United States District Court, D. Arizona
Honorable John J. Tuchi United States District Judge
issue is Plaintiff's Application for Default Judgment by
the Court (Doc. 17, Mot.), to which Defendant filed a
Response (Doc. 19, Resp.) and Plaintiff filed a Reply (Doc.
G&G Closed Circuit Events, LLC was granted exclusive
contractual rights to the nationwide distribution of a boxing
match which aired on May 6, 2017 (“the Program”).
(Doc. 1, Compl. ¶ 16.) Defendant Francisca Gonzalez
Arvizu owns Taco Mich, a restaurant and bar in Phoenix.
(Compl. ¶ 12.) In its Complaint, Plaintiff alleges that
Defendant unlawfully intercepted and broadcast the Program at
Taco Mich, and that the broadcast “resulted in
increased profits for Taco Mich.” (Compl. ¶¶
11, 13.) Plaintiff seeks damages under Title 47 U.S.C.
§§ 605(e) and 553. (Compl. ¶¶ 15-29.)
filed its Complaint on March 1, 2018 and executed service on
Defendants Gonzalez Arvizu and Taco Mich. on April 27, 2018.
(Compl, Doc. 13.) Defendants failed to answer or otherwise
appear in their defense. On May 14, 2018, Plaintiff filed an
Application for Entry of Default (Doc. 14). The Clerk of
Court entered default against Defendants on May 15, 2018
(Doc. 15). Plaintiff timely filed a Motion for Default
Judgment as to both Defendants on July 12, 2018 (Mot.). On
July 30, Defendants filed a Response (Resp.) Plaintiff then
filed a Reply, arguing that because default has already been
entered, Defendants are barred from appearing or presenting
evidence. (Reply at 2.)
their Response, Defendants allege that Plaintiff cannot prove
its damages because it lacks supporting evidence. (Resp. at
2-4.) Defendants assert that Plaintiff's investigator,
Amanda Hidalgo (“Hidalgo”) misrepresented the
events of May 6, 2017 in her affidavit in support of
Plaintiff's allegation. (Resp. at 2.) Defendants argue
that Hidalgo could not possibly have been at Taco Mich.
between 9:11 and 9:17 p.m. when she claims she saw the
Program being unlawfully broadcast but then arrive at a
different establishment seven miles away at 9:15. (Resp. at
2.) Defendant also argues that Plaintiff's contract with
the third party (“Promoter”) who conveyed to
Plaintiff rights to nationally broadcast the Program, did not
provide Plaintiff any rights to broadcasts of the Program in
languages other than English. (Resp. at 3). Defendant alleges
that, if the Program was broadcast at Taco Mich, it was in
Spanish, and therefore Plaintiff would not have any rights to
that broadcast. (Resp. at 3.)
Reply, Plaintiff responds to Defendants' two points, but
argues in the alternative that “Defendant's
Opposition should be disregarded in its entirety”
because once in default, Defendants had no right to
participate in the litigation. (Reply at 2.) Plaintiff seeks
entry of default judgment in a total amount of $60, 000 for
violations of 47 U.S.C. §§ 605(e)(3)(C)(i)(II) and
(ii). (Mot. at 3.)
party against whom relief is sought fails to defend against
the claim, the court may enter default against that party.
Fed.R.Civ.P. 55(a). After entry of default, the other party
may move for entry of default judgment, which will stand as a
final judgment in the case. Fed.R.Civ.P. 55(b). But at either
stage-entry of default or entry of default judgment-the party
against whom default was entered has an avenue for relief.
“The court may set aside an entry of default for good
cause, and may set aside a final default judgment under Rule
60(b).” Fed.R.Civ.P. 55(c). Rule 60(b) lays out
specific grounds for relief, but “[t]he different
treatment of default entry . . . by Rule 55(c) frees a court
considering a motion to set aside a default entry from the
restraint of Rule 60(b) and entrusts determination to the
discretion of the court.” Haw. Carpenters'
Trust Funds v. Stone, 794 F.2d 508, 513 (9th Cir. 1986).
Thus, while courts have held that the possible reasons for
relief under Rule 55 and Rule 60 are roughly equivalent,
“the standards for setting aside entry of default under
Rule 55(c) are less rigorous than those for setting aside a
default [judgment].” Id. And in any case,
reaching entry of default judgment is “appropriate only
in extreme circumstances [because] a case should, whenever
possible, be decided on the merits.” Falk v.
Allen, 739 F.2d 461, 463 (9th Cir. 1984).
party seeking to set aside entry of default under Rule 55(c)
must show that any one of three factors favors their motion.
Franchise Holding II, LLC v. Huntington Rest. Grp.,
Inc., 375 F.3d 922, 925-26 (9th Cir. 2004). The three
factors are: (1) whether the party against whom default was
entered “engaged in culpable conduct that led to the
default;” (2) “whether [that party] had a
meritorious defense; or (3) whether reopening the default
judgment would prejudice” the party in whose favor
default was entered. Id. at 926. “As these
factors are disjunctive, the district court [is] free to deny
the motion ‘if any of the three factors [is]
true.'” Id. (quoting Amer. Ass'n
of Naturopathic Physicians v. Hayhurst, 227 F.3d 1104,
1108 (9th Cir. 2000)).
order to justify vacating default on the grounds that it had
a meritorious defense, the party so moving must
“present the district court with specific facts that
would constitute a defense.” Id. (citing
Madsen v. Bumb, 419 F.2d 4, 6 (9th Cir. 1969)).
is not misguided in its argument that Defendant's
Response constitutes an argument on the merits that it is not
normally permitted after default has been entered. (Reply at
2.) But Defendants are within their rights to seek relief
under Rule 55(c), which governs when default has been entered
but there is not yet a final default judgment. In substance,
Defendant's Response comports with Rule 55(c) and
addresses the appropriate factors that the Court considers
when ruling on a Motion to Set Aside Default. Thus, the Court
will treat Defendant's Response as a Motion to Set Aside
a Default under Rule 55(c) and will treat Plaintiff's
Reply as a Response to that Motion.
need only show that one of the three factors outlined above
justifies vacating default. Defendants seem to have only
addressed the existence of a meritorious defense. Thus, the
Court will not determine whether Defendants “engaged in
culpable conduct that led to the default” or “whether