United States District Court, E.D. California
ORDER AND FINDINGS AND RECOMMENDATIONS
KENDALL J. NEWMAN, Magistrate Judge.
Presently pending before the court is plaintiffs DISH Network L.L.C. ("DISH Network"), EchoStar Technologies L.L.C. ("EchoStar"), and NagraStar LLC's ("NagraStar") motion for default judgment against defendant Ulises Rios, who is the only named defendant in this action. (ECF No. 8.) Defendant failed to file an opposition to plaintiffs' motion in accordance with Local Rule 230(c). At the February 12, 2015 hearing on the motion, attorney Timothy Frank appeared telephonically on behalf of plaintiffs and defendant failed to appear. Plaintiffs' counsel confirmed that he has not received any communication from defendant.
After carefully considering the written briefing, the court's record, and the applicable law, the court recommends that plaintiffs' motion for default judgment be GRANTED.
The background facts are taken from plaintiffs' complaint, unless otherwise noted. (See Plaintiffs' Complaint, ECF No. 1 ["Compl."].)
Plaintiff DISH Network is "a multi-channel video provider that delivers video, audio, and data services to approximately 14 million customers throughout the United States, Puerto Rico, and the U.S. Virgin Islands via a direct broadcast satellite system." (Compl. ¶ 9.) "DISH Network uses high-powered satellites to broadcast, among other things, movies, sports, and general entertainment services to consumers who have been authorized to receive such services after payment of a subscription fee, or in the case of a pay-per-view movie or event, the purchase price." (Id. ¶ 10.) "DISH Network contracts for and purchases the distribution rights for most of the programming broadcast on the DISH Network platform from providers such as network affiliates, motion picture distributors, pay and specialty broadcasters, cable networks, sports leagues, and other holders of programming rights." (Id. ¶ 11.) According to plaintiffs, the works that DISH Network broadcasts are copyrighted, and DISH Network has the authority of the copyright holders to protect the works from unauthorized reception and viewing. (Id. ¶ 12.) Plaintiff EchoStar "provides receivers, dish antenna, and other digital equipment for the DISH Network system, " whereas "[s]mart cards and other proprietary security technologies that form a conditional access system" are supplied by plaintiff NagraStar. (Id. ¶ 14.)
Plaintiffs allege that "DISH Network programming is digitized, compressed, and scrambled prior to being transmitted...." (Compl. ¶ 13.) Plaintiffs explain the transmission as follows:
The EchoStar Technologies receiver processes an incoming DISH Network satellite signal by locating an encrypted part of the transmission known as the NagraStar entitlement control message and forwards it to the smart card. Provided the subscriber is tuned to a channel he is authorized to watch, the smart card uses its decryption keys to unlock the message, uncovering a NagraStar control word. The control word is then transmitted back to the receiver to decrypt the DISH Network satellite signal. Together, the EchoStar Technologies receiver and NagraStar smart card convert DISH Network's encrypted satellite signal into viewable programming that can be displayed on the attached television of an authorized DISH Network subscriber.
(Id. ¶¶ 17-18.)
Plaintiffs allege that defendant circumvented the system, and received transmissions of "DISH Network's satellite broadcasts of copyrighted television programming without payment of the required subscription fee" by "subscribing to the pirate television service known as NFusion Private Server ("NFPS")." (Compl. ¶ 8.) Plaintiffs explain that, "[t]hrough NFPS, Defendant illegally obtained DISH Network's control words or keys, ' which Defendant then used to decrypt DISH Network's satellite signal and watch DISH Network programming without authorization." (Id.) According to plaintiffs, defendant purchased subscriptions to NFPS from an individual named Francis Philip, who eventually cooperated with DISH Network's investigation, and whose records showed that defendant "purchased subscriptions to NFPS on or about September 14, 2012, November 23, 2012, December 9, 2012, and February 15, 2013." (Id. ¶ 26; see also Declaration of Steven Rogers, ECF No. 8-3 ["Rogers Decl."] ¶¶ 3-6, Exs. 1-9.) With the assistance of a company performing Internet investigation services and computer forensics analysis, plaintiffs also ascertained that defendant made several posts on hosted online discussion forums relating to satellite television piracy, indicating that defendant had been using NFPS to intercept DISH Network programming as early as July 2011, even before purchasing NFPS subscriptions from Philip. (Rogers Decl. ¶¶ 2-3, 6-8, Exs. 9-18.)
Based on the above, plaintiffs commenced this action on October 30, 2014, alleging, inter alia, a claim for violation of the Electronic Communications Privacy Act ("ECPA"), 18 U.S.C. §§ 2511(1)(a) & 2520. (Compl. ¶¶ 38-41.) A proof of service in the record reflects that plaintiffs, through a process server, effectuated service of process on defendant by personally serving defendant on November 8, 2014. (ECF No. 5.) On December 4, 2014, plaintiffs requested that the Clerk of Court enter default against defendant, and on December 8, 2014, the Clerk of Court entered defendant's default. (ECF Nos. 6, 7.) The instant motion for default judgment followed. (ECF No. 8.) Plaintiffs seek $10, 000.00 in statutory damages and a permanent injunction, as discussed further below. (Id.)
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 ...