputation and loss of its right and ability to control and receive fees for transmission of

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the Program.” (Doc. 47-1 at 14). However, Plaintiff cannot and does not argue that Defendant’s

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individual violation made a large impact. Defendant’s establishment is not large and the Program was

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viewed on one small television, making the violation de minimis. In the Court’s discretion, this factor

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weighs heavily in reducing the damages award. Further, El Cachnilla holds a maximum of one-

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hundred people, with no more than twenty-five present during Mr. Brookter’s head count. No cover

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charge was required, no alcohol was served, and the Program was shown on a 20 inch television.

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These factors suggest that substantial damages are unwarranted. Balancing these facts with the

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widespread problem of piracy and the need for an award sufficient to deter future piracy, this Court

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will recommend an award of statutory damages in the amount of $2,000.

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B.

Enhanced Damages pursuant to 47 U.S.C. 605(e)(3)(C)(ii)

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Plaintiff seeks enhanced damages under 47 U.S.C. § 605(e) (3)(C)(ii), which provides that the

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Court can provide for an enhanced damage award of up to $100,000.00 when “a violation was

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committed willfully and for purposes of direct or indirect commercial advantage or financial gain.” 47

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U.S.C. 605(e)(3)(C)(ii). Plaintiff requests an award of $16,500.00 in enhanced damages because

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Defendant’s interception of the program was allegedly willful and for purposes of commercial

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advantage or private gain. Compl. ¶ 18.

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Courts that have awarded enhanced damage awards due to willful violations of the

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Communications Act have cited such factors as the repeated violation of the Act, the intent to profit

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from the violations and actual profit derived from the violation. Kingvision Pay-Per-View Ltd. v.

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Backman, 102 F. Supp. 2d 1196, 1197 (N.D. Cal. 2000).

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Plaintiff contends that it is entitled to enhanced damages even though it alleges nothing more

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than that Defendant aired the program. Although El Cachanilla can hold approximately 100 people,

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only 25 were present on the night of the Program. Thus, while Defendant was displaying the Program,

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the restaurant was only one-fourth-full. Defendant did not impose a cover charge. Plaintiff does not

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contend that food or drink prices were increased. There is no evidence that Defendant advertised the
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program. Further, Plaintiff does not allege that any patrons were present primarily to watch the

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program rather than to simply play pool.

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As the Court observed in Joe Hand Promotions, Inc. v. Streshly: “[Defendant] may be the

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Blackbeard of pirates, but Plaintiff makes no attempt to portray it as such, and to the contrary, the act

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of piracy attributed to [Defendant] is as routine as they come . . . . .” 655 F.Supp.2d 1136, 1139 (S.D.

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Cal. 2009). The Court refused to enter default judgment, finding that the plaintiff overreached by

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seeking damages of $100,875.00. Id. Here, Plaintiff does not seek the maximum, but instead seeks a

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total of $16,500 in enhanced damages.

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However, the Court finds no evidence to support a conclusion that the violation was both

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willful and for financial gain or commercial advantage. See National Satellite Sports, Inc. v. Carrabia,

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et al., 2003 U.S. Dist. LEXIS 27198, 2003 WL 24843407 at *4 (citing Kingvision Pay-Per-View, Ltd.

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v. Arias, 2000 U.S. Dist. LEXIS 162, 2000 WL 20973 (N.D. Cal. Jan 7, 2000); Don King

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Productions/Kingvision v. Carrera, 1997 U.S. Dist. LEXIS 9137, 1997 WL 362115 at *2 (N.D. Cal.

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June 24, 1997) (evidence of willful exhibition for financial gain insufficient when there was no

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showing that a cover was charged, that the program was advertised or that food or drink prices were

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increased, and that the establishments were not filled to capacity.)). Accordingly, the Court declines

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to exercise its discretion to enhance Plaintiff’s award of damages pursuant to 47 U.S.C. §

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605(e)(3)(C)(ii). See J & J Sports Productions, Inc. v. Miranda, 2009 U.S. Dist. LEXIS 112415, 2009

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WL 3837273, *4 (N.D. Cal. November 16, 2009) (awarding $1,000 statutory damages and finding that

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an enhanced damage award is no warranted under the statute).

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C.

Damages for Conversion

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Plaintiff also seeks $2,200.00 in conversion damages, the value of the property at the time of

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the conversion. (Doc. 47-1 at 17). Under California law, “[c]onversion is the wrongful exercise of

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dominion over the property of another. The elements of a conversion are (1) the plaintiff’s ownership

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or right to possession of the property at the time of the conversion; (2) the defendant’s conversion by a

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wrongful act or disposition of property rights; and (3) damages.” Greka Integrated, Inc. v. Lowrey,

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133 Cal.App.4th 1572, 1581 (2005) (internal quotation marks omitted); see also G.S. Rasmussen &

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Assocs., Inc. v. Kalitta Flying Serv., Inc., 958 F.2d 896, 906 (9th Cir.1992). “Because conversion is a
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strict liability tort, questions of the defendant’s good faith, lack of knowledge, motive, or intent are not

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relevant.” Gilman v. Dalby, 176 Cal.App.4th 606, 615 n.1, 98 Cal.Rptr.3d 231 (2009). Exclusive

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right to distribute a broadcast signal to commercial establishments constitutes a “right to possession of

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property” for purposes of conversion. See Don King Prods./Kingvision v. Lovato, 911 F.Supp. 419,

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423 (N.D. Cal. 1995); see also DIRECTV, Inc. v. Pahnke, 405 F.Supp.2d 1182, 1189 (E.D. Cal. 2005)

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(concluding that the “right to distribute programming via satellite” constituted a “right to possession of

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personal property” for purposes of a conversion claim under California law).

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Here, the evidence supports the request for conversion damages. Plaintiff was granted the

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exclusive domestic commercial exhibition licensing rights to the program at issue, and thus had the

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right to possession of the property at the time of the conversion. Defendant did not legally purchase

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the program. (Doc. 47-1 at 19). Finally, Plaintiff notes that Defendant would have been required to

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pay $2,200.00 if he had ordered the Program from Plaintiff. Id. Thus, Plaintiff is entitled to recover

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the sublicensing fee conversion damages in the amount of $2,200.00.
CONCLUSION AND RECOMMENDATION

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Based on consideration of the declarations, pleadings and exhibits to the present application,
the Court RECOMMENDS as follows:

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Plaintiff’s motion for default judgment be GRANTED in part;

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Judgment be entered in this action against Defendant Ruben Garcia Aranda a/k/a Ruben

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Garcia d/b/a/ El Cachanilla Pool House; and

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3.

Damages in the amount of $4,200.00 be awarded as follows:

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a.

For the violation of 47 U.S.C. § 605(e)(3)(C)(i)(II), the sum of $2,000.00;

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b.

For the conversion of Plaintiff’s property, the sum of $2,200.00.

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These findings and recommendations are submitted to the district judge assigned to this action,

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pursuant to Title 28 of the United States Code section 636(b)(1)(B) and this Court’s Local Rule 304.

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Within fifteen (15) days of service of this recommendation, any party may file written objections to

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these findings and recommendations with the Court and serve a copy on all parties. Such a document

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should be captioned “Objections to Magistrate Judge’s Findings and Recommendations.” The district

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judge will review the magistrate judge’s findings and recommendations pursuant to Title 28 of the
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United States Code section 636(b)(1)(C). The parties are advised that failure to file objections within

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the specified time may waive the right to appeal the district judge’s order. Martinez v. Ylst, 951 F.2d

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1153 (9th Cir. 1991).

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IT IS SO ORDERED.
Dated:

/s/ Barbara

January 27, 2015

A. McAuliffe

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UNITED STATES MAGISTRATE JUDGE

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