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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

G & G Closed Circuit Events LLC,

Plaintiff, 

v. 

Francisca Gonzalez Arvizu, et al., 

Defendants.

No. CV-18-00671-PHX-JJT

ORDER 

 At issue is Plaintiff’s Application for Default Judgment by the Court (Doc. 17, 

Mot.), to which Defendant filed a Response (Doc. 19, Resp.) and Plaintiff filed a Reply 

(Doc. 20, Reply). 

I. FACTUAL BACKGROUND 

 Plaintiff G&G Closed Circuit Events, LLC was granted exclusive contractual rights 

to the nationwide distribution of a boxing match which aired on May 6, 2017 (“the 

Program”). (Doc. 1, Compl. ¶ 16.) Defendant Francisca Gonzalez Arvizu owns Taco Mich, 

a restaurant and bar in Phoenix. (Compl. ¶ 12.) In its Complaint, Plaintiff alleges that 

Defendant unlawfully intercepted and broadcast the Program at Taco Mich, and that the 

broadcast “resulted in increased profits for Taco Mich.” (Compl. ¶¶ 11, 13.) Plaintiff seeks 

damages under Title 47 U.S.C. §§ 605(e) and 553. (Compl. ¶¶ 15–29.) 

 Plaintiff filed its Complaint on March 1, 2018 and executed service on Defendants 

Gonzalez Arvizu and Taco Mich on April 27, 2018. (Compl, Doc. 13.) Defendants failed 

to answer or otherwise appear in their defense. On May 14, 2018, Plaintiff filed an 

Application for Entry of Default (Doc. 14). The Clerk of Court entered default against 
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Defendants on May 15, 2018 (Doc. 15). Plaintiff timely filed a Motion for Default 

Judgment as to both Defendants on July 12, 2018 (Mot.). On July 30, Defendants filed a 

Response (Resp.) Plaintiff then filed a Reply, arguing that because default has already been 

entered, Defendants are barred from appearing or presenting evidence. (Reply at 2.) 

 In their Response, Defendants allege that Plaintiff cannot prove its damages because 

it lacks supporting evidence. (Resp. at 2–4.) Defendants assert that Plaintiff’s investigator, 

Amanda Hidalgo (“Hidalgo”) misrepresented the events of May 6, 2017 in her affidavit in 

support of Plaintiff’s allegation. (Resp. at 2.) Defendants argue that Hidalgo could not 

possibly have been at Taco Mich between 9:11 and 9:17 p.m. when she claims she saw the 

Program being unlawfully broadcast but then arrive at a different establishment seven miles 

away at 9:15. (Resp. at 2.) Defendant also argues that Plaintiff’s contract with the third 

party (“Promoter”) who conveyed to Plaintiff rights to nationally broadcast the Program, 

did not provide Plaintiff any rights to broadcasts of the Program in languages other than 

English. (Resp. at 3). Defendant alleges that, if the Program was broadcast at Taco Mich, 

it was in Spanish, and therefore Plaintiff would not have any rights to that broadcast. (Resp. 

at 3.) 

 In its Reply, Plaintiff responds to Defendants’ two points, but argues in the 

alternative that “Defendant’s Opposition should be disregarded in its entirety” because 

once in default, Defendants had no right to participate in the litigation. (Reply at 2.) 

Plaintiff seeks entry of default judgment in a total amount of $60,000 for violations of 47 

U.S.C. §§ 605(e)(3)(C)(i)(II) and (ii). (Mot. at 3.) 

II. LEGAL STANDARD 

 When a party against whom relief is sought fails to defend against the claim, the 

court may enter default against that party. Fed. R. Civ. P. 55(a). After entry of default, the 

other party may move for entry of default judgment, which will stand as a final judgment 

in the case. Fed. R. Civ. P. 55(b). But at either stage—entry of default or entry of default 

judgment—the party against whom default was entered has an avenue for relief. “The court 

may set aside an entry of default for good cause, and may set aside a final default judgment 
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under Rule 60(b).” Fed. R. Civ. P. 55(c). Rule 60(b) lays out specific grounds for relief, 

but “[t]he different treatment of default entry . . . by Rule 55(c) frees a court considering a 

motion to set aside a default entry from the restraint of Rule 60(b) and entrusts 

determination to the discretion of the court.” Haw. Carpenters’ Trust Funds v. Stone, 794 

F.2d 508, 513 (9th Cir. 1986). Thus, while courts have held that the possible reasons for 

relief under Rule 55 and Rule 60 are roughly equivalent, “the standards for setting aside 

entry of default under Rule 55(c) are less rigorous than those for setting aside a default 

[judgment].” Id. And in any case, reaching entry of default judgment is “appropriate only 

in extreme circumstances [because] a case should, whenever possible, be decided on the 

merits.” Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984). 

 The party seeking to set aside entry of default under Rule 55(c) must show that any 

one of three factors favors their motion. Franchise Holding II, LLC v. Huntington Rest. 

Grp., Inc., 375 F.3d 922, 925–26 (9th Cir. 2004). The three factors are: (1) whether the 

party against whom default was entered “engaged in culpable conduct that led to the 

default;” (2) “whether [that party] had a meritorious defense; or (3) whether reopening the 

default judgment would prejudice” the party in whose favor default was entered. Id. at 926. 

“As these factors are disjunctive, the district court [is] free to deny the motion ‘if any of 

the three factors [is] true.’” Id. (quoting Amer. Ass’n of Naturopathic Physicians v. 

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

 In order to justify vacating default on the grounds that it had a meritorious defense, 

the party so moving must “present the district court with specific facts that would constitute 

a defense.” Id. (citing Madsen v. Bumb, 419 F.2d 4, 6 (9th Cir. 1969)). 

III. ANALYSIS 

Plaintiff is not misguided in its argument that Defendant’s Response constitutes an 

argument on the merits that it is not normally permitted after default has been entered. 

(Reply at 2.) But Defendants are within their rights to seek relief under Rule 55(c), which 

governs when default has been entered but there is not yet a final default judgment. In 

substance, Defendant’s Response comports with Rule 55(c) and addresses the appropriate 
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factors that the Court considers when ruling on a Motion to Set Aside Default. Thus, the 

Court will treat Defendant’s Response as a Motion to Set Aside a Default under Rule 55(c) 

and will treat Plaintiff’s Reply as a Response to that Motion. 

 Defendants need only show that one of the three factors outlined above justifies 

vacating default. Defendants seem to have only addressed the existence of a meritorious 

defense. Thus, the Court will not determine whether Defendants “engaged in culpable 

conduct that led to the default”1

 or “whether reopening the [default] would prejudice” 

Plaintiff. Franchise Holding II, LLC, 375 F.3d at 926. 

 Defendants assert two possible defenses. First, they argue that Plaintiff’s 

investigator, Hidalgo, could not possibly have been at Taco Mich from 9:11 to 9:17 if she 

arrived at a second establishment by 9:15. (Resp. at 2–3.) Second, Defendants argue that 

Plaintiff had no rights to a broadcast of the Program in Spanish, and thus Defendants could 

not have infringed upon Plaintiff’s exclusive broadcast rights. (Resp. at 3.) The Court need 

not determine at this stage whether these defenses are winning arguments—only whether 

they are meritorious. The Court finds that Defendants did indeed allege sufficient facts to 

constitute a meritorious defense to Plaintiff’s claim. See Madsen v. Bumb, 419 F.2d 4, 6 

(9th Cir. 1969) (requiring more than “a mere general denial without facts to support it” in 

order to set aside entry of default), see also Haw. Carpenters’ Trust Funds, 794 F.2d at 513 

(instructing that the meritorious defense requirement be “liberally interpreted when used 

on a motion for relief from an entry of default.”). 

IV. CONCLUSION 

Treated as a Motion to Set Aside Entry of Default, Defendants’ Response presents 

facts that contradict Plaintiff’s claims and collectively constitute a meritorious defense 

under Rule 55(c). The Court will vacate the entry of default and Defendant will file an 

Answer to Plaintiff’s Complaint so that this case may be decided on its merits. Given that 

 

1

 While Defendants did not need to address their potentially culpable conduct in order to justify vacating the entry of default, the Court acknowledges that Defendants’ failure to answer Plaintiff’s Complaint or participate in litigation prior to the entry of default might merit an award of sanctions if they cannot show good cause for their failure 

to defend against Plaintiff’s claim. 
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entry of default in favor of Plaintiff is vacated, Plaintiff is not entitled to attorneys’ fees 

and costs as a prevailing party at this time. 

 IT IS THEREFORE ORDERED denying Plaintiff’s Motion for Default Judgment 

(Doc. 17). 

 IT IS FURTHER ORDERED vacating the Entry of Default (Doc. 15). 

 IT IS FURTHER ORDERED that Defendant shall file an Answer to Plaintiff’s 

Complaint (Doc. 1) by February 20, 2019. 

 IT IS FURTHER ORDERED that Defendants shall show cause why they should 

not be sanctioned for failing to defend against Plaintiff’s claims and forcing Plaintiff to 

incur the expense of filing its Motion for Default Judgment. Defendants shall show cause 

by February 13, 2019. 

 Dated this 5th day of February, 2019. 

Honorable John J. Tuchi 

United States District Judge