J & J Sports Productions, Inc. v. Herrera, No. 1:2010cv02090 - Document 15 (E.D. Cal. 2011)
Court Description: FINDINGS and RECOMMENDATIONS recommending that 8 MOTION for DEFAULT JUDGMENT filed by J & J Sports Productions, Inc. be GRANTED. The Motion is referred to Judge Ishii; Objections to F&R due within 15 days of service of this recommendation; signed by Magistrate Judge Sheila K. Oberto on 2/16/2011. (Timken, A)
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J & J Sports Productions, Inc. v. Herrera Doc. 15 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA – FRESNO DIVISION 10 11 J & J SPORTS PRODUCTIONS, INC., CASE NO. 1:10-cv-02090-AWI-SKO 12 FINDINGS AND RECOMMENDATIONS ON PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT Plaintiff, 13 v. 14 15 ANGELINA CARREON HERRERA, (Docket No. 8) 16 Defendant. OBJECTIONS DUE: 15 DAYS 17 / 18 19 I. INTRODUCTION 20 On January 10, 2010, Plaintiff, J & J Sports Productions, Inc. (“Plaintiff”), filed the present 21 motion for default judgment against Defendant, Angelina Carreon Herrera, dba El Pio Pio 22 (“Defendant”). 23 § 636(b)(1)(B) and Local Rule 302. This matter was taken under submission pursuant to Local Rule 24 230(g). (Doc. 12.) 25 (Doc. 8.) The motion was referred to this Court pursuant to 28 U.S.C. II. FACTUAL BACKGROUND 26 Plaintiff filed the instant action on November 9, 2010. (Doc. 1.) The complaint alleges 27 violations of 47 U.S.C. §§ 605 and 553, as well as causes of action for conversion and for violation 28 of the California Business and Professions Code section 17200, et. seq. The suit is based on Dockets.Justia.com 1 Defendant’s alleged unlawful interception, receipt, and exhibition of “‘Firepower’: Manny Pacquiao 2 v. Miguel Cotto, WBO Welterweight Championship Fighting Program” (the “Program”), a boxing 3 match that took place and was broadcast on November 14, 2009. (Doc. 1 at ¶¶ 9, 12.) According 4 to the complaint, Plaintiff was the exclusive commercial distributor of the Program. (Doc. 1 at ¶ 9.) 5 Count I of the complaint asserts a violation of 47 U.S.C. § 605 (Unauthorized Publication 6 or Use of Communications) alleging that Defendant knowingly intercepted, received, and exhibited 7 the Program for purposes of direct or indirect commercial advantage or private financial gain. (Doc. 8 1 at ¶¶ 8-16.) Plaintiff seeks $100,000 in statutory damages as well as attorneys’ fees and costs. 9 (Doc. 1 at ¶ 17.) Count II asserts a violation of 47 U.S.C. § 553 (Unauthorized Reception of Cable 10 Services) based upon the same allegations. (Doc. 1 at ¶¶ 18-21.) Plaintiff requests $60,000 in 11 statutory damages, as well as attorneys’ fees and costs. (Doc. 1 at ¶ 22.) Count III states a claim for 12 conversion alleging that Defendant tortiously obtained possession of the Program and wrongfully 13 converted it for her own benefit. (Doc. 1 at ¶¶ 23-25.) As to Count III, Plaintiff seeks compensatory 14 damages, exemplary damages, and punitive damages. (Doc. 1 at ¶ 26.) Count IV alleges a violation 15 of the California Business & Professions Code § 17200, et. seq. (Doc. 1 at ¶¶ 27-34.) As to Count 16 IV, Plaintiff seeks restitution, declaratory relief, injunctive relief, and attorneys’ fees. (Doc. 1 at 17 ¶¶ 35-36.) 18 On December 20, 2010, the summons as to Defendant Angelina Carreon Herrera, was 19 returned showing that service of the summons and complaint was executed on December 5, 2010. 20 (Doc. 5.) Defendant failed to respond to the complaint by the December 27, 2010, due date. On 21 December 30, 2010, pursuant to Plaintiff’s request, the Clerk entered default against Defendant. 22 (Doc. 7.) On January 10, 2010, Plaintiff filed this motion for default judgment against Defendant. 23 (Doc. 8.) Defendant did not oppose the motion. On February 8, 2010, the Court requested further 24 evidence as to proof of damages for Plaintiff's claim for conversion. (Doc. 11.) Plaintiff filed an 25 additional declaration to support its request for damages for conversion in the amount of $2,200. 26 (Doc. 13.) 27 28 2 1 2 III. DISCUSSION A. Legal Standard 3 Federal Rule of Civil Procedure 55(b)(2) provides that judgment may be entered as follows: 4 By the Court. In all other cases, the party must apply to the court for a default judgment. A default judgment may be entered against a minor or incompetent person only if represented by a general guardian, conservator, or other like fiduciary who has appeared. If the party against whom a default judgment is sought has appeared personally or by a representative, that party or its representative must be served with written notice of the application at least 7 days before the hearing. The court may conduct hearings or make referrals – preserving any federal statutory right to a jury trial – when, to enter or effectuate judgment, it needs to: 5 6 7 8 (A) (B) (C) (D) 9 10 conduct an accounting; determine the amount of damages; establish the truth of any allegation by evidence; or investigate any other matter. 11 Upon default, the well-pleaded allegations of the complaint relating to liability are taken as 12 true. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987); Dundee Cement Co. 13 v. Highway Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983). 14 Factors which may be considered by courts in exercising discretion as to the entry of a default 15 judgment include: (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s 16 substantive claims, (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; 17 (5) the possibility of a dispute concerning material facts; (6) whether the default was due to 18 excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring 19 decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). 20 B. Analysis 21 Service of the summons and complaint in this action was made on Defendant on December 22 5, 2010. A copy of the Proof of Service was filed with this Court on December 20, 2010. Defendant 23 failed to respond to the complaint or otherwise appear in the action. The Clerk of the Court entered 24 default against Defendant on December 30, 2010. Defendant is not an infant or incompetent person, 25 and is not in the military service or otherwise exempted under the Servicemembers Civil Relief Act 26 of 2003. (Doc. 8 at ¶ 1.) 27 In its motion, Plaintiff seeks judgment and an award of damages pursuant to 47 U.S.C. 28 § 605(e)(3)(C)(i)(II) (statutory damages) and 47 U.S.C. § 605(e)(3)(C)(ii) (enhanced statutory 3 1 damages) in the amount of $110,000 against Defendant for unlawfully intercepting, receiving, and 2 exhibiting the Program on November 14, 2010, at Defendant’s restaurant. Plaintiff also seeks 3 damages in the amount of $2,200 for its state law conversion claim. 4 1. Statutory Damages Pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II) and Enhanced Statutory Damages Pursuant to 47 U.S.C. § 605(e)(3)(C)(ii) 5 Plaintiff seeks statutory damages pursuant to 47 U.S.C. § 605(e)(C)(i)(II) and enhanced 6 statutory damages pursuant to Section 605(e)(3)(C)(ii). (Doc. 8-1 at 6:15-16, 9:24-25). Pursuant 7 to Section 605(a), no person receiving or transmitting any interstate or foreign communication by 8 wire or radio shall “divulge or publish the existence, contents, substance, purport, effect, or meaning 9 thereof, except through authorized channels of transmission or reception . . . .” Those who violate 10 this Section are subject to the following civil penalty: 11 12 13 14 15 [T]he party aggrieved may recover an award of statutory damages for each violation of subsection (a) of this section involved in the action in a sum of not less than $1,000 or more than $10,000, as the court considers just, and for each violation of paragraph (4)1 of this subsection involved in the action an aggrieved party may recover statutory damages in a sum not less than $10,000, or more than $100,000, as the court considers just. 47 U.S.C. § 605(e)(3)(C)(i)(II). 16 Plaintiff attests that it is a closed-circuit distributor of sports and entertainment programming 17 that purchased and retained the exclusive commercial exhibition licensing rights to the Program. 18 (Doc. 1 at ¶ 9.) Plaintiff marketed the sub-licensing (commercial exhibition) rights in the Program 19 to its commercial customers. (Id. at ¶ 10.) Plaintiff claims that signal theft causes a significant 20 impact on the broadcast industry. (Doc. 8-1 at 5:22-23.) Plaintiff believes that the continued signal 21 piracy is caused, in part, by the perceived lack of consequences (including nominal or minimal 22 damage awards by the courts who hear its cases) for such unlawful interception and exhibition by 23 the commercial signal pirates. (Doc. 8-1 at 14:23-24.) As such, Plaintiff requests that it be awarded 24 the maximum allowance for statutory violations, totaling $10,000. 25 26 27 28 1 Paragraph 4 relates to persons who manufacture, assemble, modify, import, export, sell, or distributed any device or equipment knowing that the equipment is primarily of assistance in the unauthorized description of satellite cable programming. Plaintiff does not assert that Paragraph 4 is applicable in this case. 4 1 Plaintiff contends that significant enhanced statutory damages should be awarded under 2 Section 605(e)(3)(C)(ii). Section 605(e)(3)(C)(ii) provides that where the court finds that a violation 3 of the section was committed willfully and for purposes of direct or indirect commercial advantage, 4 the court, in its discretion, may increase the award of damages “by an amount of not more than 5 $100,000 for each violation of subsection (a) of this section.” Emphasizing the need for deterrence 6 as to this Defendant and others, Plaintiff requests that it be awarded $100,000 in enhanced statutory 7 damages. 8 Here, the summons and complaint were properly served upon Defendant, her default was 9 properly entered, and the complaint is sufficiently well-pled. See Eitel, 782 F.2d at 1471-72. By 10 her default, Defendant has admitted to willfully violating Section 605 for the purposes of commercial 11 advantage. TeleVideo Sys., Inc., 826 F.2d at 917-18. However, the Court notes that Defendant’s 12 conduct was not particularly egregious. The facts before the Court indicate that Defendant’s 13 establishment was not large, with a maximum capacity of approximately eighty people. (Doc. 8-3 14 at 2). Plaintiff’s investigator noted that there were two televisions in the establishment showing the 15 Program on the night the Program was broadcast. (Id. at 1). Both televisions were small; Plaintiff’s 16 investigator estimated one to be between 23 and 25 inches and the other as approximately 19 inches. 17 (Id.) At the time of the violation, Defendant’s establishment had few patrons – approximately thirty 18 people according to three separate head counts performed by Plaintiff’s investigator. (Id. at 2.) 19 There is no evidence that Defendant required a cover charge or engaged in advertising the broadcast 20 of the event at her establishment to entice a large crowd. Moreover, no evidence has been presented 21 that Defendant has previously been involved in signal piracy or is a repeat offender. 22 The amount of damages awarded should be in an amount that is adequate to deter this 23 Defendant and others from committing similar acts in the future. Therefore, the Court recommends 24 that the maximum allowable statutory damages be awarded pursuant to 47 U.S.C. 25 § 605(e)(3)(C)(i)(II) in the amount of $10,000. With regard to enhanced statutory damages, 26 however, several factors militate against a substantial award. As discussed above, there is no 27 evidence that Defendant (1) advertised the broadcast of the Program to entice a larger crowd, (2) 28 charged a cover to enter the establishment, or (3) charged a premium for food and drinks on the night 5 1 the broadcast was shown. Further, the headcounts during the Program indicate approximately thirty 2 people were present in the establishment. (Doc. 8-3 at 2.) Moreover, Defendant has not been shown 3 to be a repeat offender with regard to signal piracy. Finally, considering the small impact of 4 Defendant’s conduct, the Court finds that limited enhanced damages will still produce the 5 appropriate deterrent effect.2 There is no evidence that Defendant’s financial resources would 6 require a large judgment to achieve the desired deterrent effect. However, the Court is also mindful 7 that minimal damage awards may result in a perceived lack of consequences for signal piracy. (See 8 Doc. 13 at ¶¶ 11-13.) Considering these factors, the Court recommends that enhanced statutory 9 damages be awarded pursuant to Section 605(e)(3)(C)(ii) in the amount of $5,000. 10 2. 11 Plaintiff seeks conversion damages for the value of the property at the time of the conversion. 12 (Doc. 8-1, at 15:17-18) Plaintiff also claims that it is entitled to “compensation for the time and 13 money properly expended in pursuit of the property” based on Cal. Civ. Code § 3336. (Id. at 15:20- 14 21). Damages for Conversion 15 Under California law, conversion is the wrongful exercise of dominion over the property of 16 another. The elements of conversion are (1) the plaintiff’s ownership of right to possession of the 17 property at the time of the conversion; (2) the defendant’s conversion by a wrongful act or 18 disposition of property rights; and (3) damages. Greka Integrated, Inc. v. Lowrey, 133 Cal. App. 4th 19 1572, 1581 (2005); see also G.S. Rasmussen & Assocs., Inc. v. Kalitta Flying Serv., Inc., 958 F.2d 20 896, 906 (9th Cir. 1992). “Because conversion is a strict liability tort, questions of the defendant’s 21 good faith, lack of knowledge, motive, or intent are not relevant.” Gilman v. Dalby, 176 Cal. App. 22 4th 606, 615 n.1 (2009). 23 establishments constitutes a “right to possession of property” for purposes of conversion. See Don 24 King Prods./Kingvision v. Lovato, 911 F.Supp. 419, 423 (N.D. Cal. 1995) (misappropriation of Exclusive right to distribute a broadcast signal to commercial 25 26 27 28 2 Plaintiff asserts that because Defendant’s establishment is located in Tulare County which has an estimated population in excess of 429,668 it is located in a relatively urban area increasing the impact of the piracy and should support a larger enhanced damage award. (Doc. 8-1 at 11:6-19.) However, Plaintiff’s investigator’s declaration states that Defendant’s establishment is “[s]ituated within the rural unincorporated community of Orosi (Tulare County), it is located on the southwest corner of Road 128 and Avenue 413 (see included photographs). [Its] clientele appeared to primarily consist of Spanish[-]speaking laborers.” (Doc. 8-3 at 2.) 6 1 intangible property without authority from owner is conversion); see also DIRECTV, Inc. v. Pahnke, 2 405 F. Supp. 2d 1182,1189 (E.D. Cal. 2005) (concluding that the right to distribute programming 3 via satellite constituted a right to possession of personal property for purposes of a conversion claim 4 under California law.) 5 Here, Plaintiff was granted the exclusive domestic commercial exhibition licensing rights to 6 the Program, and thus had the right to possession of the property at the time of the conversion. 7 Because Defendant did not legally purchase the Program, the exhibition of the fight in El Pio Pio on 8 November 14, 2009, constituted conversion by a wrongful act or disposition of property rights. 9 Finally, the rate card for the Program at an establishment with a seating capacity of between zero and 10 100, which would apply to Defendant’s establishment, indicates that the sub-license fee for the 11 Program would have been $2,200. (Doc. 13 at Exhibit 1.) Thus, Plaintiff is entitled to damages for 12 conversion in the amount of $2,200. 13 14 15 IV. RECOMMENDATION Based on a consideration of the declarations, pleadings, and exhibits to the present motion, the Court RECOMMENDS as follows: 16 1. Plaintiff’s motion for default judgment be GRANTED; 17 2. Judgment be entered in this action against Defendant Angelina Carreon Herrera 18 individually and dba El Pio Pio as follows: 19 a. $10,000 statutory damages for violation of 47 U.S.C. § 605; 20 b. $5,000 enhanced statutory damages for violation of 47 U.S.C. § 605; and 21 c. $2,200 for the tort of conversion. 22 These findings and recommendations are submitted to the district judge assigned to this 23 action, pursuant to 28 U.S.C. § 636(b)(1)(B) and this Court’s Local Rule 304. Within fifteen (15) 24 days of service of this recommendation, any party may file written objections to these findings and 25 recommendations with the Court and serve a copy on all parties. Such a document should be 26 captioned “Objections to Magistrate Judge’s Findings and Recommendations.” The district judge 27 will review the magistrate judge’s findings and recommendations pursuant to 28 U.S.C. 28 7 1 § 636(b)(1)(C). The parties are advised that failure to file objections within the specified time may 2 waive the right to appeal the district judge’s order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991). 3 4 IT IS SO ORDERED. 5 Dated: ie14hj February 16, 2011 /s/ Sheila K. Oberto UNITED STATES MAGISTRATE JUDGE 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8
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