Opinion
No. CV-19-0376-PHX-DMF
08-22-2019
Joe Hand Promotions Incorporated, Plaintiff, v. Zaid Tarik Alhamedany, Defendant.
REPORT AND RECOMMENDATION
TO THE HONORABLE STEPHEN M. McNAMEE, SENIOR U.S. DISTRICT JUDGE:
Before the Court is Plaintiff Joe Hand Promotions Incorporated's Application for Default Judgment. (Doc. 19) On March 21, 2019, Plaintiff consented to magistrate judge jurisdiction pursuant to 28 U.S.C. 636(c). (Doc. 11) Because Defendant has not appeared or consented to magistrate judge jurisdiction, the Court proceeds by a Report and Recommendation to the Honorable Stephen M. McNamee. For the reasons below, the undersigned recommends that default judgment be entered in favor of Plaintiff and against Defendant, individually as Zaid Tarik Alhamedany and doing business as Babylon Lounge & Café.
See General Order 18-03.
I. BACKGROUND
Plaintiff filed this action on January 25, 2019 against Defendant Zaid Tarik Alhamedany, an individual, and doing business as ("d/b/a") Babylon Lounge & Café. (Doc. 1 at ¶ 2) Defendant Zaid Tarik Alhamedany was personally served by a private process server on March 18, 2019. (Doc. 10) Because Defendant failed to answer, appear, or otherwise respond to the Complaint, Plaintiff applied for entry of default. (Doc. 15) The Clerk of Court entered default against Defendant on May 2, 2019. (Doc. 17)
According to the Complaint, Plaintiff is a Pennsylvania corporation with exclusive rights to domestically distribute and license Ultimate Fighting Championship programs to commercial establishments. (Doc. 1 at ¶¶ 1, 6) The Complaint alleges that Plaintiff "held the exclusive commercial distribution rights to the broadcast of Ultimate Fighting Championship 217: Bisping v. St.-Pierre, including all undercard bouts and commentary" ("the Program") televised on November 4, 2017. (Doc. 1 at ¶ 1) Plaintiff "entered into subsequent agreements with various commercial establishments in the State of Arizona that, in exchange for a fee, allowed them to exhibit the Program to their patrons." (Doc. 1 at ¶ 8)
Plaintiff alleges that Defendant did not contract with or pay a fee to Plaintiff and therefore unlawfully intercepted the Program to exhibit to patrons at Defendant's commercial establishment, Babylon Lounge & Café (the "Establishment"). (Doc. 1 at ¶¶ 9-10) More particularly, Plaintiff alleged that "[b]y unauthorized satellite transmission or, alternatively, by unauthorized receipt over a cable system, Defendant willfully intercepted or received the interstate communication of the Program or assisted in such actions." (Doc. 1 at ¶ 10) Plaintiff further alleges that "Defendant then unlawfully transmitted, divulged and published said communication, or assisted in unlawfully transmitting, divulging and publishing said communication to patrons in the Establishment." (Id.) The Complaint further states that "[w]ithout authorization, license, or permission to do so from Plaintiff, Defendant exhibited the Program to the patrons within the Establishment. (Doc. 1 at ¶ 11)
The Complaint alleges that "Defendant's actions were committed willfully and with the purpose and intent to secure a commercial advantage and private financial gain." (Doc. 1 at ¶ 12) Further, "[a]t the time of the wrongful conduct described herein, Defendant's agents, servants and employees were in fact Defendant's agents, servants and employees, and acting within the scope of their employment and authority as Defendant's agents, servants and employees." (Doc. 1 at ¶ 13).
The Complaint alleges that by pirating the Program, Defendant violated 47 U.S.C. § 605 or, alternatively, the Communications Act of 1934, as amended, 47 U.S.C. § 553. (Doc. 1 at ¶ 15-16) The Complaint seeks "statutory damages, in the discretion of this Court, of up to the maximum amount of $110,000.00 for the willful violation of 47 U.S.C. § 605, or alternatively, for statutory damages, in the discretion of this Court of up to the maximum amount of $60,000.00 for the willful violation of 47 U.S.C. § 553" as well as "Plaintiff's attorney's fees, interest, and costs of suit pursuant to 47 U.S.C. § 605(e)(3)(B)(iii) or, alternatively, pursuant to § 553(c)(2)(C)." (Doc. 1 at 4-5)
As noted above and reflected in the filed proof of service, Defendant Alhamedany was personally served by a private process server on March 18, 2019. (Doc. 10) Despite personal service, Plaintiff's counsel avowed in support of entry of default that not only had an answer not been filed, but also that "[n]either the Defendant nor anyone claiming to represent the defendant has contacted anyone at [Plaintiff counsel's law firm] to request an extension to respond to [the] Complaint." (Doc. 15 at 4)
Approximately one and a half months after the entry of default by the Clerk of Court (Doc. 17), the Court ordered Plaintiff to either show cause for non-dismissal for failure to prosecute or move for default judgment (Doc. 18). On July 11, 2019, Plaintiff timely filed the instant Motion for Default Judgment. (Docs. 19, including attachments 19-1 through 19-8). Also on July 11, 2019, Plaintiff sent to Defendant by First Class US Mail a copy of Plaintiff's Motion for Default Judgment. (Doc. 19 at 4)
Plaintiff's Motion for Default Judgment seeks statutory damages of $10,000.00 under 47 U.S.C. § 605(e)(3)(C)(i)(II). (Doc. 19-1 at 6-9) Plaintiff also seeks enhanced damages of $20,000.00 under 47 U.S.C. § 605(e)(3)(c)(ii). Such enhanced damages may be up to $100,000 and are appropriate when the violation was willful and committed for the direct or indirect commercial advantage or for private financial gain. (Doc. 19-1 at 9-12)
In addition to damages, Plaintiff seeks costs of $465.00. (Doc. 19-1 at 15) Yet, Plaintiff has not filed a Bill of Costs as required under Federal Rule of Civil Procedure 54(d)(1) and LRCiv 54.1. Plaintiff also seeks leave to file application for attorneys' fees (Doc. 19-1 at 15)
Plaintiff's Motion for Default Judgment neither differs in kind from nor exceeds in amount the relief prayed for in the Complaint, complying with Fed. R. Civ. P. 54(c). Plaintiff has satisfied the procedural requirements for default judgment pursuant to Fed. R. Civ. P. 55(b).
II. LEGAL STANDARD
Because Defendant's default has been properly entered pursuant to Rule 55(a), the Court has discretion to grant default judgment against Defendant under Rule 55(b). See Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Under Rule 55(b), either the Clerk or the Court may enter default judgment. Entry by the Clerk is proper when the amount of damages is "for a sum certain or a sum that can be made certain by computation." Fed. R. Civ. P. 55(b)(1). Entry by the Court is proper "[i]n all other cases." Fed. R. Civ. P. 55(b)(2). Plaintiff seeks entry of Default Judgment by the Court under Rule 55(b)(2). (Doc. 19 at 1)
When the Court considers the entry of default judgment, the well-pleaded "factual allegations of the complaint, except those relating to the amount of damages, will be taken as true." Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977) (citing Pope v. United States, 323 U.S. 1, 12 (1944)); see TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987).
The Court considers the following factors when deciding whether to grant default judgment: (1) the possibility of prejudice to the plaintiff, (2) the merits of the claims, (3) the sufficiency of the complaint, (4) the amount of money at stake, (5) the possibility of a dispute concerning material facts, (6) whether default was due to excusable neglect, and (7) the policy favoring a decision on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).
III. ANALYSIS
Having considered Plaintiff's Motion (Doc. 19), including the supporting Memorandum of Points and Authorities (Doc. 19-1) as well as the other exhibits (Doc. 19-2 through 19-8), and having reviewed the well-pled factual allegations in the Complaint (Doc. 1), the undersigned concludes that default judgment is appropriate in this case, although Plaintiff's proposed form of order (Doc. 19-8) is not recommended.
The proposed form of judgment includes relief beyond that which is requested in the Complaint, such as the following: "That Plaintiff, in the event Defendant fails to voluntarily pay the judgment, is entitled to reasonable attorneys' fees for post-trial and appellate services." (Doc. 19-8 at 2)
A. Motion for Default Judgment
In its Motion for Default Judgment, Plaintiff does not specifically address the Eitel factors. The undersigned considers these factors in reviewing Plaintiff's claim for damages arising from Defendant's alleged violation of 47 U.S.C. § 605.
1. Possible prejudice to Plaintiff
Plaintiff served Defendant over four months ago. (Doc. 10) Defendant has not answered, appeared, or otherwise responded to the Complaint. (Docs. 17, 19) If Plaintiff's Motion for Default Judgment is not granted, Plaintiff "will likely be without other recourse for recovery." PepsiCo, Inc. v. Cal. Sec. Cans, 238 F.Supp.2d, 1172, 1177 (C.D. Cal. 2002). The first Eitel factor therefore weighs in favor of granting default judgment.
2. The merits of the claim and sufficiency of the Complaint
When analyzing the Eitel factors, "the merits of plaintiff's substantive claims and the sufficiency of the complaint are often analyzed together." Dr. JKL Ltd. v. HPC IT Educ. Ctr., 749 F.Supp.2d 1038, 1048 (N.D. Cal. 2010). The second and third Eitel factors favor a default judgment where the complaint states a claim for relief. See Cal. Sec. Cans, 238 F.Supp.2d at 1175.
47 U.S.C. § 605(a) states that "no person not being authorized by the sender shall intercept any radio communication and divulge or publish" the communication, nor shall any person publish the communication "for his own benefit or for the benefit of another not entitled thereto." 47 U.S.C. § 605(a). Plaintiff alleges a violation of 47 U.S.C. § 605 because Defendant did not contract with or pay Plaintiff to exhibit the Program. (Doc. 1 at ¶ 9) Additionally, Plaintiff alleges that Defendant willfully and unlawfully intercepted and exhibited the Program to patrons for commercial advantage and financial gain, infringing on Plaintiff's exclusive rights to license exhibition of the Program. (Id. at ¶¶ 10-12) In addition to the well plead factual allegations in the Complaint, the allegations are supported by an investigator's affidavit submitted with the Motion for Default. (Doc. 19-5) Plaintiff has sufficiently pled a claim for violation of 47 U.S.C. § 605 and has stated a plausible claim for relief.
3. The amount of money at stake
A court considers "the amount of money at stake in relation to the seriousness of [the defendant's] conduct." Cal. Sec. Cans, 238 F.Supp.2d at 1176-77. When the amount "of money at stake is completely disproportionate or inappropriate, default judgment is disfavored." Twentieth Century Fox Film Corp. v. Streeter, 438 F.Supp.2d 1065, 1071 (D. Ariz. 2006).
Although Plaintiff claims Defendant is liable under both 47 U.S.C. §§ 553 and 605, a plaintiff may only recover damages under one section. Kingvision Pay-Per-View Corp., LTD v. Wright, 2006 WL 4756450 at *2 (M.D. Fla. 2006). Here, Plaintiff chooses to claim damages under § 605 (Doc. 19-1 at 5), which allows statutory damages of no less than $1,000.00 and up to $10,000.00 for each violation. 47 U.S.C. § 605(e)(3)(C)(i)(II). The statute additionally permits additional damages of up to $100,000.00 for each violation "committed willfully and for purposes of direct or indirect commercial advantage." 47 U.S.C. § 605(e)(3)(C)(ii).
Here, Plaintiff requests statutory damages of $10,000.00 under § 605(e)(3)(C)(i)(II) and $20,000.00 in enhanced damages under § 605(e)(3)(C)(ii). (Doc. 19-1 at 9, 12) Plaintiff also claims court filing fees of $465.00. (Docs. 19-1 at 15, 19-6 at 2) Plaintiff's Memorandum of Points and Authorities cites to several recent cases in this district that have awarded identical monetary damages for violations of § 605:
Plaintiff believes damages in the amounts of $10,000.00 under § 605(e)(3)(C)(i)(II) and $20,000.00 under § 605(e)(3)(C)(ii) adequately compensates Plaintiff for its damages, penalizes Defendant for his illegal conduct, upholds the statutory intent of deterrence, and aligns with recent damage awards in this Court. See J & J Sports Prods., Inc. v. Arvizu, C.A. No. 2:17-cv-4055-GMS, Doc. No. 17 (D. Ariz. May 24, 2018) (awarding $10,000 in statutory damages and $20,000 in enhanced damages); J & J Sports Prods., Inc. v. Arvizu, 2018 WL 905139, at *3 (D. Ariz. Feb. 15, 2018) (awarding $10,000 in statutory damages and $20,000 in enhanced damages); J & J Sports Prods., Inc. v. Meza-Jimenez, 2018 WL 317288, at *3 (D. Ariz. Jan. 8, 2018) (awarding $10,000 in statutory damages and $20,000 in enhanced damages). For these reasons, Plaintiff believes a total award of $30,000.00 is reasonable under the circumstances of this case.(Doc. 19-1 at 12-13). In the cases cited in Plaintiff's Memorandum, the commercial establishments displayed the infringing programs on one to two televisions and had estimated capacities of 35-55 persons.
Plaintiff's Motion for Default Judgment makes persuasive arguments supporting its damages request. (Doc. 19-1 at 6-13) Further, and noteworthy on damages, is an affidavit attached to Plaintiff's Motion for Default Judgment in which Plaintiff's investigator avows that she visited the Establishment on November 4, 2017. (Doc. 19-5 at 1-2) The investigator observed that the Program was shown on three televisions. (Id.) The investigator estimated the Establishment's capacity to be 30 persons, and the investigator did not pay an entry fee. (Id.) Particularly significant to willfulness and conduct for commercial advantage, the investigator noted that less than two hours before she observed the Program aired at the Establishment, the Facebook page of the Establishment had posted a video stating "UFC on live." (Id.)
The sum of money at stake is not "completely disproportionate" and the sum falls within the statutory limits of § 605(e): the requested $10,000.00 is the statutory limit, and the requested $20,000.00 in enhanced damages is one fifth of the statutory limit of $100,000.00. 47 U.S.C. § 605(e)(3)(C). The Court concludes that this Eitel factor weighs in favor of entry of default judgment.
4. Possible dispute concerning material facts
Given the factual sufficiency of the Complaint and entry of default for Defendant, "no genuine dispute of material facts would preclude granting [Plaintiff's] motion." Cal. Sec. Cans, 238 F.Supp.2d at 1177. When default is entered, "all well-pleaded facts in the complaint are taken as true, except those relating to damages." Dr. JKL Ltd., 749 F.Supp.2d at 1051. As noted above, Plaintiff has sufficiently alleged a cause of action against Defendant, including willful conduct for commercial advantage or financial gain. Defendant has not appeared or answered Plaintiff's Complaint. Therefore, given the absence of any dispute over material facts, this factor favors the entry of default judgment.
5. Whether default was due to excusable neglect
Defendant was properly served with the Summons and Complaint in person on March 18, 2019 (Doc. 10), and on July 11, 2019, Defendant was served by First Class US Mail with a copy of Plaintiff's Motion for Default Judgment (Doc. 19 at 4). In Plaintiff's application for default, counsel for Plaintiff avowed that "[n]either the Defendant nor anyone claiming to represent the defendant has contacted anyone at [Plaintiff counsel's law firm]." (Doc. 15 at 4) The Defendant has not otherwise responded or appeared in the case. (Doc. 19 at 2) Under the circumstances in this case, it is unlikely that Defendant's "failure to answer and the resulting default was a result of excusable neglect." See Streeter, 438 F.Supp.2d at 1072 (citing Cf. Shanghai Automation Instrument Co., Ltd. v. Kuei, 194 F.Supp.2d 995, 1005 (N.D. Cal. 2001)).
6. Policy favoring a decision on the merits
Although "cases should be decided upon their merits whenever reasonably possible," Eitel, 782 F.2d at 1472, the mere existence of Rule 55(b) "indicates that this preference, standing alone, is not dispositive." Cal. Sec. Cans, 238 F.Supp.2d at 1177 (citation omitted). Defendant's failure to respond to the Complaint or participate in this action "makes a decision on the merits impractical, if not impossible." Id. This factor therefore supports an entry of default judgment against Defendant.
7. Conclusion
The undersigned's analysis of the Eitel factors strongly supports a recommendation that default judgment be granted in Plaintiff's favor as set forth below.
Accordingly,
IT IS RECOMMENDED that Plaintiff's Motion for Default Judgment for the violation of 47 U.S.C. § 605 (Doc. 19) be GRANTED as set forth herein.
IT IS FURTHER RECOMMENDED that final Judgment be entered in favor of Plaintiff and against Defendant Zaid Tarik Alhamedany d/b/a Babylon Lounge & Café as follows:
1. For damages in the amount of $30,000.
2. For costs incurred in this matter.
3. For reasonable attorneys' fees to be determined by the Court.
4. For post-judgment interest pursuant to 28 U.S.C. § 1961.
IT IS FURTHER RECOMMENDED that a bill of costs and any motion for attorneys' fees and supporting affidavits be filed by Plaintiff no later than fourteen (14) days of entry of Judgment.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of the District Court's judgment.
Pursuant to Rule 72(b), Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from the date of service of a copy of this Report and Recommendation within which to file specific written objections with the Court. Thereafter, the parties have fourteen (14) days within which to file a response to the objections. Pursuant to Rule 7.2, Local Rules of Civil Procedure for the United States District Court for the District of Arizona, objections to the Report and Recommendation may not exceed seventeen (17) pages in length. Failure to timely file objections to any factual or legal determinations of the Magistrate Judge will be considered a waiver of a party's right to de novo appellate consideration of the issues. See United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc). Failure to timely file objections to any factual or legal determinations of the Magistrate Judge will constitute a waiver of a party's right to appellate review of the findings of fact and conclusions of law in an order or judgment entered pursuant to the recommendations of the Magistrate Judge.
Dated this 22nd day of August, 2019.
/s/_________
Honorable Deborah M. Fine
United States Magistrate Judge