Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-01099/USCOURTS-azd-2_08-cv-01099-0/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 28:1338 Copyright Infringement

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

BERTRAM MUSIC COMPANY, EMI )

APRIL MUSIC INC., MUSIC SALES )

CORP., EMI FULL KEEL MUSIC )

CO. ) CIV 08-01099 PHX MEA

 Plaintiff, )

) ORDER

vs. ) 

)

SC.GS & CO., LLC, SASHA )

COSIC, DRAGANA COSIC, aka ) 

DONNA COSIC, ) 

) 

 Defendants. )

_____________________________ )

Plaintiffs have agreed to the exercise of magistrate

judge jurisdiction over all of the claims asserted, including

the entry of final judgment. Defendants, although served with

the summons and complaint in this matter, have not appeared in

the matter. Before the Court is Plaintiffs’ motion for the

entry of judgment by default [Docket No. 14].

I Background

Plaintiffs filed a complaint on June 12, 2008, alleging

that Defendants were liable to Plaintiffs for copyright

infringement. Plaintiffs allege Defendants are the owners of Va

Bene, a bar and restaurant. Plaintiffs allege that Defendants

allowed four copyrighted works to be performed at Va Bene,

located in Phoenix, Arizona, on a specific date in 2007.

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1 ASCAP is a central administrator utilized by copyright owners

to control licensed performance of their copyrighted works. On behalf

of the copyright owners, ASCAP negotiates fee agreements, or licenses,

allowing nightclubs and restaurants, inter alia, to play or allow the

performance of the musical compositions in the ASCAP catalogue.

Generally, when ASCAP determines that an establishment is playing

copyrighted music the owner of the establishment is notified of the

infringement and is offered a chance to purchase a license. See

Broadcast Music, Inc. v. Columbia Broad. Sys., 441 U.S. 1, 4-5, 99 S.

Ct. 1551, 1554-55 (1979); International Korwin Corp. v. Kowalcyzk, 855

F.2d 375, 376 n.1 (7th Cir. 1988); Morganactive Songs v. K&M Fox Inc., 77 U.S.P.Q. 2d 1064, 1070 (S.D. Ind. 2005).

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Plaintiffs allege they were not provided with a royalty for the

performance of their copyrighted works either directly to

Plaintiffs or through the payment of a license for the

performance of copyrighted works to the American Society of

Composers, Authors and Publishers (“ASCAP”).1 Plaintiffs allege

Defendants have knowingly violated their copyrights for a period

of two years. The complaint seeks injunctive relief, i.e., an

order prohibiting Defendants from authorizing or allowing

further infringing performances of their copyrighted works,

statutory damages pursuant to 17 U.S.C. §§ 502(a), 504(c) and

505, and an award of Plaintiffs’ attorneys fees. 

Service of the summons and complaint was executed on

Defendants on June 19, 2008. See Docket No. 8. An answer to a

complaint must be filed within twenty days of service of the

summons and complaint. See Fed. R. Civ. P. Rule 12(1)(A)

(2008). Accordingly, Defendants’ answer to the complaint was

due no later than June 30, 2008.

On July 16, 2008, Plaintiffs applied for the entry of

Defendants’ default, which was entered by the Clerk of the Court

pursuant to Rule 55(a), Federal Rules of Civil Procedure, on

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July 30, 2008. See Docket No. 11 & Docket No. 13. On August 7,

2008, Plaintiffs moved the Court for the entry of judgment in

favor of Plaintiffs and against Defendants by virtue of

Defendants’ default in asserting an answer to Plaintiffs’ claims

for relief, citing Rule 55(b)(2), Federal Rules of Civil

Procedure. See Docket No. 14. 

II Analysis

Rule 55 provides that if “a party against whom a

judgment for affirmative relief is sought has failed to plead or

otherwise defend as provided by these rules and that fact is

made to appear by affidavit or otherwise, the clerk shall enter

the party’s default.” Fed. R. Civ. P. 55(a) (2008). Rule

55(b)(2) requires the application be accompanied with a

declaration that the defaulting defendants are not minors,

incompetent, or members of the armed services. Additionally,

Rule 55 does not require the entry of judgment against a

defaulting party and the entry of a judgment by default is

completely within the Court’s discretion. See, e.g., DIRECTV,

Inc. v. Hoa Huynh, 503 F.3d 847, 852 (9th Cir. 2007), petition

for cert. filed, 76 U.S.L.W. 3557 (Apr. 02, 2008)(No. 07-1261);

Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986); Aldabe

v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Default

judgments are disfavored because public policy favors the

resolution of civil cases on their merits. Eitel v. McCool, 782

F.2d 1470, 1471-72 (9th Cir. 1986); Krieg v. U.M.C. Hosp., 217

Fed. App. 604, 605 (9th Cir. 2007); Lacy v. Sitel Corp., 227

F.3d 290, 292 (5th Cir. 2000)(“federal courts should not be

agnostic with respect to the entry of default judgments, which

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are ‘generally disfavored in the law’ and thus ‘should not be

granted on the claim, without more, that the defendant had

failed to meet a procedural time requirement.’”). Cf. Latsham

v. Trainer Wortham & Co., Inc., 452 F.3d 1097, 1103 (9th Cir.

2006).

When exercising its discretion in this regard, the

Court may consider a variety of factors, including:

(1) the possibility of prejudice to the

plaintiff, (2) the merits of plaintiff’s

substantive claim, (3) the sufficiency of the

complaint, (4) the sum of money at stake in

the action, (5) the possibility of a 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. See also DIRECTV, Inc., 503 F.3d at

852. 

When determining whether judgment by default should be

granted, the Court must take as true all factual allegations in

the complaint, except for those related to the amount of

Plaintiffs’ damages. See Geddes v. United Financial Group, 559

F.2d 557, 560 (9th Cir. 1977); Twentieth Century Fox Film Corp.

v. Streeter, 438 F. Supp. 2d 1065, 1070 (D. Ariz. 2006).

Defendants’ default functions as their admission of the

complaint’s well-pleaded allegations of fact. See Cripps v.

Life Ins. Co., 980 F.2d 1261, 1267 (9th Cir. 1992); Danning v.

Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978). Facts necessary to

establish each element of the cause of action stated in the

complaint that are not themselves stated in the complaint and

claims that are legally insufficient are not established by a

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2

 Liability for copyright infringement extends to those who own

or control the premises where the infringing conduct occurs, or where

the purported defendants have the right and ability to supervise those

responsible for the infringing conduct. Supervisor or control

liability is predicated on the fact that the purported defendant

derives direct financial benefit from infringing performances on their

premises. See, e.g., Ellison v. Robertson, 357 F.3d 1072, 1076 (9th

Cir. 2004); A & M Records v. Napster, Inc., 239 F.3d 1004, 1013 (9th

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defendant’s default. See Cripps, 980 F. 2d at 1267; Danning,

572 F.2d at 1388.

A. The prejudice to Plaintiffs if default judgment is

denied

Plaintiffs will be substantially prejudiced if default

judgment is denied. Defendants have not answered the complaint

nor otherwise defended this matter. There is no indication in

the record that Defendants will appear or otherwise respond to

the complaint. Additionally, Plaintiffs will be prejudiced, in

the form of accumulating additional attorneys’ fees, by any

further delay in resolving these proceedings.

B. The merits of Plaintiffs’ substantive claim

The Court finds that Plaintiffs’ substantive claims are

meritorious. Taking the facts of the complaint as true,

Defendants violated federal copyright law by allowing the

performance of copyrighted works at their establishment without

paying the appropriate fees. Defendants have not contested the

facts alleged in the complaint.

C. The sufficiency of the complaint

The complaint sufficiently alleges jurisdiction over

the parties and the subject matter at issue in this suit. The

complaint sufficiently allege a factual predicate for the relief

sought. The complaint names eligible defendants.2

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Cir. 2001); Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 263-

64 (9th Cir. 1996); Broadcast Music, Inc. v. Blueberry Hill Family

Rest., Inc., 899 F. Supp. 474, 480-81 (D. Nev. 1995); Boz Scaggs

Music v. KND Corp., 491 F. Supp. 908, 913 (D. Conn. 1980).

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D. The sum of money at stake in this action

The sum of money sought by Plaintiffs in this action is

statutory damages in the amount of $7,500 for each of four

infringements, i.e., $30,000.

E. The possibility there would be a dispute concerning

material facts if the case were to proceed

It is unlikely that there would be a dispute concerning

material facts if this case proceeds. 

F. Whether the default was due to Defendants’ excusable

neglect

Defendants have had notice of these proceedings and

have not appeared nor objected thereto, nor asked for additional

time to answer the complaint. Defendants’ default in this

matter is not due to excusable neglect. 

G. The strong policy underlying the Federal Rules of

Civil Procedure favoring decisions on the merits

The entry of default judgment is disfavored. The Court

should not enter a default judgment if Defendants would be

entitled to have the default judgment set aside pursuant to Rule

60(b), Federal Rules of Civil Procedure. See, e.g., Educational

Servs., Inc. v. Maryland State Bd. for Higher Educ., 710 F.2d

170, 177 (4th Cir. 1983); Martin v. Coughlin, 895 F. Supp. 39,

42 (N.D.N.Y. 1995). 

At this time, Defendants would not be entitled to have

a default judgment set aside and Plaintiffs will be prejudiced

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if default judgment is not entered. It is also unlikely that

Defendants could present meritorious defenses to Plaintiffs’

claims. Finally, it is unlikely that Defendants would be able

to show good cause for their failure to answer the complaint or

otherwise appear in this matter.

 The majority of courts hold that a

defendant’s conduct will be considered

culpable only if the defendant has defaulted

willfully, or has no excuse for the default.

See, e.g., EEOC v. Mike Smith Pontiac GMC,

Inc., 896 F.2d 524 (11th Cir. 1990) (denial

of motion to vacate default affirmed where

defendant offered no meaningful reason for

its having defaulted). A defendant’s conduct

has been determined to be “culpable” if he

has received actual or constructive notice of

the filing of the action and failed to

answer. Pena v. Seguros La Comercial, S.A., 770 F.2d 811, 814 (9th Cir. 1985). If the

default was the result of culpable conduct on

the part of the defendant, the court need not

consider anything else in refusing to set

aside the default judgment. Meadows v. The

Dominican Republic, 817 F.2d 517, 522 (9th

Cir. 1987); Pena v. Seguros Comercial, S.A., 770 F.2d 811, 814 (9th Cir. 1985).

Hunt v. Cling Motor Co., 841 F. Supp. 1098, 1106-07 (D. Kan.

1994) (citations omitted).

Because Defendants have completely failed to appear in

this matter, the Court may enter a default judgment against

Defendants. See Meadows, 817 F.2d at 521 (concluding that

receiving actual notice of complaint and failing to respond is

culpable conduct).

III Amount of statutory damages

Plaintiffs seek statutory damages in the amount of

$7,500 for the four incidents of infringement. Plaintiffs cite

to recent unpublished decisions of the United States District

Court for the District of Arizona deciding the same issue

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wherein the plaintiffs were awarded $4,000 for willful

infringements in two of the suits and $7,500 for willful

infringements in one of the suits. 

Statutory damages, within a range, are to be assessed

in an amount “as the court considers just.” 17 U.S.C. §

504(c)(1) (2005 & Supp. 2008). The amount of an award of

statutory damages pursuant to section 504(c)(1) is a matter left

to the discretion of the Court, and for a non-willful

infringement the Court is authorized to award damages in the

range of $750 to $30,000 for each act of infringement. See,

e.g., Cass County Music Co. v. C.H.L.R., Inc., 88 F.3d 635, 641

(8th Cir. 1996); Chi-Boy Music v. Charlie Club, Inc., 930 F.2d

1224, 1229 (7th Cir. 1991). If the Court concludes, within its

discretion, that Defendants’ infringement was willful, the Court

may award damages in the amount of up to $150,000 per

infringement. See Cass County Music Co., 88 F.3d at 641; 17

U.S.C. § 504(c)(2) (2005 & Supp. 2008). 

The federal courts have repeatedly stated that the

amount of the statutory damages should exceed what the

defendants would have paid for an annual ASCAP license, so that

defendants are not rewarded for their infringing behavior. See,

e.g., International Korwin Corp. v. Kowalcyzk, 855 F.2d 375, 383

(7th Cir. 1988) (holding also that, where the infringement is

willful, “deterrence of future violations is a legitimate

consideration.”), citing F.W. Woolworth Co. v. Contemporary

Arts, Inc., 344 U.S. 228, 233, 73 S. Ct. 222, 225, (1952) (“The

statutory rule, formulated after long experience, not merely

compels restitution of profit and reparation for injury but also

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is designed to discourage wrongful conduct.”).

The federal courts are within their discretion to award

statutory damages in excess of what the infringer would have

paid in license fees if the court concludes the violation was

willful, rather than unintentional or unknowing. See 17 U.S.C.

§ 504(c)(2) (2005 & Supp. 2008); Charlie Club Inc., 930 F.2d at

1230; International Korwin Corp., 855 F.2d at 383. The Court may

conclude that the infringement was “willful” if Defendants knew

their conduct constituted an infringement of a copyright or if

they acted in “reckless disregard” of copyrights. See Wildlife

Exp. Corp. v. Carol Wright Sales, Inc., 18 F.3d 502, 511 (7th

Cir. 1994). In making this determination the Court may consider

as a “persuasive” factor whether Defendants had notice that

their acts constituted infringement. See Cass County Music Co.,

88 F.3d at 637-38; Chi-Boy Music, 930 F.2d at 1227-28;

Morganactive Songs v. K&M Fox Inc., 77 U.S.P.Q. 2d 1064, 1069-70

(S.D. Ind. 2005).

Plaintiffs have properly alleged that Defendants’

infringement was willful. Accordingly, the Court concludes that

it is within its discretion to authorize the statutory damages

sought by Plaintiffs, i.e., $7,500 for each of the four alleged

infringements, i.e., an aggregate of statutory damages in the

amount of $30,000.

In their motion for default judgment Plaintiffs submit

their attorneys fees and costs are in the amount of $5,891.80.

Reasonable attorneys fees may be awarded to a successful party

in a copyright infringement action. See 17 U.S.C. § 505 (2005

& Supp. 2008); Columbia Pictures Television, Inc. v. Krypton

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Broad. of Birmingham, Inc., 259 F.3d 1186, 1191 n.3 (9th Cir.

2001) (holding the District Court must explain whether it finds

the amount of fees sought to be reasonable). Cf. Derek Andrew,

Inc. v. Poof Apparel Corp., 528 F.3d 696, 702 (9th Cir. 2008)

(holding Lanham Act provides for an award of attorneys fees in

a trademark suit wherein the judgment was by default). Having

reviewed the application for fees submitted by Plaintiffs’

counsel and the relevant legal opinions, the Court concludes the

amount sought in attorneys fees and costs is reasonable and

shall be included in the judgment awarded Plaintiffs.

IV Conclusion

Plaintiffs have filed and served a well-plead complaint

which includes the facts necessary to establish a prima facie

case against Defendants for violation of federal copyright

statutes. Because the entry of a default judgment is completely

within the Court’s discretion, Plaintiffs’ complaint alleges the

facts necessary to find in favor of Plaintiffs, and there is no

clear reason why default may not be entered in this matter, 

IT IS ORDERED that Plaintiffs’ motion [Docket No. 14]

for judgment by default is granted. Judgment in favor of

Plaintiffs and against Defendants is hereby granted with regard

to all of the claims for relief stated in Plaintiffs’ complaint.

IT IS FURTHER ORDERED that statutory damages are

awarded to Plaintiffs in the amount of $30,000.

IT IS FURTHER ORDERED that Defendants shall pay and

Plaintiffs are awarded Plaintiffs’ attorneys fees and costs in

the amount of $5,891.80.

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IT IS FURTHER ORDERED that Plaintiffs may also have

judgment against Defendants, and each of them, and any persons

acting under the direction, control, permission, and authority

of Defendants, that Defendants and said persons are enjoined and

restrained permanently from publicly performing, or causing or

permitting, in any place owned, controlled, or conducted by any

Defendant, the public performance of any copyrighted musical

works in the American Society of Composers, Authors and

Publishers ("ASCAP") repertory without permission obtained from

ASCAP or directly from the copyright owner.

The Clerk of the Court shall enter judgment

accordingly.

DATED this 3rd day of September, 2008.

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