G & G Closed Circuit Events, LLC v. Benjamin

Background

G&G Closed Circuit Events, LLC distributes closed-circuit and pay-per-view events. G&G alleged that it held exclusive nationwide rights to distribute the November 6, 2021 boxing match between Saul “Canelo” Alvarez and Caleb Plant, and that the program was unlawfully intercepted and shown at a boxing gym operated by the defendants.

The complaint asserted claims under 47 U.S.C. §§ 605 and 553, for conversion, and under the California Business and Professions Code. Ali Benjamin initially filed an answer while appearing without a lawyer and asserted a counterclaim seeking $1 for emotional distress. After the court appointed pro bono counsel, Project Fitness Benjamin’s Boxing filed an answer with four affirmative defenses. An affirmative defense is a specific legal reason a defendant says the plaintiff should not win even if the complaint’s allegations are accepted.

The pending motions were: G&G’s motion to strike Project Fitness’s affirmative defenses; G&G’s motion to strike Benjamin’s answer and counterclaim; and Benjamin’s motion for leave to file an amended answer and affirmative defenses.

Rulings on Project Fitness’s defenses

The court granted G&G’s motion to strike Project Fitness’s affirmative defenses except for the reservation of future defenses.

The first defense, called the “Internet Defense,” argued that the federal signal-piracy laws did not apply because Project Fitness obtained and displayed the program through the internet rather than through a cable or satellite signal. The court held that this was a denial of G&G’s allegations, not an affirmative defense. The court struck it as an affirmative defense but said defendants could still present the argument as a denial. The court also stated that the Ninth Circuit’s decision in a cited case had not decided whether those laws cover internet streaming.

The second defense asserted that Project Fitness had a license because it purchased the program twice through Showtime. The court held that this argument also effectively denied G&G’s allegations that it had exclusive commercial distribution rights and that Project Fitness was not a sublicensee. The court struck the defense as an affirmative defense but allowed defendants to make the argument as a denial.

The third defense asserted acquiescence, meaning implied consent based on G&G’s conduct. Project Fitness relied on G&G’s hiring of a private investigator and failure to notify defendants of G&G’s rights. The court held that these allegations did not identify an affirmative act showing implied consent and struck the defense.

The fourth defense asserted that G&G lacked standing because it did not have the exclusive right to distribute the program commercially. The court held that lack of standing was a negative defense rather than an affirmative one and struck it as an affirmative defense. Defendants were not barred from arguing that G&G lacked standing.

The court declined to strike Project Fitness’s statement reserving the right to raise additional defenses. It said it would evaluate additional defenses if and when defendants sought to add them.

Benjamin’s motion to amend

The court granted Benjamin’s motion to amend his answer except with respect to affirmative defenses one through four, which it denied. Benjamin could amend the rest of his answer, including to address the complaint’s allegations and remove his previously pleaded defenses. The court found no bad faith or undue delay, noting the period when the case was stayed while counsel was located and appointed and the fact that Benjamin filed his motion before the court’s amendment deadline.

Because the motion to amend was granted except as to the affirmative defenses, the court denied as moot G&G’s motion to strike Benjamin’s original answer and counterclaim.

Final disposition and effect

The order states that G&G’s motion to strike Project Fitness’s affirmative defenses was granted except as to the reservation of future defenses. Benjamin’s motion to amend his answer was granted except as to the affirmative defenses, which were stricken. Both defendants’ defenses were stricken without leave to amend but without prejudice to factual or legal arguments about whether G&G ultimately proves all factual elements of its claims. G&G’s motion to strike Benjamin’s original answer and counterclaim was denied as moot.

Judge Susan Illston did not decide whether the alleged program interception violated the federal or state laws asserted in the complaint.