Broadcast Music, Inc. et al v. MIDTOWN BEVERAGE, LLC d/b/a CLARION INN HOUSTON EAST et al

Filing 32

MEMORANDUM AND ORDER GRANTING 17 MOTION for Summary Judgment (Signed by Judge Keith P Ellison) Parties notified.(sloewe)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
BROADCAST MUSIC, INC. ET AL,
Plaintiffs,
v.
MIDTOWN BEVERAGE, LLC D/B/A
CLARION INN HOUSTON EAST AND
STEVE WENCHUNG HSU,
Defendants.

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CIVIL ACTION NO. 4:12-CV-1617

MEMORANDUM AND ORDER

Before the Court is Plaintiffs’ Motion for Summary Judgment (“Motion”). (Doc.
No. 17.) After considering the Motion, all responses and replies thereto, and the
applicable law, the Court concludes that the Motion must be GRANTED.
I.

BACKGROUND

This is a copyright infringement lawsuit. Plaintiff Broadcast Music, Inc. (“BMI”)
is a corporation that has been granted the right to license the public performance rights in
approximately 7.5 million copyrighted musical compositions (“BMI Repertoire”). (Doc.
No. 1, Complaint, ¶ 4.) The other Plaintiffs are the owners of the copyrights in the
musical compositions that are subject to this lawsuit. (Id. at ¶ 5.) BMI grants to music
users, such as broadcasters and the owners and operators of concert halls, restaurants,
nightclubs and hotels, the right to publicly perform any of the works in BMI’s Repertoire
by means of “blanket license agreements.” (Doc. No. 18 p. 1.)

Defendant Midtown Beverage, LLC is a limited liability company that operates,
maintains and controls the Clarion Inn Houston East. (Compl. ¶ 31.) Defendant Steve
Wenchung Hsu manages and supervises the activities of Midtown Beverage, LLC.
Defendants Midtown Beverage and Hsu (collectively “Defendants”) operate Brewsky’s, a
restaurant/bar within the Clarion Inn Houston East. (Doc. No. 18 p. 2.)
The following facts are undisputed. Plaintiffs allege fifteen claims of willful
copyright infringement based upon Defendants’ unauthorized public performances of
musical compositions from the BMI Repertoire. (Compl. ¶ 36.) BMI further alleges that
between July 2010 and October 2011, it repeatedly informed Defendants of the need to
obtain permission for public performances of copyrighted music. (Doc. No. 18 p. 2.) BMI
sent thirty-one letters to Defendants advising them of the need to enter into a license
agreement. (Doc. No. 18 p. 11.) Despite BMI’s repeated offers of a license agreement to
Defendants, they ignored all communications. (Id. at p. 2) On July 11, 2011, BMI
instructed Defendants to cease public performances of music licensed by BMI.
Nevertheless, public performances of BMI licensed music continued at Clarion Inn
Houston East, as chronicled by a BMI investigator on September 17, 2011. (Id.) The
investigator generated an audio recording and written report of the songs played at
Brewsky’s on September 17, 2011, which includes all fifteen of the songs that are the
subject of this infringement action. (Id. at p. 3.) Plaintiffs then brought this action for
copyright infringement in May 2012.
II.

LEGAL STANDARD

To grant summary judgment, the Court must find that the pleadings and evidence
show that no genuine issue of material fact exists, and therefore the movant is entitled to

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judgment as a matter of law. Fed. R. Civ. P. 56. The party moving for summary judgment
must demonstrate the absence of any genuine issue of material fact; however, the party
need not negate the elements of the nonmovant’s case. Little v. Liquid Air Corp., 37 F.3d
1069, 1075 (5th Cir. 1997). If the moving party meets this burden, the nonmoving party
must then go beyond the pleadings to find specific facts showing there is a genuine issue
for trial. Id. “A fact is material if its resolution in favor of one party might affect the
outcome of the lawsuit under governing law.” Sossamon v. Lone Star State of Texas, 560
F.3d 316, 326 (5th Cir. 2009) (quotations and footnote omitted).
Factual controversies should be resolved in favor of the nonmoving party. Liquid
Air Corp., 37 F.3d at 1075. However, “summary judgment is appropriate in any case
where critical evidence is so weak or tenuous on an essential fact that it could not support
a judgment in favor of the nonmovant.” Id. at 1076 (internal quotations omitted).
Importantly, “[t]he nonmovant cannot satisfy his summary judgment burden with
conclusional allegations, unsubstantiated assertions, or only a scintilla of evidence.” Diaz
v. Superior Energy Services, LLC, 341 Fed.Appx. 26, 28 (5th Cir. 2009) (citation
omitted). The Court should not, in the absence of proof, assume that the nonmoving party
could or would provide the necessary facts. Liquid Air Corp., 37 F.3d at 1075. As the
Supreme Court has noted, “[w]hen opposing parties tell two different stories, one of
which is blatantly contradicted by the record, so that no reasonable jury could believe it, a
court should not adopt that version of the facts for purposes of ruling on a motion for
summary judgment.” Scott v. Harris, 550 U.S. 372, 380 (2007).

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III.

ANALYSIS
A. Copyright Claim

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).
Any person who violates this exclusive right is an infringer. 17 U.S.C. § 501(a). In order
to prevail in an action for copyright infringement, Plaintiffs must establish the following
elements: (1) originality and authorship of the copyrighted worked involved; (2)
compliance with the formalities of the Copyright Act; (3) proprietary rights in the
copyrighted works involved; (4) public performance of the compositions involved; and
(5) lack of authorization for public performance. Fermata Int'l Melodies, Inc. v.
Champions Golf Club, Inc., 712 F.Supp. 1257, 1259 (S.D. Tex. 1989), aff'd, 915 F.2d
1567 (5th Cir. 1990).
Plaintiffs, through the declaration by BMI’s attorney, Renee Wolfe (“Wolfe
Declaration) and registration documentation, meet their burden for the first three
elements of the claim. Defendants do not dispute these facts. Additionally, the fourth
element of public performance is established by (1) the Certified Infringement Report of
Robert Allman; and (2) the Certification of BMI’s Performance Identification employee,
Rachel Dooley. Defendants state they cannot admit or deny that the songs were
performed. The fifth element, lack of authorization, is also undisputed by Defendants.
Therefore, Plaintiffs have established a claim for copyright infringement. Furthermore, in
their response to the Motion, Defendants admit to joint and several liability for copyright
infringement. The question then remains whether Defendants are innocent infringers and
what the appropriate remedy should be.

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B. Innocent Infringer
Defendants first filed their answer in July 2012. Nearly a year later, Defendants
amended their answer to add the defense of innocent infringer. In support of their
innocent infringer defense within their response to the Motion, Defendants offer only an
affidavit by Dana Mosley, who testifies that she “believed that the karaoke provider was
licensed.” (Doc. No. 26, Ex. 1.) However, Federal Rules of Civil Procedure 56(c)(4)
provides that when affidavits are used to oppose a motion for summary judgment, they
“shall be made upon personal knowledge, set forth such facts as would be admissible in
evidence, and shall show affirmatively that the affiant is competent to testify to the
matters stated therein.” Therefore, subject matter properly included in an affidavit
opposing a motion for summary judgment is limited to facts based on personal
knowledge. Statements made on “belief” or “on information and belief” are
inappropriate. See, e.g., Automatic Radio Mfg. Co. v. Hazeltine Research, Inc., 339 U.S.
827, 831 (1950) (rejecting averments in affidavit where made upon “information and
belief” as opposed to personal knowledge). Ms. Mosley’s affidavit testified that she
“believed that the karaoke provider was licensed.” (Doc. No. 26, Ex. 1.) This belief is not
personal knowledge and does not raise a genuine issue of material fact.
Furthermore, the Court does not find Defendants to be innocent infringers because
Defendants were given ample notice of their infringing acts. BMI sent thirty-one letters to
Defendants and repeatedly advised them of the need to enter into a license agreement.
(Doc. No. 18, APP. 341-384.) A BMI representative telephoned Defendants on forty-one
occasions and on a number of those occasions spoke to persons associated with the
establishment’s operation. (Doc. No. 18 p. 12.) On July 11, 2011, BMI sent Defendants

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an overnight letter informing them that they must immediately cease unauthorized
performances of BMI-licensed music. This demand to cease infringement was followed
up with multiple letters. (Id.) Defendants were not innocent infringers, but were advised
both timely and repeatedly that their conduct constituted infringement. Nevertheless, they
failed to cease their infringing acts or come into compliance with the copyrights, despite
multiple offers to do so.
C. Injunctive Relief
The Court finds this is a case for injunctive relief. Section 502(a) provides that the
Court may grant final injunctions “to prevent or restrain infringement of a copyright.” 17
U.S.C. § 502(a). To obtain a permanent injunction, Plaintiffs must (1) succeed on the
merits; (2) have no adequate remedy at law; (3) show that the threatened injury outweighs
any damage to the Defendants; and (4) demonstrate that the injunction will not disserve
the public interest. DSC Comms. Corp. v. DGI Tech., Inc., 81 F.3d 597, 600 (5th Cir.
1996)
Defendants did not cease their infringing activity even after thirty-one letters and
forty-one phone calls. It appears that Defendants’ establishment continues to permit
unauthorized performances today. (Doc. No. 18, Stevens Decl., ¶¶ 10-12, 16.) Despite
BMI’s multiple offers for a blanket license, similar to the agreement entered into by tens
of thousands of similar establishments across the United States, Defendants refused to
comply with copyrights.
Plaintiffs have established the first prong for permanent injunction because they
have succeeded on the merits of a copyright infringement claim. Second, Plaintiffs have
no adequate remedy at law because Defendants have demonstrated a blatant disregard of

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Plaintiffs’ repeated entreaties to cease infringement. The Sixth Circuit held “that a
showing of past infringement and a substantial likelihood of future infringement justifies
issuance of a permanent injunction.” Bridgeport Music v. Justin Combs Publishing, 507
F.3d 470 (6th Cir. 2007). Third, any damage that Defendants may suffer from not being
able to perform the music could have been avoided had they entered into a license with
BMI. Fourth, the injunction will not disserve the public interest, but rather, preserve
copyright law. Defendants are unlicensed and continue to offer unauthorized
performances of Plaintiffs’ music. Therefore, permanent injunctive relief is appropriate
and necessary.
D. Statutory Damages
The Copyright Act empowers Plaintiffs to elect to receive an award of statutory
damages “in a sum of not less than $750 or more than $30,000” per infringement in lieu
of an award representing the Plaintiffs’ actual damages and the Defendants’ profits. 17
U.S.C. §504(c)(2). Within these statutory limits, the assessment of damages is at the
discretion of the Court. See F.W. Woolworth Co. v. Contemporary Arts, Inc., 344 U.S.
228, 231-32 (1952).

Plaintiffs request an award of $3,000 for each of the fifteen

copyrighted songs infringed, for a total award of $45,000. Courts considering awards of
statutory damages have recognized that awards up to $10,000 per infringement are
appropriate in cases where the infringement resulted from deliberate indifference toward
copyright laws. See Broadcast Music, Inc. v. question Mark, 220 U.S.P.Q. 531, 532-33
(N.D. Tex. 1983) (“an award of $10,000 for each of nine infringements is reasonable,
particularly in light of Question Mark’s refusal of BMI’s offer to grant a license for the
public performance of the compositions in issue.”); Controversy Music v. Down Under

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Pub Tyler, Inc., 488 F. Supp. 2d 572, 579 (E.D. Tex. 2007) (“given the Defendants'
willful infringement, an award of $5,000 per infringement is just and sufficient to deter
future copyright violations while promoting respect for the law.”). Defendants have
willfully disregarded Plaintiffs’ repeated attempts to enter into a license agreement.
Therefore, Plaintiffs’ request of $3,000 for each of the fifteen infringements is
reasonable.
E. Attorneys’ Fees
The Copyright Act provides that the “court may also award a reasonable
attorney’s fee to the prevailing party.” 17 U.S.C. § 505. Courts have routinely awarded
the reasonable fees incurred by a plaintiff asserting its rights. “The Fifth Circuit has
acknowledged that an award of attorneys' fees in copyright cases is within the discretion
of the trial court, but has held that the award of attorneys' fees in copyright cases is the
rule rather than the exception, and should be awarded routinely.” Compaq Computer
Corp. v. Ergonome Inc., 387 F.3d 403, 411 (5th Cir. 2004) (citing Hogan Sys., Inc. v.
Cybresource Int'l, Inc., 158 F.3d 319, 325 (5th Cir. 1998)). Defendants have not
presented any argument why there should not be an award of attorneys’ fees.
Furthermore, the Court finds that Defendants’ deliberate misconduct warrants an award
of attorneys’ fees. Plaintiffs set forth attorneys’ fees and costs in the Declaration of
William R. Hales (“Hales Declaration”) and other records. (Doc. No. 18, Ex. A, APP.
400-405.) Defendants do not dispute Plaintiffs’ attorneys’ fees and costs of $11,243.36.
Therefore, the Court awards Plaintiffs $11,243.36.

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IV.

CONCLUSION

For the reasons explained above, Plaintiffs’ Motion for Summary Judgment is
GRANTED. The Court enters a permanent injunction against Defendants. Plaintiffs are
awarded $45,000 in statutory damages and $11,243.36 for reasonable attorneys’ costs and
fees.

IT IS SO ORDERED.
SIGNED at Houston, Texas, on this the 11th day of July, 2013.

KEITH P. ELLISON
UNITED STATES DISTRICT JUDGE

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