G and G Closed Circuit Events v. Zihao Liu ( 2022 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
G AND G CLOSED CIRCUIT EVENTS, No. 21-56047
LLC,
Plaintiff-Appellant, D.C. No.
2:19-cv-07896-
v. WDK-JC
ZIHAO LIU, DBA Wave Hookah;
WAVE HOOKAH, INC., DBA Wave OPINION
Hookah, an unknown business
entity,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
William D. Keller, District Judge, Presiding
Argued and Submitted May 10, 2022
Pasadena, California
Filed August 22, 2022
Before: M. Margaret McKeown and Sandra S. Ikuta,
Circuit Judges, and George B. Daniels, * District Judge.
Opinion by Judge McKeown
*
The Honorable George B. Daniels, United States District Judge for
the Southern District of New York, sitting by designation.
2 G AND G CLOSED CIRCUIT EVENTS V. LIU
SUMMARY **
Communications Law
The panel affirmed, on an alternative ground, the district
court’s summary judgment in favor of the defendant in an
action alleging that transmission of a pirated television
program via Internet streaming, as opposed to via satellite or
cable systems, violated the Cable Communications Policy
Act, 47 U.S.C. § 553, and the Communications Act,
47 U.S.C. § 605.
The district court ruled that §§ 553 and 605 do not apply
when a pirated program is transmitted via Internet streaming.
The panel, however, concluded that the plaintiff, a
middleman distributor of entertainment display rights, failed
to meet its burden on summary judgment to provide
evidence sufficient to demonstrate a genuine issue of
material fact regarding the method of transmission of the
program at issue. Accordingly, the panel declined to reach
the merits and affirmed on that alternative ground.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
G AND G CLOSED CIRCUIT EVENTS V. LIU 3
COUNSEL
Thomas P. Riley (argued), Law Offices of Thomas P. Riley
P.C., South Pasadena, California, for Plaintiff-Appellant.
Trevor B. McCann (argued) and Ryan P. Harley, Collins &
Collins LLP, Walnut Creek, California, for Defendants-
Appellees.
OPINION
McKEOWN, Circuit Judge:
Television “signal piracy,” that is, displaying television
programs without the right to do so, has long been regulated
by the Cable Communications Policy Act, 47 U.S.C. § 553(“§ 553”) and the Communications Act, 47 U.S.C. § 605(“§ 605”). Those statutes clearly apply when the pirated
program is transmitted via traditional satellite or cable
systems. See, e.g., Int’l Cablevision, Inc. v. Sykes, 75 F.3d
123 (2d Cir. 1996); Cablevision of Michigan, Inc. v. Sports
Palace, Inc., 27 F.3d 566 (6th Cir. 1994). G & G Closed
Circuit Events, LLC (“G & G”), a middleman distributor of
entertainment display rights, asks us to resolve a blockbuster
question of first impression for the courts of appeals:
Whether §§ 553 and 605 apply when the pirated program is
transmitted via Internet streaming. The district court said
“no,” holding that the “[I]nternet defense” is dispositive.
But on appeal, G & G’s case never makes it past the opening
credits. Because G & G failed to meet its burden on
summary judgment to provide evidence sufficient to
demonstrate a genuine issue of material fact regarding the
method of transmission of the program at issue, we decline
4 G AND G CLOSED CIRCUIT EVENTS V. LIU
to reach the merits and affirm the district court’s grant of
summary judgment on that alternative ground.
BACKGROUND
G & G buys commercial distribution rights from
entertainment producers and then sublicenses the rights to
display televised sports and entertainment programs at
commercial establishments such as bars, clubs, and
restaurants. Here, G & G purchased exclusive commercial
distribution rights to a televised boxing match (the “fight”)
and charged businesses between $2,800 and $14,000 for a
sublicense. Wave Hookah (“Wave”), a hookah lounge in
Van Nuys, California, displayed the fight to its customers on
a September evening in 2018. Rather than sublicensing the
fight from G & G, a Wave employee purchased it from
digital media provider Flipps Media, Inc., for $84.99, and
displayed the fight to guests on a laptop “via the [I]nternet.”
G & G sued Wave under §§ 553 and 605, alleging violations
of those statutes’ prohibitions on signal piracy. The district
court granted summary judgment in favor of Wave, finding
that §§ 553 and 605 did not regulate streaming over the
Internet.
We do not reach this interesting and complicated
question because the familiar summary judgment standard
counsels upholding summary judgment on alternate
grounds. See Nissan Fire & Marine Ins. Co. v. Fritz Cos.,
Inc., 210 F.3d 1099, 1102–03 (9th Cir. 2000). We review de
novo a district court’s grant of summary judgment,
considering the record in the light most favorable to the non-
moving party. Tschida v. Motl, 924 F.3d 1297, 1302–03 (9th
Cir. 2019). Where, as here, the party moving for summary
judgment (Wave) has borne its initial burden to show that
the nonmoving party (G & G) “does not have enough
evidence of an essential element to carry its ultimate burden
G AND G CLOSED CIRCUIT EVENTS V. LIU 5
of persuasion at trial,” the nonmoving party then has the
burden “to produce evidence to support its claim.” Nissan
Fire & Marine Ins. Co., 210 F.3d at 1102–03. Because
G & G failed to produce evidence to support its claim after
Wave carried its initial burden, summary judgment for Wave
was appropriate. See Celotex Corp. v. Catrett, 477 U.S. 317,
322–23 (1986).
ANALYSIS
I. THE SIGNAL PIRACY STATUTES
To explain why G & G failed to meet its burden on
summary judgment, it is helpful to briefly lay out the signal
piracy statutes at issue. To begin, § 553 concerns “cable
systems.” See 47 U.S.C. § 553(a). To be liable under § 553,
Wave must have intercepted or received a “communications
service offered over a cable system” without authorization.
Id. § 553(a)(1). A “cable system” is defined for purposes of
§ 553 as “a facility, consisting of a set of closed transmission
paths and associated signal generation, reception, and
control equipment that is designed to provide cable service
which includes video programming and which is provided to
multiple subscribers within a community” with certain
exceptions. Id. § 522(7).
Section 605, by contrast, prohibits the unauthorized
interception, receipt, and use of “radio communications,”
including “satellite television signal piracy.” DirecTV, Inc.
v. Webb, 545 F.3d 837, 844 (9th Cir. 2008); see also
47 U.S.C. § 605(a). To establish liability under § 605 here,
Wave’s display of the fight must have been a “radio
communication” as it is defined under § 605 or otherwise
involved a satellite television signal, see DirecTV, Inc.,
545 F.3d at 844 (“[T]he ‘communications’ protected by
§ 605(a) include satellite television signals.”). “Radio
6 G AND G CLOSED CIRCUIT EVENTS V. LIU
communication” for purposes of § 605 means “the
transmission by radio of writing, signs, signals, pictures, and
sounds of all kinds, including all instrumentalities, facilities,
apparatus, and services (among other things, the receipt,
forwarding, and delivery of communications) incidental to
such transmission.” 47 U.S.C. § 153(40).
Both the Supreme Court and the Ninth Circuit have
acknowledged that transmissions over the Internet involve
myriad technologies that may include both cable and satellite
components. See Nat’l Cable & Telecomms. Ass’n v. Brand
X Internet Servs., 545 U.S. 967, 975 (2005) (explaining that
Internet cable modem service “transmits data between the
Internet and users’ computers via the network of television
cable lines owned by cable companies,” and that Internet
service may be provided by other “terrestrial- and satellite-
based wireless networks”); Brand X Internet Servs. v.
F.C.C., 345 F.3d 1120, 1124 (9th Cir. 2003) (“[C]able
modem service uses the network of coaxial cable employed
to transmit television signals.”), rev’d on other grounds,
545 U.S. 967 (2005). The “potentially intricate issues of
overlap and distinction” between §§ 553 and 605 have not
been clearly resolved in the Ninth Circuit. Kingvision Pay-
Per-View v. Lake Alice Bar, 168 F.3d 347, 349 n.1 (9th Cir.
1999). Neither statute expressly references Internet
streaming. See 47 U.S.C. §§ 553, 605.
II. THE PARTIES’ EVIDENCE AT SUMMARY JUDGMENT
In its summary judgment motion, Wave posited that
because the lounge displayed the fight “via the [I]nternet”
rather than via traditional satellite or cable transmissions,
there could be no dispute that Wave’s conduct fell outside
the ambit of §§ 553 and 605. Wave supported its motion
with declarations from the lounge owner and an employee
that Wave purchased the fight from an Internet streaming
G AND G CLOSED CIRCUIT EVENTS V. LIU 7
service and displayed the program by streaming it over the
Internet.
G & G said, “not so fast,” arguing that the signal piracy
statutes did extend to programs transmitted over the Internet,
and that Wave’s discovery responses were inadequate
because they failed to provide sufficient information for
G & G to prosecute its claims under this theory. See Fed. R.
Civ. P. 56(d). G & G supplied a declaration from counsel
identifying gaps in Wave’s discovery responses, which
ostensibly prevented G & G from supporting its claims. For
example, G & G noted that Wave had declined to respond to
interrogatories regarding satellite or cable services
employed by Wave, among other discovery deficiencies.
The district court agreed with G & G and deferred
consideration of the summary judgment motion pursuant to
its authority to do so when the nonmovant has shown that it
cannot present facts “essential to justify its position.” Id.
The court reopened discovery for sixty days “in order for the
parties to determine the method of transmission” of the fight
and granted an additional ten days for supplemental briefing.
At the end of the sixty-day extension, however, G & G
had taken no steps to participate in additional discovery or
to compel any further response from Wave. Instead, G & G
elected not to supplement its briefing and asked the court to
consider Wave’s summary judgment motion fully briefed
and ready for consideration. The district court obliged. This
time, the district court agreed with Wave and granted
summary judgment on the grounds that the “[I]nternet
defense” was “dispositive” and §§ 553 and 605 did not
extend to “unauthorized broadcasts over the [I]nternet.”
8 G AND G CLOSED CIRCUIT EVENTS V. LIU
III. SUMMARY JUDGMENT WAS APPROPRIATE
The district court granted summary judgment, holding
that the “Internet defense” absolved Wave of liability. We
agree that summary judgment was appropriate, albeit for the
alternative, independent reason that G & G failed to bear its
burden of production. Sully v. Ayers, 725 F.3d 1057, 1067
(9th Cir. 2013) (a court of appeals may affirm the district
court on any grounds the record supports). Although the
district court afforded G & G ample opportunity to pursue
additional discovery to demonstrate how §§ 553 and 605
might encompass the Internet transmission at issue here,
G & G sat on its hands. For example, G & G produced no
evidence that would address whether the fight was relayed
by way of a “facility, consisting of a set of closed
transmission paths” or “provided to multiple subscribers
within a community,” such that the fight could have been
transmitted by way of a “cable system” within the meaning
of § 553. See 47 U.S.C. § 522(7) (defining “cable system”).
Similarly, G & G produced no witnesses or documents to
explain whether Wave’s display of the program involved a
“transmission by radio of writing, signs, signals, pictures,
and sounds of all kinds” or otherwise involved a satellite
transmission as would be required to establish liability under
§ 605. Id. § 605(a). And, remarkably, G & G undertook no
discovery about the nature of the transmission to or from
Flipps Media, Inc., the entity from which Wave purchased
the fight. For instance, G & G never offered evidence
addressing whether Flipps itself obtained the fight from a
satellite or cable provider, nor did G & G investigate the
technology that Flipps used to transmit programming to its
customers.
Thus, G & G ended discovery on a cliffhanger, offering
at best conclusory statements about the fight’s method of
G AND G CLOSED CIRCUIT EVENTS V. LIU 9
transmission and the underlying technology. This posture
made it impossible for the district court to undertake the
basic exercise of comparing the facts of the case to the
statutory language to assess whether §§ 553 or 605 regulate
Wave’s conduct.
CONCLUSION
We note that on their face, §§ 553 and 605 do not provide
for an “Internet defense” that automatically absolves an
entity of liability, as the district court held. Rather, these
statutes regulate specific methods of transmission. We
affirm the district court’s grant of summary judgment for
Wave because G & G failed to meet its burden of production
to establish that Wave’s method of transmitting the fight
comes within the ambit of §§ 553 or 605. The district court
afforded G & G generous time to undertake additional
discovery to provide the evidence necessary to ascertain the
technical nature of the transmission at issue. Instead of
taking that opportunity, G & G simply stopped the show and
asked the district court to rule on the sparse record.
Summary judgment for Wave was appropriate. 1
AFFIRMED.
1
Because we affirm the district court’s dismissal of G & G’s federal
claims, we decline to reinstate G & G’s pendent state-law claims. See
28 U.S.C § 1367(c)(3).