Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-01381/USCOURTS-casd-3_09-cv-01381-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed Question: Fed Communications Act of 1934

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

J & J SPORTS PRODUCTIONS, Inc.,

Plaintiff,

CASE NO. 09cv1381 WQH (CAB)

ORDER

vs.

EMILIA CARVAJAL PEREZ, et al.,

Defendants.

HAYES, Judge:

The matters before the Court are the Motion for Default Judgment (Doc. # 10) filed by

Plaintiff J & J Sports Productions Inc. (“J & J Sports”) and the Amended Motion to Set Aside

Default (Doc. # 21) filed by Defendants Emilia Carvajal Perez and Jose Alfredo Perez.

BACKGROUND

On June 25, 2009, J& J Sports initiated this action by filing a complaint. (Doc. # 1).

 The complaint alleges Defendants own a restaurant called Mariscos Ensenada located in

Oceanside, California. Id. at 3. The complaint alleges J & J Sports held exclusive nationwide

commercial distribution rights to “Lethal Combination: Manny Pacquiao v. David Diaz WBC

Lightweight Championship Fight Program” (“the Program”) broadcast on June 28, 2008. Id.

The complaint alleges that Defendants’ restaurant unlawfully intercepted the broadcast and

showed the Program to customers. Id. at 4. The complaint alleges the unauthorized screening

of the Program was intentional and done for commercial advantage and financial gain. Id. The

complaint alleges claims for: (1) violation of 47 U.S.C. § 605; (2) violation of 47 U.S.C. § 553;

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(3) conversion; and (4) violation of California Business & Professions Code § 17200, et seq.

Id. at 4-8. The complaint seeks injunctive relief, $170,000 in statutory damages, exemplatory

damages, punitive damages, restitution, compensatory damages, attorneys’ fees, and costs. Id.

at 9-10.

On June 25, 2009, the Clerk of the Court issued a summons to Defendants. (Doc. # 2).

On July 21, 2009, the summons was returned executed. (Docs. # 4, 5). An answer was due

by August 3, 2009. Id. No answer was filed. On August 4, 2009, J & J Sports requested entry

of Clerk Default against Jose Perez. (Doc. # 6). On August 5, 2009, the Clerk of the Court

entered default against Jose Perez. (Doc. # 7). On August 18, 2009, J & J Sports requested

entry of Clerk Default against Emilia Perez. (Doc. # 8). On August 19, 2009, the Clerk of the

Court entered Default against Emilia Perez. (Doc. # 9). On October 8, 2009, J & J Sports

moved for default judgment. (Doc. # 10).

On November 6, 2009, Defendants filed a Motion to Set Aside Clerk’s Default. (Doc.

# 20). On November 16, 2009, Defendants filed their Amended Motion to Set Aside Clerk’s

Default. (Doc. # 21). On December 4, 2009, J & J Sports filed an amended proof of service

and a second amended proof of service. (Docs. 22, 23).

ANALYSIS

I. Amended Motion to Set Aside Clerk’s Default

A. Contentions of the Parties

Defendants contend that they were not aware of the pending lawsuit until mid-October

of 2009, when they immediately sought legal counsel. (Doc. # 21-1 at 2). Defendants contend

that the service of process was defective and that they were not actually served. Id.

Defendants contend that the proof of service as to Jose Perez states he was served at the

restaurant on Monday July 13, 2009, at 10:35 AM, but he only works from about 7 AM to 8

AM on Mondays because Defendants are semi-retired. Id. Defendants contend the proof of

service as to Emilia Perez is internally inconsistent as to where and how she was served,

casting doubt on its validity. Id. Defendants contend that they also failed to receive a mailed

copy of the lawsuit due to negligent mail handling at the restaurant. Id. 

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Defendants contend that they have a meritorious defense to the allegations of the

complaint. Id. at 8. Defendants contend that they subscribe to a Mexican satellite television

network called “Sky TV Mexico,” which broadcasts Mexican television programs in the

United States. Id. Defendants contend that the Program was broadcast on Sky TV Mexico

and shown in their restaurant by simply turning on the television and selecting that channel.

Id. Defendants contend that there will be no prejudice to J & J Sports if the default is set

aside. Id. at 9. Defendants attached the sworn declarations of Emilia Perez, Jose Perez, and

their attorney, Sergio Feria, in support of their motion as well as their proposed answer to the

complaint. (Docs. # 21-2, 21-3, 21-4, and 21-5). 

J & J Sports contends that Defendants have failed to show good cause for setting aside

the Clerk’s Default. (Doc. # 24 at 3-4). J & J Sports contends Defendants’ statements do not

show that they were not properly served and that at most, they are able to show “technical

discrepancies” in the proof of service as to Emilia Perez. Id. at 5. J & J Sports contends that

Defendants defense to the allegations in the complaint is not meritorious because even if

Defendants did receive the broadcast from Sky TV Mexico, showing it in the restaurant would

violate J &J Sports’s licensing rights. Id. at 7. J &J Sports further contends that it would be

prejudiced if the default were set aside because “Defendants are intimately intertwined”

resulting in “a possibility of fraud or collusion” and because “Defendants admittedly to having

[sic] little to do with the day to day operations of the business there is a likelihood of loss of

evidence.” Id. at 9. Finally, J & J sports contends that “even if Defendants were not properly

served, Defendants have not presented a meritorious defense to liability in this case and setting

aside the default would be a waste of judicial time and resources.”

B. Applicable Law

Pursuant to Federal Rule of Civil Procedure 55(c), “[t]he court may set aside an entry

of default for good cause.” A party moving to set aside a clerk’s default has a lower burden

than a party moving to set aside default judgment. “Any of the reasons sufficient to justify the

vacation of a default judgment under Rule 60(b) normally will justify relief from a default

entry and in various situations a default entry may be set aside for reasons that would not be

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enough to open a default judgment.” Charles Alan Wright, Arthur R. Miller, and Mary Kay

Kane, 10A Federal Practice and Procedure § 2696 (3d ed. 1998). Pursuant to Federal Rule of

Civil Procedure 60(b)(1), a court may set aside a judgment “for the following reasons: mistake,

inadvertence, surprise, or excusable neglect.” The grounds listed in Rule 60(b) “are liberally

interpreted when used on a motion for relief from an entry of default.” Hawaii Carpenters’

Trust Funds v. Stone, 749 F.2d 508, 513 (9th Cir. 1986). “The different treatment of default

entry and judgment by Rule 55(c) frees a court considering a motion to set aside a default entry

from the restraint of Rule 60(b) and entrusts determination to the discretion of the court.” Id.

A district court is “free to deny the motion ‘if any of the three factors’” identified by the Ninth

Circuit in American Association of Naturopathic Physicians v. Hayhurst favor denial: “(1)

whether [Defendants] engaged in culpable conduct that led to the default; (2) whether

[Defendants] had a meritorious defense; or (3) whether reopening the default judgment would

prejudice [Plaintiff.]” Franchise Holding II, LLC v. Huntington Rest.’s Group, 375 F.3d 922,

926 (9th Cir. 2004) (citing American Ass’n of Naturopathic Physicians v. Hayhurst, 227 F.3d

1104, 1109 (9th Cir. 2000)).

C. Ruling of the Court

Defendants have both sworn that they were not served and that they did not receive

notice of the lawsuit until mid-October of 2009. (Docs. # 21-2, 21-3). The defects in the proof

of service submitted as to Emilia Perez support her assertion that she never received service.

(Docs. # 5, 22, 23). The three proofs of service filed in this case are internally contradictory

and inconsistent with each other. The original proof of service states that Emilia Perez was

served at 1405 South El Camio Real, Suite 108B, Oceanside, California 92054, the address for

the restaurant. (Doc. # 5 at 1). The proof of service also states that the server was unable to

contact Emilia Perez at her residence because she was “not home.” Id. at 2. The proof of

service states service was attempted four times at the residence before “substituted service”

was performed at the residence. The manner of service is “substitute service” via serving a

“John Doe” co-occupant who refused to give his name. Id. at 1. The co-occupant of the

residence is described as approximately 30 years old, weighs 180 pounds, and is Hispanic. Id.

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at 1. However, the same form states “Residence address was not known at the time of

service.” Id. at 2. The “Amended” proof of service filed December 4, 2009, states that service

was accomplished at Emilia Perez’s residence by serving the same “John Doe” who is listed

as a “co-occupant.” (Doc. # 22 at 1-2). This proof of service lists the restaurant’s address as

the residence address and states “Business address was not known at the time of service.” Id.

at 2. Finally, the “Second Amended” proof of service filed December 4, 2009, states that

Emilia Perez was served at her business address, that the residential address was not known,

and lists the same “John Doe” not as a “co-occupant” but as the “Person in charge.” (Doc. #

23). Defendants have come forward with credible evidence that they were unaware of the

lawsuit. The Court finds that Defendants did not engage in any “culpable conduct” that

resulted in their default.

Defendants stated that they subscribe to a satellite television service from Mexico which

broadcast the Program and have provided bills from that service to support their claim. (Docs.

21-2, Ex. 1, 21-3, Ex. 1). Such evidence is relevant to establish whether showing the Program

was unauthorized pursuant to 47 U.S.C. § 605 and 47 U.S.C. § 553; whether it was “unlawful,

unfair or fraudulent” pursuant to California Business & Professional Code § 17200; and

whether it was “wrongful” under California tort law on conversions. Even if J & J Sports is

correct that purchasing a satellite broadcast of the Program from another provider within the

United States would still be a violation of 47 U.S.C. § 605 and 47 U.S.C. § 553, this evidence

would be relevant to damages. A “willful” violation of 47 U.S.C. § 605 for “the purposes of

direct or indirect commercial advantage” allows the court to increase the damage award by up

to $100,000 over the damages for an unintentional violation. If a defendant who violates 47

U.S.C. § 553 can establish that he was “not aware and had no reason to be aware that his acts

constituted a violation of this section, the court in its discretion may reduce the award of

damages, whether actual or statutory, to a sum of not less than $100.” Defendants’ evidence

would help to establish that if there was a violation, it was not willful, and that they had no

reason to be aware of any statutory violation. The Court therefore finds that Defendants have

a meritorious defense to the allegations of the complaint.

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J & J Sports contends it has expended time and money in pursuing its claim and there

will be financial loss if the default is set aside. Id. The expense of prosecuting a lawsuit is

not the sort of unfair prejudice that the rule from American Association of Naturopathic

Physicians v. Hayhurst is designed to protect against. J & J Sports would have had to bear the

expense of proceeding with the lawsuit if Defendants had timely filed an answer. Defendants

filed their motion approximately three months after the clerk’s defaults were entered and less

than a month after J & J Sports moved for default judgment. See Docs. # 9, 10, 12. There is

no evidence that this three-month delay will make it any more difficult for J & J Sports to

prove its case. Defendants have therefore shown that J & J Sports will not be subject to

prejudice if the default is set aside. The Court finds that Defendants have established good

cause to set aside the entry of default against them. 

II. Motion for Default Judgment

J & J Sports contends that it is entitled to default judgment because its complaint pleads

all of the elements of the alleged claims and Defendants failed to file an answer or other

responsive pleading on the properly served complaint. (Doc. # 10-1 at 2). Because the Court

has granted Defendants’ motion to set aside the entry of default, J & J Sports’s motion is

moot.

CONCLUSION

IT IS HEREBY ORDERED that Defendants’ Amended Motion to Set Aside Default

(Doc. # 21) is GRANTED. Defendants may file the answer attached to their motion. IT IS

FURTHER ORDERED that Plaintiff’s Motion for Default Judgment (Doc. # 10) is DENIED

AS MOOT. 

DATED: January 20, 2010

WILLIAM Q. HAYES

United States District Judge

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