Pacific Stock, Inc. v. KONA KUSTOM TOURS LLC et al

Filing 18

ORDER ADOPTING MAGISTRATE JUDGE'S FINDINGS AND RECOMMENDATION re 17 - Signed by JUDGE ALAN C KAY on 12/22/2014. (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
PACIFIC STOCK, INC.,

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Plaintiff,
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vs.
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KONA KUSTOM TOURS LLC, ET )
AL.,
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Defendants.
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_____________________________ )

CIVIL 14-00326-ACK-RLP

ORDER ADOPTING MAGISTRATE JUDGE’S
FINDINGS AND RECOMMENDATION
Findings and Recommendation having been filed and served on all
parties on November 25, 2014, and no objections having been filed by any party,
IT IS HEREBY ORDERED AND ADJUDGED that, pursuant to Title 28, United
States Code, Section 636(b)(1)(C) and Local Rule 74.2, the “FINDINGS AND
RECOMMENDATION TO GRANT IN PART AND DENY IN PART
PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT AGAINST
DEFENDANT KONA KUSTOM TOURS LLC, A HAWAII LIMITED
LIABILITY COMPANY, DBA KONA KUSTOM TOURS, AND DEFENDANT
PHILIP D. DAVIDSON,1 AN INDIVIDUAL, AKA PHILIP DAVIDSON,” docket
1

The Court notes that default judgment is appropriate as against all Defendants in light of
the allegations in the Complaint that Defendant Philp D. Davidson is vicariously liable for
Defendant Kona Kustom Tours LLC’s copyright infringements because Davidson “is the sole
owner and manager of [Kona Kustom Tours], is the registrant and administrator of the

entry no. 17, are adopted as the opinion and order of this Court.
The Court notes that it concurs with the magistrate judge that the
balance of the equities in this case supports injunctive relief. See eBay Inc. v.
MercExchange, LLC, 547 U.S. 388, 391 (2006). Plaintiff has demonstrated
irreparable harm will result absent injunctive relief, as Defendants’ unauthorized
use of the Copyrighted Works interferes with and undercuts Plaintiff’s ability to
market Plaintiff’s own original photographic works, thereby impairing the value
and prejudicing the sale of the photographs. Defendants’ unlawful use of Plaintiff’s
photographic works diminishes the value of the original works by diluting the
market for them and undermining their distinctiveness. Moreover, while Plaintiff is
entitled to statutory monetary damages, it nevertheless appears that monetary
damages are insufficient to compensate for Defendants’ ongoing copyright
violations. Notwithstanding notice by Plaintiff, Defendants continue to infringe on

konakustomtours.com web domain, and enjoys a direct financial benefit from, and has the right
and ability to supervise or control, the infringing activity and/or removal or alteration of
copyright management information associated with the photographic works at issue.” (Compl.
¶ 18.) Generally, upon default, “the factual allegations of the complaint, except those relating to
the amount of damages, will be taken as true.” TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915,
917-18 (9th Cir. 1987) (quoting Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir.
1977)); see also United States v. Suganuma, 546 F. Supp. 2d 996, 1001 (D. Haw. 2008). Thus,
here, because a default has been entered, the Court must take Plaintiff’s allegations regarding
Davidson’s vicarious liability as true for purposes of determining whether an entry of default
judgment is appropriate. See Fair Housing of Marin v. Combs, 285 F.3d 899, 906 (9th Cir.2002);
Geddes, 559 F.2d at 560; see also American Cash Card Corp. v. AT&T Corp., 210 F.3d 354 (2d
Cir. 2000) (upholding default judgment entered against two principals of plaintiff corporation,
finding allegations in the complaint (taken as true following entry of default) sufficient to
support piercing the corporate veil); In re Burwell, 391 B.R. 831, 837 (B.A.P. 8th Cir. 2008)
(relying on the allegations in the complaint to uphold the trial court’s entry of default judgment
piercing the corporate veil and holding the debtor liable for corporate debts).

twelve of the fourteen Copyrighted Works and have failed to appear in this action.
There is therefore every indication that Defendants will continue to infringe upon
the Copyrighted Works. Monetary damages alone cannot fully compensate
Plaintiff for the harm arising from this continuing infringement. See Robert Bosch
LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1155 (Fed. Cir. 2011) (noting that
monetary damages are inadequate compensation where “[t]here is no reason to
believe that [the defendant] will stop infringing, or that the irreparable harms
resulting from its infringement will otherwise cease, absent an injunction”).
Likewise, the balance of hardships tips in favor of Plaintiff, as Defendants could
easily remove the infringing images from their website while still continuing to
maintain its commercial purpose. Conversely, as discussed above, Plaintiff
continues to suffer financial harm because of Defendants’ unlawful use of his
photographic works. Finally, as the magistrate judge noted, enforcing the
Copyright Act and the DMCA is manifestly in the public interest. See N.D. v.
Haw. Dep’t of Educ., 600 F.3d 1104, 1113 (9th Cir. 2010) (“[I]t is obvious that
compliance with the law is in the public interest.”). For all of these reasons, the
Court agrees with the magistrate judge that injunctive relief is appropriate in this
case.

IT IS SO ORDERED.
DATED: Honolulu, Hawaii, December 22, 2014

________________________________
Alan C. Kay
Senior United States District Judge

Pacific Stock, Inc. v. Kona Kustom Tours LLC, et al., Civ. No. 14-00326 ACK RLP, Order
Adopting Findings and Recommendation