Opinion
Case No. 3:18-cv-01517-SB
03-06-2019
CARL JOSEPH TRENTADUE (aka CARLO TRENTA), Plaintiff, v. JOHN DONALD LAMONTE, an individual, CREATIVE SOUNDS, LTD, a corporation, DOES 1 through 100, inclusive, Defendants.
FINDINGS AND RECOMMENDATION
BECKERMAN, Magistrate Judge.
Carl Joseph Trentadue ("Plaintiff") brings this action against Defendants John Donald Lamonte ("Lamonte"), Creative Sounds, Ltd. ("Creative Sounds"), and Does 1 through 100, alleging claims for copyright infringement under the Copyright Act. Plaintiff now moves, pursuant to Fed. R. Civ. P. 55(b), for entry of default judgment against Lamonte and Creative Sounds (together, "Defendants"). The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1331. For the reasons that follow, the district judge should grant Plaintiff's motion for default judgment (ECF No. 21).
BACKGROUND
Plaintiff is the registered copyright holder of copyrights for the music compositions and sound recordings of the following seven songs: "Mechanical Liz," "Habit Rabbit," "Tough Boy's A Punk (aka Tough Boy)," "I'm Not Your Pushing Broom," "Credit Card," "Next Door Girl," and "Next Girl Door (Disco music version)" (collectively, the "Copyrighted Works"). (Compl. ¶ 2; Compl. Schedule A.) Plaintiff registered the copyrights for these works in 1979 and 1980, and recorded them on a vinyl album entitled "Carlo Trenta and The Demons" in 1981. (Decl. of Carl Joseph Trentadue in Supp. of Mot. for Gen. J. by Def. ("Trentadue Decl.") ¶ 4; Compl. Schedule A.) Five thousand copies of the album were distributed in record stores in a seven-state area between 1981 and 1982. (Trentadue Decl. ¶ 5.)
In July 2017, a Connecticut record store owner contacted Plaintiff to inform him that Creative Sounds had, years prior, released an album entitled "Billy Joel with Attila/The Hassles Rollin' Home" ("Rollin' Home") that contained Plaintiff's Copyrighted Works. (Trentadue Decl. ¶ 6, Ex. 6.) The record store owner informed Plaintiff that "Rollin Home" had been on the market since at least 1992, when he first purchased the album on compact disc, and that he had later come across it in vinyl record and cassette tape formats. (Trentadue Decl. Ex. 6.) The store owner told Plaintiff that the songs numbered 9-14 on "Rollin Home" were identical to Plaintiff's Copyrighted Works, although the song titles had been changed. (Id.) Plaintiff was previously unaware of the existence of any duplications or other versions of his Copyrighted Works. (Id.) The store owner mailed Plaintiff a "Rollin Home" compact disc and, upon receipt, Plaintiff confirmed that the album contained his Copyrighted Works. (Id., Trentadue Decl. ¶ 7.) Plaintiff later discovered that "Rollin Home" is still being sold on several websites, as well as retail stores in Portland, Oregon. (Trentadue Decl. ¶¶ 8-9.)
Defendant Lamonte is the owner of Creative Sounds, Ltd. (Compl. ¶ 5.)
Although the song titles were changed, several of the titles on "Rollin' Home" had similar names as the corresponding Copyrighted Works. For example, the title of the song "Habit Rabbit" appeared as "Rabbit" on "Rollin' Home." Another song originally entitled "Tough Boy's a Punk" appeared on "Rollin Home" as "Tough Boy." (Compl. Schedule A.)
Plaintiff filed this action on August 17, 2018, alleging that Defendants infringed Plaintiff's copyrights on the seven Copyrighted Works in violation of the Copyright Act, 17 U.S.C. §§ 101-1332. (Compl. ¶ 15.) On August 23, 2018, Plaintiff served the complaint on Defendants, via a process server, at Lamonte's home in Sedona, Arizona. (ECF Nos. 8-9.) Defendants did not timely file an answer and, after serving a notice of default, Plaintiff moved for entry of default, which the clerk entered on October 11, 2018. (ECF Nos. 12, 14, 15.)
Plaintiff now seeks a default judgment permanently enjoining Defendants from engaging in infringing activity and awarding statutory damages of $1,050,000, reflecting the maximum statutory damages of $150,000 for each of Plaintiff's seven Copyrighted Works. (Pl.'s Mot. for Def. J. ¶ 6.)
ANALYSIS
I. STANDARD OF REVIEW
Pursuant to Fed. R. Civ. P. 55(a), the clerk of court is required to enter an order of default if a party against whom affirmative relief is sought has failed timely to plead or otherwise defend an action. See 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."). "The general rule is that upon default the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true." Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977) (citations omitted); see also City of N.Y. v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 128 (2d Cir. 2011) ("The entry of a default, while establishing liability, 'is not an admission of damages.'") (citation omitted).
Fed. R. Civ. P. 55 "provides that after the clerk's entry of default against a defendant, a court may enter default judgment against that defendant." FirstBank P.R. v. Jaymo Props., LLC, 379 F. App'x 166, 170 (3d Cir. 2010). "The district court's decision whether to enter a default judgment is a discretionary one." Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In exercising this discretion, district courts in the Ninth Circuit consider the factors articulated in Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986). See J&J Sport Prods., Inc. v. Salas, No. 13-cv-05553, 2015 WL 3429153, at *2 (N.D. Cal. May 27, 2015). The Eitel factors are: (1) the possibility of prejudice to Plaintiff; (2) the merits of Plaintiff's substantive claims; (3) the sufficiency of the operative complaint; (4) the sum of money at stake in the litigation; (5) the possibility of dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. Eitel, 782 F.2d at 1471-72. The "starting point" of the district court's analysis, however, "is the general rule that default judgments are ordinarily disfavored." Id. at 1472.
II. DISCUSSION
A. Default Judgment
The Court finds that the Eitel factors weigh in favor of entering default judgment in this case.
First, Plaintiff will suffer prejudice if default judgment is not entered because Defendants' failure to respond to the lawsuit has left Plaintiff with no alternative means for relief. See Philip Morris USA, Inc. v. Castworld Prods., Inc., 219 F.R.D. 494, 499 (C.D. Cal. 2003) (noting that the "[p]laintiff would suffer prejudice if the default judgment is not entered because Plaintiff would be without other recourse for recovery"). This factor weighs in favor of default judgment.
The second and third Eitel factors, which, respectively, consider the merits of Plaintiff's claim and the sufficiency of the complaint, also support default judgment. To establish a claim of copyright infringement, a "plaintiff must show ownership of the copyright and copying by the defendant." Fox Broad. Co., Inc. v. Dish Network L.L.C., 747 F.3d 1060, 1066-67 (9th Cir. 2013) (quoting Kelly v. Arriba Soft Corp., 336 F.3d 811, 817 (9th Cir. 2003)). The allegations in the complaint, which must be taken as true upon default, establish the elements of copyright infringement. See, e.g., Voltage Pictures, LLC v. Martinez, No. 3:15-cv-00002-AC, 2015 WL 4772856, at *2 (D. Or. Aug. 11, 2015) (concluding that default judgment was appropriate where the factual allegations in the amended complaint, taken as true upon default, established the elements of a copyright claim). Accordingly, the second and third Eitel factors also favor entry of default judgment.
The fourth, fifth, and sixth Eitel factors further support a default judgment. The fourth Eitel factor requires a court to "consider the amount of money at stake in relation to the seriousness of Defendant's conduct." PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1176 (C.D. Cal. 2002). Although Plaintiff requests the maximum amount of statutory damages, the statutory damages the Court recommends below is consistent with the seriousness of Defendants' conduct. The fifth Eitel factor, which concerns the possibility of dispute about material facts, also weighs in favor of granting default judgment because "[w]hen default has been entered, courts find that there is no longer the possibility of a dispute concerning material facts because the court must take the plaintiff's factual allegations as true." Curtis v. Illumination Arts, Inc., 33 F. Supp. 3d 1200, 1212 (W.D. Wash. 2014) ("Curtis I"), aff'd, 682 F. App'x 604 (9th Cir. 2017) ("Curtis II"). Finally, the sixth factor turns on whether the defendant's default is due to excusable neglect. Eitel, 782 F.2d at 1472. It appears that Plaintiff properly served Defendants at Lamonte's home address, and therefore it is unlikely that Defendants' failure to respond was due to excusable neglect. All of these factors support entry of default judgment.
The seventh Eitel factor requires a court to consider the strong policy favoring resolving disputes on the merits. Id. While this factor weighs against default judgment, "this preference, standing alone, is not dispositive." PepsiCo, 238 F. Supp. 2d at 1177 (citing Kloepping v. Fireman's Fund, No. C 94-2684 TEH, 1996 WL 75314, at *3 (N.D. Cal. Feb. 13, 1996)). "Moreover, Defendant's failure to answer [Plaintiff's] Complaint makes a decision on the merits impractical, if not impossible." PepsiCo, 238 F. Supp. 2d at 1177. This factor alone does not merit denying entry of default judgment.
Having balanced the Eitel factors, the Court determines that default judgment is appropriate here.
B. Statutory Damages
The court recommends that the district judge award statutory damages of $70,000, i.e., $10,000 for each of Plaintiff's seven Copyrighted Works.
Under the Copyright Act, a plaintiff may elect an award of statutory damages "in a sum of not less than $750 or more than $30,000" per infringement, in lieu of an award representing actual damages. 17 U.S.C. § 504(c)(1). If the Court determines that the "infringement was committed willfully, the court in its discretion may increase the award of statutory damages to a sum of not more than $150,000." 17 U.S.C. § 504(c)(2). "[A]n award of statutory damages is meant to serve both compensatory and punitive purposes." Curtis II, 682 F. App'x at 605 (citation omitted). A district court has wide discretion in setting the amount of statutory damages. Nintendo of Am., Inc. v. Dragon Pac. Int'l, 40 F.3d 1007, 1010 (9th Cir. 1994); see also Curtis I, 33 F. Supp. 3d at 1217 (noting the Ninth Circuit has not adopted uniform criteria for determining statutory damages for willful copyright infringement). In formulating a statutory damage award, the court should consider "what is just in the particular case, considering the nature of the copyright, the circumstances of the infringement and the like." L.A. News Serv. v. Reuters Television Int'l, Ltd., 149 F.3d 987, 996 (9th Cir. 1998) (citing Peer Int'l Corp. v. Pausa Records, Inc., 909 F.2d 1332, 1336 (9th Cir.1990)).
Plaintiff requests the maximum statutory damages of $1,050,000, or "$150,000 for willful infringement of each of the seven Plaintiff's copyrighted works." (Compl. at 6.) The Court finds a $1 million award to be excessive here. Damages in the amount of $10,000 per infringement, for a total of $70,000, is more appropriate given the factual circumstances of this case. The Court bases its recommendation on several factors, including the willful and serious nature of Defendants' conduct, the lack of any concrete information regarding Plaintiff's loss, and the need to ensure the integrity of copyright laws. See Curtis, 33 F. Supp. 3d at 1217 (arriving at statutory damage award based on several factors, including "the plaintiff's lost revenues," "whether the infringer acted willfully," and "the strong public interest in ensuring the integrity of copyright laws").
First, the willful and serious nature of Defendants' conduct merits an award higher than the statutory minimum of $750 per infringement. Plaintiff has sufficiently alleged that Defendants acted willfully in duplicating and distributing the Copyrighted Works. See, e.g., Compl. ¶ 17 (alleging that "the foregoing acts of infringement have been willful and intentional . . ."); see also Curtis II, 682 F. App'x at 605 ("[A]llegations of willful infringement are deemed true on account of the [entry of] default . . . ."). Defendants' willful conduct is also supported by the fact that Defendants tried to hide the infringement by changing the names of the songs and attributing the songs to a well-known recording artist (see Compl. Schedule A). For these reasons, an award greater than the minimum statutory damage award is justified. See BMG Music v. Perez, 952 F.2d 318, 320 (9th Cir. 1991) (affirming award of $15,000 per infringing phonorecord for a total award of $60,000); cf. Chanel, Inc. v. Yang, No. C 12-4428 PJH, 2013 WL 5755217, at *13 (N.D. Cal. Oct. 21, 2013) (awarding $3,000 for each of 35 infringements of Chanel's mark, for a total award of $105,000).
In contrast to the instant matter, which involves more egregious conduct, this Court has consistently recommended the minimum $750 statutory damage award per copyrighted film in a series of copyright infringement cases involving an individual's use of a peer-to-peer file sharing network. See, e.g., Cell Film Holdings, LLC v. Newcomb, No. 3:16-CV-01387-SB, 2017 WL 5615171, at *5 (D. Or. Oct. 12, 2017); Cobbler Nevada, LLC and Clear Skies Nevada, LLC v. Moss, No. 3:15-cv-01915-SB, 2016 WL 7856616, at *4 (D. Or. Dec. 19, 2016); Cobbler Nevada, LLC v. Shaffer, No. 3:15-cv-01233-SB, 2016 WL 6821145, at *4 (D. Or. Oct. 26, 2016); Cobbler Nevada, LLC v. Ronne, No. 3:15-cv-01230-SB, 2016 WL 6821144, at *4 (D. Or. Oct. 26, 2016); Cobbler Nevada, LLC v. Osier, No. 3:15-cv-00828-SB, 2016 WL 6211735, at *4 (D. Or. Oct. 3, 2016); Glacier Films (USA), Inc. v. Tenorio, No. 3:15-cv-01729-SB, 2016 WL 3766465, at *3 (D. Or. June 22, 2016); Glacier Films (USA), Inc. v. Gallatin, No. 3:15-cv-01632-SB, 2016 WL 3148401, at *3 (D. Or. May 12, 2016).
Second, the Court has considered Plaintiff's inability to present any evidence of Defendants' profits or his own losses resulting from the infringement. "Most judges have issued awards far below the statutory maximum . . . where the defendant willfully infringes . . . but where there is no concrete information about the defendant's actual sales figures and profits and the estimate of plaintiff's lost revenue." All-Star Mktg. Grp., LLC v. Media Brands Co., 775 F. Supp. 2d 613, 624, 627 (S.D.N.Y. 2011) (discussing statutory damages under the Lanham Act and noting that the analysis for statutory damages under Copyright Act is "nearly identical"); see also Disney Enter., Inc. v. Smith, No. CV0807666SJOSSX, 2009 WL 10671789, at *3 (C.D. Cal. May 22, 2009) (declining to award amount of damages requested by the plaintiff where the plaintiff offered "no evidence of [the defendant's] profits, [the plaintiff's] losses, or the value of the copyrights"). While the Court acknowledges that Defendants' failure to engage in this litigation has precluded Plaintiff from conducting discovery, Plaintiff has failed to provide any estimate or evidence of any lost revenue resulting from the infringement. Accordingly, this factor weighs against a statutory maximum damage award.
Finally, and having considered the aforementioned factors, the Court concludes that an award of $70,000 is just and sufficient to achieve the policy goals that statutory damages are designed to serve. See Nintendo, 40 F.3d at 1011 ("[W]hen the infringement is willful, the statutory damages award may be designed to penalize the infringer and to deter future violations.") (citing Chi-Boy Music v. Charlie Club, Inc., 930 F.2d 1224, 1229-30 (7th Cir. 1991)); Twentieth Century Fox Film Corp. v. Riquelme, No. LA CV16-08328 JAK (MRWx), 2017 WL 8231046, at *5 (C.D. Cal. Nov. 3, 2017) ("Although statutory damages are warranted to compensate Plaintiffs for the harm incurred and deter Defendant and others from similar conduct in the future, an award of $7500 per infringement is sufficient to accomplish these goals."). An award of $70,000 here will adequately compensate Plaintiff, punish Defendants, and deter Defendants and others from committing similar copyright offenses in the future.
For all of these reasons, the Court recommends that the district judge award $70,000 in statutory damages to Plaintiff.
C. Injunctive Relief
Plaintiff also seeks injunctive relief preventing Defendants from engaging in future copyright infringement. See Twentieth Century Fox Film Corp., 2017 WL 8231046, at *5 (noting that "[a] plaintiff seeking a permanent injunction must demonstrate each of the following: (i) it has suffered irreparable injury; (ii) there is no adequate remedy at law; (iii) considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (iv) it is in the public interest to issue the injunction") (citation omitted). Having considered the relevant factors, the Court agrees that this case merits injunctive relief.
Under the Copyright Act, a district court may "grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright," and "order the destruction or other reasonable disposition of all copies or phonorecords found to have been made or used in violation of the copyright owner's exclusive rights." 17 U.S.C. §§ 502-03. Accordingly, the Court recommends that the district judge enter a permanent injunction enjoining Defendants from any further infringement of the Copyrighted Works, and ordering Defendants to destroy any unauthorized copies of the Copyrighted Works.
CONCLUSION
For the reasons stated, the Court recommends that the district judge GRANT Plaintiff's Motion for Default Judgment (ECF No. 21), enter default judgment and a permanent injunction, award statutory damages in the amount of $70,000, and dismiss without prejudice the Doe defendants. /// /// /// /// ///
See Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 110 (1969) (holding that courts may enter default judgment against a defendant only if the defendant has been made a party to the action by service of process); see also Fed. R. Civ. P. 4(m) ("If a defendant is not served within 90 days after the complaint is filed, the court—on motion or on its own after notice to the plaintiff—must dismiss the action without prejudice against that defendant or order that service be made within a specified time.").
SCHEDULING ORDER
The Court will refer its Findings and Recommendation to a district judge. Objections, if any, are due within fourteen (14) days. If no objections are filed, the Findings and Recommendation will go under advisement on that date. If objections are filed, a response is due within fourteen (14) days. When the response is due or filed, whichever date is earlier, the Findings and Recommendation will go under advisement.
DATED this 6th day of March, 2019.
/s/_________
STACIE F. BECKERMAN
United States Magistrate Judge