Innovative Sports Management, Inc. d/b/a Integrated Sports Media v. Guerrero

Background

Innovative Sports Management, Inc. alleged that it held exclusive distribution rights for a soccer game telecast on October 10, 2021, and that the defendants showed the game to customers at Fonda Colombiana without a sublicense. The complaint asserted claims under 47 U.S.C. §§ 553 and 605, conversion, and California Business and Professions Code § 17200.

The defendants were served by substituted service at Fonda Colombiana but did not answer or otherwise appear. Default judgment had been entered against them on December 8, 2022. Innovative Sports later voluntarily dismissed its claims against Adolfo Cendejas Guerrero, who was not a defendant in the caption addressed by this order. The plaintiff moved for default judgment against the two captioned defendants, seeking statutory and enhanced damages, conversion damages, and attorney’s fees.

Jurisdiction and Service

The court found federal-question jurisdiction because the action included federal claims, and supplemental jurisdiction over the state-law claims. It also found venue appropriate.

The court concluded that service on both defendants was sufficient. For Arias, the court determined that Fonda Colombiana could fairly be treated as her usual place of business under California law after three service attempts and mailing of the summons and complaint. The court found service on 818 Sports sufficient under the rules governing service on corporations.

Default-Judgment Analysis

The court applied the seven factors used to decide whether to enter default judgment. The requested amount was moderate and the absence of any defense provided no basis to question service or suggest excusable neglect. Some factors were neutral, including the possibility of a factual dispute and the competing policies favoring relief for the plaintiff and decisions on the merits.

The court found the claim under Section 605 legally insufficient. It found, however, that the complaint adequately stated a Section 553 claim because it alleged that Innovative Sports had an exclusive license and that the defendants unlawfully intercepted and exhibited the program. The court also found that the complaint adequately stated a conversion claim by alleging ownership or a right to possess the distribution rights, wrongful interception and exhibition, and resulting damages.

Damages and Fees

The court awarded $2,500 in statutory damages under Section 553. It found enhanced damages appropriate because the complaint alleged that the defendants advertised the game on the restaurant’s Facebook page, and the evidence described a near-capacity crowd and seven television screens. The court awarded $6,000 in enhanced damages, making the Section 553 award $8,500.

The court also awarded $550 for conversion, based on the estimated sublicense fee for an establishment of Fonda Colombiana’s capacity. The total damages award was therefore $9,050. The request to submit supporting evidence for attorney’s fees was granted, and the plaintiff was ordered to file a properly supported fee request within fourteen days.

Disposition

The court granted the default-judgment motion in part. It awarded $9,050 in damages and allowed the plaintiff to submit its attorney-fee request.