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Joe Hand Promotions, Inc. v. Hetemi

United States District Court, D. Idaho

June 6, 2017

JOE HAND PROMOTIONS, INC., Plaintiff,
v.
AFRIM HETEMI, Defendants.

          MEMORANDUM DECISION AND ORDER

          HONORABLE CANDY W. DALE UNITED STATES MAGISTRATE JUDGE.

         INTRODUCTION

         Before the Court in the above-entitled matter is the Plaintiff's Motion for Default Judgment as to the Defendants Afrim Hetemi and Burhan Hetemi, individually, and as officers, directors, shareholders or principals of Bumpin' Bernies a/k/a 3D Nightclub (“Defendants”). (Dkt. 15.) Having fully reviewed the record, the Court finds the facts and legal arguments are adequately presented in the briefs and record. Accordingly, in the interest of avoiding delay, and because the Court conclusively finds that the decisional process would not be significantly aided by oral argument, the motion will be decided on the record without oral argument.

         BACKGROUND

         On October 24, 2016, Plaintiff filed its complaint in this matter against Defendants. Plaintiff is a Pennsylvania corporation that specializes in distributing and licensing premier sporting events to commercial locations such as bars, restaurants, lounges, clubhouses and similar establishments. Defendants Afrim and Burhan Hetemi operate Bumpin' Bernies, also known as the 3D Nightclub, in Twin Falls, Idaho. Since 2001, Plaintiff has been the exclusive domestic distributor for the world's premier mixed martial arts promotion company, the Ultimate Fighting Championship®. By contract, Plaintiff held the exclusive commercial exhibition rights to the broadcasts of UFC® 183: Silva v. Diaz, telecast nationwide on January 31, 2015 (“UFC 183 Program”), and UFC® 199: Rockhold v. Bisping 2, telecast nationwide on June 4, 2016 (“UFC 199 Program”) (collectively “Programs”).

         The Programs' broadcast originated via satellite uplink, and was later retransmitted interstate to cable systems and satellite television companies via satellite signal. Plaintiff entered into agreements with various commercial establishments in the State of Idaho that, in exchange for a fee, allowed them to broadcast the Programs to their patrons. The fee is calculated based on the maximum occupancy of the commercial establishment. (Dkt. 15-2 at 2 and 4.) In return, Plaintiff expended funds to market, advertise, promote, administer and transmit the Programs broadcast to those establishments in the State of Idaho.

         Once an establishment paid the sublicense fee and was authorized to broadcast the events, it was provided with electronic decoding equipment and the satellite coordinates necessary to receive the signal. Joe Hand, Jr., explained that, to intercept the broadcasts without obtaining the decoding equipment from Plaintiff, signal pirates must use black boxes, smartcards, or other means of interception. (Dkt. 15-1 at 5.)

         To ensure no commercial establishment obtained the programming without paying Plaintiff, Plaintiff engages outside independent auditors to identify and visit establishments that it finds are broadcasting the programming without authorization. Plaintiff's outside auditor visited Bumpin' Bernies on January 31, 2015, and noted that it had an approximate capacity of one hundred people, with fifteen patrons present watching the broadcast of the UFC 183 Program on four televisions. Another auditor visited Bumpin' Bernies on June 4, 2016, and estimated an approximate capacity of at least seventy-five patrons, with seventeen patrons present watching the broadcast of the UFC 199 Program on three televisions.

         Defendants did not contract with Plaintiff or pay a fee to Plaintiff to obtain the proper license or authorization to broadcast the Programs at either establishment. At no time did Plaintiff give Defendants license, permission or authority to broadcast the Programs in Bumpin' Bernies. According to the rate sheets for the respective programs, the fee for a commercial establishment for the UFC 183 Program if the establishment had a capacity of 51-100 persons was $1, 100.00. The fee for the UFC 199 Program was $998.00 for a similar occupancy rate.

         Instead of paying the sublicense fee, Plaintiff alleges that Defendants, by unauthorized satellite transmission or, alternatively, by unauthorized receipt over a cable system, willfully intercepted or received the interstate communication of the Programs or assisted in such actions. Defendants then transmitted, divulged and published the communication, or assisted in transmitting, divulging and publishing the communication to patrons in Bumpin' Bernies, without authorization, license, or permission to do so from Plaintiff. Plaintiff contends Defendants pirated Plaintiff's licensed exhibition of the Programs and infringed upon Plaintiff's exclusive rights, while avoiding proper authorization and payment to Plaintiff.

         Plaintiff alleges Defendants' acts constitute violations of the Communications Act of 1934, specifically sections 47 U.S.C. § 605 (prohibiting cable piracy), or alternatively 47 U.S.C. § 553 (prohibiting satellite piracy). The Complaint contends Bumpin' Bernies broadcast the UFC 183 Program on January 31, 2015, and the UFC 199 Program on June 4, 2016. Defendants were served with the Summons and Complaint on November 7, 2016. (Dkt. 7, 8.) On April 21, 2017, Plaintiff sought entry of default, which the Clerk granted on April 24, 2017. This motion followed on May 8, 2017.

         Plaintiff argues it is entitled to damages under 47 U.S.C. § 605, which allows a plaintiff to recover statutory damages of up to $10, 000.00 for each violation. 47 U.S.C. § 605(e)(3)(C)(i)(II). Additionally, Plaintiff seeks additional damages of up to $100, 000.00 per violation, on the grounds that the violations were committed “willfully and for purposes of direct or indirect commercial advantage or private financial gain….” 47 U.S.C. § 605(e)(3)(C)(ii). Plaintiff contends that $5, 000 for each violation of Section 605(e)(3)(c)(i)(II), and $20, 000 for each violation of Section 605(e)(3)(C)(ii), plus costs of $545.42, would compensate it for its losses and adequately deter future conduct. Plaintiff seeks also to collect attorney fees, in an amount to be determined at a later time.

         Defendants have not appeared in this action. Plaintiff, the only party who has appeared, has consented in writing to the jurisdiction of a magistrate judge to enter final orders in this case.[1]

         DISCUSSION

         1. Default Judgment

         Pursuant to Federal Rule of Civil Procedure 55(b)(2), the Court may enter a default judgment where default under Rule 55(a) has been previously entered based upon failure to plead or otherwise defend the action. Fed.R.Civ.P. 55(b). Once a party's default has been entered, the factual allegations of the complaint, except those concerning damages, are deemed to have been admitted by the non-responding party. Fed. R. Civ. Proc. 8(b)(6); see also Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977); Garamendi v. Henin, 683 F.3d 1069, 1080 (9th Cir. 2012). “A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed.R.Civ.P. 54(c).

         A defendant's default does not, however, automatically entitle the plaintiff to a court-ordered default judgment. Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986). The court “must still consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law.” Landstar Ranger, Inc. v. Parth Enterprises, Inc., 725 F.Supp.2d 916, 920 (C.D. Cal. 2010) (citation omitted). “[N]ecessary 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); see also Doe v. Qi, 349 F.Supp.2d 1258, 1272 (N.D. Cal. 2004) (“[Although] the factual allegations of [the] complaint together with other competent evidence submitted by the moving party are normally taken as true ... this Court must still review the facts to insure that the Plaintiffs have properly stated claims for relief.”)). Where the pleadings are insufficient, the Court may require the moving party to produce evidence in support of the motion for default judgment. See TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987).

         Whether default judgment should be entered is within the discretion of the Court. Shanghai Automation Instrument Co. v. Kuei, 194 F.Supp.2d 995, 999 (N.D. Cal. 2001); Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980) (“The district court's decision whether to enter a default judgment is a discretionary one.”). In deciding whether to exercise its discretion to impose judgment by default, the Court is directed to consider the following: (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, 1471B72 (9th Cir. 1986) (citation omitted); see also Landstar, 725 F.Supp.2d at 920.

         A. Possible ...


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