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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`PRIORITY RECORDS, et al.,
`Plaintiffs,
`
`v.
`ANTHONY MARINARO,
`Defendant.
`___________________________________/
`
`No. C-05-1748 JSW (EMC)
`
`REPORT AND RECOMMENDATION
`RE PLAINTIFFS’ MOTION FOR
`DEFAULT JUDGMENT
`(Docket No. 15)
`
`I. FACTUAL & PROCEDURAL BACKGROUND
`On October 10, 2005, Plaintiffs Priority Records LLC, Sony BMG Music Entertainment,
`Virgin Records America, Inc., Elektra Entertainment Group, Inc., Capitol Records, Inc., Warner
`Bros. Records, Inc., and UMB Recordings, Inc. (“Plaintiffs”) moved for default judgment against
`Defendant, Anthony Marinaro. The Clerk of the Court entered default on July 8, 2005. Plaintiffs’
`Complaint pleads injunctive relief for copyright infringement and alleges statutory damages and
`costs totaling $6,403.00.
`Having considered Plaintiffs’ brief and supporting documents, the Court hereby issues the
`following report and recommends that Plaintiffs’ motion for default judgment be granted.
`II. DISCUSSION
`On April 26, 2005, Plaintiffs filed a complaint against Defendant for copyright infringement,
`citing generally to provisions under the Copyright Act. See Pl.’s Compl. ¶ 1 (April 26, 2005). In its
`Complaint, Plaintiffs allege that they are all copyright owners or licensees of exclusive rights under
`United States copyright with respect to certain copyrighted sound recordings (“Copyrighted
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`Case3:05-cv-01748-JSW Document22 Filed03/21/06 Page2 of 11
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`Recordings”). Id. at ¶ 13. Among the exclusive rights granted to each Plaintiff under the Copyright
`Act are those associated with the reproduction and distribution of Copyrighted Recordings to the
`public. Id. at ¶ 15. Plaintiffs claim that Defendant violated these rights by willfully using and
`continuing to use an online media distribution system to download, distribute, and/or make available
`for distribution Copyrighted Recordings. See id. at ¶¶ 15, 16. Specifically, they allege that
`Defendant infringed their rights over eight copyrighted sound recordings identified in Exhibit A as
`well as some listed in Exhibit B, which are owned or exclusively licensed to one or more of
`Plaintiffs or their affiliate’s record labels. Id. at ¶ 13, Ex. A, and Ex. B. In the prayer for relief,
`Plaintiffs seek a total of $6,000.00 in minimum statutory damages under Section 504 of the
`Copyright Act; an injunction pursuant to Section 502 of the Copyright Act; and costs in the amount
`of $403.00 under Section 505 of the Copyright Act. See Pl.’s Applic. for Entry of Default Judgment
`at ¶ 4 (October 10, 2005). Plaintiffs ask for an injunction as they believe there is “no adequate
`remedy at law” and, unless enjoined, Defendant would continue to cause “great and irreparable
`injury” that could not be fully compensated. See Pl.’s Compl. ¶ 18.
`Plaintiffs’ Proof of Service states that, on April 27, 2005, Defendant was served with a
`Summons and Complaint by personal delivery at his residence located at 1040 7th Street, Apt. B,
`Novato, California. See Summons (Docket No. 4). Having not received a timely response from
`Defendant, Plaintiffs subsequently filed for a request to enter default and notified Defendant via U.S.
`Mail on July 6, 2005. See Certificate of Service (Docket No. 9). The Clerk of the Court entered
`default two days later. Plaintiffs further notified Defendant of application for entry of default
`judgment via U.S. Mail on October 10, 2005. See Certificate of Service (Docket No. 18).
`A.
`Adequacy of Service of Process
`As a preliminary matter, the Court must first “assess the adequacy of the service of process
`on the party against whom default is requested.” Board of Trustees of the N. Cal. Sheet Metal
`Workers v. Peters, No. C-00-0395 VRW, 2000 U.S. Dist. LEXIS 19065, at *2 (N.D. Cal. Jan. 2,
`2001). Rule 4(e) authorizes service upon an individual within a judicial district: “Unless otherwise
`provided by federal law, service upon an individual from whom a waiver has not been obtained and
`filed, other than an infant or an incompetent person, may be effected in any judicial district of the
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`United States: (1) pursuant to the law of the state in which the district court is located...” Fed. R.
`Civ. Proc. 4(e)(1). As such, where a waiver has not been obtained and Defendant is neither an infant
`nor incompetent person, the California Code of Civil Procedure governs the proper method of
`delivery. Section 415.10 of the California Code of Civil Procedure declares that a “summons may
`be served by personal delivery of a copy of the Summons and of the Complaint to the person to be
`served. Service of summons in this manner is deemed complete at the time of such delivery.” Cal.
`Code Civ. Proc. § 415.10.
`On April 27, 2005, Defendant was served with the Summons and Complaint by personal
`delivery at his residence which is in Novato, California. See Summons (Docket No. 4). Plaintiffs
`have not alleged in their Complaint that they obtained a waiver from Defendant. In addition,
`Plaintiffs’ counsel has declared that Defendant is not an infant, incompetent person, nor in military
`service. See Sheila M. Salomon Decl. in Support of Application for Default Judgment ¶¶ 4, 5
`(October, 10, 2005). Hence, under Federal Rule of Civil Procedure 4 and California Code of Civil
`Procedure Section 415.10, service of process via personal delivery to Defendant was properly
`effected.
`B.
`Entry for Default Judgment/ Personal and Subject Matter Jurisdiction
`Defendant has not filed an Answer nor otherwise appeared in the action. Salomon Decl. in
`Support of Applic. for Entry of Default Judgment, at ¶ 4. Given Defendant’s absence and the
`allegation by Plaintiffs that Defendant is not an infant, incompetent person, nor in the military
`service, the entry of default judgment by the Court was proper. Furthermore, since all allegations
`are taken as true on motions for default judgment, Plaintiffs’ claims regarding Defendant’s residence
`in the District and his acts of infringement that violate the Copyright Act provide the Court with
`personal jurisdiction as well as subject matter jurisdiction. See Pl.’s Compl. ¶ 3.
`Default Judgment and the Eitel Factors
`C.
`After entry of default judgment, a court may grant a default judgment on the merits of the
`case. See Fed. R. Civ. P. 55. “The district court’s decision whether to enter a default judgment is a
`discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Factors which inform
`the exercise of discretion as to the entry of a default judgment include: (1) the possibility of
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`prejudice to the plaintiff; (2) the merits of plaintiff’s substantive claim; (3) the sufficiency of the
`complaint; (4) the sum of the money at stake in the action; (5) the possibility of a dispute concerning
`material facts; (6) whether the default was due to excusable neglect; and (7) the strong public policy
`underlying the Federal Rules of Civil Procedure favoring decisions on the merits. Eitel v. McCool,
`782 F.2d 1470, 1471-72 (9th Cir. 1986). Since, as noted above, default has already been entered in
`this case, the Court must take as true all factual allegations in Plaintiffs’ complaint except for those
`related to the amount of damages. See Televideo Sys., Inc. v. Hidenthal, 826 F.2d 915, 917-18 (9th
`Cir. 1987).
`The Possibility of Prejudice to Plaintiffs
`1.
`The first Eitel factor “considers whether the plaintiff will suffer prejudice if default judgment
`is not entered.” Pepsico, Inc. v. Cal. Sec. Cans, 238 F.Supp.2d 1172, 1177 (C.D. Cal. 2002). This
`Court has found such prejudice when the denial of the default judgment would have left the Plaintiff
`“without other recourse for recovery.” See Webb v. Indigenous Global Dev. Corp., 2005 WL
`1200203, at *3 (N.D. Cal. May 16, 2005). In the case at bar, Plaintiffs would suffer prejudice if a
`default is not entered since, without an injunction, Plaintiffs would not be able to enjoin Defendant
`from continuing to reproduce and distribute copyrighted sound recordings. Nor would Plaintiffs be
`able to obtain monetary relief to which they are entitled under the Copyright Act. Effectively,
`Plaintiffs would not have any other recourse for recovery.
`2.&3. The Merits of Plaintiffs’ Substantive Claim and Sufficiency of the Complaint
`The second and third Eitel factors “require that a plaintiff state a claim on which the
`[plaintiff] may recover.” Philip Morris U.S.A., Inc. v. Castworld Products, Inc., 219 F.R.D. 494,
`500 (C.D. Cal. 2003) (internal citations omitted).
`Plaintiffs allege direct copyright infringement and generally cite to provisions under the
`Copyright Act. Pl.’s Compl. ¶ 1. Section 501(b) of the Copyright Act deems that “the legal or
`beneficial owner of an exclusive right under copyright is entitled, subject to requirements of section
`411, to institute an action for infringement of that particular right committed while he was an owner
`of it.” 17 U.S.C. § 501(b). The 9th Circuit has further required that, in order to establish a prima
`facie case of direct infringement, Plaintiffs must satisfy two requirements: (1) they must show
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`ownership of the allegedly infringed material and (2) they must demonstrate that the alleged
`infringers violate at least one exclusive right granted to copyright holders under 17 U.S.C. § 106.
`A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1014 (9th Cir. 2001).
`a.
`Ownership
`“With respect to ownership, the copyright registration certificate constitutes prima facie
`evidence in favor of the plaintiff, creating a presumption of ownership.” Elektra Entertainment
`Group, Inc. v. Bryant, 2004 U.S. Dist. LEXIS 26700, at *9 (finding ownership when Plaintiffs
`provided a list of their copyrighted sound recordings which were each the subject of a valid
`certificate of copyright registration (C.D. Cal. 2004, February 13, 2004)). Similarly, in the present
`case, Plaintiffs have not provided the Court with the actual registration certificate. However, in
`Exhibit A, they have provided a list of eight copyrighted sound recordings which are all subject to
`valid certificates of copyright registration. Salomon Decl., Ex. A. Furthermore, in the Complaint,
`Plaintiffs have asserted that each of the copyrighted sounds recordings listed in Exhibit A are subject
`to a valid Certificate of Copyright Registration. Pl.’s Compl. ¶ 13. As such, the Court presumes
`Plaintiffs’ owned the allegedly infringed materials.
`However, it is unclear how many of the hundreds of sound recordings listed in Exhibit B are
`owned by Plaintiffs. In the Complaint, they allege that they own only “certain of the sound
`recordings listed on Exhibit B.” Id. Since Plaintiffs did not specifically identify which sound
`recordings they own, this ambiguity weighs against Plaintiffs’ substantive claim regarding the extent
`of Defendant’s alleged copyright infringement. However, it does not affect the fact that Plaintiffs
`have clearly identified ownership over at least eight sound recordings that were copyrighted and that
`Defendant allegedly infringed.
`b.
`Violations of 17 U.S.C. § 106
`Section 106 of the Copyright Act lays out six exclusive rights that belong to copyright
`owners.1 In their Complaint, Plaintiffs allege that Defendant willfully used and continues to use an
`
`1 The owner of the copyright has the exclusive rights: “(1) to reproduce the copyrighted work
`in copies or phonorecords; (2) to prepare derivative works based upon the copyrighted work; (3) to
`distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of
`ownership, or by rental, lease, or lending; (4) in the case of literary, musical, dramatic, and
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`online media distribution system to download, distribute, and/or make available for distribution
`Copyrighted Recordings. These alleged acts are in direct violation of the rights of reproduction
`under Subsection 106(1) and distribution under Subsection 106(3). Given these allegations and the
`aforementioned ownership of at least eight copyrighted sound recordings, Plaintiffs have adequately
`stated a claim for copyright infringement.
`4.
`Sum of Money at Stake
`Pursuant to the fourth Eitel factor, “the court must consider the amount of money at stake in
`relation to the seriousness of Defendant’s conduct.” Philip Morris U.S.A., Inc., 219 F.R.D. at 500
`(internal citations omitted) (noting that defendant’s willful infringement of plaintiff’s trademarks
`justified the imposition of a substantial $2 million award). If the sum at stake is completely
`disproportionate or inappropriate considering Defendant’s actions, default judgment is disfavored.
`See Board of Trustees of the Cal. Metal Trades v. Pitchometer Propeller, 984 F.Supp. 978, 978
`(N.D. Cal. 1997) (in granting default judgment, noting that “[t]he amount of money at stake is
`reasonable, properly documented and contractually justified”). As discussed further under “Part E:
`Damages,” infra, Plaintiffs seek a total of $6,403.00 in total damages: $750 in minimum statutory
`damages for each infringement under 17 U.S.C. § 504(c)(1) and $403.00 in costs pursuant to 17
`U.S.C. § 505. The overall damage request is tailored specifically to the copyright infringement by
`Defendant. Plaintiffs are seeking the minimum statutory damages. In addition, Plaintiffs have
`suffered great harm due to Defendant’s alleged piracy. As such, the Court finds the amount of
`money at stake is reasonable.
`5.
`Possibility of a Dispute Concerning Material Facts
`If the plaintiff has filed a well-pleaded complaint, alleging facts sufficient to support his
`claim, and the clerk has entered default, the court presumes there is no dispute over facts. Elektra
`Entertainment, Inc. v. Bryant, 2004 LEXIS 26700, at *5 (C.D. Cal. Feb. 13, 2004) (citing Televideo
`
`choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the
`copyrighted work publicly; (5) in the case of literary, musical, dramatic, and choreographic works,
`pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion
`picture of other audiovisual work, to display the copyrighted work publicly; and (6) in the case of sound
`recordings, to perform the copyrighted work publicly by means of a digital audio transmission.” 17
`U.S.C. § 106.
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`Sys., Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987)). In the instant case, Plaintiffs have
`adequately stated a claim for copyright infringement, alleging facts sufficient to support the claim,
`and the Clerk has entered default. In all likelihood, the act of downloading copyright songs can be
`documented by objective evidence. Since Defendant has not made any attempt to challenge
`Plaintiffs, then the analysis of this factor supports a default judgment.
`6.
`Whether the Default was Due to Excusable Neglect
`Usually, a court will ask whether the failure to answer is due to excusable neglect. See Eitel,
`782 F.2d at 1472 (noting the fact that the parties were engaged in settlement negotiations excused
`defendant from failing to answer). In Webb v. Indigenous Global Dev. Corp., this Court found it
`unlikely that a Defendant’s failure to answer and consequently default was a result of excusable
`neglect when Defendant had been properly served with a summons and complaint, with a request to
`enter default judgment, and an application for default judgment. Webb, 2005 WL 1200203, at *4.
`Similarly, in the instant case, Defendant was properly served the Summons and Complaint on April
`27, 2005, was provided notice of entry of default on July 6, 2005, and the application for default
`judgment on October 10, 2005. See Summons (Docket No. 4), Certificate of Service (Docket No.
`9), Certificate of Service (Docket No. 18). Given these circumstances, it is unlikely that
`Defendant’s failure to answer and consequently default was a result of excusable neglect.
`7.
`The Strong Public Policy Underlying the Federal Rules of Civil Procedure Favoring
`Decisions on the Merits
`Generally, default judgments are disfavored because “cases should be decided upon their
`merits whenever reasonably possible.” Eitel, 782 F.2d at 1472. However, because a discretionary
`standard is applied, “default judgments are more often granted than denied.” Pepsico v. Triunfo-
`Mex, Inc., 189 F.R.D. 431, 432 (C.D. Cal. 1999). In this case, Plaintiffs have provided notice to
`Defendant concerning the various stages leading up to this application for entry of default judgment
`and they have pled relevant facts supporting their copyright infringement claim. As such, the policy
`encouraging decisions of cases on their merits does not weigh against granting default judgment.
`Based on all the Eitel factors discussed above, the Court recommends that Plaintiffs’ motion
`for default judgment be granted.
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`D.
`
`Remedies
`1.
`Statutory Damages
`Although the factual contentions of the Complaint must be taken as true, those statements
`regarding damages are an exception, and a hearing in order to determine damages is authorized by
`Federal Rule of Civil Procedure 55(b). While the courts are not obligated to hold such hearings, it
`may not simply rely on bare assertions of damages; it must ensure the propriety of the damages
`sought. Transatlantic Marine Claims Agency v. Ace Shipping Corp., 109 F.3d 109, 111 (2d Cir.
`1997). The plaintiff must prove up damages.
`The Copyright Act provides that “the copyright owner may elect, at any time before
`judgment is rendered, to recover, instead of actual damages and profits, an award of statutory
`damages for all infringements involved in the action, with respect to any one work...in the sum of
`not less than $750 or more than $30,000 as the court considers just.” 17 U.S.C. § 504(c)(1). A
`plaintiff can recover statutory damages regardless of adequate evidence of the actual damages
`suffered or the profits reaped by Defendant. Columbia Pictures Television, Inc. v. Krypton Broad,
`of Birmingham, Inc., 259 F.3d 1186, 1194 (9th Cir. 1997).
`Under the Copyright Act, if the Court finds that Defendant committed the infringement
`willfully, as Plaintiffs allege in this case, it has the discretion to increase the award to a sum of not
`more than $150,000. 17 U.S.C. § 504(c)(2). The Court has great discretion to determine the amount
`of damages to be awarded within statutory limits. Elektra Entertainment Group, 2004 LEXIS
`26700, at *19, 20 (citing Nimmer § 14.04[B][3] at 14-55 (Rel. No. 574/02)).
`Although Plaintiffs here have alleged willfulness in their Complaint, they seek only the
`minimum award of statutory damages of $750 for each infringed work. Pl’s Applic. for Entry of
`Default Judgment at ¶ 4. Although not expressly mentioned, Plaintiffs appear to be asking for
`damages for infringement of the eight sound recordings listed in Exhibit A of the Complaint. They
`do not appear to seek damages for any copyrighted sound recordings in Exhibit B. Plaintiffs request
`a total award of $6,000, an amount which is ascertainable from the Application for Entry of Default
`Judgment. These damages are reasonable and appropriate given the finding that at least eight
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`recordings were illegally downloaded and the need to deter Defendant and others from violating
`Plaintiffs’ rights in the future. As such, the Court recommends that Plaintiffs’ award be granted.
`2.
`Permanent Injunctive Relief
`The Copyright Act authorizes a court to grant injunctions “on such terms as it may deem
`reasonable to prevent or restrain infringement of a copyright.” 17 U.S.C. 502(a). The four elements
`for granting a permanent injunction include: (1) irreparable harm; (2) success on the merits; (3) a
`balancing of competing claims of injury to the parties; and (4) consideration of the public interest.
`Sony Music Entm’t, Inc. v. Global Arts Prod. 45 F.Supp. 2d 1345, 1347 (S.D. Fla. 1999) (citing
`Warren Pub., Inc. v. Microdos Data Corp., 115 F.3d 1509, 1516 (11th Cir.), cert. den., 522 U.S. 963
`118 S. Ct. 397, 139 L. Ed. 2d 311 (1997)). Injunctive relief is a traditional remedy for copyright
`infringement and is especially favored where there is a history of continuing infringement and a
`substantial threat of continued infringement. Id.
`Plaintiffs seek an injunction to enjoin Defendant from reproducing, distributing, or making
`available for distribution to the public any present and future Copyrighted Recordings owned by
`Plaintiffs and/or their affiliate record labels. Plaintiffs further request that Defendant destroy all
`copies of Plaintiffs’ Copyrighted Recordings that he has downloaded or transferred onto any
`computer hard drive, server, physical medium, or device without Plaintiffs’ authorization. Pl.’s
`Compl. ¶ 18.
`Plaintiffs allege that Defendant’s conduct is causing irreparable injury that cannot fully be
`compensated or measured in money, and that they will continue to suffer such an injury unless the
`Court enjoins Defendant from continuing to infringe Plaintiffs’ copyrights. Pl.’s Compl. ¶ 18.
`Copyright infringement is presumed to give rise to irreparable injury. Elektra Entm’t Group, 2004
`LEXIS 26700, at *17 (citing A&M Records v. Napster, 114 F.Supp. 2d 896, 925 (N.D. Cal. 2000)).
`Hence, when seeking a permanent injunction in copyright cases, irreparable harm is presumed on a
`showing of success on the merits. Id. at *17-18 (citing Micro Star v. Formgen, Inc., 154 F.3d 1107,
`1109; Sony Music Entm’t, 45 F.Supp. 2d at 1347). In addition, given the default on the merits,
`Plaintiffs have established success on the merits. Id. (citing Caribbean Produce Exchange v. Caribe
`Hydro-Trailer, Inc., 65 F.R.D. 46, 48 (D.P.R. 1974)).
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`An analysis of the third and fourth elements also weighs in Plaintiffs’ favor of granting an
`injunction. Plaintiffs claim that damages could not adequately compensate them for the harm caused
`by Defendant’s widespread infringements. Pl’s Applic. for Entry of Default Judgment at 7: 3-5.
`There is no question that any piracy committed by Defendant results in monetary injury to Plaintiffs.
`In fact, the extent of this injury is difficult, if not impossible, to measure especially given the means
`of infringement -- an online distribution system with millions of potential users who can further
`unlawfully distribute sound recordings. Such an infringement leaves Plaintiffs “vulnerable to
`massive, repeated, near-instantaneous, and worldwide infringement.” Elektra Entm’t Group, 2004
`LEXIS 26700, at *19, 20. In addition, the public interest factor also favors an injunction. Record
`piracy is reportedly a multi-billion dollar-a-year “industry” worldwide which can keep companies
`from reaping financial rewards and cause record labels to increase wholesale prices of compact discs
`and prevent companies from taking a risk on records in the future. Sony Music Entm’t, Inc., 45 F.
`Supp. 2d at 1348. Conversely, there is no obvious injury to a protectible interest suffered by
`Defendant if Defendant is ordered not to unlawfully reproduce, distribute, or make available for
`distribution to the public the Plaintiffs’ Copyrighted Recordings and to destroy those which were
`illegally downloaded.2
`Given the aforementioned reasons and the fact that there is no evidence that Defendant will
`not continue to infringe Plaintiffs’ recordings, a permanent injunction is warranted.
`3.
`Costs
`The Copyright Act gives the Court the discretion to allow recovery of full costs. 17 U.S.C. §
`505. Plaintiffs seek reimbursement of costs in the amount of $403.00 without any documentation to
`show why they are entitled to these costs. See Salomon Decl. ¶ 6. In this District, a prevailing party
`may recover the Clerk’s filing fee “if paid by the claimant” and fees for service of process “to the
`extent reasonable required and actually incurred.” Civ. L.R. 54-3(a)(1). Hence, it is reasonable for
`the Court to infer that $250.00 was spent for these purposes and this amount should be awarded.
`(Docket No. 1 (indicating receipt of filing fee upon filing complaint)). If Plaintiffs would like to
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`2 The injunction requested by Plaintiffs does not specify that the distribution, reproduction, or
`download be unlawful. To be enjoined, they must be.
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`recover the remaining $153.00, then they must provide documentation detailing how the costs were
`incurred.
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`III. CONCLUSION
`For the foregoing reasons, this Court recommends that Plaintiffs’ motion for default
`judgment and request for permanent injunction against Defendant be granted. Plaintiffs should be
`awarded $6,000 in statutory damages for copyright infringement and $250.00 in costs. Defendant
`should be permanently enjoined from unlawfully reproducing, distributing, or making available for
`distribution any present and future Copyrighted Recordings owned by Plaintiffs and/or their affiliate
`record labels. Defendant should be further ordered to destroy all copies of Plaintiffs’ Copyrighted
`Recordings that he has unlawfully downloaded and transferred onto any computer hard drive, server,
`physical medium, or device.
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`Dated: March 21, 2006
`
`
`
`_________________________
` EDWARD M. CHEN
`United States Magistrate Judge
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`United States District Court
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`11