J&J Sports Productions, Inc. v. Guerrero

Filing 12

ORDER Granting 10 MOTION for Default Judgment against Elsa H. Guerrero (Signed by Judge Marina Garcia Marmolejo) Parties notified.(vcantu, 5)

United States District Court
Southern District of Texas
O

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
LAREDO DIVISION
§
§
§
Plaintiff,
VS.
§
§
ELSA H. GUERRERO; dba LUCKY
§
CITY; dba LUCKY CITY AMUSEMENT §
CENTER,
§
§
§
Defendants.

January 11, 2018
David J. Bradley, Clerk

J & J SPORTS PRODUCTIONS, INC.,

CIVIL ACTION NO. 5:17-CV-92

ORDER
This is an anti-piracy case arising under the Federal Communications Act of
1934, as amended by the Federal Cable Communications act of 1984, 47 U.S.C. §§
553 and 605. Plaintiff J & J Sports Productions, Inc. alleges that Defendant Elsa
Guerrero, individually and d/b/a Lucky City a/k/a Lucky City Amusement Center,
illegally intercepted and displayed its closed-circuit telecast of the May 3, 2014,
Floyd Mayweather, Jr. v. Marcos Rene Maidana fight.
On October 2, 2017, Plaintiff filed a Request for Entry of Default and a
Motion for Final Default Judgment. (Dkt. Nos. 9, 10). Two days later the Clerk of
Court entered default against Defendant because she failed to appear after proper
service. (Dkt. No. 11). Since then, Defendant is still absent and has not responded
to Plaintiff’s Motion for Final Default Judgment.
Plaintiff seeks statutory damages under 47 U.S.C. § 605 in the amount of
$10,000, an additional $50,000 for a willful violation of the statute, attorney’s fees,
costs, and post-judgment interest. For the following reasons, the Court GRANTS

Plaintiff’s Motion.
I. LEGAL STANDARD
Under Fifth Circuit law, there are three steps to obtaining a default
judgment: (1) default, (2) entry of default, and (3) default judgment. N.Y. Life Ins.
Co. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996). “A default occurs when a defendant
has failed to plead or otherwise respond to the complaint within the time required
by the Federal Rules. An entry of default is what the clerk enters when the default
is established by affidavit or otherwise. After defendant’s default has been entered,
plaintiff may apply for a judgment based on such default. This is a default
judgment.” Id. (citing FED. R. CIV. P. 55(a)) (footnote omitted).
In determining whether a default judgment should be entered against a
defendant, courts have developed a two-part analysis. First, courts must consider
whether entry of default judgment is appropriate under the circumstances. Lindsey
v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998). Factors relevant to this inquiry
include: (1) whether material issues of fact exist; (2) whether there has been
substantial prejudice; (3) whether the grounds for default are clearly established;
(4) whether the default was caused by a good faith mistake or excusable neglect; (5)
the harshness of a default judgment; and (6) whether the court would think itself
obliged to set aside the default on the defendant’s motion. Id.
Second, courts must assess the merits of the plaintiff’s claims and find a
sufficient basis in the pleadings for the judgment. Nishimatsu Constr. Co. v. Hous.
Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975). In doing so, courts accept as true
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the well-pleaded factual allegations in the complaint.

Id.

However, “[t]he

defendant is not held to admit facts that are not well-pleaded or to admit
conclusions of law.” Id.
While a defendant’s default concedes the truth of a complaint’s factual
allegations, a plaintiff must still prove damages. U.S. for the Use of M–Co Constr. v.
Shipco Gen. Inc., 814 F.2d 1011, 1014 (5th Cir. 1987). Damages are normally not
awarded without an evidentiary hearing. James v. Frame, 6 F.3d 307, 310 (5th Cir.
1993). “That rule, however, is subject to an exception where the amount claimed is
a liquidated sum or one capable of mathematical calculation.”

Id. (citations

omitted).
II. ANALYSIS
A. The Appropriateness of Default Judgment
In this case, the Court finds that the six Lindsey factors, outlined above,
weigh in favor of granting default judgment. First, Defendant has not filed any
responsive pleadings, so no material facts are in dispute. See Nishimatsu Constr.,
515 F.2d at 1206 (noting that the “defendant, by his default, admits the plaintiff’s
well-pleaded allegations of fact”). Second, Defendant’s “failure to respond threatens
to bring the adversary process to a halt, effectively prejudicing Plaintiff’s interests.”
Ins. Co. of the W. v. H & G Contractors, Inc., No. CIV.A. C-10-390, 2011 WL
4738197, at *1 (S.D. Tex. Oct. 5, 2011) (citing Lindsey, 161 F.3d at 893). Third, the
grounds for default are clearly established, as Defendant has failed to answer or
defend. Fourth, there is no evidence before the Court indicating that Defendant’s
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silence is the result of a good-faith mistake or excusable neglect.

Fifth, the

harshness of default judgment is mitigated as time passes without an appearance or
filing from an opposing party, which in this case has been over eight months. Cf. J
& J Sports Productions, Inc. v. Rivera, CIV. A. H-13-902, 2014 WL 353347, at * 2
(S.D. Tex. July 14, 2014) (noting that the harshness of default judgment was
mitigated where 15 months had passed without the defendant making an
appearance of filing in the case). Sixth, the Court is unaware of any facts that
would give rise to good cause to set aside the default if challenged by Defendant.
Thus, the Court finds that entry of default judgment is appropriate here.
B. The Basis for Judgment in the Pleadings
Section 605 of the Communications Act governs the “unauthorized
publication or use of communications.” 47 U.S.C. § 605(a). “An individual violates
section 605 by displaying an intercepted communication.” J & J Sports Prods., Inc.
v. Lopez, No. CIV. A. H-10-1504, 2011 WL 175875, at *1 (S.D. Tex. Jan. 18, 2011).
The aggrieved party may elect to receive actual damages or statutory damages “in a
sum of not less than $1,000 or more than $10,000, as the court considers just.” 47
U.S.C. § 605(e)(3)(C)(i)(II).

The Court may, in its discretion, award additional

damages not more than $100,000 if the “violation was committed willfully and for
purposes of direct or indirect commercial advantage.” Id. at § 605(e)(3)(C)(ii). Costs
and reasonable attorney’s fees are mandatory. Id. at § 605(e)(3)(B)(iii).
Here, the complaint establishes that (1) Plaintiff is a license company
exclusively authorized to sublicense the boxing-match telecast at commercial
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locations, and (2) Defendant intercepted that telecast without authorization and
displayed it to patrons. (Dkt. No. 1 at 2–4). These facts establish base liability
under § 605. Thus, Plaintiff is entitled to an award of statutory damages. The
Court finds that an award of $10,000 is appropriate given Plaintiff’s projected loss
and the need to deter future piracy.
Plaintiff is also entitled to an award of additional damages because the
complaint establishes the Defendant violated § 605 willfully and for commercial
gain. An award of three to eight times the statutory damages is justified for a
willful violation. See, e.g., J & J Sports Prods., Inc. v. Rivera, No. CIV. A. H-13-902,
2014 WL 3533472, at *3 (S.D. Tex. July 14, 2014). Here, Defendant showed the
boxing match on multiple big-screen televisions and charged a $20 match-pay
charge. (Dkt. No. 10-1 at 21). Based on these facts, a multiplier of five is proper,
and the Court therefore awards $50,000 in additional damages for Defendant’s
willful violation.
As the prevailing party, Plaintiff is entitled to an award of its costs, including
reasonable attorney’s fees. See 47 U.S.C. § 605(e)(3)(B)(iii). Plaintiff’s attorney has
submitted an affidavit stating that fees should be based on a one-third contingency
fee or, in the alternative, on the lodestar method—that is, hours expended times a
reasonable hourly rate. (Id. at 29–36). In this case, the Court determines that it is
more equitable to award fees based on the lodestar method.

The affidavit

establishes that Plaintiff’s attorneys worked four hours on this case and charged an
hourly rate of $250. Since these numbers are reasonable, the Court awards $1,000
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in attorney’s fees.
III. CONCLUSION
For the foregoing reasons, Plaintiff’s Motion for Final Default Judgment
(Dkt. No. 10) is hereby GRANTED. A separate Judgment in favor of Plaintiff will
be entered in the following amounts:
1. $10,000 in statutory damages
2. $50,000 in enhanced damages
3. $1,000 in reasonable attorney’s fees plus costs
4. Post-judgment interest on the above at a rate of 1.76% per annum.
It is so ORDERED.
SIGNED January 11, 2018

___________________________________
Marina Garcia Marmolejo
United States District Judge

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