Malibu Media, LLC v. DOE

Filing 22

MEMORANDUM OPINION AND ORDER GRANTING IN PART, DENYING IN PART 21 Amended MOTION for Default Judgment against Jonathan Gonzales. (Signed by Judge Gray H Miller) Parties notified.(rkonieczny, 4)

United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
MALIBU MEDIA, LLC.,
Plaintiff,
v.
JONATHAN GONZALES,
Defendant.

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July 13, 2017
David J. Bradley, Clerk

CIVIL ACTION H-16-2406

MEMORANDUM OPINION & ORDER
Pending before the court is plaintiff Malibu Media, LLC’s (d/b/a “X-Art.com”) (“Malibu
Media”) amended motion for default judgment. Dkt. 21. Having considered the amended
complaint, motion, record evidence, and applicable law, the court is of the opinion that the motion
should be GRANTED IN PART AND DENIED IN PART.
I. BACKGROUND
This case arises under the United States Copyright Act of 1976, as amended, 17 U.S.C. §§
101 et. seq. (the “Copyright Act”). Dkt. 10 at 1. Malibu Media brings this copyright infringement
action against defendant Jonathan Gonzales. Malibu Media alleges that it owns copyrights to
eighteen adult films (the “Copyrighted Works”) and that Gonzales used computer software known
as BitTorrent to illegally download, copy, and distribute the films. Dkt. 10 at 4.
Malibu Media is a California corporation engaged in the production and distribution of adult
erotic films through its website “X-Art.com.” See Dkt. 6-2 (Pelissier Dec.). Customers pay monthly
or annual subscription fees to access an online library of copyrighted video content. Id. at 3. Internet
subscription sales are Malibu Media’s primary source of revenue. Id. However, Malibu Media

claims its content is well-known and ranks as the most downloaded adult content on several popular
BitTorrent websites. Id. According to Malibu Media, it must “protect its copyrights in order to
survive and . . . hope for future revenue growth.” Id. at 4.
A.

BitTorrent
Malibu Media alleges that the copyright infringement occurred through the use of BitTorrent.

Malibu Media alleges that BitTorrent is one of the most common computer programs that allows
people to share files over the Internet. Dkt. 10 at 2–3. BitTorrent, a peer-to-peer file sharing system,
is primarily used for distributing large amounts of data, including digital movie files. Id. at 3.
Malibu Media claims that BitTorrent’s defining feature is that it allows files to be transferred among
multiple computers simultaneously without creating a heavy load on any individual source computer.
Id.
Malibu Media explains that in order to distribute a large file, the BitTorrent protocol breaks
a file into smaller pieces and assigns each piece a “hash,” a unique alphanumeric identifier, similar
to an electronic fingerprint. Id. Every digital file has one hash value correlating to it. Id. The
BitTorrent protocol uses the hash values to ensure each piece is properly routed among BitTorrent
users as they engage in file sharing. Id. The entire digital media file also has a hash value that acts
as a digital fingerprint to identify the media file or movie. Id. When a software user completes
downloading all the pieces of a digital media file, the BitTorrent software uses the file hash to
determine that the file is complete and accurate. Id. Once a BitTorrent file has been created, other
BitTorrent users may access and download the file. Id.
B.

Alleged Copyright Infringement
Malibu Media hired investigators, IPP International UG and Excipio GmbH (“IPP”), to
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identify individuals who use BitTorrent to illegally download and distribute content. Id. IPP uses
software to detect the Internet Protocol (“IP”) addresses of BitTorrent users that distribute Malibu
Media’s Copyrighted Works within the BitTorrent File Distribution Network. See Dkt. 6-4 at 2
(Fieser Dec.). Infringement of Malibu Media’s copyrights can occur through the distribution of a
single movie file correlating to a copyrighted Malibu Media movie, or a large scale distribution of
“Unauthorized Packs.” Id. IPP claims it established a direct Transmission Control Protocol/Internet
Protocol (“TCP/IP”) connection with the assigned IP address of 98.195.133.204, belonging to
Gonzales. Dkt. 10 at 3; Dkt. 1-1. IPP claims it downloaded a full copy of each file hash from the
BitTorrent File Distribution Network and confirmed that the file hash matched files containing
Malibu Media’s Copyrighted Works. Dkt. 10 at 4. IPP claims its investigation revealed that
Gonzales had used BitTorrent to download, copy, and distribute the Copyrighted Works without
authorization. Dkt. 10 at 4.
C.

Procedural History
On August 9, 2016, Malibu Media filed a complaint against an unnamed individual who

allegedly used BitTorrent to copy and distribute the Copyrighted Works without Malibu Media’s
consent, thereby infringing its copyright. Dkt. 1. The original complaint alleged that the defendant
John Doe, a subscriber with an IP address of 98.195.133.204, infringed on Malibu Media’s registered
copyrights using BitTorrent. Dkt. 1. After filing the complaint, Malibu Media moved for leave to
serve a third-party subpeona on John Doe’s Internet Service Provider, commanding it to provide the
subscriber’s name and contact information. Dkt. 8. The court granted the motion, after which
Malibu Media filed an amended complaint naming Gonzales as the infringer. Dkt. 10. Malibu
Media then moved for entry of default judgment (Dkt. 17), but the court granted an order striking
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the motion for failing to comply with filing requirements. Dkt. 20. The original motion for default
judgment failed to serve Gonzales by certified mail with a return receipt. Id. On January 24, 2017,
Malibu Media properly served Gonzales with certified mail and a return receipt. Dkt. 21-1. On
January 26, 2017, Malibu Media filed an amended motion for default judgment against Gonzales.
Dkt. 21. Malibu Media’s attorney provides a sworn declaration stating that Gonzales is not a minor,
incompetent, or in active military service. Dkt. 19.
II. LEGAL STANDARD
Under Federal Rule of Civil Procedure 55(a), “[w]hen a party against whom judgment for
affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by
affidavit or otherwise, the clerk must enter the party’s default.” Fed. R. Civ. P. 55(a). Under Rule
55(b)(2), a party may apply for the court to enter a default judgment, and 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.” Fed. R.
Civ. P. 55(b)(2). Rule 4 of the Federal Rules of Civil Procedure requires the plaintiff to serve a copy
of the summons and complaint on the defendant. Fed. R. Civ. P. 4(c)(1). Under Local Rule 5.5, a
motion for default judgment must be served upon the defendant via certified mail, return receipt
requested. S.D. Tex. L.R. 5.5.
A default judgment is a “drastic remedy, not favored by the Federal Rules[,] and resorted to
by courts only in extreme situations.” Sun Bank of Ocala v. Pelican Homestead & Sav. Ass’n,
874 F.2d 274, 276 (5th Cir. 1989). “The Federal Rules of Civil Procedure[s] are designed for the

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just, speedy, and inexpensive disposition of cases on their merits, not for the termination of litigation
by procedural maneuver.” Id.
Gonzales has failed to plead or otherwise defend against this lawsuit. Malibu Media properly
served Gonzales with this lawsuit under the Federal Rules and with the amended motion for default
judgment under the Local Rules. Dkt. 11; Dkt. 21; see Tex. L.R. 5.5. Given Gonzales’ failure to
answer the complaint in a timely manner, the court: (1) has the authority to enter default against
Gonzales, (2) accept all well-pleaded facts in Malibu Media’s complaint as true, and (3) award the
relief sought by Malibu Media in this action. See Nishimatsu Constr. Co. v. Hous. Nat’l Bank, 515
F.2d 1200, 1206 (5th Cir. 1975).
III. ANALYSIS
To receive a default judgment, a plaintiff must state a plausible claim for relief. Id. Malibu
Media argues that Gonzales committed direct copyright infringement. Copyright infringement
requires two elements to be proven: (1) ownership of a valid copyright, and (2) copying of
constituent elements of the work that are original. Feist Publications, Inc. v. Rural Tel. Serv. Co.,
499 U.S. 340, 361, 111 S. Ct. 1282(1991).
A.

Ownership of a Valid Copyright
First, Malibu Media alleges that it is the registered owner of the eighteen Copyrighted Works

listed in Exhibit B. Dkt. 10-2. Exhibit B provides an overview of the Copyrighted Works, including
a hit date, date of first publication, registration date, and registration number issued by the United
States Copyright Office. Dkt. 10 at 4; Dkt. 10-2. However, the court observes that Malibu Media
lists three of the registration numbers as “pending” Dkt. 10-2.

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Section 411 of the Copyright Act governs registration and civil infringement actions of
copyrights. 17 U.S.C. § 411 (2012). A copyright claim cannot be instituted until preregistration or
registration of the copyright claim has been made. 17 U.S.C. § 411(a) (2012). The Supreme Court
has “declined to address whether Section 411(a)’s registration requirement is a mandatory
precondition to suit that . . . district courts may or should enforce sua sponte by dismissing copyright
infringement claims involving unregistered works.” Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154,
130 S.Ct. 1237, 1240 (2010). However, in the Fifth Circuit, a copyright infringement claim may be
dismissed if a plaintiff does not comply with Section 411(a)’s registration requirement. Real Estate
Innovations, Inc. v. Hous. Ass’n of Realtors, Inc., 422 F. App’x 344, 348 (5th Cir. 2011).
A plaintiff does not need a certificate of registration from the Copyright Office before
bringing a suit and the Office does not need to consider the application for registration. Starr v.
DaimlerChrysler Corp., 252 F. App’x 590, 590 (5th Cir. 2007); see Positive Black Talk, 394 F.3d
at 365. The Fifth Circuit “requires only that the Copyright Office actually receive the application,
deposit, and fee before a plaintiff files an infringement action” to comply with Section 411(a).
Positive Black Talk, Inc. v. Cash Money Records, Inc., 394 F.3d 357, 365 (5th Cir. 2004); see also
Apple Barrel Prods., Inc. v. Beard, 730 F.2d 384, 386 (5th Cir. 1984) (holding that plaintiff must
only “prove payment of the required fee, deposit of the work in question, and receipt by the
Copyright Office of a registration application” to state a claim for copyright infringement.).
Here, Malibu Media does not allege that it complied with Section 411(a)’s registration
requirement, or even the Fifth Circuit’s interpretation of the requirement. Malibu Media has not
claimed it was in the process of sending an application to the Copyright Office or that it was
intending to do so. Instead, Malibu Media merely claimed to be the owner of all eighteen
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Copyrighted Works and provided three as “pending” in lieu of providing copyright registration
numbers. Dkt. 10-2. The three works, listed as the first, second, and seventh works respectively,
all have a registration date asserted in Exhibit B. Id. However, Malibu Media has failed to include
any factual basis for asserting its copyright ownership for these audiovisual works, such as proof of
the required Copyright Office fee, deposit, or receipt by the Copyright Office of a registration
application. See e.g., Apple Barrel Prods., 730 F.2d at 386; see also Breadmore v. Jacobson, No.
4:13-cv-361, 2014 WL 3543726, at *5–6 (S.D. Tex. July 14, 2014) (Harmon, J.) (holding that the
plaintiff’s copyright claim failed for lack of compliance with the Fifth Circuit’s registration
requirement); Atl. Recording Corp. v. Anderson, No. H-06-3578, 2008 WL 2316551, at *6 (S.D.
Tex. Mar. 12, 2008) (Gilmore, J.) (holding that copies of registration certificates are prima facie
evidence of copyright ownership).
Therefore, the court finds that Malibu Media has failed to allege copyright ownership over
these three works. However, the court finds that Malibu Media has demonstrated ownership of a
valid copyright of the fifteen Copyrighted Works which have a registration number.
B.

Direct Copyright Infringement
Second, Malibu Media alleges that Gonzales infringed on its copyrights. The second

element of a copyright infringement claim requires proof of unauthorized copying of the original
work. Peel & Co. v. The Rug Market, 238 F.3d 391, 395 (5th Cir. 2001). “Copyright infringement
actions . . . ordinarily require no showing of intent to infringe. Instead, knowledge and intent are
relevant in regard to damages.” Chavez v. Arte Publico Press, 204 F.3d 601, 607 (5th Cir. 2000).
Malibu Media claims that Gonzales used the BitTorrent protocol to illegally “download,
reproduce, distribute, perform[,] and display” Malibu Media’s copyrighted audiovisual works.
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Dkt. 18 at 3. Malibu Media alleges that its investigators established a direct TCP/IP connection with
Gonzales’ IP address and downloaded one or more pieces of the digital media files identified by the
file hashes in Exhibit A. Id. Each file hash listed in Exhibit A correlates to a copyrighted film in
Exhibit B. Id. Each digital media file listed in Exhibit A was allegedly verified to be a copy
identical or similar to Malibu Media’s corresponding original work. Id. Malibu Media claims that
Gonzales copied and distributed the original works listed in Exhibit B without Malibu Media’s
authorization, thereby violating Malibu Media’s exclusive copyrights. Id.
Downloading and distributing audiovisual works without authorization through peer-to-peer
networks such as BitTorrent is a “distribution” prohibited by the Copyright Act. See Atl. Recording
Corp., 2008 WL 2316551, at *8 (holding that making copyrighted works available for download
through a peer-to-peer network constituted a violation). Using an online file-sharing system
contemplates “further distribution” and therefore satisfies the second element of a copyright
infringement claim. Id. Malibu Media argued that Gonzales’ unauthorized use of BitTorrent
violated the Copyright Act. Dkt. 18 at 3–4. Furthermore, Gonzales’ IP address was documented
distributing multiple pieces of a Malibu Media copyrighted movie. See Dkt. 6-4 at 3 (Fieser Dec.).
Because Malibu Media pled enough facts, when taken as true, to support the allegation of
unauthorized copying and distribution of its original work, the court finds that Malibu Media has
satisfied the second element of copyright infringement.
C.

Default Judgment
Although a default judgment is a “drastic remedy, not favored by the Federal Rules[,] and

resorted to by courts only in extreme situations,” Gonzales failed to respond to Malibu Media’s
complaint. Sun Bank of Ocala, 874 F.2d at 276. The court finds that Malibu Media made a
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sufficient showing with respect to the two elements of copyright infringement for fifteen of the
Works. The court therefore GRANTS IN PART Malibu Media’s motion and enters default
judgment against Gonzales for fifteen of the Copyrighted Works and DENIES IN PART Malibu
Media’s motion for default judgment for the three copyright-pending works.
IV. DAMAGES
In its complaint, Malibu Media requests that the court issue an injunction against Gonzales,
and requests relief in the form of statutory damages, costs, attorney’s fees, and pre- and postjudgment interest. Dkt. 10 at 6. The court will address each of these requests for relief in turn.
A.

Injunctive Relief
Malibu Media requests the court to enter an injunction against Gonzales as proposed in its

complaint. Id. Specifically, Malibu Media seeks an order enjoining Gonzales and all other persons
who are in active concert or participation with Gonzales from continuing to infringe on Malibu
Media’s copyrighted works. Id. Further, Malibu Media seeks a court order that Gonzales delete and
permanently remove all infringing copies of Malibu Media’s works on Gonzales’ computer. Id.
Under section 502(a), a court may grant a permanent injunction on terms it finds reasonable
to prevent or restrain copyright infringement. 17 U.S.C. § 502(a). For a permanent injunction, a
party must demonstrate: (1) actual success on the merits; (2) no adequate remedy at law; (3) that the
threatened injury outweighs any damage to the defendant; and (4) that the injunction will not
disserve the public interest. See DSC Comms. Corp. v. DGI Tech., Inc., 81 F.3d 597, 600 (5th Cir.
1996).
In the present case, Malibu Media has succeeded on the merits against Gonzales. Malibu
Media also has no adequate remedy at law because Malibu Media’s injury cannot be fully
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compensated or measured in a dollar amount because the extent of distribution cannot be measured.
Atl. Recording Corp., 2008 WL 2316551, at *10. Without enjoining Gonzales from further
infringing on Malibu Media’s copyrighted content, Malibu Media would remain vulnerable to
continued infringement. The injunction does not burden Gonzales, as he is merely required to
comply with the law, and the public interest is served by upholding Malibu Media’s copyright
protections.
The court finds that Malibu Media has shown it is entitled to injunctive relief based on
Gonzales’ alleged violation of federal copyright law. Generally, an injunction must be narrowly
tailored to remedy only the specific harms shown by Malibu Media, rather than to enjoin all possible
breaches of the law. Fed. R. Civ. P. 65(d); see Daniels Health Sciences, L.L.C. v. Vascular Health
Sciences, L.L.C., 710 F.3d 579, 587 (5th Cir. 2013). The court has reviewed the injunction Malibu
Media proposed and finds that it is not over-broad and merely enjoins Gonzales from engaging in
further offending conduct. The court GRANTS Malibu Media’s request for an injunction.
B.

Statutory Damages
Malibu Media is seeking statutory damages as outlined in 17 U.S.C. § 504. A copyright

owner may elect to recover statutory damages for all infringements “with respect to any one
work . . . in a sum of not less than $750 or more than $30,000 as the court considers just.” 17 U.S.C.
§ 504(c)(1). A finding of willful infringement may “increase the award of statutory damages to a
sum or not more than $150,000.” 17 U.S.C. § 504(c)(2).
Malibu Media requests an award of $13,500 in statutory damages ($750 per work). Dkt. 18
at 9. Malibu Media argues that the requested amount is reasonable because Gonzales aided other
BitTorrent users by distributing the copyrighted material. Id.
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The actual damages due to lost

subscriptions relates to the thousands of infringers that have access to the copyrighted material. Id.
Although Malibu Media discusses willful infringement and possible recovery of $150,000,
Malibu Media ultimately only requests statutory damages of $13,500. The court finds that Malibu
Media’s request of $750 per work is reasonable. However, the court is only granting default on
fifteen of the Works. Therefore, the court GRANTS IN PART Malibu Media’s request for statutory
damages in the amount of $11,250 ($750 per work) for the fifteen Copyrighted Works.
C.

Attorney’s Fees and Costs
In any civil action under this title, the court in its discretion may allow the recovery of full

costs and award reasonable attorneys’ fees to the prevailing party. 17 U.S.C. § 505 (2012). To
collect costs, parties must maintain their own record of taxable costs and an application for costs
shall be made by filing a bill of costs within 14 days of the entry of a final judgment. S.D. Tex.
L.R. 54.2.
Courts use a two-step process to calculate reasonable attorney’s fees. Migis v. Pearle Vision,
Inc., 135 F.3d 1041, 1047 (5th Cir. 1998). First, the court calculates a “lodestar” fee by multiplying
the reasonable number of hours spent on the case by the reasonable hourly rates for the participating
lawyers. Id. Second, the court considers whether the lodestar should be adjusted upward or
downward depending on the circumstances of the case, under the twelve Johnson factors. Id. (citing
Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717–19 (5th Cir. 1974)).
The movant seeking attorneys’ fees bears the initial burden of submitting adequate
documentation of the hours expended and the hourly rates. Hensley v. Eckerhart, 461 U.S. 424, 437,
103 S. Ct. 1933 (1983). Plaintiffs seeking attorneys’ fees are charged with the burden of showing
the reasonableness of the hours billed, and therefore, are also charged with proving that the attorneys
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exercised billing judgment. Saizan v. Delta Concrete Prods. Co., Inc., 448 F.3d 795, 799 (5th Cir.
2006). Billing judgment requires documentation of the hours charged and the hours written off as
unproductive, excessive, or redundant. Id.
17 U.S.C. § 505 allows the court to award costs and reasonable attorneys fees to the
prevailing party, Malibu Media. Malibu Media has submitted adequate documentation of the hours
its attorney and attorney support staff have spent pursuing this claim. Dkt. 19. The invoice lists
Malibu Media’s attorney as spending 1.9 hours on this claim at a rate of $300.00 per hour. Id.
Additionally, the invoice indicates that a paralegal working on behalf of Malibu Media has spent 7.2
hours on this claim at a rate of $85.00 per hour. Id. The total amount of attorney’s fees that Malibu
Media requests is $1,182.00. Id. The court finds this request to be reasonable and GRANTS Malibu
Media attorney’s fees in the amount of $1,182.00. Additionally, the court GRANTS Malibu Media
costs of court in accordance with S.D. Tex. L.R. 54.2.
D.

Interest on the Judgment
Interest is allowed on any money judgment in a civil case recovered in a district court.

28 U.S.C. § 1961 (2000). Malibu Media is entitled to post-judgment interest, but the Copyright Act
does not specifically authorize an award of pre-judgment interest. Granville v. Suckafree Records,
Inc., No. H-03-3002, 2006 WL 2520909, at *5 (S.D. Tex. June 28, 2006) (Werlein, J.). The Fifth
Circuit has not addressed the issue, but precedent of this court is that pre-judgment interest is not
available on an award comprised entirely of statutory damages under 17 U.S.C. § 504(c). Granville,
2006 WL 2520909 at *6; see also Blackmer v. Monarch Holdings (USA), Inc., No. H-00-4290, 2002
WL 32361935, at *5 (S.D. Tex. July 11, 2002) (Hittner, J.) (concluding that a plaintiff could not
recover pre-judgment interest on his recovery of statutory damages under the Copyright Act).
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Malibu Media is entitled to recover damages against Gonzales as detailed above, plus
post-judgment interest at the rate of 1.22% per annum in accordance with 28 U.S.C. § 1961(a).
There shall be no award of pre-judgment interest.
V. CONCLUSION
For the foregoing reasons, the court GRANTS IN PART Malibu Media’s motion for default
judgment with respect to the fifteen Copyrighted Works and DENIES IN PART Malibu Media’s
motion for default with respect to the three copyright-pending works. The court GRANTS IN PART
the request for damages.
It is ORDERED that judgment by default be entered in favor of plaintiff Malibu Media
against defendant Jonathan Gonzalez as follows:
1. Statutory damages in the amount of $11,250
2. Post-judgment interest at the rate of 1.22% per annum from entry of judgment until the
judgment is paid in full;
3. Attorneys’ fees and costs in the amount of $1,182; and
4. All costs of court as provided by law.
The court also ENJOINS the defendant as follows:
1. Defendant Johathan Gonzalez is enjoined from directly, contributorily or indirectly
infringing Plaintiff’s rights under federal or state law in the Works, including, without limitation,
by using the internet, BitTorrent or any other online media distribution system to reproduce (e.g.,
download) or distribute the Works, or to make the Works available for distribution to the public,
except pursuant to a lawful license or with the express authority or Plaintiff; and

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2. Defendant Jonathan Gonzalez is ordered to destroy all copies of Plaintiff’s works that the
Defendant Jonathan Gonzales has downloaded onto any computer hard drive or server without
Plaintiff’s authorization, and shall destroy all copies of the Works transferred onto any physical
medium or device in Defendant Jonathan Gonzales’s possession, custody, or control.
Signed at Houston, Texas on July 13, 2017.

___________________________________
Gray H. Miller
United States District Judge

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