The opinion of the court was delivered by: Kendall J. Newman United States Magistrate Judge
FINDINGS AND RECOMMENDATIONS
Presently before the court is plaintiff's application for default judgment.*fn1 This matter was submitted without oral argument on January 14, 2011. (Dkt. No. 15.) The undersigned has fully considered the briefs and record in this case and, for the reasons stated below, recommends that plaintiff's application for default judgment be granted.
Plaintiff, a California corporation, is a closed-circuit distributor of sports and entertainment programming. (Pl.'s Compl. ¶ 6, Dkt. No. 1; Gagliardi Aff. ¶ 3, Dkt. No. 12.) Pursuant to a contract, plaintiff acquired exclusive commercial exhibition licensing rights to a televised boxing match titled "The Battle of East and West": Manny Pacquiao v. Ricky Hatton, IBO Light Welterweight Championship Fight Program ("Program") (Pl.'s Compl. ¶ 9; Gagliardi Aff. ¶ 3.) Thereafter, plaintiff entered into sublicensing agreements with various commercial entities across North America, through which it granted limited public exhibition rights to the entities for the benefit and entertainment of the patrons within the entities' respective establishments (e.g., casinos, racetracks, bars, restaurants, nightclubs). (Pl.'s Compl. ¶ 10; Gagliardi Aff. ¶ 3.) Plaintiff made transmission of the Program available only to its customers, which were commercial entities that had paid plaintiff a commercial sublicense fee to broadcast the Program. (Gagliardi Aff. ¶ 8; see also Pl.'s Compl. ¶ 10.) For example, for permission to exhibit the Program in a commercial establishment that had a fire code occupancy of seventy-two persons, the commercial sublicense fee would have been $1,600. (Gagliardi Aff. ¶ 8 & Ex. 1.)
Defendant is alleged to be the owner, operator, licensee, or person in charge of the commercial establishment doing business as Victoria's Mexican Food. (Pl.'s Compl. ¶ 7; Haverty Aff. at 2, Dkt. No. 11, Doc. 11-3.) Victoria's Mexican Food is located at 526 W. Benjamin Holt Dr., Suite G, in Stockton, California. (Pl.'s Compl. ¶ 7; Haverty Aff. at 2.) Defendant did not obtain a license to exhibit the Program from plaintiff.
On May 2, 2009, plaintiff's investigator, Jessica Haverty, entered Victoria's Mexican Food and observed the unauthorized broadcast of a portion of the Program on one nineteen-inch television and also on a projected image on a large pull down screen. (Haverty Aff. at 2.) Haverty's affidavit approximates Victoria's Mexican Food's seating capacity at 72 people, and states that Haverty observed approximately 75 patrons inside the subject establishment and approximately 15 people standing outside the doorway watching the Program. (Id.)
On April 30, 2010, plaintiff filed this action alleging that defendant unlawfully intercepted and intentionally broadcast the Program at Victoria's Mexican Food for the purpose of direct or indirect commercial advantage and/or private financial gain. (See generally Pl.'s Compl.) Plaintiff alleges four claims for relief, which are labeled as "Counts" in the complaint. Plaintiff's first claim for relief alleges that defendants engaged in the unauthorized publication or use of communications in violation of the Federal Communications Act of 1934, 47 U.S.C. §§ 605 et seq.*fn3 (Pl.'s Compl. ¶¶ 8-17.) The second claim alleges that defendant engaged in the unauthorized interception, reception, divulgence, display, and exhibition of the Program in violation of 47 U.S.C. §§ 553 et seq.*fn4 (Pl.'s Compl. ¶¶ 18-22.) Plaintiff's third claim alleges a common law claim of conversion. (Id. ¶¶ 23-26.) The fourth claim for relief alleges a violation of California Business and Professions Code §§ 17200 et seq. (Pl.'s Compl. ¶¶ 28-37.)
A declaration of service filed with the court demonstrates that defendant was properly served through substituted service on July 16, 2010. (Dkt. No. 5.) On August 11, 2009, the Clerk of this Court entered a certificate of entry of default against defendant. (Dkt. No. 8.) On December 16, 2010, plaintiff filed the motion for default judgment that is presently before the court and which was served on defendant. (Dkt. No. 11.) The application seeks judgment on plaintiff's claims for violation of 47 U.S.C. § 605 and 47 U.S.C. § 553, and for common law conversion.*fn5 Plaintiff requests judgment in the amount of $111,600.*fn6 No response to the motion has been filed.
Pursuant to Federal Rule of Civil Procedure 55, default may be entered against a party against whom a judgment for affirmative relief is sought who fails to plead or otherwise defend against the action. See Fed. R. Civ. P. 55(a). However, "[a] defendant's default does not automatically entitle the plaintiff to a court-ordered judgment." PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002) (citing Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986)); see Fed. R. Civ. P. 55(b) (governing the entry of default judgments). Instead, the decision to grant or deny an application for default judgment lies within the district court's sound discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In making this determination, the court may consider the following factors:
(1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff's substantive claim; (3) the sufficiency of the complaint;
(4) the sum of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.
Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Default judgments are ordinarily disfavored. Id. at 1472.
As a general rule, once default is entered, well-pleaded factual allegations in the operative complaint are taken as true, except for those allegations relating to damages. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (per curiam) (citing Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977) (per curiam)); see also Fair Housing of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). Although well-pleaded allegations in the complaint are admitted by a defendant's failure to respond, "necessary facts not contained in the pleadings, and claims which are legally insufficient, are notestablished by default." Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)); accord DIRECTV, Inc. v. Huynh, 503 F.3d 847, 854 (9th Cir. 2007) ("[A] defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law" (citation and quotation marks omitted).); Abney v. Alameida, 334 F. Supp. 2d 1221, 1235 (S.D. Cal. 2004) ("[A] default judgment may not be entered on a legally insufficient claim."). A party's default conclusively establishes that party's liability, although it does ...