Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_18-cv-08216/USCOURTS-azd-3_18-cv-08216-2/pdf.json

Nature of Suit Code: 490
Nature of Suit: Cable/ Satellite TV
Cause of Action: 47:0605 Communications Act of 1934

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

G&G Closed Circuit Events LLC,

Plaintiff,

v. 

Luis Espinoza, et al.,

Defendants.

No. CV-18-08216-PCT-JAT

ORDER 

Pending before the Court is Plaintiff G&G Closed Circuit Events LLC’s 

(“Plaintiff”) Motion for Default Judgment. (Doc. 30). The Court now rules on the motion.

I. BACKGROUND

On September 16, 2017, Gennady “GGG” Golovkin and Saul “Canelo” Alvarez 

squared off in a professional boxing match to determine the holder of several championship 

titles in the middleweight division. (Docs. 1 at ¶ 16; 30-1 at 6). Plaintiff, an international 

distributor of sports and entertainment programming, held the exclusive nationwide 

commercial distribution rights to air this match and the associated undercard bouts (the 

“Fights”). (Doc. 1 at ¶ 16). Before the Fights, Plaintiff entered into various sublicensing 

agreements with other entities to allow these entities to publicly exhibit the Fights at their 

commercial establishments. (Doc. 1 at ¶ 17).

Plaintiff alleges that Defendant El Agave LLC (“El Agave”), of which Defendant 

Luis Espinoza (“Espinoza”) is the sole and managing member, owns and operates La Casita 

Family Mexican Restaurant (“La Casita”) in Camp Verde Arizona. (Docs. 1 at ¶ 7; 30-3 at 

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7). Plaintiff contends further that, with full knowledge he was unauthorized to do so,

Espinoza either directed La Casita employees, or personally undertook, to “intentionally 

intercept[] and/or publish” the Fights at La Casita. (Doc. 1 at ¶ 11). Through this conduct, 

Plaintiff alleges that Espinoza and El Agave (collectively, “Defendants”) violated 47 

U.S.C. §§ 553 and 605. (Doc. 1 at 8–11).

Plaintiff filed its complaint in this Court on September 11, 2018, to recover, as 

relevant here, both statutory damages and enhanced statutory damages for Defendants’ 

alleged violation of these statutes. (Doc. 1). After service was completed, (Docs. 9 & 10), 

Espinoza twice moved, unsuccessfully, to dismiss the case against him, (Docs. 13 & 15).

1

The parties then reached a settlement, (Doc. 20), but the case was ultimately reinstated in 

an order setting Defendants’ deadline to answer as July 3, 2019, (Doc. 24). Neither 

Defendant answered and the Clerk of the Court entered default against both on July 9, 

2019. (Doc. 26). Plaintiff and Espinoza (but not El Agave) later attended a fruitless 

settlement conference on August 30, 2019. (Doc. 29). Neither Defendant has moved to set 

aside the default. Plaintiff now moves under Federal Rule of Civil Procedure (“Rule”) 

55(b) for entry of default judgment. (Doc. 30).

II. DEFAULT JUDGMENT

Once the clerk has entered default, a court may, but is not required to, grant default 

judgment under Rule 55(b). Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980) (per 

curiam). In considering whether to enter default judgment, a court may consider 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.

 

1 Although the first motion to dismiss purported to be made in conjunction with El Agave, 

it was made by Espinoza personally. An entity can only appear in federal court through 

licensed counsel, D-Beam Ltd. P’ship v. Roller Derby Skates, Inc., 366 F.3d 972, 973–74 

(9th Cir. 2004); see also Rowland v. Cal. Men’s Colony, Unit II Men’s Advisory Council, 

506 U.S. 194, 202 (1993), which Espinoza is not. As such, El Agave has never appeared.

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Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986). When considering these factors, 

Defendants are deemed to have admitted all well-pleaded allegations in the complaint, 

except those related to damages, but does not admit allegations that do no more than “parrot 

the language” of the relevant statute. DirecTV v. Hoa Huynh, 503 F.3d 847, 854 (9th Cir.

2007); Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977).

A. Possible Prejudice to Plaintiff

A possibility of prejudice exists when failure to enter default judgment denies a

plaintiff judicial resolution of the claims presented or leaves it without other recourse for 

recovery. Elektra Entm’t Grp., Inc. v. Crawford, 226 F.R.D. 388, 392 (C.D. Cal. 2005).

Espinoza has not answered, and El Agave has neither answered nor appeared. Moreover,

Espinoza has already repudiated a settlement agreement that he previously agreed to. (Doc. 

22 at 3). Thus, if Plaintiff’s motion for default judgment is not granted, it will likely be left 

without recourse. Therefore, this factor weighs in favor of granting the motion.

B. Sufficiency of the Complaint and Merits of Plaintiff’s Claims

“The second and third Eitel factors address the substantive merits of the claim and 

the sufficiency of the complaint and are often analyzed together.” Joe Hand Promotions, 

Inc. v. Garcia Pacheco, No. 18-cv-1973-BAS-KSC, 2019 WL 2232957, at *2 (S.D. Cal. 

May 23, 2019). These two factors may favor entering default judgment when, considering 

the complaint and subsequently submitted affidavits, a plaintiff shows a plausible claim for 

relief. Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978); see also J & J Sports 

Prods., Inc. v. Molina, No. CV15-0380 PHX DGC, 2015 WL 4396476, at *1 (D. Ariz. July 

17, 2015) (considering affidavits attached to the motion for default judgment). In its motion 

for default judgment, Plaintiff clarifies that it now seeks relief under § 605 only. (Doc. 30-

1 at 8). Thus, Plaintiff must show that Defendants, “(1) intercepted or aided the interception 

of, and (2) divulged or published, or aided the divulging or publishing of, a communication 

transmitted by [P]laintiff.” Nat’l Subscription Television v. S & H TV, 644 F.2d 820, 826 

(9th Cir. 1981); see also DirecTV, Inc. v. Webb, 545 F.3d 837, 844 (9th Cir. 2008) (applying 

§ 605 to satellite television signals).

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As indicated above, Plaintiff’s complaint generally alleges that Defendants willfully 

intercepted the program and displayed it at La Casita live. Although Plaintiff’s complaint 

seems to do no more than rehearse the elements required to establish liability under § 605

without factual content to provide a plausible basis for its claims—and thus appears to be 

insufficiently pleaded—Plaintiff bolsters these allegations with an affidavit accompanying 

the motion for default judgment in which an investigator attests to observing the Fights 

displayed on two televisions at the restaurant in front of approximately 15 patrons, and that 

one of the televisions had to be rebooted. (Doc. 32 at 2). The affidavit is also accompanied 

by pictures showing a satellite antenna on the roof of the establishment. (Doc. 32 at 4–8). 

Although this Court considers the factual content of the complaint to be rather paltry, courts 

faced with similar facts or allegations have concluded that they are enough to support a 

willful violation of § 605. J & J Sports Prods., Inc. v. Meza Jimenez, No. CV-17-1320-

PHX-DGC, 2018 WL 317288, at *2 (D. Ariz. Jan. 8, 2018); Molina, 2015 WL 4396476, 

at *1; Joe Hand Promotions, Inc. v. Pinkhasov, No. CV 11-20437-PHX-FJM, 2012 WL 

3641451, at *1 (D. Ariz. Aug. 24, 2012); cf. J&J Sports Prods., Inc. v. Brady, 672 F. App’x 

798, 801 (10th Cir. 2016) (explaining that such circumstantial evidence may even justify 

summary judgment on a § 605 claim); J & J Sports Prods., Inc. v. Greathouse, No. CV13-00922-PHX-GMS, 2015 WL 717907, at *3 (D. Ariz. Feb. 19, 2015) (same).2

“[A]n additional layer of analysis is required,” however, before Plaintiff can hold 

Espinoza individually liable. (Doc. 30-1 at 9). Espinoza’s status as the sole member of El 

Agave alone is insufficient to support individual liability; instead, Plaintiff’s allegations 

must show Espinoza (1) “had a right and ability to supervise the infringing activities and 

 

2 To be sure, whether the complaint is sufficiently pleaded is an extremely close call under 

Hao Huynh, where the Ninth Circuit Court of Appeals ruled in an action involving a 

different subsection of § 605 that DirecTV’s allegation “that appellees ‘knowingly 

manufactured, assembled, sold, distributed, or modified an electronic, mechanical or other 

device or equipment knowing, or having reason to know, that the device or equipment is 

used primarily in the assistance of the unauthorized decryption of satellite programing’” 

was no more than a legal conclusion that the defendants were “not held to have admitted 

through default.” Hao Huynh, 503 F.3d at 854. In Hao Huynh, however, there was no 

supporting affidavit attached to the motion for default judgment. With the factual support 

furnished by this affidavit, this Court can conclude that, unlike Hao Huynh, Plaintiff has 

shown a plausible claim for relief. The allegations are not mere legal conclusions, but rather 

are supported by an adequate factual basis—albeit not in the complaint itself.

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(2) had an obvious and direct financial interest in those activities.” G & G Closed Circuit 

Events, LLC v. Miranda, No. 2:13-cv-2436-HRH, 2014 WL 956235, at *4 (D. Ariz. Mar.

12, 2014) (quoting J & J Sports Prods., Inc. v. Walia, No. 10-5136 SC, 2011 WL 902245, 

at *3 (N.D. Cal. Mar. 14, 2011)). The factual allegations in Plaintiff’s complaint, along 

with the documents supporting its motion for default judgment, supply sufficient factual 

content to support a finding that Espinoza is individually liable under this test. Specifically, 

these documents show that Espinoza is not only the sole member of El Agave, but he also 

holds a liquor license for La Casita, that La Casita aired the Fights on two televisions 

without authorization, even rebooting one to continue airing the Fights, and that 

approximately 15 patrons were in La Casita during the investigator’s inspection. This 

suffices to show that Espinoza may be liable for his restaurant’s interception and display

of the Fights. Garcia Pacheco, 2019 WL 2232957, at *3 (explaining that restaurant owners 

are typically liable for unauthorized airings because they have management power over the 

restaurant, and its staff, as well as a vested financial stake in the restaurant’s success (citing 

J & J Sports Prods., Inc. v. Owens, No. 09-cv-1614 JLS-CAB, 2010 WL 11519395, at *2 

(S.D. Cal. Mar. 2, 2010)); see also Joe Hand Promotions, Inc. v. Tickle, No. 4:12-cv-01874, 

2016 WL 393797, at *13 (M.D. Penn. Feb. 2, 2016) (“It is not necessary that Defendant 

violated the law himself or that he was present for the violation.”).

Accordingly, however slightly, these two factors weigh in favor of entering default 

judgment against the Defendants here.

C. Sum at Stake

“Under the fourth Eitel factor, the Court considers the amount of money at stake in 

relation to the seriousness of [Defendant’s] conduct.” Bankers Ins. Co. v. Old W. Bonding 

Co., LLC, No. CV11-1804 PHX DGC, 2012 WL 2912912, at *2 (D. Ariz. July 16, 2012).

When a plaintiff seeks only statutory damages that “consist[] of discretionary awards and 

statutory minimums” this factor may weigh in favor of entering default judgment. Elektra 

Entm’t Grp. Inc., 226 F.R.D. at 393. Because Plaintiff seeks statutory damages, analyzed 

separately below, this factor also weighs in favor of entering default judgment.

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D. Possibility of Disputed Material Facts

Considering the well-pleaded facts in the complaint that are now deemed admitted 

and the factual support furnished by the investigator’s affidavit, “no genuine dispute of 

material facts would preclude granting Plaintiff’s motion.” See Pepsi Co., Inc. v. Cal. Sec. 

Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002).

E. Excusable Neglect

On this record, little possibility exists that Defendants’ default resulted from 

excusable neglect. Defendants were duly served. (Docs. 9 & 10). Moreover, Espinoza—El 

Agave’s sole member—filed two motions to dismiss, (Docs. 11 & 14), and even 

participated in settlement conferences, (Doc. 20), but never answered. Thus, the possibility 

of excusable neglect is especially remote here.

F. Policy Favoring Decision on the Merits

Although it is true that “[c]ases should be decided upon their merits whenever 

reasonably possible,” Eitel, 782 F.2d at 1472, that is made “impractical, if not impossible,” 

when a defendant fails to defend an action, Pepsi Co., Inc., 238 F. Supp. 2d at 1177. Thus, 

this factor does not preclude entering default judgment against Defendants. 

III. DAMAGES

Plaintiff seeks statutory damages under both §§ 47 U.S.C. 605 (e)(3)(C)(i)(II) 

(allowing a party to recover an award of “not less than $1,000 or more than $10,000, as the 

court considers just”), (e)(3)(C)(ii) (authorizing the court to increase the award “by an 

amount of not more than $100,000 for each violation” committed willfully and for 

commercial advantage or financial gain). Plaintiff asks for $7,500 under

§ 605(e)(3)(C)(i)(II) and $25,000 under § 605(e)(3)(C)(ii) for a total award of $32,500. 

(Doc. 30-1 at 11).

Based on the foregoing analysis, Plaintiff is entitled to its sought-after award of 

$7,500 under § 605(e)(3)(C)(i)(II). To reiterate, by defaulting, Defendants admitted they

engaged in an unlicensed display of the Fights on two televisions in La Casita for paying 

customers on the night in question for commercial advantage or financial gain. These facts

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support Plaintiff’s reasonable request for damages under § 605(e)(3)(C)(i)(II). Molina, 

2015 WL 4396476, at *2 (citing cases).

In analyzing Plaintiff’s request for enhanced damages, this Court acknowledges 

“that enhanced damages are desirable in many cases because of their tendency to deter 

future violations.” J & J Sports Prods., Inc. v. Barrio Fiesta of Manila Rest. LLC, No. CV 

11-2216-PHX-JAT, 2012 WL 2919599, at *2 (D. Ariz. July 17, 2012). At the same time,

as this Court reasoned in a previous case, several factors here weigh in favor of a reduced 

award, including that:

[Defendants] did not charge a cover for entry, the restaurant 

was not filled to capacity, and there is no evidence that 

[Defendants have] repeatedly violated this statute, that it 

advertised the [Fights] to draw larger crowds, that it charged a 

premium for food and drinks, or that its earnings were 

significantly larger than usual during the time that the [Fights 

were] displayed.

Id. (quoting Kingvision Pay–Per–View, Ltd. v. Gutierrez, 544 F. Supp. 2d 1179, 1185 (D.

Colo. 2008) (discussing these factors as reducing the size of an enhanced damages award)).

Indeed, because Plaintiff’s investigator approximated only 15 people in a restaurant that 

seats approximately 100 the facts are even less egregious than in Barrio Fiesta, where 

“approximately 110 to 115 people were present.” Id. There, this Court awarded 

approximately $130 per person observed in the restaurant to enhance the award by $15,000. 

Id. Given the far less serious nature of the allegations at issue here, this Court will award 

$100 per person and enhance the award by $1,500. The combined award of $8,500 will 

both compensate Plaintiff and deter future violations.

/ / /

/ / /

/ / /

/ / /

/ / /

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IV. CONCLUSION

Based on the foregoing,

IT IS ORDERED that Plaintiff’s motion for default judgment (Doc. 30) is 

GRANTED. The Clerk of the Court shall enter judgment for Plaintiff G&G Closed Circuit 

Events LLC and against Defendants Luis Espinoza and El Agave LLC in the total amount 

of $8,500 which may be collected from either Defendant.

IT IS FURTHER ORDERED that Plaintiff may submit its motion for attorneys’ fees 

within 14 days of the date of this order; a bill of costs may be filed in accordance with 

LRCiv 54.1.

Dated this 23rd day of January, 2020.

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