G & G Closed Circuit Events, LLC v. Segura

Background

G & G Closed Circuit Events, LLC said it owned exclusive distribution rights to the Saul Alvarez v. Sergey Kovalev Championship Fight Program, telecast on November 2, 2019. It sublicensed the program to commercial establishments in California. The complaint alleged that Jesus Segura, who owns and operates La Selva Taqueria, intercepted and showed the program there without obtaining a sublicense.

G & G asserted claims under 47 U.S.C. §§ 553 and 605, conversion, and California Business and Professions Code § 17200. Segura was personally served but did not answer or otherwise appear. The clerk entered default against him. G & G then sought default judgment and $29,600 in damages, plus attorney’s fees and costs.

Jurisdiction and default-judgment standard

The court found that it had federal-question jurisdiction over the federal claims and supplemental jurisdiction over the related state-law claims. It also found personal jurisdiction because Segura was personally served in California, and it found venue proper.

Because Segura had not defended the case, the court applied the seven factors used to decide whether to enter default judgment. The court treated the complaint’s well-pleaded factual allegations, other than damages allegations, as admitted, but explained that legally insufficient claims and unsupported damages are not established merely because a defendant defaults.

Claims

The court found that G & G adequately stated a claim under Section 553, which addresses unauthorized interception of communications offered over a cable system. It also found that G & G adequately stated a conversion claim. Conversion is the wrongful control or taking of property belonging to someone else; under California law, G & G had to show a property right, wrongful interference with that right, and damages.

The court rejected the Section 605 claim. That provision addresses unlawful interception of radio communications and could apply to a satellite transmission. The complaint said that the program originated through a satellite uplink and was later retransmitted to cable systems and satellite companies, but it did not specify whether Segura intercepted a satellite transmission or a cable signal. The court concluded that the allegations did not adequately state a Section 605 claim and that the available evidence did not resolve that uncertainty. The court therefore analyzed liability under Section 553 instead.

Damages and fees

The court awarded $1,400 in Section 553 statutory damages, equal to the cost of a sublicense for a restaurant with comparable capacity. It declined to apply a multiplier to the statutory damages.

The court found that Segura’s conduct was willful and for commercial gain, in part because of the three previous default judgments against him. But it also noted that several commonly considered factors, including cover charges, increased food prices, and advertising, were absent. It awarded $2,800 in enhanced Section 553 damages as a deterrent and found that a larger amount would be excessive.

The court awarded another $1,400 for conversion, based on the comparable sublicense fee. The total damages award was $5,600. The court granted G & G’s request to submit supporting evidence for attorney’s fees and costs and ordered it to file that request within 14 days.

Disposition

Judge William Alsup granted the default-judgment motion as to the Section 553 and conversion claims, denied the motion as to the Section 605 claim, awarded $5,600 in damages, and granted the request to submit a supported attorney’s-fee request.