J & J Sports Prods., Inc. v. Golden Penny Indus., LLC
| Decision Date | 11 September 2020 |
| Docket Number | Case No. 2:18-cv-00748-JAD-BNW |
| Parties | J & J Sports Productions, Inc., Plaintiff, v. Golden Penny Industries, LLC, et al., Defendants. |
| Court | U.S. District Court — District of Nevada |
In this signal piracy case, plaintiff J&J Sports Productions, Inc. moves for summary judgment against defendant Jerome Kosak. ECF No. 27.1 The motion is unopposed. The Court believes that J&J has carried its summary judgment burden on the first of its two claims, and the Court therefore recommends that the motion be granted in part and denied in part.
J&J brought its complaint against Kosak and Golden Penny Industries, LLC ("GPI"). ECF No. 1 at 1. J&J asserts two claims under the Communications Act: (1) Count I is for violation of 47 U.S.C. § 605, and (2) Count II is for violation of 47 U.S.C. § 553. Id. at 4, 7.
Apart from Kosak's answer to J&J's complaint and response to the Court's order to show cause, see ECF Nos. 4 and 16, neither defendant has participated in this case. This case, further, is stayed as it pertains to GPI, which filed for Chapter 7 bankruptcy in July 2019. ECF No. 23.
J&J filed its unopposed motion for summary judgment in December 2019. ECF No. 27. The Court notes that Kosak provided a notice of change of address in October 2018. ECF No. 16. J&J duly served its summary judgment motion and other relevant documents upon Kosak at thataddress by depositing the same in a sealed envelope, postage prepaid, in the United States Mail. See Fed. R. Civ. P. 5(b)(2); ECF No. 27 at 24; ECF No. 34 at 2.2
A. J&J and "the Program"
J&J is a closed-circuit distributor of sports and entertainment programming. (ECF No. 27-2 (Gagliardi Aff. ¶ 3, Ex. 2)). In April 2015 J&J purchased the exclusive commercial exhibition licensing rights to a program entitled "The Fight of the Century," Floyd Mayweather, Jr. v. Manny Pacquiao Championship Fight Program (the "Program"). Id. The Program, which aired on May 2, 2015, included the main event bout between the Program's eponymous boxers, the undercard bouts preceding the main event, and the commentary expressed in the Program's television broadcast. Id. J&J's exclusive licensing rights are set forth in a written agreement between J&J and the Program's promoters. Id. Ex. 1 (the "Agreement").
J&J marketed and sublicensed the right to broadcast the Program to commercial establishments, including casinos, racetracks, bars, and nightclubs. Id. ¶ 3. In exchange for the ability to lawfully broadcast the program, commercial establishments were required to pay a commercial sublicense fee to J&J. Id. ¶ 12. The fee amount was based on the commercial establishment's capacity. Id. ¶ 12; id. Ex. 3.
The satellite signal containing the Program was not available to or intended for use by the general public. Id. ¶ 15. Thus, to safeguard against the unauthorized receipt or interception of the Program, the satellite transmission containing the Program was encrypted or scrambled. Id. If J&J authorized an establishment to receive the program, J&J would direct the establishment's cable or satellite provider to unscramble the satellite signal. Id. Because J&J held the exclusive commercial distribution rights to the Program, the Program was not available to commercial establishments except through agreement with J&J. Id. ¶ 3.
B. The Bar
J&J did not sublicense the Program to Kosak, GPI, or its commercial establishment: Rebel Republic, then-located at 3540 West Sahara Avenue, Suite E1, Las Vegas, Nevada 89102 (the "Bar"). Id. ¶ 3. Kosak admitted to being the owner and operator of GPI and the Bar and to having dominion, control, oversight, and management over the Bar. ECF No. 4 at 1-2.
J&J hired four investigators to visit the Bar on the night the Program aired. ECF No. 27 at 3. None of the investigators paid a cover charge. See ECF No. 34-1.
Investigator Gerald Andrews arrived at the Bar first, at around 5:45 PM, and he counted eight patrons. Id. at 15. Andrews counted close to twenty televisions, including four above the Bar's service bar. Id. According to Andrews, the Program began at 6:00 PM with a copyright warning and introductory commentary by the Program's announcers. Id. Andrews left the bar at 6:10 PM. Id.
Investigator Lawrence Sanchez was next, and he counted approximately 28 patrons in the Bar at 6:45 PM. Id. at 9. Sanchez attests that the Bar's capacity was 125 persons and that there were 17 televisions throughout the establishment. Id. He observed an undercard bout, noted the screens showing the Program were experiencing connection issues, and counted 40 patrons when we left the Bar at 7:10 PM. Id. at 10.
Investigator Magic Sixx followed. ECF No. 34-1 at 4. Ms. Sixx arrived at 7:40 PM and observed a large banner advertising the Program affixed to the Bar's front roof. Id. Ms. Sixx counted 50 customers and 18 televisions—all approximately 40 inches—inside the Bar. Id. at 4, 5. According to Ms. Sixx, half of the televisions were tuned to the Program. Id. at 5. Forthose televisions tuned to the Program, the signal reception was "poor" and the lower area of the televisions listed a "contact Dish" prompt. Id. The images on the television would freeze for around ten seconds approximately every two minutes before becoming heavily pixelated and disjointed. Id. The Bar's customers complained about the poor picture quality, and the Bar explained that this was due to too many persons receiving the satellite signal. Id. The televisions not depicting the program lacked similar reception issues. Id.
Ms. Sixx observed one of the Program's undercard bouts. Id. She took two more headcounts before departing the bar: there were 65 customers in the Bar at 8:29 PM and 80 at 8:34 PM. Id.
Ms. Pamela Purdy was the final auditor to enter the bar. Id. at 12. She arrived at 8:53 PM and likewise counted eighteen screens, which included seventeen televisions and a screen projected onto a wall adjacent to the Bar's exit. Id. Ms. Purdy noted that each television was marked with a number tag, and by her count there were nine screens showing the Program. Id. at 12. Like Ms. Sixx, Ms. Purdy observed that the screens depicting the Program "kept freezing." Id.
Ms. Purdy noted that the Bar's capacity was 120 persons. Id. at 13. Ms. Purdy counted the Bar's patrons three times before she left at 9:27 PM. Id. She counted 108, 108, and 115 patrons. Id.
Based on the Bar's capacity, the price for a sublicensing fee to broadcast the Program was $6,000.00. ECF No. 27-2, Ex. 3.
Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact," therefore entitling the movant to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986); Fed. R. Civ. P. 56(a). The movant bears the initial responsibility of articulating the basis for its motion and identifying the portions of the record that the movant believes demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. If the movant meets its initial responsibility, the burden shifts to thenonmovant to "produce evidence of a genuine dispute of material fact that could satisfy its burden at trial." Sonner v. Schwabe N. Am., Inc., 911 F.3d 989, 992 (9th Cir. 2018). To resolve a summary judgment motion, the Court views all facts and draws all inferences in the light most favorable to the nonmoving party. Kaiser Cement Corp. v. Fishbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986).
The Ninth Circuit has made clear that the trial court may not grant a summary judgment motion merely because it is unopposed. Heinemann v. Setterberg, 731 F.3d 914, 917 (9th Cir. 2013). Instead, the nonmovant's failure to respond to a fact asserted in the motion "permits a court to consider the fact undisputed." Id. (citing Fed. R. Civ. P. 56(e)(2)).
If summary judgment is sought against a pro se defendant, the court considers the defendant's contentions offered in motions and pleadings, so long as the contentions are made on personal knowledge, set forth facts that would be admissible as evidence, and were made under penalty of perjury. Xue Bao Chen v. Viduarri, No. 2:12-cv-2163-JAD-PAL, 2014 WL 5307928, at *2 (D. Nev. 2014) (citing Jones v. Blanas, 393 F.3d 918, 923 (9th Cir. 2004)). Finally, pro se filings are liberally construed. Erickson v. Pardus, 551 U.S. 89, 94 (2007).
The Agreement between J&J and the Program's promoters grants J&J the exclusive license to exhibit the Program in the United States but specifically excludes "exhibition rights in Clark County, Nevada." ECF No. 27-2 at 11.3 J&J argues, however, that it and the promoters modified the contract to lift the territorial restriction on J&J's rights. ECF No. 27 at 12.
According to J&J, the territorial restriction was imposed to protect ticket sales to Program-related events in Las Vegas, Nevada, including the live event at the MGM Grand Garden Arena. ECF No. 27-2 ¶ 7. Following the ratification of the Agreement, the Program-related events enjoyed substantial ticket sales, which obviated the purpose for the territorial restriction. Id.; ECF No. 27 at 12. Thus, the promoters authorized J&J to license the Program's exhibition to commercial establishments in Las Vegas. ECF No. 27-2 ¶ 7. J&J did so. Id.
To determine whether J&J in fact had the legal right to license the exhibition of the Program in Las Vegas, the Court must resolve whether the J&J and the promoters waived the territorial restriction. The Agreement contains no choice-of-law provision. Under the Restatement (Second) of Conflict of Laws, the Court applies the law of the state which has "the most significant relationship to the transaction." Commercial Ins. Co. of Newark, N.J. v. Pacific-Peru Const. Corp., ...
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