J & J Sports Productions Inc. v. Torres

Filing 13

FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Kendall J. Newman on 9/22/2011 RECOMMENDING that Pltf's 8 Motion for Default Judgment against dft Dulce Torres, individually and doing business as Prime Time Bar and Grill, also known as El Malecon Bar & Grill, be granted. The court enter judgment in Pltf's favor. The court award statutory damages in an amount of $10,000 to Pltf. This case be closed and all future dates be vacated. Motion referred to Judge John A. Mendez. Objections to F&R due within 14 days. (Zignago, K.)

1
2
3
4
5
6
7
8

IN THE UNITED STATES DISTRICT COURT

9

FOR THE EASTERN DISTRICT OF CALIFORNIA

10

J & J SPORTS PRODUCTIONS, INC.,

11

Plaintiff,

12
13
14

No. 2:11-cv-00653 JAM KJN

v.
DULCE TORRES, INDIVIDUALLY
and d/b/a PRIME TIME BAR AND
GRILL A/K/A EL MALECON BAR &
GRILL,

15
Defendant.
16

FINDINGS AND RECOMMENDATIONS
/

17

Presently before the court is plaintiff’s application for default judgment (Dkt.

18

No. 8), to which no written opposition was filed.1 The court heard plaintiff’s application for

19

default judgment on its law and motion calendar on September 22, 2011. Plaintiff’s counsel’s

20

appearance at the hearing was excused by an order entered in advance of the hearing. (Order,

21

Sept. 20, 2011, Dkt. No. 11.) No appearance was made by or on behalf of defendant. For the

22

reasons stated below, the undersigned recommends that plaintiff’s motion for default judgment

23

be granted, that judgment be entered in plaintiff’s favor, and that plaintiff be awarded $10,000 in

24

damages.

25
1

26

This action proceeds before the undersigned pursuant to Eastern District of California
Local Rule 302(c)(19) and 28 U.S.C. § 636(b)(1).
1

1

I.

BACKGROUND2

2

Plaintiff, a California corporation, is a closed-circuit distributor of sports and

3

entertainment programming. (See Pl.’s Compl. ¶¶ 6, 10-11, Dkt. No. 1; Gagliardi Aff. ¶ 3, Dkt.

4

No. 8, Doc. No. 8-4.) Pursuant to a contract, plaintiff acquired exclusive commercial exhibition

5

licensing rights to a televised boxing match entitled “‘The Event’: The Manny Pacquiao v.

6

Joshua Clottey, WBO Welterweight Championship Fight Program,” which was broadcast via

7

telecast on Saturday, March 13, 2010 (the “Program”).3 (Pl.’s Compl. ¶¶ 9-10; Gagliardi Aff. ¶ 3

8

& Ex. 1.) Thereafter, plaintiff entered into sublicensing agreements with various commercial

9

entities across North America, through which it granted limited public exhibition rights to the

10

entities for the benefit and entertainment of the patrons within the entities’ respective

11

establishments (e.g., hotels, racetracks, casinos, taverns, bars, restaurants, social clubs, etc.).

12

(Pl.’s Compl. ¶ 10; Gagliardi Aff. ¶ 3.) Plaintiff made transmission of the Program available

13

only to its commercial customers, which were commercial entities that had paid plaintiff a

14

commercial sublicense fee to broadcast the program. (Gagliardi Aff. ¶ 8; see also Pl.’s Compl.

15

¶¶ 10-11.) For example, to exhibit the Program in a commercial establishment that had a

16

maximum occupancy of 101 to 200 people, the commercial sublicense fee would have been

17

$2,000. (Gagliardi Aff. ¶ 8 & Ex. 2.)

18

Defendant is alleged to be an owner, operator, licensee, permittee, person in

19

charge of, and doing business as, Prime Time Bar and Grill, also known as El Malecon Bar &

20

Grill, operating at 2518 East Fremont Street, Stockton, California 95205 (“Prime Time”). (Pl.’s

21

Compl. ¶ 7; Exhibits to Medine Aff., Dkt. No. 8, Doc. No. 8-3.) Defendant did not obtain a

22

license to exhibit the Program from plaintiff. (See Pl.’s Compl. ¶¶ 12-13; Gagliardi Aff. ¶ 7.)

23
24

2

These background facts are taken from plaintiff’s complaint and the affidavits
submitted in support of plaintiff’s application for default judgment. (Dkt. Nos. 1, 8.)

25
3

26

The Program included “all under-card bouts and fight commentary encompassed in the
television broadcast of the event.” (Pl.’s Compl. ¶ 9.)
2

1

On March 12, 2010, plaintiff’s investigator, John Medine of Slay & Associates

2

investigative agency, entered Prime Time and observed the unauthorized broadcast of a portion

3

of the Program on four televisions located inside the establishment. (Medine Aff. at 2.) Medine

4

represents that he entered Prime Time at approximately 8:30 p.m. after paying a five dollar cover

5

charge, purchased a beverage from the bar, observed the first three rounds of the “Pacquiao vs.

6

Clottey” fight on the four televisions, and left the establishment at about 9:10 p.m. (Id. at 2-3.)

7

Medine states that he counted the number of patrons at Prime Time three times, resulting in

8

“head counts” of 157, 159, and 161 patrons. (Id. at 3.)

9

On March 9, 2011, plaintiff filed this action alleging that defendant unlawfully

10

intercepted and intentionally broadcast the Program at Prime Time for the purpose of direct or

11

indirect commercial advantage and/or private financial gain. (See generally Pl.’s Compl.)

12

Plaintiff alleges four claims for relief, which are labeled as “Counts” in the complaint. Plaintiff’s

13

first claim for relief alleges that defendant engaged in the unauthorized publication or use of

14

communications in violation of the Federal Communications Act of 1934, 47 U.S.C. §§ 605 et

15

seq.4 (Pl.’s Compl. ¶¶ 8-17.) Its second claim alleges that defendant engaged in the unauthorized

16

interception, reception, divulgence, display, and exhibition of the Program at Prime Time in

17

violation of 47 U.S.C. §§ 553 et seq.5 (Pl.’s Compl. ¶¶ 18-22.) Plaintiff’s third claim alleges a

18

common law claim of conversion. (Id. ¶¶ 23-26.) Its fourth claim for relief alleges a violation of

19

California Business and Professions Code §§ 17200 et seq. (Pl.’s Compl. ¶¶ 27-36.)

20

On June 22, 2011, plaintiff filed a Proof of Service with the court that

21

demonstrates that on May 20, 2011, May 21, 2011, and May 24, 2011, plaintiff, through a

22

process server, attempted personal service on defendant at the address for Prime Time, 2518 East

23
4

24

Title 47 U.S.C. § 605 and provisions that follow prohibit the unauthorized use of wire
or radio communications, including interception and broadcast of pirated cable or broadcast
programming.

25
5

26

Title 47 U.S.C. § 553 and related provisions prohibit the unauthorized interception or
receipt, or assistance in the intercepting or receiving, of cable service.
3

1

Fremont Street, Stockton, California 95205. (Proof of Service, Dkt. No. 5.) It further reflects

2

that on May 24, 2011, plaintiff’s process server left the summons, complaint, and related

3

documents with “John Doe”—a person listed as the “person in charge” who refused to provide

4

his name—with instructions to deliver the documents to defendant. (Id.) The Proof of Service

5

further reflects that a copy of the summons, complaint, and related documents were mailed to

6

defendant on May 25, 2011. (Id.)

7

On June 28, 2011, plaintiff requested that default be entered by the Clerk of Court

8

against defendant. (Req. To Enter Default, Dkt. No. 6.) On June 29, 2011, the Clerk of Court

9

entered a certificate of entry of default against defendant. (Cert. of Entry of Default, Dkt. No. 7.)

10

In entering default, the Clerk of Court stated that it appeared from the record and papers on file in

11

the action that defendant was duly served with process yet failed to appear, plead, or answer

12

plaintiff’s complaint within the time allowed by law. (Id.)

13

On July 22, 2011, plaintiff filed the application for default judgment that is

14

presently before the court. The application seeks judgment on plaintiff’s claims for violation of

15

47 U.S.C. § 605 and 47 U.S.C. § 553, and for common law conversion.6 Plaintiff requests

16

judgment in the amount of $112,000.7 Plaintiff filed proofs of service indicating that it served

17

defendant with the application for default judgment and related documents by mail. (See Proofs

18

of Service, Dkt. No. 8.) No response to plaintiff’s application is on record in this action.

19

II.

LEGAL STANDARDS

20
21

Pursuant to Federal Rule of Civil Procedure 55, default may be entered against a
party against whom a judgment for affirmative relief is sought who fails to plead or otherwise

22
6

23
24
25
26

The application does not specifically request judgment on plaintiff’s claim that
defendant violated California Business and Professions Code §§ 17200 et seq., and plaintiff’s
memorandum in support of the application does not address this claim. Accordingly, the
undersigned does not address this claim.
7

Although plaintiff’s application for default judgment states that plaintiff seeks
attorney’s fees and relevant costs, plaintiff has provided no legal argument or evidentiary support
for its request for fees and costs. Accordingly, the undersigned does not address those requests.
4

1

defend against the action. See Fed. R. Civ. P. 55(a). However, “[a] defendant’s default does not

2

automatically entitle the plaintiff to a court-ordered judgment.” PepsiCo, Inc. v. Cal. Sec. Cans,

3

238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002) (citing Draper v. Coombs, 792 F.2d 915, 924-25

4

(9th Cir. 1986)). Instead, the decision to grant or deny an application for default judgment lies

5

within the district court’s sound discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir.

6

1980). In making this determination, the court considers the following factors:

7
8
9

(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.

10
11

Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Default judgments are ordinarily

12

disfavored. Id. at 1472.

13

As a general rule, once default is entered, well-pleaded factual allegations in the

14

operative complaint are taken as true, except for those allegations relating to damages.

15

TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (per curiam) (citing

16

Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977) (per curiam)); accord Fair

17

Housing of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002), cert. denied, 537 U.S. 1018

18

(2002). In addition, although well-pleaded allegations in the complaint are admitted by a

19

defendant’s failure to respond, “necessary facts not contained in the pleadings, and claims which

20

are legally insufficient, are not established by default.” Cripps v. Life Ins. Co. of N. Am., 980

21

F.2d 1261, 1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978));

22

accord DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 854 (9th Cir. 2007) (stating that a defendant

23

does not admit facts that are not well-pled or conclusions of law), cert. denied, 129 S. Ct. 40

24

(2008); Abney v. Alameida, 334 F. Supp. 2d 1221, 1235 (S.D. Cal. 2004) (“[A] default judgment

25

may not be entered on a legally insufficient claim.”). A party’s default conclusively establishes

26

that party’s liability, although it does not establish the amount of damages. Geddes, 559 F.2d
5

1

at 560 (stating that although a default established liability, it did not establish the extent of the

2

damages).

3

III.

4

ANALYSIS
A.

Appropriateness of the Entry of Default Judgment Under the Eitel Factors

5

1.

Factor One: Possibility of Prejudice to Plaintiff

6

The first Eitel factor considers whether the plaintiff would suffer prejudice if

7

default judgment is not entered, and such potential prejudice to the plaintiff militates in favor of

8

granting a default judgment. See PepsiCo, Inc., 238 F. Supp. 2d at 1177. Here, plaintiff would

9

potentially face prejudice if the court did not enter a default judgment. Absent the entry of a

10

default judgment, plaintiff would be without another recourse for recovery. Accordingly, the

11

first Eitel factor favors the entry of default judgment.

12

2.

Factors Two and Three: The Merits of Plaintiff’s Substantive Claims and
the Sufficiency of the Complaint

13
14

The undersigned considers the merits of plaintiff’s substantive claims and the

15

sufficiency of the complaint together below because of the relatedness of the two inquiries. The

16

undersigned must consider whether the allegations in the complaint are sufficient to state a claim

17

that supports the relief sought. See Danning, 572 F.2d at 1388; PepsiCo, Inc., 238 F. Supp. 2d

18

at 1175.

19

Plaintiff seeks entry of default judgment on its claims brought pursuant to 47

20

U.S.C. § 605(a) and 47 U.S.C. § 553(a).8 Plaintiff’s inability to allege the precise nature of the

21

intercepted transmission in this case, which is largely due to defendant’s failure to appear or

22

defend herself in the action, raises a question regarding the scope of 47 U.S.C. § 605(a) and the

23
24
25
26

8

The undersigned does not address the merits of, or sufficiency of the allegations in
support of, plaintiff’s state law claim for conversion. As discussed more fully below, the
undersigned need not reach plaintiff’s conversion claim because the recommended statutory
damages, if awarded, will sufficiently compensate plaintiff such that an award for conversion
damages would be duplicative.
6

1

sufficiency of plaintiff’s claim under that provision. The Federal Communications Act prohibits,

2

among other things, commercial establishments from intercepting and broadcasting radio

3

communications to its patrons. See 47 U.S.C. § 605(a). In relevant part, 47 U.S.C. § 605(a)

4

states:

5

No person not being authorized by the sender shall intercept any radio
communication and divulge or publish the existence, contents, substance,
purport, effect, or meaning of such intercepted communication to any
person. No person not being entitled thereto shall receive or assist in
receiving any interstate or foreign communication by radio and use such
communication (or any information therein contained) for his own benefit
or for the benefit of another not entitled thereto. No person having
received any intercepted radio communication or having become
acquainted with the contents, substance, purport, effect, or meaning of
such communication (or any part thereof) knowing that such
communication was intercepted, shall divulge or publish the existence,
contents, substance, purport, effect, or meaning of such communication (or
any part thereof) or use such communication (or any information therein
contained) for his own benefit or for the benefit of another not entitled
thereto.

6
7
8
9
10
11
12
13

The Ninth Circuit Court of Appeals has determined that satellite television signals are covered

14

communications under 47 U.S.C. § 605(a). DIRECTV, Inc. v. Webb, 545 F.3d 837, 844 (9th

15

Cir. 2008).

16

The scope of section 605(a) is less clear with respect to transmissions intercepted

17

from a cable system, which are expressly covered under 47 U.S.C. § 553(a). Section 553(a)

18

states, in relevant part: “No person shall intercept or receive or assist in intercepting or receiving

19

any communications service offered over a cable system, unless specifically authorized to do so

20

by a cable operator or as may otherwise be specifically authorized by law.” 47 U.S.C.

21

§ 553(a)(1).9

22
23
24
25
26

9

Section 553 carries lower minimum statutory damages and lower enhanced damages
than section 605. Compare 47 U.S.C. §§ 605(e)(3)(C)(i)(II) and 605(e)(3)(C)(ii) (providing for
the award of statutory damages of not less than $1,000 and no more than $10,000, and under
certain circumstances enhanced damages of up to $100,000 per violation), with 47 U.S.C.
§ 553(c)(3)(A)(ii) (providing for the award of statutory damages of not less than $250 and not
more than $10,000, and under certain circumstances enhanced damages of up to $50,000 per
violation).
7

1

Here, plaintiff has not alleged whether the transmission that defendant intercepted

2

was intercepted through a cable system or a satellite television signal. As plaintiff’s brief

3

correctly suggests, a split of authority has developed regarding the scope of section 605(a) in that

4

numerous courts have concluded that section 605(a) applies exclusively to broadcasts obtained

5

by way of a satellite television signal, as opposed to transmissions over a cable system, and that

6

section 553 applies exclusively to transmission over a cable system. Compare United States v.

7

Norris, 88 F.3d 462, 466-69 (7th Cir. 1996) (holding that sections 553(a) and 605(a) are not

8

“overlapping statutes” and are thus mutually exclusive), with Int’l Cablevision, Inc. v. Sykes, 75

9

F.3d 123, 132-33 (2d Cir. 1996) (holding that section 605 and section 553 are not completely

10

overlapping); see also TKR Cable Co. v. Cable City Corp., 267 F.3d 196, 204-07 (3d Cir. 2001)

11

(recognizing the disagreement between the holdings in Norris and Sykes, and holding “that § 605

12

encompasses the interception of satellite transmissions to the extent reception or interception

13

occurs prior to or not in connection with, distribution of the service over a cable system, and no

14

more” (internal quotation marks omitted).).

15

At a minimum, plaintiff’s complaint and evidence support a conclusion that

16

defendant intercepted, without authorization, a transmission of the Program and broadcast it to its

17

patrons. (Pl.’s Compl. ¶¶ 3, 12-13, 19-20; Medine Aff. at 2-3.) Plaintiff essentially concedes

18

that its complaint and the record contain no allegations or evidence substantiating the nature of

19

the transmission that was intercepted by defendant. Plaintiff argues, however, that although it

20

was unable to allege the precise means of transmission in this case (i.e., transmission over a cable

21

system or satellite broadcast), it “should not be prejudiced” given defendant’s failure to appear or

22

defend itself in this action. (Pl.’s Memo. of P. & A. in Supp. of Application for Default J. at 10,

23

Dkt. No. 8, Doc. No. 8-1.) The undersigned agrees with plaintiff that under the circumstances of

24

this case, where plaintiff was deprived of the opportunity to conduct discovery regarding the

25

transmission at issue because of defendant’s failure to appear or defend itself in this action,

26

plaintiff should not suffer the resulting prejudice. In any event, the split of authority presented
8

1

above has little practical impact in this case because the undersigned recommends the entry of a

2

judgment in the total amount of $10,000, which is the maximum, non-enhanced statutory

3

damages available under both 47 U.S.C. § 553(c)(3)(A)(ii) and 47 U.S.C. § 605(e)(3)(C)(i)(II).

4

Thus, insofar as the merits of plaintiff’s statutory claims and the sufficiency of its pleadings

5

under the Eitel factors are concerned, the complaint and record before the undersigned favor

6

entry of default judgment.

7

3.

Factor Four: The Sum of Money at Stake in the Action

8

Under the fourth factor cited in Eitel, “the court must consider the amount of

9

money at stake in relation to the seriousness of Defendant’s conduct.” PepsiCo, Inc., 238 F.

10

Supp. 2d at 1177; see also Philip Morris USA, Inc. v. Castworld Prods., Inc., 219 F.R.D. 494,

11

500 (C.D. Cal. 2003). Here, plaintiff seeks a significant amount of damages, i.e., $112,000.

12

However, plaintiff’s request for statutory damages and damages for conversion are tailored to

13

defendant’s specific wrongful conduct. Plaintiff seeks statutory damages under the federal

14

statutes implicated by its claims and, although plaintiff requests $110,000 in statutory damages,

15

the statutes involved contemplate such an award under certain circumstances.10 Under these

16

circumstances, the undersigned concludes that this factor favors the entry of default judgment.

17

4.

Factor Five: The Possibility of a Dispute Concerning Material Facts

18

The facts of this case are relatively straightforward, and plaintiff has provided the

19

court with well-pleaded allegations supporting its statutory claims and affidavits in support of its

20

allegations. Here, the court may assume the truth of well-pleaded facts in the complaint (except

21

as to damages) following the clerk’s entry of default and, thus, there is no likelihood that any

22

genuine issue of material fact exists.11 See, e.g., Elektra Entm’t Group Inc. v. Crawford, 226

23
24

10

Whether plaintiff is entitled to an award of this size is a different issue, which the
undersigned addresses in greater detail below.

25
11

26

Defendant’s failure to file an answer in this case further supports the conclusion that
the possibility of a dispute as to material facts is minimal.
9

1

F.R.D. 388, 393 (C.D. Cal. 2005) (“Because all allegations in a well-pleaded complaint are taken

2

as true after the court clerk enters default judgment, there is no likelihood that any genuine issue

3

of material fact exists.”); accord Philip Morris USA, Inc., 219 F.R.D. at 500; PepsiCo, Inc., 238

4

F. Supp. 2d at 1177.

5

5.

Factor Six: Whether the Default Was Due to Excusable Neglect

6

Upon review of the record before the court, the undersigned finds that the default

7

was not the result of excusable neglect. See PepsiCo, Inc., 238 F. Supp. 2d at 1177. Plaintiff

8

made numerous attempts to personally serve defendant with the summons and complaint and

9

ultimately effectuated substituted service of those documents on defendant. Moreover, plaintiff

10

served defendant by mail with its application for default judgment. Despite ample notice of this

11

lawsuit and plaintiff’s intention to seek a default judgment, defendant has not appeared in this

12

action to date. Thus, the record suggests that defendant has chosen not to defend herself in this

13

action, and not that the default resulted from any excusable neglect. Accordingly, this Eitel

14

factor favors the entry of a default judgment.

15

6.

Factor Seven: The Strong Policy Underlying the Federal Rules of Civil
Procedure Favoring Decisions on the Merits

16
17

“Cases should be decided upon their merits whenever reasonably possible.” Eitel,

18

782 F.2d at 1472. However, district courts have concluded with regularity that this policy,

19

standing alone, is not dispositive, especially where a defendant fails to appear or defend itself in

20

an action. PepsiCo, Inc., 238 F. Supp. 2d at 1177; see also Craigslist, Inc. v. Naturemarket, Inc.,

21

694 F. Supp. 2d 1039, 1061 (N.D. Cal. 2010); ACS Recovery Servs., Inc. v. Kaplan, No. C 09-

22

01304, 2010 WL 144816, at *7 (N.D. Cal. Jan. 11, 2010) (unpublished); Hartung v. J.D. Byrider,

23

Inc., No. 1:08-cv-00960 AWI GSA, 2009 WL 1876690, at *5 (E.D. Cal. June 26, 2009)

24

(unpublished). Accordingly, although the undersigned is cognizant of the policy in favor of

25

decisions on the merits—and consistent with existing policy would prefer that this case be

26

resolved on the merits—that policy does not, by itself, preclude the entry of default judgment.
10

1

Upon consideration of the Eitel factors, the undersigned concludes that plaintiff is

2

entitled to the entry of default judgment against defendant and recommends the same. What

3

remains is the determination of the amount of damages to which plaintiff is entitled.

4
5

B.

Terms of the Judgment to Be Entered
After determining that a party is entitled to a default judgment, the court must

6

determine the terms of the judgment to be entered. Considering plaintiff’s briefing and the

7

record in this case, including the affidavits and declarations submitted by plaintiff, the

8

undersigned concludes that plaintiff is entitled to an award of statutory damages in the amount of

9

$10,000 as a result of defendant’s unlawful interception and broadcast of the Program, and

10

recommends the same.

11

Pursuant to section 605, a court may award statutory damages of “not less than

12

$1,000 or more than $10,000” for violation of the Federal Communications Act, and may also

13

award enhanced damages of up to $100,000 if the “violation was committed willfully and for

14

purposes of direct or indirect commercial advantage or private financial gain.” 47 U.S.C.

15

§§ 605(e)(3)(C)(i)(II), (e)(3)(C)(ii). Where a violation 47 U.S.C. § 553(a) is concerned, a court

16

may award statutory damages of “not less than $250 or more than $10,000,” and may increase the

17

award up to $50,000 if the “violation was committed willfully and for purposes of commercial

18

advantage or private financial gain.” 47 U.S.C. § 553(c)(3)(A), (B).

19

Here, plaintiff seeks a judgment in the amount of $112,000. Plaintiff’s

20

application for default judgment and proposed order indicate that this sum consists of $110,000

21

for a violation of 47 U.S.C. § 605(e)(3)(B)(iii) and (e)(3)(C)(ii), and $2,000 as compensatory

22

damages arising from defendant’s act of conversion. (See Notice of Appl. & Appl. for Default J.

23

at 2-3; Proposed Order at 2, Dkt. No. 8, Doc. No. 8-6.)

24

Plaintiff’s investigator’s affidavit states that approximately 160 patrons were

25

inside the restaurant on the night in question, and that they likely paid a five dollar cover charge

26

to enter. (See Medine Aff. at 2-3.) The affidavit further states that Prime Time was unlawfully
11

1

broadcasting the Program on four televisions. (Id. at 2.) Plaintiff provided no evidence that

2

Prime Time prepared any special advertising for the broadcast of the Program or that Prime Time

3

charged a special premium for food or drink that night. Plaintiff does not suggest that defendant

4

is a repeat offender with respect to intercepting transmissions of the type at issue here. Balancing

5

these facts with the widespread problem of piracy and the need for an award sufficient to deter

6

future piracy, the undersigned recommends an award of statutory damages in the amount of

7

$10,000. On the record before the court, the undersigned does not find that this case merits an

8

award of enhanced damages.

9

Plaintiff also seeks actual damages for defendant’s alleged tortious act of

10

conversion in the amount of $2,000, which consists of the fee that defendant would have had to

11

pay to plaintiff in order to lawfully broadcast the Program through a contractual sublicense.12

12

(See Pl.’s Proposed Order at 2; Gagliardi Aff. ¶ 8 & Ex. 2.) The undersigned does not

13

recommend an award of damages with respect to plaintiff’s claim for conversion. The statutory

14

damages provisions at issue serve not only a deterrent function, see J & J Sports Prods. v.

15

Orellana, No. 08-05468 CW, 2010 WL 1576447, at *3 (N.D. Cal. Apr. 19, 2010) (unpublished),

16

but also a compensatory function, which is evidenced by provisions that permit the award of

17

statutory damages or actual damages in a civil action. See 47 U.S.C. § 605(e)(3)(C)(i); 47 U.S.C.

18

§ 553(c)(3)(A)(i). Here, the recommended award of statutory damages in the amount of $10,000

19

sufficiently compensates plaintiff, and this case does not present a set of circumstances where an

20

additional award might be warranted. Accordingly, the undersigned recommends that plaintiff be

21

awarded no damages on its conversion claim.13

22
23
24

12

Damages for conversion are measured, in relevant part, by the value of the property at
the time of the conversion. Cal. Civ. Code § 3336; see also Stan Lee Trading, Inc. v. Holtz, 649
F. Supp. 577, 581 (C.D. Cal. 1986); Spates v. Dameron Hosp. Ass’n, 114 Cal. App. 4th 208, 221,
7 Cal. Rptr. 3d 597, 608 (Ct. App. 2003).

25
13

26

Because the undersigned does not recommend an award of damages on plaintiff’s
conversion claim, the court need not address the question of whether an interest in intangible
12

1

Finally, although the prayer for relief in the complaint and the application for

2

default judgment indicate that plaintiff seeks the award of costs and attorney’s fees, the

3

application for default judgment contains no argument or evidence in support of such a request.

4

Accordingly, the undersigned does not recommend the award of costs or attorney’s fees.

5

IV.

CONCLUSION

6

For the reasons stated above, IT IS HEREBY RECOMMENDED that:

7

1.

Plaintiff’s application for default judgment (Dkt. No. 8) against defendant

8

Dulce Torres, individually and doing business as Prime Time Bar and Grill, also known as El

9

Malecon Bar & Grill, be granted.

10

2.

11

The court enter judgment in plaintiff’s favor with respect to its claims

brought pursuant to 47 U.S.C. § 605(a) and 47 U.S.C. § 553(a).

12

3.

The court award statutory damages in an amount of $10,000 to plaintiff.

13

4.

This case be closed and all future dates be vacated.

14

These findings and recommendations are submitted to the United States District

15

Judge assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1). Within fourteen

16

days after being served with these findings and recommendations, any party may file written

17

objections with the court and serve a copy on all parties. Id.; see also E. Dist. Local Rule 304(b).

18

Such a document should be captioned “Objections to Magistrate Judge’s Findings and

19

Recommendations.” Any response to the objections shall be filed with the court and served on

20

all parties within fourteen days after service of the objections. E. Dist. Local Rule 304(d).

21
22
23
24
25
26

property such as an exclusive license to distribute a broadcast signal is the proper subject of a
claim of conversion under California law. Compare, e.g., Fremont Indem. Co. v. Fremont Gen.
Corp., 148 Cal. App. 4th 97, 119-20, 55 Cal. Rptr. 3d 621, 638 (Ct. App. 2007) (acknowledging
California courts’ traditional refusal to recognize as conversion the unauthorized taking of
intangible interests that are not merged with or reflected in something tangible), with DIRECTV,
Inc. v. Pahnke, 405 F. Supp. 2d 1182, 1189-90 (E.D. Cal. 2005) (concluding that the exclusive
right to distribute proprietary cable programming is the proper subject of a conversion claim
under California law), and Don King Prods./Kingvision v. Lovato, 911 F. Supp. 419, 423 (N.D.
Cal. 1995) (holding that plaintiff’s alleged exclusive rights to distribute a telecast in California
constituted a right to possession of property supporting a claim of conversion).
13

1

Failure to file objections within the specified time may waive the right to appeal the District

2

Court’s order. Turner v. Duncan, 158 F.3d 449, 455 (9th Cir. 1998); Martinez v. Ylst, 951 F.2d

3

1153, 1156-57 (9th Cir. 1991).

4
5

IT IS SO RECOMMENDED.
DATED: September 22, 2011

6
7
8

_____________________________________
KENDALL J. NEWMAN
UNITED STATES MAGISTRATE JUDGE

9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
14