Warner Bros Home Entertainment Inc v. Ernest Slaughter et al
Filing
32
MINUTES (IN CHAMBERS): ORDER Granting Plaintiff's Motion for Default Judgment by Judge David O. Carter: For the reasons discussed above, the Court GRANTS the Motion for default judgment. As toDefendant Ernest Slaughter, the Court hereby: 1. GR ANTS Plaintiff default judgment on its claim for copyright infringement; 2. GRANTS Plaintiff $24,000 in statutory damages under 17 U.S.C. § 504(c)(2); 3. GRANTS Plaintiffs request for post-judgment interest at the statutory rates provided i n 28 U.S.C. § 1961; and 4. GRANTS Plaintiffs request for a permanent injunction. Accordingly, Plaintiffs Renewed Motion for Default Judgment filed October 24, 2013(Dkt. 30), is hereby DENIED AS MOOT. 30 MD JS-6. (twdb) Modified on 10/31/2013 (twdb).
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
JS-6
O
CIVIL MINUTES – GENERAL
Case No. CV 13-0892-DOC (RNBx)
Date: October 30, 2013
Title: WARNER BROS. HOME ENTERTAINMENT, INC., V. ERNEST SLAUGHTER
PRESENT:
THE HONORABLE DAVID O. CARTER, JUDGE
Julie Barrera
Deputy Clerk
N/A
Court Reporter
ATTORNEYS PRESENT FOR PLAINTIFF: ATTORNEYS PRESENT FOR DEFENDANT:
None Present
None Present
PROCEEDINGS (IN CHAMBERS): ORDER GRANTING PLAINTIFF’S
MOTION FOR DEFAULT JUDGMENT
Plaintiff Warner Bros. Home Entertainment, Inc. (“Plaintiff”) moved for default
judgment against Defendant Ernest Slaughter, d/b/a Amazon.com Seller Fox Media
(“Defendant”). Plaintiff’s Motion for Default Judgment (“Motion”) (Dkt. 20). The Court finds
this issue suitable for decision without oral argument. Fed R. Civ. P. 78; L.R. 7-15. Having
reviewed the papers in support of Plaintiff’s Motion, the Court GRANTS Plaintiff’s Motion.
I.
Background
In light of the procedural posture of this case, the Court adopts the following facts as set
out in the Plaintiff’s Complaint. (Dkt. 1).
Plaintiff is a corporation engaged in a variety of businesses, including the production
and distribution of motion pictures and television programs. Compl. ¶ 5. Plaintiff owns the
exclusive rights to reproduce, distribute, or license the reproduction and distribution of motion
pictures in video format, such as digital versatile discs (“DVDs”) and Blu-ray discs, in the
United States. Compl. ¶ 6.
Among these motion pictures, Plaintiff’s works include, but are not limited to, Harry
Potter and the Sorcerer’s Stone, Harry Potter and the Chamber of Secrets, Harry Potter and
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. CV 13-0892-DOC (RNBx)
Date: October 30, 2013
Page 2
the Prisoner of Azkaban, Harry Potter and the Goblet of Fire, Harry Potter and the Order of
the Phoenix, Harry Potter and the Half-Blood Prince, and Harry Potter and the Deathly
Hallows Parts I and II (the “Warner Bros. Works”). Compl. ¶ 1. Each of the Warner Bros.
Works is entitled to copyright protection. Id.
Defendant used an e-commerce platform to reproduce, advertise, offer, sell, and
distribute unauthorized copies of counterfeit products owned by Plaintiff. Compl. ¶ 15.
Defendant acted with willful disregard toward laws protecting Plaintiff’s copyrights. Id. ¶ 16.
Specifically, Defendant operates a business by selling products on Amazon.com (“Amazon”)
using the seller identity, “Fox Media.” Compl. ¶ 10. Amazon provides services to third-party
sellers, including Defendant. Amazon’s services include, but are not limited to, design of the
webpage describing the product being offered by third-party Amazon sellers, access to the
Internet community seeking products offered by third-party Amazon sellers, and shipping
goods from their warehouses. Compl. ¶ 13. Smaller third-party sellers use Amazon’s online
platform to offer new, used, and collectible products at fixed prices to Amazon customers
across the globe. Id. ¶ 14. Defendant is among the third-party sellers who use Amazon’s
platform to market, offer, sell, and distribute their merchandise. Id. ¶ 15. Defendant has used
Amazon to market, offer, sell, and distribute unauthorized copies of motion pictures owned by
Warner Bros., including, but not limited to, the following Warner Bros. Works:
Copyright Registration Number
PA 1-063-646
PA 1-105-748
PA 1-222-542
PA 1-279-121
PA 1-355-547
PA 1-647-906
PA 1-721-904
Title of Work
HARRY POTTER AND THE
SORCERER’S STONE
HARRY POTTER AND THE
CHAMBER OF SECRETS
HARRY POTTER AND THE
PRISONER OF AZKABAN
HARRY POTTER AND THE GOBLET
OF FIRE
HARRY POTTER AND THE ORDER
OF THE PHOENIX
HARRY POTTER AND THE HALFBLOOD PRINCE
HARRY POTTER AND THE
DEATHLY HALLOWS PART 1
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. CV 13-0892-DOC (RNBx)
PA 1-742-099
Date: October 30, 2013
Page 3
HARRY POTTER AND THE
DEATHLY HALLOWS PART 2
Plaintiff filed suit for copyright infringement in this Court on February 7, 2013. Compl.
at 1. On May 6, 2013, the Court granted Defendant a thirty-day extension to file an answer.
Order (Dkt. 13). Defendant did not file an answer within the thirty days. On June 14, 2013,
the Clerk entered default against Defendant. Default by Clerk (Dkt. 18). On that same day,
Plaintiff’s attorney filed a request to appear pro hac vice. Notice of Discrepancy and Order
(Dkt. 21). The Court denied the request, however, because it was not properly filed. Notice of
Discrepancy and Order (Dkt. 21). On June 26, 2013 Defendant filed an Answer, but the Court
rejected this filing because Defendant did not sign it. Notice of Discrepancy and Order (Dkt.
22). Plaintiff then filed a Motion for Default Judgment against Defendant on June 27, 2013.
Motion (Dkt. 20). However, because Defendant had attempted to respond and appear through
counsel, the Court denied the motion. Order Denying Motion for Default Judgment (Dkt. 24).
The Court instructed Defendant to properly file an answer that complied with the Local Rules.
However, Defendant has not responded.
Plaintiff again moved for default judgment on September 6, 2013. It seeks a permanent
injunction, statutory damages for willful copyright infringement, and post-judgment interest at
the statutory rate. Mot. at 9-16.
II.
Legal Standard
The decision to grant or deny a motion for default judgment is within the district court’s
discretion. Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). After the clerk has entered
default against the Defendant, the factual allegations of the complaint (except those relating to
damages) are deemed admitted by the defaulting party. Fed. R. Civ. P. 8(b)(6); see Geddes v.
United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977). The district court considers seven factors
when deciding whether to grant the motion: “(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.” Id. at 1471-72.
Because the Plaintiff’s allegations of damages are not presumed true, a court granting a
motion for default must “determine the amount and character of the relief” due. Landstar
Ranger, Inc. v. Parth Enters., Inc., 725 F. Supp. 2d 916, 920 (C.D. Cal. 2010) (internal
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. CV 13-0892-DOC (RNBx)
Date: October 30, 2013
Page 4
quotation marks omitted).
III.
Discussion
A.
Local Rule 55-1
The Plaintiff has satisfied its obligations under Fed. R. Civ. P. 55(a) and Local Rules
55-1 and 55-2. The Plaintiff has shown that it requests default judgment against Defendant
Ernest Slaughter, that default was entered against Defendant as to Plaintiff’s Complaint on
June 14, 2013, that the Defendant is not an infant or an incompetent person, and that the
Servicemembers Civil Relief Act, 50 U.S.C. § 521, does not apply. Notice of Renewed
Motion For Entry of Default Judgment (Dkt. 25) ¶ 1.
B.
Eitel Factors
1.
Possibility of Prejudice to the Plaintiff
The first Eitel factor supports granting default judgment because Plaintiff has no other
means to collect compensation from the Defendant, leaving Plaintiff without a proper remedy
absent default judgment. See Landstar, 725 F. Supp. 2d at 920; PepsiCo, Inc. v. Cal. Sec.
Cans, 238 F. Supp. 2d 1172, 1176 (C.D. Cal. 2002).
2.
Merits of Plaintiff’s Claims and the Sufficiency of the
Complaint
The second and third Eitel factors look to whether the Plaintiff’s Complaint has
sufficiently stated a claim for relief. PepsiCo, 238 F. Supp. 2d at 1175.
a.
Copyright Infringement
In order to state a claim for copyright infringement, a plaintiff must allege “(1)
ownership of the copyright by the plaintiff [and] (2) copying by the defendant.” Lamb v.
Starks, 949 F. Supp. 753, 756 (N.D. Cal. 1996) (quoting 17 U.S.C. § 501(a)).
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. CV 13-0892-DOC (RNBx)
Date: October 30, 2013
Page 5
The Complaint sufficiently alleges these elements. Plaintiff claims to own the federally
registered copyrights relevant to this case. Compl. ¶ 1 Ex. A. Plaintiff alleges that Defendant
copied material covered by said copyrights to sell its counterfeit products without permission.
Id. ¶ 15.
3.
Sum of Money at Stake
The fourth Eitel factor requires that the damages sought be “proportional to the harm
caused by defendant’s conduct.” Landstar, 724 F. Supp. 2d at 921. Plaintiff claims statutory
damages to remedy its lost profits for the infringing items it identified as sold by the
Defendant. Mot. at 11-16; see 17 U.S.C. § 504(c)(1). Here, Plaintiff requests statutory
damages of $25,000 for each of the eight copyright infringements, which totals $200,000.
However, the requested award is substantially large relative to the harm caused by Defendant’s
conduct. See, e.g., J & J Sports Productions. v. Cardoze, 2010 WL 2757106, at *5 (N.D. Cal.
2010) (“a large sum of money at stake would disfavor default damages,” such as damages
totaling $114,200); Joe Hand Promotions v. Streshly, 655 F. Supp. 2d 1136 (S.D. Cal.
2009) (proposed award amount of $100,975 was “manifestly excessive under existing law”);
see also Board of Trustees of the Sheet Metal Workers v. Vigil, 2007 WL 3239281, at *2 (N.D.
Cal. 2007) (“[D]efault judgment is disfavored if there were a large sum of money involved.”).
Taking the facts pled as true, the requested damages are disproportional to the harm
caused by Defendant’s conduct. This factor thus weighs against default judgment.
4.
Possibility of Dispute Concerning Material Facts
Where the Plaintiff’s complaint is well-pleaded and the defendant makes no effort to
properly respond, the likelihood of disputed facts is very low. See Landstar, 725 F. Supp. 2d
at 921-22. The Plaintiff’s claim is well-pleaded, and Defendant has not challenged its
allegations with a proper answer or reply. This factor weighs in favor of default judgment.
5.
Possibility of Excusable Neglect
The sixth Eitel factor favors default judgment when the defendant has been properly
served or the plaintiff demonstrates that the defendant is aware of the lawsuit. Id. at 911.
Defendant acknowledged receipt of the Complaint and requested an extension to answer.
Moreover, Defendant was properly served and submitted an insufficient and improperly filed
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. CV 13-0892-DOC (RNBx)
Date: October 30, 2013
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answer. Defendant was thus clearly aware of the lawsuit and yet refused to properly respond.
The likelihood of excusable neglect is low, and this factor favors default judgment. See
PepsiCo, 238 F. Supp. 2d at 1172.
6.
Policy Favoring Decision on the Merits
Although decisions on the merits are preferred, this does not prevent a court from
entering judgment where the Defendant refuses to respond. See id. at 1177. Where the
Defendant’s failure to appear makes decision on the merits impossible, default judgment is
appropriate. Craigslist, Inc. v. Naturemarket, Inc., 694 F. Supp. 2d 1039, 1061 (N.D. Cal.
2010). Defendant has not properly responded, and so this factor weighs in favor of default
judgment.
IV.
Remedies
A.
Statutory Damages
Under the Copyright Act, the Plaintiff may recover a sum “not less than $750 or more
than $30,000” for any one work, “as the court considers just.” 17 U.S.C. § 504(c)(2). A
plaintiff seeking default judgment is “required to prove all damages sought in the complaint.”
Philip Morris USA, Inc. v. Castworld Products, Inc., 219 F.R.D. 494, 498 (C.D. Cal. 2003).
However, “A plaintiff may elect statutory damages ‘regardless of the adequacy of the evidence
offered as to his actual damages or the amount of the defendant’s profits.’” Columbia Pictures
Television v. Krypton Broad. of Birmingham, Inc., 259 F.3d 1186, 1195 (9th Cir.
2001) (quoting Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 14.04[A] ).
Plaintiff submits pictures of products and online labeling showing Defendant, using the
seller identity “FoxMedia,” selling counterfeit versions of Plaintiff’s products on Amazon.
Pearson Decl. Ex. A, at 6 (Dkt. 20-1). The pictures show seller “FoxMedia” selling a product
titled, “Harry Potter: The Complete 8-Film Collection (2011),” for $33.89. Id. The product is
said to ship from New York. Id. Plaintiff also avers that an examination of the product reveals
that the digital content, quality, and format of the DVD disc art and case wrapping is
inconsistent with and inferior to Plaintiff’s authorized versions of the product. Id. at 3. Taking
all alleged facts as true, the Plaintiff has established willful copyright infringement.
Plaintiff seeks statutory damages for willful copyright infringement totaling $200,000,
or $25,000 for infringement of each of the eight copyrighted motion pictures. See 15 U.S.C. §
504(c)(1). However, despite Defendant’s conduct being willful, the $25,000 per infringement
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. CV 13-0892-DOC (RNBx)
Date: October 30, 2013
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plaintiff seeks is “at the high end of the § 504(c)(1) scale.” See Warner Bros. Home
Entertainment Inc. v. Jimenez, 2013 WL 3397672, at *5 (C.D. Cal. 2013) (holding plaintiff
would receive a windfall if it received $25,000 for each of the 22 copyright infringements
against Amazon third-party seller reproducing and selling counterfeit copies of plaintiff’s
copyrighted motion pictures); Disney Enters., Inc. v. San Jose Party Rental, 2010 WL
3894190, at *2 (N.D. Cal. 2010) (holding despite defendants’ conduct being willful, “$25,000
per infringement is nonetheless at the high end of the §504(c)(1) scale . . .”).
In the instant action, Plaintiff provides a copy of an Amazon invoice showing the
allegedly infringed product’s sale price when Plaintiff purchased Defendant’s product
($33.89). Pearson Decl. Ex. A, at 8 (Dkt. 20-1). However, other than this receipt, Plaintiff
provides no baseline measure of actual damages to assist the Court in determining statutory
damages. “In calculating statutory damages, some courts have looked to estimates of actual
damages.” Microsoft Corporation v. Ricketts, 2007 WL 1520965, at *4 (N.D. Cal. 2007); see
also Warner Bros. Home Entertainment Inc., 2013 WL 3397672, at *5 (in assessing statutory
damages “plaintiff did not present any information or estimate about the number of counterfeit
copies [of counterfeited motion pictures] sold by defendant, plaintiff’s lost profits, the number
of visitors to defendant’s website, or the amount of money spent in the course of identifying
defendant, to demonstrate that the amount sought is reasonable”). Although statutory damages
are intended to serve as a deterrent against copyright infringement, such damages should not
“justify such a windfall” for the plaintiff. Microsoft Corporation, 2007 WL 1520965, at *4.
“The court has wide discretion in determining the amount of statutory damages to be
awarded, constrained only by the specified maxima and minima.” Harris v. Emus Records
Corp., 734 F.2d 1329, 1335 (9th Cir. 1984). Therefore, the court deems $3,000 for each of the
eight infringements—totaling $24,000—to be the just and proper statutory award in this case.
“In measuring the damages, the court is to be guided by ‘what is just in the particular case,
considering the nature of the copyright, the circumstances of the infringement and the like…’”
Peer Int’l Corp. v. Pausa Records, Inc., 909 F.2d 1332, 1336 (9th Cir. 1990) (quoting F.W.
Woolworth Co. v. Contemporary Arts, 344 U.S. 228, 232 (1952)). This award is within range
of damages awarded by other courts. See Warner Bros. Home Entertainment Inc., 2013 WL
3397672, at *6 (finding adequate a statutory damage award of $3,000 per infringement where
defendant third-party Amazon seller willfully infringed by reproducing and selling counterfeit
motion pictures); Microsoft Corp. v. Coppola, 2007 WL 1520964 (N.D. Cal. 2007) (awarding
$2,500 per work where defendant sold counterfeit copies of software programs recorded on
CD–ROMS). In light of the limited record in this case, the Court finds this amount sufficient
for purposes of deterrence. Twentieth Century Fox Film Corp. v. Streeter, 438 F. Supp. 2d
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CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. CV 13-0892-DOC (RNBx)
Date: October 30, 2013
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1065, 1073 (D. Ariz. 2006) (awarding $3,000 per work willfully infringed where defendant
downloaded and sold counterfeit copies of copyrighted motion pictures).
B.
Interest
Plaintiff also requests post-judgment interest at the statutory rate. See 28 U.S.C. § 1961.
The Court grants this request.
C.
Injunctive Relief
Plaintiff is entitled to permanent injunctive relief. The Copyright Act authorizes courts
to grant permanent injunction on reasonable terms to prevent future violations. 17 U.S.C. §§
502(a). For a court to grant a permanent injunction, a plaintiff must demonstrate: “(1) that it
has suffered an irreparable injury; (2) that remedies available at law, such as monetary
damages, are inadequate to compensate for that injury; (3) that, considering the balance of
hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the
public interest would not be disserved by a permanent injunction.” Ebay v. MercExchange,
L.L.C., 547 U.S. 388, 391 (2006).
Plaintiff alleges Defendant’s sales are causing irreparable injury that would
inadequately be compensated by monetary relief unless the Court enjoins Defendant’s
continuing infringements of Plaintiff’s copyrights. Compl. at 9. In copyright cases, irreparable
harm is presumed on a showing of reasonable likelihood of success on the merits.
See, e.g., Micro Star v. Formgen, Inc., 154 F.3d 1107, 1109 (9th Cir. 1998).
Moreover, Defendant’s default makes it impractical to determine monetary damages.
See Warner Bros. Home Entertainment Inc., 2013 WL 3397672, at *7 (noting “monetary
damages alone are inadequate to compensate plaintiff because defendant’s refusal to
participate in the action makes it impossible for plaintiff to determine defendant’s actual
profits, the amount of lost income as a result of defendant’s conduct, or take any action to
prevent further infringement”). Therefore, Plaintiff will be irreparably harmed and monetary
damages are alone are insufficient to compensate Plaintiff.
Without an injunction, Plaintiff will continue to suffer irreparable harm as Defendant’s
use of Plaintiff’s intellectual property—reproducing substandard counterfeit reproductions of
Plaintiff’s copyrights—harms its reputation with consumers. See Sennheiser Electronic Corp.
v. Eichler, 2013 WL 3811775, at *10 (C.D. Cal. 2013) (noting that the injury caused by the
presence of infringing products on the market such as damage to business reputation “will
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. CV 13-0892-DOC (RNBx)
Date: October 30, 2013
Page 9
often constitute irreparable injury”). These same reputational harms tip the balance of
hardships in Plaintiff’s favor. Defendant will not be harmed by ceasing the future infringement
of Plaintiff’s copyrighted works.
Finally, the public interest will be served with a permanent injunction, because it will
protect Plaintiff’s copyrights against increased infringement. See Perfect 10 v. Google,
Inc., 416 F. Supp. 2d 828, 859 (C.D. Cal. 2006), overruled on other grounds, Perfect 10 v.
Amazon.com, Inc., 487 F.3d 701 (9th Cir. 2007) (“[T]he public interest is also served when the
rights of copyright holders are protected against acts likely constituting infringement.”). The
Court thus concludes that a permanent injunction is appropriate in this case.
IV.
Disposition
For the reasons discussed above, the Court GRANTS the Motion for default judgment. As to
Defendant Ernest Slaughter, the Court hereby:
1. GRANTS Plaintiff default judgment on its claim for copyright infringement;
2. GRANTS Plaintiff $24,000 in statutory damages under 17 U.S.C. § 504(c)(2);
3. GRANTS Plaintiff’s request for post-judgment interest at the statutory rates
provided in 28 U.S.C. § 1961; and
4. GRANTS Plaintiff’s request for a permanent injunction.
Plaintiff is ordered to submit forthwith a proposed judgment that conforms with this
Order.
Accordingly, Plaintiff’s Renewed Motion for Default Judgment filed October 24, 2013
(Dkt. 30), is hereby DENIED AS MOOT.
MINUTES FORM 11
CIVIL-GEN
Initials of Deputy Clerk: jcb
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