Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-02104/USCOURTS-caed-2_07-cv-02104-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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28 This matter was determined to be suitable for decision without *

oral argument. L.R. 78-230(h).

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

J & J SPORTS PRODUCTIONS, INC., )

) 2:07-cv-02104-GEB-DAD

Plaintiff, )

)

v. ) ORDER*

)

JOSE GUADALUPE PRADO, and MARIA )

ELENA PRADO, individually and )

d.b.a. RESTAURANTE DEL PRADO, )

)

Defendants. )

)

 

On January 22, 2008, Defendants Jose Guadalupe Prado and

Maria Elena Prado (“Defendants”) moved to set aside the Default

entered against them on the Complaint by J & J Sports Productions,

Inc. (“Plaintiff”). (Mot., Dkt. No. 9.) Plaintiff opposes the

motion. For the reasons stated, the motion is granted.

BACKGROUND

Plaintiff owns the exclusive television broadcast

distribution rights to the Diego Corrales v. Jose Luis Castillo World

Light Heavyweight Championship Fight Program of October 8, 2005 (“the

Fight”). (Compl. ¶ 10.) Plaintiff entered into sublicensing

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agreements with commercial entities throughout the United States

wherein it granted limited public exhibition rights for the Fight. 

(Id. ¶ 11.) Defendants exhibited a broadcast of the Fight at their

restaurant on October 8, 2005. (Opp’n at 3:25-26.) Defendants’ son,

Javier Prado (“Javier”) declares he ordered the Fight through pay-perview under a Direct TV account in his name for the personal enjoyment

of himself, his family members and acquaintances. (Javier Prado Decl.

at 1:22-28.) Javier paid for the Fight on his next Direct TV bill. 

(Id. at 1:26-28, 2:1-3.) Jason Garner, an investigator for Plaintiff,

witnessed the exhibition of the Fight at Defendants’ restaurant. 

(Opp’n at 3:17-21.) 

Plaintiff filed a Complaint on October 5, 2007 alleging that

Defendants violated the Communications Act of 1934, 47 U.S.C. § 605,

et. seq. (“§ 605"), and the Cable & Television Consumer Protection and

Competition Act of 1992, 47 U.S.C. § 553, et. seq. (“§ 553"), when

they exhibited a broadcast of a pay-per-view fight program at their

restaurant. (Compl. ¶¶ 1, 13, 19.) Plaintiff’s Complaint also

includes a claim for conversion. (Id. ¶ 24.) Defendants were served

on November 29, 2007. (Req. for Entry of Default, Dkt. no. 7, Attach.

No. 2.) Defendants did not timely file an Answer. On January 8,

2008, following Plaintiff’s request, the Clerk of the Court entered

default against Defendants. (Dkt. No. 8.) 

LEGAL STANDARD

“The court may set aside an entry of default for good cause 

. . . .” Fed. R. Civ. P. 55(c). To satisfy the “good cause” standard

the movant must show: 1) excusable neglect; 2) a meritorious defense;

and 3) that setting aside the default will not unfairly prejudice the

other party. Franchise Holding II, LLC v. Huntington Rests. Group,

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Inc. 375 F.3d 922, 925-26 (9th Cir. 2004); Am. Ass’n of Naturopathic

Physicians v. Hayhurst, 227 F.3d 1104, 1108 (9th Cir. 2000). Where

the movant seeks timely relief from a default “and the movant has a

meritorious defense, doubt, if any, should be resolved in favor of the

motion to set aside the [default] so that cases may be decided on

their merits.’” Mendoza v. Wight Vineyard Mgmt., 783 F.2d 941, 945-46

(9th Cir. 1986) (quoting Schwab v. Bullock's Inc., 508 F.2d 353, 355

(9th Cir. 1974)).

DISCUSSION

I. Excusable Neglect

Defendants argue their failure to respond to the Complaint

constitutes excusable neglect because they are “totally ignorant of

the legal system, cannot speak or read English, and had no idea what

they had to do to protect themselves.” (Mot. at 4:13-14.) Defendants

contend that when they received the summons and complaint they “could

not read or understand what had been served on them” because Defendant

Jose Guadalupe Prado “can only speak a few English words and cannot

read English” and Defendant Maria Elena Prado “cannot speak or read

any English.” (Id. at 2:6; 1:19-20.) Defendants’ son, Javier, read

the summons but then called the Eastern District Court and “was told

that the hearing [for this action] had been continued to March 3,

2008.” (Id. at 2:10-12.) March 3, 2008 was the date of the Status

(Pretrial Scheduling) Conference. From this conversation, Defendants

thought they could respond to the Complaint by appearing in Court on

March 3, 2008. (Id. at 2:13-14.) Defendants consulted with an

attorney on January, 8, 2008. (Id. at 2:21-22.) At that time, they

learned that a default had been entered against them. (Id.) 

Plaintiff rejoins that Defendants are “neither ignorant of the legal

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system, nor unsophisticated in any way” and “knew fully the lawsuit

was coming [because of] the extensive number of demand letters served

upon them by Plaintiff’s counsel.” (Opp’n at 5:20-21; 6:10-12.)

[T]he determination [of excusable neglect] is at

bottom an equitable one, taking account of all

relevant circumstances surrounding the omission

[including] the length of the delay and its

potential impact on judicial proceedings, the

reason for the delay, including whether it was

within the reasonable control of the movant, and

whether the movant acted in good faith.

Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S.

380, 395 (1993). No excusable neglect exists when the movant’s

actions leading to the default were culpable; "[i]n this context

culpable conduct means actions taken willfully or in bad faith." 

Gross v. Stereo Component Sys., Inc., 700 F.2d 120, 123-24 (3d Cir.

1983).

Since Defendants cannot read or speak English, they were

unable to read and understand the demand letters and the summons sent

to them. When Defendants asked their son to interpret the papers

served on them, he contacted the Court Clerk and mistakenly thought

his parents were required to appear in court on March 3, 2008. 

Contrary to Plaintiff’s argument that “Defendants clearly made a

tactical decision not to properly respond to Plaintiff’s complaint,”

Defendants did make an effort to find out what they should do to

respond. There is no evidence that Defendants’ failure to respond was

in bad faith. Accordingly, Defendants have established that their

failure to file an Answer with the Court was due to excusable neglect. 

See Dalminter, Inc. v. Jessie Edwards, Inc., 27 F.R.D. 491 (S.D. Tex.

1961) (holding excusable neglect existed when defendant was a layman

not familiar with the Federal Rules and therefore could not have known

that an Answer was required to be filed with the court).

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II. Meritorious Defense

Defendants argue that they have a meritorious defense in

this action because there are factual disputes as to “what

[D]efendants did that was wrong, whether they were willful, whether

they paid for the televised fight through DirectTV, [and] whether they

obtained any financial benefit from watching the fight.” (Mot. at

5:22-24.) Defendants also argue “[e]ither there was an unlawful

interference with a radio transmission which is covered under section

605 or of a cable transmission which is covered under section 553.” 

(Id. at 5:18-20.) Plaintiff argues it would be pointless to set aside

the default because the Defendants “plainly admitted” they exhibited

the Fight through “paying a residential programming provider

(DirecTv), and thereafter broadcasting the [Fight] at their commercial

establishment.” (Opp’n at 9:13-18.)

“[A] party seeking to set aside a default need not prove his

defense by a preponderance of the evidence. Rather, that party only

carries the burden of producing competent evidence that establishes a

factual or legal basis for the tendered defense.” Tri-Cont’l Leasing

Corp., Inc. v. Zimmerman, 485 F. Supp. 495, 497 (N.D. Cal. 1980)

(citing Cent. Operating Co. v. Util. Workers Union of Am., 491 F.2d

245, 252 n.8 (4th Cir. 1974)). “If the complaint contains

contradictory allegations or omits allegations essential to recovery,

a default judgment cannot stand.” Schwarzer, Tashima & Wagstaffe,

Cal. Prac. Guide: Fed. Civ. Pro. Before Trial, § 6:48, (The Rutter

Group 2007) (citing Nishimatsu Const. Co., Ltd. v. Houston Nat. Bank,

515 F.2d 1200 (5th Cir. 1975) (holding complaint was incapable of

supporting default judgment when a letter attached to complaint

contradicted the allegations)). In a motion to set aside a default,

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any doubts as to whether Defendants have a meritorious defense are to

be resolved in their favor. Quaker Valley Sch. Dist. v. Employers

Mut. Liab. Ins. Co. of Wis., 96 F.R.D. 423 (D.C. Pa. 1983). 

Plaintiff’s first claim is for violation of § 605 of the

Communications Act. Section 605 prohibits unauthorized interception

of “any radio communication.” 47 U.S.C. § 605(a). “The term ‘radio’

includes satellite transmissions.” Kingvision Pay Per View, Ltd., v.

Williams, 1 F. Supp. 2d 1481, 1484 (S.D. Ga. 1998). Plaintiff’s

second claim is for violation of § 553 of the Cable & Television

Consumer Protection Act. Section 552 applies to “any communications

service offered over a cable system.” 47 U.S.C. § 553(a)(1). Since 

§ 605 covers satellite communications and § 553 covers cable, guilt

under one statute is a defense to the other. See Kingvision, 1 F.

Supp. 2d at 1484 (holding defendant "can only be liable under § 605

and not § 553"). Therefore, Defendants have satisfied this

requirement. 

III. Unfair Prejudice

Defendants argue that granting the motion will not prejudice

Plaintiff because “the case is only about three months old” and

“[a]llowing [D]efendants relief to file the proposed [A]nswer would

have little or no[] impact on the judicial proceedings . . . .” (Mot.

at 3:26-28, 4:6-7.) Plaintiff rejoins that setting aside the default

“would be wholly inequitable and prejudicial to the Plaintiff at this

juncture.” (Opp’n at 9:1-2.)

"The standard [for unfair prejudice] is whether

[Plaintiff’s] ability to pursue [its] claim will be hindered." Falk

v. Allen, 739 F.2d 461, 463 (9th Cir. 1984). Defendants filed their

motion to set aside the default ten days after it was entered, and the

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delay involved with Defendants’ motion has not interfered with the

scheduling of this action under Rule 16 of the Federal Rules of Civil

Procedure; a Status Order issued on February 25, 2008 fully schedules

this action. Accordingly, Plaintiff has not shown it would be

unfairly prejudiced by an order setting aside the Default.

SUMMARY

For the reasons stated, Defendants’ motion is granted. The

January 8, 2008 entry of Default against Defendants is set aside.

IT IS SO ORDERED.

Dated: March 26, 2008

 

GARLAND E. BURRELL, JR.

United States District Judge

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