Broadcast Music, Inc. et al v. Kiflit

Filing 13

Order by Hon. Lucy H. Koh granting 11 Motion for Default Judgment.(lhklc3, COURT STAFF) (Filed on 10/2/2012)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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United States District Court
For the Northern District of California

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SAN JOSE DIVISION

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BROADCAST MUSIC, INC.; AMAZEMENT
MUSIC; HIP CITY MUSIC, INC.; HIFROST
PUBLISHING; WARNER-TAMERLANE
PUBLISHING CORP.; COREY FOWLER;
CAHRON CHILDS; CHANTI GLEE;
RUNWAY STAR MUSIC PUBLISHING,

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Plaintiffs,
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v.
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TEDROS KIFLIT, individual and doing business )
as ARSIMONA,
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Defendant.
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Case No.: 12-CV-00856-LHK
ORDER GRANTING MOTION FOR
DEFAULT JUDGMENT

On April 11, 2012, the Clerk of the Court entered default against Defendant Tedros Kiflit,

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individually and doing business as Arsimona (“Defendant” or “Arsimona”), after Defendant failed

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to appear or otherwise respond to the Summons and Complaint in this case within the time

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prescribed by the Federal Rules of Civil Procedure. See ECF No. 10. Before the Court is the

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Motion for Default Judgment filed by Plaintiffs Broadcast Music, Inc. (“BMI”) and various

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copyright owners (collectively “Plaintiffs” or “BMI”). See ECF No. 11. Defendant, not having

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appeared in this action to date, has not opposed the motion. For the reasons discussed below,

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Plaintiffs’ Motion for Default Judgment is GRANTED.

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Case No.: 12-CV-00856-LHK
ORDER GRANTING MOTION FOR DEFAULT JUDGMENT

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I.

BACKGROUND

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Plaintiff BMI is a corporation that licenses the right to publicly perform copyrighted

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musical compositions to music users such as the owners and operators of concert halls, restaurants,

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nightclubs, and hotels. See Complaint (“Compl.”) ¶ 4, ECF No. 1; Decl. Kerri Howland-Kruse

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Supp. Pl.’s Appl. Default J. (“Howland-Kruse Decl.”) ¶ 2, ECF No. 11-6. BMI acquires the right

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to license these public performance rights through agreements with copyright owners such as

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composers and music publishing companies. Id. Plaintiffs Amazement Music, Hip City Music,

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Inc., Hifrost Publishing, Warner-Tamerlane Publishing Corp., Corey Fowler, Cahron Childs,

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Chanti Glee, and Runway Star Music Publishing are all copyright owners of at least one of the

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For the Northern District of California

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musical compositions licensed to BMI and allegedly infringed upon by Defendant. Compl. ¶¶ 5–

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13, 19–22; Howland-Kruse Decl. ¶¶ 4–5. Specifically, Plaintiffs allege that Defendant publicly

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performed four musical compositions from the BMI repertoire, without authorization, at

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Defendant’s commercial establishment, Arsimona, located in Oakland, California. See Compl.

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¶ 14, 18, ECF No. 11 at 3.

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Prior to July 2010, BMI learned that Arsimona was offering musical entertainment without

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a license from BMI and without permission from the copyright owners whose music was being

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performed publicly. See Decl. Lawrence Stevens Supp. Pl.’s Appl. Default J. (Stevens Decl.) ¶ 3,

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ECF No. 11-1. Over a period extending from July 29, 2010, to September 14, 2011, BMI sent no

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fewer than 13 letters to Defendant reminding Defendant of his copyright obligations and requesting

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that Defendant enter into a standard licensing agreement. Id. ¶¶ 3, 5; Ex. D to Stevens Decl., ECF.

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No. 11-5. Representatives of BMI also called Defendant by telephone on 37 occasions. Stevens

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Decl. ¶ 8. Between April 20 and November 1, 2011, BMI also sent Arsimona approximately six

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letters notifying Defendant that he must cease the public performance of BMI-licensed music. Id.

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¶ 6. Throughout this time, Defendant did not enter into a licensing agreement with Plaintiffs and

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continued to offer the unauthorized public performance of BMI-licensed music. Id. ¶ 9.

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In order to protect the rights of the publishers and writers affiliated with BMI, a BMI-music

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researcher visited Arsimona on June 25, July 15, and October 14, 2011, and heard four of the

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Plaintiffs’ songs being performed. Id. ¶¶ 11-13. On November 7, 2011, BMI sent another letter
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Case No.: 12-CV-00856-LHK
ORDER GRANTING MOTION FOR DEFAULT JUDGMENT

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advising Defendant that Plaintiffs were aware that Arsimona had performed BMI-licensed music

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without authorization. In this letter, BMI also charged Defendant with licensing fees for the period

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between August 1, 2010 and July 31, 2012, as well as music researcher costs. Ex. D to Stevens

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Decl. Defendant did not respond. Stevens Decl. ¶ 14. On November 10, 2011, BMI sent another

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letter to Defendant advising that the matter had been turned over to BMI’s attorneys. Id. ¶ 15.

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Again, there was no response. Id.

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On February 22, 2012, Plaintiffs filed this action for copyright infringement in violation of

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the United States Copyright Act of 1976, as amended, 17 U.S.C. Sections 101 et seq. (the

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“Copyright Act”). ECF No. 1. Plaintiffs then served Defendant with a copy of the Summons,

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For the Northern District of California

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Complaint, and related documents on February 24, 2012. Decl. Karen S. Frank Supp. Pl.’s Appl.

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Default J. (“Frank Decl.”) ¶ 4, ECF No. 11-7. Defendant was required to file and serve his

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responsive pleading on Plaintiffs no later than March 16, 2012, pursuant to Rule 12(a)(1)(A)(i) of

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the Federal Rules of Civil Procedure. Id. ¶ 5. However, Defendant failed to appear and failed to

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file any responsive pleading. On April 11, 2012, pursuant to Plaintiffs’ request, the Clerk of the

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Court entered default against Defendant. ECF No. 10. Plaintiffs now move this Court for entry of

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default judgment pursuant to Rule 55(b) of the Federal Rules of Civil Procedure. ECF No. 11.

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II.

DISCUSSION
A. Default Judgment

When a defendant fails to timely answer a complaint, a plaintiff may move the court for an

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entry of default judgment. Fed. R. Civ. P. 55(b)(2). The district court’s decision whether to enter a

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default judgment is discretionary. See Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). A

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court deciding whether a default judgment is warranted may consider the following factors:

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(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.

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Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986).

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Case No.: 12-CV-00856-LHK
ORDER GRANTING MOTION FOR DEFAULT JUDGMENT

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Here, the merits of Plaintiffs’ claims and the sufficiency of the complaint favor entry of

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default judgment. To establish a claim for copyright infringement, a plaintiff: (1) “must show

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ownership of the allegedly infringed material,” and (2) “must demonstrate that the alleged

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infringer[] violate[d] at least one exclusive right granted to copyright holders under 17 U.S.C.

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§ 106.” A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001). Plaintiffs have

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alleged that each of the four respective music compilations at issue in this case is the subject of a

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valid Certificate of Copyright Registration issued by the Register of Copyrights, is owned by at

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least one Plaintiff in this case, and is licensed by BMI. Compl. ¶¶ 19–22; see 17 U.S.C. § 410(c);

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see also Three Boys Music Corp. v. Bolton, 212 F.3d 477, 488–89 (9th Cir. 2000) (“Registration is

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For the Northern District of California

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prima facie evidence of the validity of a copyright.”). Moreover, for each work, Arsimona

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allegedly performed and/or caused the musical composition to be performed publicly without a

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license or permission to do so. Compl. ¶ 23; see 17 U.S.C. § 501(a) (infringement occurs when

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alleged infringer engages in activity listed in § 106); 17 U.S.C. § 106(4) (affording copyright

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owners of musical works the exclusive rights to perform the copyrighted work publicly or to

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authorize another to do so). Since the Clerk of the Court has entered default, all well-pleaded

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allegations in Plaintiffs’ complaint regarding liability should be taken as true, except as to the

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amount of damages. See Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002);

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TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987). Accordingly, Plaintiffs

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have adequately alleged valid claims for copyright infringement.

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

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Plaintiffs will be prejudiced if default judgment is not entered. Because Defendant has refused to

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take part in the litigation, Plaintiffs will be denied the right to adjudicate the claims and obtain

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relief if default judgment is not granted. See PepsiCo, Inc. v. California Security Cans, 238 F.

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Supp.2d 1172, 1177 (C.D. Cal. 2002). In addition, because Arsimona has not presented a defense

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or otherwise communicated with the Court, there is no indication that Defendant’s default is due to

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excusable neglect or that the material facts are subject to dispute. See Twentieth Century Fox Film

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Corp. v. Streeter, 438 F. Supp.2d 1065, 1071–72 (D. Ariz. 2006). Although entry of default

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judgment may not be appropriate where a large sum of money is at stake, see Eitel, 782 F.2d at
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Case No.: 12-CV-00856-LHK
ORDER GRANTING MOTION FOR DEFAULT JUDGMENT

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1472, Plaintiffs’ requested relief is not so large or burdensome to necessitate denying the motion on

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this basis alone. Finally, although strong public policy favors decisions on the merits, see Pena v.

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Seguros La Comercial, S.A., 770 F.2d 811, 814 (9th Cir. 1985), it does not appear that litigation of

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the merits will be possible due to Arsimona’s refusal to litigate. In sum, the Court finds that the

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Eitel factors favor entry of default judgment. The Court therefore GRANTS Plaintiffs’ Motion for

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Entry of Default Judgment.

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A. Requests for Relief
In light of Defendant’s default, Plaintiffs request judgment awarding an injunction,
statutory damages, the costs of this action, and reasonable attorney’s fees for copyright

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For the Northern District of California

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infringement. ECF No. 11 at 3. Specifically, Plaintiffs request that, “Defendant, his agents,

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servants, employees, and all persons acting under his permission and authority, be enjoined and

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restrained from infringing, in any manner, the copyrighted musical compositions licensed by BMI,

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pursuant to 17 U.S.C. § 502.” Id. at 5. In addition, Plaintiffs request $12,000.00 in statutory

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damages pursuant to 17 U.S.C. § 504(c), based on an award of $3,000.00 for each of the four

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alleged acts of infringement. Id. Plaintiffs further request that Defendant pay Plaintiffs’ costs,

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including reasonable attorney’s fees in the amount of $4,127.00, pursuant to 17 U.S.C. § 505. Id.

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Finally, Plaintiffs request that Defendant pay interest on all of these awards pursuant to 28 U.S.C.

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§ 1961. Id.

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1. Injunctive Relief Pursuant to 17 U.S.C. § 502(a)
Section 502(a) of the Copyright Act permits a court to grant injunctive relief on “such terms

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as it may deem reasonable to prevent or restrain infringement of a copyright.” 17 U.S.C. § 502(a).

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“As a general rule, a permanent injunction will be granted when liability has been established and

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there is a threat of continuing violations.” MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d

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511, 520 (9th Cir. 1993).

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The Court finds that injunctive relief is appropriate in this case. Not only is Defendant

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liable for copyright infringement, but Plaintiffs allege that Defendant’s conduct has caused and is

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causing Plaintiffs great and incalculable damage. Compl. ¶ 24; see Streeter, 438 F. Supp.2d at

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1072 (“Copyright infringement is presumed to give rise to irreparable injury.”). There is no
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Case No.: 12-CV-00856-LHK
ORDER GRANTING MOTION FOR DEFAULT JUDGMENT

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evidence that Defendant has ceased the allegedly wrongful behavior. Moreover, Defendant’s

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means of infringement—providing unauthorized public performances of works in the BMI

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repertoire at Arsimona—is easy for Defendant to repeat. Consequently, Plaintiffs are at genuine

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risk of further acts of copyright infringement. Finally, Plaintiffs’ requested relief will not impose a

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great hardship on Defendant as it is narrowly tailored to prohibit only future infringing behavior by

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Defendant and those acting under his permission and authority. Accordingly, the Court GRANTS

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Plaintiffs’ request for a permanent injunction.

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2. Statutory Damages Pursuant to 17 U.S.C. § 504(c)
Section 504 permits a copyright owner to recover: (1) actual damages and any additional

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For the Northern District of California

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profits of the infringer, or (2) statutory damages amounting to a sum of not less than $750 and not

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more than $30,000 per copyright infringement, as the Court considers just. 17 U.S.C. §§ 504(a),

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504(c). Trial courts have broad discretion when considering what is just in a particular case and

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should consider, among other factors, “the nature of the copyright [and] the circumstances of the

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infringement.” Peer International Corp. v. Pausa Records, Inc., 909 F.2d 1332, 1336 (9th Cir.

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1990) (internal quotation marks and citations omitted). An award of statutory damages should “not

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merely compel[] restitution of profit and reparation for injury but also . . . discourage wrongful

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conduct.” F. W. Woolworth Co. v. Contemporary Arts, 344 U.S. 228, 233 (1952).

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Here, Plaintiffs seek $12,000.00 in statutory damages pursuant to 17 U.S.C. § 504(c), based

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on an award of $3,000.00 for each of the four alleged acts of infringement. Plaintiffs submit

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evidence that, if Defendant had entered into a licensing agreement at the time BMI first contacted

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him in July 2010, the total estimated licensing fee would have been approximately $2,806.90. See

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Stevens Decl. ¶ 18. There is no evidence of how much Defendant made in profits, or continues to

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make, as a result of the infringement.

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Plaintiffs’ request for statutory damages is approximately four times the amount Plaintiffs

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would have received in licensing fees from Defendant had Arsimona been licensed properly.

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However, Plaintiffs do not explain why this specific figure is appropriate, particularly given that

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the four-fold multiple of license fees is at the upper range of many statutory damage awards

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throughout the country. See, e.g., Dream Dealers Music v. Parker, 924 F. Supp. 1146, 1153 (S.D.
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Ala. 1996) (awarding statutory damages in the amount of just less than three times what the license

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fees would have cost); see generally Sailor Music v. IML Corp., 867 F. Supp. 565, 570 (E.D. Mich.

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1994) (noting that, based on “a survey of statutory awards throughout the country . . . courts

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typically award three times the amount of a properly purchased license for each infringement.

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Typically, these ‘treble’ damages range from $1,500 to $5,000 per infringement.”).

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The Court GRANTS Plaintiffs’ request for statutory damages, but concludes that an award

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of $9,000—slightly more than three times the cost of the estimated licensing fee—is more than

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adequate and just to compensate Plaintiffs for lost profits and to deter Defendant’s future

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infringement. The Court considers this enhanced award appropriate in light of Plaintiffs’ diligent

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For the Northern District of California

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efforts over the course of two years to encourage Defendant to enter into a licensing agreement,

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and thereby avoid litigation at all costs. Plaintiffs should not have been forced to send Defendant

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at least 20 letters, telephone Defendant at least 37 times, and send a BMI-music researcher to

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Arsimona on three separate occasions, simply to protect the rights of the publishers and writers

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affiliated with BMI. See Stevens Decl. ¶¶ 3–15. Accordingly, the Court GRANTS Plaintiffs

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$9,000.00 in statutory damages.

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3. Attorney’s Fees and Costs Pursuant to 17 U.S.C. § 505

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Section 505 of the Copyright Act permits courts discretion to award full reimbursement of

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costs and reasonable attorney’s fees to the prevailing party in a copyright action. 17 U.S.C. § 505.

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Here, Plaintiffs request that Defendant pay Plaintiffs’ costs, including reasonable attorney’s fees, in

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the amount of $4,127.00. This amount constitutes $3,425.00 in attorney’s fees and $702.00 in

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costs. Frank Decl. 2–3. The Court has reviewed the Frank Declaration and believes that the hours

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billed for the specific tasks appear reasonable. See Frank Decl. ¶ 8. However, Plaintiffs’ counsel

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has failed to provide any documentation in support of the specific hourly rates. Therefore, no later

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than Friday, October 5, 2012, Plaintiffs’ counsel shall submit a declaration justifying the hourly

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rates, in addition to a curriculum vitae or resume for each attorney who worked on this case. The

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Court GRANTS Plaintiffs $702.00 for reimbursement of Court costs.

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Case No.: 12-CV-00856-LHK
ORDER GRANTING MOTION FOR DEFAULT JUDGMENT

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4. Interest Pursuant to 28 U.S.C. ¶ 1961
Pursuant to 28 U.S.C. ¶ 1961, “[i]nterest shall be allowed on any money judgment in a civil

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case recovered in a district court.” Accordingly, the Court GRANTS Plaintiffs’ request that

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Defendant pay interest on the full amount of this judgment, from the date of this judgment.

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III.

CONCLUSION

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For the reasons detailed above, Plaintiffs’ motion for default judgment is GRANTED.

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Judgment shall be entered in favor of Broadcast Music, Inc. et al. and against Defendant Tedros

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Kiflit d/b/a Arsimona. Plaintiff shall recover $9,702.00 in total damages and costs. If Plaintiffs’

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counsel wish to recover the attorney’s fees as requested, counsel must file a declaration and

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For the Northern District of California

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supporting documentation by Friday, October 5, 2012. The Clerk shall close the file.

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IT IS SO ORDERED.

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Dated: October 2, 2012

_________________________________
LUCY H. KOH
United States District Judge

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Case No.: 12-CV-00856-LHK
ORDER GRANTING MOTION FOR DEFAULT JUDGMENT