Summary
finding that "an award equal to three times the price Defendant would have had to pay the program is an appropriate sanction in this case" and thus awards plaintiff $6,600 for statutory damages and enhanced damages
Summary of this case from J&J Sports Prods., Inc. v. MunguiaOpinion
Case No. 10-5125 SC.
May 31, 2011
ORDER GRANTING APPLICATION FOR DEFAULT JUDGMENT
I. INTRODUCTION
Plaintiff J J Sports Productions, Inc. ("Plaintiff") seeks entry of Default Judgment against Defendant Elisa Aquino Marcaida ("Marcaida" or "Defendant"), individually, and doing business as Manila Manila 2 Restaurant ("the restaurant"). ECF No. 9 ("App. for Default J."). Having considered the papers submitted, the Court concludes that entry of Default Judgment against Defendant is appropriate, and GRANTS Plaintiff's Application.
II. BACKGROUND
As it must when considering an application for default judgment, the Court assumes the veracity of Plaintiff's well-pleaded allegations. Plaintiff is a California corporation with its principal place of business in Campbell, California. ECF No. 1 ("Compl.") ¶ 6. Defendant is the owner and operator of Manila Manila 2 Restaurant in Newark, California. Id. ¶ 7. Plaintiff was granted the exclusive, nationwide television rights to "'Firepower': Manny Pacquiao v. Miguel Cotto, WBO Welterweight Championship Fight Program," a November 14, 2009 closed-circuit telecast of boxing matches and commentary ("the program"). Id. ¶ 9. Plaintiff entered into sublicensing agreements that gave commercial establishments in the hospitality industry the right to publicly exhibit the program. Id. ¶ 10.
Plaintiff alleges that Defendant willfully and unlawfully intercepted and exhibited the program at the time of its transmission at the restaurant. Id. ¶¶ 12-13. Plaintiff's investigator, Gary Gravelyn ("Gravelyn"), entered the restaurant on the night of the telecast and witnessed the program being displayed on two forty-inch television sets. ECF No. 9-3 ("Gravelyn Aff."). He estimated the capacity of the restaurant to be approximately seventy-five people. Id. During the two minutes he was inside the restaurant, he performed three headcounts, each of which revealed thirty-five patrons in attendance. Id. There was no cover charge for entrance to the restaurant. Id.
Plaintiff filed this action on November 11, 2010, alleging violations of 47 U.S.C. §§ 605 and 553, conversion, and violation of California Business and Professions Code §§ 17200, et seq. Id. ¶¶ 9-37. Plaintiff filed proof of service on December 31, 2010. ECF No. 6. Defendant did not file an answer and has not subsequently appeared. On January 20, 2011, Plaintiff filed a request for entry of default with the Court. ECF No. 7. The Clerk of the Court entered default against Defendant on January 26, 2011. ECF No. 8.
III. LEGAL STANDARD
After entry of a default, the Court may enter a default judgment. Fed.R.Civ.P. 55(b)(2). Its decision whether to do so, while "discretionary," Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980), is guided by several factors. As a preliminary matter, the Court must "assess the adequacy of the service of process on the party against whom default is requested." Bd. of Trs. of the N. Cal. Sheet Metal Workers v. Peters, No. 00-0395, 2000 U.S. Dist. LEXIS 19065, at *2 (N.D. Cal. Jan. 2, 2001). If the Court determines that service was sufficient, it should consider whether the following factors support the entry of default judgment: (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. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).
IV. DISCUSSION
A. Service of Process
Federal Rule of Civil Procedure 4(e)(1) provides that an individual may be served by following state law in the state where the district court is located or where service is made. Fed.R.Civ.P. 4(e)(1). California law provides that, in lieu of personal service:
a summons may be served by leaving a copy of the summons and complaint at the person's . . . usual place of business, or usual mailing address . . . in the presence of a competent member of the household or a person apparently in charge of his or her office, place of business, or usual mailing address . . . at least 18 years of age, who shall be informed of the contents thereof, and by thereafter mailing a copy of the summons and of the complaint . . . to the person to be served at the place where a copy of the summons and complaint were left.
Cal. Code Civ. Proc. 415.20(b). This method of service on a natural person is available only after the exercise of "reasonable diligence" proves ineffective in accomplishing service by personal delivery. See id.
Here, after five attempts to serve Defendant at Manila Manila 2 Restaurant, service was left with Fred Marcaida, the person in charge at the restaurant on December 17, 2010. ECF No. 6 ("Proof of Service"). The process server instructed Fred Marcaida to deliver the documents to Defendant. Id. On December 20, 2010, copies of the summons, complaint, and other relevant documents were mailed to Defendant at Manila Manila 2 Restaurant. Id. Accordingly, the Court finds that service of process was adequate.
B. Default Judgment
"The general rule of law is that upon default the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true." Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977). Therefore, the Court accepts as true the facts as presented in the Complaint.
Here, the Eitel factors favor default judgment. If Plaintiff is not granted default judgment, it will suffer prejudice because it will not be able to recover the costs of its purchase of the exclusive distribution rights to the program.
Plaintiff's Complaint is sufficiently well-pleaded. The Complaint alleges causes of action under sections 605 and 553 of Title 47 of the United States Code. Compl. ¶¶ 9-22. Section 605 prohibits the unauthorized interception of radio or satellite communications, and section 553 prohibits the unauthorized interception of cable signals. See, e.g., California Satellite Sys. v. Seimon, 767 F.2d 1364, 1366 (9th Cir. 1985); J J Sports Prods., Inc. v. Manzano, No. 08-1872, 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."). Because Defendant has failed to respond to the Complaint, Plaintiff cannot determine the precise means Defendant used to receive the program unlawfully. See ECF No. 9-1 ("Mem. of P. A.") at 3. Plaintiff moves for statutory damages under section 605 only. See ECF No. 9-6 ("Proposed Order"). Based on the declaration of Plaintiff's investigator and Plaintiff's failure to respond to this litigation, the Court finds it appropriate to award damages under 47 U.S.C. § 605. Plaintiff has also alleged a pendent state law cause of action for conversion. Plaintiff has adequately pleaded facts in support of each of his claims. Taking these facts as true as the Court must, Plaintiff's claims have merit.
Plaintiff's investigator was unable to determine the means used to intercept the program. He declares neither a cable box nor satellite dish were visible while he was at the restaurant. See Gravelyn Aff.
The sum of money at stake is not so large as to weigh against granting default judgment. Plaintiff seeks statutory damages of $110,000 and conversion damages of $2,200. See Proposed Order. The Court has discretion to award a lesser amount under section 605.
Defendant has made no showing of excusable neglect, and given Defendant's failure to participate in this lawsuit, there is little possibility of dispute concerning material facts. Therefore, overall, the Eitel factors weigh in favor of default judgment.
C. Remedy
Plaintiff seeks statutory damages under 47 U.S.C. §§ 605(e)(3)(B)(iii) (c)(ii) and compensatory damages under state common law conversion. Mem. of P. A. at 8. 1. Damages Under § 605
Plaintiff's submissions to the Court in connection with this application for default judgment make no claim for relief under California Business and Professions Code §§ 17200 et seq. As such, the Court considers Plaintiff to have abandoned this claim.
Plaintiff seeks the maximum statutory damages of $110,000 based on a willful violation of § 605. App. for Default J. ¶ 5. Under this statute, an aggrieved party "may recover an award of statutory damages for each violation . . . 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). If the "court finds that the violation was committed willfully and for purposes of direct or indirect commercial advantage or private financial gain, the court in its discretion may increase the award of damages . . . by an amount of not more than $100,000 for each violation. . . ."Id. § 605(e)(3)(C)(ii). Here, because of the extreme unlikelihood that Defendant inadvertently acquired the signal to display the fight, coupled with Defendant's failure to appear in this lawsuit, the Court finds that Defendant acted willfully and for the purposes of commercial advantage and enhanced damages are warranted. See,e.g., Time-Warner Cable of New York City v. Googies Luncheonette, Inc., 77 F. Supp. 2d 485, 490 (S.D.N.Y. 1999) (finding signal interception willful because "signals do not descramble spontaneously, nor do television sets connect themselves to cable distribution systems").
Courts in this circuit have granted widely varying awards ranging from near the minimum statutory award of $1,000 to near the maximum of $110,000, depending on such factors as the capacity of the establishment, the number of patrons in attendance, and whether a cover charge was required for entrance.See, e.g., J J Sports Prods., Inc. v. Cardoze, 2010 U.S. Dist. LEXIS 74606, at *13 (N.D. Cal. July 9, 2010) (awarding $1,250 in statutory damages for willful interception and exhibition of boxing program); J J Sports Prods., Inc. v. Ferreyra, CIV S-08-128, 2008 WL 4104315, at *1 (E.D. Cal. Aug. 28, 2008) (awarding $100,000 where defendant was a repeat offender). InFerreyra, the court emphasized that a large award was warranted because the defendant was on notice from a prior lawsuit that pirating a commercial signal was unlawful. Id. at *1. Here, Plaintiff advises the Court that a similar action is currently pending against Defendant in another division of this Court. Riley Supp. Decl. ¶ 6. Plaintiff asks the Court to award the maximum amount authorized by statute in light of Defendant's alleged multiple infractions. Id.
Thomas P. Riley ("Riley"), attorney for Plaintiff, filed two declarations in support of the Application. See ECF No. 9-2 ("Riley Decl."), 9-4 ("Riley Supp. Decl.").
However, in this case, unlike Ferreyra, the Court cannot conclude that Defendant was on notice that her conduct was unlawful at the time it occurred, because the parallel suit referenced by Plaintiff was filed on October 7, 2010, well after Defendant's unlawful conduct at issue in this case. See J J Sports v. Marcaida, No. 10-CV-4540 (N.D. Cal. Oct. 7, 2010). Thus, the Court finds that an award comparable to the $100,000 award in Ferreyra is unwarranted.
Nevertheless, the Court notes that signal piracy is a pervasive and increasing problem and that a primary purpose of § 605 is to deter such conduct. See, e.g., Garden City Boxing Club, Inc. v. Batista, No. 05-CV-1044, 2007 WL 4276836, at *4 (E.D.N.Y. 2007) (when awarding damages under § 605, "courts should be mindful of the difficulty in detecting such violations and the widespread problem of piracy . . . [and] the deterrent purposes of the statute"). The need to deter future piracy by Defendant and others requires an award substantially higher than the cost Defendant would have incurred to purchase a license to lawfully exhibit the program. In this case, the rate to license the program for a venue of the restaurant's capacity was $2,200. ECF No. 9-5 ("Pl.'s Aff.").
Balancing the relatively small impact of Defendant's misconduct with the deterrent purpose of the statute, the Court finds that an award equal to three times the price Defendant would have had to pay to lawfully purchase the program is an appropriate sanction in this case. The Court therefore awards $6,600 to Plaintiff for Defendant's willful violation of § 605. 2. Conversion
Plaintiff also seeks $2,200 in damages for its conversion claim. See Proposed Order. Damages for conversion must be based on the value of the property at the time of the conversion.Krueger v. Bank of America, 145 Cal. App. 3d 204, 215 (Ct. App. 1983). Here, the value of the program is measured by the cost Defendant would have had to pay to lawfully purchase the program. The Court therefore awards Plaintiff $2,200 in compensatory damages for conversion.
3. Attorneys' Fees and Costs
Under § 605, a prevailing party is entitled to recover full costs and reasonable attorney's fees. 47 U.S.C. § 605(e)(3)(B)(iii). Here, Plaintiff has not provided an accounting of attorney's fees or costs. Thus, the Court cannot award fees and costs at this time.
V. CONCLUSION
The Court GRANTS the Application for Default Judgment filed by Plaintiff J J Sports Productions, Inc. against Defendant Elisa Aquino Marcaida. The Court awards Plaintiff a total of $8,800. This award consists of $6,600 in statutory damages under 47 U.S.C. § 605, and $2,200 in compensatory damages for conversion.
If Plaintiff intends to seek attorney's fees and costs, Plaintiff shall file its request, supported by an itemized accounting of fees and costs, within ten (10) days of this Order. Upon receipt and consideration of this declaration, the Court will enter judgment in an appropriate amount in favor of Plaintiff and against Defendant. Failure to timely file this declaration will result in a waiver of the request for fees and costs.
IT IS SO ORDERED.