J & J Sports Productions, Inc. v. Ortega et al
Filing
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FINDINGS and RECOMMENDATIONS Granting Plaintiff's Motion for Default Judgment (Doc. 17). Referred to Judge Mendez; within fourteen (14) 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 12/16/2015. (Herman, H)
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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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Plaintiff,
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v.
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ROGELIO ORTEGA, individually and d/b/a )
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TACO GUEY; and ORG DIAMOND, INC.,
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an unknown business entity d/b/a TACO
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GUEY,
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Defendants.
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J & J SPORTS PRODUCTIONS, INC.,
Case No.: 1:15-cv-00506-JAM-BAM
FINDINGS AND RECOMMENDATIONS
GRANTING PLAINTIFF’S MOTION FOR
DEFAULT JUDGMENT
(Doc. 17)
FOURTEEN-DAY DEADLINE
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INTRODUCTION
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On November 10, 2015, J & J Sports Production, Inc. (“Plaintiff”) filed the instant motion for
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default judgment against Defendants Rogelio Ortega, individually and doing business as Taco Guey,
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and Org Diamond, Inc., an unknown business entity doing business as Taco Guey (“Defendants”).
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(Doc. 17.) Defendants have not responded to the motion or otherwise appeared in this lawsuit. The
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motion was referred to this Court pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule 302. The
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Court deemed the matter suitable for decision without oral argument pursuant to Local Rule 230(g),
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and vacated the hearing scheduled for December 18, 2015. Having considered the moving papers, the
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briefing, and the Court’s file, the Court RECOMMENDS that Plaintiff’s motion for default judgment
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be GRANTED and judgment be entered in the amount of $5,400 against Defendants.
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FACTUAL BACKGROUND
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On April 1, 2015, Plaintiff filed its complaint against Defendants, alleging violations of 47
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U.S.C. § 605, et seq., and 47 U.S.C. § 553, et seq., as well as claims under California state law. As
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alleged in the Complaint, Plaintiff was granted the exclusive nationwide commercial distribution
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(closed-circuit) rights to Manny Pacquiao v. Timothy Bradley, II Welterweight Championship Fight
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Program (the “Program”) telecast nationwide on Saturday, April 12, 2014. Compl. ¶ 16.) Plaintiff
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entered into sublicensing agreements granting public exhibition rights to various commercial entities
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throughout the United States, and within the State of California. (Compl. ¶ 17.) Plaintiff expended
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substantial monies marketing, advertising, promoting, administering, and transmitting the Program to
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these commercial entities. (Compl. ¶ 18.)
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On Saturday, April 12, 2014, Jonathan Browne (“Browne”) entered Taco Guey in Tulare
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California, at approximately 9:31 p.m. See Affidavit of Jonathan Browne (“Browne Decl.”) (Doc. 17-
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3 at 1.) Defendants did not charge a cover to enter the establishment. While in Taco Guey, Browne
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noted one 40-42” flat screen television showing the Program. He estimated the establishment’s
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capacity as 50 people, and counted 4 patrons at three separate times before leaving. (Browne Decl. at
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1.)
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Plaintiff alleges that Defendants knowingly and unlawfully intercepted, received, published,
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divulged, displayed, and/or exhibited the Program at the time of its transmission at the commercial
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establishment, Taco Guey, owned and operated by Defendants. (Compl. ¶ 19.) Plaintiff further
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alleges Defendants did so willfully and for purposes of direct and/or indirect commercial advantage
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and/or private financial gain, in violation of 47 U.S.C. § 605, et seq. (Compl. ¶¶ 20-21.) Plaintiff
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seeks statutory damages for each violation in the amount of $10,000 pursuant to 47 U.S.C. §
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605(e)(3)(C)(i)(II), statutory damages for each willful violation in the amount of $100,000 pursuant to
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47 U.S.C. § 605(e)(3)(B)(iii), and attorneys’ fees and costs pursuant to 47 U.S.C. § 605(e)(3)(B)(iii).
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(Compl. ¶ 24.)
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On September 11, 2015, after Defendants failed to file an answer, Plaintiff requested entry of
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default against Defendants, which was entered by the Clerk of the Court on that same day. (Docs. 13,
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14, 15.) On November 10, 2015, Plaintiff filed the present motion for default judgment. (Doc. 17.)
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Plaintiff’s motion requests that the Court enter default judgment against Defendants for damages in the
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amount of $112,200.00. Defendants have not appeared or otherwise defended this action.
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LEGAL STANDARD
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Pursuant to Federal Rule of Civil Procedure 55, default may be entered against a party against
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whom a judgment for affirmative relief is sought who fails to plead or otherwise defend against the
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action. See Fed. R. Civ. P. 55(a). However, “[a] defendant’s default does not automatically entitle the
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plaintiff to a court-ordered judgment.” PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1174
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(C.D. Cal. 2002) (citing Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986)). Instead, the
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decision to grant or deny an application for default judgment lies within the district court’s sound
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discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In making this determination, the
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court considers the following factors:
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(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive
claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the
action[,] (5) the possibility of a dispute concerning material facts[,] (6) whether the
default was due to excusable neglect, and (7) the strong policy underlying the Federal
Rules of Civil Procedure favoring decisions on the merits.
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Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Default judgments are ordinarily disfavored.
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Id. at 1472.
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Generally, once default is entered, well-pleaded factual allegations in the operative complaint
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are taken as true, except for those allegations relating to damages. TeleVideo Sys., Inc. v. Heidenthal,
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826 F.2d 915, 917-18 (9th Cir. 1987) (per curiam) (citing Geddes v. United Fin. Group, 559 F.2d 557,
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560 (9th Cir. 1977) (per curiam)); accord Fair Housing of Marin v. Combs, 285 F.3d 899, 906 (9th
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Cir. 2002).
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defendant’s failure to respond, “necessary facts not contained in the pleadings, and claims which are
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legally insufficient, are not established by default.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261,
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1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)); accord
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DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 854 (9th Cir. 2007) (stating that a defendant does not
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admit facts that are not well-pled or conclusions of law); Abney v. Alameida, 334 F. Supp. 2d 1221,
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1235 (S.D. Cal. 2004) (“[A] default judgment may not be entered on a legally insufficient claim.”). A
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party’s default conclusively establishes that party’s liability, but it does not establish the amount of
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damages. Geddes, 559 F.2d at 560.
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In addition, although well-pleaded allegations in the complaint are admitted by a
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DISCUSSION
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1.
Adequacy of Service of Process
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As a general rule, the Court considers the adequacy of service of process before evaluating the
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merits of Plaintiff’s Motion for Default Judgment. See BR North 223, LLC v. Glieberman, No. 1:10-
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cv-02153 LJO-BAM, 2012 WL 639500, at *3 (E.D. Cal. Feb. 27, 2012). According to Plaintiff’s
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allegations, Defendant Rogelio Ortega is an officer of Org Diamond, Inc, which owns and operates the
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commercial establishment doing business as Taco Guey operating at 250 E. Cross Avenue, Tulare,
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California 93274. (Compl. ¶ 7.) Defendant Rogelio Ortega is the individual specifically identified on
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the California Alcoholic Beverage and Control license issued for Taco Guey (ABC #536003).
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(Compl. ¶ 8.)
Under Federal Rule of Civil Procedure 4(e), an individual, such as Defendant Rogelio Ortega,
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may be served by:
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(1)
jurisdiction in the state where the district court is located or where service is made; or
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following state law for serving a summons in an action brought in courts of general
(2)
doing any of the following:
(A)
personally; or
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(B)
(C)
delivering a copy of each to an agent authorized by appointment or by law to
receive service of process.
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leaving a copy of each at the individual’s dwelling or usual place of abode with
someone of suitable age and discretion who resides there; or
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delivering a copy of the summons and of the complaint to the individual
Fed. R. Civ. P. 4(e).
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Plaintiff contends that service of the summons and complaint in this action was made on
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Defendant Rogelio Ortega by personal service pursuant to federal law on August 19, 2015. Plaintiff’s
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proof of service indicates that process server Robert Hall served Rogelio Ortega at 643 South Olive
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Street, #421, Los Angeles, California 90014, at 3:02 p.m. A true and correct copy of the Proof of
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Service was filed with this Court on August 22, 2015. (Doc. 11.) Based on the Proof of Service,
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Plaintiff effectuated service on Defendant Rogelio Ortega pursuant to Federal Rule of Civil Procedure
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4(e)(2)(A).
Under Federal Rule of Civil Procedure 4(h), a corporation, such as Org Diamond, Inc., may be
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served:
(1)
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in a judicial district of the United States:
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(A)
in the manner prescribed by Rule 4(e)(1) for serving an individual; or
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(B)
by delivering a copy of the summons and of the complaint to an officer, a
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managing or general agent, or any other agent authorized by appointment or by
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law to receive service of process and—if the agent is one authorized by statute
and the statute so requires—by also mailing a copy of each to the defendant.
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Fed. R. Civ. P. 4(h).
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Plaintiff contends that service of the summons and complaint in this action was made on
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Defendant Org Diamond, Inc. by personal service on Rogelio Ortega, an officer of the entity and agent
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for service of process, pursuant to federal law on August 19, 2015. Plaintiff’s proof of service
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indicates that process server Robert Hall served Rogelio Ortega, as agent for service of process for
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Org Diamond, Inc. at 643 South Olive Street, #421, Los Angeles California 90014 at 3:02 p.m. A true
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and correct copy of the Proof of Service was filed with this Court on August 22, 2015. (Doc. 12.)
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Based on the proof of service, Plaintiff effectuated service on Defendant Org Diamond, Inc. pursuant
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to Federal Rule of Civil Procedure 4(h)(1)(B).
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Defendants are not infants, incompetent persons, or persons in military service or otherwise
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exempted from default judgment under the Soldiers’ and Sailors’ Civil Relief Act of 1940. (Riley
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Decl., Doc. 13-1, ¶ 5.) Accordingly, the Court finds that Plaintiff properly served the summons and
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complaint in this matter.
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2.
The Eitel Factors Favor Entry of Default Judgment
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The Court finds the Eitel factors weigh in favor of granting Plaintiff’s application for default
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judgment. With regard to the first Eitel factor, if Plaintiff’s application for default judgment were to
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be denied, it would leave Plaintiff without a remedy and Plaintiff would be prejudiced. This factor
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therefore weighs in favor of default judgment. See J & J Sports Prods, Inc. v. Concepcion, No. C-10-
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CV-05092 WHA, 2011 WL 2220101 at *2 (N.D. Cal. June 7, 2011).
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As to the second and third Eitel factors, Plaintiff’s substantive claims appear meritorious and
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the complaint is sufficiently pled. Plaintiff has alleged that Defendants violated sections of Title 47
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and set forth the activities supporting substantive violations. Plaintiff also set forth the applicable laws
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pursuant to which the court may provide relief. These factors weigh in favor of default judgment.
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As to the fourth factor, the damages in this case cannot exceed the amounts specified in 47
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U.S.C. § 605 and the maximum amount allowable for the tort of conversion. Accordingly, statutory
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damages cannot exceed $10,000, and enhanced damages may not exceed $100,000. See 47 U.S.C. §§
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605(e)(3)(C)(i)(II), 605(e)(3)(C)(ii). Plaintiff is seeking a total of $110,000 in statutory and enhanced
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damages, along with $2,200 in damages for conversion (or the amount Defendants would have been
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required to pay to order the Program). Although Plaintiff seeks the maximum statutory and enhanced
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damages available, the relatively small sum of money at stake, as explained more fully below, and the
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Court’s discretion in awarding enhanced damages weigh in favor of granting default judgment.
As to the fifth factor, there is no dispute of material fact since Defendants failed to respond to
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either the Complaint or this motion. This factor weighs in favor of default judgment.
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As to the sixth factor, it is unlikely that default was the result of excusable neglect. Defendants
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were properly served and have not appeared in this case. (See Docs. 11, 12.) This factor weighs in
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favor of default judgment.
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Finally, the seventh factor supports a default judgment because “although federal policy favors
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decisions on the merits, Rule 55(b)(2) permits entry of default judgment in situations such as this
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where defendants refuse to litigate.” Concepcion, 2011 WL 2220101, at *2. Therefore, this general
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policy is outweighed by the more specific considerations, and the motion to enter default judgment
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will be granted.
Accordingly, the Court RECOMMENDS that Plaintiff's Motion for Default Judgment be
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GRANTED.
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3.
Calculation of Damages
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Plaintiff requests $10,000 in statutory damages for violation of 47 U.S.C. § 605(a) and
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$100,000 in enhanced damages for willful violation pursuant to 47 U.S.C. § 605(e)(3)(C)(ii). (See
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Doc. 17-1 at 11-19.)
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Defendants allegedly would have been required to pay Plaintiff for a commercial sublicense to
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publicly exhibit the Program. (Doc. 17-1 at 20.)
Plaintiff also seeks $2,200 in conversion damages, the minimum amount
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A.
Statutory Damages
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Plaintiff requests $10,000 in statutory damages as a result of the alleged violation of 47 U.S.C.
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§ 605(a), which “prohibits commercial establishments from intercepting and broadcasting to its
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patrons satellite cable programming.” J & J Sports Prods., Inc. v. Ro, No. 09-CV-02860, 2010 WL
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668065 at *3 (N.D. Cal. Feb. 19, 2010) (quoting J & J Sports Prods., Inc. v. Guzman, No. 08-CV-
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05469, 2009 WL 1034218 at *2 (N.D. Cal. Apr. 16, 2009)). The statute provides statutory damages
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ranging from $1,000 to $10,000 for each violation. 47 U.S.C. § 605(e)(3)(C)(i)(II).
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Plaintiff alleges that Defendants violated Section 605 because “[w]ith full knowledge that the
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Program was not to be intercepted, received, published, divulged, displayed, and/or exhibited by
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commercial entities unauthorized to do so, . . . Defendants . . . did unlawfully intercept, received,
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publish, divulge, display, and/or exhibit the Program at the time of its transmission at their commercial
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establishment....” (Compl. ¶ 19) (italics in original). However, Plaintiff fails to identify the means of
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signal transmission, which is necessary to determine whether Plaintiff should be awarded maximum
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statutory damages pursuant to Section 605. See J & J Sports Prods., Inc. v. Deleon, No. 5:13-CV-
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02030-EJD, 2014 WL 121711, at *3 (N.D. Cal. Jan. 13, 2014). Indeed, Plaintiff admits that it “cannot
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determine the precise means that the Defendant used to receive the Program unlawfully.” (Doc. 17-1
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at 8) (italics in original). Further, the declaration of Plaintiff’s affiant, Jonathan Browne, does not state
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whether the establishment had a satellite dish or a cable box. (See Browne Decl. at 1.) Despite these
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facts, Plaintiff contends the court has discretion to award significant damages “[e]ven in . . . cases of
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commercial signal piracy where there has been no egregious circumstances noted[.]” (Doc. 17-1 at
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12.)
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Here, it is undisputed that Defendants did not charge a cover for patrons to enter Taco Guey to
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watch the Program, and there is no evidence that Defendants increased prices or required food and
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drink purchases.
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broadcasting the Program. (See Browne Decl. at 1.) Plaintiff also presents no evidence Defendants
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are repeat offenders. Given these facts, the Court in its discretion finds the minimum statutory damage
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amount to be appropriate. See, e.g., J & J Sports Prods., Inc. v. Pinon, No. 5:13-cv-05559-BLF, 2014
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WL 3593629, at *3 (N.D. Cal. Jul. 18, 2014) (awarding statutory minimum where defendant was first-
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time offender, displayed the program on one television, did not charge a cover fee and there were at
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most eleven people in the establishment); J & J Sports Prods., Inc. v. Salgadobarajas, No. 5:13-cv-
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05557-BLF, 2014 WL 3053485, at *3 (N.D. Cal. Jul. 3, 2014) (awarding statutory minimum where
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defendant was first-time offender, displayed the program on one television in a room that
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accommodated one-hundred people, did not charge a cover and there were at most sixty-nine people in
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the establishment); Deleon, 2014 WL 121711, at *3 (finding minimum statutory amount appropriate
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where no cover charge, increased prices, or required food purchase, very few patrons and three
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televisions and projector broadcasting program).
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Additionally, there were very few patrons in the bar and only one television
Accordingly, the Court RECOMMENDS that Plaintiff be awarded the minimum statutory
damages allowed, $1,000.
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B.
Enhanced Damages
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Plaintiff also requests enhanced damages pursuant to Section 605(e)(3)(C)(ii). (Doc. 17-1 at
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14-19.) This section authorizes the Court to award up to $100,000, in its discretion, upon finding that
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the violation “was committed willfully and for purposes of direct or indirect commercial advantage or
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private financial gain.” 47 U.S.C. § 605(e)(3)(C)(ii).
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The Ninth Circuit has not set forth controlling factors for the determination of when enhanced
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damages are appropriate in this context, but various factors specific to this unique line of cases have
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been considered by district courts. These include the “use of cover charge, increase in food price
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during programming, presence of advertisement, number of patrons, number of televisions used, and
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impact of the offender’s conduct on the claimant.” Concepcion, 2011 WL 2220101, at *4. Enhanced
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damages have also been awarded when the defendant has violated Section 605 on previous occasions.
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See J & J Sports Prods., Inc. v. Paniagua, No. 10-CV-05141-LHK, 2011 WL 996257, at *2 (N.D. Cal.
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Mar. 21, 2011).
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The Court does not find an award of maximum damages under Section 605 appropriate. There
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is no evidence of significant “commercial advantage or private financial gain” in this instance.
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Plaintiff has presented evidence that Defendants had only one television set in the commercial
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establishment that displayed the Program, and the affiant asserts that there were only four patrons
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present during the entirety of the investigation.
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discussed, there is no evidence that Defendants assessed a cover charge, required a minimum purchase
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from patrons, or had a special premium on food and drinks on the night of the fight. See Kingvision
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Pay-PerView, Ltd. v. Backman, 102 F. Supp. 2d 1196, 1198 n.2 (N.D. Cal. 2000) (stating that “[a]n
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establishment that does not promote itself by advertising the Program, does not assess a cover charge,
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and does not charge a special premium for food and drinks hardly seems like the willful perpetrators
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envisioned by the statute’s framers.”). Plaintiff has also failed to present evidence that Defendants
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have violated Section 605 on prior occasions.
(See Browne Decl. at 1.)
Further, as already
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In light of the above mentioned facts, the Court does not agree that the maximum enhanced
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damages award is warranted. Although Plaintiff cites primarily to several out-of-district cases to
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support its request for maximum enhanced damages (see Doc. 17-1 at 14-18), Plaintiff has not cited
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any binding precedent or identified any specific circumstances that justify such a high award here.
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Accordingly, the Court concludes that an award of $2,200—the value of the commercial license to air
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the program—is more than adequate and just to compensate Plaintiff for lost profits and to deter
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Defendants’ future infringement. See, e.g., Joe Hand Promotion, Inc. v. Munoz, No. 5:13-CV-05926-
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EJD, 2014 WL 4100724, at *3 (N.D. Cal. Aug. 20, 2014) (awarding enhanced damages equal to the
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value of the commercial license where defendant did not charge a cover, there was no evidence of
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increased prices or required purchases, two televisions displayed the event and 50 patrons were
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present); Deleon, 2014 WL 121711, at *4 (awarding enhanced damages equal to the value of the
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commercial license where no evidence of cover charge, minimum purchase or special premium,
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program displayed on three televisions and one projector, and between 9 to 23 patrons present).
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Therefore, the Court RECOMMENDS that Plaintiff be awarded $2,200 in enhanced damages.
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C.
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Plaintiff also seeks $2,200 in damages for conversion under California Civil Code § 3336.
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(Doc. 17-1 at 20.) Damages for conversion are based on the value of the property at the time of
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conversion. See Tyrone Pac. Intern., Inc. v. MV Eurychili, 658 F.2d 664, 666 (9th Cir. 1981). Here,
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Plaintiff has shown that it owns the right to distribute the Program at issue and has properly alleged the
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misappropriation of the right to distribute the Program. As to damages, the “value of the property”
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was the commercial sublicense fee amount Defendants would have been required to pay, or $2,200.
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(Affidavit of Plaintiff, Doc. 17-4, ¶ 8 and Ex. 2.)
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Damages for Conversion
Accordingly, the Court RECOMMENDS that Plaintiff be awarded $2,200 in damages for
conversion.
CONCLUSION AND RECOMMENDATIONS
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Based on the foregoing, IT IS HEREBY RECOMMENDED that Plaintiff’s application for
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default judgment (Doc. 17) be GRANTED and judgment be entered in favor of Plaintiff and against
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Defendants in the amount of $5,400 in total damages.
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These findings and recommendations are submitted to the district judge assigned to this action,
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pursuant to 28 U.S.C. § 636(b)(1)(B) and this Court's Local Rule 304. Within fourteen (14) days of
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service of this recommendation, any party may file written objections to these findings and
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recommendations with the Court and serve a copy on all parties. Such a document should be
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captioned “Objections to Magistrate Judge’s Findings and Recommendations.”
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advised that failure to file objections within the specified time may result in the waiver of the “right to
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challenge the magistrate’s factual findings” on appeal. Wilkerson v. Wheeler, 772 F.3d 834, 839 (9th
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Cir. 2014) (citing Baxter v. Sullivan, 923 F.2d 1391, 1394 (9th Cir. 1991)).
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IT IS SO ORDERED.
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Dated:
/s/ Barbara
December 16, 2015
A. McAuliffe
The parties are
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UNITED STATES MAGISTRATE JUDGE
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