Case 2:16-cv-01804-JAD-NJK Document 44 Filed 10/24/17 Page 1 of 11
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`UNITED STATES DISTRICT COURT
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`DISTRICT OF NEVADA
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`LHF Productions, Inc.,
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`2:16-cv-01804-JAD-NJK
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`Plaintiff
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`v.
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`Philina Buenafe,
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`Defendant
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`Order Granting Default Judgment
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`[ECF No. 43]
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`This is one of several essentially identical cases filed by plaintiff LHF
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`Productions, Inc., in which LHF sues many unidentified Doe defendants—under a
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`single filing fee—for infringing its copyright in the film “London Has Fallen” by
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`using BitTorrent software. LHF’s practice in these cases is to move for expedited
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`discovery to identify the defendants, and then systematically dismiss the
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`defendants after failing to serve them, or settling with them.1 LHF brought this
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`particular case against 18 initially unidentified defendants.2 After learning their
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`identities, LHF amended its complaint against 14 named defendants, and then LHF
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`proceeded to dismiss them from the case.3 Only one defendant remains: Philina
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`Buenafe. LHF now moves for default judgment against Buenafe, and because she
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`has been completely absent from this action, I grant the motion.
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`After identifying Buenafe, LHF sent a demand letter informing her of this
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`Background
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`1 See LHF Productions, Inc. v. Smith, 2:16-cv-01803-JAD-NJK; LHF Productions,
`Inc. v. Kabala, 2:16-cv-02028-JAD-NJK; LHF Productions, Inc. v. Boughton, 2:16-
`cv-01918-JAD-NJK; LHF Productions, Inc. v. Wilson, 2:16-cv-02368-JAD-NJK.
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`2 ECF No. 1.
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`3 See generally docket report case 2:16-cv-01804-JAD-NJK.
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`Case 2:16-cv-01804-JAD-NJK Document 44 Filed 10/24/17 Page 2 of 11
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`case and her potential liability.4 Buenafe did not respond, so LHF sent her a second
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`demand letter approximately three weeks later.5 LHF filed its first-amended
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`complaint three weeks after that and sent Buenafe a third demand letter and
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`served her with process.6 Despite adequate service of process, Buenafe did not
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`respond to the first-amended complaint or demand letter.7 The Clerk of Court
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`entered default against Buenafe on May 8, 2017.8 LHF now moves for default
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`judgment, requesting $15,000 in statutory damages, $6,480 in attorney’s fees and
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`costs, and a permanent injunction to prohibit Buenafe from further infringing its
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`copyright.9
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`A.
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`Default-judgment standard
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`Discussion
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`Federal Rule of Civil Procedure 55(b)(2) permits a plaintiff to obtain default
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`judgment if the clerk previously entered default based on a defendant’s failure to
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`defend. After entry of default, the complaint’s factual allegations are taken as true,
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`except those relating to damages.10 “[N]ecessary facts not contained in the
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`pleadings, and claims [that] are legally insufficient, are not established by
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`4 ECF No. 43 at 4.
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`5 Id.
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`6 Id.
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`7 Id.
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`8 ECF No. 34.
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`9 ECF No. 43.
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`10 TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987) (per
`curiam); FED. R. CIV. P. 8(b)(6) (“An allegation—other than one relating to the
`amount of damages—is admitted if a responsive pleading is required and the
`allegation is not denied.”).
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`Case 2:16-cv-01804-JAD-NJK Document 44 Filed 10/24/17 Page 3 of 11
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`default.”11 The court has the power to require a plaintiff to provide additional proof
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`of facts or damages in order to ensure that the requested relief is appropriate.12
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`Whether to grant a motion for default judgment lies within my discretion,13 which is
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`guided by the seven factors outlined by the Ninth Circuit in Eitel v. McCool:
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`(1) the possibility of prejudice to the plaintiff; (2) the
`merits of plaintiff’s substantive claim; (3) sufficiency of
`the complaint; (4) the sum of 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 policy underlying the Federal Rules of Civil
`Procedure favoring decisions on the merits.14
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`A default judgment is generally disfavored because “[c]ases should be decided upon
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`their merits whenever reasonably possible.”15
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`B.
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`Evaluating the Eitel factors
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`1.
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`Possibility of prejudice to LHF
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`The first Eitel factor weighs in favor of granting default judgment against
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`Buenafe. LHF sent Buenafe numerous demand letters and a summons along with
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`the first-amended complaint, but Buenafe never responded. LHF claims that
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`Buenafe infringed its copyright by downloading its film using BitTorrent software.
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`Given the nature of BitTorrent software, Buenafe may be exacerbating LHF’s injury
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`by seeding the file to the BitTorrent swarm.
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`2.
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`Substantive merits and sufficiency of the claims
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`The second and third Eitel factors require LHF to demonstrate that it has
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`11 Cripps v. Life Ins. Co., 980 F.2d 1261, 1267 (9th Cir. 1992).
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`12 See Fed. R. Civ. P. 55(b)(2).
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`13 Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986).
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`14 Eitel, 782 F.2d at 1471–72.
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`15 Id. at 1472.
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`Case 2:16-cv-01804-JAD-NJK Document 44 Filed 10/24/17 Page 4 of 11
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`stated a claim on which it may recover.16 The first-amended complaint sufficiently
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`pleads LHF’s direct-copyright-infringement, contributory-copyright-infringement,
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`and vicarious-liability claims.
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`To present a prima facie case of direct infringement, LHF must show that: (1)
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`it owns the allegedly infringed material, and (2) the alleged infringers violate at
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`least one exclusive right granted to copyright holders under 17 U.S.C. § 106.17 LHF
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`alleges that it is the owner of the copyright registration for the film “London Has
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`Fallen.”18 LHF also alleges that Buenafe willfully violated several exclusive rights
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`granted by 17 U.S.C. § 106 and that those violations caused it to suffer damages.19
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`The contributory-copyright-infringement claim requires LHF to allege that
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`Buenafe “had knowledge of the infringing activity” and “induce[d], cause[d,] or
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`materially contribute[d] to the infringing conduct of another.”20 “Put differently,
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`liability exists if the defendant engages in personal conduct that encourages or
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`assists the infringement.”21 Given the nature of BitTorrent technology, BitTorrent-
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`swarm participants who download files compulsorily upload those same files so that
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`other participants may download them at a faster rate. Accordingly, LHF’s
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`allegation that each defendant is a contributory copyright infringer because they
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`16 See Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978).
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`17 A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001).
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`18 ECF No. 8 at 11, ¶ 46; see also ECF No. 8-2.
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`19 ECF No. 8 at 11–12.
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`20 A&M Records, 239 F.3d at 1019 (quoting Gershwin Publ’g Corp. v. Columbia
`Artists Mgmt., 443 F.2d 1159, 1162 (2d Cir. 1971) and citing Fonovisa, Inc. v.
`Cherry Auction, Inc., 76 F.3d 259, 264 (9th Cir. 1996)).
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`21 Id. (quoting Matthew Bender & Co. v. West Publ’g Co., 158 F.3d 693, 706 (2d Cir.
`1998)).
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`Case 2:16-cv-01804-JAD-NJK Document 44 Filed 10/24/17 Page 5 of 11
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`participated in a BitTorrent swarm22 is sufficient to satisfy the induced-caused-or-
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`contributed requirement. LHF satisfies the remaining requirements by alleging
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`that each defendant knew or should have known that other BitTorrent-swarm
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`participants were directly infringing on LHF’s copyright by downloading the files
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`that they each uploaded.23
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`LHF also claims that each defendant, as the account holder for the Internet
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`service, is vicariously liable for any infringing activity conducted by other users on
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`its Internet connection.24 “Vicarious infringement is a concept related to, but
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`distinct from, contributory infringement.”25 “To state a claim for vicarious copyright
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`infringement, [LHF] must allege that [Buenafe] had (1) the right and ability to
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`supervise the infringing conduct and (2) a direct financial interest in the infringing
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`activity.”26
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`LHF’s allegations satisfy the first prong of the vicarious-infringement test.
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`As the court discussed in Dallas Buyers Club, LLC v. Doughty, “the Internet service
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`account holder, appea[rs] to have had exclusive control over use of the Internet
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`service” and the account holder “could have simply secured access to the Internet by
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`creating a password or by changing an already existing password.”27 “Thus, . . . [the
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`account holder] had the capacity to terminate use of [her] Internet service by any
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`infringing third party if [s]he believed it was being used to violate applicable law.”28
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`22 ECF No. 8 at 13, ¶ 56.
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`23 Id. at 13, ¶¶ 58–61.
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`24 Id. at 14.
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`25 Perfect 10, Inc. v. Visa Intern. Service Ass’n, 494 F.3d 788, 802 (9th Cir. 2007).
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`26 Id.
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`27 Dallas Buyers Club, LLC v. Doughty, 2016 WL 1690090 (D. Or. Apr. 27, 2016).
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`28 Id. (citing A&M Records, 239 F.3d 1004).
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`Case 2:16-cv-01804-JAD-NJK Document 44 Filed 10/24/17 Page 6 of 11
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`LHF also satisfies the direct-financial-interest prong. “The essential aspect
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`of the direct financial benefit inquiry is whether there is a causal relationship
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`between the infringing activity and any financial benefit a defendant reaps,
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`regardless of how substantial the benefit is in proportion to a defendant’s overall
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`profits.”29 “Financial benefit exists where the availability of infringing material
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`acts as a ‘draw’ for customers.”30 “The size of the ‘draw’ relative to a defendant’s
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`overall business is immaterial. A defendant receives a ‘direct financial benefit’ from
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`a third-party infringement so long as the infringement of third parties acts as a
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`‘draw’ for customers ‘regardless of how substantial the benefit is in proportion to a
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`defendant’s overall profits.’”31 LHF alleges that Buenafe benefitted from third-party
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`infringement by viewing “London Has Fallen” without paying for it.32 The law is
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`clear that it doesn’t matter how large the financial benefit is: by watching the
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`BitTorrent-downloaded film, Buenafe saved the cost of a movie ticket, and that is a
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`direct financial benefit.
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`I therefore find that LHF sufficiently pled each of its claims in the first-
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`amended complaint. I also find that LHF’s claims have substantive merit, subject
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`to any defenses that Buenafe could raise.
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`3.
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`Sum of money at stake
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`The sum-of-money factor requires me to consider “the amount of money at
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`29 Perfect 10, Inc. v. Giganews, Inc., 2014 WL 8628031, at *3 (C.D. Cal. Nov. 14,
`2014) (quoting Ellison v. Robertson, 357 F.3d 1072, 1079 (9th Cir. 2004)).
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`30 A&M Records, 239 F.3d at 1023.
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`31 Perfect 10, 2014 WL 8628031, at *3 (quoting Ellison, 357 F.3d at 1079).
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`32 ECF No. 8 at 14, ¶ 68.
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`Case 2:16-cv-01804-JAD-NJK Document 44 Filed 10/24/17 Page 7 of 11
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`stake in relation to the seriousness of [Buenafe]’s conduct.”33 “If the sum of money
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`at stake is completely disproportionate or inappropriate, default judgment is
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`disfavored.”34 LHF asks for statutory damages and attorney’s fees and costs.
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`For statutory damages, LHF requests $15,000 under 17 U.S.C. § 504(c).35
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`The statute sets a $750 minimum and a $30,000 maximum award of damages for
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`copyright infringement,36 and that maximum can be increased up to $150,000 where
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`the infringement was willful.37 I have “wide discretion in determining the amount
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`of statutory damages to be awarded, constrained only by the specified maxima and
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`minima.”38
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`Given Buenafe’s numerous opportunities to respond to LHF’s demand letters,
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`first-amended complaint, and this motion, coupled with LHF’s unopposed
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`allegations that I take as true, the factual showing before me indicates that
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`Buenafe is a willful copyright infringer. But I do not find that $15,000 is necessary
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`to compensate LHF for its injury and to deter Buenafe and other BitTorrent users.
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`Although I acknowledge that other courts—even in LHF’s other cases in another
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`district—awarded $15,000 for the same offense, I am not persuaded by their
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`actions. After considering the lost-profits movie ticket sales, the cost of identifying
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`infringers and pursuing litigation, and the boundaries provided by § 504(c), I
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`33 Twentieth Century Fox Film Corp. v. Streeter, 438 F. Supp. 2d 1065, 1071 (D.
`Ariz. 2006) (quoting PepsiCo, Inc. v. California Security Cans, 238 F. Supp. 2d
`1172, 1176 (C.D. Cal. 2002)).
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`34 Twentieth Century Fox, 438 F. Supp. 2d at 1071.
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`35 ECF No. 41 at 8.
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`36 17 U.S.C. § 504(c)(1) (2012).
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`37 17 U.S.C. § 504(c)(2) (2012).
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`38 Peer Int’l Corp. v. Pausa Records, Inc., 909 F.2d 1332, 1336 (9th Cir. 1990)
`(quoting Harris v. Emus Records Corp., 738 F.2d 1329, 1335 (9th Cir. 1984)).
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`Case 2:16-cv-01804-JAD-NJK Document 44 Filed 10/24/17 Page 8 of 11
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`determine that $1,500 is the appropriate damage award. This amount—187.5
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`times as much as the average $8.00 per movie ticket suggested by
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`LHF39—adequately accomplishes the goals of § 504(c) to protect copyrighted works
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`and deter infringement. This amount is also not excessive because it is only 1% of
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`the statutory maximum for willful infringement.
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`The Copyright Act also allows courts to award the recovery of full costs and
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`reasonable attorney’s fees to the prevailing party as part of those costs.40 LHF, in
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`applying the lodestar method,41 moves for $6,000 in attorney’s fees,42 and $480 in
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`costs, for a total of $6,480. The total sum of money at stake, then, is $7,980, and I
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`find that this factor weighs in favor of default judgment.
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`4.
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`Possibility of a dispute concerning material facts
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`Next I consider the possibility that material facts are disputed. LHF
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`adequately alleged three copyright-infringement claims against Buenafe. Buenafe
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`failed to appear or otherwise respond, so she admitted as true all of the material
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`facts alleged in LHF’s complaint. Because those facts are presumed true and
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`Buenafe failed to oppose this motion, no factual disputes exist that would preclude
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`the entry of default judgment against her.
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`5.
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`Excusable neglect
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`Under this factor, I consider whether Buenafe’s default may have resulted
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`from excusable neglect. LHF sent Buenafe two demand letters roughly six and
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`three weeks prior to filing its first-amended complaint. Buenafe did not respond to
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`39 See case 2:16-cv-02028-JAD-NJK, ECF No. 66 at 9 n.3 and accompanying text
`(LHF’s objection to report and recommendation, incorporated by reference in this
`case at ECF No. 41).
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`40 17 U.S.C. § 505 (2012).
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`41 See Camacho v. Bridgeport Financial, Inc., 523 F.3d 973, 978 (9th Cir. 2008).
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`42 This number is based on a rate of $375.00 per hour for 16 hours.
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`Case 2:16-cv-01804-JAD-NJK Document 44 Filed 10/24/17 Page 9 of 11
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`either of them. Then LHF filed its first-amended complaint on November 10, 2016,
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`and sent Buenafe a third demand letter. She did not respond to that letter either.
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`LHF served Buenafe with process on February 6, 2017, and Buenafe failed to
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`appear or file an answer to the first amended complaint. Five and a half months
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`later, LHF moved for default judgment, and Buenafe, once again, did not respond.
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`Buenafe has demonstrated a habit of ignoring LHF, so I can only conclude that her
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`default was not the product of excusable neglect. This factor thus weighs in favor of
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`entering default judgment.
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`6.
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`Favoring decisions on the merits
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`“Generally, default judgments are disfavored because cases should be decided
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`upon their merits whenever reasonably possible.”43 Because Buenafe has failed to
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`respond to anything at all in this action, it is not possible to decide this case on its
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`merits, so this factor, too, weighs in favor of default judgment. As every factor
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`weighs in favor of entering default judgment, I grant LHF’s motion as it pertains to
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`Buenafe.
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`C.
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`Permanent injunction
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`As its final claim for relief, LHF asks for a permanent injunction enjoining
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`Buenafe from “directly or indirectly infringing [its] rights” over its film “including[,]
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`without limitation[,] using the Internet to reproduce, to distribute, to copy, or to
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`publish the motion picture.”44 The Copyright Act allows me to “grant temporary
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`and final injunctions on such terms as [I] may deem reasonable to prevent or
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`restrain infringement of a copyright.”45 The Supreme Court held in eBay Inc. v.
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`MercExchange, L.L.C. that a plaintiff must satisfy a four-factor test to receive a
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`43 Twentieth Century Fox, 438 F. Supp. 2d at 1072 (quoting Eitel v. McCool, 782
`F.2d 1470, 1472 (9th Cir. 1986)).
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`44 ECF No. 43 at 12.
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`45 17 U.S.C. § 502(a) (2012).
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`Case 2:16-cv-01804-JAD-NJK Document 44 Filed 10/24/17 Page 10 of 11
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`permanent injunction in a patent-infringement case.46 LHF must demonstrate: “(1)
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`that it has suffered an irreparable injury; (2) that remedies available at law, such
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`as monetary damages, are inadequate to compensate for that injury; (3) that,
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`considering the balance of hardships between the plaintiff and defendant, a remedy
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`in equity is warranted; and (4) that the public interest would not be disserved by a
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`permanent injunction.”47 This test also applies to copyright-infringement cases.48
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`LHF argues that “[m]onetary damages alone are simply inadequate” because
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`“absent injunctive relief to force the deletion of each torrent file from the
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`Defendants’ computers . . . infringement will continue unabated in exponential
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`fashion.”49 I only consider whether monetary damages are sufficient to deter
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`Buenafe’s infringing activity. I conclude that a monetary judgment of $7,980 is
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`sufficient to compensate LHF for any infringement injury and likely to sufficiently
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`deter Buenafe from infringing LHF’s copyright, so LHF fails to satisfy the second
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`factor of the permanent-injunction test, and I deny its request for injunctive relief.
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`D.
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`Objection to report and recommendation
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`LHF objected in this case to a report and recommendation,50 but there is no
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`report and recommendation pending. A report and recommendation was issued in
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`four of LHF’s other cases, so it’s easy to see what caused the confusion. In this case,
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`however, Magistrate Judge Koppe ordered LHF to show cause why the court should
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`not (1) sever all defendants except the first defendant, (2) dismiss the remaining
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`46 eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006).
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`47 Id.
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`48 Flexible Lifeline Systems, Inc. v. Precision Lift, Inc., 654 F.3d 989, 995–96 (9th
`Cir. 2011).
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`49 ECF No. 43 at 11.
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`50 ECF No. 41.
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`Case 2:16-cv-01804-JAD-NJK Document 44 Filed 10/24/17 Page 11 of 11
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`defendants without prejudice, and (3) quash any subpoenas for discovery to the
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`extent they pertain to any defendants other than the first named defendant. After
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`that order was issued, LHF dismissed all claims against the remaining defendants
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`except Buenafe, so Magistrate Judge Koppe discharged her order to show cause and
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`never issued a report and recommendation.51 Nevertheless, LHF’s objection still
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`sits on the docket, and I overrule it as moot.
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`Conclusion
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`Accordingly, IT IS HEREBY ORDERED that LHF’s motion for default
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`judgment [ECF No. 43] is GRANTED. I award LHF $1,500 in statutory damages
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`and $6,480 in reasonable attorney’s fees and costs for a total of $7,980. I decline to
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`issue a permanent injunction against Buenafe.
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`IT IS FURTHER ORDERED that LHF’s objection to Magistrate Judge
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`Koppe’s report and recommendation [ECF No. 41] is OVERRULED as moot.
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`The Clerk of Court is directed to ENTER JUDGMENT in favor of LHF
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`Productions, Inc. and against Philina Buenafe in the total amount of $7,980 and
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`CLOSE THIS CASE.
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`DATED: October 24, 2017.
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`_______________________________
`Jennifer A. Dorsey
`United States District Judge
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`51 ECF No. 40.
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