Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_06-cv-01119/USCOURTS-caed-1_06-cv-01119-1/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:501 Copyright Infringement

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

NEW LINE PRODUCTIONS, INC., et)

al., )

)

Plaintiffs, )

v. )

)

PAULA DIXON, )

)

Defendant. )

)

 )

1:06-cv-01119-OWW-SMS

FINDINGS AND RECOMMENDATION RE:

PLAINTIFFS’ MOTION FOR DEFAULT

JUDGMENT (DOC. 12)

Plaintiffs are proceeding with a civil action in this Court.

The matter has been referred to the Magistrate Judge pursuant to

28 U.S.C. § 636(b) and Local Rules 72-302(c)(19) and 72-303.

Pending before the Court is Plaintiffs’ motion for a default

judgment against Defendant Paula Dixon, filed on December 14,

2006, including the application, a memorandum of law,

declarations of Karen Thorland, Lauren Nguyen, and Thomas

Carpenter, and a proposed order. By separate order the Court has

vacated the hearing on the motion and has deemed the matter

submitted to the Court for decision.

I. Legal Standards on a Motion for Default Judgment

A court has the discretion to enter a default judgment

against one who is not an infant, incompetent, or member of the

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armed services where the claim is for an amount that is not

certain on the face of the claim and where 1) the defendant has

been served with the claim; 2) the defendant’s default has been

entered for failure to appear; 3) if the defendant has appeared

in the action, the defendant has been served with written notice

of the application for judgment at least three days before the

hearing on the application; and 4) the court has undertaken any

necessary and proper investigation or hearing in order to enter

judgment or carry it into effect. Fed. R. Civ. P. 55(b); Alan

Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392 (9th

Cir. 1988). Factors that may be considered by courts in

exercising discretion as to the entry of a default judgment

include the nature and extent of the delay, Draper v. Coombs, 792

F.2d 915, 924-925 (9 Cir. 1986); the possibility of prejudice to th

the plaintiff, Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th

Cir.1986); the merits of plaintiff's substantive claim, id.; the

sufficiency of the allegations in the complaint to support

judgment, Alan Neuman Productions, Inc., 862 F.2d at 1392; the

amount in controversy, Eitel v. McCool, 782 F.2d at 1471-1472;

the possibility of a dispute concerning material facts, id.;

whether the default was due to excusable neglect, id.; and the

strong policy underlying the Federal Rules of Civil Procedure

that favors decisions on the merits, id.

 A default judgment generally bars the defaulting party from

disputing the facts alleged in the complaint, but the defaulting

party may argue that the facts as alleged do not state a claim.

Alan Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392.

Thus, well pleaded factual allegations, except as to damages, are

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taken as true; however, necessary facts not contained in the

pleadings, and claims which are legally insufficient, are not

established by default. Cripps v. Life Ins. Co. of North America,

980 F.2d 1261, 1267 (9 Cir. 1992); TeleVideo Systems, Inc. av. th

Heidenthal, 826 F.2d 915, 917 (9 Cir. 1987). th

II. Service, Entry of Default, Notice, and Status of

 Defendant

The sworn proofs of service reflect that on September 15,

2006, the summons and complaint were served personally on

Defendant Paula Dixon. (Docs. 7, 9.) On October 11, 2006,

Plaintiffs sent Defendant a letter advising her that she was in

default and that if she failed to answer, a default judgment

would be enforced against her. Defendant did not respond to the

letter. (Decl. of Karen R. Thorland ¶ 11.) Defendant failed to

respond to the complaint, and pursuant to Plaintiffs’ request,

the Clerk entered default as to Defendant on November 28, 2006. 

According to the declaration of Karen R. Thorland, counsel for

Plaintiffs, Defendant has not appeared in this action. (Id. ¶

12.)

Further, the notice was adequate pursuant to Fed. R. Civ. P.

55(d) and 54(c), which require that a judgment by default shall

not be different in kind from or exceed in amount that prayed for

in the demand for judgment. Plaintiffs expressly sought in the

complaint the types of relief sought by the instant application

for default judgment, including injunctive relief, actual or

statutory damages at the election of Plaintiffs, costs, and

attorneys’ fees. (Compl. at p. 4.) The failure to allege a

specific sum in the complaint does not prevent entry of a default

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judgment for a certain sum or a sum that can be made certain

where appropriate notice has otherwise been given. See Appleton

Elec. Co. v. Graves Truck Line, 635 F.2d 603, 611 (7 Cir. 1980). th

Thus, the Court finds that Plaintiffs gave adequate notice of

their claim in an amount that includes the amount that is

recommended to be awarded.

Finally, in the declaration, Thorland states that she has no

reason to believe that Defendant is an infant or incompetent or

is in the military service. (Decl. ¶ 13.) Thus, it does not

appear that a default judgment would be inappropriate with

respect to Defendant Paula Dixon.

III. Legal Sufficiency of the Complaint

An infringer of copyright is liable for actual damages and

any additional profits of the infringer attributable to the

infringement. 17 U.S.C. § 504(a). An infringer is anyone who

violates any of the exclusive rights of the copyright owner as

provided by sections 106 through 118. 17 U.S.C. § 501(a).

Copyright protection subsists in original works of authorship,

including pictorial and graphic works. 17 U.S.C. § 102. The owner

of a copyright has the exclusive rights to perform or authorize

the reproduction of the copyrighted work in copies, prepare

derivative works based on the copyrighted work, distribute 

copies to the public by sale or other transfer of ownership, and 

display the copyrighted work publicly. 17 U.S.C. § 106.

Thus, to prevail on a claim for infringement of copyright

under 17 U.S.C. § 501, Plaintiffs must establish that Defendant

violated an exclusive right of the copyright owner as provided in

17 U.S.C. §§ 106, 501(a). Elektra Entertainment Group Inc. v.

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Crawford, 226 F.R.D. 388, 392-93 (C.D.Cal. 2005). This means that 

to establish a prima facie case of direct infringement,

Plaintiffs must show 1) ownership of the allegedly infringed

material, and 2) the infringer’s violation of at least one

exclusive right granted to copyright holders under 17 U.S.C. §

106. Marder v. Lopez, 450 F.3d 445, 453 (9 Cir. 2006). th

Here, Plaintiffs alleged that Plaintiffs, and each of them,

owned the copyrights and/or the pertinent exclusive rights under

copyright law in the United States in the motion picture works,

including Elf, National Treasure, The Forgotten, The Incredibles,

Garden State, and The Chronicles of Riddick; each picture was the

subject of a valid certificate of copyright registration. (Cmplt.

pp. 2-4, Ex. A.) Plaintiffs also alleged that each of the

copyrighted motion pictures in question contained a copyright

notice advising the viewer that it was protected by copyright

laws. (Cmplt. p. 4.) Plaintiffs then alleged that without

Plaintiffs’ permission or consent, Defendant used on or about

January 9, 12, 30, and 31, 2005, and continues to use, an online

media distribution system to distribute the films to the public,

including by making them available for distribution to others,

and has thereby violated Plaintiffs’ exclusive rights of

reproduction and distribution and has committed infringement of

Plaintiffs’ rights under the Copyright Act of 1976, 17 U.S.C. §

101 et seq. (Cmplt. p. 4.) Plaintiffs further allege expressly

that the acts of infringement were willful, intentional, and with

disregard and indifference for Plaintiffs’ rights. (Id.)

Accordingly, Plaintiffs have adequately stated claims for

copyright infringement.

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IV. Discretionary Considerations

Here, it does not appear that there is any risk of mistake

or excusable neglect on the part of anyone with a potential

interest in the subject matter of the instant action. Further,

there is no apparent likelihood of a dispute as to a material

fact essential to the Plaintiffs’ case. No just cause for delay

appears. It is apparent from the declarations submitted to the

Court that there is no basis to believe that Defendant is an

infant, incompetent, or member of the armed services. There does

not appear to be any reason why the general policy in favor of a

decision on the merits would warrant refusing to enter the

requested default judgment. 

Accordingly, the Court finds that Plaintiffs have shown 

entitlement to a default judgment.

V. Damages

Plaintiffs request statutory damages in the amount of

$6,000, consisting of $1,200.00 per infringement of each of the

six motion pictures.

Title 17 U.S.C. § 504 provides in pertinent part:

(a) In General. Except as otherwise provided by

this title, an infringer of copyright is liable 

for either--

(1) the copyright owner’s actual damages

and any additional profits of the infringer,

as provided by subsection (b); or

(2) statutory damages, as provided by

subsection (c).

....

(c) Statutory Damages.--

(1) Except as provided by clause (2) of this

subsection, the copyright owner may elect, at

any time before final judgment is rendered,

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to recover, instead of actual damages and

profits, an award of statutory damages for

all infringements involved in the action,

with respect to any one work, for which any

one infringer is liable individually, or for

which any two or more infringers are liable

jointly and severally, in a sum of not less

than $750 or more than $30,000 as the court

considers just. For the purposes of this

subsection, all the parts of a compilation or

derivative work constitute one work.

(2) In a case where the copyright owner

sustains the burden of proving, and the court

finds, that 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. In a case

where the infringer sustains the burden of

proving, and the court finds, that such

infringer was not aware and had no reason to

believe that his or her acts constituted an

infringement of copyright, the court in its

discretion may reduce the award of statutory

damages to a sum of not less than $200. The

court shall remit statutory damages in any

case where an infringer believed and had

reasonable grounds for believing that his or

her use of the copyrighted work was a fair

use under section 107, if the infringer was:

(i) an employee or agent of a nonprofit

educational institution, library, or archives

acting within the scope of his or her

employment who, or such institution, library,

or archives itself, which infringed by

reproducing the work in copies or

phonorecords; or (ii) a public broadcasting

 entity which or a person who, as a regular

 part of the nonprofit activities of a public 

 broadcasting entity (as defined in subsection (g)

 of section 118) infringed by performing a published 

 nondramatic literary work or by reproducing a 

 transmission program embodying a performance of

 such a work. (Emphasis added.)

A district court has wide discretion in determining the amount of

statutory damages to be awarded and should consider what is just

in the particular case in light of the nature of the copyright,

the circumstances of the infringement, and other relevant

circumstances. Los Angeles News Service v. Reuters Television

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International, Ltd., 149 F.3d 987, 996 (9 Cir. 1998). The th

statutory damages serve both compensatory and punitive purposes,

so in order to effectuate the statutory policy of discouraging

infringement, recovery of them is permitted even absent evidence

of the actual damages suffered by the plaintiff or of the profits

reaped by the defendant. Id. 

Here, based on data received by MediaSentry, a provider of

anti-piracy services, Plaintiffs have learned that Defendant

illegally downloaded, and offered for potentially tens of

thousands of others to download, six motion pictures. (Decl. of

Lauren Nguyen ¶¶ 3-4; Decl. of Thomas Carpenter ¶¶ 3-6.)

Plaintiffs have established that six different moving pictures

were distributed by Defendant. Three of the films (The Forgotten,

National Treasure, and The Incredibles) were either still in

motion picture theaters and/or had not been released on DVD/home

video at the time of infringement. (Decl. of Lauren Nguyen ¶ 5.)

Combined with the copyright notices included in each of the

moving pictures, this establishes the willfulness of the

violation. A shared directory (i.e., a listing of files on

Defendant’s computer available for download by others) revealed

that Defendant was distributing as many as eighteen additional 

motion pictures to which Plaintiffs or others hold rights to

exclusive distribution. (Carpenter Decl. ¶ 6.) Further, Defendant

did not simply download Plaintiffs’ motion pictures for herself

and thereby deprive Plaintiffs of the sale of a few motion

picture tickets, DVD’s, or motion picture rentals; rather,

Plaintiffs’ pictures were offered via P2P networks to potentially

thousands of others. (Decl. of Nguyen ¶ 9.) Plaintiffs further

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suffered an expense of approximately $3,000 to $5,000 for

retaining MediaSentry to detect the unauthorized distribution and

for initiating a “John Doe” lawsuit to ascertain Defendant’s

identity through expedited discovery. (Decl. of Thorland ¶¶ 5-8,

Nguyen Decl. ¶ 11.) The Court further considers the fact that

copyright relates to a motion picture, a genre which is

exponentially more expensive to produce than a single song, for

example. See, Peer International Corp. v. Pausa Records, Inc.,

909 F.2d 1332, 1337 (9 Cir. 1990) (considering the compulsory th

nature of the licenses in question). 

Considering all of the pertinent circumstances as

demonstrated by the declarations and attachments submitted by

Plaintiffs, the Court concludes that $6,000.00 in damages for the

multiple infringements is just and reasonable. 

VI. Injunctive Relief

Plaintiffs request an order permanently enjoining Defendant

from infringing any of Plaintiffs’ copyrights, now existing or

later granted.

Title 17 U.S.C. § 502 states:

(a) Any court having jurisdiction of a civil

action arising under this title may, subject to the

provisions of section 1498 of title 28, grant temporary

and final injunctions on such terms as it may deem

reasonable to prevent or restrain infringement of a

copyright.

(b) Any such injunction may be served anywhere in

the United States on the person enjoined; it shall be

operative throughout the United States and shall be

enforceable, by proceedings in contempt or otherwise,

by any United States court having jurisdiction of that

person. The clerk of the court granting the injunction

shall, when requested by any other court in which

enforcement of the injunction is sought, transmit

promptly to the other court a certified copy of all the

papers in the case on file in such clerk's office

(emphasis added).

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As a general rule, absent a great public injury, a permanent

injunction will be granted when liability has been established

and there is a threat of a continuing violations. Cadence Design

Systems, Inc. v. Avant! Corp., 125 F.3d 824, 829 (9 Cir. 1997); th

MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511, 520 (9th

Cir. 1993) (issuing an injunction against further infringement of

protected software rights where the plaintiff demonstrated that

the defendant had computers in its loaner inventory with the

protected software on it). Generally a party seeking a

preliminary injunction must show either a likelihood of success

on the merits and the possibility of irreparable injury, or that

serious questions going to the merits were raised and the balance

of hardships tips sharply in its favor; however, because in a

copyright infringement claim a showing of a reasonable likelihood

of success on the merits raises a presumption of irreparable

harm, a plaintiff need only show a likelihood of success on the

merits to obtain a preliminary injunction. Micro Star v. Formgen,

Inc., 154 F.3d 1107, 1109 (9 Cir. 1998). Here, Plaintiffs have th

already shown actual success on the merits because their

complaint states a claim for infringement, and Defendant has

defaulted; further, Plaintiffs have alleged that unless

restrained, Defendant will continue to cause irreparable injury

for which there is no full monetary compensation. (Cmplt. pp. 4-

5.) This is sufficient for a permanent injunction. Sony Music

Entertaniment, Inc. v. Global Arts Productions, 45 F.Supp.2d

1345, 1347 (S.D.Fla. 1999). An injunction against further

infringement and even infringement of future works is permitted,

and it is appropriate to grant an injunction on an application

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for default judgment. Princeton University Press v. Michigan

Document Services, Inc., 99 F.3d 1381, 1392-93 (6 Cir. 1996) th

(noting that an injunction of works copyrighted in the future is

supported by the weight of authority); Elektra Entertainment

Group Inc. v. Crawford, 226 F.RD. 388, 393-94 (C.D.Cal. 2005)

(granting final injunction on default judgment to enjoin

defendant from directly or indirectly infringing plaintiffs'

rights under federal or state law in copyrighted recordings,

whether then in existence or later created, where requested terms

of injunction were the same as those prayed for in complaint,

proposed injunctive relief was appropriate, the plaintiffs sent

two letters to defendant before plaintiffs sought entry of

default which warned of default judgment, defendant failed to

respond to serious claims brought against him despite receiving

adequate notice, and failure to grant injunction would have

resulted in plaintiffs' continued exposure to harm with no method

of recourse). If infringement is established, then it is

appropriate as part of a final judgment to 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 and of all other articles by means of

which such copies might be reproduced. 17 U.S.C. § 503(b). 

Here, Plaintiffs alleged that Defendant infringed in the

past and willfully continues to use the on-line distribution

system to distribute to the public the obviously copyrighted

films and thereby is causing irreparable injury that cannot be

measured or compensated in money. Further, it is alleged that

Plaintiffs have no adequate remedy at law. 

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Plaintiffs pray for entry of preliminary and permanent

injunctions that provide that Defendant shall be enjoined from

directly or indirectly infringing the Plaintiffs’ rights in the

copyrighted motion pictures and any motion picture, whether now

in existence or later created, that is owned or controlled by the

Plaintiffs (the Plaintiffs’ motion pictures), including without

limitation by using the Internet to reproduce or copy any of the

Plaintiffs’ motion pictures, to distribute any of the Plaintiffs’

motion pictures, or to make any of the Plaintiffs’ motion

pictures available for distribution to the public, except

pursuant to a lawful license or with the express authority of the

Plaintiffs; Defendant shall also destroy all copies of the

Plaintiffs’ motion pictures that Defendant has downloaded on to

any computer hard drive or server without the Plaintiffs’

authorization and shall destroy all copies of those downloaded

motion pictures transferred onto any physical medium or device in

Defendant’s possession, custody, or control. (Cmplt. p. 4.)

Here, the requested terms of injunction are the same as

those prayed for in complaint. Defendant’s lack of intent to

comply with the copyright restrictions is demonstrated by the

Defendant’s failure to reply to the letter that Plaintiffs sent

to the Defendant which warned of enforcement of a default

judgment, and by Defendant’s further failure to respond to

serious claims brought against her despite receiving adequate

notice. It appears that the failure to grant the requested

injunction would result in Plaintiffs' continued exposure to harm

with no method of recourse. There does not appear to be any

public injury that would result from issuance of the injunction.

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Accordingly, the Court concludes that the proposed injunctive

relief is appropriate.

However, the injunctive relief sought is too broad.

Generally an injunction must be narrowly tailored to remedy only

the specific harms shown by the plaintiffs rather than to enjoin

all possible breaches of the law; injunctive relief concerning a

copyright will be limited to works that infringe on the

Plaintiffs’ copyright. Iconix, Inc. v. Tokuda, 457 F.Supp.2d 969,

998-1002 (N.D.Cal.2006) (preliminary injunction in copyright

case). Further, it is established that every order granting an

injunction shall set forth the reasons for its issuance; shall be

specific in its terms; shall describe in reasonable detail, and

not by reference to the complaint or other document, the act or

acts sought to be restrained; and is binding only upon the

parties to the action, their officers, agents, servants,

employees, and attorneys, and upon those persons in active

concert or participation with them who receive actual notice of

the order by personal service or otherwise. Fed. R. Civ. P.

65(d). Even without objections by a party, a court has an

independent duty to assure that an injunction is specific in its

terms and describes in reasonable detail the acts sought to be

restrained. See, EFS Marketing, Inc. v Russ Berrie & Co., 76 F.3d

487, 493-94 (2 Cir. 1996); 4 Nimmer on Copyright, § 14.06(C) nd

(2006).

Here, the injunction sought would enjoin infringement not

only of copyrighted motion pictures, but also of any motion

picture, whether now in existence or later created, that is owned

or controlled by Plaintiffs. Thus, it would include works that

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are not copyrighted. This exceeds the scope of the infringement,

which was limited to copyrighted works.

Accordingly, this aspect should be eliminated from the

injunctive relief sought. 

VII. Attorney’s Fees and Costs 

Plaintiffs seek $1,346.54 in attorney’s fees and costs.

Title 17 U.S.C. § 505 states:

In any civil action under this title, the court

in its discretion may allow the recovery of full

costs by or against any party other than the

United States or an officer thereof. Except as

otherwise provided by this title, the court may

also award a reasonable attorney's fee to the

prevailing party as part of the costs.

Under this provision, attorney’s fees are to be awarded to

prevailing parties in the court’s discretion after consideration

various factors, including but not limited to frivolousness,

motivation, objective unreasonableness (both as to legal and

factual components of the case), culpability, the degree of

success obtained, the strength of the case relative to the costs

of the litigation, the pecuniary circumstances of the parties,

and the need in the particular circumstances of the case to

advance considerations of compensation and deterrence; the award

should further the underlying purposes of the Copyright Act.

Fogerty v. Fantasy, Inc., 510 U.S. 517, 535 n. 19 (1994);

Fantasy, Inc. v. Fogerty, 94 F.3d 553, 557-60 (9 Cir. 1996). The th

objectives of the Copyright Act include discouraging infringement

and increasing public exposure to a creative work. Fantasy, Inc.

v. Fogerty, 94 F.3d at p. 559. A court has the discretion to

award interest on the fees. See, Fantasy, Inc. v. Fogerty, 94

F.3d at p. 561.

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Here, an award of attorney’s fees would further the

deterrent and compensatory purposes of the act and would reward

successful handling of the litigation. 

Attorney’s fees are sought in the amount of $453.58,

representing 5.90 hours at a fifteen per cent discount of the

hourly rate of $131.00; the tasks performed include preparing the

complaint, the default warning letter, and the request to enter

default and declarations. (Decl. of Thorland, Ex. 5.) However,

reference to the billing statements reveals that the attorney’s

fees reflected in those statements amount to $861.40 (without a

discount, and including in addition the 5.90 hours of Loeb and

Loeb .30 of an hour spent by Baker, Manock and Jensen in the

amount of $88.50).

Further, with respect to costs, Plaintiffs seek costs in the

amount of $892.96, consisting of filing fees, fees for service of

process, photocopies, computer research, and telephone and

postage charges. However, the billing statements for the costs

and expenses reveal only a total of $453.58 (the amount of

attorney’s fees requested. (Decl. of Thorland, Ex. 5.)

Accordingly, it appears that Plaintiffs are entitled to

attorney’s fees of $732.19. However, with respect to costs, it

appears that Plaintiffs are entitled only to costs of $453.58.

VII. Recommendation

Accordingly, it IS RECOMMENDED that

1) Plaintiffs’ motion for default judgment against Defendant

Paula Dixon BE GRANTED; and

2) The Clerk BE DIRECTED to enter judgment in favor of

Plaintiffs and against Defendant Paula Dixon in the amount of

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$6,000.00 in statutory damages, $732.19 in attorney’s fees, and 

$453.58 in costs; and

3) The Clerk BE DIRECTED to enter a judgment in favor of

Plaintiffs, and against Defendant Paula Dixon, that enjoins

Defendant from further copyright infringement as follows:

Defendant shall be enjoined from directly or indirectly

infringing the Plaintiffs’ rights in the copyrighted motion

pictures and any copyrighted motion picture, whether now in

existence or later created, that is owned or controlled by the

Plaintiffs (the Plaintiffs’ motion pictures), including without

limitation by using the Internet to reproduce or copy any of the

Plaintiffs’ motion pictures, to distribute any of the Plaintiffs’

motion pictures, or to make any of the Plaintiffs’ motion

pictures available for distribution to the public, except

pursuant to a lawful license or with the express authority of the

Plaintiffs; Defendant shall also destroy all copies of the

Plaintiffs’ motion pictures that Defendant has downloaded on to

any computer hard drive or server without the Plaintiffs’

authorization and shall destroy all copies of those downloaded

motion pictures transferred onto any physical medium or device in

Defendant’s possession, custody, or control. 

This report and recommendation is submitted to the United

States District Court Judge assigned to the case, pursuant to the

provisions of 28 U.S.C. § 636 (b)(1)(B) and Rule 72-304 of the

Local Rules of Practice for the United States District Court,

Eastern District of California. Within thirty (30) days after

being served with a copy, any party may file written objections

with the Court and serve a copy on all parties. Such a document

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should be captioned “Objections to Magistrate Judge’s Findings

and Recommendations.” Replies to the objections shall be served

and filed within ten (10) court days (plus three days if served

by mail) after service of the objections. The Court will then

review the Magistrate Judge’s ruling pursuant to 28 U.S.C. § 636

(b)(1)(C). The parties are advised that failure to file

objections within the specified time may waive the right to

appeal the District Court’s order. Martinez v. Ylst, 951 F.2d

1153 (9th Cir. 1991).

IT IS SO ORDERED.

Dated: February 27, 2007 /s/ Sandra M. Snyder 

icido3 UNITED STATES MAGISTRATE JUDGE

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