Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_14-cv-01584/USCOURTS-caed-1_14-cv-01584-0/pdf.json

Parties Involved:
El Progresso 4 Bar
Defendant
J & J Sports Productions, Inc.
Plaintiff
Alvaro Lupian Lua
Defendant

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

J & J SPORTS PRODUCTIONS, INC.,

Plaintiff,

v.

ALVARO LUPIAN LUA, individually 

and d/b/a EL PROGRESSO 4 BAR,

Defendant.

Case No. 1:14-cv-01584-KJM-MJS

FINDINGS AND RECOMMENDATIONS 

REGARDING PLAINTIFF’S APPLICATION 

FOR DEFAULT JUDGMENT

I. INTRODUCTION

On February 25, 2015, Plaintiff J & J Sports Productions, Inc. (“Plaintiff”) filed a 

motion for default judgment against Alvaro Lupian Lua, individually and doing business 

as El Progresso 4 Bar (“Defendant”). (See generally Motion, ECF No. 15.) The motion 

was referred to this Court pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule 302. 

The Court, finding the matter suitable for decision without a hearing, VACATED 

the March 27, 2015, hearing and deemed the motion submitted upon the record in 

accordance with Local Rule 230(g). (Minute Order, ECF No. 18.) For the reasons set 

forth below, the Court RECOMMENDS that Plaintiff's motion for default judgment be 

GRANTED.

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II. BACKGROUND

Plaintiff filed this civil action on October 7, 2014. (See Compl., ECF No. 1.) The 

Complaint alleges Defendant violated the Communications Act of 1934 (47 U.S.C. § 605, 

et seq.) and the Cable & Television Consumer Protection and Competition Act of 1992 

(47 U.S.C. § 553, et seq.). (Id. at 4-9.) Plaintiff also alleges a state law claim of 

conversion and a violation of California Business and Professions Code section 17200, 

et seq. (Id.)

The suit is based on Defendant's alleged unlawful interception, receipt, and 

exhibition of the “Timothy Bradley v. Juan Manuel Marquez WBO Welterweight 

Championship Fight Program,” telecast nationwide on Saturday, October 12, 2013 (the 

“Program”). (Compl., ECF No. 1 at 4.) According to the Complaint, Plaintiff was the 

exclusive commercial distributor of closed-circuit rights to the Program. (Id.) Since 

Defendant operates a commercial establishment and exhibited the Program there, he 

could not have lawfully obtained the Program without contracting with Plaintiff. 

Defendant did not so contract, and thus necessarily must have wrongfully intercepted, 

received, and broadcasted the Program.

Plaintiff, in its application for default, only requests relief as to counts one

(violation of the Communications Act) and three (conversion) of the Complaint. (Mot., 

ECF No. 15 at 3.) Count one of the Complaint asserts a violation of 47 U.S.C. § 605

(Unauthorized Publication or Use of Communications) alleging that Defendant knowingly 

intercepted, received, and exhibited the Program for purposes of direct or indirect 

commercial advantage or private financial gain. (Id.) Plaintiff prays for $24,800.00 in 

statutory damages. (Id.) Count three alleges Defendant tortuously obtained possession 

of the Program and wrongfully converted it for its own benefit. (Id.) Plaintiff requests an 

award of $1,600 in compensatory damages for the alleged conversion. (Id.)

Defendant was served with the summons and Complaint on December 20, 2014. 

(ECF No. 4.) Defendant has not filed any response to the Complaint. (ECF No. 8.) On 

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January 30, 2015, Plaintiff requested default be entered against Defendant, and on that 

same day, the Clerk entered said default. (ECF No. 8 and 9.) On February 25, 2015, 

Plaintiff filed the present motion for default judgment against Defendant. (Mot., ECF No. 

15.) Despite being served with the application by United States Mail, Defendant has filed 

no opposition to the motion or otherwise sought to appear in this action. (Id.)

III. DISCUSSION

A. Legal Standard

Federal Rule of Civil Procedure 55(b)(2) provides that judgment may be entered 

by the Court on a party's motion for default judgment and authorizes the Court to:

conduct hearings or make referrals-preserving any federal statutory right to 

a jury trial-when, to enter or effectuate judgment, it needs to:

(A) conduct an accounting;

(B) determine the amount of damages;

(C) establish the truth of any allegation by evidence; or

(D) investigate any other matter.

Upon default, the well-pleaded allegations of liability in the Complaint are taken as 

true. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987); Dundee 

Cement Co. v. Highway Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir.

1983). “Factors which may be considered by courts in exercising discretion as to the 

entry of a default judgment include: (1) the possibility of prejudice to the plaintiff, (2) the 

merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) the sum of 

money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) 

whether the default was due to excusable neglect, and (7) the strong policy underlying 

the Federal Rules of Civil Procedure favoring decisions on the merits.” Eitel v. McCool, 

782 F.2d 1470, 1471–72 (9th Cir. 1986).

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B. Analysis

1. Default Judgment

Service of the summons and Complaint in this action was effected on December 

20, 2014. (ECF No. 2.) A copy of the Proof of Service was filed with this Court on

January 3, 2015. (ECF No. 4.) Defendant has not responded to the Complaint or to this 

Motion (of which he was given notice) or otherwise appeared in the action. (ECF No. 8.) 

The Clerk of the Court entered default against Defendant on January 30, 2015. (ECF 

No. 9.) According to the Declaration of Plaintiff's counsel in support of Plaintiff's Request 

to Enter Default, Defendant is not an infant, incompetent, in the military service, or 

otherwise exempted under the Servicemembers Civil Relief Act of 2003. (Decl. of 

Thomas P. Riley, ECF No. 15-2 at 1.)

The Court finds that Plaintiff's Complaint properly and credibly alleges all material 

facts and elements necessary to the claims asserted and to the relief sought, and it 

reflects a meritorious substantive claim. Defendant has chosen not to respond to or 

contest the action or this motion. There is no basis to conclude that Plaintiff will be 

prejudiced by this case proceeding via default judgment rather than trial. Inasmuch as 

default serves as an admission of Plaintiff's well-pled allegations of fact, Danning v. 

Lavine, 572 F.2d 1386,1388 (9th Cir.1978), it must be concluded that there is no dispute 

as to any material fact. 

It appears that Defendant simply elected to allow this matter to proceed through 

default; default was not caused by excusable neglect. Although the Court favors 

resolving cases on the merits after adversarial proceedings, it cannot force Defendant to 

participate. Thus, the only factor weighing against default judgment in this case is the 

relatively large amount of money Plaintiff seeks in damages. However, as discussed 

below, the actual award made by the Court is not of such an amount as to militate 

against proceeding by default judgment.

Accordingly, the Court recommends that default judgment be entered against the 

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Defendant.

2. Statutory and Enhanced Damages

In its initial motion, Plaintiff sought default judgment and an award of damages 

pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II) (statutory damages) and 47 U.S.C. § 

605(e)(3)(C)(ii) (enhanced statutory damages) in the amount of $24,800 against 

Defendant for unlawfully intercepting, receiving, and exhibiting the Program and $1,600 

damages for conversion. (Mot., ECF No. 15 at 3.) 

However, in a supplementary declaration, Plaintiff’s counsel asks the court to 

award maximum statutory and enhanced statutory damages in the amount of $110,000, 

based on an additional default motion currently pending against Defendant by Plaintiff. 

See Supp Decl. of Thomas P. Riley, ECF No. 15-4 at 2; J & J Sports Productions, Inc. v. 

Lua, Case No. 1:14-cv-01350-MCE-SAB (E.D. Cal. Jan. 30, 2015). In the earlier filed 

matter, the magistrate judge issued a findings and recommendations on April 1, 2015, 

recomending that default judgment be entered in the amount of $4,700 ($2,500 in 

statutory damages and $2,200 for conversion). The matter was based on Defendant’s 

alleged unauthorized broadcast of a boxing telecast occurring roughly a month earlier, 

on September 14, 2014. The Court shall take into account the earlier filed action in 

determining the appropriate monetary answered in this matter. 1

Section 605(a) provides that “no person receiving, assisting in receiving, 

transmitting, or assisting in transmitting, any interstate or foreign communication by wire 

or radio shall divulge or publish the existence, contents, substance, purport, effect, or 

meaning thereof, except through authorized channels of transmission of reception....” 

Those who violate this Section are subject to the following civil penalty:

 

1

Plaintiff’s counsel is admonished that he had a duty under Local Rule 123 to promptly file a notice of 

related cases in both matters. It is without question that the matters meet the requirements of being related 

cases and “both actions involve the same parties and are based on the same or similar claim.” Local Rule 

123(a)(1). Failure of counsel to notify the court of further related matters mat result in sanctions under 

Local Rule 110.

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[T]he party aggrieved may recover an award of statutory damages for each 

violation of subsection (a) of this section involved in the action in a sum of 

not less than $1,000 or more than $10,000, as the court considers just, and 

for each violation of paragraph (4) of this subsection involved in the action 

an aggrieved party may recover statutory damages in a sum not less than 

$10,000, or more than $100,000, as the court considers just.

47 U.S.C. § 605(e)(3)(C)(i)(II).

Plaintiff attests that it is a closed-circuit distributor of sports and entertainment 

programming that purchased and retained the exclusive commercial exhibition licensing 

rights to the Program. (Mot., ECF No. 15-1 at 7.) Plaintiff marketed the sub-licensing 

(commercial exhibition) rights in the Program to its commercial customers. (Id.) Plaintiff 

seeks substantial damages as a deterrent to Defendant and others continuing to pirate 

and commercially exhibit such broadcasts. (Id. at 13.) Plaintiff contends that persistent 

signal piracy of Plaintiff's programming costs the company, its customers, and the 

community millions of dollars annually. (Id. at 13-14.) Plaintiff asserts that continued 

signal piracy is caused, in part, by the perceived lack of consequences as reflected in 

part by nominal or minimal damage awards by courts, for such unlawful interception and 

exhibition. (Id.) As such, Plaintiff requests that it be awarded the maximum, $4,800 

allowance for statutory violations. (Id. at 13.)

Plaintiff also seeks an award of significant enhanced statutory damages under 

Section 605(e)(3)(C)(ii) because Defendant's action in this case was willful—the 

technology is such that it cannot occur inadvertently or innocently-and done for 

commercial advantage. (Mot., ECF No. 15-1 at 13.) Section 605(e)(3)(C)(ii) provides that 

where “the court finds that the violation was committed willfully and for purposes of direct 

or indirect commercial advantage or private financial gain, the court in its discretion may 

increase the award of damages, whether actual or statutory, by an amount of not more 

than $100,000 for each violation of subsection (a)....” Emphasizing the need for 

deterrence as to this Defendant and others, Plaintiff requests that it be awarded $20,000 

in enhanced statutory damages. (Id. at 13.)

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Here, the summons and the Complaint were properly served upon Defendant, its 

default was properly entered, and the Complaint is sufficiently well-pled. See Eitel, 782 

F.2d at 1471–72. By default, Defendant admitted to willfully violating Section 605 for the 

purposes of commercial advantage. See TeleVideo Sys., Inc., 826 F.2d at 917–18. The 

facts before the Court indicate that Defendant's establishment had an approximate 

capacity of 70 to 80 people. (Aff. of Mitch Gerking, ECF No. 15–3 at 2-3.) There was one 

approximately 36 to 42 inch flat screen television displaying the Program on October 12, 

2013. (Id.) Photographs of the establishment depict an aging building, the bar sharing 

space with a modest supermarket. (Id.) Three head-counts revealed over 50 people in 

the facility at the time. (Id.) No evidence was presented that a cover charge was required 

to enter the establishment; however, the entrance to the bar was manned by a security 

guard. (Id.) 

The amount of damages awarded should be in an amount that is adequate to 

deter Defendant and others from committing similar acts in the future. 

Therefore, the Court recommends that statutory damages be awarded pursuant to 

47 U.S.C. § 605(e)(3)(C)(i)(II) in the amount of $4,000.

Some factors weigh against a substantial award of enhanced statutory damages 

in this case. There is no evidence that Defendant (1) advertised the broadcast of the 

Program to entice a larger crowd, (2) charged a premium for food and drinks on the night 

the broadcast was shown, or (3) had a mandatory minimum cover charge. It is noted that 

Defendant had a significant number of patrons at the business during the Program. 

However, there is no evidence that the number of customers was greater because of 

broadcast of the Program than it would have been without the broadcast.

Defendant's conduct, whether particularly profitable for Defendant or not, has an 

adverse impact on Plaintiff and the industry. Plaintiff stresses the significant adverse 

effect piracy has had on its industry, the need for deterrence, and the perception that the 

courts have placed undue weight on whether Defendants promote the program. Plaintiff 

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argues that pirates often refrain from advertising their intent to exhibit such 

programming, to increase the price of food and drinks, or to charge a cover charge, all in 

the hope of undercutting competitors who do sub-license and broadcast the program 

lawfully.

The Court is also mindful that minimal damage awards may result in a perceived 

lack of consequences for signal piracy. Moreover, here Plaintiff characterizes Defendant 

as a repeat offender as default has been entered against Defendant in other piracy

cases involving Plaintiff and has an additional action pending against it before this Court. 

See Supp Decl. of Thomas P. Riley, ECF No. 15-4; J & J Sports Productions, Inc. v. Lua, 

Case No. 1:14-cv-01350-MCE-SAB (E.D.Cal. Jan. 30, 2015). (Dkt. No. 18); see also J & 

J Sports Prods., Inc. v. Lupian, No. 1:10-CV-02104 LJO, 2011 WL 1438757, at *3 (E.D. 

Cal. Apr. 14, 2011).

Weighing all of these factors, specifically including Defendant’s repeated action in 

unlawfully broadcasting Plaintiff’s programs, the Court recommends that enhanced 

statutory damages in the amount of $2,500 be awarded under Section 605(e)(3)(C)(ii). 

This is an amount which should serve as a significant disincentive to defendant and 

others to try to profit directly or indirectly from the pirating, but also recognizes the 

absence of evidence that Defendant actively sought to profit directly or did actually profit 

from the pirating.

3. Damages for Conversion

Plaintiff seeks recovery of $1,600 as the value of the property at the time of the 

conversion.

Under California law, conversion is the wrongful exercise of dominion over the 

property of another. “The elements of a conversion are the plaintiff's ownership or right 

to possession of the property at the time of the conversion; the defendant's conversion

by a wrongful act or disposition of property rights; and damages.” Greka Integrated, Inc. 

v.Lowrey, 133 Cal.App.4th 1572, 1581, 35 Cal.Rptr.3d 684 (2005) (internal quotation 

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and citation omitted); see also G.S. Rasmussen & Assocs., Inc.v. Kalitta Flying Serv., 

Inc., 958 F.2d 896, 906 (9th Cir.1992). “Because conversion is a strict liability tort, 

questions of the defendant's good faith, lack of knowledge, motive, or intent are not 

relevant.” Gilman v. Dalby, 176 Cal.App.4th 606, 615 n. 1, 98 Cal.Rptr.3d 231 (2009). 

The exclusive right to distribute a broadcast signal to commercial establishments 

constitutes a “right to possession of property” for purposes of conversion. See Don King 

Prods./Kingvision v. Lovato, 911 F.Supp. 419, 423 (N.D.Cal.1995) (misappropriation of 

intangible property without authority from owner is conversion); see also DIRECTV, Inc. 

v. Pahnke, 405 F.Supp.2d 1182, 1189 (E.D.Cal.2005) (concluding that the right to 

distribute programming via satellite constituted a right to possession of personal property 

for purposes of a conversion claim under California law.)

Here, Plaintiff was granted the exclusive domestic commercial exhibition licensing 

rights to the Program. As such, Plaintiff had the right to possess the property at the time 

of the conversion. Because Defendant did not legally purchase the Program, the 

exhibition of the Program constituted conversion by a wrongful act or disposition of 

property rights. The rate for the Program at an establishment such as Defendant's

establishment was $1,600. Accordingly, Plaintiff is entitled to damages for conversion in 

the amount of $1,600.

IV. RECOMMENDATIONS

Based on a consideration of the declarations, pleadings, and exhibits to the 

present motion, the Court RECOMMENDS as follows:

1. Plaintiff's motion for default judgment be GRANTED;

2. Judgment be entered in this action against Defendant Alvaro Lupian Lua, 

individually and doing business as El Progresso 4 Bar as follows:

a. $4,000 statutory damages for violation of 47 U.S.C. § 605;

b. $2,500 enhanced statutory damages for violation of 47 U.S.C. § 605; 

and

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c. $1,600 damages for the tort of conversion.

These findings and recommendations are submitted to the district judge assigned 

to this action, pursuant to 28 U.S.C. § 636(b)(1) (B) and this Court's Local Rule 304. 

Within fifteen (15) days of service of this recommendation, any party may file written 

objections to these findings and recommendations with the Court and serve a copy on 

all parties. Such a document should be captioned “Objections to Magistrate Judge's 

Findings and Recommendations.” The district judge will review the magistrate judge's 

findings and recommendations 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. Wilkerson v. Wheeler, 772 F.3d 834, 839 (9th Cir. 

2014).

IT IS SO ORDERED.

Dated: May 14, 2015 /s/Michael J. Seng 

UNITED STATES MAGISTRATE JUDGE

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