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J&J Sports Productions, Inc v. Tu Minh Nguyen

November 6, 2012

J&J SPORTS PRODUCTIONS, INC.,
PLAINTIFF,
v.
TU MINH NGUYEN, ET AL,
DEFENDANT.



The opinion of the court was delivered by: Lucy H. Koh United States District Judge

ORDER GRANTING MOTION FOR DEFAULT JUDGMENT

United States District Court For the Northern District of California

On June 15, 2012, the Clerk of the Court entered default against Defendant Tu Mihn Nguyen a/k/a Tu V. Nguyen, individually and doing business as 2 Lua a/k/a Sao Bien Vietnamese 19 Restaurant ("Defendant" or "Nguyen"), after Defendant failed to appear or otherwise respond to 20 the Summons and Complaint in this case within the time prescribed by the Federal Rules of Civil 21 Procedure. See ECF No. 7. Before this Court is the Motion for Default Judgment filed by J&J 22 Sports Productions, Inc. ("Plaintiff"). See Mot. Default J. ("Mot."), ECF No. 12. Defendant, not 23 having appeared in this action to date, has not opposed the motion. Pursuant to Civil Local Rule 7-24 1(b), the Court finds this matter appropriate for determination without oral argument. Accordingly, 25 the hearing and the case management conference set for November 8, 2012, are VACATED. For 26 the reasons discussed below, Plaintiff's Motion for Default Judgment is GRANTED.

I.BACKGROUND

Plaintiff J&J Sports Productions, Inc. is a distributor of sports and entertainment 3 programming, and alleges that it secured the domestic commercial distribution rights to broadcast 4 "The Manny Pacquiao v. Shane Mosley, WBO Welterweight Championship Fight Program" 5 ("Program"), telecast nationwide on May 7, 2011. See Compl. ¶ 14, ECF No. 1. Plaintiff then 6 entered into sub-licensing agreements with various commercial entities throughout the United 7 States, wherein it granted limited public exhibition rights to these entities in exchange for licensing 8 fees. Mot. at 2. On May 7, 2011, investigator Jeff Kaplan observed the Program being displayed 9 at Defendant's commercial establishment, 2 Lua a/k/a Sao Bien Vietnamese Restaurant, located in 10 San Jose, California. Compl. ¶ 17; Mot. at 2. Plaintiff alleges that Defendant intercepted the 11 Program unlawfully and intentionally exhibited it for the purpose of direct or indirect commercial advantage. Compl. ¶¶ 17--18. 13

On May 4, 2012, Plaintiff filed this action against Defendant for: (1) violating the Federal Communications Act of 1934, as amended, 47 U.S.C. §§ 605, et seq.; (2) violating the Cable and 15 Television Consumer Protection and Competition Act of 1992, as amended, 47 U.S.C. §§ 553, et 16 seq.; (3) conversion; and (4) violating California Business and Professions Code §17200. Plaintiff 17 then served Defendant with a copy of the Summons, Complaint, and related documents on May 22, 18 2012. ECF No. 5. Pursuant to Rule 12(a)(1)(A)(i) of the Federal Rules of Civil Procedure, 19 Defendant was required to file and serve his responsive pleading on Plaintiff no later than June 12, 20 2012. However, Defendant failed to appear and failed to file any responsive pleading. See 21 Supplemental Decl. Thomas P. Riley Supp. Pl.'s Appl. Default J. ("Riley Decl. 2") ¶ 24, ECF No. 22 12-4. On June 15, 2012, pursuant to Plaintiff's request, the Clerk of the Court entered default 23 against Defendant. ECF No. 7. Plaintiff now moves this Court for entry of default judgment 24 pursuant to Rule 55(b) of the Federal Rules of Civil Procedure. ECF No. 12. 25

II.DISCUSSION

A.Default Judgment

When a defendant fails to timely answer a complaint, a plaintiff may move the court for an entry of default judgment. Fed. R. Civ. P. 55(b)(2). The district court's decision whether to enter a default judgment is discretionary. See Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980) (per 2 curiam). The entry of default "does not automatically entitle the plaintiff to a court-ordered 3 judgment." PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002), 4 accord Draper v. Coombs, 792 F.2d 915, 924--25 (9th Cir. 1986). When deciding whether a 5 default judgment is warranted, a court may consider the following factors: 6 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.

(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's Eitel v. McCool, 782 F.2d 1470, 1471--72 (9th Cir. 1986). In general, default judgments are 10 disfavored as "[c]ases should be decided upon the merits whenever reasonably possible." Id. at 1472. 12

Here, many of the Eitel factors favor entry of default judgment. For instance, Plaintiff will 13 be prejudiced if default judgment is not entered. Because Defendant has refused to take part in the 14 litigation, Plaintiff will be denied the right to adjudicate the claims and obtain relief if default 15 judgment is not granted. See PepsiCo, Inc., 238 F. Supp. 2d at 1177. In addition, there is no 16 indication that Defendant's default is due to excusable neglect or that the material facts are subject 17 to dispute since Defendant has not presented a defense or otherwise communicated with the Court. 18 Furthermore, even though strong public policy favors decisions on the merits, see Pena v. Seguros 19 La Comercial, S.A., 770 F.2d 811, 814 (9th Cir. 1985), it does not appear that litigation of the 20 merits will be possible due to Defendant's refusal to litigate. 21 In contrast, the large amount of money that Plaintiff is requesting-maximum statutory 22 damages-weighs against granting an entry of default judgment, particularly because the amount 23 requested appears disproportionate to the harm alleged. See Eitel, 782 F.2d at 1472. Given that the 24 Court may address the reasonableness of Plaintiff's request when deciding the question of 25 damages, however, the Court need not deny default judgment on this basis alone. See, e.g., Joe 26 Hand Promotions, Inc. v. Mujadidi, No. 11-5570, 2012 WL 3537036, at *3 (N.D. Cal. Aug. 14, 27 2012) (noting that a request for maximum possible statutory damages "is not enough on its own to 28 bar a default judgment (at least in this case) as it may be addressed by the Court in deciding what 2 damages should be awarded, assuming that a default judgment is otherwise appropriate."). 3

In addition, the Court finds that Eitel factors two and three, which involve the merits of Plaintiff's substantive claim and the sufficiency of the complaint, warrant closer examination. 5 Although Plaintiff's complaint alleges violations of 47 U.S.C. § 605 and 47 U.S.C. § 553, as well 6 as violations of California's law against conversion and California Business and Professions Code 7 §17200, Plaintiff's pending Motion for Default Judgment only seeks damages under Section 605 8 and for conversion. Compare Compl. at 9--10, with Decl. Thomas P. Riley Supp. Pl.'s Appl. 9 Default J. ("Riley Decl. 1") ¶ 6, ECF No. 12-2. 10 Section 605 of the Federal Communications Act of 1934 "prohibits the unauthorized receipt and use of radio communications for one's 'own benefit or for the benefit of another not entitled thereto.'" DirecTV, Inc. v. Webb, 545 F.3d 837, 844 (9th Cir. 2008) (citing 47 U.S.C. § 605(a)). 13

"[T]he 'communications' protected by § 605(a) include satellite television signals." Id. In contrast, Section 553 of the Cable and Television Consumer Protection and Competition Act of 15 1992 prohibits the unauthorized reception or interception of "any communications service offered 16 over a cable system, unless specifically authorized to do so . . . ." 47 U.S.C. § 553(a)(1) (emphasis 17 added). The maximum statutory damages permitted for each willful violation of Section 605 is 18 $100,000.00, see 47 U.S.C. § 605(e)(3)(C)(ii), whereas the maximum statutory damages permitted 19 for each willful violation of Section 553 is $50,000.00, see 47 U.S.C. § 553(c)(3)(B). Generally, "a 20 plaintiff may not recover under both § 605 and § 553 as it is highly unlikely that a pirate used a 21 satellite dish and a cable box to broadcast a single program simultaneously." Mujadidi, No. 11-22 5570, 2012 WL 3537036, at *3 (internal citations omitted). 23

Here, Plaintiff alleges that Defendant violated Section 605 because, "[w]ith full knowledge 24 that the Program was not to be intercepted . . . displayed, and/or exhibited by commercial entities 25 unauthorized to do so, . . . Defendant . . . did unlawfully intercept . . . display, and/or exhibit the 26 Program at the time of its transmission at his commercial establishment . . . ." Compl. ¶ 17. 27 Notably, Plaintiff fails to allege the means of signal transmission used, which determines whether 28 Plaintiff has sufficiently stated a claim pursuant to either Section 605 or Section 553.*fn1 In such a 2 situation, there appears to be a split of authority regarding whether to apply Section 553 or Section 3 605 in the context of an application for default judgment. Compare J&J Sports Prods., Inc. v 4 Ayala, No. 11-05437, 2012 WL 4097754, at *2 (N.D. Cal. Sept. 17, 2012) ("Because sufficient 5 facts have not been alleged, nor has Plaintiff presented any affidavit evidence of a satellite, the 6 Court holds that 47 U.S.C. § 605 does not apply" and instead "construes this motion as solely 7 seeking damages under § 553"), and Mujadidi, No. 11-5570, 2012 WL 3537036, at *3 (denying 8 Plaintiff's motion for default judgment as to Section 605 but granting it as to Section 553 because, 9 "[i]n the absence of any evidence indicating that a satellite dish was used, the Court [could only] 10 conclude[] that [Plaintiff] . . . established at most interception through use of a cable box.), with G&G Closed Circuit Events, LLC ...


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