G & G Closed Circuit Events, LLC v. California Center for the Arts, Escondido, Foundation

[7] 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA [10] 11 G & G CLOSED CIRCUIT EVENTS, Case No.: 20cv2137-LL-NLS LLC, [12] ORDER DENYING MOTION FOR Plaintiff, 13 SUMMARY JUDGMENT v. [14] CALIFORNIA CENTER FOR THE [ECF No. 34] [15] ARTS, ESCONDIDO, FOUNDATION, 16 an unknown business entity d/b/a California Center for the Arts, Escondido, [17] Defendant. [19] 20 This matter is before the Court on Defendant’s Motion for Summary Judgment. 21 ECF No. 34. The Motion has been fully briefed, and the Court deems it suitable for 22 submission without oral argument. The Motion is DENIED.1 [25] 1 The Court declines to address the parties’ individual evidentiary objections, most of [26] which are directed at the lack of foundation. These objections need not be addressed here, 27 as most of the evidence could be presented in admissible form at trial. Fraser v. Goodale, 342 F.3d 1032, 1036-37 (9th Cir. 2003). Therefore, the evidentiary objections [ECF Nos. [28] 1 I. Background 2 Plaintiff G & G Closed Circuit Events, LLC (“G&G” or “Plaintiff”) alleges that it is 3 a closed circuit distributor of sports and entertainment programming that purchased and 4 retained the exclusive commercial exhibition (closed circuit) licensing rights to Saul 5 “Canelo” Alvarez v. Sergey Kovalev Championship Fight Program (the “Program”), 6 which occurred on Saturday, November 2, 2019. ECF No. 1 ¶ 16. Plaintiff further alleges 7 that Defendant California Center for the Arts, Escondido (“CCAE” or “Defendant”) 8 violated Plaintiff’s rights by unlawfully accessing the Program and showing it at its annual 9 Dia de Los Muertos festival (the “Festival”). Id. ¶ 21. 10 Based on these allegations, G&G filed this suit against CCAE for: (1) violation of [11] 47 U.S.C. § 605 (“Section 605”); (2) violation of 47 U.S.C. § 553 (“Section 553”); 12 (3) conversion; and (4) violation of California’s Unfair Competition Law (“UCL”), 13 Business and Professions Code section 17200. ECF No. 1. Defendant now brings this 14 Motion for Summary Judgment. 15 II. Legal Standard 16 The familiar summary judgment standard applies here. Under Federal Rule of Civil 17 Procedure 56, the court shall grant summary judgment “if the movant shows that there is 18 no genuine dispute as to any material fact and the movant is entitled to judgment as a matter 19 of law.” Fed. R. Civ. P. 56(a). To avoid summary judgment, disputes must be both 20 (1) material, meaning concerning facts that are relevant and necessary and that might affect 21 the outcome of the action under governing law, and (2) genuine, meaning the evidence 22 must be such that a reasonable judge or jury could return a verdict for the nonmoving party. 23 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Cline v. Indus. Maint. Eng’g & 24 Contracting Co., 200 F.3d 1223 , 1229 (9th Cir. 2000) (citing Anderson, 477 U.S. at 248 ). 25 When ruling on a summary judgment motion, the court must view all inferences drawn 26 from the underlying facts in the light most favorable to the nonmoving party. Matsushita 27 Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). “Disputes over irrelevant [28] 1 or unnecessary facts will not preclude a grant of summary judgment.” T.W. Elec. Serv., 2 Inc. v. Pacific Elec. Contractors Ass’n, 809 F.2d 626 , 630 (9th Cir. 1987). 3 III. Discussion 4 Here, it is undisputed that the Program was shown at or near the CCAE premises, 5 during or shortly after the Festival, by a CCAE vendor named Jose Salas, aka SugerbearSD. 6 CCAE had contracted with Mr. Salas to put on a low-rider exhibit and play music at the 7 Festival, but claims it had no knowledge that Mr. Salas would be showing the Program 8 shortly after the purported end of the Festival on November 2, 2019. The question is 9 whether CCAE can be held liable for that unauthorized broadcast, and whether there are 10 any disputed facts as to that issue. 11 Defendant argues: (1) Plaintiff’s claim for violation of Section 605 fails because 12 there is no evidence that CCAE ever intercepted or received the radio or satellite signal for 13 the program; (2) Plaintiff’s claim for violation of Section 553 fails because there is no 14 evidence that CCAE ever intercepted or received the cable signal for the program; (3) 15 Plaintiff’s claim for conversion fails because intangible property cannot be converted and 16 Plaintiff has no evidence that CCAE misappropriated Plaintiff’s property; (4) Plaintiff’s 17 claim for unfair business practices under the UCL fails because CCAE did not compete 18 unfairly; (5) Plaintiff lacks standing to assert any of the claims; and (6) Plaintiff has no 19 claim for enhanced statutory damages. 20 A. Direct liability under 47 U.S.C. §§ 605 and 553 21 There are two federal statutes that generally govern television signal piracy, [22] 42 U.S.C. §§ 605 and 553 (hereinafter the “television signal piracy statutes”). 23 Section 605 concerns radio and satellite communications and states in pertinent part: 24 [N]o person receiving, assisting in receiving, transmitting, or assisting in transmitting, any interstate or foreign communication by wire or radio shall [25] divulge or publish the existence, contents, substance, purport, effect, or 26 meaning thereof, except through authorized channels of transmission or reception, (1) to any person other than the addressee, his agent, or attorney, [27] (2) to a person employed or authorized to forward such communication to its 28 destination, (3) to proper accounting or distributing officers of the various 1 communicating centers over which the communication may be passed, (4) to the master of a ship under whom he is serving, (5) in response to a subpoena [2] issued by a court of competent jurisdiction, or (6) on demand of other lawful 3 authority. . . . [4] 47 U.S.C. § 605 . 5 Section 553 concerns communications over a cable system and states in part: 6 No person shall intercept or receive or assist in intercepting or receiving any 7 communications service offered over a cable system, unless specifically authorized to do so by a cable operator or as may otherwise be specifically 8 authorized by law. [9] 47 U.S.C. § 553 (a)(1). 10 Defendant argues there is no evidence it ever “intercepted” the signal for the 11 Program and, therefore, it cannot be held liable under the television signal piracy statutes. 12 ECF No. 34-1 at 15. Defendant provides evidence that it does not have a satellite account 13 or dish, nor a cable television account. Id. However, regardless of whether CCAE had the 14 technical capability to “intercept” the Program, Section 605 also prohibits the unauthorized 15 receipt of television signals. See DirecTV, Inc. v. Webb, 545 F.3d 837, 848 (9th Cir. 2008). 16 To establish liability under this section, a plaintiff must establish that the defendant 17 “unlawfully intercepted, received, published, or divulged Plaintiff's privileged 18 communication.” J&& Sports Prods. Inc. v. Rubio, No. CV-16-1111-PHx-JST, 2017 WL 19 3234939, at *2-3 (D. Ariz. 2017) (citing 47 U.S.C. § 605 ); see also That’s Entertainment, 20 Inc. v. J.P.T., Inc., 843 F. Supp. 995, 999 (D. Md. 1993) (even if inn and its manager did 21 not “intercept” satellite cable broadcast of boxing match, inn and manager violated Federal 22 Communications Act by broadcasting event to patrons of commercial establishment 23 without authorization). Similarly, Section 553 also does not require technical capability to 24 “intercept,” as it also prohibits “assisting in intercepting or receiving any communication 25 services offered over a cable system.” 42 U.S.C. § 553 (a)(1). Thus, even if CCAE did not 26 own a satellite or cable account, liability is not precluded under the television piracy 27 statutes. [28] 1 Plaintiff acknowledges that it cannot recover damages under both Sections 605 and 2 553, and the complaint alleges violations in the alternative. ECF No. 36 at 19. There is 3 insufficient evidence at this time to conclusively determine which form of transmission is 4 at issue, although Plaintiff asserts that it appears to be an internet streaming violation. Id. 5 Defendant argues that if a signal is received via the internet, it falls outside of the coverage 6 of the television signal piracy statutes. ECF No. 34-1 at 28. While there is no Ninth Circuit 7 precedent on that issue, district courts in the Ninth Circuit have held that internet signals 8 are covered by the television signal piracy statutes, and this Court agrees with their 9 analyses. See G&G Closed Circuit Events LLC v. Montoya, No. CV-20-00834-PHX-SPL, [10] 2021 WL 3190726 , at *2–3 (D. Ariz. July 28, 2021); G&G Closed Circuit Events, LLC v. 11 Gonzalez Ruiz, 379 F. Supp. 3d 1061, 1066 (S.D. Cal. 2019); J&J Sports Prods, Inc. v. 12 Jaschkowitz, No. 5:14-cv-440-REW, 2016 WL 2727015 , at *1, 4 (E.D. Ky. May 6, 2016). 13 Therefore, liability is not precluded if the signal was received via the internet. 14 B. Vicarious and Contributory Liability under Sections 605 and 553 15 Regardless of whether Defendant is held directly liable for a Section 605 or 553 16 violation, it can be held vicariously or contributorily liable for a violation by one of its 17 vendors if it had sufficient knowledge, control, or financial interest in the offense. Flores 18 v. J&J Sports Prods, Inc., 913 F. Supp. 2d 950, 959 (E.D. Cal. 2012). Specifically, for 19 Defendant to be held vicariously liable, it “must have had the right and ability to police the 20 conduct of its vendors and have acquired a direct financial interest in the interception and 21 exhibition.” Id. For Defendant to be held contributorily liable, Defendant “must have 22 either knowingly authorized the vendors’ interception and exhibition or provided an 23 environment and market for the interception and exhibition with knowledge such activity 24 was or would be occurring.” Id. 25 Defendant argues that because the Program was shown by a vendor after 8 p.m. in a 26 location outside the CCAE office, it cannot be held vicariously or contributorily liable. 27 Specifically, Defendant argues that because the Program was shown after 8 p.m. 28 (Mr. Salas’ contract had a time of engagement of 3 to 8 p.m.), the Program was not shown 1 “during” the Festival. However, Plaintiff has presented evidence that nineteen CCAE 2 employees were paid to work at the Festival after 8 p.m. ECF No. 36-4 at 51–53. In 3 addition, Elite personnel (with whom CCAE contracted to provide security services at the 4 Festival) were present during the broadcast of the Program. ECF No. 36-2 at 3. Finally, 5 the Festival was a four-day event, and the Program was broadcast the night of the second 6 day of the Festival. ECF No. 36-4 at 59. Therefore, there are triable issues of fact as to 7 whether the Program was shown “during” the Festival. 8 Defendant also argues that the Program was not shown “inside” the CCAE and, 9 therefore, did not occur in a location Defendant could control. While it is clear the Program 10 was not shown inside a CCAE building, Plaintiff has provided evidence that it did occur 11 on CCAE grounds, or in an area over which CCAE exercised control. For example, 12 Plaintiff’s investigator (who observed the broadcast of the Program on the night in 13 question) states that the television and chairs were set up in the courtyard directly in front 14 of the CCAE office. ECF No. 36-2 at 3. He also observed two Elite personnel standing at 15 the entrance to the courtyard. Thus, there is disputed evidence as to whether the Program 16 was shown within CCAE property or in a location it could control. 17 Defendant also argues it had no control over Mr. Salas, who was an independent 18 contractor. While some of the language in the contract between CCAE and Mr. Salas may 19 have given Mr. Salas the right to control the means by which he performed, there is other 20 contractual language that suggests Defendant had the right to control some aspects of 21 Mr. Salas’ work, such as where he performed, when he performed, and his ability to serve 22 alcohol. ECF No. 34-20. In addition, as set forth above, there is disputed evidence that 23 Mr. Salas showed the Program in an area CCAE controlled and during a time when CCAE 24 employees were still present. Thus, there are disputed issues as to whether Defendant had 25 the ability to control the actions of its vendor. 26 Defendant also argues it had no prior knowledge that Mr. Salas would be showing 27 the Program. However, as discussed above, there is evidence that CCAE and Elite 28 personnel were present during the broadcast of the Program, which occurred at or near the 1 place where Mr. Salas performed his contractual services, and occurred at or near the time 2 of the Festival. There is also evidence that CCAE employees may have had prior notice 3 (from social media) that Mr. Salas would broadcast the Program. ECF No. 36-4 at 61–63. 4 Thus, there are disputed issues as to whether Defendant knew Mr. Salas would broadcast 5 the Program. 6 Finally, Defendant argues that it did not receive any income from the showing of the 7 Program and therefore had no direct financial interest in the interception and exhibition of 8 the Program. While the Program was shown free of charge by Mr. Salas after 8 p.m., it 9 was shown at or near the time and place of the Festival and was advertised on social media 10 prior to the Festival, which may have attracted more people to the Festival. Thus, there are 11 disputed issues as to whether Defendant had a financial interest in the exhibition of the 12 Program. 13 Accordingly, given the numerous disputed issues as to whether Defendant may be 14 held directly, vicariously, or contributorily liable for the broadcast of the Program, 15 summary judgment on the Sections 605 and 553 claims must be denied. 16 C. Conversion 17 Defendant argues that Plaintiff’s “signal” is an intangible property interest that 18 cannot be converted. ECF No. 34-1 at 26. Traditionally, a claim for conversion lay only 19 where the property alleged to be converted is tangible, but “courts in recent years have 20 significantly relaxed this rule.” Don King Prods./Kingvision v. Lovato, 911 F. Supp. 419 , 21 423 (N.D. Cal. 1995); DirecTV, Inc. v. Pahnke, 405 F. Supp. 2d 1182 , 1189–90 (E.D. Cal. 22 2005) (concluding that the “right to distribute programming via satellite” constituted a 23 “right to possession of personal property” for purposes of a conversion claim under 24 California law and granting plaintiff's motion for summary judgment for conversion). 25 Thus, the Program is a property interest that can be the subject of a conversion claim. 26 Defendant next argues that even if the Program can be the subject of a conversion 27 claim, Plaintiff has no evidence to support the elements of the claim. ECF No. 34-1 at 27. 28 Under California law, conversion requires a showing of: (1) ownership of a right to 1 possession of property; (2) wrongful disposition of the property right of another; and 2 (3) damages. See G.S. Rasmussen & Assoc. v. Kalitta Flying Serv., 958 F.2d 896 , 906 3 (9th Cir. 1992). “Because conversion is a strict liability tort, questions of the defendant's 4 good faith, lack of knowledge, motive, or intent are not relevant.” Gilman v. Dalby, [5] 176 Cal. App. 4th 606 , 615 n.1 (2009). 6 First, Defendant argues that Plaintiff has no standing or “right to possession of 7 property” because its rights under the contract had reverted to a third party on December 8 31, 2019. ECF No. 34-1 at 27. However, Plaintiff has submitted evidence that an 9 amendment to the original contract with the third party preserved Plaintiff’s rights. ECF 10 No. 36 at 30. Therefore, there are triable issues of fact as to Plaintiff’s standing. Second, 11 Defendant argues that there is no evidence that Defendant “disposed” of the property, 12 “exercised dominion or control over the signal,” or “intercepted or received or published 13 or divulged the Program.” ECF No. 34-1 at 27. However, as discussed above, there are 14 numerous triable issues as to whether Defendant “received, published, or divulged” the 15 Program to the Festival participants. Thus, summary judgment as to the conversion claim 16 must be denied. 17 D. Unfair Competition 18 California’s Business and Professions Code section 17200 defines “unfair 19 competition” to include any “unlawful, unfair, or fraudulent business practice.” This 20 language is intended to protect consumers as well as business competitors; its prohibitory 21 reach is not limited to deceptive or fraudulent conduct but extends to any unlawful business 22 conduct. Perdue v. Crocker National Bank, 38 Cal.3d 913, 929 (1985) (citations omitted). 23 Defendant argues that its actions were not “unfair” under the UCL. However, if Defendant 24 is found liable for violation of Section 605 or 553, this could constitute “unfair” practices. 25 Flores, 913 F. Supp. 2d at 963 (Section 605 and 553 claims can serve as a predicate for a 26 section 17200 action). For the reasons discussed above, there are triable issues as to 27 / / / 28 / / / | || whether Defendant violated Sections 605 and 553. Therefore, summary judgment as to the 2 UCL claim must be denied.” 3 E. Enhanced Statutory Damages 4 Defendant also seeks summary adjudication as to Plaintiff's request for enhanced 5 statutory damages under Sections 605 and 553 because there is no evidence that it 6 || committed a “willful” violation of the statutes. ECF No. 34-1 at 30. Given that the Court 7 denying summary judgment as to the claims for violations of Sections 605 and 553, it 8 || declines to address the issue of enhanced statutory damages at this time. 9 IV. Conclusion 10 For the foregoing reasons, Defendant’s Motion for Summary Judgment is DENIED. 11 || However, this Order should not be read as an indication by the Court that Plaintiff will 12 || prevail at trial. 13 IT IS SO ORDERED. 14 || Dated: February 28, 2022 NO 15 DE | 16 Honorable Linda Lopez 7 United States District Judge [27] 28 ? Plaintiff presumably will not seek recovery under the UCL attorneys’ fees provision as it does not challenge summary judgment on that issue. ECF No. 36 at 29.