Innovative Sports Management, Inc. v. Gutierrez

Background

Innovative Sports Management, Inc., doing business as Integrated Sports Media, alleged that it held the exclusive nationwide commercial distribution rights for a Brazil v. Columbia soccer match broadcast on October 10, 2021. Commercial establishments needed a sublicense and had to pay a licensing fee to lawfully show the match.

The plaintiff alleged that Gustavo J. Gutierrez, individually and doing business under several Mangos Mexican Grill names, and Mangos Mexican Grill LLC unlawfully intercepted and displayed the match at Mangos Mexican Grill in San Jose, California. A declaration stated that an investigator saw the match on six televisions in a sports bar, counted 10 patrons during each of three headcounts, and did not pay an entrance fee. The record did not allege increased food or drink prices, advertising of the match, or prior similar violations.

The complaint asserted claims under section 605 of the Federal Communications Act, section 553 of the Cable and Television Consumer Protection Act, conversion, and California’s Unfair Competition Law. In the motion at issue, the plaintiff pursued only the section 553 and conversion claims. The defendants did not appear or respond, and the clerk entered default on January 9, 2023.

Service, Jurisdiction, and Default Judgment

The court found that the plaintiff properly served Gutierrez personally and as an agent for service for Mangos Mexican Grill. It also found subject-matter jurisdiction because federal statutes were at issue and supplemental jurisdiction over the state-law claims. The court found personal jurisdiction because the defendants were served, resided, and did business in California.

Applying the Ninth Circuit’s seven-factor test for default judgment, the court concluded that the factors supported entering judgment on both claims. The court treated the complaint’s well-pleaded liability allegations as established, while requiring separate proof of damages.

The court found that the plaintiff adequately stated a claim under 47 U.S.C. § 553 because the evidence showed that the defendants displayed the program without permission. It also found that the allegations supported holding Gutierrez individually liable because he allegedly had the right and ability to supervise the activity and a direct financial interest in it.

For conversion, the court found that the plaintiff had alleged ownership or a right to possess the program’s distribution rights, wrongful interference with that right, and damages. The court stated that the Eitel factors supported entering default judgment against the defendants on the section 553 and conversion claims. The order’s opening states that the motion was granted in part, while the discussion states that the motion was granted.

Damages and Further Proceedings

Under section 553, the court awarded $550 in statutory damages. It found that the evidence supported enhanced damages because the defendants benefited from avoiding the licensing fee and possibly attracting additional patrons, but it concluded that the plaintiff’s requested enhancement was too high compared with awards in similar cases. The court therefore awarded $1,100 in enhanced damages, twice the statutory award.

The court also awarded $550 in conversion damages, representing the stated cost of the commercial sublicense. The total damages award was $2,200: $550 in statutory damages, $1,100 in enhanced damages, and $550 for conversion.

The court did not award a specific amount of attorneys’ fees or costs in this order. Instead, it required the plaintiff to file a properly supported request for reasonable attorneys’ fees and costs within 14 days.