J & J Sports Productions, Inc. v. Salgadobarajas

Filing 21

ORDER GRANTING 13 MOTION for Default Judgment and 20 MOTION for Attorney Fees and Costs. Signed by Hon. Beth Labson Freeman on 7/3/2014. (blflc2, COURT STAFF) (Filed on 7/3/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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J & J SPORTS PRODUCTIONS, INC.,

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Plaintiff,

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ORDER GRANTING PLAINTIFF’S
MOTION FOR DEFAULT JUDGMENT

v.

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SALVADOR SALGADOBARAJAS,

Re: ECF No. 13

Defendant.

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United States District Court
Northern District of California

Case No. 5:13-cv-05557-BLF

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Plaintiff J & J Sports Productions, Inc. (“Plaintiff”) has moved for the entry of default

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judgment against defendant Salvador Salgadobarajas, owner of Mexicalis Bar. Plaintiff is

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requesting damages from Defendant’s alleged unlawful interception and intentional exhibition of a

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boxing match at Defendant’s bar. For the following reasons, the motion for default judgment is

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GRANTED.

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I.

BACKGROUND
Plaintiff is a commercial distributor and licensor of sporting events. (Compl. ¶ 16, ECF 1)

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By contract, J & J secured the domestic commercial exhibition rights to broadcast the “Manny

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Pacquiao and Juan Manuel Márquez, IV Welterweight Fight Program” (“Program”) telecast

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nationwide on Saturday, December 8, 2012. (Id. ¶ 14) The interstate transmission of the Program

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was made available only to J & J’s customers. (Id. ¶ 15) In order to lawfully broadcast the

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Program, commercial entities were required to enter into a sublicensing agreement with J & J and

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pay the associated licensing fees. (Id.)

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On December 8, 2012, investigator Gary Gravelyn observed the alleged unlawful
exhibition of the Program at Defendant’s commercial establishment, Mexicalis, located in San
Case No. 5:13-cv-05557-BLF
ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT

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Jose, California. (Decl. of Gary Gravelyn, at 1, ECF 13) Based on Gravelyn’s observations, J & J

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alleges that Defendant intercepted the Program unlawfully, and intentionally exhibited it for the

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purpose of direct or indirect commercial advantage. (Compl. ¶ 18)
In his affidavit, Gravelyn states that Mexicalis has a capacity of approximately one-

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hundred people. (Gravelyn Decl., at 1) Gravelyn observed one thirty-six inch television located

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centrally behind the bar. (Id.) In the three minutes Gravelyn spent at Mexicalis he conducted

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three head counts, counting approximately sixty-two, sixty-seven, and sixty-nine patrons,

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respectively, inside the establishment. (Id., at 1-2) Gravelyn’s affidavit did not expressly describe

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how many of such patrons were watching the Program. Gravelyn testifies that the establishment

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has a satellite dish, but that he did not observe a cable box. (Id.)
It is unclear whether Defendant charged a fee to enter the establishment. Plaintiff has

United States District Court
Northern District of California

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provided directly conflicting statements on this point. Plaintiff states: “In this instance, I would

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further request that the Court take notice that the instant pirate establishment obtained a cover

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charge from its patrons and to view the Program. Mexicalis did not require a cover charge to enter

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the establishment.” (Pl.’s Mot. for Default J., at 11, ECF 13) Gravelyn testifies that he was not

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required to pay to enter the establishment. (Gravelyn Decl., at 1) The Court will take Gravelyn’s

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affidavit as true and assume that no cover charge was required to enter the establishment. There

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are no allegations of increased food or drink prices during the Program. Plaintiff also does not

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allege that Mexicalis is a repeat offender of the alleged unlawful conduct.

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Plaintiff filed suit against Defendant on December 2, 2013. (See Compl.) Plaintiff has

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alleged violations of the Federal Communications Act, 47 U.S.C. § 605, Cable and Television

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Consumer Protection Act, 47 U.S.C. § 553, California Civil Code § 3336, and California Business

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and Professions Code § 17200, et. seq.1 Defendant has failed to appear or otherwise respond to

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the Summons and Complaint within the time prescribed by the Federal Rules of Civil Procedure.

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On March 4, 2014 Plaintiff filed a request for entry of default judgment. (Pl.’s Mot. for Entry of

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In the Plaintiff’s Motion for Default Judgment, Plaintiff does not request relief in relation to the
alleged violation of Section 17200, therefore no relief will be granted under this statute.
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Case No. 5:13-cv-05557-BLF
ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT

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Default, at 1, ECF 10) The Court Clerk entered default against Defendant on March 13, 2014.

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(Entry of Default, at 1, ECF 11)

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II.

LEGAL STANDARDS
Pursuant to Federal Rule of Civil Procedure 55(b), the Court may enter default judgment

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against a defendant who has failed to plead or otherwise defend an action. “The district court’s

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decision whether to enter a default judgment is a discretionary one.” Aldabe v. Aldabe, 616 F.2d

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1089, 1092 (9th Cir. 1980).
The Ninth Circuit has provided seven factors for consideration by the district court in

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exercising its discretion to enter default judgment. These factors, known as the “Eitel factors,”

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are: (1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff’s substantive claim;

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United States District Court
Northern District of California

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

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of dispute concerning material facts; (6) whether default was due to excusable neglect; and (7) the

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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). When assessing these factors, and after

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entry of default, all factual allegations in the complaint are taken as true, except those with regard

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to damages. Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987).

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III.

DISCUSSION

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A.

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Six of the seven Eitel factors weigh in favor of default judgment. In respect to the first

Eitel Factors

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factor of prejudice, denying Plaintiff’s request for default judgment would be prejudicial because

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Plaintiff would be left without a remedy as a result of Defendant’s refusal to litigate this action.

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Considering the merits of Plaintiff’s substantive claims and the sufficiency of the complaint

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together (factors two and three), Plaintiff’s substantive claims appear meritorious, and its

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complaint is sufficiently pled. Plaintiff has stated the applicable laws pursuant to which the Court

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may provide relief and alleged that Defendant violated 47 U.S.C. §§ 605 and 553 and California

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Civil Code § 3336. The facts alleged concerning Defendant’s activities appear to support the

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allegation that Defendant has violated one or more sections of the cited statutes.

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Case No. 5:13-cv-05557-BLF
ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT

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As to the fifth and sixth Eitel factors, Defendant has failed to respond to this action despite

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Plaintiff’s satisfaction of all notice requirements. (Summons Issued as to Salvador

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Salgadobarajas, at 1, Dec. 2, 2013, ECF 2; Proof of Service Summons and Compl., at 1, ECF 9)

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As such, there is no dispute of material fact because Defendant has not responded (factor five).

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There is also nothing in the record to indicate that Defendant’s default is a result of excusable

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neglect (factor six). Finally, although federal policy favors decisions on the merits, Rule 55(b)(2)

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permits entry of default judgment in situations such as this where defendants refuse to litigate. J

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& J Sports Productions, Inc. v. Deleon, No. 5:13–CV–02030, 2014 WL 121711, at *2 (N.D. Cal.

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Jan. 13, 2014). Therefore, this general policy is outweighed by the more specific considerations in

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United States District Court
Northern District of California

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this case, and the seventh Eitel factor also weighs in favor of default.
With respect to the sum of money at stake in this action (fourth factor), Plaintiff’s request

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for maximum statutory damages weighs against granting default judgment, as the amount

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requested appears disproportionate to the harm alleged: a first time offender who did not charge an

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entrance fee and did not show the broadcast to a packed house. However, a disproportionate

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damages request is not enough on its own to bar default judgment, as it may be addressed by the

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Court in deciding what damages should be awarded, assuming that a default judgment is otherwise

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appropriate. Joe Hand Promotions, Inc. v. Mujadidi, No. C–11–5570, 2012 WL 3537036, at *3

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(N.D. Cal. Aug. 14, 2012).

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Accordingly, the Court GRANTS Plaintiff’s Motion for Default Judgment.

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B.

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Pursuant to 47 U.S.C. § 605(e)(3)(C)(i) Plaintiff has elected to request statutory damages.

Calculation of Damages

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Plaintiff requests $10,000 in statutory damages under Section 605(e)(3)(C)(i)(II), and $100,000 in

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enhanced damages under Section 605(e)(3)(C)(ii). (Mot., at 11, 14) Plaintiff also seeks $2,200 in

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conversion damages under California Civil Code § 3336, the amount Defendant allegedly would

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have been required to pay had Defendant licensed the Program from Plaintiff. (Mot., at 20)

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i.

Statutory Damages

The Federal Communications Act, 47 U.S.C. §§ 605 et. seq., prohibits commercial
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Case No. 5:13-cv-05557-BLF
ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT

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establishments from intercepting and broadcasting to its patrons satellite cable programming

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except through authorized channels. Under Section 605(e)(3)(C)(i)(II), damages for a violation of

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the Act are set at a minimum of $1,000 and a maximum of $10,000. Plaintiff requests the

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statutory maximum for Defendant’s allegedly unauthorized interception of the Program . (Mot., at

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11)

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Although Plaintiff has alleged that Defendant also violated 47 U.S.C. § 553, it does not

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request damages under this section, which provides a lower statutory award. Therefore, only

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damages pursuant to Section 605 will be assessed.

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Plaintiff admits that it cannot determine the precise means that the Defendant used to
receive the Program unlawfully. (Mot., at 8) Plaintiff argues that it is “inherently reasonable” to

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United States District Court
Northern District of California

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allow recovery under Section 605 under such circumstances. (Id.) Plaintiff further states the only

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lawful way Defendant could have obtained the Program was by licensing it from J & J. (Mot., at

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9) Since Defendant failed to do so, “Defendant must have undertaken specific wrongful actions to

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intercept and/or receive the broadcast the encrypted telecast.” (Id.) Plaintiff asserts that due to

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Defendant’s default, it should not be prejudiced and denied recovery of damages pursuant to

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Section 605. (Mot., at 8) The Court agrees.

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Although Plaintiff states that other districts have awarded substantial awards in comparable

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cases, the Court finds the award of maximum statutory damages to be unjust. In the instant case,

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Defendant is a first time offender, only had the Program displayed on one thirty-six inch television

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in a room that accommodates one-hundred people and did not charge a cover fee. (Gravelyn

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Decl., at 1) There were at most sixty-nine people in Mexicalis in the three minutes Gravelyn spent

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in the establishment although his affidavit does not state how many of those patrons were

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watching the Program. (Id.) There are no allegations that Defendant either increased food or

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drink prices during the exhibition of the Program or promoted itself by advertising the Program.

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Plaintiff’s arguments are limited in its memorandum because it spends less time analyzing

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the facts and violations of the defendant in this case and more time trying to showcase the larger

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awards granted in other districts. In light of the information presented and the discretion afforded

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Case No. 5:13-cv-05557-BLF
ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT

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to the undersigned, the Court awards the statutory minimum of $1000 in damages under Section

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605(e)(3)(C)(i)(II).

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ii.

Enhanced Damages

The Federal Communications Act also affords courts the discretion to award enhanced

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damages up to $100,000 upon finding that the violation “was committed willfully and for the

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

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§ 605(e)(3)(C)(ii). The statute is conjunctive and therefore the Plaintiff must provide the Court

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with sufficient evidence to support a finding that Defendant acted both willfully and for the

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purpose of obtaining direct or indirect commercial advantage or private financial gain.
Plaintiff argues that it is “clearly established” that actions in cases such as these are

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United States District Court
Northern District of California

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“willful.” (Mot., at 14) Plaintiff would like the Court to agree with other district courts that have

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inferred willfulness by reasoning that the unlawful interception of a satellite signal necessarily

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involves the defendant taking an affirmative step, thus exhibiting willful conduct. (Mot., at 14-15)

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The Court agrees that Defendant’s alleged unlawful activity was the result of a deliberate act. See

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J & J Sports Productions, Inc. v. Garcia, No. H–08–1675, 2009 WL 2567891, at *4 (S.D. Tex.

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Aug. 14, 2009) (“The Defendant must have engaged in a deliberate act since ‘signals do not

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descramble spontaneously, nor do television sets connect themselves to cable distribution

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systems.’”).

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The Court, however, is unpersuaded that Defendant has acted for the purposes of direct or

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indirect commercial advantage. Plaintiff would like the Court to make this inference but provides

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no evidence in support other than citing to Garden City Boxing Club, Inc. v. Batista for the

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proposition that “[a] defendant who intercepts signals and broadcasts programming without

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authorization in a place of business where certain events are shown to the public is generally held

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to have acted willfully and for purposes of commercial advantage.” No. 05-CV-1044, 2007 WL

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4276836, at *5 (E.D.N.Y. Nov. 30, 2007) (internal quotes omitted). What Plaintiff fails to

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mention is that the Batista court also took into account that Batista had been sued for theft of cable

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programming in at least one other action prior to the lawsuit. See Batista, No. 05-CV-1044, 2007

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Case No. 5:13-cv-05557-BLF
ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT

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WL 4276836, at *6 (E.D.N.Y. Nov. 30, 2007). This supported the court’s inference that the

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defendant “displayed the [Program] for commercial gain in order to attract customers or retain

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customers who would purchase defendants’ products.” Id. In the instant case Defendant fails to

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provide the Court with such evidence that would permit such an inference.

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Even if enhanced damages were warranted, the statutory maximum would not be justified,

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despite Plaintiff’s argument that nominal damages have proven insufficient to combat piracy.

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(Mot., at 19-20) The present claim does not appear to be sufficiently egregious to warrant

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maximum enhanced damages: Defendant is a first time offender, only had the Program displayed

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on one thirty-six inch television in a room that accommodates one-hundred people and did not
charge a cover fee. (Gravelyn Decl., at 1) There were at most sixty-nine people in Mexicalis in

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United States District Court
Northern District of California

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the three minutes Gravelyn spent in the establishment although his affidavit does not state how

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many of those patrons were watching the Program. (Id.) There are no allegations that Defendant

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either increased food or drink prices during the exhibition of the Program or promoted itself by

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advertising the Program. It may very well be the case this action is enough of a deterrent for

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Defendant. The Court will not consider awarding enhanced damages until Defendant becomes a

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repeat offender or willfully and egregiously violates the Federal Communications Act.

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For the foregoing reasons, the Court DENIES Plaintiff’s request for any enhanced
damages.
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Conversion

Plaintiff requests $2,200 in damages for conversion under California Civil Code § 3336.

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(Mot., at 20) The Ninth Circuit has held that a claim for conversion in California has three

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elements: “ownership or right to possession of property, wrongful disposition of the property right

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and damages.” G.S. Rassmussen & Associates, Inc. v. Kalitta Flying Service Inc., 958 F.2d 896,

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906 (9th Cir. 1992). Plaintiff has established that it secured the domestic commercial exhibition

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rights to broadcast the Program. (Compl. ¶ 14) Plaintiff has properly alleged that Defendant

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unlawfully exhibited the Program on December 8, 2012 and that Plaintiff suffered damages from

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being denied a license fee from Defendant. (Compl. ¶ 11) Therefore, the three elements are met.

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California Civil Code § 3336 states that a plaintiff is entitled to the value of the property at

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the time of conversion. Here, Plaintiff states that $2,200 is the amount Defendant would have

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been required to pay Plaintiff had he lawfully licensed the Program. (Mot., at 20) The Court has

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no reason to question this asserted value. Accordingly, the Court awards $2,200, the value of the

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Program at the time of conversion.
Attorney’s Fees and Costs

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C.

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The Court has reviewed the Plaintiff’s request for attorneys’ fees and costs. Plaintiff has

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requested $1,687.50 in attorney’s fees and $1,135 in costs, totaling $2,822.50. (Decl. of Pl.’s

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Attorney’s Fees and Costs, at 7)
Pursuant to 47 U.S.C. § 605(e)(3)(B)(iii), the Court shall direct the recovery of full costs,

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United States District Court
Northern District of California

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including awarding reasonable attorney’s fees to an aggrieved party who prevails. Here, Plaintiff

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has prevailed due to Defendant’s default in the action. Attorney’s fees will be limited to the work

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of attorneys and paralegals, therefore the $495 in fees requested for the administrative assistant is

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denied. An award of fees for time spent by an administrative assistant is not consistent with the

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practice in the Northern District of California. Such fees should be have been subsumed in firm

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overhead. Nadarajah v. Holder, 569 F.3d 906, 921 (9th Cir. 2009). The Court finds the hourly

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rates of $450 and $150 to be reasonable for an attorney and paralegal, respectively, of similar

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experience in the Northern District of California. The 1.65 hours devoted to this matter by

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Attorney Thomas P. Riley and the 3.0 hours by the paralegal also appear reasonable to the Court. 2

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The Court finds that costs should be limited to the complaint filing fee and the service of process

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charges. Thus, the request for investigative expenses of $650 is denied. Accordingly, the Court

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awards $1,677.50 in reasonable attorney’s fees and costs.

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D.

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For the reasons stated above, Plaintiff’s motion for default judgment is GRANTED.

Conclusion

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Plaintiff utilizes boilerplate filings for the various claims brought before the Court justifying the
reduction in fees and costs. See, e.g., J & J Sports Productions, Inc. v. Penalver, No. 13-cv-05551,
ECF Nos. 1, 17, 21, 24, 28 (N.D. Cal. 2013) (Complaint and motion papers).
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Case No. 5:13-cv-05557-BLF
ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT

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Plaintiff shall recover $1,000 in statutory damages, $2,200 in damages for conversion, and

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$1,677.50 in reasonable attorney’s fees and costs. Plaintiff’s request for enhanced damages is

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DENIED.

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IT IS SO ORDERED.
Dated: July 3, 2014
______________________________________
BETH LABSON FREEMAN
United States District Judge

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United States District Court
Northern District of California

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Case No. 5:13-cv-05557-BLF
ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT