Malibu Media, LLC v. DOE

Filing 22

REPORT AND RECOMMENDATIONS re 21 MOTION for Default Judgment against James Smith filed by Malibu Media, LLC. Objections to R&R due by 6/1/2015. Signed by Magistrate Judge Norah McCann King on 5/15/2015. (pes)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
MALIBU MEDIA, LLC,
Plaintiff,
vs.

Case No. 2:14-cv-1136
Judge Watson
Magistrate Judge King

JOHN DOE, subscriber assigned
IP address 71.72.116.231,
Defendant.
REPORT AND RECOMMENDATION
I.
Plaintiff Malibu Media, LLC, a California limited liability
company, claims the copyright to 16 motion pictures.

Plaintiff filed

this action on August 6, 2014, alleging that a John Doe defendant,
identified only by internet protocol (“IP”) address, violated
plaintiff’s copyrights by downloading plaintiff’s motion pictures and
sharing them with others using a BitTorrent network, which is a type
of peer-to-peer file sharing software.

Through early discovery, see

Order, ECF 4, plaintiff traced the IP address to one James Smith, who
was named as the only defendant in the Amended Complaint, ECF 5, and
served with process, Summons Returned Executed, ECF 15.

After

defendant failed to plead or otherwise defend in this case as required
by law, the Clerk entered his default on March 19, 2015.
Default, ECF 19.

Entry of

This matter is now before the Court, pursuant to an

order of reference, Order, ECF 13, on plaintiff's Motion for Entry of

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Default Judgment against Defendant James Smith (“Plaintiff’s Motion”),
ECF 21.
Plaintiff seeks $36,000 in statutory damages, $1,182 in
attorney’s fees, and $475 in costs; plaintiff also asks that the Court
permanently enjoin defendant Smith from infringing, directly or
indirectly, plaintiff’s copyrighted works.

Id.

II.
Rule 55(b) of the Federal Rules of Civil Procedure authorizes a
court to enter default judgment against a party whose default has been
entered by the clerk.

Once default has been entered, a defaulting

defendant is considered to have admitted all the well-pleaded
allegations relating to liability.
66 F.3d 105, 110 (6th Cir. 1995).

See Antoine v. Atlas Turner, Inc.,
In order to succeed on its claim of

copyright infringement under 17 U.S.C. § 101 et seq., plaintiff must
prove that it owns valid copyrights in the motion pictures and that
defendant violated one or more of plaintiff’s exclusive rights by
copying or distributing plaintiff’s copyrighted motion pictures
without authorization.

See Lexmark Int’l, Inc. v. Static Control

Components, Inc., 387 F.3d 522, 534 (6th Cir. 2004); Malibu Media LLC
v. Doe, No. 13-12178, 2013 WL 3945978, at *3 (E.D. Mich. July 31,
2013).

Here, the Amended Complaint alleges all the elements of

plaintiff’s claim and defendant’s default conclusively establishes
those elements.

See Thomas v. Miller, 489 F.3d 293, 299 (6th Cir.

2007) (entry of default judgment “conclusively establishes every
factual predicate of a claim for relief”).

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The mere determination of defendant’s liability does not,
however, automatically entitle plaintiff to default judgment.

The

decision to grant default judgment falls within a court's discretion.
10A Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc. Civ. §
2685 (3d ed.).

In determining whether to enter judgment by default,

courts often consider such factors as
the amount of money potentially involved; whether material
issues of fact or issues of substantial public importance
are at issue; whether the default is largely technical;
whether plaintiff has been substantially prejudiced by the
delay involved; and whether the grounds for default are
clearly established or are in doubt.
Furthermore, the
court may consider how harsh an effect a default judgment
might have; or whether the default was caused by a goodfaith mistake or by excusable or inexcusable neglect on the
part of the defendant.
Id. (footnotes omitted).

In the case presently before this Court,

consideration of these factors militates in favor of granting default
judgment.

The only matter remaining, then, is the issue of damages.

As noted supra, plaintiff seeks $36,000 in statutory damages,
which amounts to $2,250 for each motion picture infringed.

The

Copyright Act permits an award of statutory damages in lieu of actual
damages attributable to the infringement.

17 U.S.C. § 504(a)-(c).

Statutory damages for each individual act of infringement ordinarily
ranges from $750 to $30,000.

17 U.S.C. § 504(c)(1).

Where the

copyright owner establishes willful infringement, however, the Court
may increase the award of statutory damages, up to a maximum of
$150,000 per infringement.

17 U.S.C. § 504(c)(2).

“The Court has

substantial discretion to set statutory damages within the permitted
range, but it is not without guidance.”
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Broadcast Music, Inc. v.

H.S.I., Inc., No. C2-06-482, 2007 WL 4207901 at *4 (S.D. Ohio Nov. 26,
2007) (citing Douglas v. Cunningham, 294 U.S. 207, 210 (1935)).

When

determining the proper amount of statutory damages, “̔courts have
looked to: (1) whether [d]efendants' infringement was willful,
knowing, or innocent; (2) [d]efendants' profit from infringement; (3)
[p]laintiffs' loss from infringement; and (4) deterring future
violations by [d]efendants and similarly situated entities.’”
Broadcast Music, Inc. v. 4737 Dixie Highway, LLC, No. 1:12-cv-506,
2012 WL 4794052, at *4 (S.D. Ohio Oct. 9, 2012) (quoting H.S.I., Inc.,
2007 WL 4207901 at *6).
Plaintiff urges the Court to award $2,250 per infringement
because defendant’s conduct was willful and, because defendant
participated in “the BitTorrent swarm of infringers,” plaintiff “lost
sales of its content to those thousands of infringers.”
Motion, pp. 9-10.

Plaintiff’s

In this case, plaintiff has alleged facts that,

when taken as true, could support a finding of willful infringement.
However, the facts of this case do not justify plaintiff’s requested
award.
Although the entry of his default has established a copyright
infringement by defendant, it is not necessarily the case that
defendant was the original user who made plaintiff’s works available
to the public.

See Malibu Media, LLC v. Flanagan, 2:13-cv-5890, 2014

WL 2957701, at *4 (E.D. Pa. July 1, 2014).

There is also no evidence

that defendant profited from the infringement.

The nature of

BitTorrent is such that defendant would not likely have reaped any

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profit from his participation in the infringement of plaintiff’s
copyrights except for the amount that defendant saved by illegally
downloading the motion pictures.

See Bossard, 976 F. Supp. 2d at 931.

Plaintiff argues that it lost sales for each of the thousands of
infringers in the BitTorrent swarm in which defendant participated.
See Plaintiff’s Motion, pp. 9-10.

However, plaintiff also suggests

that BitTorrent users download copyrighted motion pictures merely
“because it’s free,” not because they actually plan on purchasing the
motion pictures.

See id. at p. 6.

Moreover, a review of damage

awards in other cases involving copyright infringement of plaintiff’s
works by use of the BitTorrent protocol reveals that an award of $750
to $2,250 per infringement would adequately deter future infringement.
See Malibu Media, LLC v. Funderburg, No. 1:13-cv-02614, 2015 WL
1887754, at *4 (N.D. Ill. Apr. 24, 2015) ($750 per violation, for a
total award of $9,000); Malibu Media, LLC v. Cui, No. 13-5897, 2014 WL
5410170, at *4 (E.D. Pa. Oct. 24, 2014) ($750 per violation, for a
total award of $18,000); Malibu Media, LLC v. Schelling, No. 13-11436,
2014 WL 3400580 (E.D. Mich. July 8, 2014) ($750 per violation, for a
total award of $6,000); Flanagan, 2014 WL 2957701 at *4 ($1,500 per
violation, for a total award of $30,000); Malibu Media, LLC v. Cowham,
No. 3:13-cv-00162, 2014 WL 2453027, at *2 (N.D. Ind. June 2, 2014)
($1,500 per violation, for a total award of $36,000); Malibu Media,
LLC v. Goodrich, No. 12-cv-01394, 2013 WL 6670236, at *11 (D. Colo.
Dec. 18, 2013) ($2,250 per violation, for a total award of $36,000);
Malibu Media, LLC v. Brenneman, No. 3:13-cv-00332, 2013 WL 6560387, at

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*2 (N.D. Ind. Dec. 13, 2013) ($1,500 per violation, for a total award
of $16,500).

Here, the Court concludes that an award of

$750 per work will properly account for defendant’s gain, plaintiff’s
loss, and the public’s interest in deterring future violations.
Plaintiff also asks that the Court enjoin defendant from directly
or indirectly infringing plaintiff’s copyrighted works.

The

injunction sought by plaintiff would prohibit defendant’s use of the
internet to reproduce or distribute plaintiff’s motion pictures
without license or express permission.

Plaintiff also asks that the

Court order defendant to destroy all copies of plaintiff’s copyrighted
works downloaded by him onto any computer hard drive or server or
transferred onto any physical medium or device in defendant’s
possession, custody, or control.

The Copyright Act authorizes

temporary or final injunctive relief as a remedy for infringement “on
such terms as [the court] may deem reasonable to prevent or restrain
infringement of a copyright.”

17 U.S.C. § 502(a).

It is well

established “that a showing of past infringement and a substantial
likelihood of future infringement justifies issuance of a permanent
injunction.”

Bridgeport Music, Inc. v. Justin Combs Pub., 507 F.3d

470, 492 (6th Cir. 2007) (citations and quotations omitted).

“Not

only is the issuance of a permanent injunction justified ‘when a
copyright plaintiff has established a threat of continuing
infringement, he is entitled to an injunction.’”

Id. (emphasis in

original) (quoting Walt Disney Co. v. Powell, 897 F.2d 565, 567 (D.C.
Cir. 1990)).

Otherwise, an award of damages without injunctive relief

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would amount to a “̔forced license to use the creative work of
another.’”

Id. (quoting Silverstein v. Penguin Putnam, Inc., 368 F.3d

77, 84 (2d Cir. 2004)).
In the case presently before the Court, plaintiff has established
past infringement by defendant.

Considering the factual allegations

in the Amended Complaint, the nature of the BitTorrent system, see
Patrick Collins, Inc. v. Gillispie, No. 11-cv-01776, 2012 WL 666001,
at *4-5 (D. Md. Feb. 23, 2012) (“Given the nature of the BitTorrent
system, the Court finds that a permanent injunction is necessary to
protect Plaintiff's ownership rights in this instance.”), and the
nature of the copyrighted works, see Schelling, 2014 WL 3400580
(“̔[P]ermanent injunctions are typically granted in situations
involving unlawful infringement of copyrights in . . . compositions
because of the strong probability that unlawful performances of other
copyrighted material will occur.’”) (quotations omitted) (quoting
Disney Enters., Inc. v. Farmer, 427 F. Supp. 2d 807, 819 (E.D. Tenn.
2006)), the Court concludes that plaintiff has sufficiently
established a continuing threat to its copyrights.

See Jobete Music

Co., Inc. v. Johnson Commc'ns, Inc., 285 F. Supp. 2d 1077, 1092 (S.D.
Ohio 2003) (“[C]ourts have traditionally granted permanent injunctions
if liability is established and a continuing threat to a copyright
exists.”) (quotations omitted).

Plaintiff’s request for permanent

injunctive relief is therefore meritorious.
Plaintiff also seeks $1,182 in attorney’s fees and $475 in costs.
Plaintiff itemized its costs and its counsel declared that he spent

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1.9 attorney hours prosecuting plaintiff’s claims against defendant at
a rate of $300 per hour and a 7.2 paralegal hours at a rate of $85 per
hour.

Declaration of Yousef M. Faroniya, Esq., attached to

Plaintiff’s Motion.

The Court has the discretion to award fees to the

prevailing party in a copyright infringement action.

17 U.S.C. § 505.

The United States Court of Appeals for the Sixth Circuit has
identified factors to be considered in determining whether to award
attorney’s fees, including such factors as “̔frivolousness,
motivation, objective unreasonableness (both in the factual and in the
legal components of the case) and the need in particular circumstances
to advance considerations of compensation and deterrence.’”

Zomba

Enters., Inc. v. Panorama Records, Inc., 491 F.3d 574, 589 (6th Cir.
2007) (quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994)).
“The grant of fees and costs ̔is the rule rather than the exception
and they should be awarded routinely.’”

Bridgeport Music, Inc. v. WB

Music Corp., 520 F.3d 588, 592 (6th Cir. 2008) (quoting Positive Black
Talk Inc. v. Cash Money Records, Inc., 394 F.3d 357, 380 (5th Cir.
2004)).
The Court concludes that plaintiff is entitled to an award of
reasonable attorney’s fees and costs.

The Court also concludes that

the requested attorney’s fees and costs are reasonable.
III.
It is therefore RECOMMENDED that plaintiff’s Motion for Entry of
Default Judgment Against Defendant James Smith, ECF 21, be GRANTED in
part and DENIED in part.

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It is SPECIFICALLY RECOMMENDED that Defendant James Smith be
PERMANENTLY ENJOINED from directly or indirectly infringing
plaintiff’s copyrighted works, including by use of the internet to
reproduce, copy, distribute, or make available for distribution to the
public plaintiff’s copyrighted works, unless plaintiff provides
defendant with a license or express permission.
It is RECOMMENDED that Defendant James Smith be ORDERED to
destroy all copies of plaintiff’s motion pictures identified in
Exhibit B of the Amended Complaint that defendant James Smith has
downloaded onto any computer hard drive or server without plaintiff’s
authorization and all copies that have been transferred onto any
physical medium or device in defendant James Smith’s possession,
custody, or control.
It is also RECOMMENDED that plaintiff be AWARDED statutory
damages against defendant James Smith in the amount of $12,000 and
attorney’s fees and costs in the total amount of $1,657.
IV.
If any party seeks review by the District Judge of this Report
and Recommendation, that party may, within fourteen (14) days, file
and serve on all parties objections to the Report and Recommendation,
specifically designating this Report and Recommendation, and the part
thereof in question, as well as the basis for objection thereto.
U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b).

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Response to objections

must be filed within fourteen (14) days after being served with a copy
thereof.

Fed. R. Civ. P. 72(b).

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The parties are specifically advised that the failure to object
to the Report and Recommendation will result in a waiver of the right
to de novo review by the District Judge and waiver of the right to
appeal the judgment of the District Court.

See, e.g., Pfahler v.

Nat’l Latex Prod. Co., 517 F.3d 816, 829 (6th Cir. 2007) (holding that
“failure to object to the magistrate judge’s recommendations
constituted a waiver of [the defendant’s] ability to appeal the
district court’s ruling”); United States v. Sullivan, 431 F.3d 976,
984 (6th Cir. 2005) (holding that defendant waived appeal of district
court’s denial of pretrial motion by failing to timely object to
magistrate judge’s report and recommendation).

Even when timely

objections are filed, appellate review of issues not raised in those
objections is waived.

Robert v. Tesson, 507 F.3d 981, 994 (6th Cir.

2007) (“[A] general objection to a magistrate judge’s report, which
fails to specify the issues of contention, does not suffice to
preserve an issue for appeal . . . .”) (citation omitted)).

May 15, 2015

s/Norah McCann King_______
Norah McCann King
United States Magistrate Judge

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