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J&J Sports Productions, Inc. v. Old Town Ranchers, Inc.

United States District Court, N.D. Texas, Dallas Division

June 2, 2017

J&J SPORTS PRODUCTIONS, INC., Plaintiff,
v.
OLD TOWN RANCHERS, INC., ALFREDO HINOJOSA, and JACK MICHAEL STADTMAN, Defendants.

          MEMORANDUM OPINION AND ORDER

          JANE J. BOYLE UNITED STATES DISTRICT JUDGE

         Before the Court is Plaintiff J&J Sports Productions, Inc.'s Motion for Final Default Judgment. Doc. 13. For the reasons that follow, the Court concludes that Plaintiff's motion is GRANTED IN PART and DENIED IN PART.

         I.

         BACKGROUND

         This is a case about alleged violations of the Federal Communications Act of 1934, as amended, 47 U.S.C. §§ 553 and 605 (FCA). Plaintiff J&J Sports Productions, Inc. (J&J) is in the business of marketing and licensing commercial exhibitions of pay-per-view closed-circuit prizefight events. Doc. 13-1, Pl.'s Ex. A, Affidavit of Thomas P. Riley (Riley Aff.) ¶ 4. As part of this business, J&J acquired the proprietary rights to exhibit and sub-license the closed-circuit telecast of “The One”: Floyd Mayweather, Jr. v. Saul Alvarez, WBC Middleweight Championship Fight Program, including undercard and preliminary bouts (the Event). Id. ¶ 4; Doc. 1, Compl. ¶ 7. It then marketed and distributed exhibition rights to the Event to commercial locations throughout Texas in exchange for a fee. Id. ¶ 9. To prevent unlicensed establishments from exhibiting the Event without a license, the transmission was electronically coded or “scrambled.” Id. ¶ 10. Establishments that had purchased the broadcast rights were provided with electronic decoding equipment to unscramble the signal. Id. ¶ 12. Defendants did not obtain a license, but nevertheless intercepted and broadcast the transmission of the Event to the patrons of their establishment, Medusa, on September 14, 2013, according to J&J. Id. ¶ 13.

         On July 20, 2016, J&J filed this case against Defendants, alleging they had willfully violated the FCA for commercial gain. Id. ¶ 14. It asks for statutory and additional damages under the FCA; a permanent injunction preventing Defendants from intercepting or exhibiting future J&J programs without a license; court costs; attorney's fees; and pre- and post-judgment interest. Id. at 5-6.

         J&J served all Defendants with its Complaint by October 31, 2016. Doc. 6, Summons Returned Executed as to Jack Michael Stadtman; Doc. 9, Summons Returned Executed as to Alfredo Hinojosa; Doc. 10, Summons Returned Executed as to Old Town Ranchers, Inc. Nothing in the record indicates that Defendants ever responded. Accordingly, J&J requested that the court clerk make an entry of default on January 18, 2017. Doc. 12, Req. for Entry of Default. That same day, J&J moved the Court for a default judgment. Doc. 13, Mot. For Final Default J. (Pl.'s Motion). The clerk issued an entry of default the next day. Doc. 14, Clerk's Entry of Default. Now the Court considers J&J's Motion for Default Judgment. To date, Defendants have not made an appearance in this case.

         II.

         LEGAL STANDARD

         “When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend . . . the clerk must enter the party's default.” Fed.R.Civ.P. 55(a). Once default has been entered, the Court may enter a default judgment against the defaulting defendant upon motion of the plaintiff. Fed.R.Civ.P. 55(b)(2). Through the entry of default judgment, the “conduct on which liability is based may be taken as true as a consequence of the default.” Frame v. S-H, Inc., 967 F.2d 194, 205 (5th Cir. 1992) (citations omitted). In considering a motion for default judgment, the court accepts as true the well-pleaded allegations of facts in the complaint. Nishimatsu Constr. Co., Ltd. v. Hous. Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975). When “all elements of [a] cause of action are present by implication, ” a complaint is “well-pleaded” for default judgment purposes. Wooten v. McDonald Transit Assocs., Inc., 788 F.3d 490, 499 (5th Cir. 2015).

         In determining whether a default judgment should be entered against a defendant, courts have developed a two-part analysis. See, e.g., Ins. Co. of the W. v. H & G Contractors, Inc., No. C-10-390, 2011 WL 4738197, at *2, 3 (S.D. Tex. Oct. 5, 2011). First, the court must consider whether entry of default judgment is appropriate under the circumstances. Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998). The factors relevant to this inquiry include: (1) whether material issues of fact exist; (2) whether there has been substantial prejudice; (3) whether the grounds for default are clearly established; (4) whether the default was caused by a good faith mistake or excusable neglect; (5) the harshness of a default judgment; and (6) whether the court would think itself obliged to set aside the default on the defendant's motion. Id. Second, the court must assess the merits of the plaintiff's claims and find sufficient basis in the pleadings for the judgment. Nishimatsu Constr., 515 F.2d at 1206. Although the defendant may be in default, “[t]he defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law.” Id.

         III.

         ANALYSIS

         Applying this two-part analysis, the Court ultimately concludes that a default judgment here (1) is procedurally warranted and (2) is supported by a sufficient factual basis in J&J's Complaint. The valuation of damages, however, requires a hearing as the Court is unable to determine the amount of damages with mathematical calculation by referencing information in the pleadings and supporting documents. See James v. Frame, 6 F.3d 307, 310 (5th Cir. 1993). As discussed below, the Court finds that J&J is entitled to a default judgment against Defendant for their alleged FCA violations, but it must supplement the record with additional evidence before damages are awarded.

         A. Whether An Entry of Default Judgment is Procedurally Warranted

          After applying the six Lindsey factors to J&J's Motion, the Court determines that default judgment is procedurally warranted. First, Defendants have not filed any responsive pleadings so there exists no material issues of fact. Lindsey, 161 F.3d at 893; Nishimatsu Constr., 515 F.2d at 1206 (noting that “[t]he defendant, by his default, admits the plaintiff's well-pleaded allegations of fact”). Second, Defendants' “failure to respond threatens to bring the adversary process to a halt, effectively prejudicing Plaintiff's interests.” Ins. Co. of the W., 2011 WL 4738197, at *3 (citing Lindsey, 161 F.3d at 893). Third, given that Defendants have had sufficient time to either file an answer to J&J's Complaint, or else explain why they have not done so, the grounds for default are clearly established. Cf. Elite v. KNR Group, 216 F.3d 1080, 2000 WL 729378, at *1 (5th Cir. May 19, 2000) (per curiam) (unpublished table decision) (holding default judgment to be inappropriate where defendant sent letter to court explaining his failure to appear was due to financial privation). Fourth, there is no evidence before the Court to suggest Defendants' silence is the result of a “good faith mistake or excusable neglect.” Lindsey, 161 F.3d at 893. Fifth, J&J seeks only the relief the law provides it, and Defendants have no applicable defense for their claims, at least as far as the Court can see, which “mitigat[es] ...


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