J J Sports Prod. v. Victoria Estrella Concepcion

Full title: J J SPORTS PRODUCTIONS, INC., Plaintiff, v. VICTORIA ESTRELLA CONCEPCION…

Court: United States District Court, N.D. California

Date published: Jun 7, 2011

No. C 10-05092 WHA (N.D. Cal. Jun. 7, 2011)

Opinion

No. C 10-05092 WHA.

June 7, 2011

ORDER GRANTING DEFAULT JUDGMENT

WILLIAM ALSUP, District Judge

INTRODUCTION

Plaintiff brings this action against defendants for unlawfully intercepting and broadcasting a boxing match for which plaintiff owned the exclusive television distribution rights. Default has been entered against defendants, and plaintiff now moves for default judgment. For the following reasons, the motion is GRANTED.

STATEMENT

Plaintiff J J Sports Productions, Inc., is a California company, which owned the exclusive nationwide television distribution rights to "Firepower": Manny Pacquiao v. Miguel Cotto, WBO Welterweight Championship Fight Program, telecasted nationwide on November 14, 2009 (Br. 1).

Defendants Victoria Estrella Concepcion and William Henry Concepcion are the owners and operators of Henry's commercial establishment in South San Francisco (Compl. ¶ 7). They did not enter into a subleasing agreement with plaintiff in order to broadcast the program. The interstate transmission of the program was encrypted and was only made available to plaintiff's customers who had paid the licensing fees (Compl. ¶ 11).

The complaint alleges that on the date of the nationwide telecast of the program, defendants, with willful knowledge that the program was not to be intercepted by an unauthorized entity, intercepted and displayed the program at Henry's (Compl. ¶ 13).

On the date of that telecast, investigator Jeff Kaplan observed the alleged unlawful exhibition of the program at Henry's. Kaplan observed three televisions and noted that Henry's had a 60-person capacity. Kaplan's affidavit reports "50+" people after three separate head counts, without providing any further clarification as to the range implied by the plus sign. He also noted that there was no required cover charge (Br. 6; Kaplan Aff. 1). Plaintiff did not submit any evidence as to how defendants intercepted the program, whether they advertised, or whether they marked up food prices during the program.

Plaintiff commenced this action on November 10, 2010. The complaint was served on defendants on January 14 (Dkt. Nos. 11-12). They failed to answer the complaint by the required deadline and have not subsequently appeared (Riley Decl. ¶ 2). The Clerk entered default against defendants on March 3. Plaintiff now moves for default judgment and seeks to recover damages under 47 U.S.C. 605 and for conversion. Plaintiff's motion for default judgment also asserts the right to recover costs and attorney's fees pursuant to Section 605 (Br. 3). Oral argument was held on May 12, and Attorney Thomas Riley appeared for plaintiff. Neither defendants nor any representatives for defendants appeared.

ANALYSIS

A. DEFAULT JUDGMENT

FRCP 55(b)(2) permits a court, following an entry of default, to enter default judgment against a defendant. "The district court's decision whether to enter a default judgment is a discretionary one." Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). The scope of relief allowed through default judgment is limited by FRCP 54(c), which states that "[a] default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings."

The court of appeals considers several factors in exercising its discretion to award 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). After entry of default, well-pled allegations in the complaint regarding liability are taken as true, except as to amount of damages. Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). Consequently, Eitel factors two, three, and five weigh in favor of the entry of default judgment. For the following reasons, each of the remaining factors also favor entry of default judgment.

First, if the motion were denied, plaintiff would be without a remedy. Failure to enter a default judgment would therefore result in prejudice to plaintiff.

Second, the sum of money at stake is moderate. In general, the fact that a large sum of money is at stake is a factor disfavoring default judgment. See Eitel, 782 F.2d at 1472 (the fact that $2,900,000 was at stake, when considered in light of the parties' dispute as to material facts, supported the Court's decision not to enter judgment by default). In the present action, plaintiff has asked for a $2,200 relief on the conversion claim plus damages up to the $110,000 maximum allowed cumulatively under 47 U.S.C. 605(e)(3)(C)(i)(II) and (e)(3)(C)(ii) (Br. 6, 9). Although a substantial amount, this is a far cry from the $2,900,000 sum contemplated in Eitel. This factor weighs in favor of entering default judgment.

Third, it is unlikely that default was the result of excusable neglect. This action was filed back in November 2010, and defendants were properly served. Defendants are presumably aware of the payment obligations for which they are responsible and were put on notice of this action against them.

Fourth, although federal policy favors decisions on the merits, Rule 55(b)(2) permits entry of default judgment in situations such as this where defendants refuse to litigate. After careful consideration of all of the Eitel factors, this order finds that the entry of default judgment is warranted.

B. SCOPE OF RELIEF

Plaintiff's complaint sought relief for conversion and violations of 47 U.S.C. 605, 553, and California Business and Professions Code 17200. In the application for default judgment, plaintiff claims conversion and violation of 47 U.S.C. 605 and 553, but in its memorandum in support, by contrast, plaintiff only requests conversion damages and damages assessed under 47 U.S.C. 605, including costs and attorney's fees pursuant to that code section (Dkt. No. 22; Br. 6, 9). A conversion requires "ownership or right to possession of property, wrongful disposition of the property right and damages." G.S. Rassmussen Assocs., Inc. v. Kalitta Flying Serv., Inc., 958 F.2d 896, 906 (9th Cir. 1992). A claim under Section 605 can be established when defendants engage in unlawful interception of "radio communication," whereas a Section 553 claim concerns interception "over a cable system." Section 605 allows for damages to be enhanced above conversion damages and costs and attorney's fees up to $110,000, while Section 553 allows for up to $60,000. 47 U.S.C. 605(e)(3)(C)(i-ii) and 553(c)(3)(A-B). Reasonable attorney's fees shall be awarded under Section 605 and may be awarded under Section 553. 47 U.S.C. 605(e)(3)(B)(iii) and 553(c)(2)(C).

1. CONVERSION

As plaintiff's factual allegations are taken as true, they support all three elements of a conversion claim. Plaintiff has purchased licensing rights to the program at issue. Given that the defendants' establishment had a capacity of 60 people, they would have been required to pay $2,200 for a subleasing agreement with plaintiff (Gagliardi Aff. ¶ 8). As defendants did not enter into an agreement and pay the fee, plaintiff is entitled to $2,200 in conversion damages. Accordingly, this order awards $2,200 for the conversion claim.

2. DAMAGES UNDER SECTIONS 605 AND 553

i. Consistency of Treatment

As background, plaintiff J J Sports Productions, Inc., and Attorney Riley are not strangers to this court or this district. In fact, Attorney Riley appears to be counsel of record in 96 open cases in our district. At the hearing on the instant motion, Attorney Riley represented that the assigned judge, by not awarding greater total damages in cases like this one, was out of step with other district court judges.¹

1 Although at the hearing the judge had proposed $500 in enhanced damages and $2,200 in conversion damages, for a total of $2,700, this order settles instead on $1,000 in enhanced damages and $2,200 in conversion damages, for a total of $3,200.

While courts that have awarded similar types of damages refer to the damages in different ways, this order will refer to all similar damages under either Sections 605 or 553 as enhanced damages, excluding costs and attorney's fees under those code sections and also excluding damages for the conversion claim. Total damages will refer to enhanced damages and conversion damages.

At the hearing on this motion, Attorney Riley represented that other judges often award enhanced damages closer to the maximum of $110,000 under Section 605.² He claimed that the proposed total award was "literally a tenth of probably the average award that we see on a nonegregious violation . . . on an event of this caliber" (Tr. 5).

2 The maximum damages under 47 U.S.C. 605(e)(3)(C)(i)(II) is $10,000, and the maximum under (e)(3)(C)(ii) is $100,000, for a total of $110,00 under the code section.

Upon a search of decisions, however, involving J J as plaintiff and Attorney Riley as counsel, where plaintiff moved for default judgment pursuant to Section 605, here are the actual results. Of 16 awards based on Section 605 that were found in our district, the average enhanced damages was $8,413, and the average total damages was $10,336.

The undersigned has granted default judgment awards to Riley and J J in three cases prior to this one, and all under Section 553.³ For these, the average enhanced damages was $667, and the average total damages was $3,700. Comparing these awards against the 11 total awards based on Section 553 that were found in our district, the average enhanced damages was $11,462, and the average total damages was $13,053.⁴

3 The undersigned judge has had other Riley-J J cases, but not that resulted in default judgment.

4 Docket-by-docket research was done to obtain these numbers in our district.

State-wide, outside of our district, district court decisions award damages often under both Sections 605 and 553, and the average enhanced damages was $28,533, and the average total damages was $29,124.⁵

5 All of the cases supporting the figures cited above can be found in an appendix to this order.

Although it seems correct that the assigned judge has been less generous than other judges, Attorney Riley is incorrect in suggesting that most judges award the maximum or close thereto.

ii. Whether to Apply Section 605 or 553

Plaintiff requests damages under Section 605, which prohibits "radio" or satellite interception, but has not provided evidence that transmission was by satellite. As satellite is different from cable, this order shall examine whether application of either or both Sections 605 and 553 is appropriate. In assessing which scenario is more likely given the facts of this specific incident, where plaintiff did not report seeing a satellite dish after inspecting the premises, damages are more appropriately analyzed under Section 553. See J J Sports Prods., Inc. v. Juanillo, No. C 10-01801 WHA, 2010 WL 5059539, at *2 (N.D. Cal. Dec. 6, 2010).

iii. Factors Used to Determine Amount of Damages

Applying Section 553 as the relevant statute, enhanced damages may be awarded up to a $60,000 maximum. 47 U.S.C. 553(c)(3)(A)(ii) and (c)(3)(B). The court of appeals has not set forth specific factors to use in determining the appropriate amount of such enhancements. District courts have thus considered different factors to determine culpability and to achieve proper compensation and deterrence. These include: use of cover charge, increase in food price during programming, presence of advertisement, number of patrons, number of televisions used, and impact of the offender's conduct on the claimant. Repeated violations may also justify enhanced damages.⁶

6 Two representative cases are: J J Sports Prods., Inc. v. Herrera, No. 1:10-cv-02090-AWI-SKO, 2011 WL 643413, at *4 (E.D. Cal. Feb. 17, 2011) (assessing damages based on use of cover charge, increase in food price, presence of advertisements, number of patrons, number of televisions used, impact of offender's conduct on claimant, and whether or not offender was engaged in a repeated offense); and J J Sports Prods., Inc. v. Paniagua, No. 10-CV-05141-LHK, 2011 WL 996257, at *2 (N.D. Cal. Mar. 21, 2011) (using multiple violations as a factor in increasing damages from $2,200 to $4,400).

Considering these factors, the extent of enhanced damages in the present action should be limited because defendants are apparently first-time offenders, and plaintiff has provided no evidence of promotional activities or extensive exploitation of the intercepted programming. Although defendants had "50+" patrons and used three televisions, these two factors alone have not justified maximum total damages in any prior district court decisions involving plaintiff. A larger establishment may normally have more patrons and televisions, so those numbers do not necessarily justify greater damages. Awarding the maximum would leave no room to differentiate defendants from more culpable offenders who commit multiple offenses or who actively promote and exploit their illegal acts.

Plaintiff asserts that awarding damages closer to the maximum would more effectively deter future offenses, reduce the amount of its investigative work, and appease bar owners whose businesses were allegedly affected by competition from defendants. Plaintiff cites several decisions awarding $250 to $15,000 in enhanced damages and asserts that such cases were a "major reason" for continued piracy (Br. 15). However, plaintiff provided no evidence to support this assertion and no evidence that any particular amount of damages would be necessary to increase deterrence. Nor has plaintiff submitted declarations from bar owners miffed because they did subscribe lawfully, as claimed at the hearing.

In light of the given facts, this order awards $1,000 more than what defendants would have had to pay for a proper license, $2,200, for a total award of $3,200. That amount is a reasonable one in the instant case, excluding costs and attorney's fees and damages for conversion, especially for first-time offenders for whom plaintiff provided no evidence of advertising, cover charge, or increased food price. This amount will deter first-time offenders while compensating plaintiff. The undersigned declines to award further damages under Sections 553(c)(3)(A)(ii) and (c)(3)(B) because plaintiff has not demonstrated that any additional amount is warranted. If, however, the same defendants (or an alter ego) do it again later on, the enhanced damages should be substantially increased for that offense.

iv. Costs and Attorney's Fees

Plaintiff's motion requests costs and attorney's fees under Section 605. As reviewed above, Section 553 is the properly applicable code section. Under Section 605, an award is mandatory, but under Section 553, it is not. Obviously, the Court is not required to grant the award under either code section if plaintiff does not provide any supporting evidence, as reasonable costs and attorney's fees cannot be determined. In the instant motion, plaintiff did not ask for a specific amount of costs and attorney's fees in either the application for default judgment or the memorandum in support (Dkt. No. 22; Br. 3). Neither did plaintiff provide supporting documents of expenses or rates. Given the lack of a sworn record, this order denies an award of costs or attorney's fees, without prejudice to any post-judgment request if the law allows it.

CONCLUSION

Plaintiff's motion for default judgment is GRANTED. For the reasons stated, plaintiff shall be awarded $2,200 in conversion damages and $1,000 in enhanced damages under Section 553. Judgment will be entered separately in favor of plaintiff and against defendants in the amount of $3,200.

IT IS SO ORDERED.

APPENDIX JUDGE ALSUP DECISIONS INVOLVING ATTORNEY RILEY AND J J SPORTS

Actual Enhanced Enhanced Total Costs and Damages Damages Damages Damages Attorney's (605) (553) Fees J J Sports Prods., Inc. v. Juanillo J J Sports Prods., Inc. v. Cardoze 2010 WL 2757106 J J Sports Prods., Inc. v. Ro

2000 0 500 2500 0 NO. C 10-01801 WHA, 2010 WL 5059539 (order signed Dec. 6, 2010). 4200 0 1250 5750 1500 NO. C 09-05683 WHA, (order signed July 9, 2010). 2600 0 250 2850 1500 NO. C 09-02860 WHA, 2010 WL 668065 (order signed Feb. 19, 2010).

OTHER N.D. CAL. DECISIONS INVOLVING ATTORNEY RILEY AND J J SPORTS

Judge Actual Enhanced Enhanced Total Costs and Damages Damages Damages Damages Attorney' (605) (553) s Fees J J Sports Prods., Inc. v. Delatorre J J Sports Prods., Inc. v. Dailey J J Sports Prods., Inc. v. Dailey J J Sports Prods., Inc. v. Cardoze J J Sports Prods., Inc. v. Cardoze J J Sports Prods., Inc. v. Fraide 2011 WL 566829 J J Sports Prods., Inc. v. Cortez 2011 WL 311375 J J Sports Prods., Inc. v Guzman 2010 WL 4055934 J J Sports Prods., Inc. v. Medinarios 2008 WL 4412240 J J Sports Prods., Inc. v Canedo J J Sports Prods., Inc. v. Basto J J Sports Prods., Inc. v. Miranda J J Sports Prods., Inc. v. Bonilla 2011 WL 1344346 J J Sports Prods., Inc. v. Paniagua 2011 WL 996257 J J Sports Prods., Inc. v. Ho 2010 WL 3912179 J J Sports Prods., Inc. v. Guzman J J Sports Prods., Inc. v. Guzman J J Sports Prods., Inc. v. Cardoze J J Sports Prods., Inc. v. Dailey J J Sports Prods., Inc, v. Montecinos J J Sports Prods., Inc. v. Doan 2008 WL 4911223 J J Sports Prods., Inc. v. Manzano 2008 WL 4542962 J J Sports Prods., Inc. v. Huezo J J Sports Prods., Inc. v. Mosley 2011 WL 2066713 Armstrong 2200 6000 0 8200 2825 4:10-cv-04168-SBA (order signed Apr. 28, 2011). Armstrong 1600 10000 0 11600 0 No. 4:10-cv-01874-SBA (order signed Apr. 19, 2011). Breyer 1800 15000 0 16800 0 No. 3:09-cv-04904-CRB (order signed July 23, 2010). Conti 2800 2000 0 4800 0 3:10-cv-01875-SC (order signed Mar. 9, 2011). Conti 1800 2000 0 3800 5887 NO. 09-4944 SC, 2010 WL 3702836 (order signed Oct. 4, 2010). Fogel 2200 0 57800 60000 0 NO. 5:10-CV-04180- JF/HRL, (order signed Feb. 14, 2011). Fogel 800 0 15928 16728 0 NO. 5:10-CV-02717-JF/PSG, (order signed Jan. 28, 2011). . Fogel 1200 0 39400 40600 0 NO. 5:09-CV-05124 JF/HRL, (order signed Oct. 14, 2010). Fogel 123 6000 0 6123 0 NO. C 08-0998 JF (RS), (order signed Sept. 25, 2008). . Hamilton 0 0 1200 1200 0 NO. C 09-01488 PJH, 2009 WL 4572740 (order signed Dec. 1, 2009). Illston 2800 3000 0 5800 0 NO. C 10-1803 SI, 2011 WL 566843 (order signed Feb. 14, 2011). Illston 1500 1000 0 2500 1873 NO. C 09-1037 SI, 2009 WL 3837273 (order signed Nov. 16, 2009). Koh 2200 4400 0 6600 0 NO. 10-CV-05140-LHK, (order signed Apr. 8, 2011). Koh 2200 6600 0 8800 0 NO. 10-CV-05141-LHK, (order signed Mar. 21, 2011). Koh 1600 11600 0 13200 0 NO. 10-CV-01883-LHK, (order signed Oct. 5, 2010). Patel 2000 0 2000 4000 0 NO. C 08-05469 MHP, 2009 WL 1034218 (order signed Apr. 16, 2009). Walker 2600 40000 0 42600 0 3:09-cv-02866-VRW (order filed Sept. 10, 2010). Ware 1600 1000 0 2600 2506 5:09-cv-04204-JW (order signed Apr. 7, 2010). Ware 1000 5000 0 6000 3811 No. 5:09-cv-04205-JW (order signed Apr. 7, 2010). White 3750 15000 0 18750 0 NO. C 09-02604 JSW, 2010 WL 144817 (order signed Jan. 11, 2010). Whyte 0 0 2500 2500 0 NO. C-08-00324 RMW, (order signed Nov. 13, 2008). Whyte 0 0 250 250 0 NO. C-08-01872 RMW, (order signed Sept. 29, 2008). Wilkin 1200 6000 0 7200 0 NO. C 09-4906 CW, 2011 WL 1134265 (order signed July 2, 2010). Wilkin 2200 0 5000 7200 2611 NO. C-10-5126 CW EMC, (order signed May 25, 2011).

OUT-OF-DISTRICT DECISIONS INVOLVING ATTORNEY RILEY AND J J SPORTS

Judge Actual Enhanced Total Costs and Damages Damages Damages Attorney's (605 and 553) Fees J J Sports Productions, Inc. v. Torres 2011 WL 999199 J J Sports Productions, Inc. v. Hernandez 2010 WL 2650526 J J Sports Productions, Inc. v. Pollard 2011 WL 777931 J J Sports Productions, Inc. v. Rodriguez 2011 WL 778201 J J Sports Productions, Inc. v. Rafael 2011 WL 445803 J J Sports Productions, Inc. v. Herrera 2011 WL 643413 J J Sports Productions, Inc. v. Villalobos J J Sports Productions, Inc. v. George J J Sports Productions, Inc. v. George 2008 WL 4224616 J J Sports Productions, Inc. v. Guzman 2008 WL 3905972 J J Sports Productions, Inc. v. Pollard 2011 WL 356087 J J Sports Productions, Inc. v. Rodriguez 2010 WL 796942 J J Sports Productions, Inc. v. Ferreyra 2008 WL 4104315 J J Sports Productions, Inc. v. Olivares J J Sports Productions, Inc. v. Lupian J J Sports Productions, Inc. v. Flores J J Sports Productions, Inc. v. Esquivel J J Sports Productions, Inc. v. Betancourt 2009 WL 3416431 J J Sports Productions, Inc. v. Juarez, 2011 WL 221634 J J Sports Productions, Inc. v. Lemus 2011 WL 703606 J J Sports Productions, Inc. v. Lopez 2008 WL 3889749 J J Sports Productions, Inc. v. Hernandezsilva 2010 WL 3702593 Brennan 0 25000 25000 0 No. CIV S-10-3012 JAM EFB (TEMP), (E.D. Cal.) (order signed Mar. 17, 2011). Burrell 0 10000 10000 0 No. CIV. S-09-3389-GEB-KJN, (E.D. Cal.) (order signed July 1, 2010). Hollows 0 40000 40000 0 Civ. No. S-10-3047 KJM GGH, (E.D. Cal.) (order signed Feb. 28, 2011). Hollows 0 23328 23328 0 No. S-10-1044 KJM GGH, (E.D. Cal.) (order signed Feb. 28, 2011). Hollows 0 46000 46000 0 No. CIV S-10-1046 LKK GGH, (E.D. Cal.) (order signed Feb. 8, 2011). Ishii 2200 15000 17200 0 No. 1:10-cv-02090-AWI-SKO, (E.D. Cal.) (order signed Mar. 16, 2011). Ishii 2600 80000 82600 0 No. 1:09-cv-01130-AWI-DLB (E.D. Cal.) (order signed Jan. 30, 2010). Ishii 0 20000 20000 0 No. CV-F-08-0090 AWI DLB (E.D. Cal.) (order signed Oct. 29, 2008). Ishii 0 20000 20000 0 No. 1:08-CV-00091-AWI-DLB, (E.D. Cal.) (order signed Aug. 20, 2008). Ishii 0 30000 30000 0 No. 1:08-CV-00091-AWI-DLB, (E.D. Cal.) (order signed Aug. 20, 2008). Mendez 0 32400 32400 0 No. CIV S-10-1066 JAM GGH, (E.D. Cal.) (order signed Mar. 3, 2011). Mendez 800 5000 5800 0 No. CIV S-08-1140 JAM DAD, (E.D. Cal.) (order signed Mar. 26, 2010). Mueller 0 100000 100000 0 No. CIV S-08-128 LKK KJM, (E.D. Cal.) (order signed Aug. 28, 2008). O'Neill 2200 60000 62200 0 No. 1:10-cv-01708-LJO-DLB (E.D. Cal.) (order signed Apr. 15, 2011). O'Neill 2200 8000 10200 0 No. 1:10-cv-02104 LJO GSA (E.D. Cal.) (order signed Apr. 29, 2011). O'Neill 0 20000 20000 0 No. 1:08cv0483 LJO DLB (E.D. Cal.) (order signed Aug. 14, 2009). O'Neill 0 30000 30000 0 No. 1:08-cv-00392 LJO GSA (E.D. Cal.) (order signed Nov. 12, 2008). Sammartino 0 6000 6000 0 No. 3:08-cv-00937 JLS POR, (S.D. Cal.) (order signed Oct. 20, 2009). Shubb 0 25000 25000 0 No. 2:10-1071 WBS KJN (TEMP), (E.D. Cal.) (order signed Feb. 10, 2011). Wanger 2200 1000 3200 0 No. 1:10-cv-02085 OWW JLT, (E.D. Cal.) (order signed Feb. 17, 2011). Wanger 0 30000 30000 0 No. 1:08-cv-00388-OWW- TAG, (E.D. Cal.) (order signed Aug. 19, 2008). Whelan 800 1000 1800 0 No. 10-CV-0389 W(WVG), (S.D. Cal.) (order signed Sept. 15, 2010).