Garnier-Theibaut, Inc. v. Castello 1935 Inc. et al
Filing
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MEMORANDUM OPINION AND ORDER denying without prejudice 35 Motion for Default Judgment. Signed by Judge Paul W. Grimm on 8/7/2019. (jf3s, Deputy Clerk) cm on 8/8/2019 (jf3s, Deputy Clerk).
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Southern Division
GARNIER-THEIBAUT,
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INC.,
Plaintiff,
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v.
CASTELLO 1935 INC. et aI.,
Case No.: 8:17-cv-03632-PWG
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Defendants.
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MEMORANDUM OPINION AND ORDER
Plaintiff Garnier- Thiebaut, Inc. seeks a default judgment against Defendant Castello 1935
Inc. (the "Corporate Defendant"), one of two defendants in this case.l ECF No. 35. The Corporate
Defendant did not answer the Complaint, and the time for doing so has passed. See ECF No. 24.
Nevertheless, because Plaintiff retains the prospect of holding the defendants jointly and severally
liable on the copyright infringement claim, the motion for default judgment will be denied without
prejudice.
PROCEDURAL HISTORY
Plaintiff brought this copyright infringement suit on December 7, 2017, naming both the
Corporate Defendant and its president, Richard Campbell, as defendants. See CompI. 1, ECF NO.1.
Plaintifflater filed proof that it served both defendants on December 14,2017.
See ECF No. 10.
I The docket misspells Plaintiff s name. The correct spelling, which I take from the Complaint, is
Garnier-Thiebaut, Inc. See CompI., ECF No.1. I direct the Clerk's Office to correct the docket
accordingly.
On January 26, 2018, Plaintiff filed an amended complaint. Am. Compl., ECF No. 16.
Counsel, representing
Plaintiffs
both the Corporate Defendant and Mr. Campbell, moved to dismiss
amended pleading for a failure to state a claim. ECF No. 17. While the motion was
pending, the attorney representing both defendants moved for leave to withdraw from the case
"due to the Defendants'
actions that were contrary to legal advice and due to the failure of
Defendants to remit payment for services rendered in accord with" the representation agreement.
ECF No. 20. On May 17,2018, I issued a memorandum opinion and order denying the motion to
dismiss and granting defense counsel's motion for withdrawal. See Mem. Op. & Order, ECF No.
21. The memorandum opinion ordered the defendants to answer the Amended Complaint by June
7, 2018, and cautioned that the Corporate Defendant "must retain counsel as this case proceeds"
in light of precedent establishing that corporations, "as artificial entities, may not appear pro se but
must instead appear through counsel." Id. at 13 (quoting McGowan v. Cross, Nos. 92-1480 & 1584, 1993 WL 125416, at *1 n.l (4th Cir. Apr. 22, 1993) (per curiam) (unpublished table
decision)); see Loc. R. 101.2.b.
Defendants did not file a timely answer, and the Corporate Defendant did not retain
counsel.
Consequently, on July 2, 2018, I issued a show cause order requiring the Corporate
Defendant to explain why a default judgment should not be entered against it for failing to have
new counsel enter an appearance on its behalf. ECF No. 22. Mr. Campbell's response to the order
said that the company had "been trying to secure a new attorney to take over this case," but, to
date, had "been unable to find one." ECF No. 23. I later ordered each defendant to answer the
Amended Complaint by August 23, 2018, specifying that Mr. Campbell may do so without the
assistance of counsel but that the Corporate Defendant may not. ECF No. 24. The order further
required counsel for the Corporate Defendant to enter an appearance by August 23, 2018. See id.
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It concluded: "Failure to file a timely answer and for corporate counsel to enter his or her
appearance may subject the defendant failing to do so to a default judgment on the claims against
him or it." Id.
Mr. Campbell met the deadline to answer the Complaint. See ECF No. 25. The Corporate
Defendant, however, did not, and it remains unrepresented.
On March 28, 2019, upon a motion
filed by Plaintiff, the Clerk's Office entered a default against the Corporate Defendant. ECF No.
38. Plaintiffs motion for a default judgment against the Corporate Defendant (ECF No. 35) now
is before me. Having reviewed the filings, I find that a hearing is not necessary. See Loc. R. 105.6.
DISCUSSION
The question before me is whether it would be proper to issue a default judgment against
the Corporate Defendant while identical claims remain pending against its president, Mr.
Campbell.
In Frow v. De La Vega, the Supreme Court declared that, in a case where joint liability is
alleged, it would both unlawful and "absurd" to issue a default judgment against one defendant,
individually, while the same claims proceed against other, non-defaulting defendants.
552, 554 (1872).
82 U.S.
This is so, the Court explained, because a default judgment under those
circumstances would run the risk of producing inconsistent judgments.
See id. Accordingly, it is
generally accepted that "when an action is brought against several defendants, charging them with
joint liability," judgment
cannot be entered against a defendant "until the matter has been
adjudicated with regard to all defendants, or all defendants have defaulted." lOA Charles Alan
Wright & Arthur R. Miller, Fed. Prac. & Proc. Civ.
S
2690 (3d ed.). The Fourth Circuit has
extended the Frow rule to cases where the plaintiff alleges defendants are liable not jointly, but
jointly and severally. See United States ex reI. Hudson v. Peerless Ins. Co., 374 F.2d 942, 944
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(4th Cir. 1967) (stating that the "procedure established for multiple defendants by Rule 54(b)
[pertaining to judgments] is ... applicable not only to situations of joint liability but to those where
the liability is joint and/or several"); Richardson v. Bostick; No. 11-CT-3045-FL, 2013 WL
3166398, at *3-*4 (E.D.N.C. June 20, 2013).
Here, the terms "joint liability" or "joint and several liability" do not appear in the
Amended Complaint.
Nevertheless, this is a suit for copyright infringement.
And "[b ]ecause
infringement of copyright is considered a tort, the general statement often is made that all
defendants concerned in the infringement are jointly and severally liable" for damages. MCA, Inc.
v. Wilson, 677 F.2d 180, 186 (2d Cir. 1981); see Nelson-Salabes, Inc. v. Morningside Dev., LLC,
284 F.3d 505, 517 (4th Cir. 2002); Broad. Music, Inc. v. Hobi, Inc., No. 93-3505, 1994 WL
144812, at *1, *2 (5th Cir. Apr. 8,1994) (per curiam) ("The test of whether a corporate officer is
jointly and severally liable with the corporation for copyright infringement is whether the officer
has the right and ability to supervise the infringing activity and also has a direct financial interest
in such activities."); see also, e.g., Buttnugget Publ'g v. Radio Lake Placid, Inc., 807 F. Supp. 2d
100, 107-08 (N.D.N.Y. 2011) (determining that plaintiffs who brought a copyright infringement
suit against a company and its president had adequately alleged "facts sufficient to establish the
alleged copyright infringements and that all defendants may be held joint and severally liable");
Crabshaw Music v. K-Bob's of El Paso, Inc., 744 F. Supp. 763, 767 (W.D. Tex. 1990) ("Courts
have traditionally held the 'corporate officer will be liable as ajoint tortfeasor with the corporation
in a copyright infringement case where the officer was the dominant influence in the corporation,
and determined the policies which resulted in the infringement.'"
(quoting Sailor Music v. Mai
Kai of Concord, Inc., 640 F. Supp. 629 (D.N.H. 1986))). That principle would seem to be in play
here, where the Amended Complaint identifies Mr. Campbell as an officer of the Corporate
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Defendant who "was the dominant influence in" the company; "had the sole and direct right and
ability to supervise and control [its] infringing activity"; and "ha[ d] a direct financial interest in
the infringing activity."
Am. Compl. ~ 6; see also Mot. for Default Judgment 3, ECF No. 35
(noting that "evidence as to damages would be identical" for the two defendants).
The Amended Complaint repeatedly alleges that Mr. Campbell was acting on behalf of the
Corporate Defendant throughout the relevant time period. See, e.g., Am. Compl. ~ 15(c) (alleging
that the Corporate Defendant acted "through Campbell"); id. ~ 15(d) (alleging that the company
acted "at the direction of Campbell").
On these facts, it is more than plausible that the two
defendants will have defenses in common. I find, therefore, that a default judgment against the
Corporate Defendant would risk producing inconsistent judgments, a result the Frow Court found
intolerable.
Accordingly, until the matter has been adjudicated as to Mr. Campbell, I consider it
premature to rule on Plaintiff s motion for default judgment. The motion will therefore be denied
without prejudice. Plaintiff may renew its motion following adjudication of the claims against Mr.
Campbell.
ORDER
Accordingly, it is, this day, by the United States District Court for the District of Maryland,
hereby ORDERED that Plaintiff Gamier-Thiebaut, Inc.'s Motion for Default Judgment (ECF No.
35) IS DENIED without prejudice.
Paul W. rimm
United States District Judge
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