G & G Closed Circuit Events, LLC v. Castillo

Decision Date20 June 2018
Docket NumberNo. 14 C 2073,14 C 2073
Parties G & G CLOSED CIRCUIT EVENTS, LLC, Plaintiff, v. Jaime CASTILLO, Maria Castillo, and El Bajio Enterprises, Inc., Defendants. Jaime Castillo, Maria Castillo, and El Bajio Enterprises, Inc., on behalf of themselves and others similarly situated, Counter-Plaintiffs v. Law Offices of Thomas P. Riley, and G & G Closed Circuit Events, LLC, Counter-Defendants.
CourtU.S. District Court — Northern District of Illinois

Boris G. Samovalov, Andre Ordeanu, Zane D. Smith, Zane D. Smith & Associates, Ltd., Chicago, IL, for Plaintiff.

Lisa L. Clay, Attorney at Law, Chicago, IL, Patrick W. Walsh, Patrick W. Walsh, P.C., Clarendon Hills, IL, for Defendants.


Honorable Edmond E. Chang, United States District Judge

This is the latest installment in a years-long saga of litigation between Jaime and Maria Castillo, El Bajio Enterprises,1 G & G Closed Circuit Events (G & G for short), and G & G's attorney, the Law Offices of Thomas P. Riley (Riley for short). The conflict began when G & G accused the Castillos of unlawfully broadcasting a boxing match at their restaurant in violation of G & G's exclusive commercial distribution rights.2 When G & G's settlement demands proved futile, G & G initiated this lawsuit. R. 1, Compl.3 The Castillos struck back with several counterclaims, the current version looping in Riley as a defendant. R. 178, Third Am. Counterclaim. At this point (after years of disputes over discovery and liability), G & G and the Castillos have both moved for summary judgment on the issue of the Castillos' liability for broadcasting the boxing match. R. 295, Castillo Mot. Summ. J.; R. 304, G & G Mot. Summ. J. Meanwhile, G & G and Riley have each moved to dismiss the Castillos' entire Third Amended Counterclaim. R. 293, G & G Mot. Dismiss; R. 300, Riley Mot. Dismiss. For the reasons stated below, the Castillos' motion for summary judgment is granted on G & G's claim under 47 U.S.C. § 553, but otherwise denied. G & G's motion for summary judgment is also denied. Both motions to dismiss are granted, and the Castillos' Third Amended Counterclaim is dismissed with prejudice.

I. Summary Judgment Motions
A. Background

In deciding a motion for summary judgment, the Court views the evidence in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Because G & G and the Castillos have both moved for summary judgment, the Court will consider the evidence in the light most favorable to each party to see if the opposing party is entitled to summary judgment.

G & G's version of events is that G & G owns the commercial distribution rights to a boxing match, Saul Alvarez v. Austin Trout Championship Fight Program , which was telecast nationwide on April 20, 2013. R. 306, G & G SOF ¶ 7.4 The Castillos obtained access to the fight through their residential DirecTV account, and broadcast the fight at their restaurant, La Pena.5 Id. ¶¶ 8-11. Aaron Lockner, an investigator working on behalf of G & G,6 observed the fight through the window of La Pena, and went into the restaurant to investigate. R. 320, G & G Resp. Castillo SOF ¶ 46. Lockner wrote an affidavit stating that he saw the fight being displayed on three TVs in La Pena around 10:30 p.m. on April 20. G & G SOF Exh. 9, Lockner Aff. The Castillos did not order the fight from G & G, and did not obtain a commercial license to broadcast it. G & G SOF ¶ 12.

The Castillos admit that they showed the fight at their restaurant, and that they never purchased a commercial license from G & G. R. 324, Castillo Resp. G & G SOF ¶ 12; R. 297, Castillo SOF ¶ 42. But the Castillos maintain that they were entrapped into showing the fight by Aaron Lockner. See Castillo SOF ¶ 42. According to the Castillos, on the night of the fight, an unknown customer—who the Castillos now believe to be Lockner—asked Jaime Castillo to change the channel to Showtime to put on the fight. Id. The Castillos were able to show the fight because (they maintain), DirecTV had mistakenly installed residential programming at La Pena. Id. ¶ 43. (The fight was broadcast to residential customers at no charge on April 20, so the Castillos presumably were not prompted to pay for the programming when they put on the fight at Lockner's request. See Castillo SOF ¶¶ 44, 46.) The Castillos further assert that G & G encourages investigators like Lockner to engage in dishonest behavior by paying them only if they provide signed affidavits attesting to acts of piracy, by not double-checking the investigators' assertions in their affidavits, and by failing to verify other evidence provided by the investigators, such as photos and videos. Castillo SOF ¶¶ 30-33, 38.

B. Summary Judgment Standard

Summary judgment must be granted "if the 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 genuine issue of material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In evaluating summary judgment motions, courts must view the facts and draw reasonable inferences in the light most favorable to the non-moving party. Scott v. Harris , 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007). The Court may not weigh conflicting evidence or make credibility determinations, Omnicare, Inc. v. UnitedHealth Grp., Inc. , 629 F.3d 697, 704 (7th Cir. 2011), and must consider only evidence that can "be presented in a form that would be admissible in evidence." Fed. R. Civ. P. 56(c)(2). The party seeking summary judgment has the initial burden of showing that there is no genuine dispute and that they are entitled to judgment as a matter of law. Carmichael v. Village of Palatine , 605 F.3d 451, 460 (7th Cir. 2010) ; see also Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Wheeler v. Lawson , 539 F.3d 629, 634 (7th Cir. 2008). If this burden is met, the adverse party must then "set forth specific facts showing that there is a genuine issue for trial." Anderson , 477 U.S. at 256, 106 S.Ct. 2505.

C. Analysis
1. G & G's Commercial Distribution Rights

A threshold dispute is whether G & G actually owns the commercial distribution rights to the Alvarez/Trout boxing match. G & G asserts that it purchased the rights from Showtime, and backs up this assertion with testimony from G & G's president Nicholas Gagliardi. G & G SOF ¶ 7; G & G SOF Exh 4, Gagliardi Dep. 21:5-23:1; R. 308, Gagliardi Aff. ¶ 3. The Castillos, on the other hand, argue that G & G's proof is insufficient to prove that G & G owns the commercial rights to the fight. See Castillo SOF ¶¶ 12-20; R. 296, Castillo Summ. J. Br. at 4. The Castillos do not provide any evidence to back up their suspicion that G & G does not own the rights to the fight, choosing to point only to oddities and inconsistencies in Gagliardi's testimony. See id.7

Ordinarily, this kind of speculation about the truthfulness of the other side's testimony would not be enough to defeat a motion for summary judgment. See, e.g. , Bell v. Duperrault , 367 F.3d 703, 707 (7th Cir. 2004) ("Inferences that are supported by only speculation or conjecture will not defeat a summary judgment motion."). In this case, however, there is some reason to be skeptical about Gagliardi's testimony. Gagliardi states that he negotiated purchase of the rights via email with someone named Jock McLean, who was then a vice president for sports and event programming at Showtime Networks, Inc. Gagliardi Aff. ¶ 3. Gagliardi testifies that it was the usual practice to not have a written contract. Castillo SOF Exh. 7, Gagliardi Dep. 22:2-5.

But Gagliardi was also unable to produce the emails that supposedly memorialized the agreement, or any other documentation to confirm that the sale actually took place. See id. 23:18-24:3. Gagliardi did explain the missing emails by testifying that his computer files got corrupted and the email was lost. Id. Gagliardi also testified that he tried to reach out to McLean, his contact at Showtime, and got no response. Id. 93:15-94:5. To be sure, none of this is a smoking gun. It could very well be true that Gagliardi's emails were indeed lost, and that McLean no longer works at Showtime or just refused to respond (though a subpoena would have required a response). Still, it is odd that G & G would have no documentation of its supposed rights to the programming. It is also strange that Gagliardi's emails were apparently stored only as files on one computer and could not be obtained from the provider of the email service. But, on the other hand, the Castillos provided no actual evidence to cast doubt on Gagliardi's testimony, even though they could presumably have backed up their theories by (as noted earlier) subpoenaing records from Showtime, for example. Even an absence of Showtime records would have been probative to rebut Gagliardi's testimony.

At the end of the day, this is a close enough question to preclude summary judgment right now. Taken in the light most favorable to the Castillos , a reasonable jury could find, on these facts, that there is enough circumstantial evidence to disbelieve Gagliardi's testimony on ownership. This is an example of a case where the gaps in a movant's summary-judgment presentation cast enough doubt on an asserted fact that the non-movant can reasonably point to the absence of evidence as enough to raise a genuine issue. Having said that, a prompt motion from either side might be granted for very limited and targeted discovery on Showtime, even at this late date, to ascertain the truth of the ownership issue. And, in any event, at the pretrial order stage, the parties should consider whether a special interrogatory would be helpful on this...

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