United States District Court, E.D. California
ORDER AND FINDINGS AND RECOMMENDATIONS
KENDALL J. NEWMAN, Magistrate Judge.
Presently before the court is plaintiff Joe Hand Promotions, Inc.'s ("plaintiff") motion for default judgment against defendants Ruben Contreras Machuca and Silvia Ochoa Gomez, both individually and doing business as Centennial Bar and Grill a/k/a Centenial Ranch Sports Bar and Grill (collectively "defendants"). (ECF No. 19.) After defendants failed to file an opposition to the motion in accordance with Local Rule 230(c), the March 27, 2014 hearing was vacated, and the motion was submitted on the record pursuant to Local Rule 230(g). (ECF No. 22.)
For the reasons stated below, the undersigned recommends that plaintiff's motion for default judgment be granted in part, that judgment be entered in plaintiff's favor, and that plaintiff be awarded a total of $4, 850.00 in statutory and compensatory damages.
Plaintiff initiated this action on June 20, 2013, alleging claims under 47 U.S.C. § 605; 47 U.S.C. § 553; and Cal. Bus. & Prof. Code §§ 17200 et seq., in addition to a state law tort claim for conversion. (See generally Complaint, ECF No. 1 ["Compl."].) Defendants are the owners, operators, licensees, permittees, persons in charge, or persons with control of the commercial establishment doing business as Centennial Bar and Grill a/k/a Centenial Ranch Sports Bar and Grill ("Centennial Bar"), which is located at 10408 Franklin Boulevard, in Elk Grove, California. (Compl. ¶¶ 7-8.) Plaintiff was granted by contract "the exclusive nationwide commercial distribution (closed-circuit) rights to Ultimate Fighting Championship 147: Wanderlei Silva v. Rich Franklin, telecast nationwide on Saturday, June 23, 2012" ("Plaintiff's Program"), which included the distribution rights to "all under-card bouts and fight commentary encompassed in the television broadcast of the event." (Id. ¶ 18.)
Plaintiff alleges that on June 23, 2012, defendants either specifically directed the employees of Centennial Bar "to unlawfully intercept and broadcast Plaintiff's Program" at Centennial Bar, or that the actions of Centennial Bar employees are directly imputable to defendants "by virtue of their acknowledged responsibility for the actions of Centennial Bar." (Compl. ¶ 15.) Plaintiff further alleges that "the unlawful broadcast of Plaintiff's Program, as supervised and/or authorized by Defendants... resulted in increased profits for Centennial Bar." (Id. ¶ 16.)
In its complaint, plaintiff requested statutory damages of $110, 000 for defendants' violation of 47 U.S.C. § 605, as well as recovery of all costs and reasonable attorneys' fees. (Compl. at 10.) The complaint further sought statutory damages of $60, 000 for defendants' violation of 47 U.S.C. § 553, as well as recovery of all costs and reasonable attorneys' fees. (Id.) The complaint also sought compensatory, exemplary, and punitive damages; reasonable attorneys' fees; and costs of suit for defendants' tortious conversion of Plaintiff's Program. (Id. at 11.) Finally, the complaint requested restitution, declaratory relief, injunctive relief, attorneys' fees, and costs of suit for defendants' violation of sections 17200 et seq. of the California Business & Professions Code. (Id.)
Plaintiff's complaint and summons were personally served on defendant Machuca on July 23, 2013, at the address of Centennial Bar. (ECF No. 5.) Plaintiff's complaint and summons were served on defendant Gomez on August 5, 2013, by substituted service at the address of Centennial Bar. (ECF No. 6.)
On August 20, 2013, plaintiff filed a request for entry of default against defendant Machuca, which the Clerk of Court entered that same day. (ECF Nos. 7, 8.) Thereafter, on September 23, 2013, plaintiff also filed a request for entry of default against defendant Gomez. (ECF No. 14.) On September 25, 2013, the Clerk of Court entered defendant Gomez's default. (ECF No. 17.)
The instant motion for default judgment against defendants was filed on February 5, 2014. (ECF No. 19.) Despite being served with process and all papers filed in connection with plaintiff's requests for entry of default and motion for default judgment, defendants failed to respond to plaintiff's complaint, plaintiff's requests for entry of default, or plaintiff's motion for default judgment.
II. LEGAL STANDARDS
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)). 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 considers 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)); accord Fair Housing of Marin v. Combs , 285 F.3d 899, 906 (9th Cir. 2002). In addition, 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 not established 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. Hoa Huynh , 503 F.3d 847, 854 (9th Cir. 2007) (stating that a defendant does not admit facts that are not well-pled or conclusions of law); 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, but it does not establish the amount of damages. Geddes , 559 F.2d at 560.
A. Appropriateness of the Entry of Default Judgment Under the Eitel Factors
For the reasons stated below, an evaluation of the Eitel factors supports the ...