Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-05433/USCOURTS-cand-3_06-cv-05433-0/pdf.json

Parties Involved:
Arista Records LLC,
Plaintiff
Capitol Records, Inc.
Plaintiff
Motown Record Company, L.P.
Plaintiff
Dorothy Schmidt
Defendant
Sony BMG Music Entertainment
Plaintiff
Virgin Records America, Inc.
Plaintiff

Document Text:

United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

CAPITOL RECORDS, INC., A DELAWARE

CORPORATION; VIRGIN RECORDS

AMERICA, INC., A CALIFORNIA

CORPORATION; MOTOWN RECORD COMPANY,

L.P., A CALIFORNIA LIMITED

PARTNERSHIP; ARISTA RECORDS LLC, A

DELAWARE LIMITED LIABILITY COMPANY;

AND SONY BMG MUSIC ENTERTAINMENT, A

DELAWARE GENERAL PARTNERSHIP,

Plaintiffs,

v.

DOROTHY SCHMIDT, 

Defendant. 

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No. C-06-5433 SC

DEFAULT JUDGMENT

I. INTRODUCTION

Plaintiffs Capitol Records, Inc., Virgin Records America,

Inc., Motown Record Company, L.P., Arista Records LLC, and Sony

BMG Music Entertainment ("Plaintiffs" or "Record Companies")

brought this action against Defendant Dorothy Schmidt ("Defendant"

or "Schmidt"). Plaintiffs assert that Schmidt infringed their

copyrights in multiple sound recordings by allegedly using an

online media distribution system to download, distribute, and/or

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make available for distribution Plaintiffs' copyrighted sound

recordings. Defendant was properly served with the Summons and

Complaint on September 18, 2006, but failed to respond. Docket

No. 7. On November 14, 2006, the Clerk entered default against

Defendant. Docket No. 10. On December 26, 2006, Defendant was

properly served with the Summons and Amended Complaint. Docket

No. 14. The Defendant again failed to respond, and the Clerk

entered default against the Defendant on February 9, 2007. Docket

No. 18. 

Now before the Court is Plaintiffs' Motion for Default

Judgment. For the reasons stated herein, the Court GRANTS

Plaintiff Default Judgment and AWARDS Plaintiffs $6,000.00 in

damages, and costs in the amount of $420.00. The Court further

ENJOINS Defendant from directly or indirectly infringing

Plaintiffs' rights under federal or state law in any sound

recording, whether now in existence or later created, that is

owned or controlled by Plaintiffs, or to which Plaintiffs are

licensees of exclusive rights under United States copyright,

including without limitation, by using the Internet or any online

media distribution system to reproduce any such recording, to

distribute any such recording, or to make any such recording

available for distribution to the public, except pursuant to a

lawful license or with the express authority of Plaintiffs. 

Defendant shall destroy any copies of any sound recordings which

Plaintiffs own or to which Plaintiffs are licensees of exclusive

rights, that Defendant has downloaded onto any computer hard drive

or server without Plaintiffs' authorization, and all copies of

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such downloaded sound recordings.

II. BACKGROUND 

Plaintiffs are the copyright owners or licensees of exclusive

rights under copyright with respect to certain copyrighted sound

recordings, identified in Exhibits A and B to the Amended

Complaint. ("Copyrighted Recordings"). Am. Compl., ¶ 11; Kerr

Decl., Ex. 1. As such, Plaintiffs hold the exclusive rights to

reproduce and distribute the Copyrighted Recordings. Am. Compl.,

¶ 12. Pursuant to 17 U.S.C. § 401, Plaintiffs have placed proper

notices of copyright on the album cover of each of the Copyrighted

Recordings. Id., ¶ 14. 

Plaintiffs allege that, without their permission, Defendant

has used and continues to use an online media distribution system

to download the Copyrighted Recordings, to distribute the

Copyrighted Recordings, and to make the Copyrighted Recordings

available for distribution to others. Id., ¶ 13. Plaintiffs seek

the minimum statutory damages for the alleged infringement of each

of the eight identified Copyrighted Recordings, totaling

$6,000.00, pursuant to 17 U.S.C. § 504(c) . Id., ¶ 16; Pl.'s Mot.

for Default J. at 2. Additionally, pursuant to 17 U.S.C. § 505,

Plaintiffs seek to recover $420.00 in costs. Pl.'s Mot. for

Default J. at 2; Kerr. Decl. ¶ 21. Finally, Plaintiffs seek a

permanent injunction pursuant to 17 U.S.C. §§ 502 and 503. See

Am. Compl., ¶ 17; Pl.'s Mot. for Default J. at 2. 

/

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III. LEGAL STANDARD

After entry of default, the Court may enter a default

judgment. Fed. R. Civ. P. 55(b)(2). Its decision whether to do

so, while "discretionary," Aldabe v. Aldabe, 616 F.2d 1089, 1092

(9th Cir. 1980), is guided by several factors.

As a preliminary matter, the Court must "assess the adequacy

of the service of process on the party against whom default is

requested." Bd. of Trs. of the N. Cal. Sheet Metal Workers v.

Peters, No. C-00-0395 VRW, 2000 U.S. Dist. LEXIS 19065, at *2

(N.D. Cal. Jan. 2, 2001). 

If the Court determines that service was sufficient, it may

consider the following factors in its decision on the merits of a

motion for default judgment:

(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 v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). "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. Fin. Group, 559 F.2d

557, 560 (9th Cir. 1977). Therefore, for the purposes of this

Motion, the Court accepts as true the facts as portrayed in the

Amended Complaint. 

/

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IV. DISCUSSION

A. Service of Process

Service of process against Defendant was adequate. Federal

Rule of Civil Procedure 4(e) allows service upon an individual by

personally delivering to the individual the summons and complaint. 

Fed. R. Civ. P. 4(e)(2). On September 18, 2006, copies of the

Complaint, the Summons, and other related documents were

personally delivered to Ms. Schmidt. See Docket. No. 7. On

December 26, 2006, copies of the Amended Complaint and the Summons

were personally delivered to Ms. Schmidt. See Docket No. 14.

B. Merits of Motion

Accepting the allegations in the Complaint as true, as it

must, the Court finds that Eitel factors favor default judgment.

1. Prejudice

Plaintiffs would be prejudiced absent entry of default

judgment. If Defendant is allowed to continue downloading or

distributing Plaintiffs' Copyrighted Recordings, Plaintiffs will

suffer irreparable harm from copyright infringement. See Am.

Compl., ¶ 17. Without the entry of a default judgment, Plaintiffs

would not have another remedy for these harms. Such a situation

qualifies as prejudice. See PepsiCo, Inc. v. Cal. Sec. Cans, 238

F. Supp. 2d 1172, 1177 (C.D. Cal. 2002).

2. Merits of Plaintiffs' Substantive Claim for 

Copyright Infringement

The Record Companies' claim for infringement of copyrights is

meritorious. To prevail on a claim for copyright infringement,

Plaintiffs must establish ownership of a valid copyright and

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unauthorized copying of original elements of the protected work by

Defendant. See Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499

U.S. 340, 361 (1991). As alleged in the Amended Complaint,

Plaintiffs are "the copyright owners or licensees of exclusive

rights under United States copyright with respect to the

Copyrighted Recordings." Am. Compl., ¶ 11. Section 501(b) of the

Copyright Act allows the owners of a legal or beneficial interest

in a copyright to sue for infringement. 17 U.S.C. § 501(b). 

Therefore, Plaintiffs satisfy the first element of Feist. 

Plaintiffs identify multiple violations of their rights,

satisfying the second element of Feist. Defendant has violated

the Record Companies' exclusive right to reproduce the Copyrighted

Recordings by downloading electronic copies of the Copyrighted

Recordings to her computer without permission. Am. Compl., ¶ 13. 

Defendant has violated the Record Companies' exclusive right to

distribute the Copyrighted Recordings by using an online media

distribution system to distribute the Copyrighted Recordings to

the public. Id. Section 106 of the Copyright Act enumerates the

exclusive rights of the copyright owner, including the right to

reproduce the copyrighted work in copies or phonorecords, and the

right to distribute copies or phonorecords of the work to the

public by sale or other transfer of ownership, or by rental,

lease, or lending. See 17 U.S.C. § 106. Anyone who violates

these exclusive rights infringes the copyright. See 17 U.S.C §

501(a). 

3. Sufficiency of the Complaint

Plaintiffs properly allege the necessary elements for a claim

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of copyright infringement. The Amended Complaint identifies the

copyrighted works in dispute, identifies Plaintiffs as owners of

legal or beneficial interests in the exclusive rights to those

copyrighted works, and describes how Defendant is violating those

exclusive rights. See Am. Compl., ¶¶ 11-15. Accordingly,

Plaintiffs' Amended Complaint is sufficient.

4. Amount of Money at Stake

The sum of money at stake favors the Record Companies. 

Including costs, the Record Companies seek a total of $6,420.00. 

Pl.'s Mot. for Default J. at 2. While Defendant would suffer from

entry of judgment in this amount against her, these damages are

authorized by statute. See 17 U.S.C. § 504(c). For each of the

eight specific Copyrighted Recordings Plaintiffs identify, the

statute authorizes damages ranging from $750.00 to $30,000.00. 

Id. Plaintiffs also allege that Defendant's infringement was

willful, which would raise the maximum recovery available to

$150,000.00 for each infringed work. See id.; Am. Compl., ¶ 15. 

Finally, although the statute authorizes an award of attorney's

fees, Plaintiffs have limited their request to costs. See 17

U.S.C. § 505; Pl.'s Mot. for Default J. at 4-5. Because the

Record Companies are seeking only the minimum authorized award of

damages and their actual costs, the Court finds that this factor

weighs in favor of default judgment.

5. Possibility of a Dispute Concerning Material Facts

There is little possibility of a dispute concerning material

facts. The Record Companies have demonstrated that they have

exclusive rights in the Copyrighted Recordings. Kerr Decl., ¶ 5;

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Am. Compl., ¶ 11. Further, the Record Companies have provided

adequate evidence of Defendant's unauthorized copying and

distribution of the Copyrighted Recordings. See Kerr Decl., ¶¶ 2-

8, Exh. 1. Therefore, this factor also favors default judgment. 

6. Whether Default Was Due to Excusable Neglect

Defendant's failure to act here is not a case of excusable

neglect. Prior to bringing suit, Plaintiffs contacted Defendant

and attempted to resolve this matter out of Court. Kerr Decl., ¶¶

8-9. When that failed, Plaintiffs filed suit on September 5,

2006. Defendant was personally served with the Summons and

Complaint on September 18, 2006, but did not respond. See Docket

No. 7; Kerr Decl., ¶¶ 10-11. Before the Clerk entered default

against Defendant, Plaintiffs again contacted her and urged her to

respond to the Complaint. Kerr Decl., Ex. 2. The entire cycle

was repeated when Plaintiffs served the Amended Complaint and

Defendant again failed to respond. Kerr Decl., ¶¶ 14-16. In

fact, Plaintiffs even served Defendant with notice of the instant

Motion, although such notice was not necessary. See Pl.'s Mot.

for Default J. at 14 n.4; Fed. R. Civ. P. 55(b)(2). Plaintiffs

have made every reasonable effort to engage defendant in this

process with no success. Because Defendant's failure to

participate in this litigation cannot be considered excusable

neglect, this factor favors entry of default judgment.

7. Strong Policy Favoring Decision on the Merits

While it is preferable to decide cases on the merits whenever

possible, this preference is not dispositive. Where a party fails

to defend against a complaint, as Defendant has failed here, Rule

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55 authorizes the Court to enter default judgment. Kloepping v.

Fireman's Fund, No. C 94-2684 TEH, 1996 U.S. Dist. LEXIS 1786, at

*10 (N.D. Cal. Feb. 14, 1996).

In light of all of the Eitel factors discussed above, the

Court finds that entry of default judgment is appropriate.

C. Remedy

Plaintiffs request monetary damages, costs, and equitable

relief in the form of a permanent injunction.

1. Damages

The Record Companies seek $6,000.00 in statutory damages. 

Pursuant to section 504(a) of the Copyright Act, an infringer is

liable for either the plaintiff's actual damages or statutory

damages. See 17 U.S.C. § 504(a). A plaintiff seeking statutory

damages may recover between $750.00 and $30,000.00 for all

infringements of a copyrighted work. 17 U.S.C. § 504(c). Where a

plaintiff chooses to recover statutory damages, he need not prove

actual damages. See Columbia Pictures Indus., Inc. v. Krypton

Broad. of Birmingham, Inc., 259 F.3d 1186, 1194 (9th Cir.

1997)(citation omitted). When awarding statutory damages, the

Court has broad discretion within the range provided by statute. 

Id. Here, Plaintiffs have proven that Defendant infringed the

eight identified Copyrighted Recordings. Accordingly, the

Defendant is liable for $750.00 in damages for each of the eight

infringed Copyrighted Recordings, for a total of $6,000.00.

2. Costs

Plaintiffs also seek to recover their costs, $350.00 in

filing fees and $70.00 for service of process, for a total of

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$420.00. See Pl's Mot. for Default J. at 13; Kerr Decl., ¶ 21. 

By statute, the Court may award a prevailing copyright owner

costs, including reasonable attorneys' fees. See 17 U.S.C. § 505. 

Here, the Plaintiffs seek only to recover their costs, not

attorneys' fees. Having successfully proven infringement,

Plaintiffs are entitled to recover $420.00 in costs.

3. Injunctive Relief

Plaintiffs have demonstrated that their exclusive rights in

the Copyrighted Recordings have been, and continue to be, violated

by the Defendant. In such circumstances, the Court is authorized

to issue a permanent injunction to prevent or restrain further

infringements. See 17 U.S.C. § 502(a); Sega Enters. Ltd. v.

MAPHIA, 948 F. Supp. 923, 940 (N.D. Cal. 1996) ("Generally, a

showing of copyright infringement liability and the threat of

future violations is sufficient to warrant a permanent

injunction.") Injunctive relief is available in copyright actions

resulting in default judgment. See e.g., Jackson v. Sturkie, 255

F. Supp. 2d 1096, 1103 (N.D. Cal. 2003) ("[D]efendant's lack of

participation in this litigation has given the court no assurance

that defendant's infringing activity will cease. Therefore,

plaintiff is entitled to permanent injunctive relief.")

Plaintiffs are entitled to a broad injunction, not limited to

the identified Copyrighted Recordings. In addition to the

Copyrighted Recordings, the injunction shall extend to all sound

recordings owned by the Record Companies or to which the Record

Companies are the licensees of exclusive rights. See e.g., Picker

Int'l Corp. v. Imaging Equip. Serv., Inc., 931 F. Supp. 18, 45 (D.

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Mass. 1995), aff'd sub nom Picker Int'l, Inc. v. Leavitt, 94 F.3d

640 (1st Cir. 1996). Furthermore, the injunction shall prohibit

Defendant from infringing any rights in any sound recordings which

Plaintiffs may acquire in the future. See Sony Music Entm't, Inc.

v. Elias, No. CV 03-6387, 2004 U.S. Dist. LEXIS 30385, at *13-14

(C.D. Cal. Jan. 20, 2004) (enjoining infringement of existing and

future works).

V. CONCLUSION

For the foregoing reasons, the Court GRANTS Plaintiffs

Default Judgment. The Court hereby AWARDS Plaintiffs $6,000.00 in

damages and $420.00 in costs. The Court also GRANTS Plaintiffs'

request for a permanent injunction.

Defendant shall be and hereby is ENJOINED from directly or

indirectly infringing Plaintiffs' rights under federal or state

law in any sound recording, whether now in existence or later

created, that is owned or controlled by Plaintiffs, or to which

Plaintiffs are licensees of exclusive rights under United States

copyright, including without limitation, by using the Internet or

any online media distribution system to reproduce any such

recording, to distribute any such recording, or to make any such

recording available for distribution to the public, except

pursuant to a lawful license or with the express authority of

Plaintiffs. Defendant shall destroy any copies of any sound

recordings which Plaintiffs own or to which Plaintiffs are

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licensees of exclusive rights, that Defendant has downloaded onto

any computer hard drive or server without Plaintiffs'

authorization, and all copies of such downloaded sound recordings.

IT IS SO ORDERED.

Dated: June 6, 2007

 

UNITED STATES DISTRICT JUDGE

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