Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-04047/USCOURTS-cand-3_05-cv-04047-1/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:101 Copyright Infringement

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

BROADCAST MUSIC INC., et al.,

Plaintiff,

 v.

 JAVIER MENDEZ, et al.,

Defendants. /

No. C-05-04047 MJJ (EDL)

REPORT AND RECOMMENDATION

RE: PLAINTIFF’S MOTION FOR

DEFAULT JUDGMENT

On October 6, 2005, Plaintiffs filed this action against Defendants Javier Mendez and

Michelle Khanbabian, doing business as B Street Billards, for copyright infringement. After entry

of default on January 4, 2006, Plaintiff filed a motion for default judgment, which was referred to

the undersigned Magistrate Judge pursuant to Civil Local Rule 72-1. The motion came on for

hearing on March 21, 2006. Attorney Karen Frank appeared for Plaintiff. Defendants did not file an

opposition to Plaintiff’s motion and did not appear at the hearing.

Background

Plaintiff Broadcast Music Inc. (“BMI”) has been granted the right to license the public

performance rights in approximately 4.5 million copyrighted musical compositions, including those

which are alleged to have been infringed in this case. Compl. ¶ 3. The other Plaintiffs are the

owners of the copyrights in the musical compositions which are the subject of this lawsuit. Id. ¶ 4. 

Defendants Javier Mendez and Michelle Khanbabian own, operate, maintain and control B Street

Billiards, a bar/restaurant establishment located at 164 South B Street, San Mateo, California 94401. 

Id. ¶¶ 5-8. Both Defendants have the right and ability to supervise the activities at B Street Billiards

and have a direct financial interest in the establishment. Id. ¶¶ 9-10. 

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B Street Billiards regularly features live and recorded music performances, including music

compositions from Plaintiff BMI’s catalog. Compl. ¶¶ 5-6. Defendants have never obtained a

license from BMI to perform those compositions. Id. ¶ 17; Declaration of Lawrence Stevens ¶¶ 5,

11. 

On April 24, 2003, BMI sent a letter to B Street Billiards advising Defendants that a license

was required to perform the musical compositions in BMI’s catalog, and including an informational

brochure and license agreement. Compl. ¶ 18; Stevens Decl. ¶ 4, Ex. C. Having received no

response, BMI sent letters and agreements to both Defendants on May 5, 2003, May 29, 2003, June

24, 2003, August 5, 2003, August 21, 2003, December 23, 2003, March 22, 2004, June 3, 2004, July

12, 2004, August 2, 2004, February 15, 2005, March 1, 2005 and March 10, 2005. Compl ¶ 18;

Stevens Decl. ¶ 6, Ex. C. BMI also sent letters without agreements on August 23, 2004, November

16, 2004, June 1, 2005 and August 26, 2005. Compl. ¶ 18; Stevens Decl. ¶ 7. On August 23, 2004,

BMI sent Defendant Mendez an Airborne overnight letter instructing him to cease all use of BMI

licensed music at B Street Billiards. Stevens Decl. ¶ 8; Ex. C. In addition during this time, BMI

licensing personnel telephoned B Street Billiards on thirty-four occasions and left messages on the

voice mail and spoke to Defendant Khanbabian and other person associated with the establishment’s

operation. Compl. ¶ 18; Stevens Decl. ¶¶ 9-10. Defendants did not respond to the letters or

telephone calls, and have not purchased a license. 

BMI authorized Christopher K. Pisano to visit B Street Billiards on January 13, 2005 and

August 5, 2005, and to make written reports of the music being played there. Stevens Decl. ¶ 12;

Ex. B. The reports contain each of the eleven unauthorized performances of musical compositions

from BMI’s repertoire that are alleged in the complaint. Compl. ¶ 12; Ex. A; Stevens Decl. Ex. B. 

On March 11, 2005, BMI sent DHL overnight letters dated March 10, 2005 to Defendants Mendez

and Khanbabian advising them of the investigation and offering to furnish them with a license. 

Stevens Decl. ¶ 13; Ex. C. Defendants did not respond to those letters. Stevens Decl. ¶ 13. 

Default Judgment

 Federal Rule of Civil Procedure 55(b)(2) authorizes the Court to enter judgment against a

defendant against whom a default has been entered, assuming that defendant is not an infant, is not

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incompetent or in military service. Defendants here are not unrepresented minors, incompetent or in

military service. Declaration of Karen Frank ¶ 10. 

“The general rule of law 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 Financial Group,

559 F.2d 557, 560 (9th Cir. 1977) (citing Pope v. United States, 323 U.S. 1, 12 (1944)). In

exercising its discretion to grant default judgment, the court may consider the following factors: (1)

the possibility of prejudice to the plaintiff; (2) the merits of plaintiff’s substantive claims; (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. See

Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Generally, upon entry of default, the

factual allegations of the complaint are taken as true, except for those relating to damages. See

Televideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir.1987). 

Here, the Eitel factors weigh in favor of default judgment. Most importantly, the substantive

claims in the complaint appear to have merit and the complaint is sufficient to state those claims. A

claim for copyright infringement relating to the unauthorized public performance of musical works

has five elements: (1) originality and authorship of the copyrighted works involved; (2) compliance

with the formalities of the Copyright Act; (3) proprietary rights in the copyrighted works involved;

(4) public performance of the compositions involved; and (5) lack of authorization for public

performance. See Broadcast Music. Inc. v. Pine Belt Inv. Developers, Inc., 657 F. Supp. 1016, 1020

(S.D. Miss. 1987). Moreover, vicarious liability for copyright infringement exists when: “(1) a

defendant has the right and ability to supervise the infringing conduct and (2) the defendant has an

obvious and direct financial interest in the infringement.” Abode Systems Inc. v. Canus

Productions, Inc., 173 F. Supp. 2d 1044 (C.D. Cal. 2001) (citing Shapiro, Bernstien & Co. v. H.L.

Green Co., 316 F.2d 304, 307 (2d Cir. 1963), Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259,

262 (9th Cir. 1996)); see also 17 U.S.C. § 501(a) (“. . . anyone who violates the exclusive rights of

the copyright owner . . . is an infringer of the copyright.”). 

In its complaint, Plaintiff BMI alleges that, in compliance with the Copyright Act, the

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Plaintiff copyright owners granted to BMI the right to license the public performance rights for the

musical compositions at issue in this case. Compl. ¶¶ 3-4, 15; Declaration of Judith Saffer ¶ 5; Ex.

A. BMI also alleges some musical compositions in BMI’s repertoire were performed without a

license or other authority to do so. Compl. ¶ 17; Stevens Decl. Ex. B. Defendants Javier Mendez

and Michelle Khanbabian control B Street Billiards and have primary responsibility for the

operation and management of the establishment, including the right and ability to supervise the

activities there. Compl. ¶¶ 5-8. Further, Plaintiff allege that both Defendants have a direct financial

interest in the establishment. Compl. ¶¶ 9-10. Therefore, Plaintiff has alleged sufficient facts to

state a claim for vicarious liability for copyright infringement based on the unauthorized public

performance of copyrighted musical compositions. 

The remaining Eitel factors also weigh in favor of granting default judgment. First, if the

motion were denied, BMI would be prejudiced because it would likely be without a remedy; BMI

attempted to reach a compromise with Defendants but was unsuccessful. See Stevens Decl. ¶¶ 3, 6-

10, 12-13; see Pepsico, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002) (“If

Plaintiffs’ motion for default judgment is not granted, Plaintiffs will likely be without other recourse

for recovery.”). Second, the amount of money sought is not disproportionate or unreasonable given

the number of copyrighted works that were publicly performed. Finally, because Defendants did not

file an answer to the complaint, there is little to suggest that there is a possibility of a dispute

concerning material facts. Nor is it likely that Defendants’ default was due to excusable neglect. 

BMI sent numerous letters to Defendants regarding the need for a license before filing suit. 

Accordingly, the motion for default judgment should be granted. The remaining issue is the

amount of the judgment. 

Damages for copyright infringement

Plaintiff BMI is the attorney-in-fact for the musical works owned by the other Plaintiffs and

therefore may prosecute copyright infringement actions and recover damages in its own name. 

Saffer Decl. ¶ 6. Defendants are liable for the acts of infringement that occurred at B Street Billiards

because once a copyright has been validly obtained, the owner of the copyright has the exclusive

right to perform the copyrighted work publicly or to authorize public performance of the

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copyrighted work, and any person who violates any of the exclusive rights of the copyright owner is

“an infringer” of the copyright. 17 U.S.C. §§ 106(4); 501(a). 

BMI requests statutory damages in the amount of $33,000, or $3,000 for each of the eleven

unauthorized performances of musical compositions. See 17 U.S.C. § 504(c)(1) (providing for

statutory damages between $750 and $30,000 per work). Plaintiff argues that it made substantial

efforts to secure a licensing agreement with Defendants; representatives from BMI initiated

approximately fifty-eight contacts with Defendants. These contacts were by telephone and by letter,

and often included a sample license agreement and informational brochures, all of which were

designed to inform Defendants of the need to purchase a license with BMI. Yet Defendants

continued to perform copyrighted music without a license. 

An award of damages for copyright infringement is within the discretion of the Court. 17

U.S.C. § 504(c). Factors the Court may consider in determining the amount of damages are: (1) the

expense saved by the defendant in avoiding a licensing agreement; (2) profits reaped by defendant in

connection with the infringement; (3) revenues lost to the plaintiff; and (4) the willfulness of the

infringement. Cross Keys Publishing Co., Inc. v. Wee, Inc., 921 F. Supp. 479, 481 W.D. Mich.

1995) (citing Boz Scaggs Music v. KND Corp., 491 F. Supp. 908, 914 (D. Conn. 1980)). 

Here, it appears that Defendants have saved approximately $4,000 in licensing fees from

May 2003 through April 2005. See Stevens Decl. Ex. C (March 10, 2005 letter). Plaintiff also

appears to have incurred costs associated with Mr. Pisano’s investigative services. Id. Considering

the amount of the license fee that Defendants avoided paying, and the fact that Defendants continued

to infringe even after receiving Plaintiff’s numerous communications, the Court recommends

awarding statutory damages of $3,000 per song, for a total of $33,000. 

Injunctive relief

The Copyright Act provides for injunctive relief to restrain future infringement. 17 U.S.C. §

502. In this case, Plaintiff BMI has provided evidence that Defendants infringed eleven songs, yet

BMI seeks injunctive relief against unauthorized performance of any BMI-licensed music. The

threat of continued infringement is real based on Defendants’ failure to respond to BMI’s numerous

oral and written notices of infringement, or to stop infringing. And there is no indication that future

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infringement would be limited to the eleven songs at issue in this case. Therefore, the Court

recommends permanently enjoining Defendants from publicly performing or causing the public

performance of the eleven musical compositions at issue in this case or any musical composition

licensed through BMI. 

Attorney’s fees and costs

Finally, Plaintiff BMI seeks reimbursement of the attorney’s fees and costs that it has

incurred in the prosecution of this action. 17 U.S.C. § 505. Plaintiff has submitted the declaration

of Karen Frank, which details the amount of time spent and the hourly rate of the lawyer and legal

assistant who worked on this case. A total of 4.5 hours of attorney time at the rate of $375.00 per

hour and 10.4 hours of legal assistant time at the rate of $175.00 per hour was spent in researching

and preparing the complaint, preparing an application for and obtaining entry of default and

preparing the motion for default judgment. The total amount of fees sought is $3,508.00. Plaintiff

also seeks $396.97 is costs, including the filing fee and the cost of serving Defendants. The amount

of time spent and the hourly rates are reasonable, and therefore the Court recommends awarding

Plaintiff $3,508.00 in fees and $396.97 in costs. 

Conclusion

The Court recommends granting Plaintiff’s motion for default judgment in the total amount

of $36,904.97 and issuing a permanent injunction. Any party may serve and file specific written

objections to this recommendation within ten (10) business days after being served with a copy. 28

U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); Civil Local Rule 72-3 . Failure to file objections within

the specified time may waive the right to appeal the District Court’s order. 

Dated: March 22, 2006

 

ELIZABETH D. LAPORTE

United States Magistrate Judge

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