Joe Hand Promotions, Inc. v. Purple Pig, LLC

          ORDER

          PHILIP A. BRIMMER, UNITED STATES DISTRICT JUDGE

         This matter is before the Court on plaintiff's Notice of Motion and Motion for Default Judgment [Docket No. 18].

         I. BACKGROUND

         Because of the Clerk of Court's entry of default, Docket No. 17, the allegations in plaintiff's complaint, Docket No. 1, are deemed admitted. Olcott v. Del. Flood Co., 327 F.3d 1115, 1125 (10th Cir. 2003). This case concerns defendants' unauthorized broadcast of Ultimate Fighting Championship® 205: Alvarez v. McGregor (the “Program”) at the Purple Pig Pub in Alamosa, Colorado on November 12, 2016. Docket No. 1 at 1, 3, ¶¶ 1, 2, 11-12. Plaintiff possessed the exclusive right to license and distribute the Program to commercial establishments. Id. at 3, ¶ 8. Without obtaining permission from plaintiff, defendants, “[b]y unauthorized satellite transmission or . . . unauthorized receipt over a cable system . . . willfully intercepted or received the interstate communication of the Program” and unlawfully exhibited it to patrons at the Purple Pig Pub. Id., ¶¶ 11-12.

         Plaintiff filed this lawsuit on April 28, 2017 asserting claims for satellite and/or cable piracy in violation of 47 U.S.C. §§ 553 and 605. Id. at 4. After defendants failed to respond to the complaint or otherwise appear in the action, plaintiff moved for entry of default. Docket No. 16. The Clerk of the Court entered default against defendants on July 24, 2017. Docket No. 17. On December 6, 2017, plaintiff filed a motion for default judgment. Docket No. 18.

         II. LEGAL STANDARD

         In order to obtain a judgment by default, a party must follow the two-step process described in Fed.R.Civ.P. 55. First, the party must seek an entry of default from the Clerk of the Court under Rule 55(a). Second, after default has been entered by the Clerk, the party must seek judgment under the strictures of Rule 55(b). See Williams v. Smithson, 57 F.3d 1081, 1995 WL 365988, at *1 (10th Cir. June 20, 1995) (unpublished table decision) (citing Meehan v. Snow, 652 F.2d 274, 276 (2d Cir. 1981)).

         The decision to enter default judgment is “committed to the district court's sound discretion.” Olcott, 327 F.3d at 1124 (citation omitted). In exercising that discretion, the Court considers that “[s]trong policies favor resolution of disputes on their merits.” Ruplinger v. Rains, 946 F.2d 731, 732 (10th Cir. 1991) (quotation and citations omitted). “The default judgment must normally be viewed as available only when the adversary process has been halted because of an essentially unresponsive party.” Id. It serves to protect plaintiffs against “interminable delay and continued uncertainty as to his rights.” Id. at 733. When “ruling on a motion for default judgment, the court may rely on detailed affidavits or documentary evidence to determine the appropriate sum for the default judgment.” Seme v. E&H Prof'l Sec. Co., Inc., No. 08-cv-01569-RPM-KMT, 2010 WL 1553786, at *11 (D. Colo. Mar. 19, 2010).

         A party may not simply sit out the litigation without consequence. See Cessna Fin. Corp. v. Bielenberg Masonry Contracting, Inc., 715 F.2d 1442, 1444-45 (10th Cir. 1983) (“[A] workable system of justice requires that litigants not be free to appear at their pleasure. We therefore must hold parties and their attorneys to a reasonably high standard of diligence in observing the courts' rules of procedure. The threat of judgment by default serves as an incentive to meet this standard”). One such consequence is that, upon the entry of default against a defendant, the well-pleaded allegations in the complaint are deemed admitted. See Charles Wright, Arthur Miller & Mary Kane, Fed. Prac. & Proc. § 2688 (3d ed. 2010). “Even after default, however, it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law.” Id. at 63. A court need not accept conclusory allegations. Moffett v. Halliburton Energy Servs., Inc. 291 F.3d 1227, 1232 (10th Cir. 2002). Although “[s]pecific facts are not necessary” in order to state a claim, Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)), the well-pleaded facts must “permit the court to infer more than the mere possibility of misconduct.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (internal quotation and alteration marks omitted). Thus, even though modern rules of pleading are somewhat forgiving, “a complaint still must contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory.” Bryson v. Gonzales, 534 F.3d 1282, 1286 (10th Cir. 2008) (quotation and citation omitted).

         III. ANALYSIS

         A. Jurisdiction

         Before addressing the merits of plaintiff's motion for default judgment, the Court must determine whether it has subject matter and personal jurisdiction over this case. See Dennis Garberg & Assocs., Inc. v. Pack-Tech Int'l Corp., 115 F.3d 767, 772 (10th Cir. 1997) (holding that “a district court must determine whether it has jurisdiction over the defendant before entering judgment by default against a party who has not appeared in the case”). The Court finds that it has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 because plaintiff asserts claims under a federal statute. Additionally, the Court may exercise personal jurisdiction over defendants because defendants operate the Purple Pig Pub in Alamosa, Colorado and the alleged statutory violation took place in Colorado.

         B. Violations of 47 U.S.C. §§ 553 and 605

         Plaintiff asserts violations of 47 U.S.C. §§ 553 and 605. Section 553 provides that “[n]o person shall intercept or receive or assist in intercepting or receiving any communications service offered over a cable system, unless specifically authorized to do so by a cable operator or as may otherwise be ...