J & J Sports Productions, Inc. v. Castro Chavez, et al.

Filing 14

ORDER and FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Carolyn K. Delaney on 9/16/2013 ORDERING default be entered against defendant Avalos-Garcia; and RECOMMENDING that 10 MOTION for DEFAULT JUDGMENT be granted; judgment be entered ag ainst defendants Chavez and Avalos-Garcia d/b/a/ El Patron Bar and Grill in the sum of $25,000; and this case be closed; Matter referred to Judge Kimberly J. Mueller; Any party may filed objections to these findings and recommendations within 14 days after being served; failure to file objections within the specified time may waive the right to appeal the District Court's order. (Waggoner, D)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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J & J SPORTS PRODUCTIONS, INC.,

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No. 2:13-cv-1120 KJM CKD

Plaintiff,
v.

ORDER AND

JOSE L. CASTRO CHAVEZ, et al.,

FINDINGS AND RECOMMENDATIONS

Defendants.

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Presently before the court is plaintiff’s application for default judgment. This matter was

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submitted without oral argument. The undersigned has fully considered the briefs and record in

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this case and, for the reasons stated below, will recommend that plaintiff’s application for default

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judgment be granted.

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BACKGROUND

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Plaintiff J&J Sports Productions, Inc. is a closed-circuit distributor of sports and

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entertainment programming. Defendants operate a bar called “El Patron Bar & Grill” located on

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Folsom Boulevard in Sacramento, California. Plaintiff purchased and retains the commercial

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exhibition licensing rights to “Manny Pacquiao v. Timothy Bradley, WBO Welterweight

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Championship Fight Program,” which was broadcast on Saturday, June 9, 2012 (“The Program”).

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Defendants intercepted and exhibited the program in the commercial establishment referred to

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above without authorization to do so.
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The record reflects that defendant Chavez was properly served with process on July 24,

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2013 and defendant Avalos-Garcia was properly served with process by substituted service on

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August 1, 2013. Default was entered against defendant Chavez on August 27, 2013.1 On

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September 5, 2013, plaintiff filed its motion for default judgment with a proof of service

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reflecting service of the motion on defendants.

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LEGAL STANDARDS

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Federal Rule of Civil Procedure 55(b)(2) governs applications to the court for entry of

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default judgment. Upon entry of default, the complaint’s factual allegations regarding liability

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are taken as true, while allegations regarding the amount of damages must be proven. Dundee

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Cement Co. v. Howard Pipe & Concrete Prods., 722 F.2d 1319, 1323 (7th Cir. 1983) (citing Pope

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v. United States, 323 U.S. 1 (1944); Geddes v. United Fin. Group, 559 F.2d 557 (9th Cir. 1977));

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see also DirectTV v. Huynh, 503 F.3d 847, 851 (9th Cir. 2007); TeleVideo Sys., Inc. v.

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Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987).

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Where damages are liquidated, i.e., capable of ascertainment from definite figures

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contained in documentary evidence or in detailed affidavits, judgment by default may be entered

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without a damages hearing. Dundee, 722 F.2d at 1323. Unliquidated and punitive damages,

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however, require “proving up” at an evidentiary hearing or through other means. Dundee, 722

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F.2d at 1323-24; see also James v. Frame, 6 F.3d 307, 310-11 (5th Cir. 1993).
Granting or denying default judgment is within the court’s sound discretion. Draper v.

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Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986); Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir.

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1980). The court is free to consider a variety of factors in exercising its discretion. Eitel v.

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McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Among the factors that may be considered by

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the court are (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s substantive

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claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action; (5) the

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possibility of a dispute concerning material facts; (6) whether the default was due to excusable

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Plaintiff did not request entry of default against defendant Avalos-Garcia but moved for default
judgment against both defendants. Because defendant Avalos-Garcia was properly served and
has not filed an answer, the court will direct entry of default against this defendant.
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neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring

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decisions on the merits. Eitel, 782 F.2d at 1471-72 (citing 6 Moore’s Federal Practice ¶ 55-05[2],

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at 55-24 to 55-26).

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ANALYSIS

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I. Whether Default Judgment Should Be Entered

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The factual allegations of plaintiff’s complaint, taken as true pursuant to the entry of

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default against defendants, and the affidavits submitted in support of the motion for summary

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judgment establish the following circumstances: (1) defendants are the owners, operators,

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licensees, permitees, persons in charge, or persons with control over the commercial

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establishment at issue in this action; (2) plaintiff purchased and retains the commercial exhibition

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licensing rights to the Program; (3) plaintiff entered into sublicensing agreements with various

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commercial entities by which it granted those entities limited sublicensing rights to exhibit the

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Program to their patrons within their establishments; (4) as a commercial distributor of sporting

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events, plaintiff expended substantial monies marketing, advertising, promoting, administering,

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and transmitting the program to its customers; (5) with full knowledge that the program was not

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to be intercepted, received, and exhibited by unauthorized entities, defendants exhibited the

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program and did so willfully and for purposes of commercial or private gain at both locations;

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and (6) defendants violated either 47 U.S.C. § 553 or 47 U.S.C. § 605.

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In the motion for default judgment, plaintiff seeks enhanced statutory damages for willful

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violation of the Communications Act, 47 U.S.C. § 605.2 Under section 605, statutory damages

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may be awarded between $1,000 and $10,000 for violation of the Federal Communications Act

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In the complaint, plaintiff also seeks damages for willful violation of the Cable & Television
Consumer Protection & Competition Act, 47 U.S.C. § 553. Statutory damages are allowed under
section 553 of $250 to $10,000 or up to $50,000 for willful violations. 47 U.S.C. § 553(c)(3).
Damages may not be awarded under both section 605 and 553. See J & J Sports Productions, Inc.
v. Manzano, NO. C 08-01872 RMW, 2008 WL 4542962, at *2 (N.D. Cal. Sept. 29, 2008) (“A
signal pirate violates section 553 if he intercepts a cable signal, he violates section 605 if he
intercepts a satellite broadcast. But he cannot violate both by a single act of interception.”); see
also J & J Sports Productions, Inc. v. Ro, No. C 09-02860 WHA, 2010 WL 668065, at *3 (N.D.
Cal. Feb. 19, 2010); J & J Sports Productions, Inc. v. Prado, No. 2:07-cv-02104 GEB DAD, 2008
WL 822159, at *3 (E.D. Cal. Mar. 27, 2008); Kingvision Pay Per View, Ltd., v. Williams , 1 F.
Supp. 2d 1481, 1484 (S.D. Ga. 1998).
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and up to $100,000 when the violation “was committed willfully and for purposes of direct or

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indirect commercial advantage or financial gain.” 47 U.S.C. § 605(e)(3)(C)(ii). Because

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defendants have not appeared in this action and plaintiff has been precluded from conducting

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discovery, the precise means of transmission cannot be ascertained. At a minimum, however,

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plaintiff’s complaint and evidence support a conclusion that defendants intercepted, without

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authorization, a transmission of the Program and broadcast it to its patrons. Plaintiff should not

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be prejudiced by defendants’ failure to appear or defend itself in this action and the court

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concludes, therefore, that statutory damages should be awarded under section 605.

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After weighing the Eitel factors, the undersigned finds that the material allegations of the

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complaint support plaintiff’s claims. Plaintiff will be prejudiced if default judgment is denied

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because plaintiff has no other recourse for recovery of the damages suffered due to the

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defendants’ failure to pay for the right to exhibit the Program.

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In light of the entry of default against the defendants, there is no apparent possibility of a

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dispute concerning the material facts underlying the action. Nor is there any indication that the

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defendants’ default resulted from excusable neglect, as defendants were properly served with

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plaintiff’s pleading as well as with plaintiff’s request for entry of default and motion for default

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judgment. Defendants have had ample notice of plaintiff’s intent to pursue a default judgment

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against them.

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Although public policy generally favors the resolution of a case on its merits, the

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defendants’ failure to make a proper appearance and defend against plaintiff’s claims has made a

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decision on the merits impossible in this case. Because most of the Eitel factors weigh in

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plaintiff’s favor, the undersigned, while recognizing the public policy favoring decisions on the

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merits, will recommend that default judgment be entered against the defaulted defendant.

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II. Terms of Judgment to Be Entered

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After determining that entry of default judgment is warranted, the court must next

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determine the terms of the judgment. Upon consideration of all of plaintiff’s briefing, the

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undersigned will recommend that damages be awarded but not in the amount requested.

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By its motion for default judgment, plaintiff seeks a judgment in the total amount of

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$112,200.00. That sum consists of $110,000 for the violation of Title 47 and $2,200 for the tort

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of conversion. The undersigned recognizes that defendants were served with plaintiff’s motion

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for default judgment and were thereby placed on notice of the amount sought by plaintiff.

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However, granting or denying default judgment is within the court’s sound discretion, and one of

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the factors the court is free to consider in exercising its discretion is the sum of money at stake.

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See J & J Sports Productions, Inc. v. Betancourt, No. 08cv937 JLS (POR), 2009 WL 3416431, at

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*3 (S.D. Cal. Oct. 20, 2009).

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The affidavit of the investigator, Stevan Gonsales, establishes that defendants broadcast

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the program to the bar patrons, that there was one screen in the establishment on which the

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Program was displayed (with screen size of approximately 40+ inches), that the capacity of the

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bar was 70 people and that at the time of the broadcast, headcounts were taken three different

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times showing 6, 10, and 12 patrons. There is no evidence in the record that defendants are repeat

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violators. Under these circumstances, the court finds enhanced statutory damages should be

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awarded and that default judgment in the amount of $25,000 is appropriate.

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In his declaration in support of the motion for default judgment, counsel indicates that

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plaintiff also seeks the award of $2,200 in damages for the state law tort of conversion,

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representing the amount defendant would have paid plaintiff to show the Program lawfully

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according to the rate card for the event. The undersigned will not recommend an award of

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damages with respect to plaintiff’s conversion claim. The statutory damages provisions at issue

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serve not only a deterrent function, see J & J Sports Prods. v. Orellana, No. 08-05468 CW, 2010

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WL 1576447, at *3 (N.D. Cal. Apr. 19, 2010) (unpublished), but also a compensatory function,

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which is evidenced by provisions that permit the award of statutory damages or actual damages in

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a civil action. See 47 U.S.C. § 605(e)(3)(C)(I); 47 U.S.C. § 553(c)(3)(A)(i). Here, the

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recommended award in the amount of $25,000 sufficiently compensates plaintiff. See J & J

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Sports Productions, Inc. v. Ferreyra, No. C 08-128 LKK KJM, 2008 WL 4104315, at *1 (E.D.

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Cal. Aug. 28, 2008) (“Inasmuch as plaintiff seeks statutory damages rather than actual damages,

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plaintiff’s request for damages for conversion should be denied.”).
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Finally, although the prayer for relief in the complaint indicates that plaintiff seeks an

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award of costs and attorney fees, the motion for default judgment does not contain any argument

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in support of such a request. Moreover, no evidence of costs or attorney fees incurred was

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submitted to the court in connection with the pending motion. Accordingly, the court will not

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recommend an award of costs and attorney’s fees.

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CONCLUSION

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For the reasons set forth above, IT IS HEREBY ORDERED that default be entered

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against defendant Avalos-Garcia; and
IT IS HEREBY RECOMMENDED that:

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1. Plaintiff’s motion for default judgment (ECF No. 10) be granted;

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2. Judgment be entered against the defendants Chavez and Avalos-Garcia d/b/a/ El Patron

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Bar and Grill in the sum of $25,000; and

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3. This case be closed.

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These findings and recommendations are submitted to the United States District Judge

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

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

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objections with the court and serve a copy on all parties. Such a document should be captioned

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“Objections to Magistrate Judge’s Findings and Recommendations.” Failure to file objections

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within the specified time may waive the right to appeal the District Court’s order. Martinez v.

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Ylst, 951 F.2d 1153 (9th Cir. 1991).

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Dated: September 16, 2013

_____________________________________
CAROLYN K. DELANEY
UNITED STATES MAGISTRATE JUDGE

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