Joe Hand Promotions, Inc. v. Adame

• Decision Date: 16 August 2012
• Docket Number: EP-12-CV-141-KC
• Parties: JOE HAND PROMOTIONS, INC., as Broadcast Licensee of the April 18, 2009 UFC 97: "Redemption": Silva/Leites Event, Plaintiff, v. STEVEN ADAME, Individually and d/b/a MI OFICINA NITE CLUB, Defendant.
• Court: U.S. District Court — Western District of Texas

JOE HAND PROMOTIONS, INC., asBroadcast Licensee of the April 18,2009 UFC 97: "Redemption":Silva/Leites Event, Plaintiff,

v. STEVEN ADAME, Individually andd/b/a MI OFICINA NITE CLUB, Defendant.

EP-12-CV-141-KC

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS EL PASO DIVISION

Date: August 16, 2012

ORDER

On this day, the Court considered "Defendants' Verified Motion to Vacate the Clerk's Default Judgment" ("Motion"), ECF No. 12, and "Plaintiff's Motion for Final Default Judgment & Brief in Support" ("Motion for Default"), ECF No. 9. For the reasons set forth herein, the Court GRANTS the Motion. The Court DENIES the Motion for Default as moot.

I. BACKGROUND

Plaintiff alleges that Defendant unlawfully and willfully intercepted and published the telecast of the April 18, 2009, Ultimate Fighting Championship 97: "Redemption": Silva/Leites (the "Event") at Mi Oficina Nite Club (the "Establishment"). Pl. Original Compl. ("Complaint") ¶¶ 5, 9, 11-15, ECF No. 1. Accordingly, Plaintiff filed suit on April 18, 2012, alleging violations of the Federal Communications Act ("FCA"), 47 U.S.C. §§ 553 and 605. See Compl. ¶¶ 16-17. A summons against Defendant was issued on April 19, 2012, served on April 26, 2012, andreturned executed on July 9, 2012. Summons in a Civil Action 1, ECF No. 4; Summons in a Civil Action 1-2, ECF No. 7.

On May 14, 2012, Defendant attempted to file an answer to Plaintiff's Complaint. See Answer, ECF No. 5. However, the answer contained the incorrect case number and case style, and therefore, the answer was deemed deficient. See Answer; Deficiency Notice 1, ECF No. 6. The Court issued a deficiency notice notifying Defendant that he must refile the document "immediately." See Deficiency Notice 1. Defendant did not refile the answer.

On July 9, 2012, Plaintiff moved for an entry of default and default judgment. Pl.'s Req. for Entry of Default ("Motion for Entry"), ECF No. 8; Pl.'s Mot. for Final Default J. & Br. in Supp. ("Motion for Default"), ECF No. 9. The Clerk issued an entry of default on July 10, 2012. Clerk's Entry of Default ("Entry of Default"), ECF No. 10. As of the date of this Order, the Court has not ruled on the Motion for Default or issued a default judgment. On July 17, 2012, Defendant moved to vacate the Entry of Default.¹ See Mot. Plaintiff did not file a response to the Motion.²

II. DISCUSSION

A. Standard

Federal Rule of Civil Procedure 55(c) provides that "[t]he court may set aside an entry of default for good cause." Fed. R. Civ. P. 55(c). Good cause "is not susceptible of precise definition, and no fixed, rigid standard can anticipate all of the situations that may occasion the failure of a party to answer a complaint timely." In the Matter of Dierschke, 975 F.2d 181, 183 (5th Cir. 1992); see also United States v. One Parcel of Real Prop., 763 F.2d 181, 183 (5th Cir. 1985) (explaining that the standard to set aside an entry of default is less rigorous than the "excusable neglect" standard for setting aside a default judgment under Rule 60(b)).³ Informing the good cause inquiry is the "policy in favor of resolving cases on their merits and against the use of default judgments." Rogers v. Hartford Life and Accident Ins. Co., 167 F.3d 933, 936 (5th Cir. 1999). Accordingly, "where there are no intervening equities any doubt should, as a general proposition, be resolved in favor of the movant to the end of securing a trial upon the merits." Lacy v. Sitel Corp., 227 F.3d 290, 291 (5th Cir. 2000) (quoting Gen. Tel. Corp. v Gen. Tel. Answering Serv., 277 F.2d 919, 921 (5th Cir. 1960)). Ultimately, relief from default is within the discretion of the district court. Moldwood Corp. v. Stutts, 410 F.2d 351, 352 (5th Cir. 1969).

"In determining whether to set aside a default decree, the district court should consider whether the default was willful, whether setting it aside would prejudice the adversary, and whether a meritorious defense is presented." Dierschke, 975 F.2d at 183 (quoting One Parcel, 763 F.2d at 183). However, these three factors "are not talismanic." Id. at 184. "Whatever factors are employed, the imperative is that they be regarded simply as a means of identifying circumstances which warrant the finding of 'good cause' to set aside a default." Id.

B. Analysis

1. Defendant's default was not willful

Defendant argues that his failure to file a response was not intentional or willful. Defs.' Mem. in Supp. of Mot. to Vacate the Clerk's Default J. ("Memorandum") ¶ 5(c), ECF No. 13. Defendant explains that he filed an answer with the Clerk under an incorrect case number, and that defense counsel's office staff did not properly notify Defendant's attorney of the Deficiency Notice. Id. Defendant contends that defense counsel was on vacation from June 7, 2012 to July 9, 2012, thus further delaying the matter. Id.

Defendant's default appears to be the result of mistake rather than a willful action. See Lacy, 227 F.3d at 291. First, the record indicates that Defendant did in fact attempt to file an answer. See generally Answer. Additionally, Defendant claims that because defense counsel's "office staff failed to place [the Deficiency Notice] on the 'Urgent Action' list," defense counsel was not "properly notified" of the answer's deficiency. Mot. 1; Mem. ¶ 5(c). Such a mistake does not suffice to establish willful default. See, e.g., Owens-Illinois, Inc v. T& N Ltd., 191 F.R.D. 522, 528 (E.D. Tex. 2000) (holding a "mislaid compl[ai]nt was the product of isolated human error" in setting aside a default judgment under Rule 60(b)(1)). Thus, althoughDefendant did not respond to the Deficiency Notice for over two months, this failure to respond in a timely fashion was at most negligent and does not rise to the level of "gross carelessness." See id. at 525; Easley v. Kirmsee, 382 F.3d 693, 698 (7th Cir. 2004) (stating that, in the context of a Rule 60(b)(1) motion, "attorney carelessness can constitute 'excusable neglect'"). Accordingly, this factor weighs in favor of setting aside the Entry of Default.

2. Setting aside the default would not prejudice Plaintiff

Defendant contends that vacating the Entry of Default will not prejudice Plaintiff because it would merely require Plaintiff to litigate the case. See Mem. ¶ 5(a). Defendant also claims that discovery will not be hindered because the alleged events giving rise to the action occurred recently. Id.

The Court agrees with Defendant. Requiring a plaintiff to litigate its case does not constitute prejudice. Lacy, 227 F.3d at 293 ("[M]ere delay [of the case] does not alone constitute prejudice."); One Parcel, 763 F.2d at 183 (holding that requiring the plaintiff to litigate the action is insufficiently prejudicial to require a default decree to stand); Gen. Tel. Corp., 277 F.2d at 921 (finding no prejudice because "the setting aside of the default has done no harm to plaintiff except to require it to prove its case"). Further, there is no indication that vacating the Entry of Default will affect Plaintiff's discovery. Lacy, 227 F.3d at 293 (quoting Berthelsen v. Kane, 907 F. 2d 617, 620) (holding there was no prejudice when the plaintiff did not show that vacating the default would "result in the loss of evidence, increased difficulties in discovery, or greater opportunities for fraud and collusion").

Plaintiff has not responded to Defendant's Motion, and therefore has not presented any other argument with respect to prejudice. In the absence of a response, the Court is "reluctant tospeculate as to possible prejudices beyond the readily-apparent fact that [Plaintiff] would now be required to litigate this case on the merits." United States v. Tellez, 678 F. Supp. 2d 437, 442 (W.D. Tex. 2009). Accordingly, this factor weighs in favor of granting Defendant's motion to vacate the Entry of Default.

3. Defendant presents a meritorious defense

If a defaulting party fails to present a meritorious defense, a court may refuse to grant relief on this ground alone. Id. at 442-43 (citing In re OCA, Inc., 551 F.3d 359, 370 (5th Cir. 2008); Rogers, 167 F.3d at 936). "In determining whether a meritorious defense exists, '[t]he underlying concern is . . . whether there is some possibility that the outcome of the suit after a full trial will be contrary to the result achieved by the default.'" In re OCA, 551 F.3d at 373 (quoting Jenkens & Gilchrist v. Groia & Co., 542 F.3d 114, 119 (5th Cir. 2008)) (discussing meritorious defense standard for a Rule 60(b) motion). A defendant's allegations are meritorious if they contain "'even a hint of a suggestion' which proven at trial, would constitute a complete defense." Side by Side Redevelopment, Inc. v. City of New Orleans, No. 09-03861, 2010 WL 375237, at *3 (E.D. La. Jan. 25, 2010) (quoting Howard v. United States, No. 93-1520, 1993 WL 353506, at *3 (E.D. La. Sep. 8, 1993)); Robinson v. Griffith, 108 F.R.D. 152, 155 (W.D. La. 1985). Indeed, even an "obtuse" showing of a meritorious defense will suffice. One Parcel, 763 F.2d at 183.

Here, Plaintiff argues that Defendant violated §§ 553 and 605 of the FCA by intercepting and broadcasting the Event to patrons in Defendants' Establishment. Compl. ¶¶ 11, 16-17. Section 553 of the FCA prohibits any unauthorized person from "intercept[ing] or receiv[ing] or assist[ing] in intercepting or receiving any communications service offered over a cable system."47 U.S.C. § 553(a)(1). In order to establish liability under § 553, Plaintiff must show that "(a) the Event was shown in Defendant['s] Establishment and (b) that such exhibition of the Event was not authorized" by Plaintiff. See J & J Sports Prods., Inc. v. Q Cafe, Inc., No. 3:10-CV-02006-L, 2012 WL 215282, at *3 (N.D. Tex. Jan. 25, 2012) (citing King Vision Pay-Per-View, Ltd. v. Lake Alice Bar, 168 F.3d 347, 349 (9th Cir. 1999)); Zuffa, LLC v. Trappey, No. 11-0006, 2012 WL 1014690, at *4 (W.D. La. Mar. 22, 2012). Additionally, § 605 of the FCA prohibits any unauthorized person from "divulg[ing] or publish[ing]...