Joe Hand Promotions, Inc. v. Prince Cafe Rest.
| Decision Date | 22 April 2022 |
| Docket Number | 2:20-cv-01563-JAD-NJK |
| Parties | JOE HAND PROMOTIONS, INC., Plaintiff, v. PRINCE CAFE RESTAURANT, INC. et al., Defendants. |
| Court | U.S. District Court — District of Nevada |
REPORT AND RECOMMENDATION
On November 18, 2021, Plaintiff filed a motion for entry of default judgment. Docket No. 12. On April 21, 2022, the motion was referred to the undersigned Magistrate Judge. The motion is properly resolved without a hearing. See LR 78-1. For the reasons discussed below, the undersigned RECOMMENDS that the motion for default judgment be GRANTED in part and DENIED in part.
This signal-piracy case arises out of a commercial licensing dispute between Plaintiff and Defendant Prince Cafe Restaurant, Inc, d/b/a Prince Cafe. Docket No. 1. Defendants Nebojsa Krkeljas, Sinisa Krkeljas, and Veseljko Krkeljas are officers, shareholders, directors, members, or principals of Defendant Prince Cafe. Id. at 2. The dispute arises out of two instances where Defendants illegally screened Ultimate Fighting Championship matches, for which Plaintiff holds the exclusive commercial licensing rights, in their restaurant Prince Cafe without paying to screen the matches. Id. at 2-3.
Plaintiff Joe Hand Promotions, Inc. is a company that specializes in licensing and distributing “premier sporting events” to commercial establishments. Id. at 2. Plaintiff holds the exclusive commercial licensing rights for two Ultimate Fighting Championship matches: Program 241 Cormier v. Miocic 2, broadcast on August 17, 2019, and Program 242: Khabib v. Porier, broadcast on September 7, 2019. Id. Plaintiff licenses the programs to commercial establishments after these establishments pay the proper commercial licensing fee, which is set based on the maximum occupancy of the establishment. Id. at 3; Docket No. 12-2 at 3-4. Plaintiff submits that, on the night of both programs, Defendants did not pay the commercial licensing fee, but instead used an illegal Internet streaming service or a residential streaming service to exhibit the two programs at Cafe Prince, thus infringing Plaintiff's commercial licensing rights. Docket No. 1 at 2-3. Plaintiff submits that Defendants did this to avoid paying the commercial license rate and exhibited the programs for the commercial purpose of attracting paying customers and, by doing so, wrongfully benefitted financially by infringing on Plaintiff's rights. Id. at 3-4.
Plaintiff's complaint alleges violations of the Federal Communications Act, 47 U.S.C. §§ 553 and 605 et seq., and the Copyright Act, 17 U.S.C. § 501 et seq. In its complaint, Plaintiff seeks monetary damages against Defendants joint and severally. Id. at 6. Specifically, Plaintiff seeks statutory damages of up to the amount of $110, 000 for each willful violation of 47 U.S.C. § 605 or, in the alternative, statutory damages of up to $60, 000 for each willful violation of 47 U.S.C. § 553. Id. Plaintiff also seeks statutory damages of up to $150, 000 for each willful violation of 17 U.S.C. § 501. Plaintiff finally seeks attorneys' fees, interests, and costs of suit pursuant to 47 U.S.C. §§ 553(c)(2)(C), 605(e)(3)(B)(iii), and 17 U.S.C. § 505. Id.
Plaintiff filed the instant action on August 21, 2020. Docket No. 1. After effectuating service and waiting the required 21-day period required by the Federal Rules of Civil Procedure without any action or responsive pleading by Defendants, Plaintiff sought an entry of default. Docket No. 10. The Clerk entered default on September 10, 2021. Docket No. 11. Plaintiff now seeks entry of default judgment against Defendants and the award of $40, 000 in statutory damages, $1, 050 in costs, and attorneys' fees. Docket No. 12.
“When entry of default judgment is sought against a party who has failed to plead or otherwise defend, a district court has an affirmative duty to look into its jurisdiction over both the subject matter and the parties.” Tuli v. Republic of Iraq, 172 F.3d 707, 712 (9th Cir. 1999). To ensure that any entered default judgment will not later be attacked as void, the Court must “determine whether it has the power . . . to enter the judgment in the first place.” Id. Here, both subject matter jurisdiction and personal jurisdiction are satisfied.
The Court's personal jurisdiction over a defendant is generally a waivable defense that the Court does not raise sua sponte. See Fed.R.Civ.P. 12(h)(1). Nonetheless, “[w]hen entry of default judgment is sought against a party that has failed to plead or otherwise defend, a district court has an affirmative duty to look into its jurisdiction over both the subject matter and the parties.” Tuli v. Republic of Iraq, 172 F.3d 707, 712 (9th Cir. 1999). Thus, after giving Plaintiff notice and an opportunity to assert jurisdictional facts, the Court may dismiss an action for lack of personal jurisdiction. See id. at 712-13.
Here, the Court has both subject matter jurisdiction and personal jurisdiction. The Court has subject matter jurisdiction pursuant to the Court's federal question jurisdiction, set forth in 28 U.S.C. § 1331, and the Court's exclusive original jurisdiction for all suits related to copyrights, set forth in 28 U.S.C. § 1338(a). Plaintiff's complaint alleges violations of the Copyright Act of the United States, 17 U.S.C. § 101 et seq., and provisions of the Communications Act of 1934, 47 U.S.C. §§ 553, 605. The Court also has personal jurisdiction over all the Defendants. Defendant Prince Cafe Restaurant, Inc. is incorporated in Nevada. Docket Nos. 1 at 1; 12-8. Defendants Nebojsa Krkeljas, Sinisa Krkeljas, and Veseljko Krkeljas are the owners and officers of Prince Cafe Restaurant, Inc. and are all domiciled in Nevada. Id. Moreover, service was properly effectuated on all Defendants in the forum state. See Docket Nos. 5, 6, 7, 8. The Court finds that it has been provided sufficient evidence to establish its jurisdiction and will, therefore, proceed to determining whether entering default judgment is warranted in this case.
Obtaining default judgment is a two-step process set forth by Rule 55 of the Federal Rules of Civil Procedure. Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). First, “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.” Fed.R.Civ.P. 55(a). Following the entry of a default, a court may enter a default judgment. Fed.R.Civ.P. 55(b).
A defendant's default alone does not entitle the movant to a court-ordered judgment. See Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980) (per curiam); see also PepsiCo., Inc. v. Cal. Sec. Cans., 238 F.Supp.2d 1172, 1174 (C.D. Cal. 2002). The choice of whether to enter default judgment lies within the discretion of the Court. Aldabe, 616 F.2d at 1092. In determining whether default judgment is appropriate, the Court considers the seven factors set forth in Eitel v. McCool.
The Court must consider: (1) the possibility of prejudice to plaintiff if default judgment is not entered; (2) the merits of the claims; (3) the sufficiency of the complaint; (4) the amount of money at stake; (5) the possibility of a dispute concerning material facts; (6) whether default was due to excusable neglect; and (7) the strong public policy favoring decisions on the merits. Eitel, 782 F.2d at 1471-72. In evaluating these factors, The Court will take as true all the factual allegations in the complaint, except those relating to the amount of damages. See e.g., TeleVideo Sys., Inc. v. Heidenthal, 862 F.2d 915, 917-18 (9th Cir. 1987) (per curiam).
As discussed below, the Court finds that the Eitel factors weigh in Plaintiffs favor.
The first Eitel factor weighs in favor of granting default judgment. Defendants' failure to respond to Plaintiffs complaint or otherwise appear in this matter has prejudiced Plaintiffs ability to pursue its claim on the merits. See e.g., Markley v. Gleeson & Assocs., 2021 U.S. Dist. LEXIS 236559, at *4 (D. Nev. Nov. 9, 2021), report and recommendation adopted by 2021 U.S. Dist. LEXIS (D. Nev. Dec. 8, 2021); Tropicana Ent., Inc. v. N3A Mfg., Inc., 2018 WL 2088871 (D. Nev. May 3, 2018).
The second and third Eitel factors look at the underlying claims being raised by the party seeking default and whether the plaintiff “state[s] a claim on which the plaintiff can recover.” Danning v. Lavine, 572 F.2d 1386, 1389 (9th Cir. 1978); see also Fed.R.Civ.P. 8. The Court is required to accept the factual allegations set forth in the complaint as true upon the entry of default. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1986).
Section 605 of the Communications Act “prohibits the unauthorized receipt and use of radio communications for one's own benefit or for the benefit of another” not entitled to receipt. DirecTV v. Webb, 545 F.3d 837, 844 (9th Cir. 2008) (citing 47 U.S.C. § 605(a)). The Ninth Circuit construes “communications” to “include satellite television signals.” Id. (citing Sosa v. DIRECTV, Inc., 437 F.3d 923, 926 (9th Cir. 2006); Nat'l Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d 900, 911-12 (6th Cir. 2001)). To establish a § 605 violation, Plaintiff must show that it had a proprietary interest in each program; that Defendants unlawfully intercepted, received, published, divulged, displayed, and/or exhibit the program at their establishment; and that such display was done without Plaintiff's authorization. 47 U.S.C. § 605. See also J&J Sports Prods. v. Chikiss Botanas N' Beer, ...
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