Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_03-cv-05670/USCOURTS-caed-1_03-cv-05670-2/pdf.json

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

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

DIRECTV, Inc. )

)

Plaintiff, )

v. )

)

Robert Loomis, et al., )

)

Defendants. )

)

 )

1: 03-CV-5670-REC-SMS

FINDINGS AND RECOMMENDATION RE:

PLAINTIFF’S MOTION FOR DEFAULT

JUDGMENT (DOC. 43)

Plaintiff is proceeding with a civil action in this Court.

The matter has been referred to the Magistrate Judge pursuant to

28 U.S.C. § 636(b) and Local Rule 72-302(c)(19).

I. Procedural History

On May 23, 2003, Plaintiff filed its complaint for damages.

On October 2, 2003, Plaintiff filed a proof of service as to

Defendant Robert Loomis. The proof shows that on September 18,

2003, at 9:20 a.m., the summons and complaint were left with Ron

Roper, a person at least eighteen years of age and apparently the

person in charge of the business at 3999 N. Chestnut Diagonal, 

Number 2357. Copies were mailed, postage prepaid, to Defendant

Loomis at the same address on September 19, 2003. The person

serving the documents was identified and was a registered

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California Process server; the proof was declared to be true

under penalty of perjury and was dated September 19, 2003. The

server executed a declaration of due diligence indicating that

attempts to serve at a superseded address were made on August 16,

2003, and at the new address (a Derrel’s mini-storage facility

where Defendant had a post office box) on six different days in

September 2003. This service is sufficient pursuant to Fed. R.

Civ. P. 4(e)(1) and Cal. Civ. Proc. Code § 415.20(b) (providing

1) for service in lieu of personal delivery by leaving a copy of

the summons and complaint with a person at least eighteen years

of age at one’s usual mailing address other than a United States

Postal Service post office box, with the person apparently in

charge, informing the person of the contents, and thereafter

mailing a copy of the documents by first-class mail, postage,

prepaid, to the person to be served at the place where the copies

of the documents were left; and 2) that service in this manner is

deemed complete on the tenth day after mailing). A signed return

or proof of service has been held to constitute prima facie

evidence of valid service which can be overcome only by strong

and convincing evidence. O’Brien v. R. J. O’Brien & Assocs.,

Inc., 998 F.2d 1394, 1398 (7th Cir. 1993). Thus, Plaintiff has

established that effective service was established as of

September 29, 2003.

On January 28, 2004, Plaintiff requested the entry of

Defendant Loomis’s default. A declaration of counsel established

that Plaintiff’s counsel had not received any response, and

counsel was informed and believed that Defendant failed to file a

response to the complaint. Thus, Defendant had failed to answer

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the complaint in the period of time permitted by Fed. R. Civ. P.

12(a)(1). The request for entry of default was served on

Defendant at the same address. 

Default was entered by the Clerk on January 30, 2004.

On March 15, 2005, Plaintiff filed a motion for a default

judgment against Defendant Loomis in the amount of $20,000.00,

representing statutory damages, plus post-judgment interest, and

attorney’s fees in the amount of $2,254.28 pursuant to 18 U.S.C.

§ 2520(b)(3). Plaintiff stated it would file a bill of costs

pursuant to Fed. R. Civ. P. 54 if it prevailed. Plaintiff also

filed a memorandum and declarations of Kimberly R. Colombo and

Jaime Sichler in support of the motion. All the documents were

served on Defendant Loomis at the address at which the complaint

was served.

The motion of Plaintiff for default judgment against

Defendant Loomis came on regularly for hearing on June 3, 2005,

at 9:30 a.m., in Courtroom 4 before the Honorable Sandra M.

Snyder, United States Magistrate Judge. Brandon Tran appeared

telephonically on behalf of Plaintiff; there was no appearance on

behalf of Defendant. Mr. Tran represented that Plaintiff had had

no contact with Defendant Loomis. Before argument was presented,

the Court informed Plaintiff’s counsel of the need for additional

authorities and further documentation on the issue of attorney’s

fees. Plaintiff was given leave to submit additional authorities

and documentation, and the matter was set for further hearing.

Plaintiff timely submitted a supplemental memorandum of

points and authorities and declarations of Brandon Q. Tran and

Michelle Stone on June 17, 2005. Further hearing on the motion

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was vacated.

Plaintiff’s motion for default judgment against Defendant

Marino, the sole remaining defendant in the action, is stayed

because Defendant Marino is in bankruptcy.

II. Default Judgment

A court has the discretion to enter a default judgment

against one who is not an infant, incompetent, or member of the

armed services where the claim is for an amount that is not

certain on the face of the claim and where 1) the defendant has

been served with the claim; 2) the defendant’s default has been

entered for failure to appear; 3) if the defendant has appeared

in the action, the defendant has been served with written notice

of the application for judgment at least three days before the

hearing on the application; and 4) the court has undertaken any

necessary and proper investigation or hearing in order to enter

judgment or carry it into effect. Fed. R. Civ. P. 55(b); Alan

Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392 (9th

Cir. 1988). Factors that may be considered by courts in

exercising discretion as to the entry of a default judgment

include the nature and extent of the delay, Draper v. Coombs, 792

F.2d 915, 924-925 (9th Cir. 1986); the possibility of prejudice to

the plaintiff, Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th

Cir.1986); the merits of plaintiff's substantive claim, id.; the

sufficiency of the allegations in the complaint to support

judgment, Alan Neuman Productions, Inc., 862 F.2d at 1392; the

amount in controversy, Eitel v. McCool, 782 F.2d at 1471-1472;

the possibility of a dispute concerning material facts, id.;

whether the default was due to excusable neglect, id.; and the

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strong policy underlying the Federal Rules of Civil Procedure

that favors decisions on the merits, id.

 A default judgment generally bars the defaulting party from

disputing the facts alleged in the complaint, but the defaulting

party may argue that the facts as alleged do not state a claim.

Alan Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392.

Thus, well pleaded factual allegations, except as to damages, are

taken as true; however, necessary facts not contained in the

pleadings, and claims which are legally insufficient, are not

established by default. Cripps v. Life Ins. Co. of North America,

980 F.2d 1261, 1267 (9th Cir. 1992); TeleVideo Systems, Inc. av.

Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987).

A. Notice

Here, as previously detailed, Defendant Loomis has been

served with the claim; his default has been entered for failure

to appear; and even though Defendant Loomis has not appeared in

the action, he has been timely served with written notice of the

application for judgment. In the complaint, Plaintiff sought a

judgment of $10,000.00 for each of two pirated access devices,

(Complt. at 3, 10); thus, the Court finds that Defendant was

given adequate notice pursuant to Fed. R. Civ. P. 55(d) and

54(c), which require that a judgment by default shall not be

different in kind from or exceed in amount that prayed for in the

complaint. Plaintiff expressly sought in the complaint the types

of relief (statutory damages, compensatory damages, punitive

damages, and attorney’s fees and costs) sought herein. Plaintiff

also alleged that Defendant possessed two devices, and the

complaint sought statutory damages of $10,000.00 for each device

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possessed. The fact that the complaint does not allege a specific

total sum does not prevent entry of a default judgment for a sum

that can be made certain where appropriate notice has otherwise

been given. See Appleton Elec. Co. v.Graves Truck Line, 635 F.2d

603, 611 (7th Cir. 1980).

B. Military Status

Kimberly R. Colombo, counsel for Plaintiff, declares under

penalty of perjury that she has personal knowledge that Plaintiff

is not an infant or incompetent person, in the military service,

or otherwise exempted under the Servicemembers Civil Relief Act

of 1940, 50 App. U.S.C. §§ 501, 521. It appears that Colombo

obtained the information regarding Defendant’s status from a

website operated by the Department of Defense Manpower Data

Center that provides information concerning the military service

status of individuals. The Court finds that Defendant is not

exempt from entry of default judgment.

C. Sufficiency of the Claim

Plaintiff seeks damages pursuant to 18 U.S.C. §§ 2511 and

2520; only if the Court is not inclined to award such damages

does Plaintiff request an award pursuant to 47 U.S.C. § 605(a).

(Memo. at 2.)

As a preliminary matter, this Court has jurisdiction

pursuant to 28 U.S.C. § 1331, as Plaintiff’s claim arises under

the Electronic Communications Privacy Act (ECPA), 18 U.S.C. §§

2510-2521.

Plaintiff alleged that on May 25, 2001, Plaintiff executed,

with the assistance of local law enforcement, writs of seizure at

the mail shipping facility used by sources of pirate technologies

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and thereby came into possession of sales records that evinced

Defendant’s purchase of illegal pirate access devices. On or

about March 26, 2001, Defendant purchased two pirate access

devices, each consisting of a printed circuit board device, one

of which is called a “Terminator Emulator,” and one of which is

called a “Terminator SU2 Unlooper,” from DSS-Stuff. The devices

were shipped to Plaintiff at his address in Clovis, California. 

Plaintiff illegally used modified DIRECTV access cards and other

pirate access devices designed to permit viewing of Plaintiff’s

television programming without authorization or payment by

Plaintiff. Defendant’s activities violated 18 U.S.C. §§ 2510-

2521. (Cmplt. at 1-3.) 

In the second claim, Plaintiff alleged that by using the

devices to decrypt and view Plaintiff’s satellite transmissions

of television programming, Defendant intentionally intercepted,

endeavored to intercept, or procured other persons to intercept

or endeavor to intercept Plaintiff’s satellite transmission of

television programming in violation of 18 U.S.C. § 2511(1)(a).

Defendant knew or should have known that the interception was

illegal and prohibited. (Id. at 7-8.) 

In the third claim, Plaintiff alleges that Defendant used

the access devices to view satellite transmissions with intent to

avoid payment of lawful charges, by trick, artifice, deception,

and other fraudulent means, without Plaintiff’s consent, and

thereby violated 18 U.S.C. § 2512(1)(b). (Id. at 8.)

In both claims, Plaintiff alleges that the violations

injured and will continue to injure Plaintiff by depriving

Plaintiff of subscription and pay-per-view revenues and other

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valuable consideration, compromising Plaintiff’s security and

accounting systems, infringing Plaintiff’s trade secrets and

proprietary information, and interfering with Plaintiff’s

contractual and prospective business relations. (Id. at 8.)

Title 18 U.S.C. § 2511, a criminal statute, prohibits the

interception and disclosure of wire, oral, or electronic

communications and provides in pertinent part:

(1)(a)... any person who intentionally intercepts,

endeavors to intercept, or procures any other person

to intercept or endeavor to intercept, any wire, oral,

or electronic communication... shall be punished as 

provided in subsection (4) or shall be subject to suit

as provided in subsection (5).

Title 18 U.S.C. § 2520(a) provides that “any person whose

wire, oral, or electronic communication is intercepted,

disclosed, or intentionally used in violation of the chapter may

in a civil action recover from the person or entity... which

engaged in that violation such relief as may be appropriate.” A

corporation qualifies as a person within the meaning of § 2520.

18 U.S.C. § 2510(6). Sections 2511 and 2520 have been interpreted

to authorize a private cause of action. DIRECTV, Inc. v. Kimball,

312 F.Supp.2d 1043, 1045-46 (W.D.Tenn.2004) (noting that even

courts that decline to permit a civil action for violation of §

2512, which prohibits possession of piracy devices, permit a

civil action to remedy violations of § 2511 because the acts

proscribed (interception, disclosure, intentional use) appear in

both §§ 2511 and 2520); DIRECTV, Inc. v. Hosey, 289 F.Supp.2d

1259, 1264 (D.Kan.2003); DIRECTV, Inc. v. Childers, 274 F.Supp.2d

1287 (M.D.ALA 2003); DIRECTV, Inc. v. Cardona, 275 F.Supp.2d

1357, 1367 (M.D.Fla.2003). See also In the Matter of DIRECTV,

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Inc., 2004 WL 2645971, at *7 (N.D.Cal. 2004). At least one court

has held that no private cause of action exists for violations of

§ 2511 in the commercial context. DIRECTV, Inc. v. DeCroce, 332

F.Supp.2d 715 (D.N.J. 2004). However, the list of decisions

appended to Plaintiff’s motion reveals that this case is against

the great weight of authority.

Plaintiff has alleged that it is a corporation that is the

nation’s leading direct broadcast satellite system, delivering

over 225 channels of television and other programming to more

than ten million homes and businesses in the United States.

Satellite transmissions are electronic communications protected

under the ECPA. United States v. Lande, 968 F.2d 907, 909-10 (9th

Cir. 1992). Plaintiff alleged that Defendant purchased and used

pirate access devices to view programs without authorization by

or payment to DIRECTV; Defendant intentionally, and with

knowledge or reason to know it was illegal and prohibited,

intercepted, endeavored to intercept, or procured others to

intercept or endeavor to intercept Plaintiff’s satellite

transmission of television programming, thereby injuring

Plaintiff. 

The Court finds that Plaintiff has stated a claim pursuant

to 18 U.S.C. §§ 2511 and 2520(a).

D. Damages

Title 18 § 2520(a) creates the private cause of action.

Section 2520 further provides in pertinent part:

(b) Relief.--In an action under this section,

appropriate relief includes–

. . .

(2) damages under subsection (c) and punitive damages 

in appropriate cases; and

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(3) a reasonable attorney's fee and other litigation 

costs reasonably incurred.

(c) Computation of damages.--(1) In an action under this 

section, if the conduct in violation of this chapter is

the private viewing of a private satellite video

communication that is not scrambled or encrypted or if

the communication is a radio communication that is

transmitted on frequencies allocated under subpart D

of part 74 of the rules of the Federal Communications

Commission that is not scrambled or encrypted and the

conduct is not for a tortious or illegal purpose or for

purposes of direct or indirect commercial advantage or

private commercial gain, then the court shall assess

damages as follows:

(A) If the person who engaged in that conduct has

not previously been enjoined under section 2511(5)

and has not been found liable in a prior civil

action under this section, the court shall assess

the greater of the sum of actual damages suffered by

the plaintiff, or statutory damages of not less than

$50 and not more than $500.

(B) If, on one prior occasion, the person who engaged 

in that conduct has been enjoined under section 2511(5)

or has been found liable in a civil action under this

section, the court shall assess the greater of the sum

of actual damages suffered by the plaintiff, or

statutory damages of not less than $100 and not more

than $1000.

(2) In any other action under this section, the court

may assess as damages whichever is the greater of–

(A) the sum of the actual damages suffered by the

plaintiff and any profits made by the violator as a

result of the violation; or

(B) statutory damages of whichever is the greater

of $100 a day for each day of violation or $10,000.

(Emphasis added.)

Section 2520 by its terms provides for three different

measures of damages: actual damages and profits of the violator

(§ 2520(c)(2)(A)), statutory damages of $100.00 per day for each

day of violation (§ 2520(c)(2)(B)), or $10,000.00 if it is larger

than $100.00 per day (id.).

 Courts disagree about whether an award of damages is

discretionary under § 2520(c)(2), which provides that the Court

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1 No guidance is found in cases from the Court of Appeals for

the Ninth Circuit.

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“may assess” damages.1 DIRECTV v. Brown, 371 F.3d 814, 818 (11th

Cir. 2004) (holding that an award of damages is discretionary and

that an award of actual damages was sufficient under the

circumstances); Dorris v. Absher, 179 F.3d 420, 427-30 (6th Cir.

1999) (holding that an award is discretionary but further holding

that the $10,000.00 figure may not be multiplied by each

violation of the statute because of the plain language used and

Congress’s intent to have the $10,000.00 compensate a plaintiff

for all of a defendant’s misdeeds under the statute arising out

of a closely related course of conduct that takes place over a

relatively short period of time); Reynolds v. Spears, 93 F.3d

428, 433-35 (8th Cir. 1996) (holding that an award is

discretionary); Nalley v. Nalley, 53 F.3d 649, 651-53 (4th Cir.

1995) (holding that the statute’s plain language and the change

of verbs from “shall” to “may” renders damages discretionary);

but see Rodgers v. Wood, 910 F.2d 444 (7th Cir. 1990), rehearing

denied 914 F.2d 260 (7th Cir. 1990) (holding that legislative

history, and the absence thereof, indicates that Congress did not

intend to give the district courts discretion). The Court accepts

as appropriate the view based on the plain language of the

statute and comprising the weight of authority; the Court

concludes that an award of damages is discretionary.

Here, the damages Plaintiff seeks for Defendant’s

interception, disclosure, or intentional use of wire, oral, or

electronic communications is $10,000.00 for each pirate access

device, or $20,000.00.

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It is suggested that in determining damages, the analysis

that should be undertaken under § 2520 is as follows:

(1) The court should first determine the amount of

actual damages to the plaintiff plus the profits

derived by the violator, if any. See 18 U.S.C. §

2520(c)(2)(A).

(2) The court should next ascertain the number of

days that the statute was violated, and multiply by

$100. See 18 U.S.C. § 2520(c)(2)(B).

(3) The court should then tentatively award the

plaintiff the greater of the above two amounts, unless

each is less than $10,000, in which case $10,000 is to

be the presumed award. See id.

(4) Finally, the court should exercise its

discretion to determine whether the plaintiff should

receive any damages at all in the case before it. See

18 U.S.C. § 2520(c)(2). 

Dorris v. Absher, 179 F.3d at 430.

Here, as to actual damages, the declaration of Sichler

establishes by a preponderance that Defendant purchased DIRECTV

satellite equipment from in August 1999; Defendant activated an

account on August 11, 1999, and cancelled it on August 17, 1999.

Defendant further obtained two other DIRECTV accounts in August

1999 (which occurs when a customer purchases a DIRECTV satellite

system from an authorized DIRECTV retailer), but Defendant did

not activate them; they remained pending. Sichler’s declaration

tends to show that Defendant thus had all the satellite equipment

necessary to receive Plaintiff’s programming when used with the

pirate access device. Further, Sichler declares that it is common

for signal pirates to have been subscribers at some time. 

The declaration of Sichler establishes that the primary use

of the devices is piracy of Plaintiff’s satellite programming;

there are generally no other legitimate commercial or private

uses. Although a user of a single modified access card

theoretically has access to over a million dollars worth of

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programming services annually (including the purchase price of

every program broadcast on each channel every day), the value of

subscription and movies viewed only once is over $150,000.00

annually. The value of programming purchased by the top ten per

cent of subscribers to a total choice premier package (a “high

end” package) is $2,748.96 annually, or $7.53 daily; Sichler

declares that persons engaged in piracy are likely to be heavy

consumers of more expensive programming. This figure does not

include allegedly significant expenses suffered by Plaintiff for

investigating and preventing piracy; no figure for such expenses

is given. Assuming that Defendant purchased a pirate access

device on March 26, 2001 (a fact deemed to be established as to

the violation because it was alleged in the complaint), and

Defendant then used the device daily since then and until April

30, 2004 (when the data stream for the particular access card was

discontinued), the total loss would be represented by 1,131 days

at $7.53 per day, or $8,516.43. 

There is no evidence that Defendant profited from the use of

the access devices.

The Court concludes that although Plaintiff has presented

some evidence of likelihood that Plaintiff suffered actual harm,

the amount or extent of the harm is speculative. Plaintiff’s

evidence does not establish the amount of actual damages by a

preponderance of the evidence.

 As to statutory damages, Plaintiff asserts that based on

the March 26, 2001, purchase date of the pirate access devices,

Defendant has violated § 2520 for 1,131 days. Pursuant to §

2520's provision of statutory damages in the amount of $100.00

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per day of violation, Plaintiff would be entitled to $113,100.00

(or, as limited by Plaintiff’s demand in the complaint,

$20,000.00; see DIRECTV, Inc. v. Oliver, No. 04-3454 SBA, 2005 WL

1126786 at *6 (N.D.Cal. 2005)). Again, the Court concludes that

Plaintiff’s showing as to the number of days of actual violation

is speculative; Plaintiff has not established by a preponderance

of the evidence the number of days during which the statute was

violated.

The Court thus concludes that the amount of appropriate

statutory damages under § 2520(c)(2) is $10,000.00.

Plaintiff argues that $10,000.00 should be awarded for each

of the two devices. Plaintiff represents that the authority is to

the effect that conduct in violation of the statute should be

treated as a single violation, warranting $10,000.00 for the

entire course of conduct, unless it is demonstrated that the

statute was violated for 100 or more days or the violations are

not interrelated and time-compacted. The authorities do not

support Plaintiff’s characterization of the law as permitting

multiple awards of liquidated damages in circumstances such as

those of the present case. See Smoot v. United States Transp.

Union, 246 F.3d 633, 642 (6th Cir. 2001) (relying on the plain

wording of the statute and the policy to avoid rendering the

$100-per-day provision meaningless, the court held that where

eight violations occurred within a ten-month period, and a ninth

violation occurred four years after the first with disclosure

occurring in six states to eleven different persons, the

appropriate award was $10,000 because violation for more than one

hundred separate days had not been established; the statutory

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damages of $10,000 should not be awarded for each separate

violation of the statute); Dorris v. Absher, 179 F.3d 420, 428

(6th Cir. 1999) (holding that the plain language of the statute

reveals that $10,000 is intended to compensate the injured party

“for all of the transgressor's misdeeds under the wiretapping

statute arising out of a closely related course of conduct that

takes place over a relatively short period of time”; however, the

court expressly did not decide the question of more long-term,

multiple violations presented later in Smoot); Desilets v. WalMart Stores, Inc., 171 F.3d 711, 713-16 (1st Cir. 1999) (where

there were violations consisting of both interceptions and use,

$10,000 would not be awarded per violation because Congress

intended to award damages with respect to the number of days of

violation, not the number of violations). In view of the clear

wording of the statutory scheme, the fact that Defendant may have

purchased two pirate access devices and three sets of satellite

equipment does not affect the award of statutory damages. 

Factors to be considered in determining whether to award

damages include whether the defendant profited by the violations;

whether there was evidence that the defendant actually used his

pirate access devices; the extent of the Plaintiff’s financial

harm; the extent of the defendant’s violation; whether the

defendant had a legitimate reason for his actions; whether an

award of damages would serve a legitimate purpose; and whether

the defendant was also subject to another judgment based on the

same conduct. DIRECTV, Inc. v. Huynh, 318 F.Supp.2d 1122, 1132

(M.D.Ala 2004).

Here, there is no evidence of profit on the part of

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Defendant. There is some evidence (as distinct from facts

necessarily established as true based on Defendant’s default)

tending to show that Defendant actually used the pirate access

devices, although the extent of both the harm and the violation

are uncertain. There does not appear to be a legitimate purpose

for the Defendant’s actions. Damages would serve the legitimate

purposes of compensation and deterrence. It does not appear that

Defendant is subject to another judgment based on the same

conduct. Colombo declares that Defendant has not paid any part of

the damages to Plaintiff. (Decl. at 2.) 

The Court thus concludes that discretion should be exercised

to award statutory damages of $10,000.00.

E. Entitlement to Default Judgment against

 One of Two Defendants

Plaintiff chose to join seven defendants in this action. 

At the hearing held on June 3, 2005, Plaintiff’s counsel

confirmed that only Defendants Robert Loomis and Pat Marino

remain in the case. The bankruptcy stay regarding Defendant

Marino is still in effect.

Fed. R. Civ. P. 54(b) provides:

When more than one claim for relief is presented in an

action, whether as a claim, counterclaim, cross-claim,

or third-party claim, or when multiple parties are

involved, the court may direct the entry of a final

judgment as to one or more but fewer than all of the

claims or parties only upon an express determination

that there is no just reason for delay and upon an 

express direction for the entry of judgment. In the 

absence of such determination and direction, any order

or other form of decision, however designated, which

adjudicates fewer than all the claims or the rights

and liabilities of fewer than all the parties shall

not terminate the action as to any of the claims or 

parties, and the order or other form of decision is

subject to revision at any time before the entry of

judgment adjudicating all the claims and the rights

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and liabilities of all the parties.

Plaintiff states that although Defendants Loomis and Marino

were sued as co-defendants, their claims are separate in the

sense that there is no allegation of concerted or conspiratorial

action; the two defendants purchased pirate access devices from

separate vendors on separate dates. The only similarities or

overlap between the two cases are the seizure of evidence from

the same distributor or shipper, the legal nature of the claims,

and some unspecified duplication of witnesses’ testimony; there

is no assertion that the two defendants even knew each other.

(Supp. Memo. at 2-3.)

The policy concerns underlying Rule 54(b), namely, finality,

severability, and avoidance of piecemeal litigation, arise

principally in the context of the availability of appellate

recourse. See Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 432-

48 (1956); W. L. Gore & Associates, Inc. v. International Medical

Prosthetics Research Association, Inc., 975 F.2d 858, 862-65

(Fed. Cir. 1992). However, considerations of fairness and the

sound administration of justice are also applicable to the entry

of a default judgment in a case involving multiple parties or

claims. Further, default judgment should not be entered against a

defendant who is alleged to be liable jointly with other

defendants until the case is adjudicated against all defendants,

or all defendants have defaulted; the possibility of inconsistent

judgments must be avoided. Frow v. La Vega, 15 Wall. 552, 554-55

(1872) (default judgment against one defendant charged with joint

participation in fraud held to be improper until judgment against

the other defendants was adjudicated). It has been held that

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despite the absence of an allegation of joint liability, entry of

default judgment against a single defaulting defendant is

improper where the defendants are similarly situated defendants,

even if not jointly and severally liable, and where delay is

necessary to avoid an inherently inconsistent result. In re First

T.D. & Investment, Inc., 253 F.3d 520, 532 (9th Cir.2001)

(holding that default judgment should not be entered where

defendants participated in similar transactions such that it was

not logically possible that one defendant could be liable without

another being liable); see Shanghai Automation Instrument Co. Ltd

v. Kuei, 194 F.Supp.2d 995, 1005-10 (N.D.Cal. 2001) (collecting

cases and suggesting that the unifying principle is that the risk

of inconsistent judgments is too high, and entry of default

judgment against a defendant is inappropriate, where other

answering defendants remain in the case without their liability

being adjudicated, and where under the theory of the complaint,

liability of all the defendants must be uniform).

The instant case is analogous to B and B Associates v.

Fonner, 700 F.Supp. 7, 9-10 (S.D.N.Y. 1988), a case involving

enforcement of a settlement agreement, in which it was held to be

appropriate to enter judgment against one defendant while a codefendant was in bankruptcy. The Court reasoned that the

liability of the defendants was independent and completely

unrelated, there were no identical or closely related issues that

remained to be litigated against the defendant that remained in

the case, and it was uncertain when the bankruptcy stay would be

lifted. The court concluded that there was no just reason to

delay judgment.

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 Here, there is no factual overlap in the transactions before

the Court other than some similarity of subject matter. The two

remaining defendants’ claims are severable. The two defendants

purchased different devices from different sources on different

dates. (Complt. at 3-4.) No answering defendant, who could

anticipate adjudication of liability on the merits, remains in

the case; the other defendant has also defaulted. There is no

evidence regarding the anticipated duration of the bankruptcy

stay against the other defaulting defendant. Under the

circumstances, the Court concludes that the risk of inconsistent

judgments is not appreciable, and the Plaintiff has demonstrated

a need to proceed to final judgment against Defendant Loomis

without delay. 

The Court concludes that final judgment should be entered

against Defendant Loomis and that there is no just reason for

delay.

F. Attorney’s Fees

Title 18 § 2520(b)(3) provides that in an action under that

section, appropriate relief includes “a reasonable attorney's fee

and other litigation costs reasonably incurred.” 

Generally, to determine a "reasonable" attorney fee award,

district courts generally start by calculating the "lodestar"

amount (the product of multiplying the number of hours reasonably

expended on the litigation by a reasonable hourly fee). See

Hensley v. Eckerhart, 461 U.S. 424, 433-437 (1983); City of

Burlington v. Dague, 505 U.S. 557, 561 (1992). It is the burden

of the party seeking the award to submit evidence supporting the

hours worked and rates claimed, and when the documentation of

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hours is inadequate, a court may reduce an award accordingly.

Hensley, 461 U.S. at 433, 437. A party requesting a fee award has

the burden of presenting detailed records of the time spent, so

that the judge can make a fair evaluation of the amount of fees

warranted. The records should be comparable to those that a

private attorney would present to a client to substantiate a fee.

Evers v. Custer County, 745 F.2d 1196, 1205 (9th Cir. 1984),

citing Hensley v. Eckerhart, 461 U.S. 424. The minimum required

for satisfaction of this burden is to list hours and identify the

general subject matter of the time expenditures. Fischer v. SJBP.D. Inc., 214 F.3d 1115, 1121 (9th Cir. 2000). Fee awards will be

set aside where summaries make it very difficult to ascertain

whether the time devoted to particular tasks was reasonable and

whether there was improper overlapping of hours. Intel Corp. v.

Terabyte Intern., Inc., 6 F.3d 614, 623 (9th Cir. 1993). 

The initial declaration of attorney Colombo was unclear as

to what services concerning Defendant were being billed, and the

attached billing summaries did not clearly correspond with the

declaration with respect to tasks billed, persons performing the

work, or hourly rate. The Court permitted clarification. In a

supplemental declaration, attorney Tran clarified that legal

bills (apparently with respect to work other than that relating

to the application for default judgment) from both previous and

present counsel reflected 15.3 hours billed for prosecution of

Plaintiff’s claims against all seven defendants originally named

in the complaint; another .9 hours was directly attributable to

prosecution of claims against Defendant Loomis specifically.

Thus, the total amount of feels billed to Plaintiff for the case

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have been divided by seven for services that allegedly relate to

all seven defendants. Although it might be reasonable and fair to

divide drafting the complaint into fractions, some of the other

tasks (which include investigating evidentiary issues; analyzing

evidence; preparing for, scheduling, and appearing at case

management conference; maintaining and managing a pretrial

calendar; maintaining an accurate and up-to-date defendant file;

correspondence between law firms; drafting of case summaries; and

contact with Plaintiff regarding case status) do not appear to be

necessarily subject to a fair or reasonable division on a perdefendant basis. One attachment to the Colombo declaration

indicates that persons whose initials did not correspond to

Colombo’s drafted the complaint; the time is set forth, but the

appropriateness of the hourly rate of the unknown persons is not

established. It is unclear which attorney at which rate completed

the .9 hour of services attributable solely to Defendant Loomis

or what those services were. Although Colombo states that hours

relating to all seven defendants were divided in seven, from the

billing summaries submitted it is unreasonably difficult to

determine which time or work is claimed to have related to

Defendant Loomis or to have been included in the pool of tasks

divided; there is no underlining or highlighting or other

indication of which hours were included. The supplemental

declaration of attorney Tran does not clarify this, and thus

there is no adequate explanation or documentation of the billing.

Thus, the Court is unable to determine whether the time or rates

claimed were actually reasonable. Plaintiff has not provided

clear and simple summaries, adequately annotated, in order to

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demonstrate what matters are included in the present claim, the

matters performed, the identity of the attorney, the hourly rate,

and the relationship of these matters to the present Defendant,

who defaulted and apparently has not been in communication with

any of Plaintiff’s attorneys. Therefore, none of these fees

should be awarded.

Colombo states that with respect to the present motion, she

spend 1.5 hours reviewing and revising the motion and its

accompanying documents; her billing rate is $255.00, which is

reasonable pursuant to her declaration. This time was time

relating to the case against Defendant Loomis, and the rate and

amount of time was reasonable. The sum of $382.50 for this work

should be awarded.

Plaintiff claims 3.5 hours for Michelle Stone, a paralegal,

for preparation of the motion for default judgment. Stone’s

declaration covers her qualifications and training in detail,

indicates she was instructed to prepare a notice of motion and

various documents, and summarizes the facts and evidence she

obtained to use in preparing the motion for default judgment.

However, Stone does not actually say she prepared the motion,

state how much of her time was spent, or give any basis for a

conclusion as to the reasonableness of the $135.00 per hour

figure that is claimed for her services. Colombo’s declaration

indicates that Stone spent approximately 3.5 hours preparing the

motion and accompanying documents; she does not state the source

of her knowledge. Tran declares that Suzanne M. Burke directed

Stone to analyze the issues and draft a motion and documents, and

that Stone was being supervised by Colombo, an associate, and by

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Pandher, an independent contract attorney. There is no indication

that Stone’s fee was billed to the client. Colombo claims that

Michelle Stone spent approximately 3.5 hours preparing the motion

and documents for Colombo’s review, and that Stone’s hourly rate

is $135.00. It further appears that the rates were set to be

competitive with comparative rates in the pertinent community.

Under 42 U.S.C. § 1988, a sufficiently analogous statute

which provides for a reasonable attorney’s fee as part of the

costs, it is established that paralegal time is included in the

work product of an attorney. Missouri v. Jenkins, 491 U.S. 274,

285 (1989). Paralegal time should be compensated at the

prevailing market rate in the relevant community, i.e., as

calculated on the basis of rates and practices prevailing in the

relevant market. Id. at 285-289. If billing separately for

paralegal services is found to be customary and reasonable in the

relevant community, then an award may be made.

Here, the amount of time is reasonable in light of the tasks

performed; the rate is reasonable. The sum of $472.50 should be

awarded. 

Colombo’s initial estimate for time spent in preparing for

and appearing telephonically at the hearing on the motion is

superseded by Tran’s declaration that he spent 2.6 hours at

$215.00 per hour in preparation and appearance. The Court should

award $559.00 as reasonable compensation for these services.

It is established by declaration that counsel spent 6.5

hours researching and preparing the supplemental memorandum at

$275.00 per hour. The Court finds this reasonable and concludes

that $1,787.50 should be awarded for these services.

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No award should be made for preparation for and attendance

at the hearing that was set for July 1, 2005, and was vacated.

In summary, the Court finds the number of hours and rates,

as analyzed above, to be reasonable in light of all pertinent

factors, and finds that an award of $3,201.50 as attorney’s fees

would be reasonable.

The Court does not consider an award of costs because

Plaintiff will proceed to tax costs pursuant to Rule 54(d).

G. Recommendation

Accordingly, it IS RECOMMENDED that

1. Plaintiff’s motion for entry of default judgment BE

GRANTED in part; and

2. It being appropriate, and there being no just reason for

delay, the Clerk BE DIRECTED TO ENTER DEFAULT JUDGMENT for

Plaintiff DIRECTV against Defendant Robert Loomis as follows:

a. Pursuant to 18 U.S.C. § 2520, statutory damages in

the amount of $10,000.00, with post-judgment interest thereon at

the legal rate pursuant to 28 U.S.C. § 1961 from the date of

entry of the judgment; and

b. Attorney’s fees in the amount of $3,201.50.

This report and recommendation is submitted to the United

States District Court Judge assigned to the case, pursuant to the

provisions of 28 U.S.C. § 636 (b)(1)(B) and Rule 72-304 of the

Local Rules of Practice for the United States District Court,

Eastern District of California. Within ten court days after being

served with a copy, any party may file written objections with

the Court and serve a copy on all parties. Such a document should

be captioned “Objections to Magistrate Judge’s Findings and

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Recommendations.” Replies to the objections shall be served and

filed within ten (10) court days (plus three days if served by

mail) after service of the objections. The Court will then review

the Magistrate Judge’s ruling pursuant to 28 U.S.C. § 636

(b)(1)(C). The parties are advised that failure to file

objections within the specified time may waive the right to

appeal the District Court’s order. Martinez v. Ylst, 951 F.2d

1153 (9th Cir. 1991).

IT IS SO ORDERED.

Dated: July 6, 2005 /s/ Sandra M. Snyder 

icido3 UNITED STATES MAGISTRATE JUDGE

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