J & J Sports Productions, Inc. v. Ramirez

Filing 27

FINDINGS and RECOMMENDATIONS re Plaintiff's 18 Motion for Default Judgment signed by Magistrate Judge Gary S. Austin on 8/21/2015. Objections to F&R's due within fourteen (14) days of service.(Martinez, A)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

EASTERN DISTRICT OF CALIFORNIA

10
11

J & J SPORTS PRODUCTIONS,

12
13
14
15
16

No. 1:14-cv-01340 AWI-GSA

Plaintiff,
v.
REYNA RAMIREZ, individually and d/b/a
REDWOOD INN,

FINDINGS AND RECOMMENDATIONS
RE. PLAINTIFF’S MOTION FOR
DEFAULT JUDGMENT

Defendant.
(Doc. 18)

17
18
19

Plaintiff J & J Sports Productions, Inc. (“Plaintiff”) filed a complaint against Defendant

20

Reyna Ramirez (“Defendant”), individually and doing business as Redwood Inn, alleging, inter

21

alia, violations of federal telecommunications statutes. (Doc. 1). Pending before the Court is

22

Plaintiff’s motion for default judgment. (Doc. 18).

23

Defendant Reyna Ramirez has not appeared in the action, nor has she filed an opposition.

24
The Court took the matter under submission, without oral argument, pursuant to Local Rule
25
26
27
28

230(g). Upon a review of the pleadings, Plaintiff’s motion is GRANTED IN PART.
BACKGROUND
The complaint alleges violations of the Federal Communications Act of 1934, as
1

1

amended, specifically 47 U.S.C. §§ 553 and 605, et seq. It also alleges a state law claim of

2

conversion, as well as a violation of California Business and Professions Code § 17200, et seq.

3

(Doc. 1). Plaintiff’s claims are premised on the allegation that it held the exclusive nationwide

4

commercial distribution (closed-circuit) rights to “The One” Floyd Mayweather, Jr., v. Saul

5
6

Alvarez WBC Light Middleweight Championship Fight Program (“the Program”).” Plaintiff

7

alleges that on Saturday, September 14, 2013, the Defendant illegally intercepted and broadcast

8

Plaintiff’s Program at her business establishment, the Redwood Inn, in Sultana, California. (Doc.

9

1, ¶¶ 9, 14, 17).

10
11

Plaintiff was served with the summons and complaint via personal service on January 8,
2015, pursuant to Federal Rule of Civil Procedure 4(e)(1). (Doc. 9). Under Rule 4(e)(1), an

12
13
14

individual may be served under state law, here California law. California law authorizes personal
service. See, Cal. Civ. Proc. Code § 415.10.
Defendant has not answered the complaint or otherwise appeared in this action. (Doc. 14-

15
16

1). Accordingly, on February 3, 2015, the Clerk of Court entered default against Defendant.

17

(Doc. 15). In the instant Motion for Default Judgment, Plaintiff requests that the Court enter

18
19

judgment in its favor. Plaintiff seeks relief on two of the four claims for relief asserted in the
complaint, specifically claim one (Communications Act, 47 U.S.C. § 605, et seq.), and claim

20
21

three (conversion). (Doc. 18-1, pg. 17). Plaintiff requests $110,000.00 pursuant to its

22

Communications Act claim, (47 U.S.C. §§ 605(e)(3)(C)(i)(II) and (c)(ii)) and $2,200.00 for the

23

conversion claim.1 (Doc. 18-1, pgs. 9 & 17 and Doc. 18-5). Thus, the total damages sought by

24

Plaintiff amount to $112,200.00. (Doc. 18-5, pg. 2).

25

Although Defendant was served with Plaintiff’s Motion for Default Judgment by United

26
1

27
28

In the motion, Plaintiff initially requested a total of $52,200.00 in damages. (Doc. 18-2, pg. 2). However, in a
supplemental declaration attached to the motion, Plaintiff’s counsel requests a total of $112,200.00. (Doc. 18-5, pg.
2). Although not articulated in the argument section of the brief, the Court presumes that Plaintiff is requesting the
higher amount.

2

1

States Mail, she has not filed an opposition or other response. (Doc. 18-2). There is no evidence

2

that Defendant is an infant or incompetent person, is in the military, or otherwise exempted from

3

default judgment under the Servicemembers Civil Relief Act of 2003. (Doc. 18-2).

4
LEGAL STANDARD
5
6

Pursuant to Federal Rule of Civil Procedure 55(b)(2), the Court may enter a default

7

judgment upon application of the plaintiff. Courts generally consider the Eitel factors in

8

determining whether to grant a request for default judgment. See Eitel v. McCool, 782 F.2d 1470,

9

1471-1472 (9th Cir. 1986). The Eitel factors are: (1) the possibility of prejudice to the plaintiff;

10

(2) the merits of plaintiff’s substantive claim; (3) the sufficiency of the complaint; (4) the sum of

11

money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether

12
13
14

the default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules
of Civil Procedure favoring decisions on the merits.

15

When a defendant has failed to respond to the complaint, courts presume that all well-

16

pleaded factual allegations relating to liability in the complaint are true. See Geddes v. United

17

Financial Group, 559 F.2d 557, 560 (9th Cir. 1977); Dundee Cement Co. v. Highway Pipe and

18

Concrete Products, 722 F.2d 1319, 1323 (7th Cir. 1983) (“Upon default, the well-pleaded

19

allegations of the complaint relating to liability are taken as true.”); TeleVideo Systems, Inc. v.

20
21

Heidenthal, 826 F.2d 915, 917-918 (9th Cir. 1987). Therefore, when determining liability, a

22

defendant’s default functions as an admission of the plaintiff’s well-pleaded allegations of fact.

23

See Panning v. Lavine, 572 F.2d 1386 (9th Cir. 1978). While factual allegations concerning

24

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

25

amount of damages are not presumed to be true. See Geddes, 559 F.2d at 560; TeleVideo Sys.,

26

Inc., 826 F.2d at 917-18. The Court must ensure that any damages awarded are reasonable and

27
supported by the evidence in the record. Fed. R. Civ. P. 55(b)(2)(C); Geddes, 559 F.2d at 560;
28
3

1

TeleVideo Sys., Inc., 826 F.2d at 917-18.

2
3

DISCUSSION
A. Default Judgment is Warranted under the Eitel Factors

4
Entry of default judgment is committed to the Court's discretion. Eitel v. McCool, 782
5
6

F.2d 1470, 1471 (9th Cir. 1986). Applying the Eitel factors delineated above, the Court

7

recommends that default judgment should be granted here. Plaintiff's complaint reflects a

8

meritorious substantive claim; it properly alleges material facts and elements necessary to the

9

claims asserted and to the general relief sought. Defendant has not appeared in this action or

10
11

contested this motion, and there is no evidence that her default is the result of excusable neglect.
Inasmuch as Defendant’s default serves as an admission to Plaintiff's well-pled allegations of fact,

12
13
14

Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978), the Court concludes that there is no
dispute as to any material fact. There is no basis to conclude that Plaintiff will be prejudiced by

15

the case proceeding via default judgment rather than trial. Indeed, Plaintiff would suffer

16

prejudice if the Court does not enter default judgment as Plaintiff would have no other means of

17

recovery. See, e.g., Philip Morris, USA, Inc. v. Castworld Prods., Inc., 219 F.R.D. 494, 499

18
19

(C.D.Cal.2003); Joe Hand Promotions, Inc. v. Hauser, 2014 WL 172532, at *3 (E.D. Cal. Jan.
15, 2014) (No. 1:13-cv-01072 LJO-SKO); Joe Hand Promotions, Inc. v. Joseph Anthony

20
21

Gonzalez, 2015 WL 507397 at * 2 (E.D. Cal. Feb. 5, 2015) (No. 1:14-cv-1485 AWI-GSA). Thus,

22

the only factor weighing against default judgment in this case is the relatively large amount of

23

money Plaintiff seeks in damages. However, as discussed below, the actual award made by the

24

Court is not so large as to militate against proceeding by default judgment. Therefore, although

25

the Court favors resolving cases on the merits after adversarial proceedings, a default judgment is

26

appropriate here. Accordingly, the Court RECOMMENDS that default judgment be entered

27
against the Defendant.
28
4

1

B. Damages under the Federal Communications Act

2
3

The Federal Communications Act of 1934, 47 U.S.C. § 605 et seq., prohibits commercial
establishments from intercepting and broadcasting satellite cable programming without a license.

4
It provides a private right of action in federal court. Both statutory and enhanced damages may
5
6

be awarded for violations of 47 U.S.C. § 605(a), which prohibits the unauthorized interception

7

and distribution of communications. 47 U.S.C. § 605(a). “[L]iability under section 605 requires

8

proof that a defendant has (1) intercepted or aided the interception of, and (2) divulged or

9

published or aided the divulging or publishing of, a communication transmitted by the plaintiff.”

10

California Satellite Systems v. Seimon, 767 F.2d 1364, 1366 (9th Cir. 1985). Plaintiff's complaint

11

states a claim for a violation of § 605(a). See J and J Sports Productions v. Coyne, 857 F. Supp.

12
13
14

2d 909, 914 (N.D. Cal. 2012) (commercial establishment violated § 605 by broadcasting pay-perview boxing match without authorization).
Statutory Damages Pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II) and Enhanced
Statutory Damages Pursuant to the 47 § 605(e)(3)(C)(ii)

15
16

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

17
18

$10,000 for a violation of the Act. Plaintiff seeks the maximum limit of statutory damages of

19

$10,000 under § 605(e)(3)(C)(i)(II). Plaintiff also seeks $100,000.00 in “enhanced statutory

20

damages,2” the maximum amount of damages authorized by 47 U.S.C. § 605(e)(3)(C)(ii) which

21

provides the following:

22

In any case in which the court finds that the violation was committed willfully and
for purposes of direct or indirect commercial advantage or private financial gain,
the court in its discretion may increase the award of damages, whether actual or
statutory, by an amount of not more than $100,000 for each violation of subsection
(a) of this section.

23
24
25
26
27
28

2

Although the term “enhanced” does not appear in the statute, courts have characterized the damages under § 605(e)
(3)(C)(ii) as “enhanced” damages. See, e.g., Joe Hand Promotions, Inc. v. Streshly, 655 F.Supp.2d 1136 (S.D. Cal.
2009); Kingvision Pay–Per–View, Ltd. v. Backman, 102 F.Supp.2d 1196 (N.D. Cal. 2000). Accordingly, the Court
will use the same term when referencing damages under this section.

5

1

(Emphasis added).

2

In support of its request for maximum statutory damages, Plaintiff has submitted an

3
4

affidavit from its investigator. (Doc. 13-3). The investigator spent twelve minutes (10:08 p.m. to
10:12 p.m.) at the Redwood Inn, the Defendant’s establishment, on September 14, 2013, when the

5
6

Program was telecast nationwide. (Doc. 18-3). When the investigator approached the bar, he

7

observed a large “Mayweather v. Canelo” fight poster prominently displayed to the right side of

8

the main entrance.3 Id. After paying the required cover charge, he entered the building. Id.

9

During his stay, the investigator noted there were 75 patrons in the establishment.4 Id. He

10

watched the fight on a 42 inch, flat screen television, in the southeast corner of the building. The

11

fight was also being aired on a second, 72 inch screen television, in a separate room at the north

12
13
14

end of the building. Id. The affidavit is silent as to whether any of the people present in the
establishment were actually watching the Program. Moreover, although the affidavit describes

15

the establishment as a “medium bar,” it does not indicate that food and/or drinks were being

16

served at the time the fight was being aired. Id.

17
18
19

In addition to the investigator’s affidavit, Plaintiff’s counsel has submitted an unsworn
“declaration” alleging that “an additional action has been brought forth against Defendant Reyna
Ramirez, individually and d/b/a Redwood Inn in the United States District Court, for the Eastern

20
21

District.” (Doc. 18-5). Attached to the declaration is a docket sheet for J & J Sports Productions,

22

Inc., v. Reyna Ramirez, 14-cv-1575 JAM-MJ (E.D. Cal., October 8, 2014) (“Ramirez II”). After

23

reviewing the docket and filings, the Court takes judicial notice that in Ramirez II, Plaintiff

24

alleges that Defendant showed a fight on October 12, 2013, approximately one month after the

25

fight was telecast in this case. Default judgment in Ramirez II was entered in the amount of

26
27
3

28

4

The boxer Saul Alvarez is commonly known as Saul “Canelo” Alvarez.
The maximum capacity of the bar was 90-100 people.

6

1

$7,600.005 on July 7, 2014 (Docs. 18 & 19), after the complaint in the instant case was filed.6

2

Defendant urges this Court to impose enhanced damages because Plaintiff is a repeat offender.

3

The Court determines the statutory damages award according to what it “considers just.”

4
Kingvision Pay–Per–View, Ltd. v. Backman, 102 F. Supp. 2d 1196, 1198 (N.D.Cal.2000); 47
5
6

U.S.C. § 605(e)(3)(C)(i)(II). Court have taken different approaches and have awarded a wide

7

array of damages in these types of cases. See Joe Hand Promotions, Inc. v. Williams, 2011 WL

8

6012483 (E.D. Cal. Dec. 1, 2011) (providing an expansive review of California statutory and

9

enhanced statutory damage awards); see also, e.g., J & J Sports Productions, Inc. v. Cardoze,

10
11

2010 WL 2757106 (N.D. Cal. July 9, 2010) (No. C 09–05683 WHA) (setting statutory damages
of $1000 and enhanced damages of $250 in bar and grill with capacity of 150 people, and seven

12
13
14

television sets where 37 to 45 people were present while bout was broadcast); J & J Sports
Productions, Inc. v. Rodriguez, 2010 WL 796942 (E.D. Cal. March 5, 2010) (No. CIV S08–1140

15

JAM DAD) (setting statutory damages of $1000 and enhancements of $4000 for taqueria with

16

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

17

Inc. v. Gamino, No. 1:11–cv–1056–AWI–BAM, 2012 WL 913743 at * 5 (E.D.Cal. March 16,

18
19

2012) (recommending statutory damages of $1,000 where restaurant sat 75 people and 12 persons
were present during the Program's broadcast.

20
In Kingvision Pay–Per–View, Ltd. v. Backman, the court awarded the statutory minimum

21
22

of $1,000, finding that “distributors should not be overcompensated and statutory awards should

23

be proportional to the violation,” but noting that “a higher statutory award may be justified in

24

cases where defendants are repeat offenders who have pirated similar Programs on previous

25

occasions, and who need an especially severe financial deterrent.” Kingsvision Pay-Per-View,

26
27
28

5

The judgment was comprised of $3,000.00 statutory damages for a violation of 47 U.S.C. § 605; $3,000.00
enhanced statutory damages for a violation of 47 U.S.C. § 605; and $1,600.00 damages for conversion.
6
This instant case was filed on August 28, 2014. (Doc. 1).

7

1

102 F. Supp. 2d at 1198-99. Similarly, in Don King Productions/Kingvision v. Maldonado, 1998

2

WL 879683 (N.D. Cal. December 11, 1998), the court noted that “in the absence of unusual or

3

particularly egregious circumstances under which a defendant broadcast the fight … it would be

4

inappropriate to award the statutory maximum.” Id., citing Joe Hand Promotions v. Burg’s

5
6
7

Lounge, 955 F.Supp. 42, 44 (E.D. Pa. 1997).
Here, the Court notes that there was a $15.00 cover charge to attend the fight. However, it

8

is unclear from the declaration whether premium prices for food and drinks were charged during

9

the telecast. Moreover, there is no evidence that the patrons who were present were even

10

watching the Program, or that the establishment experienced more than its usual level of

11

patronage as a result of showing the Program. The Court is unpersuaded by Plaintiff’s argument

12
13
14

that Defendant is a repeat offender because the incident in this case occurred one month prior to
the incident in Ramirez II. Absent evidence that Defendant was on notice that her conduct was in

15

violation of laws against interception and that a prior damages award had failed to deter the

16

Defendant, the Court finds it would be unjust to find Defendant is a repeat offender. In light of

17

all the applicable facts, imposing the maximum statutory of $10,000.00 in damages would be

18
19

inappropriate under § 605(e)(3)(C)(i)(II). See, e.g., J & J Sports Prods., Inc. v. Montano, 2013
WL 1680633, at *3 (E.D. Cal. Apr.17, 2013) (No. 1:12–cv–00738–AWI–SAB); J & J Sports

20
21

Prods., Inc. v. Orellana, 2013 WL 3341001, at *4 (E.D.Cal. July 2, 2013) (No. 1:12–cv–01850–

22

AWI–SMS); Joe Hand Promotions, Inc. v. Hauser, 2014 WL 172532, at *1 (E.D. Cal. Jan. 15,

23

2014) (No. 1:13-cv-01072-LJO-SKO); J & J Sports Prod. Inc. v. Reyes, 2013 WL 4482742, at *1

24

(E.D. Cal. Aug. 20, 2013) (No. 1:12-CV-1847 LJO-BAM).

25

Notwithstanding the above, “[a] traditional method of determining statutory damages is to

26

estimate either the loss incurred by the plaintiff or the profits made by the defendants.” Joe Hand

27
Promotions v. Kim Thuy Ho, 2009 WL 3047231, at *1, (N.D. Cal.Sept.18, 2009) (citations
28
8

1

omitted). Weighing all of the relevant factors, the Court recommends a statutory damages award

2

in the amount of $4,400.00 under 605(e)(3)(C)(i)(II) is appropriate. Here the sub-licensing fee

3

was $2,200.00 and the fight was shown on two televisions. There is no evidence that Defendant

4
received other financial benefit other than the cover charge that will be addressed below. (Doc.
5
6

18-1, pg. 13; Doc. 18-3 and pg. 2). When considered together with the other damages

7

recommended herein, this damages amount is a significant deterrent for Defendant or others

8

inclined to illegally intercept protected programming.

9
10
11

Enhanced statutory damages pursuant to § 605(e)(3)(C)(ii) provides are analogous to
punitive damages, as they are awarded at the Court's discretion in cases where a defendant's
actions are willful and for the purpose of financial gain. See BMW of North America, Inc. v.

12
13
14

Gore, 517 U.S. 559, 580 (1996) (purpose of punitive damages is to punish and deter egregiously
improper conduct); J & J Sports Prods., Inc. v. Montano, 2013 WL 1680633, at *4 (E.D. Cal.

15

Apr. 17, 2013) (No. 1:12-cv-00738-AWI-SAB). Factors considered by courts in assessing

16

whether to award enhanced statutory damages include (1) repeat violations, (2) the extent of the

17

unlawful monetary gains, (3) actual damages to the plaintiff, (4) the defendant's advertising for

18
19

the broadcast of the event, (5) charging cover to enter the establishment to view the event, or (6)
charging a premium for food or drinks during the event. See Kingsvision Pay–Per–View, Ltd. v.

20
21

Backman, 102 F.Supp.2d at 1198 (noting that “the principle of proportionality governs here:

22

distributors should not be overcompensated and statutory awards should be proportional to the

23

violation”).

24
25
26
27

The Court has discretion to increase the award of damages for each violation in an amount
up to $100,000 when a “violation was committed willfully and for purposes of direct or indirect
commercial advantage or financial gain.” Backman, 102 F. Supp. 2d at 1198. Here, however,
Plaintiff’s request for $100,000 in enhanced damages is based on a 12-minute investigation, a

28
9

1

short affidavit from its investigator, and briefing that appears largely to be boilerplate. In fact, the

2

request for the maximum statutory damages award appears to be an afterthought, as the request is

3

not included in the argument section of the motion, but instead is attached as a declaration to the

4
moving papers. See J & J Sports Prods., Inc. v. Montano, 2013 WL 1680633, at *4 (E.D. Cal.
5
6

Apr. 17, 2013) (No. 1:12-cv-00738-AWI-SAB) (“Determining whether Defendant's actions were

7

willful or egregious is hampered because Plaintiff filed a brief with minimal analysis of the facts

8

specific to this case.”).

9
10
11

The Court does find it significant, however, that the Defendant advertised the event and
there was a $15.00 cover charge in this case. At the time the investigator viewed the fight, there
were 75 patrons watching the game. Thus, there is evidence that the violation was committed for

12
13
14

financial gain since it is reasonable to assume that the Defendant received at least $1,125.00
($15.00 x 75) from the cover charge. Given these facts, the Court recommends that Plaintiff be

15

awarded $2,250.00, or double the amount of the profits received from money collected at the

16

door.

17
18
19

C. Damages for Conversion
Finally, Plaintiff seeks $2,200.00 in conversion damages, the value of the property at the
time of conversion (i.e., the fee to be paid to lawfully exhibit the Program). Under California

20
21
22

law, “[c]onversion is the wrongful exercise of dominion over the property of another. The
elements of a conversion are (1) the plaintiff’s ownership or right to possession of the property at

23

the time of the conversion; (2) the defendant’s conversion by a wrongful act or disposition of

24

property rights; and (3) damages.” Greka Integrated, Inc. v. Lowrey, 133 Cal.App.4th 1572, 1581

25

(2005) (internal quotation marks omitted); see also G.S. Rasmussen & Assocs., Inc. v. Kalitta

26

Flying Serv., Inc., 958 F.2d 896, 906 (9th Cir. 1992). “Because conversion is a strict liability tort,

27

questions of the defendant’s good faith, lack of knowledge, motive, or intent are not relevant.”

28
10

1

Gilman v. Dalby, 176 Cal.App.4th 606, 615 n.1, 98 Cal.Rptr.3d 231 (2009). The exclusive right

2

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

3

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

4
419, 423 (N.D. Cal. 1995); see also DIRECTV, Inc. v. Pahnke, 405 F.Supp.2d 1182, 1189 (E.D.
5
6
7
8

Cal. 2005) (concluding that the “right to distribute programming via satellite” constituted a “right
to possession of personal property” for purposes of a conversion claim under California law).
Here, the evidence supports the request for conversion damages. Plaintiff was granted the

9

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

10

the right to possession of the property at the time of the conversion. (Docs. 1, ¶ 14). Defendant

11

did not legally purchase the program. (Doc. 1, ¶ 11). Finally, Plaintiff notes that Defendant

12
13
14
15

would have been required to pay $2,200.00 for the right to lawfully exhibit the Program. (Doc.
18-1, pg. 13). Thus, Plaintiff is entitled to recover conversion damages in the amount of the
sublicensing fee of $2,200.00.

16
17
18
19

RECOMMENDATION
For the reasons discussed above, the Court RECOMMENDS as follows:
1. Plaintiff's motion for default judgment be GRANTED IN PART;
2. Judgment be entered in this action against Defendant Reyna Ramirez d/b/a Redwood Inn;

20
21
22

and
3. Damages in the total amount of $8,850.00 be awarded as follows:

23

a. $4,400.00 in statutory damages pursuant to 47 U.S.C. § 605(3)(C)(i)(II);

24

b. $ 2,250.00 in enhanced statutory damages pursuant to 47 U.S.C. § 605(e)(3)(C)(ii); and

25

c. $2,200.00 in damages for conversion.

26

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

27
action, pursuant to 28 U.S.C. § 636(b)(1)(B). Within fourteen (14) days of service of these
28
11

1

findings and recommendations, any party may file written objections with the Court and serve a

2

copy on all parties. Such a document should be captioned "Objections to Magistrate Judge's

3

Findings and Recommendations." The district judge will review the magistrate judge's findings

4
and recommendations pursuant to 28 U.S.C. § 636(b)(1)(C). The parties are advised that failure
5
6
7

to file objections within the specified time may waive the right to appeal the district judge's order.
Wilkerson v. Wheeler, 772 F. 3d 834, 839 (9th Cir. 2014).

8
9
10

IT IS SO ORDERED.

11
Dated:
12

August 21, 2015

/s/ Gary S. Austin
UNITED STATES MAGISTRATE JUDGE

13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
12