G & G Closed Circuit Events, LLC v. Macias

Background

G & G Closed Circuit Events, LLC distributes and licenses commercial closed-circuit sports and entertainment programming. It alleged that it held nationwide commercial distribution rights to the May 4, 2019 Saul “Canelo” Alvarez v. Daniel Jacobs championship fight program and had sublicensed public-exhibition rights to commercial entities.

G & G 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, intercepted and showed the program at the establishment. G & G sued under 47 U.S.C. §§ 553 and 605, for conversion, and under California’s unfair-competition statute. In the renewed motion, however, G & G sought default judgment only on the claims under §§ 553 and 605 and for conversion.

The defendants did not respond to the summons and complaint or appear in the case. The clerk entered default. The court found that service was proper and that it had federal-question jurisdiction over the federal claims and supplemental jurisdiction over the state-law claims. It also found personal jurisdiction because the defendants were served, resided, and did business in California.

Default-judgment analysis

A default judgment is a judgment entered after a defendant fails to respond. The court applied the Ninth Circuit’s seven-factor test, including the possibility of prejudice, the strength of the claims, the sufficiency of the complaint, the amount at stake, the possibility of factual disputes, whether the failure to respond resulted from excusable neglect, and the preference for decisions on the merits.

The court distinguished the two federal communications laws. Section 605 covers unauthorized interception and exhibition of satellite programming, while Section 553 covers unauthorized interception or receipt of communications offered over a cable system. A single interception cannot ordinarily support recovery under both provisions.

The court denied default judgment on the Section 605 claim. Although the complaint alleged that the program originated through a satellite uplink and was retransmitted to cable systems and satellite companies, it did not allege that the defendants intercepted a satellite transmission. The investigator also did not establish whether the establishment used a cable box or satellite dish or otherwise explain how the program was transmitted. The court therefore found that G & G had not stated a claim for relief under Section 605.

The court granted default judgment on the Section 553 claim. The investigator’s declaration and video showed that he watched at least part of the Alvarez-Jacobs fight on the defendants’ televisions at Los Compadres. The court found that this evidence adequately established that the defendants exhibited the program without permission.

The court also granted default judgment on conversion. Under California law, conversion requires ownership or a right to possess property, wrongful interference with that property right, and damages. The court found that G & G adequately alleged ownership of the program’s nationwide distribution rights, the defendants’ intentional and unlawful interception of the program, and damages.

Damages and other relief

For the Section 553 violation, the court awarded $875 in statutory damages. It found evidence supporting an inference that the defendants acted willfully because they avoided the licensing fee and presumably attracted additional patrons who spent more time at the establishment watching the program. The court nevertheless found that G & G’s requested enhanced damages were much higher than comparable awards and awarded $1,750 in enhanced damages.

The court awarded another $875 for conversion, representing the commercial sublicense fee that the defendants would have paid to broadcast the program. The total damages award was $3,500: $875 in Section 553 statutory damages, $1,750 in enhanced damages, and $875 for conversion.

The court ordered G & G to file a properly supported request for reasonable attorneys’ fees and costs within 14 days. It did not award a specific amount of fees or costs in this order.

Order

The court granted G & G’s motion for default judgment as to the claims under 47 U.S.C. § 553 and for conversion, denied the motion as to the claim under 47 U.S.C. § 605, awarded $3,500 in damages, and required a supported fee-and-cost request within 14 days. Judge Beth Labson Freeman signed the order.