The Estate of Rafael Leavitt-Rey v. Samuel Marrero-Gonzalez et al
Filing
556
AMENDED OPINION AND ORDER (NUNC PRO TUNC) granting 548 Motion for Default Judgment. The Court awards the Estate damages against SMYSO, Inc. and Centro Cultural de Corozal, Inc. as follows: (A) $150,000.00 in damages for violations to the Copyr ight Act; and (B) $50,000.00 in damages for violations to the Puerto Rico Moral Rights Act. Lastly, pursuant to Section 502 of the Copyright Act, the Court issues a permanent injunction against SMYSO, Inc. and Centro Cultural de Corozal Inc., th eir officers, agents, servants, employees, and any persons in active concert or participation with them and permanently enjoins them from publicly performing, reproducing, distributing and/or making derivative works of La Cuna Blanca, Amor y Paz, Dificil de Olvidar, El Buen Pastor, and Jibaro Soy. Judgment shall be entered accordingly. Signed by Judge Raul M. Arias-Marxuach on 10/30/2020. (mrr)
Case 3:16-cv-02769-RAM Document 556 Filed 10/30/20 Page 1 of 27
IN THE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF PUERTO RICO
THE ESTATE OF RAFAEL LEAVITT-REY,
Plaintiff,
vs.
CIVIL NO: 16-2769 (RAM)
SAMUEL MARRERO-GONZALEZ ET AL.,
Defendants.
AMENDED OPINION AND ORDER
(NUNC PRO TUNC)
Pending before the Court is the Estate of Rafael “Raphy”
Leavitt Rey’s (“Plaintiff” or the “Estate”) Motion And Memorandum
for Default Judgment And Award of Damages Against SMYSO, Inc. And
Centro Cultural de Corozal, Inc. (“Motion”). (Docket No. 548). Codefendants
SMYSO,
Inc.,
d/b/a
Sammy
Marrero
y
su
Orquesta,
(“SMYSO”) and Centro Cultural de Corozal, Inc. (“CCC”) have yet to
respond to the pending motion. Pursuant to the below findings of
fact and conclusions of law, Plaintiff’s Motion is GRANTED.
I.
BACKGROUND
On October 4, 2016, Plaintiff filed suit against twelve (12)
musicians, their spouses, and the conjugal partnership between
them,
when
applicable
(“Defendant
musicians”)
(“Complaint”).
(Docket No. 1 ¶¶ 12-22). SMYSO and CCC, among other additional codefendants, were also included in the Complaint. Id. ¶¶ 23 and 25.
All Defendants were accused of “jointly and severally, willfully
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2
and
without
authorization
from
Plaintiff,
directly
and/or
contributory infringed the rights of Plaintiff by, at least,
publicly performing the copyrighted works without permission from
Plaintiff.” Id. ¶ 29. Defendants were accused of direct copyright
infringement under the Copyright Act and under the Puerto Rico
Moral Rights Act for five (5) of the Estate’s songs. Id. ¶¶ 56115. Certain co-defendants such as CCC were also accused of
contributory infringement. Id. ¶¶ 116-139. Finally, the Estate
sought a preliminary injunction to enjoin all Defendants from
continued violations of their rights. Id. ¶¶ 140-144.
The
Complaint
avers
SMYSO
is
a
for-profit
corporation
organized under the laws of the Commonwealth of Puerto Rico and
which can be served through its resident agent José Armando LópezHaddock (“López”). Id. ¶ 23. López, a co-defendant musician, is a
trumpet player and band manager for the musical group Sammy Marrero
y su Orquesta, or “Sammy Marrero and his Orchestra” (“Orchestra”)
in English. Id. ¶¶ 5, 19. SMYSO is led by Sammy Marrero (“Marrero”)
and is composed of at least the Defendant musicians. Id. ¶ 23.
Marrero, also a musician co-defendant, is the Orchestra’s lead
vocalist. Id. ¶ 12. Further, SMYSO has two officers, López and
Edgard Nevárez-Hernández (“Nevárez”). (Docket No. 648-2 at 14).
Nevárez is SMYSO’s president and secretary and is responsible for
SMYSO’s musical direction, whereas López is the vice-president and
treasurer and oversees SMYSO’s administration. Id. at 14-15, 23.
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Civil No. 16-2769(RAM)
3
Nevárez, a co-defendant musician, is as a trumpet player and the
Orchestra’s arranger and music director. (Docket No. 1 ¶ 18).
On the other hand, the Complaint identifies CCC as a non-forprofit corporation organized under the laws of the Commonwealth of
Puerto Rico. Id. ¶ 25. And as a “promoter of at least one event
where the Defendants infringed on Plaintiff’s copyrights[.]” Id.
The Complaint was amended on April 6, 2018. (Docket No. 160).
The claims, issues and facts of both complaints are identical. Id.
The
only
changes
are
the
inclusion
of
spouses’
names,
when
applicable, and a jury trial demand. Id. The request for jury trial
was subsequently denied by this Court. (Docket No. 413).
On April 30, 2018, default was entered upon CCC for “having
failed to file an answer or pleading within fourteen (14) days of
the Court’s Order on October 27, 2017 denying defendant SMYSO’s
Motion to Dismiss for Failure to State a Claim.” (Docket Nos. 106,
162 and 165).
On October 3, 2018, SMYSO’s attorney filed a
Motion to
Withdraw, which was granted by the previous Judge assigned to this
case. (Docket Nos. 181 and 186). The Court ordered that SMYSO’s
new counsel enter an appearance in the case by September 24, 2018.
(Docket No. 186). To date, no new counsel for SMYSO has appeared
on the record.
On November 2018, Plaintiff informed that SMYSO had filed a
Chapter 11 Voluntary Petition for Bankruptcy in the Bankruptcy
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Civil No. 16-2769(RAM)
4
Court for the District of Puerto Rico, automatically staying this
case as to SMYSO. (Docket No. 275). On December 27, 2018, the
Bankruptcy Court granted relief from the stay and allowed this
suit against SMYSO to continue with “the sole limitation that
[Plaintiff] cannot pursue a collection of judgment until the
bankruptcy process provides otherwise.” (Docket Nos. 313 ¶ 5 and
313-4).
The case at bar was transferred to the undersigned on June
20, 2019. (Docket No. 375). On August 3, 2020, SMYSO was ordered
to show cause why default should not be entered against it for
failure “to defend the lawsuit since the stay was lifted” and for
failure “to participate in the preparation of the proposed pretrial
order.” (Docket No. 527). Even though the Order to show cause was
served by mail to SMYSO’s at the address listed in the records of
the Puerto Rico Department of State’s Registry of Corporations,
SMYSO did not respond. Thus, default was entered against SMYSO on
August 12, 2020. (Docket Nos. 535 and 536).
On August 27, 2020, the Court issued an Amended Partial Final
Judgment whereby it disposed the claims against the Defendant
musicians, including Nevárez, López and Marrero. (Docket No. 544).
It also incorporates by reference and enforces all the stipulations
set forth in the Joint Motion Regarding Stipulation of Judgment
and Request for Entry of Judgment in Favor of the Estate of Rafael
Leavitt Rey. Id. at 4. The Court ordered and adjudged that the
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5
Defendant musicians were jointly and severally liable to the Estate
in the amount of fifty thousand dollars ($50,000). Id. at 2.
On September 11, 2020, Plaintiff filed the pending Motion.
(Docket No. 458). On September 25, 2020, Defendant musicians filed
an opposition to the Motion (“Opposition”) and on October 6, 2020,
the Estate replied (“Reply”). (Docket Nos. 549 and 552).
II.
FINDINGS OF FACT
To make findings of fact, the Court has taken as true the
well-plead allegations of the Complaint,1 the Amended Complaint,
and the documents attached to said complaints and to the pending
Motion. (Dockets Nos. 1 to 1-10; 160 to 160-11 and 548 to 548-21).
Having reviewed said allegations and documents, the Court enters
the following findings of fact:2
1.
The Estate is the sole and rightful owner of all rights,
titles, and interests in and to the Copyrighted Works which
include the following musical and performance works:
a. El Buen Pastor,
b. Amor y Paz,
c. Difícil de Olvidar,
d. La Cuna Blanca, and
1
Given that CCC was found in default of the original Complaint, the Court will
only consider the allegations set forth against CCC in said Complaint. See e.g.,
Atlanta Gas Light Co. v. Semaphore Advert., Inc., 747 F. Supp. 715, 719 (S.D.
Ga. 1990) (holding that defendant’s “default as to plaintiff's original
complaint cannot be stretched to cover plaintiff's amended complaint.”).
2
Reference to a Finding of Fact shall be cited as follows: (Fact ¶ _).
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Civil No. 16-2769(RAM)
6
e. Jíbaro Soy
(the “Copyrighted Works”). (Docket No. 160-1 ¶¶ 32, 43).
2.
The Copyrighted Works are duly registered in the United
States Copyright Office and in the Puerto Rico Intellectual
Property Office. Id. ¶¶ 32-43.
3.
Prior to the filing of the Complaint, SMYSO and its musicians
publicly performed the Copyrighted Works, without license
or authorization, in at least the following venues:
a. Viera Discos on March 14, 2016;
b. Municipality of Caguas on May 20, 2016;
c. Municipality of Arroyo on August 12, 2016;
d. Municipality of Hormigueros on September 3, 2016;
e. Municipality of Corozal on October 1, 2016; and
f. Municipality of Utuado on October 2, 2016
(Docket No. 160-1 ¶¶ 40, 48; 548-1; 548-2 at 57).
4.
The Estate sent SMYSO three (3) cease and desist letters
requesting that SMYSO refrain from continuing to infringe
the
Estate’s
rights
in
the
Copyrighted
Works
on
the
following dates: (1) March 21, 2016; (2) March 30, 2016, and
(3) July 13, 2016. (Docket No. 160-1 ¶ 45; 548-2 at 126127; 548-16).
5.
Following the filing of the Complaint, SMYSO continued to
publicly
perform
unauthorized
derivative
works
of
Copyrighted Works in the following venues and dates:
the
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Civil No. 16-2769(RAM)
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a. Municipality of Carolina on December 28, 2016
b. Municipality of Coamo on January 27, 2017
c. Municipality of Cayey on April 28, 2017
d. Municipality of Villalba on July 14, 2017
e. State of New Jersey on August 12, 2017
f. Los Niños Celebran San Sebastian at the Botanical Gardens
in Río Piedras, San Juan on January 20, 2018
g. Ft. Lauderdale, Florida on March 3, 2018
h. Latin Roots in San Juan on June 16, 2018
i. Ft. Buchanan in San Juan on July 29, 2018
(Docket No. 548-1; 548-3)
6.
CCC was the promoter of the National Plantain Festival (the
“Festival”)
of
the
Municipality
of
Corozal,
thereby
facilitating, promoting and enabling SMYSO to infringe on
the Estate’s rights. (Docket No. 1 ¶ 51).
7.
As the promoter, CCC organized the Festival, including
booking the talent and staging the concert. Id. ¶ 128.
8.
CCC did not have a license nor authorization from either the
Estate or ASCAP allowing public performances of any of the
Copyrighted Works at the Festival of the Municipality of
Corozal on October 1, 2016. Id. ¶ 129.
9.
As
the
promoter
of
the
Festival,
CCC
directly
and
economically benefited from SMYSO’s infringing actions. Id.
¶¶ 128-130.
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Civil No. 16-2769(RAM)
8
10.
SMYSO, without authority or license, publicly performed,
reproduced, distributed, and created derivative works of
the Copyrighted Works. (Docket No. 160-1 ¶¶ 29, 56-85).
11.
SMYSO tarnished the Copyrighted Works and publicly performed
and adapted the same without showing the proper attribution.
Id. ¶¶ 29, 86-115.
12.
SMYSO’s compensation per event was:
a. Municipality of Caguas on May 20, 2016 – four thousand
fifty dollars ($4,050)
b. Municipality of Hormigueros on September 3, 2016 – five
thousand dollars ($5,000)
c. Municipality
of
Corozal
on
October
1,
2016
–
five
thousand five hundred dollars ($5,500)
d. Municipality of Utuado on October 2, 2016 – five thousand
five hundred dollars ($5,500)
e. Municipality of Coamo on January 27, 2017 – four thousand
five hundred dollars ($4,500)
f. Municipality of Cayey on April 28, 2017 – four thousand
five hundred dollars ($4,500)
g. Municipality
of
Villalba
on
July
14,
2017
–
three
thousand six hundred thirty-five dollars ($3,635)
h. State of New Jersey on August 12, 2017 – seven thousand
dollars ($7,000)
i. “Los Niños Celebran San Sebastián” at the Botanical
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Civil No. 16-2769(RAM)
9
Gardens in Río Piedras, San Juan on January 20, 2018 –
four thousand dollars ($4,000)
j. Fort Lauderale, Florida on March 3, 2018 – ten thousand
dollars ($10,000)
k. Municipality of Barranquitas on April 27, 2018 – four
thousand dollars ($4,000)
(Docket Nos. 548-2 at 50; 548-4 to 548-14).
III. LEGAL STANDARD
A. Default Judgment under Fed. R. Civ. P. 55
Per Federal Rule of Civil Procedure 55(b), a party must “apply
to the Court for a default judgment in cases where default has
been entered against the defendant, but the amount of damages is
not a sum certain.” Puerto Rico Tel. Co. v. Ayala Rivera, 2018 WL
1705301, at *2 (D.P.R. 2018) (quotation omitted). Thus, a default
judgment “is a ‘final disposition of the case and an appealable
order’ that has the same effect as a judgment rendered after a
trial on the merits.” Grajales v. Puerto Rico Ports Auth., 2016 WL
9458792, at *2 (D.P.R. 2016) (quotation omitted). After a default
entry, a court may examine a complaint “to determine whether it
alleges a cause of action. In making that determination it must
assume
that
all
well
pleaded
factual
allegations
are
true.”
Quirindongo Pacheco v. Rolon Morales, 953 F.2d 15, 16 (1st Cir.
1992) (citations omitted) (emphasis added). See also Franco v.
Selective Ins. Co., 184 F.3d 4, 9 n. 3 (1st Cir. 1999).
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Civil No. 16-2769(RAM)
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An entry of default does not automatically entitle a plaintiff
to damages. See Scalia v. Evolution Quality Guard, Inc., 2020 WL
1492782, at *5 (D.P.R. 2020) (citation omitted). Instead, Fed. R.
Civ. P. 55(b) states that when entering a default judgment:
The court may conduct hearings or make
referrals —preserving any federal statutory
right to a jury trial— when, to enter or
effectuate judgment, it needs to:
(A) conduct an accounting;
(B) determine the amount of damages;
(C) establish the truth of any allegation
by evidence; or
(D) investigate any other matter.
While the Court can hold a hearing, it is not obligated to do
so if there is basis for the damages awarded in the default
judgment. See In re The Home Restaurants, Inc., 285 F. 3d 111, 114
(1st Cir. 2002) (holding that a court has discretion to order a
default judgment without a hearing if “the allegations in the
complaint state a specific, cognizable claim for relief, and the
defaulted party had fair notice of its opportunity to object”). A
hearing is unnecessary when “arriving at the judgment amount
involves nothing more than arithmetic — the making of computations
which may be figured from the record.” See HMG Property Investors,
Inc. v. Parque Indus. Rio Canas, Inc., 847 F.2d 908, 919 (1st Cir.
1988) (finding no abuse of discretion where the amount of damages
was calculated from mortgage and loan agreements, certifications,
and other documents). Instead, the court “may rely on detailed
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Civil No. 16-2769(RAM)
11
affidavits or documentary evidence” to determine the amount of
damages. See Scalia, 2020 WL 1492782, at *6 (holding unnecessary
a damages hearing because wages object of the suit could be
calculated via a sworn statement which included reports of the
methodology used to calculate damages); see also Auctus Fund, LLC
v. ERHC Energy, Inc., 2019 WL 1316749, at *3 (D. Mass. 2019);
Formatech, Inc., 2019 WL 7165930, at *8 (B.A.P. 1st Cir. 2019).
III. CONCLUSIONS OF LAW
A. Copyright Infringement and Statutory Damages
According to Section 106 of the Copyright Act, an owner of a
valid copyright retains the exclusive right to reproduce the
copyrighted work, prepare derivative works of the same, distribute
copies of the copyrighted work to the public, and perform the
copyrighted work publicly, among other rights. See 17 U.S.C. §
106. To state a valid claim for direct copyright infringement, a
plaintiff must establish two elements: “(1) ownership of a valid
copyright, and (2) copying of constituent elements of the work
that are original.” Bosh v. Banco Popular de Puerto Rico, Inc.,
2016 WL 7665774, at *2 (D.P.R. 2016) (quoting Johnson v. Gordon,
409 F.3d 12, 17 (1st Cir. 2005)). The second element requires a
plaintiff to establish that the alleged use of the copyrighted
work
was
“so
extensive
that
it
rendered
the
infringing
and
copyrighted works ‘substantially similar.’” Pina v. Rivera, 2014
WL 12749230, at * 3 (D.P.R. 2014), report and recommendation
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Civil No. 16-2769(RAM)
12
adopted, (D.P.R. April 2, 2014) (quoting Airframe Sys., Inc. v. L3 Comms. Corp., 658 F.3d 100, 105–06 (1st Cir. 2011)).
Per the Amended Complaint, Plaintiff is the copyright owner
of the Copyrighted Works according to Certificates of Registration
issued by the United States Copyright Office and the Certification
of Positive Inscription in the Puerto Rico State Department. (Fact
¶ 2; Docket Nos. 160-3 to 160-10). SMYSO, and as facilitated by
CCC on one occasion, publicly performed the Copyrighted Works
without authorization. (Facts ¶¶ 3, 5 and 8). Further, SMYSO
performed unauthorized and distorted versions of the Copyrighted
Works. (Facts ¶¶ 5, 10 and 11; Docket No. 160-1 ¶¶ 88, 94, 100,
106, 112). On its face, the Complaint and the Amended Complaint
adequately allege a copyright infringement claim.
In a copyright infringement case, a copyright owner may elect
to recover statutory damages instead of actual damages and any
additional profits. See 17 U.S.C. § 504. Here, there is no doubt
that Plaintiff requested statutory damages. (Docket Nos. 1 at 29;
160—1 at 29). The First Circuit has explained that the amount of
statutory damages a plaintiff may recover “depends on the number
of works that are infringed and the number of individually liable
infringers and is unaffected by the number of infringements of
those works.” Venegas-Hernandez v. Sonolux Records, 370 F.3d 183,
194 (1st Cir. 2004) (emphasis in original).
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Civil No. 16-2769(RAM)
13
The Copyright Act provides the Court with discretion to set
a range of statutory damages between seven hundred fifty dollars
($750) to thirty thousand dollars ($30,000) per infringed work.
See 17 U.S.C. § 504(c)(1). But, if the infringer’s actions are
found to be “willful,” the range may increase up to one hundred
fifty thousand dollars ($150,000) per work. Id. § 504(c)(2). An
infringement is willful if the plaintiff can prove that the
defendant committed the infringing action “knowing” that their
actions could be copyright infringement. See Sony BMG Music Entm't
v. Tenenbaum, 660 F.3d 487, 507 (1st Cir. 2011). Thus, “statutory
damages
are
intended
to
deter
infringement
generally
and
in
particular willful infringement.” Bebe Studio, Inc. v. Zakkos,
2010 WL 3419978, at *2 (D.P.R. 2010) (citation omitted).
Typically, a corporation can act only through its agents. See
Daimler AG v. Bauman, 571 U.S. 117, 135 n.13 (2014)(citing 1 W.
Fletcher, Cyclopedia of the Law of Corporations § 30, p. 30
(Supp.2012–2013) (“A corporation is a distinct legal entity that
can act only through its agents.”)). The First Circuit has also
repeated as a “fundamental premise” that “while a corporation does
have a noncorporeal and independent existence, it conducts its
affairs only through its officers and employees.” Stop & Shop
Companies, Inc. v. Federal Ins. Co., 136 F.3d 71, 74 (1st Cir.
1998)) (emphasis added). Further, in claims of direct copyright
infringement, such as here, “corporate officers can be held liable
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Civil No. 16-2769(RAM)
14
for a corporation's infringing activity.” 43 N. Broadway LLC v.
Essential Media Grp. LLC, 2018 WL 2864014, at *2 (S.D. Fla. 2018).
In the pending Motion, the Estate avers it is entitled to
statutory damages at the top of the statutory limit given that
SMYSO, via its officers Nevárez and López, willfully disregarded
the Estate’s rights over the Copyrighted Works. (Docket No. 548 at
5 n. 1, 18). Plaintiff included alongside the pending Motion
several
pages
of
López’s
deposition
wherein
he
admitted
to
receiving two of the cease and desist letters sent to SMYSO.
(Docket No. 548-2 at 41-43). Yet SMYSO continued to perform all
the Copyrighted Works in different venues until 2018. (Facts ¶¶ 3
and 5). This because, per López’s deposition, the officers thought
the musicians were not responsible for getting the ASCAP license
authorizing them to play the Estate’s songs. (Docket No. 548-2 at
43-44, 46-48). The Estate also attached to their Motion parts of
a transcript from Nevárez’s interview where he acknowledged how he
altered
the
original
arrangements
of
the
Copyrighted
Works.
(Docket No. 548-23 at 4-5). Hence, Nevárez and López, as SMYSO’s
agents, were purportedly the moving forces behind SMYSO’s willful
infringement of the Estate’s rights over the Copyrighted Works.
Plaintiff therefore alleges it is entitled to one hundred and fifty
thousand dollars ($150,000) per infringed work, or seven hundred
fifty thousand dollars ($750,0000) in damages. Id. at 12.
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15
While the Court is aware that it must accept the well-pled
and uncontroverted allegations set forth in the Amended Complaint,
willful infringement cannot be imputed to SMYSO. In the Joint
Motion Regarding Stipulation of Judgment and Request for an Entry
of Judgment in Favor of the Estate of Rafael Levitt Rey, Plaintiff
and the Defendant Musicians stipulated and requested that the
Court: (a) enter judgment against the Defendant Musicians for
copyright
infringement;
and
(b)
do
not
enter
a
finding
of
willfulness against the Defendant Musicians. (Docket No. 532 at 23). Thus, the Court specifically stated in the Amended Partial
Final Judgment that it made “no finding of willfulness by the
Musicians[,]” including López, Nevárez and Marrero. (Docket No.
544
at
2)
(emphasis
added).
This
finding,
or
lack
thereof,
precludes a potential finding of willfulness that may attach to
the musicians and officers of SMYSO, Nevárez and López, and by
extension to SMYSO itself. It likewise binds SMYSO’s leader,
Marrero. (Docket No. 160-1 ¶ 23).
Defendant
Musicians
espouse
a
similar
argument
in
their
Response. (Docket No. 549 at 3). Plaintiff’s Reply however states
that such a conclusion is improper given that SMYSO and the
musicians are separate defendants. (Docket No. 552 at 6). The
Estate claims that such a conclusion is uncalled for because SMYSO,
through López, admitted “in his official capacity as an officer of
this entity” that he received the cease and desist letters. Id.
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16
(emphasis in original). Lastly, the Estate avers its “evidence as
to SMYSO’s acts is undoubtedly intertwined with the actions made
by its officers, [López] Haddock and Nevárez.” Id.
Yet, the Court cannot simply separate López and Nevarez’s
personal capacity, as Defendant Musicians against whom Plaintiff
agreed the Court could not find willfulness, and their official
capacities, as officers of SMYSO. There is no evidence on the
record
that
their
activities
as
musicians
performing
the
Copyrighted Works were separate from their activities as agents of
SMYSO.
Instead,
responsibility
the
upon
Amended
SMYSO
based
Complaint
on
the
sought
Defendant
to
impose
Musicians’
performances of the Copyrighted Works. (Facts ¶¶ 3, 5, 10-11.
Thus, although there was infringement, because SMYSO’s officers
and agents cannot be found to have acted willfully, neither can
SMYSO. As noted earlier, a corporation can only act through its
agents which in SMYSO’s case happen to be the Defendant Musicians
as to whom the Court is precluded from finding willfulness due to
the stipulation plaintiff subscribed.
The record shows that SMYSO performed the Copyrighted Works
in the Municipality of Corozal on October 1, 2016 at a concert
organized by CCC. (Facts ¶ 3 and 8; Docket No. 548-6). Per the
original Complaint, CCC is accused of direct infringement and
contributory infringement. (Docket No. 1 ¶¶ 57-86, 125-132). A
defendant may “be found liable for copyright infringement on a
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Civil No. 16-2769(RAM)
17
direct or secondary theory of liability.” Berio-Ramos v. FloresGarcía, 2020 WL 2788504, at *13 (D.P.R. 2020) (citing OrtizGonzález v. Fonovista, 277 F.3d 59, 62 (1st Cir. 2002)). Under the
secondary theory of liability, the United States Supreme Court has
stated
that
a
defendant
who
fails
to
personally
“violate
a
copyright may be liable for acts of infringement by third parties
when it ‘infringes contributorily by intentionally inducing or
encouraging direct infringement’
or
‘infringes vicariously by
profiting from direct infringement while declining to exercise a
right to stop or limit it.’” e-Steps, LLC v. Americas Leading Fin.,
LLC, 2019 WL 9834429, at *2
(D.P.R. 2019) (Metro-Goldwyn-Mayer
Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 930 (2005))(emphasis
added).
“Although
the
defendant
must
have
knowledge
of
the
infringing activity, ‘the defendant need only have known of the
direct infringer's activities, and need not have reached the legal
conclusion that those activities infringed a copyrighted work.’”
Montalvo v. LT's Benjamin Records, Inc., 56 F. Supp.3d 121, 134
(D.P.R. 2014) (quoting Jalbert v. Grautski, 554 F.Supp.2d 57, 68
(D. Mass. 2008). Taking the well-pled allegations in original
Complaint and in the pending Motion as true, CCC is liable for
direct and contributory infringement of the Estate’s rights over
the Copyrighted works. (Facts ¶¶ 6-9, 12; Docket Nos. 106, 162 and
165). Per the Complaint, CCC hired SMYSO to perform at the Festival
without a license or authorization
to have public performers
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Civil No. 16-2769(RAM)
18
perform any of the Copyrighted Works. (Facts ¶¶ 7-8). Therefore,
CCC facilitated that SMYSO, via its musicians, infringe on the
Estate’s rights. (Fact ¶ 6). See e.g., Broad. Music, Inc. v. Prana
Hosp., Inc., 158 F. Supp. 3d 184, 194 (S.D.N.Y. 2016) (quoting
Shapiro, Bernstein & Co., H.L. Green Co., 316 F.2d 304, 307 (2d
Cir. 1963)) (“[P]proprietors are liable for the infringements of
performers within their establishment, ‘whether the [performer] is
considered, as a technical matter, an employee or an independent
contractor, and whether or not the proprietor has knowledge of the
compositions to be played or any control over their selection.’”).
Again, given that the direct infringers are the musicians, who
this Court already made no finding of willfulness, CCC cannot be
found willful either. (Docket No. 544 at 2). Thus, CCC is liable
for the infringement that occurred at the Festival, albeit not for
willful infringement.
The Court now turns to the amount of statutory damages that
may be awarded to Plaintiff. Typically, “although the plaintiff
requesting statutory damages does not have to prove its own actual
damages or the amount the infringer profited from his conduct,
courts
have
considered
these
amounts
when
awarding
statutory
damages.” Pina, 2014 WL 12749230, at * 3 (citation omitted). A
court may also consider “factors such as ‘the expenses saved and
profits
reaped
by
the
defendants
in
connection
with
the
infringements, the revenues lost by the plaintiffs as a result of
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19
the defendant's conduct,’ and the state of mind of the infringers.”
Curet-Velazquez v. ACEMLA de Puerto Rico, Inc., 656 F.3d 47, 58
(1st Cir. 2011) (quotation omitted). Here, the only evidence
provided
by
Plaintiff
related
to
lost
profits
from
SMYSO’s
performance of the Copyrighted Works is SMYSO’s compensation for
eleven performances between May 2016 to April 2018. (Fact ¶ 12).
The
compensation
amounts
to
fifty-seven
thousand
six
hundred
eighty-five dollars ($57,685). Id. In another section of its
Motion, the Estate avers that the total sum of the performance
profits
really
amounts
to
seventy-seven
thousand
six
hundred
eighty-five dollars ($77,685). (Docket No. 548 at 15-16). But this
amount includes four (4) performances for which Plaintiff has not
provided supporting evidence. Id. Thus, Plaintiff only evinced
$57,685 in performance profits. (Fact ¶ 12).
Similarly, Plaintiff has failed to include a set list of the
songs
performed
at
each
show.
Meanwhile,
López’s
deposition
supports a finding that other songs were played in addition to the
Copyrighted Works. The deposition states, to counsel’s question
regarding which songs were played at the March 20, 2016 performance
in Caguas that “there is no way of knowing. The five songs there
are [sic], but there were other songs.” (Docket No. 548-2 at 47).
López also answered affirmatively that all five songs were played
at
subsequent
performances
in
Hormigueros,
Corozal,
Utuado,
Carolina, Coamo, Cayey, Villalba, New Jersey, Río Piedras and Ft.
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Lauderdale. Id. at 47-48. Hence, the profits that SMYSO derived
from each performance include not just the five songs object of
this suit, but other songs which the Court is not privy to. The
Court is also unaware of how many songs were played at each show.
Thus, the Court cannot calculate how much profit the Estate lost
from each infringed work. Cf. Frank Music Corp. v. Metro–Goldwyn–
Mayer, Inc., 772 F.2d 505 (9th Cir. 1985) (finding that defendant's
use of five of plaintiff's copyrighted songs in a musical revue,
which consisted of 6 minutes of a 100-minute show, entitled
plaintiff to recover a share of the profits from the revue but
that the award of $22,000 out of $2,500,000 in profits was “grossly
inadequate”); Caffey v. Cook, 409 F.Supp.2d 484, 501-02, 509
(S.D.N.Y. 2006) (finding that defendants infringed plaintiff's
copyright through live performances, and that a third of the shares
of the net profits from concert revenues were attributable to the
copyrighted element of the show); Lottie Joplin Thomas Trust v.
Crown Publishers, Inc., 456 F. Supp. 531, 538 (S.D.N.Y. 1977)
(awarding half of the profits of a “complete works” album even
though the infringing song was only one-tenth of the set).
The Court finds that SMYSO and CCC committed either direct or
contributory copyright infringement. Hence, Plaintiff is awarded
thirty thousand dollars ($30,000) per infringed work under the
Copyright Act. The District Court of Puerto Rico’s opinion in Pina
v. Rivera is instructive. See e.g., Pina, 2014 WL 12749230, at *3.
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21
In Pina, the Court held that expected album sale profits of
$500,000, but which included profits from songs unrelated to the
copyright
infringement,
were
insufficient
evidence
of
lost
profits. Id. at *4. The Court also held therein that plaintiff
failed to present evidence of profits that accrued to defendants
from their infringement. Id. But, considering the number of online
views and downloads of the infringed works, the Court awarded
$30,000 in statutory damages for each of the three infringed songs.
Id. Here, co-defendants SMYSO and CCC will be held jointly and
severally liable for $150,000 in statutory damages. This amount,
which is almost two and a half times the amount that Plaintiff
showed they lost in profits over eleven performances, is warranted
to deter future infringing conduct. (Fact ¶ 12).
B. Moral Rights Act and Statutory Damages
According to the Complaint and the Amended Complaint, the
Estate also seeks statutory damages for the Copyrighted Works
pursuant to the Puerto Rico Moral Rights Act (“Moral Rights Act”),
P.R. Laws Ann. tit. 31 §§ 1401j-1401ff. (Docket Nos. 1 ¶¶ 87-116;
Docket No. 160-1 ¶¶ 86-115). Said statute “grants an author of an
original work the exclusive rights of attribution, withdrawal,
integrity, and access.” Berio-Ramos, 2020 WL 2788504, at *12
(citing P.R. Laws Ann. tit. 31 §§ 1401j(b)). This also “includes
the right to prevent the alteration, truncation, and distortion of
the work.” Ferrer v. Mun. Gov't of Lajas, 2014 WL 12686916, at *3
Case 3:16-cv-02769-RAM Document 556 Filed 10/30/20 Page 22 of 27
Civil No. 16-2769(RAM)
22
(D.P.R. 2014) (quoting Venegas Hernández v. Peer Intern. Corp.,
270 F.Supp.2d 207, 213 (D.P.R. 2003)) (quotation marks omitted)).
A violation of moral rights under the act “empowers the author or
rightful claimant to seek temporary or permanent injunction to
assert
his
compensation.”
rights,
Id.
redress
(official
for
damages
translation
at
and
160-2
financial
at
9).
Therefore, unlike the Copyright Act which only provides economic
damages, the Moral Rights Act also provides recovery for mental
suffering. See Berio-Ramos, 2020 WL 2788504, at *12. See also
Torres-Negrón v. Rivera, 413 F.Supp.2d 84, 85-87 (D.P.R. 2006)
(discussing moral right under predecessor statute, Puerto Rico’s
Intellectual Property Act, Law No. 96 of July 15, 1988, as amended,
which also protects “against harm to an author's dignity and person
that ensues from an infringement of an author's work.”).
The statute provides the Court with discretion to set a range
of statutory damages between seven hundred fifty dollars ($750) to
twenty thousand dollars ($20,000) per infringed registered work.
See P.R. Laws Ann. tit. 31 §§ 1401s. Here, there is no doubt that
the Copyrighted Works were registered. (Fact ¶ 2). In the pending
Motion, the Estate claims that co-defendants SMYSO and CCC’s joint
liability for the infringement of the Estate’s rights over the
Copyrighted Works means that they are also subject to statutory
damages per the Moral Rights Act. (Docket No. 548 at 16-19).
Plaintiff also cites several Puerto Rico state court opinions which
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Civil No. 16-2769(RAM)
23
explain that calculating moral damages is a difficult endeavor.
Id. at 17. Further, the Puerto Rico Supreme Court has explained
that the measure of damages for a violation of a party’s moral
rights “is the spiritual and social damage sustained, paying heed
to the fact that the author's moral rights may vanish if the
sanctions imposed are not sufficient.” Ferrer, 2014 WL 12686916,
at *3 (quoting Pancorbo v. Wometco de P.R., Inc., 15 P.R. Offic.
Trans. 650, 659 (1984)). The Puerto Rico District Court also held
under the Moral Right Act’s predecessor that “[g]iven the nature
of the law protecting an author's moral rights to his work, an
evaluation necessarily involves an element of subjectivity.” Id.
at *3.
The Estate therefore claims that SMYSO’s “careless disregard
of the Estate’s moral rights of attribution and integrity over the
Copyright Works deserves no less than the maximum award [$20,000
per infringed work] of statutory damages under the Moral Rights
Act.” (Docket No. 548 at 17). This because, due to an entry of
default, it is admitted that SMYSO “tarnished” the Copyrighted
Works, and publicly performed the works and adapted versions of
them without attribution. Id. The Estate attached SMYSO’s adapted
versions of the Copyrighted Works to its Motion, as well as parts
of a transcript from an interview by Nevárez where he explained
how he altered the song’s original arrangements. (Docket Nos. 54822 and 548-23 at 4-5). Plaintiff alleges that “[t]his intentional
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Civil No. 16-2769(RAM)
24
deformation of the Copyrighted Works was carried-out to alienate
the author, Raphy Leavitt, from his work, so that SMYSO could
become in the public perception the owners or creators of the
Copyrighted Works.” (Docket No. 548 at 18). Thus, Plaintiff claims
that the willful violation of its rights of attribution and
integrity over the Copyrighted Works warrants one hundred thousand
dollars ($100,000) in moral damages.
However, the Court finds that it is precluded from a potential
finding of willfulness that may attach to SMYSO and CCC warranting
moral damages at the top of the statutory range. Further, Plaintiff
did
not
provide
any
evidence
showing
how
the
value
of
the
Copyrighted Works was affected by SMYSO’s actions or how the late
Mr. Raphael Leavitt Rey’s dignity was harmed. Nor did they provide
any evidence of the “the spiritual and social damage” sustained by
the Estate as a result of SMYSO and CCC’s actions. Cf. Ferrer,
2014 WL 12686916, at *3 (holding that plaintiff was entitled to
$73,000 in moral damages as based on the reinstallation costs used
as a proxy for calculating plaintiff’s moral damages and because
“[t]he manner in which the sculptures were uprooted from the
ground” without notice to the artist or the Instituto de Cultura
Puertorriqueña and “were carelessly abandoned in a parking lot
demonstrates a high degree of ingratitude and disrespect for the
integrity of the artist's work.”). Considering that Plaintiff
proffered
evidence
that
SMYSO,
via
Nevárez,
altered
the
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Civil No. 16-2769(RAM)
25
arrangements of the Copyrighted Works, the Court believes that
moral damages in the amount of ten thousand dollars ($10,000) per
infringed work is appropriate. The Estate is hence entitled to
fifty thousand dollars ($50,000) in moral damages.
C. Injunction
According to Section 502 of the Copyright Act, an owner of a
valid copyright is entitled to injunctive relief. See 17 U.S.C. §
502. Specifically, the statute states that “[a]ny court having
jurisdiction of a civil action arising under this title may […]
grant temporary and final injunctions on such terms as it may deem
reasonable to prevent or restrain infringement of a copyright.” 17
U.S.C.A. § 502(a). “If liability is established and a continuing
threat
to
the
copyright
exists,
courts
have
usually
granted
permanent injunctions.” EMI Mills Music, Inc. v. Empress Hotel,
Inc., 470 F. Supp. 2d 67, 74 (quoting Pedrosillo Music, Inc.v.
Radio Musical, Inc., 815 F.Supp. 511, 516 (D.P.R. 1993)).
Here, SMYSO continued to perform the Estate’s Copyrighted
Works without authorization or license to do so and once in
conjunction with CCC even after it received the cease and desist
letters and two years into this case’s litigation. (Facts ¶¶ 3-5,
8 and 10). There is a continued threat to the copyright. Given codefendant SMYSO and CCC’s infringement of the Estate’s rights over
the Copyrighted Works and of the possibility that additional
infringements by SMYSO and CCC might take place, the Court finds
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Civil No. 16-2769(RAM)
26
that SMYSO and CCC, their agents, servants, employees, successors,
licensees,
officers,
partners,
assigns,
parent
corporations,
attorneys and any person with each or any of them are hereby
permanently enjoined from infringing “any of the exclusive rights
belonging to Plaintiff over the Copyrighted Works, including but
not limited to publicly performing, reproducing, adapting, and
distributing any and all of the Copyrighted Works, and any other
work to which Plaintiff has exclusive ownership to.” (Docket Nos.
1 ¶¶ 141-145; 160-1 ¶¶ 140-144). See Banco Popular De Puerto Rico
v. Asociación De Compositores Y Editores De Música Latinoamericana
(ACEMLA), 678 F.3d 102, 114 (1st Cir. 2012) (upholding district
court’s decision to permanently enjoin Banco Popular de Puerto
Rico “from performing, producing, selling, and/or distributing the
1999 Christmas concert.”)
V. ORDER
For the foregoing reasons, the Estate of Rafael “Raphy”
Leavitt Rey’s Motion And Memorandum for Default Judgment And Award
of Damages Against SMYSO, Inc. And Centro Cultural de Corozal, Inc.
is GRANTED. The Court awards the Estate damages against SMYSO,
Inc. and Centro Cultural de Corozal, Inc. as follows:
A. $150,000.00 in damages for violations to the Copyright Act;
B. $50,000.00 in damages for violations to the Puerto Rico
Moral Rights Act.
Case 3:16-cv-02769-RAM Document 556 Filed 10/30/20 Page 27 of 27
Civil No. 16-2769(RAM)
27
Lastly, and pursuant to Section 502 of the Copyright Act, the
Court issues a permanent injunction against SMYSO, Inc. and Centro
Cultural
de
Corozal
Inc.,
their
officers,
agents,
servants,
employees, and any persons in active concert or participation with
them
and
permanently
enjoins
them
from
publicly
performing,
reproducing, distributing and / or making derivative works of La
Cuna Blanca, Amor y Paz, Dificíl de Olvidar, El Buen Pastor, and
Jíbaro Soy.
Per Fed. R. Civ. P. 54(d) costs are awarded to Plaintiff.
Judgment shall be entered accordingly.
IT IS SO ORDERED.
In San Juan, Puerto Rico this 30th day of October 2020.
S/ RAÚL M. ARIAS-MARXUACH
United States District Judge
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