G & G Closed Circuit Events, LLC v. Macias

Background

G & G Closed Circuit Events, LLC alleged that it owned exclusive nationwide commercial distribution rights to a boxing program involving Saul “Canelo” Alvarez and Daniel Jacobs. It alleged that Ramon Macias, individually and doing business as Los Compadres Bar & Grill, and Los Compadres Bar & Grill, Inc., an unknown business entity doing business as Los Compadres Bar & Grill, unlawfully intercepted and displayed the program at the establishment.

The plaintiff filed claims under 47 U.S.C. §§ 553 and 605, for conversion, and under California’s unfair-competition law. In its motion, however, it sought damages only under § 605 and for conversion. After the defendants failed to appear or respond, the clerk entered default against them.

Service, jurisdiction, and judicial notice

The court took judicial notice of three public records concerning Los Compadres Bar & Grill, Inc.: a liquor license, a business-entity record, and a statement of information. It found that the plaintiff properly served Ramon Macias personally and as the agent for service of process for Los Compadres Bar & Grill, Inc. The court also found subject-matter jurisdiction because federal statutes were at issue and found personal jurisdiction because the defendants were served, resided, and did business in California.

Default-judgment analysis

The court applied the seven factors used in the Ninth Circuit to decide whether default judgment is appropriate. Those factors include the possible prejudice to the plaintiff, the merits and sufficiency of the claims, the amount of money sought, the possibility of disputes about important facts, whether the default resulted from excusable neglect, and the policy favoring decisions on the merits.

For the federal claim, the plaintiff had to show that the defendants violated 47 U.S.C. § 605(a), which addresses unauthorized disclosure or publication of certain wire or radio communications. For conversion, the plaintiff had to show ownership or a right to possess the property, a wrongful conversion, and damages.

The court held that the complaint’s allegations about liability largely repeated statutory language and consisted of broad legal conclusions. The investigator’s affidavit did not fill that gap. The investigator said he visited Los Compadres Bar & Grill shortly before the main event and saw the fighters on televisions, but he did not say that he saw any part of the main event, the undercard bouts, or the commentary covered by the plaintiff’s rights. The court also noted that the fighters’ clothing could have been identified from sources other than an unlawful display of the fight.

Because the complaint and affidavit did not adequately establish unlawful interception, receipt, or publication under § 605 or conversion, the court found a possibility of disputes about important facts. The requested damages of $22,750 and the policy favoring decisions on the merits also weighed against default judgment. The court found that denying the motion would not prejudice the plaintiff because the plaintiff could seek to amend its complaint or submit additional evidence, if available.

Disposition

The court DENIED the plaintiff’s motion for default judgment, without prejudice to filing an amended complaint and/or a renewed motion for default judgment if additional evidence was available. The court stated that the plaintiff could file those materials by December 18, 2020, provided that any amended complaint complied with Federal Rule of Civil Procedure 11 and stated sufficient facts establishing the defendants’ liability.