Zuffa, LLC v. Perris

ZUFFA, LLC, Plaintiff, v. DENISE PERRIS & LYTLE CAFE, INC., Defendants.

2:19-cv-00938

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

January 31, 2020

OPINION

Mark R. Hornak, Chief United States District Judge

Plaintiff Zuffa, LLC, filed a Motion for Default against Defendants Lytle Cafe, Inc., and Denise Perris. (ECF No. 17.) That Motion is granted for the reasons that follow.

I. BACKGROUND

Zuffa, LLC, doing business as the Ultimate Fighting Championship ("UFC"), is a sports promotion company specializing in mixed martial arts. On October 6, 2018, the Khabib v. McGregor fight was held at the Octagon in Las Vegas, Nevada, and was broadcast by Zuffa via pay-per-view.¹ That event was the third-highest pay-per-view ("PPV") fight in history, with 2.5 million PPV buys.² Commercial establishments could stream the fight by purchasing a license and contract for authorized commercial exhibition. (Pl.'s Mot. for Default J., ECF No. 17-3, at 2, ¶ 4.)

The Defendants in this case, Denise Perris and Lytle Cafe, Inc., did not purchase such a license. (Id. at 3, ¶ 9.) On the evening of the fight, one (1) of Zuffa's auditors visited Lytle Cafe and observed the undercard match, Ferguson v. Pettis, playing on the bar's television. (ECF No. 17-4, at 8.) Zuffa alleges that the Defendants illegally intercepted the Broadcast and claims damages pursuant to 47 U.S.C. § 605 and 17 U.S.C. § 504.

The Summons and Complaint were served upon each Defendant on August 7, 2019. (See ECF Nos. 9 and 10.) Since then, Defendants have failed to plead or otherwise appear. Accordingly, the Clerk of Court entered default against Denise Perris and Lytle Cafe, Inc., on September 24, 2019. (Clerk's Certificate, ECF No. 14.) That means the allegations of the Complaint were deemed admitted. Fed. R. Civ. P. 8(b)(6). Now, Zuffa moves for default judgment before this Court. (ECF No. 17.)

II. JURISDICTION

The Court has subject-matter jurisdiction over this action pursuant to 28 U.S.C. § 1331, which states that district courts have jurisdiction over civil actions arising under the laws of the United States. Here, this action is brought pursuant to two federal statutes: (1) 17 U.S.C. § 501; and (2) 47 U.S.C. § 605. Thus, the Court has proper subject-matter jurisdiction over Zuffa's claims.

In pleading personal jurisdiction, Zuffa provides information in its affidavits and pleadings to support a conclusion that Lytle Cafe, Inc., is owned and operated in Pittsburgh, Pennsylvania, and that Denise Perris is a resident thereof. The Court concludes that information to sufficiently establish that it has personal jurisdiction and venue over the matter.

Service also appears to be sufficient. Under Federal Rule of Civil Procedure 4(e), a party may serve a person by leaving a copy of the summons and complaint at their "dwelling or usualplace of abode with someone of suitable age and discretion who resides there." Here, a copy of the Summons and Complaint were personally served upon each Defendant. (See ECF Nos. 9 and 10.)

III. LEGAL STANDARD

Obtaining a default judgment requires a one-two punch. First, the party seeking default must request that the Clerk of Court enter default against the party for failing to plead or otherwise defend itself. Fed. R. Civ. P. 55(a) ("When 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."). Then, upon the Clerk's entry of default, the party must move for a default judgment. See Fed. R. Civ. P. 55(b)(2).

A court's power to grant a default judgment "has generally been considered an 'inherent power,' governed not by rule or statute but by the control necessarily vested in courts to manage their own affairs so as to achieve the orderly and expeditious disposition of cases." HICA Educ. Loan Corp. v. Lepera, 2011 WL 3515911, at *1 (D.N.J. Aug. 10, 2011) (quoting Hritz v. Woma Corp., 732 F.2d 1178, 1181 (3d Cir. 1984)).

In assessing whether or not a default judgment is due, courts generally move through a two-part process. First, the court should "ascertain whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law." Serv. Emps. Int'l Union Local 32BJ, Dist. 36 v. ShamrockClean, Inc., 325 F. Supp. 3d 631, 635 (E.D. Pa. Sept. 7, 2018) (quoting Chanel, Inc. v. Gordashevsky, 558 F. Supp. 2d 532, 536 (D.N.J. Apr. 7, 2008)). In conducting that assessment, the court should accept as true any factual allegations contained in the complaint (aside from those relating to the amount of damages). DIRECTV, Inc. v. Pepe, 431 F.3d 162, 165 n.6 (3d Cir. 2005). In other words, the court should start by determining whether the plaintiff has submitted sufficient information (taken as true) to justify the relief sought.

Then, even if it appears that the plaintiff is entitled to relief, default judgment is only appropriate where: (1) the plaintiff would suffer prejudice if default is denied; (2) the defendant does not appear to have a litigable defense; and (3) the defendant's delay is due to culpable conduct. Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000). This is because our Circuit generally "disfavors default judgments and encourages decisions on the merits." Culver v. U.S. Dep't of Labor Occupational Safety & Health Admin., 248 F. App'x 403, 408 (3d Cir. 2007) (citing Harad v. Aetna Cas. & Sur. Co., 839 F.2d 979, 982 (3d Cir. 1988)).

IV. THE DEFAULT JUDGMENT

In this case, the Court serves as referee over Zuffa's fight for a default judgment. Defendants make that task an easy one, as they tapped out before the fight even began. For the reasons that follow, the Court concludes that Zuffa satisfied the requirements for a default judgment and as such, its Motion at ECF No. 17 will be granted.

A. Entry of Default

Zuffa delivered its first jab when it requested that the Clerk of Court enter default against Defendants. (Req. for Clerk's Entry of Default, ECF No. 13.) And the Clerk entered default in Zuffa's favor on September 24, 2019. (ECF No. 14.)

B. Liability

A second punch was thrown when Zuffa moved for default judgment before this Court. (ECF No. 17.) As noted above, the Court must first assess whether or not the Defendants appear to be liable based on the facts asserted in Zuffa's filings, which are to be taken as true. For thereasons noted below, the Court concludes that the Defendants are liable for violations of 47 U.S.C. § 605 and 17 U.S.C. § 501.³

Section 605 prohibits the unauthorized reception and publication or use of communications. 47 U.S.C. § 605(a). Here, Zuffa is the owner of the communication at issue—the UFC 229 Broadcast, which included both the Khabib v. McGregor and Ferguson v. Pettis fights. (ECF No. 1, at 4, ¶ 18.) And, taking the facts in the Complaint as true, the Defendants "effected unauthorized interception and receipt of Plaintiff's Broadcast by ordering programming for residential use and subsequently displaying the programming in the commercial establishment known as Lytle Cafe, Inc., for commercial gain." (ECF No. 1, at 5-6, ¶ 24.) This assertion is also supported by several documents attached to the Complaint or to Zuffa's Motion for Default Judgment. (See ECF No. 1-1 (noting on Facebook that Lytle Cafe was hosting the "McGregor Fight" and that patrons of the bar should "[s]top down for the fight"); ECF No. 17-4, at 2-7 (providing a list of establishments that paid the licensing fee, which does not include Lytle Cafe); ECF No. 17-4, at 8-9 (detailing a "site inspection" of Lytle Cafe and indicating that the UFC 229 Broadcast was displayed on the bar's television).) The Court therefore concludes that the facts presented sufficiently establish that the Defendants violated 47 U.S.C. § 605(a).

Section 501 states that "anyone who violates any of the exclusive rights of the copyright owner . . . is an infringer of the copyright or right of the author." Here, Zuffa is the owner of the UFC 229 Broadcast. (ECF No. 1, at 4, ¶ 18.) As such, Zuffa maintains the right to distribute that Broadcast, or to license commercial establishments to do the same. Defendants failed to obtain proper authority or license to publicly exhibit the UFC 229 Broadcast on October 6, 2018. (ECFNo. 1, at 5, ¶ 23.) Thus, the Court concludes that the facts presented sufficiently establish that the Defendants violated 17 U.S.C. § 501.

C. Chamberlain Factors

Lastly, in order to clinch a knockout, Zuffa must survive the Chamberlain factors. In considering Chamberlain's first factor, the Court finds that Zuffa will suffer prejudice if the Court denies its Motion at ECF No. 17. As Zuffa stated in both its filings and through its attorney's statements on the record at the hearing in open Court on January 8, 2020, the Defendants have refused to engage throughout the entirety of this litigation. And by refusing to engage, Defendants have essentially choked off any remedy available to Zuffa, aside from default judgment. Thus, the Court finds that the first Chamberlain factor is satisfied because default judgment is the only way for Zuffa to vindicate its claims.

As to the second factor, the Court need not engage in legal jiujitsu to conclude that Defendants' lack of response means that they have no litigable defense to Zuffa's claims against them. See Carpenters Health & Welfare Fund of Phila. v. NDK Gen. Contractors, Inc., 2007 WL 1018227, at *1 (E.D. Pa. Mar. 29, 2007) (presuming that the defendant had no litigable defense where it failed to file a responsive pleading).

Similarly, the Court concludes that the Defendants' failure to respond to the Complaint is due to culpable conduct, as the docket indicates that they were properly served. (ECF Nos. 9 and 10.) See, e.g., Bibbs v. Sec. Atl. Mortg. Co., Inc., 2012 WL 3113975, at *2 (E.D. Pa. Aug. 1, 2012) (citing York Int'l Corp. v. York HVACSys. Corp., 2010 WL 1492851,...