Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_19-cv-02791/USCOURTS-cand-4_19-cv-02791-2/pdf.json

Nature of Suit Code: 490
Nature of Suit: Cable/ Satellite TV
Cause of Action: 47:553 Communications Act of 1994

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

INNOVATIVE SPORTS MANAGEMENT, 

INC.,

Plaintiff,

v.

PEDRO ZERPA, et al.,

Defendants.

Case No. 19-cv-02791-HSG 

ORDER GRANTING IN PART AND 

DENYING IN PART MOTIONS FOR 

PARTIAL SUMMARY JUDGMENT

Re: Dkt. No. 36, 37

Pending before the Court are the parties’ cross-motions for partial summary judgment for 

which briefing is complete. Dkt. Nos. 36 (“ISM Mot.”), 37 (“FPG Mot.”), 38 (“ISM Opp.”), 40 

(“FPG Reply). Plaintiff Integrated Sports Management, Inc. d/b/a Integrated Sports Media 

(“ISM”) initially sought a summary judgment of liability under 47 U.S.C. Section 605, as well as 

under a theory of common law conversion, for the interception and broadcast of a soccer game by

Defendants Pedro Zerpa (“Zerpa”), Julio Antonio Martinez “(“Martinez”), and Fusion Peruvian 

Grill Corporation d/b/a Fusion Peruvian Grill (“FPG”). Defendants cross-moved for summary 

judgment, conceding that FPG is liable for violating 47 U.S.C. Section 553, and for conversion, 

but denying that Defendants Zerpa and Martinez are liable in their individual capacities. 

Defendants also moved for summary judgment of nonliability for violations of UCL Section 

17200. Plaintiff reversed course in its opposition, abandoned its claim of liability under Section 

605, and now seeks summary judgment that all Defendants are liable under Section 553, as well as 

under a common law conversion theory. The Court held a hearing on the motions on April 23, 

2020. Dkt. No. 43. 

The Court GRANTS in part and DENIES in part the motions for summary judgment. As 

liability is admitted under Section 553, the Section 605 cause of action is not viable, and summary 

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judgment will be granted in favor of all Defendants. The Court will grant summary judgment of 

liability in favor of Plaintiff on the Section 553 and conversion causes of action as to Defendants 

FPG and Zerpa, and will deny summary judgment on those causes of action as to Defendant 

Martinez. The Court will also deny summary judgment as to the UCL Section 17200 cause of 

action. 

I. BACKGROUND

Defendant FPG is a California corporation formed on July 10, 2015 by Defendants Pedro 

Zerpa and Julio Martinez. Dkt. No. 37-1 (“Zerpa Decl.”) ¶ 2; see id. at 5-6 (Ex. A). Plaintiff ISM 

was granted exclusive nationwide commercial distribution rights to broadcast Peru v. Scotland, 

International Friendly Soccer Game (“Program”) on Tuesday, May 29, 2018. Dkt. No. 1 

(“Compl.”) ¶¶ 20-21. Plaintiff entered into a number of sub-licensing agreements with various 

bars and restaurants, among others, to permit broadcasting of the Program. Id. ¶ 21. FPG had 

access to television and internet services through a Comcast commercial account. Zerpa Decl. ¶ 6. 

On March 23, 2018, Defendant Zerpa responded to a solicitation from “latamtvip.com,” an 

online television service, and requested information about Peruvian television programming. FPG

Mot. at 2. Defendant Zerpa sent an email to latamtvip.com’s representative, who established 

FPG’s account and charged FPG the service fee to exhibit the Program without a license from 

ISM . Zerpa Decl. ¶ 7. FPG and Defendant Zerpa had never previously purchased pay-per-view 

programming. Id. ¶¶ 7-8. Defendant Zerpa contends that he never read latamtvip.com’s Terms of 

Service, nor the Comcast Terms of Services, and was unaware FPG would require an additional 

license, because he believed that all of the programming that was available was purchased 

lawfully by FPG. Id. ¶¶ 6-7, 9. There is no dispute that the Program was received and published 

via cable at the FPG establishment without ISM’s authorization on May 29, 2018. See ISM Opp. 

at 2; Zerpa Decl. ¶¶6-7. The Program was advertised on FPG’s Facebook page, where it was also 

livestreamed. Dkt. No. 36-1 (“Riley Decl.”) at 8-9.

On May 22, 2019, Plaintiff filed suit and alleged violations of 47 U.S.C. Section 605

(“Section 605”), 47 U.S.C. Section 553 (“Section 553”), common law conversion, and the 

California Business and Professions Code Section 17200 (“UCL Section 17200”). Dkt. No. 1.

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ISM never served discovery on the Defendants. Dkt. No. 37-2 (“McCann Decl.”) at ¶ 4. 

II. LEGAL STANDARD

Summary judgment is proper when a “movant shows that there is no genuine dispute as to 

any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). 

A fact is “material” if it “might affect the outcome of the suit under the governing law.” Anderson 

v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). And a dispute is “genuine” if there is evidence 

in the record sufficient for a reasonable trier of fact to decide in favor of the nonmoving party. Id. 

But in deciding if a dispute is genuine, the court must view the inferences reasonably drawn from 

the materials in the record in the light most favorable to the nonmoving party, Matsushita Elec. 

Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986), and “may not weigh the evidence 

or make credibility determinations.” Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997), 

overruled on other grounds by Shakur v. Schriro, 514 F.3d 878, 884-85 (9th Cir. 2008). If a court 

finds that there is no genuine dispute of material fact as to only a single claim or defense or as to 

part of a claim or defense, it may enter partial summary judgment. Fed. R. Civ. P. 56(a).

The moving party bears both the ultimate burden of persuasion and the initial burden of 

producing those portions of the pleadings, discovery, and affidavits that show the absence of a 

genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the 

moving party will not bear the burden of proof on an issue at trial, it “must either produce 

evidence negating an essential element of the nonmoving party’s claim or defense or show that the 

nonmoving party does not have enough evidence of an essential element to carry its ultimate 

burden of persuasion at trial.” Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 

(9th Cir. 2000). Where the moving party will bear the burden of proof on an issue at trial, it must 

also show that no reasonable trier of fact could not find in its favor. Celotex, 477 U.S. at 325. In 

either case, the movant “may not require the nonmoving party to produce evidence supporting its 

claim or defense simply by saying that the nonmoving party has no such evidence.” Nissan Fire, 

210 F.3d at 1105. “If a moving party fails to carry its initial burden of production, the nonmoving 

party has no obligation to produce anything, even if the nonmoving party would have the ultimate 

burden of persuasion at trial.” Id. at 1102-03. 

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“If, however, a moving party carries its burden of production, the nonmoving party must 

produce evidence to support its claim or defense.” Id. at 1103. In doing so, the nonmoving party 

“must do more than simply show that there is some metaphysical doubt as to the material facts.” 

Matsushita Elec., 475 U.S. at 586. A nonmoving party must also “identify with reasonable 

particularity the evidence that precludes summary judgment,” because the duty of the courts is not 

to “scour the record in search of a genuine issue of triable fact.” Keenan v. Allan, 91 F.3d 1275, 

1279 (9th Cir. 1996). If a nonmoving party fails to produce evidence that supports its claim or 

defense, courts must enter summary judgment in favor of the movant. Celotex, 477 U.S. at 323.

III. DISCUSSION

Section 605

Section 605 “prohibits commercial establishments from intercepting and broadcasting to 

[their] patrons satellite cable programming.” Integrated Sports Media, Inc. v. Mendez, No. C 10-

3516 PJH, 2014 WL 3728594, at *4 (N.D. Cal. July 28, 2014). Plaintiff initially moved for 

summary judgment that Defendants violated Section 605. ISM Mot. at 9. After Defendants

conceded that FPG received and published the Program via cable and not satellite, FPG Mot. at 3, 

Plaintiff abandoned its motion as to this cause of action. ISM Opp. at 24. Because liability is 

conceded under Section 553, liability cannot also exist under Section 605. J & J Sports Prods., 

Inc. v. Manzano, No. 08-1872-RMW, 2008 WL 4542962, at *2 (N.D. Cal. Sept. 29, 2008). 

Defendants’ motion for summary judgment of nonliability under Section 605 is GRANTED. 

Section 553

Plaintiff’s revised theory of summary judgment is that Defendants’ unauthorized 

interception and exhibition of the Program violated Section 553. Section 553(a)(1) provides that: 

“No person shall intercept or receive or assist in intercepting or receiving any communications 

service offered over a cable system, unless specifically authorized to do so by a cable operator or 

as may otherwise be specifically authorized by law.” 47 U.S.C. § 553(a)(1). To establish liability 

under Section 553, Plaintiff must demonstrate that: (1) Plaintiff had a proprietary right in the 

Program, (2) Plaintiff did not authorize Defendants’ exhibition of the Program, and (3) Defendant 

exhibited the Program via cable. See Integrated Sports Media, Inc. v. Canseco, No. CV 10-7392 

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RSWL AJWX, 2012 WL 631851, at *4 (C.D. Cal. Feb. 27, 2012).

i. Defendant FPG

Defendants concede that FPG violated Section 553, and that FPG received and displayed 

the Program via cable, without authorization from ISM. FPG Mot. at 3. The parties do not 

dispute that ISM owned the commercial licensing rights to the Program. Id. Plaintiff has 

therefore met its burden of establishing that FPG is liable under Section 553. Accordingly, 

Plaintiff’s motion concerning FPG’s liability under Section 553 is GRANTED.

ii. Personal Liability of Individual Defendants

Defendants, while conceding liability as to FPG, contend that Defendants Zerpa and 

Martinez cannot be held personally liable under Section 553 based on “established principles of 

limited liability.” FPG Mot. at 20. Personal liability for the acts of a corporation under Section 

553 requires that the individual had “right and ability to supervise the violation, as well as an 

obvious and direct financial interest in the misconduct.” Joe Hand Promotions, Inc. v. Alvarado, 

No. CV F 10-0907 LJO JLT, 2011 WL 1740536, at *7 (E.D. Cal. May 4, 2011) (quotations and 

citation omitted). To satisfy both prongs, Plaintiff must show that the “defendant had supervisory 

power over the infringing conduct itself” and that any financial interest was directly linked to that

conduct. See J & J Sports Prods., Inc. v. Walia, No. 10-5136 SC, 2011 WL 902245, at *3 (N.D. 

Cal. Mar. 14, 2011). Status as an officer alone is “insufficient to show ... the requisite supervision 

authority or financial interest to warrant individual liability.” Id.

a. Defendant Zerpa

Defendant Zerpa is Chief Executive Officer of FPG. Compl. ¶¶ 7-8, 10; Riley Decl. at 6 

(Ex. 2). Plaintiff submits evidence that Defendants Zerpa and Martinez are the only individuals 

identified on the California Alcoholic Beverage and Control license issued for FPG. Compl. ¶ 8; 

Riley Decl. ¶ 4. Plaintiff alleged that Defendant Zerpa either took action himself or directed 

employees to intercept and exhibit the Program, Compl. ¶ 23, and Defendant Zerpa admits that he

took steps to obtain the Program through latamvip.com. ISM Opp. at 4; Zerpa Decl. ¶¶ 7-8. 

Defendant Zerpa also admits to holding the title of CEO, and to being identified on the liquor 

license. Dkt. No. 23 (“Answer”) ¶¶ 7-8. 

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Defendant Zerpa acknowledges having “the right and ability to supervise the activities of 

Fusion Peruvian Grill, which included the unlawful interception of Plaintiff’s Program[,]” on May 

29, 2018, and to having “an obvious and direct financial interest in the activities of Fusion 

Peruvian Grill.” Id. ¶¶ 11, 12, 15. Defendant Zerpa, while acknowledging he corresponded on 

behalf of FPG with latamtvip.com to acquire the Program, asserts that he is not liable because 

Plaintiff has failed to establish “alter-ego liability.” FPG Mot. at 19. Defendant Zerpa contends 

that he was under the mistaken belief that the Program was legitimately acquired, and was

therefore lawful. Zerpa Decl. ¶ 9. Similarly, Defendant Zerpa contends that his lack of awareness 

regarding the need to purchase a commercial license for the Program was negligent, and did not 

meet the heightened willfulness standard set forth in Section 553. Id. ¶ 10; FPG Mot. at 2.

The Court finds that Defendant Zerpa was the “moving active conscious force” in 

intercepting and exhibiting the Program. See J & J Sports Prods., Inc. v. Walia, 2011 WL 

902245, at *3. While Defendant Zerpa professes ignorance regarding the legality of his actions, 

there is no dispute that he was the individual who took the steps necessary to obtain the Program 

and broadcast it at FPG, ISM Opp. at 4 (citing Zerpa Decl. ¶¶ 7-8), and that he had a financial 

interest warranting individual liability. Answer ¶¶ 11, 12, 15 (admitting allegations of Complaint 

that, among others, Zerpa “had an obvious and direct financial interest in the activities of [FPG]”).

Whether Defendant Zerpa’s conduct is willful, oblivious, or negligent is not a factor in 

determining liability. See Doherty v. Wireless Broadcasting Systems of Sacramento, Inc., 151 

F.3d 1129, 1131 (9th Cir. 1998) (“The remedial provisions in both Sections 553 and 605 take into 

consideration the degree of the violator’s culpability and provide for reduced damages in those 

instances where the violator was unaware of the violation.”); see also J & J Sports Productions, 

Inc. v. Delgado, 2012 WL 371630, at *3 (E.D. Cal. Feb. 3, 2012) (“[b]oth § 553 and § 605 are 

strict liability statutes”). The Court therefore finds that there is no genuine issue of material fact 

that Defendant Zerpa had the supervisory power and direct financial interest to be held personally 

liable.1 Therefore, the Court GRANTS summary judgment in favor of Plaintiff as to Defendant 

1 Whether FPG is formed as a limited liability corporation or a corporation under California law, 

“this distinction does not alter the appropriate standard for individual shareholder liability.” J & J 

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Zerpa’s liability under Section 553.

b. Defendant Martinez

Defendants Martinez and Zerpa allegedly had a “falling out” that caused Martinez to resign 

and “relinquish his rights in FPG on March 1, 2018,” prior to the alleged violation of Section 553.

Zerpa Decl. ¶ 4. Since the time Martinez relinquished his rights in FPG, Defendants contend that 

he has had no rights to supervise, nor any rights to profit from, FPG’s operations. Id. In support 

of this argument, Defendants submit evidence of a resignation letter signed by Julio Martinez on 

March 1, 2018. Id. (Ex. D).2 Nevertheless, Plaintiff contends that Defendant Martinez is an 

owner with oversight of the restaurant, Compl. ¶ 9, and cites to various records filed by 

Defendants with the California Secretary of State in which Defendant Martinez is identified as the 

co-owner of FPG. ISM Opp. at 5; Riley Decl. ¶ 4 (Ex. 1). Defendant Martinez was also the 

primary owner of the liquor license for Fusion Peruvian Grill at least as late as July 12, 2018. See

Riley Decl. ¶ 4 (Ex. 1).

Notwithstanding Defendant Zerpa’s liability, there remains a genuine issue of material fact 

regarding Defendant Martinez’s liability, and as to whether and when he relinquished his rights in

FPG. It is unclear when Defendant Martinez actually (and formally) relinquished ownership of 

FPG, if he ever did. As Plaintiff points out, subsequent filings with the California Secretary of 

State confirm the change of ownership status, but only as of June 2019. ISM Opp. at 5; Riley 

Decl. ¶¶ 4-5, Ex. 1-2. And while the parties disagree regarding the validity of the resignation 

letter submitted as evidence of the relinquishment of Martinez’s rights, even if Martinez did not 

relinquish his rights, it is still unclear if he had the rights and abilities necessary to be found 

personally liable for the actions of FPG. For at least these reasons, the Court DENIES summary 

Sports Prods., Inc. v. Walia, 2011 WL 902245, at *3. 

2 Plaintiff objects to Defendant Martinez’s resignation letter on the grounds that it is hearsay, or in 

the alternative, that it does not qualify as a business record. ISM Opp. at 5. Plaintiff also contends

that the Court cannot consider the letter as evidence at the summary judgment stage under Federal 

Rule of Civil Procedure 56(c)(4). ISM Opp. at 5. The Court OVERRULES Plaintiff’s objection, 

and will consider the letter, because it is inappropriate to focus on the admissibility of the 

evidence’s form at the summary judgment stage. See Fraser v. Goodale, 342 F.3d 1032, 1036 

(9th Cir. 2003). Instead, the focus at this stage in the proceeding is the admissibility of its 

contents. Id. Zerpa has directly explained in his Declaration what the letter is, and that it reflects 

Martinez’s resignation, which is enough at this stage. 

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judgment as to Martinez’s liability on the Section 553 cause of action. 

iii. Damages as to FPG and Zerpa

Although the parties agree that FPG violated Section 553—and the Court has found that

Defendant Zerpa is liable—they dispute which Section 553 damages provision should apply. 

Defendants request that the Court find that FPG and Zerpa are liable as non-willful violators under 

Section 553(c)(3)(A)(ii), and accordingly only award the minimum statutory damages. FPG Mot. 

at 4-5. Plaintiff, meanwhile, requests that the Court award enhanced damages for a willful 

violation pursuant to Section 553(c)(3)(B). ISM Opp. at 9.

There are two types of damages available for violations of Section 553: actual damages 

and statutory damages. “[T]he party aggrieved may recover the actual damages suffered by him as 

a result of the violation and any profits of the violator that are attributable to the violation which 

are not taken into account in computing the actual damages.” 47 U.S.C. § 553(c)(3)(A)(i)

(providing formula for how to calculate profit). Alternatively, “the party aggrieved may recover 

an award of statutory damages for all violations involved in the action, in a sum of not less than 

$250 or more than $10,000 as the court considers just.” Id. at (c)(3)(A)(ii). Here, ISM has elected 

to pursue statutory damages. See Compl. ¶ 33(a).

The statute provides an enhancement for willful violators, and a reduction for what might 

be characterized as “oblivious violators.” Under Section 553(c)(3)(B), “[i]n any case in which the 

court finds that the violation was committed willfully and for purposes of commercial advantage 

or private financial gain, the court in its discretion may increase the award of damages, whether 

actual or statutory under subparagraph (A), by an amount of not more than $50,000.” 47 U.S.C. § 

553(c)(3)(B). Under Section 553(c)(3)(C) “[i]n any case where the court finds that the violator 

was not aware and had no reason to believe that his acts constituted a violation of this section, the 

court in its discretion may reduce the award of damages to a sum of not less than $100.” Id. at

553(c)(3)(C). Defendants do not contend that they are oblivious violators, and Section 

553(c)(3)(C) does not apply. FPG Mot. at 4. 

Determining the appropriate damages that apply under Section 553 requires two separate 

steps: (1) was the violation “willful”; and (2) what is the appropriate amount of statutory damages. 

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Defendants somewhat theatrically contend that the term “willfully” with respect to Section

553(c)(3)(B) has been rendered meaningless, and that “[c]ourts award enhanced damages almost 

as a matter of course, not because defendants intended to violate signal piracy laws, but because of 

the dubious conclusion that ‘[t]he broadcast of an event without authorization is a deliberate act, 

and this establishes willfulness.’” FPG Mot. at 11 (citing J & J Sports Productions, Inc. v. Welch, 

No. 10-cv-0159, 2010 WL 4683744, at *4 (E.D.N.Y. Nov. 10, 2010)). However, a number of 

Courts in this District have found that willfulness is not a mere formality. See Joe Hand 

Promotions, Inc. v. Santana, 964 F. Supp. 2d 1067, 1075 (N.D. Cal. 2013) (“The simple fact that 

Mr. Guzman showed the Program in a commercial establishment is not enough to establish 

willfulness.”); J & J Sports Prods. v. Coyne, 857 F. Supp. 2d 909, 918 (N.D. Cal. 2012) (finding 

that establishment and owner did not commit a willful violation due to lack of awareness and 

failure to read Comcast contract); see e.g., Innovative Sports v. West, No. 19-cv-1455-WHO, 2019 

WL 8261691, at *6 (N.D. Cal. Dec. 23, 2019) (denying summary judgment on willfulness, and 

noting that the introduction of text messages suggesting that defendants were aware that the cost 

of commercial licenses is much higher than what they paid to display a soccer game is a fact that 

could prove willfulness); compare Sports Prod. v. Marcaida, No. 10-5125 SC, 2011 WL 2149923, 

at *3 (N.D. Cal. May 31, 2011) (granting the entry of default judgment, and holding that under 

Section 605 (satellite signal interception) “because of the extreme unlikelihood that Defendant 

inadvertently acquired the signal to display the fight, coupled with Defendant’s failure to appear 

in this lawsuit, the Court finds that Defendant acted willfully and for the purposes of commercial 

advantage and enhanced damages are warranted.”) (emphasis added).

The evidence here raises a question of material fact concerning willfulness. Defendants

contend that Plaintiff has not established a willful violation because Zerpa and FPG were unaware 

that FPG required a commercial license from both latamtvip.com and ISM to lawfully broadcast

the Program at FPG. Zerpa Decl. ¶ 9. Defendants provide evidence that Zerpa responded to a 

solicitation from latamtvip.com, requested information on latamtvip.com’s services to broadcast 

the Program at FPG, and used his FPG email address to do so. Id. ¶ 7. FPG paid latamtvip.com a 

fee for the Program, the cost of which was $20 for the 90 days Defendants requested. Id. at 21

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(Ex. F). Latamtvip.com established the account for FPG, but according to Zerpa, never informed 

him that FPG might need to purchase an additional commercial license from ISM. Id. ¶ 7.

Plaintiff counters that Zerpa’s conduct was “willful” because of his “reckless disregard” 

and “willful blindness” to ISM’s property rights. ISM Opp. at 7-8. Plaintiff presents little 

evidence to support this contention, likely because discovery was not conducted.3 Plaintiff’s 

evidence, however, does show that Defendants advertised the Program on Facebook, Riley Decl. 

at 9-10, and livestreamed it on that same platform. Id. at 8.

Although the Ninth Circuit has not provided a specific test to determine the amount of 

enhanced damages, “District courts have thus considered different factors to determine culpability 

and to achieve proper compensation and deterrence. These include use of cover charge, increase 

in food price during programming, presence of advertisement, number of patrons, number of 

televisions used, and impact of offender’s conduct on the claimant. Repeated violations may also 

justify enhanced damages.” Coyne, 857 F. Supp. 2d at 917 (citation omitted). (quoting J & J 

Sports Prods., Inc. v. Concepcion, No. 10-cv-5092-WHA, 2011 WL 2220101, at *4 (N.D. Cal. 

June 7, 2011)). Drawing all reasonable factual inferences in favor of Defendants, Zerpa’s state of 

mind leading up to the display of the Program could show that he did not believe FPG required a 

license from ISM to display the Program, considering that this appears to be Defendants’ first 

violation, they did not charge a cover fee or a drink minimum, they exhibited the Program on a 

single TV, and they paid latamtvip.com a (small) fee.4 Conversely, drawing all reasonable factual 

inferences in favor of ISM, Zerpa’s state of mind, as the owner of FPG, could show that he acted 

willfully by advertising and livestreaming the Program via Facebook, and was aware that FPG 

would require some type of further licensing separate and apart from the de minimis and 

3 Perhaps this is why Plaintiff moved for summary judgment on the grounds that Defendants used 

a satellite instead of cable to intercept the Program. 

4 Plaintiff relies on a number cases to argue that enhanced damages are found for “first-time 

offenders, and [where] plaintiff has provided no evidence of promotional activities or extensive 

exploitation of the intercepted programming.” ISM Opp. at 13 (quoting Concepcion, 2011 WL 

2220101, at *4); see Joe Hand Promotions, Inc. v. Ho, No. C-09-1435 RMW, 2009 WL 3047231, 

at *1 (N.D. Cal. Sept. 18, 2009). These cases involved either (1) the entry of default judgment 

where defendants had no opportunity to rebut the allegations, or (2) Section 605 violations (or, in 

the case of Ho, both). And in any event, these courts limited the amount of damages because the 

absent defendants were first-time offenders. 

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disproportionate fee paid to latamtvip.com.5

Further, there is also genuine dispute of fact over the cost of the license, a relevant factor in 

assessing statutory damages. Defendants contend that the license cost $750, FPG Mot. at 13, and 

ISM contends that it cost $1,000 (per its rate for establishments that have a seating capacity of 

between 50 and 100 people). ISM Opp. at 20 (citing McCann Decl. ¶ 3, Ex. H). The evidence 

raises a question of material fact concerning FPG’s seating capacity, and thus the proper amount 

of the licensing fee.6 

“Credibility determinations, the weighing of the evidence, and the drawing of legitimate 

inferences from the facts are jury functions, not those of a judge.” Liberty Lobby, 477 U.S. at 255. 

The Court therefore finds that there is a genuine dispute of material fact as to FPG and Zerpa’s 

state of mind, and DENIES both parties’ summary judgment motions regarding willfulness and 

the appropriate damages cap under Section 553.

7

 

Conversion

Plaintiff’s third cause of action alleges that the Defendants are liable for conversion under 

California law. In California, the elements of conversion are “(1) plaintiffs’ ownership or right to 

possession of the property at the time of the conversion; (2) defendants’ conversion by a wrongful 

act or disposition of plaintiffs’ property rights; and (3) damages.” Tyrone Pac. Intern., Inc. v. MV 

Eurychili, 658 F.2d 664, 666 (9th Cir. 1981). Exclusive distribution rights over a program may be 

5 The Court notes, based on the record evidence adduced so far and the factors considered in 

determining enhanced damages, that even if Plaintiff establishes a willful violation, an award of 

(or even close to) the maximum amount of enhanced statutory damages appears very unlikely. 

See, e.g., Marcaida, 2011 WL 2149923, at *4 (finding “that an award equal to three times the 

price Defendant would have had to pay to lawfully purchase the program is an appropriate 

sanction” for a “willful violation of Section 605.”); J & J Sports Prods., Inc. v. Mosley, No. 10-cv5126 CW-EMC, 2011 WL 2066713, at *6 (N.D. Cal. Apr. 13, 2011), report and recommendation 

adopted, No. 10-cv-5126-CW, 2011 WL 2039374 (N.D. Cal. May 25, 2011) (awarding $2,500 in 

statutory damages, considering the $1,000 cost of the commercial license, defendant’s incremental 

profits, and the need to deter piracy, and awarding an additional $2,500 in enhanced damages 

because defendant’s conduct was willful); Ho, 2009 WL 3047231, at *1 (finding non-willful 

statutory damages in the amount of $1,000 appropriate where commercial license would have been 

between $750 to $975). 

6

It is unclear what impact the livestream would have on the licensing fee. 

7 Under Section 553(c)(2)(C), the court “may . . . direct the recovery of full costs, including 

awarding reasonable attorneys' fees to an aggrieved party who prevails.” (emphasis added). The 

parties have not briefed this issue, and this Order does not prejudice Plaintiff’s ability to seek

those costs.

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converted. See Don King Prods./Kingvision v. Lovato, 911 F.Supp. 419, 423 (N.D. Cal. 1995). 

As discussed above, there is no dispute that Plaintiff owned the exclusive distribution 

rights over the Program, and FPG has conceded liability for Section 553 and conversion. FPG 

Mot. at 3. Moreover, ISM suffered damages by losing the potential profit it would have obtained 

from sublicensing fees for the Program. Answer ¶ 15. FPG has also conceded liability. FPG 

Mot. at i (“FPG Converted ISM’s video programming”). Therefore, FPG is liable for conversion. 

Defendants also contend that Plaintiff’s conversion claim can apply only to FPG, and not 

to Defendants Zerpa and Martinez. FPG Reply at 6. As with Section 553 violations, an 

“individual officer or director will be immune from torts committed by the corporation unless he 

authorizes, directs, or in some meaningful sense actively participates in the wrongful conduct.” 

See J & J Sports Prods., Inc. v. Walia, 2011 WL 902245, at *5 (internal quotations omitted). With 

respect to Defendant Zerpa, Plaintiff’s claim is predicated on the violations of Section 553 by 

FPG. Therefore, for the same reasons Zerpa is liable for Section 553 violations, Plaintiff has met 

its burden to establish Plaintiff Zerpa’s personal liability for conversion because he actively 

participated in the unauthorized acquisition of the Program. With respect to Defendant Martinez, 

there remains a genuine issue of material fact as to liability for conversion.

Defendants also contend that awarding damages for both conversion and Section 553 is 

“duplicative.” FPG Mot. at 16. Courts have “subsumed” conversion damages under statutory 

damages where the statutory damages are sufficient to compensate the plaintiff for its loss. See, 

e.g., Santana, 964 F.Supp.2d at 1076 (citing J & J Sports Prods. v. Corona, 2013 WL 3481697, at 

*7 (E.D. Cal. July 10, 2013) (“because Plaintiff chose to receive statutory damages rather than 

actual damages under the Communications Act, damages for conversion are subsumed into the 

total award”) and Joe Hand Promotions, Inc. v. Behari, 2013 WL 1129311, at *3 (E.D. Cal. Mar. 

18, 2013) (explaining damages for conversion would not be awarded “because the recommended 

statutory damages will sufficiently compensate plaintiff such that an award for conversion 

damages would be duplicative”)).

The Court GRANTS Plaintiff’s motion for summary judgment on the conversion cause of 

action as to the liability of Defendants FPG and Zerpa. Given that damages under Section 553 are 

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not yet decided, Defendants’ argument that damages for conversion would be duplicative of 

damages under Section 553, FPG Mot. at 16, is premature. See Santana, 964 F. Supp. 2d at 1076

(declining to determine whether it is appropriate to award separate damages for conversion 

because neither party asked the court to decide damages under Section 553 in their cross-motions 

for summary judgment). 

UCL Section 17200

Plaintiff’s fourth claim alleges that Defendants are liable for violating the California Unfair 

Competition Law Section 17200. Cal. Bus. & Prof. Code § 17200 et seq. Only Defendants have 

moved for summary judgment on this cause of action. UCL Section 17200 prohibits any 

“unlawful, unfair or fraudulent business act or practice” and any “unfair, deceptive, untrue or 

misleading advertising.” See J & J Sports Prods., Inc. v. Flores, 913 F. Supp. 2d 950, 963 (E.D. 

Cal. 2012) (citing Levine v. Blue Shield of California, 117 Cal.Rptr.3d 262 (Cal. Ct. App. 2010)).

As relevant here, the “unlawful” prong of the UCL incorporates other laws and treats violations of 

those laws as unlawful business practices independently actionable under state law. Chabner v. 

United Omaha Life Ins. Co., 225 F.3d 1042, 1048 (9th Cir. 2000). The remedies provided under 

UCL Section 17200 are cumulative and derivative, such that if Defendants are liable for any other 

claim, they are liable under Section 17200. Khoury v. Maly's of Cal., Inc., 14 Cal.App.4th 612, 

619 (Cal. Ct. App. 1993); Cal. Bus. & Prof. Code § 17205. 

Defendants contend only that their conduct was not unfair or fraudulent, and do not 

address the “unlawful” prong of UCL Section 17200. See FPG Mot. at 17-18. In light of the 

Court’s finding that Defendants FPG and Zerpa are liable for violations of Section 553, and that 

there is a genuine issue of material fact as to Martinez, the Court DENIES Defendants’ motion as 

to this cause of action. 

IV. CONCLUSION

For the foregoing reasons, the Court GRANTS Plaintiff’s motion for summary judgment 

as to liability for Defendants FPG and Zerpa under Section 553 and for conversion. The Court 

DENIES the parties’ cross-motions as to the willfulness of FPG and Zerpa, and Plaintiff’s and 

Defendants’ cross-motions as to Defendant Martinez’s personal liability for Section 553 and for 

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common law conversion. The Court also DENIES Defendants’ motion for summary judgment as 

to the UCL Section 17200 cause of action.

As discussed at the hearing, the parties are DIRECTED to meet and confer in an effort to 

resolve the case informally, after which time the parties shall file a status report of no more than 

two pages by May 29, 2020 regarding the status of their settlement discussions. If the case is not 

resolved by then, the Court will refer the parties to court-connected mediation. All other pending 

pretrial and trial dates are hereby VACATED.

IT IS SO ORDERED.

Dated:

______________________________________

HAYWOOD S. GILLIAM, JR.

United States District Judge

4/29/2020

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