Broadcast Music, Inc. et al v. Second Chance Operating Ventures, LLC et al
Filing
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MEMORANDUM AND ORDER granting in part and denying in part 26 Motion for Summary Judgment; DIRECTING plaintiffs to arrange a telephone conference regarding scheduling of further proceedings. Signed by Judge Marvin J. Garbis on 7/17/2017. (hmls, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
BROADCAST MUSIC, INC. et al.
Plaintiffs
vs.
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CIVIL ACTION NO. MJG-16-3096
SECOND CHANCE OPERATING VENTURES*
LLC, et al.
Defendants
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MEMORANDUM AND ORDER RE: SUMMARY JUDGMENT
The Court has before it Plaintiffs’ Motion for Summary
Judgment [ECF No. 26] and the materials submitted relating
thereto.
The Court has held a hearing and had the benefit of
the arguments of counsel.
I.
BACKGROUND
At all times relevant hereto, Broadcast Music, Inc. (“BMI”)
has been, and is, an organization that receives and enforces
rights (including copyright rights) with regard to musical
compositions owned by others. Prior to the filing of this
lawsuit, Plaintiffs other than BMI had assigned to BMI, “the
right to license the public performance rights in” the musical
compositions at issue.
Compl. ¶¶ 3, 4.
Defendant Second Chance Operating Ventures, LLC (“Second
Chance”) is a limited liability company that operates an
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establishment known as Game Sport’s & Social or Baltimore Sports
Bar (“the Sports Bar”), located in Baltimore, Maryland.
The
Sports Bar regularly features performances of live and recorded
music.
Defendant James Trujillo (“Trujillo”) is the sole owner
and sole member of Second Chance, and he also operates the
Sports Bar.
Defendant William Hotaling (“Hotaling”) is not a
member or owner of Second Chance nor involved in the operation
of the Sports Bar, but he is the Baltimore City resident liquor
licensee on behalf of Second Chance.
The parties agree that in September 2016, the Sports Bar
performed, in the course of its business, the four musical
compositions at issue without a license from anyone permitting
it to do so.1
There are no genuine issues of material fact regarding the
capacity of the Sports Bar, the performance of the musical
compositions, the Sports Bar’s mode of operation or the
communications between BMI and Trujillo regarding licensing.
The parties agree that Second Chance infringed the copyrights on
the four musical compositions at issue and agree that Second
Chance and Trujillo are liable for the infringement. The parties
dispute whether Hotaling - a liquor licensee but neither an
1
Subsequent to the filing of suit, Second Chance entered
into a licensing agreement with BMI covering the period of
January 2017 through December 2017 for an annual fee of
$7,162.50.
2
owner nor manager of the Sports Bar – is liable for
infringement.
The parties also dispute the extent of damages
and the degree of Defendants’ culpability with regard to the
copyright infringement.
By the instant motion, Plaintiffs seek summary judgment
establishing liability for damages and costs (including fees) on
the part of all Defendants, establishing the amounts of
statutory damages ($44,000.00 claimed) and fees ($6,740.00
claimed)
and enjoining future infringements.
Defendants agree
that Plaintiffs should be granted summary judgment with regard
to infringement by the Sports Bar, establishing liability of
Defendants Second Chance and Trujillo.
There is at issue herein
Plaintiffs’ request for summary judgment with regard to:
The amount of statutory damages and fees to award.
II.
Any liability of Defendant Hotaling.
Any injunctive relief.
LEGAL STANDARD
A motion for summary judgment shall be granted if the
pleadings and supporting documents “show[] that there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.”
56(a).
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Fed. R. Civ. P.
The well-established principles pertinent to summary
judgment motions can be distilled to a simple statement:
The
Court may look at the evidence presented in regard to a motion
for summary judgment through the non-movant’s rose-colored
glasses, but must view it realistically.
After so doing, the
essential question is whether a reasonable fact finder could
return a verdict for the non-movant or whether the movant would,
at trial, be entitled to judgment as a matter of law.
See,
e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986);
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986);
Shealy v. Winston, 929 F.2d 1009, 1012 (4th Cir. 1991).
Thus,
in order “[t]o defeat a motion for summary judgment, the party
opposing the motion must present evidence of specific facts from
which the finder of fact could reasonably find for him or her.”
Mackey v. Shalala, 43 F. Supp. 2d 559, 564 (D. Md. 1999)
(emphasis added).
When evaluating a motion for summary judgment, the Court
must bear in mind that the “[s]ummary judgment procedure is
properly regarded not as a disfavored procedural shortcut, but
rather as an integral part of the Federal Rules as a whole,
which are designed ‘to secure the just, speedy and inexpensive
determination of every action.’”
Celotex, 477 U.S. at 327
(quoting Fed. R. Civ. P. 1).
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III. DISCUSSION
A.
Direct Infringement
The Copyright Act provides the owner of a copyright with
the exclusive right to perform, or to authorize others to
perform, the copyrighted work.
17 U.S.C. § 106(4).
Direct
infringement requires proof of (1) ownership of a valid
copyright and (2) copying, which is established when any of the
exclusive rights listed in § 106 are violated. See 17 U.S.C. §
501(a) (“Anyone who violates any of the exclusive rights of the
copyright owner . . . is an infringer of the copyright. . . .”).
The parties agree that Plaintiffs have proven that there was a
public performance of four songs without authorization at the
Sports Bar on the evening of July 12, 2016.
Therefore, Plaintiffs are entitled to partial summary
judgment establishing direct copyright infringement by the
Sports Bar.
B.
Vicarious Liability
To make each Defendant liable for the infringement requires
Plaintiffs to establish vicarious liability for that defendant.
See Nelson-Salabes, Inc. v. Morningside Dev., LLC, 284 F.3d 505,
513 (4th Cir. 2002).
“In order to establish vicarious
liability, a copyright owner must demonstrate that the entity to
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be held so liable: (1) possessed the right and ability to
supervise the infringing activity; and (2) possessed an obvious
and direct financial interest in the exploited copyrighted
materials.”
Id.
Defendants do not dispute that Second Chance
and Trujillo directly control and benefit from the Sports Bar
and are liable for the infringing acts committed at the Sports
Bar and should be held vicariously liable for the Sports Bars’
infringements.
Therefore, Plaintiffs shall be granted summary
judgment establishing infringement and liability on the part of
Second Chance and Trujillo.
Defendants aver, however, that Hotaling is neither an owner
nor operator, nor employed by, Second Chance.
Trujillo states
by affidavit that he is the only owner and sole member of Second
Chance, and Hotaling’s only connection to Second Chance is as a
liquor licensee.
See Opp’n 5, ECF No. 27-1.
Plaintiffs respond
that Hotaling, as a liquor license holder for Second Chance,
must be “the actual owner and operator of the business conducted
on the licensed premises.”
Pls.’ Reply 2, ECF No. 30 (quoting
the “Alcoholic Beverages Rules and Regulations for the Board of
Liquor License Commissioners for Baltimore City,” Chapter 3,
Rule 3.01).
Based on the record before the Court,2 viewed in the
light most favorable to Hotaling, there is a material question
2
Hotaling’s application for the liquor license is not on the
record nor is his application for renewal.
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of fact as to Hotaling’s alleged liability.
The issues include
whether he had the “right and ability to supervise” or had “an
obvious and direct financial interest in the exploited
copyrighted materials.”
C.
Nelson-Salabes, 284 F.3d at 513.
Damages
Under the Copyright Act, 17 U.S.C. § 504(c)(1) provides
that a
copyright owner may elect, at any time
before final judgment is rendered, 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.
For a willful infringement, the amount may be increased to
$150,000 or may be reduced to $200 if the infringer was not
aware that there was an infringement.
17 U.S.C. § 504(c)(2).
In the instant case, Plaintiffs seek $11,000.00 in
statutory damages for each of the four infringed musical
compositions for a total of $44,000.00 in damages, plus costs
and reasonable attorney’s fees.
While Plaintiffs contend that
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Defendants acted willfully,3 they do not seek summary judgment
with regard to willfulness.
Rather, the amount of damages
sought by the instant motion is within the range permitted for a
non-willful infringement.
The Court agrees with the Defendants that there are genuine
issues of material fact related to the determination of the
amount of statutory damages to award.
These disputed facts
include, but are not limited to, the actual damages sustained4
(as a guide for what is fair and reasonable with regard to
statutory damages), Defendants’ intent, and the parties’ good
faith in the course of dealing with the issue.5
Although Plaintiffs do not seek summary judgment for
enhanced damages based upon a finding of willfulness, there
remain factual issues pertaining to willfulness that are likely
3
According to Plaintiffs, BMI sent Defendants 29 letters,
made 16 telephone calls, and a representative made two personal
visits in an effort to license the Sports Bar. Pls.’ Reply 3,
ECF No. 30. On at least two of those occasions, Trujillo stated
he did not have a license and would not get a license and
suggested BMI sue him. Id.
4
The Sports Bar got its liquor license and opened for
business in July 2015 but did not obtain its permission for live
entertainment until October 20, 2015, and the current BMI
license, although not entered into until March 2017, was
effective as of January 1, 2017.
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Defendants contend that Trujillo was not willfully avoiding
paying BMI, but “was under the mistaken belief that the . . .
karaoke licensing covered the venue as well,” and because the
Sports Bar had a proper license for satellite radio, Trujillo
“believed that no additional licensing was required.” Opp’n 34, ECF No. 27-1.
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to be material in determining the amount of statutory damages to
be awarded.
See Feltner v. Columbia Pictures Television, Inc.,
523 U.S. 340, 353 (1998) (holding that there is a constitutional
right to a trial on all issues pertinent to an award of
statutory damages under the Copyright Act, including the amount
itself).
Accordingly, the Court shall not grant summary
judgment to Plaintiffs on the amount of damages.
D.
Injunctive Relief
In addition to monetary relief, Plaintiffs seek an
injunction to prevent further copyright violations.
17 U.S.C. § 502(a) provides that courts may grant final
injunctions “to prevent or restrain infringement of a
copyright.”
Plaintiffs argue that a permanent injunction is
both warranted and necessary because Defendants willfully
disregarded Plaintiffs’ copyrights as well as the written and
oral notices given to Defendants.
However, as matters now stand, Defendants have secured a
license with BMI so that further performances of the works at
issue would not be infringements.
The evidence of record does
not establish conclusively the existence of circumstances
warranting a permanent injunction.
Hence, summary judgment on
injunctive relief is denied without prejudice to the ability of
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Plaintiffs to continue to be able to seek to obtain an
injunction at trial.
IV.
CONCLUSION
For the foregoing reasons:
1.
Plaintiffs’ Motion for Summary Judgment [ECF No.
26] is GRANTED IN PART and DENIED IN PART.
(a)
(b)
2.
The Court grants Plaintiffs’ request for
partial summary judgment of liability with
regard to Defendants Second Chance Operating
Ventures, LLC and James Trujillo.
The Court shall hold a bench trial with
regard to Defendant William Hotaling’s
liability, and to determine remedies.
Plaintiffs shall arrange a telephone conference
to be held by July 31, 2017, regarding the
scheduling of further proceedings.
SO ORDERED, on Monday, July 17, 2017.
/s/__________
Marvin J. Garbis
United States District Judge
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