G & G Closed Circuit Events, LLC v. Barajas-Quijada ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 G & G CLOSED CIRCUIT EVENTS, LLC, ) Case No.: 1:19-cv-01259 - AWI - JLT ) 12 Plaintiff, ) ORDER ADOPTING IN FULL THE FINDINGS ) AND RECOMMENDATIONS GRANTING IN 13 v. ) PART PLAINTIFF’S MOTION FOR DEFAULT ) JUDGMENT 14 RAMON A. BARAJAS-QUIJADA and ) GUSTAVO GARCIA, JR., individually and ) (Docs. 11, 14) 15 doing business as CULICHI SUSHI AND ) MARISCOS, ) 16 ) Defendants. ) 17 ) 18 G & G Closed Circuit Events, LLC seeks the entry of default judgment against Ramon A. 19 Barajas-Quijada and Gustavo Garcia, Jr, individually and doing business as Culichi Sushi and Mariscos. 20 (Doc. 11) The magistrate judge recommended Plaintiff’s request for default judgment be granted in the 21 amount of $13,100.00. (Doc. 14) For the reasons set forth below, Plaintiff’s objections to the 22 recommendations are overruled, and the findings and recommendations of the magistrate judge are 23 adopted in full. 24 I. Background 25 G & G Closed Circuit Events, LLC asserts the company possessed the exclusive rights to the 26 nationwide commercial distribution of “Saul ‘Canelo’ Alvarez v. Gennady ‘GGG’ Golovkin II 27 Championship Fight Program,” (“the Program”) televised on September 15, 2018. (Doc. 1 at 5, ¶ 20) 28 However, Plaintiff contends Defendants broadcast the Program at Culichi Sushi and Mariscos without 1 paying the requisite fee. (Id., ¶¶ 16-17) Defendants were served with the summons and complaint 2 filed on September 10, 2019 (Docs. 6-7) but failed to respond within the time prescribed by the 3 Federal Rules of Civil Procedure. Default was entered on October 30, 2019. (Docs. 8-9) 4 On December 6, 2019, Plaintiff filed a second motion for default judgment, which is now 5 pending before the court. (Doc. 11) 6 II. Findings and Recommendations 7 A. Eitel Factors 8 The magistrate judge reviewed the factors set forth by the Ninth Circuit in Eitel v. McCool, 782 9 F.2d 1470, 1471-72 (9th Cir. 1986), to determine whether the request for default judgment should be 10 granted. (Doc. 14 at 3-7) In particular, the magistrate judge found the plaintiff would be prejudiced if 11 default judgment was not granted. (Id. at 3, citing Pepsico, Inc. v. Cal. Sec. Cans, 238 F.Supp.2d 1172, 12 1174 (C.D. Cal 2002)) In addition, she found the merits of the plaintiff’s claims and the sufficiency of 13 the complaint weighed in favor of the entry of default judgment, because the facts supported a claim for 14 conversion and a violation of the Communications Act. (Id. at 3-5) Likewise, the magistrate judge 15 found there was “little possibility of dispute concerning material facts,” and the defendants’ conduct 16 did not weigh against the entry of default judgment. (Id. at 6-7) 17 Though the sum of the money requested could weigh against default judgment, the magistrate 18 judge observed that “the statutes involved contemplate such an award under certain circumstances,” 19 and authorize awards up to $110,000.” (Doc. 14 at 6, citing G & G Closed Events, LLC v. Shahen, 20 2012 WL 1455087, at *6 (E.D. Cal. Apr. 26, 2012). Therefore, this factor did not weigh against 21 Plaintiff’s request for default judgment. (Id.) Finally, the magistrate judge determined that “[t]he 22 policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits does not weigh 23 against default judgment because Defendants’ failure to appear before the Court and defend in this 24 action makes a decision on the merits impractical.” (Id. at 6-7) 25 B. Damages 26 Having determined the Eitel factors weighed in favor of the entry of default judgment, the 27 magistrate judge evaluated the requested damages. (Doc. 14 at 7-9) The magistrate judge noted: 28 Hector Cardenas, Plaintiff’s investigator, attached an advertisement for the Program 1 broadcast Culichi Sushi and Mariscos, which stated: Join us this Saturday for Canelo vs. GGG2 fight. $10 event charge. Live music, Mexican party after the fight to 2 celebrate Mexican Independence Day!!!” (Doc. 11-3 at 4) Mr. Cardenas indicated he paid the $10 to enter, and observed five televisions that ranged in size from 32 inches to 3 50 inches. (Id. at 2) He stated that he observed the fight, but did not clarify if the fight was on one television or all five. (See id.) Mr. Cardenas estimated the capacity of the 4 restaurant was 100 people, and he counted the number of patrons three times, finding 54, 56, and 58 people were present. (Id.) 5 6 (Doc. 14 at 7) Having reviewed these factors, the magistrate judge round an award of $5,600, or twice 7 the cost of a proper sublicense, was appropriate. (Id.) 8 The magistrate judge noted this Court has awarded enhanced damages “where the defendant 9 imposes a cover charge or fee.” (Doc. 14 at 8-9, citing, e.g., J & J Sports Prods., Inc. v. Mendoza, 2015 10 WL 5009000, at *4 (E.D. Cal. Aug. 20, 2015); see also Joe Hand Promotions, Inc. v. Burleson, 2011 11 WL 4905631, at *5 (E.D. Cal. Oct. 14, 2011)) Because the evidence submitted established that 12 “Defendants both advertised the fight at Culichi Sushi and Mariscos and a $10 cover charge was 13 required,” the magistrate judge recommended enhanced damages in the amount of $7,500 be awarded. 14 (Id. at 9, emphasis in original) 15 Finally, the magistrate judge found that “because Plaintiff elected to receive statutory damages 16 rather than actual damages under the Communications Act, damages for conversion are subsumed into 17 the total award of $13,100.” (Doc. 14 at 9). Thus, the magistrate judge also recommended additional 18 damages for conversion be denied. (Id.) 19 III. Plaintiff’s Objections 20 Plaintiff was given fourteen days to file any objections to the recommendations. (Doc. 14 at 10- 21 11) In addition, the plaintiff was “advised that failure to file objections within the specified time may 22 waive the right to appeal the District Court’s order. (Id. at 11, citing Martinez v. Ylst, 951 F.2d 1153 23 (9th Cir. 1991); Wilkerson v. Wheeler, 772 F.3d 834, 834 (9th Cir. 2014)). On January 21, 2020, 24 Plaintiff filed timely objections. (Doc 15) 25 Plaintiff objects to the amount of damages recommended by the magistrate judge. (See Doc. 15 26 at 1-2) According to Plaintiff, the statutory damages award of $5,600 “does not sufficiently 27 compensate Plaintiff,” and argues that the magistrate judge should have applied a greater multiplier to 28 the cost of a sublicense. (Id. at 1, 3) In addition, Plaintiff asserts the amount of enhanced damages 1 does not “properly address the severity of Defendants’ violation,” asserting the magistrate judge erred 2 in making inferences in favor of Defendants rather than Plaintiff in analyzing the evidence presented 3 related to the advertisement and cover charge. (Id. at 2, 4) Finally, Plaintiff requests $2,800 be awarded 4 for conversion—“the amount Defendant would have had to pay to broadcast the Program lawfully”— 5 arguing the election to receive statutory damages does not impact the availability of damages for other 6 violations. (Id. at 7-8) Therefore, Plaintiff requests that the Court now award $8,400 in statutory 7 damages; $25,200 in enhanced statutory damages; and $2,800 in conversion damages. (Id. at 8) 8 IV. Discussion and Analysis 9 A district judge may “accept, reject or modify, in whole or in part, the findings and 10 recommendations . . .” 28 U.S.C. § 636(b)(1). If objections to the findings and recommendations are 11 filed, “the court shall make a de novo determination of those portions of the report or specified 12 proposed finding or recommendations to which objection is made. Id. A de novo review requires the 13 court to “consider[] the matter anew, as if no decision had been rendered.” Dawson v. Marshall, 561 14 F.3d 930, 932 (9th Cir. 2009). Accordingly, because Plaintiff objects to the findings related to the 15 amount of damages to be awarded, the Court addresses damages under the Federal Communications 16 Act and conversion. 17 A. Statutory and Enhanced Damages 18 Under the Federal Communications Act, a plaintiff may recover actual damages or statutory 19 damages “not less than $1,000 or more than $10,000, as the court considers just.” 47 U.S.C. § 20 605(e)(3)(C)(i)(II). When a court finds a violation was “committed willfully and for the purposes of 21 direct or indirect commercial advantage or private financial gain,” a court may award enhanced 22 damages by increasing the awarded damages up to $100,000.00 for each violation. Id. at § 23 605(e)(3)(C)(ii). 24 Notably, courts have declined to award damages that greatly exceed the cost of a commercial 25 licensing fee. For example, in J&J Sports Prods. v. Martinez, the plaintiff requested “nearly three times 26 the $1,600 amount of the commercial licensing fee for the Program” and $20,000 in enhanced damages, 27 arguing—as Plaintiff suggests here— “that an increased statutory damages amount is warranted not 28 only to compensate it for loss of revenue, but also to deter broadcast piracy in the future.” Id., Case 1 No. 1:14-cv-01578-DAD-BAM, 2017 U.S. Dist. LEXIS 72235 at *3, (May 20, 2017). The Court 2 awarded a total of $2,000 in damages, which included $200.00 in enhanced damages. Id. Likewise, 3 the Northern District declined a request from G &G Closed Circuit events for an award twice the cost 4 of a commercial licensing fee, finding the statutory minimum of $1,000 to be appropriate—despite the 5 fact that the licensing fee was $3,200. G & G Closed Circuit Events, LLC v. Zapata, 2019 WL 3363793 6 (N.D. Cal. Apr. 30, 2019) 7 As the magistrate judge observed, there were no factual allegations in the complaint supporting 8 a conclusion that the defendant’s actions were willful or for the purpose of financial gain, such that 9 enhanced damages are appropriate. Previously, the Court explained: 10 To adequately state a claim against a defendant, a plaintiff must set forth the legal and factual basis for his or her claim. Detailed factual allegations are not required, but 11 “[t]hreadbare recitals of the elements of the cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678, (2009), 12 citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While factual allegations are accepted as true, legal conclusions are not. Iqbal, 556 U.S. at 678. A 13 plaintiff must set forth “the grounds of his entitlement to relief,” which “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of 14 action.” Twombly, 550 U.S. at 555-56 (internal quotation marks and citations omitted). In its complaint, Plaintiff simply alleged a legal conclusion: “Said unauthorized 15 interception, reception, publication, exhibition, divulgence, display, and/or exhibition by each of the Defendant [sic] was done willfully and for purposes of direct and/or 16 indirect commercial advantage and/or private financial gain.” 17 Joe Hand Promotions, Inc. v. Hathcock, 2012 U.S. Dist. LEXIS 101208, at *2-3 (E.D Cal. July 20, 18 2012). Indeed, the complaint in this case contains the same language as the complaint in Hathcock (see 19 Doc. 1 at 6, ¶ 24), and suffers the same pleading and factual deficiencies. Nevertheless, Plaintiff 20 presented evidence of an advertisement and cover charge. 21 Although Plaintiff contends the magistrate judge viewed the evidence presented in the light 22 most favorable to Defendants, the Court’s review indicates that inferences were taken in favor of 23 Plaintiff. For example, the magistrate judge reviewed the advertisement submitted by Plaintiff in 24 support of the motion for default judgment and considered this as a factor in favor of both the statutory 25 award that was double the licensing fee and enhanced damages. However, Hector Cardenas, Plaintiff’s 26 investigator, makes no mention of the advertisement attached to his affidavit. Mr. Cardenas did not 27 state under penalty of perjury that the advertisement was displayed at Culichi Sushi and Mariscos, 28 where he saw it, the size of the advertisement, or the number of copies (if there was more than one). 1 Despite both the procedural and substantive flaws in the evidence, the magistrate judge considered the 2 advertisement as supporting more than minimal statutory damages. 3 Despite Plaintiff’s contention that the recommended statutory award of $5,600 “does not 4 sufficiently compensate Plaintiff,” the recommended award is double what Plaintiff would have 5 received for a proper license for a venue the size of Culichi Sushi and Mariscos. Thus, the argument 6 that Plaintiff would not be sufficiently compensated is without merit. Further, the Court finds the 7 recommended enhanced damages of $7,500 to be appropriate in light of the cover charge paid by the 8 individuals in attendance—ranging from 54 to 58 patrons while the investigator was present—and the 9 advertisement that the Court presumes was seen by the investigator as it was attached to his affidavit. 10 (See Doc. 11-3) 11 The total award of $13,100 is more than five times the amount Defendants would have paid for 12 a license. This amount also would deter the defendants and others from future wrongful conduct while 13 not destroying the business, because the proper license could be obtained at a significantly lesser cost. 14 See Kingvision Pay-Per-View v. Lake Alice Bar, 168 F.3d 347, 350 (9th Cir. 1999) (observing that a 15 lower statutory award may deter while not destroying a business). Accordingly, the Court ADOPTS the 16 recommended award of $13,100. 17 B. Conversion 18 The magistrate judge declined to award additional damages for conversion, finding such 19 damages were subsumed into the total award of $13,100. (Doc. 14 at 9) As another distict court 20 observed, “as a matter of law that if liability is established for both a violation of § 605 and the 21 conversion claim, [the plaintiff] must elect its remedy because the Court will not allow recovery for 22 both.” J & J Sports Prods. v. Argueta, 224 F.Supp.3d 700, 703 (W.D. Ark. 2016) Indeed, as the 23 magistrate judge observed, this Court has repeatedly declined to award damages for conversion in 24 addition to statutory damages for the same wrong. See, e.g., J & J Sports Prods. Inc. v. Meza, 2015 25 WL 1787479, at *6 (E.D. Cal. Apr. 20, 2015) (“because Plaintiff chose to receive statutory damages 26 rather than actual damages under the Communications Act, damages for conversion are subsumed into 27 the total award”); Joe Hand Promotions, Inc. v. Behari, 2013 WL 1129311, n.2 (E.D. Cal. Mar. 18, 28 2013) (explaining damages conversion would not be awarded “because the recommended statutory 1 damages will sufficiently compensate plaintiff such that an award for conversion damages would be 2 duplicative”); J & J Sports Productions, Inc. v. Ferreyra, 2008 WL 4104315at *1 (E.D. Cal. Aug. 28, 3 2008) (“Inasmuch as plaintiff seeks statutory damages rather than actual damages, plaintiff’s request 4 for damages for conversion should be denied”). 5 As Plaintiff acknowledges, in the cases referred to by the magistrate judge, the court determined 6 the plaintiff was sufficiently compensated through the statutory award and declined to award additional 7 damages for the tort of conversion. (See Doc. 15 at 8; see also J & J Sports Prods. v. Mannor, 2011 8 WL 1135356, at *3 (E.D. Cal. Mar. 28, 2011) (finding the “plaintiff has been sufficiently compensated 9 through the federal statutory scheme” where the award total was $3,200 and the cost of the proper 10 license was $2,200, and declining to award additional damages for conversion); J & J Sports Prods. v. 11 Bachman, 2010 U.S. Dist. LEXIS 44884, at *22 (E.D. Cal. May 7, 2010) (declining conversion 12 damages because statutory damages “sufficiently compensate[d]” the plaintiff). Likewise, here the 13 Court finds the $13,100.00 awarded under the Federal Communications Act sufficiently compensates 14 Plaintiff, because it is more than five times the amount the company would have received from 15 Defendants for a proper sublicense. 16 Accordingly, having conducted a de novo review, the Court agrees with the recommendation to 17 deny a separate award of damages for conversion. 18 V. Conclusion 19 In accordance with the provisions of 28 U.S.C. § 636 (b)(1)(C) and Britt v. Simi Valley United 20 School Dist., 708 F.2d 452, 454 (9th Cir. 1983), this court conducted a de novo review of the case. 21 Having carefully reviewed the file, the court finds the findings and recommendations are supported by 22 the record and proper analysis. 23 24 ORDER 25 Accordingly, IT IS HEREBY ORDERED that: 26 1. The findings and recommendations dated January 7, 2020 (Doc. 14) are ADOPTED; 27 2. Plaintiff’s motion for default judgment (Doc. 11) is granted in part as follows: 28 A. Plaintiff’s request for statutory damages for the violation of the Communications 1 Act is GRANTED in the amount of $5,600; 2 B. Plaintiff's request for enhanced damages is GRANTED in the amount of □□□□□ 3 C. Plaintiff's request for separate damages for the tort of conversion is DENIED; 4 3. Judgment SHALL be entered in favor of Plaintiff G & G Closed Circuit Events, LLC 5 and against Defendants Ramon A. Barajas- Quijada and Gustavo Garcia, Jr., 6 individually and doing business Culichi Sushi and Mariscos; and 7 4. Plaintiff SHALL file any application for attorney’s fees pursuant to 47 U.S.C. § 605 n 8 later than fourteen days from the entry of judgment. 9 10 || IT IS SO ORDERED. 2p 11 |! Dated: _February 10, 2020 7 Sz 7 Cb Lec _SENIOR DISTRICT JUDGE 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28