G & G Closed Circuit Events, LLC v. Miranda

Background

G & G Closed Circuit Events, LLC alleged that it held exclusive nationwide commercial exhibition rights for the November 2, 2019 Saul “Canelo” Alvarez v. Sergey Kovolev Championship Fight Program and sublicensed those rights to commercial entities. It alleged that Ismael M. Miranda, individually and doing business as El Agave Restaurant, and El Agave Restaurant, Inc., an unknown business entity doing business as El Agave Restaurant, unlawfully intercepted and exhibited the program at El Agave Restaurant.

The complaint asserted claims under 47 U.S.C. §§ 553 and 605, conversion, and California Business and Professions Code §§ 17200 et seq. In the motion for default judgment, however, the plaintiff sought remedies only under § 605 and for conversion. The defendants failed to appear or respond. After the clerk entered default, the court previously denied the plaintiff’s first default-judgment motion without prejudice because the original proof of service did not establish service at the correct address. The plaintiff later filed an amended proof of service, and the court reconsidered the previously filed motion based on that amended proof.

Service, jurisdiction, and default judgment

The court concluded that service was proper based on the sworn proofs of service. It also concluded that it had subject-matter jurisdiction because federal statutes were at issue and personal jurisdiction over both defendants because the complaint and public records indicated that El Agave Restaurant operated in San Jose, California and that Miranda was identified in public records as president of El Agave Restaurant, Inc.

Applying the Ninth Circuit’s factors for deciding whether to enter default judgment, the court found that most factors favored judgment. It reasoned that the plaintiff would have no other recourse if judgment were denied, the claims were adequately pleaded, there was no indication of excusable neglect or a dispute about material facts, and the defendants’ failure to litigate made a decision on the merits unlikely. The court therefore recommended granting the plaintiff’s motion for default judgment, subject to the claim-specific relief described below.

Section 605 claim

The court recommended denial of default judgment on the claim under 47 U.S.C. § 605. It explained that § 553 applies to interception of a cable signal, while § 605 applies to interception of a satellite broadcast, and that a single interception cannot violate both provisions.

Although the complaint and supporting affidavit described a satellite-originated transmission that was later retransmitted to cable systems and satellite companies, neither the complaint nor the affidavit established whether the defendants intercepted the program through a cable signal or a satellite broadcast. The investigator’s affidavit also did not say whether he saw a satellite dish or a cable box at the restaurant. Because the evidence suggested that the program came from a cable signal, the court found that the plaintiff had failed to state a claim for relief under § 605.

Section 553 and conversion claims

The court found that the plaintiff sufficiently alleged a violation of 47 U.S.C. § 553 because the evidence established that the defendants exhibited the program without permission. It recommended awarding $1,400 in statutory damages under § 553, representing the stated cost of a commercial sublicense fee. It did not recommend enhanced statutory damages, noting the lack of evidence of increased food or beverage prices, advertising, repeat violations, or other facts supporting an enhanced award, and explaining that merely asserting willfulness was insufficient.

The court also recommended granting the conversion claim. Conversion is the wrongful taking or use of another’s property. The court found that the plaintiff alleged ownership of the program’s nationwide distribution rights, wrongful interception of those rights, and damages. It recommended awarding $1,400 for conversion, also based on the commercial sublicense fee.

Fees, costs, and disposition

The court noted that attorney fees and costs may be available under § 553(c)(2). It stated that, if the assigned district judge entered the recommended judgment, plaintiff’s counsel should file a properly supported request for reasonable attorney fees and costs within 14 days of the district court’s order.

The recommendation was to enter judgment for the plaintiff against the defendants; deny the motion as to the § 605 claim; grant the motion as to the § 553 and conversion claims; and award $2,800 in damages jointly and severally against the defendants. The case was directed to be reassigned to a district judge. Any party could file objections within 14 days after being served with the recommendation. The opinion was signed by Magistrate Judge Susan Van Keulen.