Case 2:18-cv-00141-KSH-CLW Document 21 Filed 02/20/20 Page 1 of 13 PageID: 225
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`NOT FOR PUBLICATION
`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW JERSEY
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`
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`MALIBU MEDIA, LLC,
`Plaintiff,
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`
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`Civil No.: 2:18-cv-00141-KSH-CLW
`
`
`OPINION
`
`
`v.
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`
`
`AMIRAM PELED,
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` Defendant.
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`
`
`Katharine S. Hayden, U.S.D.J.
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`
`I. Introduction
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`
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`This matter comes before the Court on the unopposed motion for default
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`judgment (D.E. 20) pursuant to Fed. R. Civ. P. 55(b)(2) brought by plaintiff Malibu
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`Media, LLC (“Malibu Media”), a creator and distributor of pornographic films, against
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`defendant Amiram Peled (“Peled”). The Court has reviewed all submissions made in
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`support of this motion and decides it without oral argument pursuant to Federal Rule
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`of Civil Procedure 78(b) and Local Civil Rule 78.1(b). For the reasons stated below,
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`the motion is denied because Malibu Media has not sufficiently shown that Peled
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`committed the complained of acts of infringement.
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`II. Background
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`Malibu Media, the owner of the copyrighted pornographic movies at issue in this
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`case, alleges that Peled is a persistent online infringer of its copyrights. (D.E. 12
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`(“Amend. Compl.”) ¶ 2.) Malibu Media labels him as such because his Internet Protocol
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`address (“IP address”) was used to illegally distribute 19 copyrighted movies via the
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`BitTorrent file distribution network (“BitTorrent”), a peer-to-peer filing sharing system
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`used to distribute large amounts of data. (Amend. Compl. ¶¶ 2, 10, 23.; see also D.E. 12-
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`1, Ex. A). Malibu Media further contends that its investigator, IPP International UG,
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`established a direct Transmission Control Protocol (“TCP”)/IP connection with
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`Peled’s IP address, and was therefore able to confirm that the IP address was used to
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`download, copy, and distribute Malibu Media’s works without authorization. (Id. ¶¶ 17-
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`23.)1 Because Malibu Media has identified Peled as the subscriber of the IP address, it
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`asserts that it was Peled who illegally downloaded, reproduced, distributed, and
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`displayed its films. (Amend. Compl. ¶¶10, 23.)
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`III. Procedural History
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`On January 5, 2018, Malibu Media filed a complaint against John Doe Subscriber
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`IP address 148.75.88.44, claiming damages for copyright infringement pursuant to the
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`Copyright Act of 1976, 17 U.S.C. §§ 1010 et seq (“Copyright Act”). (D.E. 1.) Malibu
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`Media then used “proven IP address geolocation technology” which it claims has
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`“consistently worked in similar cases” to trace the alleged acts of copyright infringement
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`1 To distribute a large file, the BitTorrent protocol breaks the file down into many small pieces,
`which BitTorrent users exchange amongst themselves. Each of these small file pieces is assigned a
`unique “hash value.” These hash values ensure that each small piece is properly routed amongst
`BitTorrent users as they engage in file sharing. The entire media file is also assigned a specific hash
`value. Malibu Media’s investigator established a direct connection with Peled’s IP address and
`downloaded one or more pieces of Malibu Media’s files, as identified by their specific hash values, to
`confirm that an internet user at Peled’s IP address had illegally maintained Malibu Media’s content.
`(Amend. Compl. ¶¶ 12-21.)
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`

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`to a physical address located within the District of New Jersey. (Amend. Comp. ¶ 5.)
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`Malibu Media asserts that this geolocation technology “has proven to be accurate to the
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`District level in over 99% of cases.” (Id. ¶ 6.)
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`On January 24, 2018, Malibu Media moved for leave to serve a third-party
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`subpoena on John Doe Subscriber’s Internet Service Provider (“ISP”). (D.E. 5.) The
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`ISP maintains internal logs, which record the date, time, and customer identity for each
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`IP address assignment made by that IP. (D.E. 4 (“Pl. Motion for Leave to Serve a
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`Third-Party Subpoena”), at pg. 5.) As a result, the ISP can use this information to
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`identify the subscriber of a given IP address. Malibu’s motion was granted on March
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`26, 2018 (D.E. 6) and on August 3, 2018, it filed an amended complaint naming Peled
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`as the defendant-subscriber. (D.E. 12.)
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`On August 11, 2018, Peled was personally served with the summons and
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`amended complaint at his home address in New Jersey. (D.E. 17.) Peled failed to
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`answer, move, or otherwise respond. Malibu Media requested that default be entered
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`against him on October 30, 2018 (D.E. 19) and it was entered the next day. Malibu
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`Media filed this motion for default judgment on March 15, 2019 (D.E. 20) and served
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`the motion for default on Peled by mail to his New Jersey address. (D.E. 20-1.)
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`IV. Discussion
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`a. Standard of Review
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`
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`The Court may enter default judgment under Fed. R. Civ. P. 55(b)(2) against a
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`properly served defendant who does not file a timely responsive pleading. The “entry
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`of default judgment is left primarily to the discretion of the district court.” Hritz v.
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`Woma Corp., 732 F.2d 1178, 1180 (3d Cir. 1984). In Chanel, Inc. v. Gordashevsky, Judge
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`Kugler cited to Third Circuit precedent and wrote the authoritative opinion relied upon
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`in this District, stating that in ruling on a motion for default judgment, the Court accepts
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`the well-pleaded factual allegations in the complaint as true but “need not accept the
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`moving party’s legal conclusions or allegations relating to the amount of damages,” and,
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`further, the Court must “ascertain whether ‘the unchallenged facts constitute a
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`legitimate cause of action, since a party in default does not admit mere conclusions of
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`law.’” 558 F. Supp. 2d 532, 535-36 (D.N.J. 2008) (citations omitted); see also Comodyne
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`I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990).
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`Prior to entering default judgment, the Court must be satisfied that it has subject
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`matter and personal jurisdiction, that defendant was properly served, and that defendant
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`failed to file an answer or otherwise respond to the complaint within 21 days, as
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`provided by the Federal Rules. See Baymont Franchise Sys., Inc. v. Shree Hanuman, Inc., 2015
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`WL 1472334, at *2, 3 (D.N.J. Mar. 30, 2015) (McNulty, J.); see also Gold Kist, Inc. v.
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`Laurinburg Oil Co., Inc., 756 F.2d 14, 18-19 (3d Cir. 1985); Fed. R. Civ. P. 12(a).
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`Additionally, the Court must consider the following three factors: “(1) prejudice to the
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`plaintiff if default is denied, (2) whether the defendant appears to have a litigable
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`defense, and (3) whether defendant's delay is due to culpable conduct.” Chamberlain v.
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`Giampapa, 210 F.3d 154, 164 (3d Cir. 2000); see also Nationwide Mut. Ins. Co. v. Starlight
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`Ballroom Dance Club, Inc., 175 Fed. Appx. 519, 522 (3d Cir. 2006).
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`b. Jurisdiction
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`Before entering default judgment against a party who has failed to plead or
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`otherwise defend against a complaint, the Court has an “affirmative duty to look into
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`its jurisdiction both over the subject matter and the parties.” Ramada Worldwide, Inc. v.
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`Benton Harbor Hari Ohm, L.L.C., 2008 WL 2967067, at *9 (D.N.J. July 31, 2008) (internal
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`citations omitted) (Greenaway, J.). 28 U.S.C. § 1331 provides that “district courts shall
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`have original jurisdiction of all civil actions arising under the Constitution, laws, or
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`treaties of the United States.” 28 U.S.C. § 1331. Malibu Media has sued under the
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`Copyright Act (Amend. Compl. ¶¶ 1, 4). Because the Act creates a cause of action in
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`favor of the copyright owner for direct infringement, the Court has subject matter
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`jurisdiction. 17 U.S.C. § 501. The Court also has personal jurisdiction over Peled. A
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`person’s “domicile, or home, constitutes the paradigmatic forum for the exercise of
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`general jurisdiction. Chanel, Inc. v. Matos, 133 F.Supp.3d 678, 684 (internal quotations
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`and citations omitted) (Simandle, J.). Peled is a resident of New Jersey and was
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`personally served at his New Jersey residence. (Amend. Comp. ¶ 9.)
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`c. Sufficiency of Proof of Service
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`“Before the Court can enter default judgment, it must find that process was
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`properly served on the Defendant.” Teamsters Pension Fund of Phila., 2011 WL 4729023,
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`at *2 (Simandle, J.) (citing Gold Kist, Inc. v. Laurinburg Oil Co., Inc., 756 F.2d 14, 19 (3d
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`Cir. 1985)). An individual defendant may be served by “delivering a copy of the
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`summons and of the complaint to the individual personally[.]” Fed. R. Civ. P. 4(e).
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`Because Peled was personally served with a copy of the summons and complaint at his
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`home on August 11, 2018, the Court finds that service was proper.
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`d. Sufficiency of Causes of Action
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`In assessing whether the complaint states a legitimate cause of action, the Court
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`accepts the well-pleaded factual allegations in the complaint as true, but “need not
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`accept the moving party’s legal conclusions or allegations relating to the amount of
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`damages” and must “ascertain whether ‘the unchallenged facts constitute a legitimate
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`cause of action, since a party in default does not admit mere conclusions of law.’”
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`Chanel, 558 F. Supp. 2d at 535-36 (citations omitted). A plaintiff asserting a claim for
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`copyright infringement must establish “(1) ownership of a valid copyright; and (2)
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`unauthorized copying of original elements of the plaintiff’s work.” Dun & Bradstreet
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`Software Servs., Inc. v. Grace Consulting, Inc., 307 F.3d 197, 206 (3d Cir. 2002) (citation
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`omitted).
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`Malibu Media is the registered owner of the 19 copyrighted films it alleges Peled
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`pirated via BitTorrent without its permission or consent. (Amend. Comp. ¶¶ 3, 10 22,
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`25 29, 30-32; D.E. 12-1.) And Malibu Media asserts that it relied on geolocation
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`technology to identify Peled’s IP address and trace it to an address in this District. (Id.
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`¶¶ 5-6.) However, the Court is concerned that, no matter how reliable the tracing
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`technology is, Peled’s status as the subscriber of the IP address is insufficient to prove
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`that he was in fact the infringer of the copyrighted materials.
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`There are decisions in this District that hold a plaintiff’s use of geolocation
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`technology to identify a subscriber is sufficient to order default judgment in a copyright
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`infringement case. And many of these cases involve this plaintiff, Malibu Media,
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`pleading analogous facts—individual defendants purportedly illegally downloading
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`pornographic films. See, e.g., Malibu Media, LLC v. Toshi Yamada, 2019 WL 1586813, at
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`*2 (D.N.J. Apr. 12, 2019) (Salas, J.); Malibu Media, LLC v. Tsao, 2016 WL 3450815, at
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`*3 (D.N.J. June 20, 2016) (Arleo, J.) ; and Malibu Media, LLC v. Deleon, 2016 WL
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`3452481, at *3 (D.N.J. June 20, 2016) (Arleo, J.). But other district courts, here and
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`outside the District of New Jersey, have evaluated the relevant technology, considered
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`its limitations, and found comparable factual allegations insufficient to grant copyright
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`owners’ requests both for expedited discovery and default judgment.
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`In November 2018, Judge Royce Lamberth denied an adult movie producer’s
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`request for a Rule 26(f) subpoena to identify the owner of an IP address. Strike 3
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`Holdings, LLC v. Doe, 351 F. Supp. 3d 160 (D.D.C. 2018), on appeal, No. 18-7188 (Dec.
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`19, 2018). The plaintiff, like Malibu Media, had identified an infringing IP address and
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`used the same type of geolocation technology to trace the defendant’s address to the
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`court’s jurisdiction. However, unlike Peled, the defendant in that case was still
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`anonymous. As a result, Judge Lamberth was therefore particularly concerned with the
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`unnamed defendant’s privacy and the danger of "having your name and reputation
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`publicly—and permanently connected” to pornographic movie titles; however, he also
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`took issue with the imprecise nature of the request (i.e., that the subpoena would not
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`necessarily identify a copyright infringer) and criticized the coercive nature of these
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`types of lawsuits. In a scathing opinion, Judge Lamberth described Strike 3 as a
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`“copyright troll,” and accused it of using bad technology to support predatory litigation.
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`This method is famously flawed: virtual private networks and onion routing
`spoof IP addresses (for good and ill); routers and other devices are unsecured;
`malware cracks passwords and opens backdoors; multiple people (family,
`roommates, guests, neighbors, etc.) share the same IP address; a geolocation
`service might randomly assign addresses to some general location if it cannot
`more specifically identify another. . . Simply put, inferring the person who pays
`the cable bill illegally downloaded a specific file is even less trustworthy than
`inferring they watched a specific TV show. Id. at 162.
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`He also criticized Strike 3’s litigation strategy:
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`[T]he copyright troll’s success rate comes not from the Copyright Act, but
`from the law of large numbers. According to PACER, over the past thirteen
`months, Strike 3 has filed 1849 cases just like this one in courts across the
`country—forty in this district alone. . . . These serial litigants drop cases at the
`first sign of resistance, preying on low-hanging fruit and staying one step ahead
`of any coordinated defense. They don’t seem to care about whether defendant
`actually did the infringing, or about developing the law. Id.
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`Preliminarily, Judge Lamberth found that Strike 3 had shown the good cause
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`required for the Court to order discovery because using geolocation technology justifies
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`a good-faith belief that the court had personal jurisdiction over the defendant. Id. at
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`162-163. However, applying the standard set forth by the Second Circuit in Arista
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`Records, LLC v. Doe 3, 604 F.3d 110, 119 (2d Cir. 2010), which requires a balancing of
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`interests by the Court, and placing great weight on the anonymous defendant’s
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`expectation of privacy, he denied the motion for early discovery. Id. at 164. Judge
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`Lamberth further reasoned that “Strike 3’s request lacks the type of specificity the test
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`requires: that the request will identify a copyright infringer who can be sued.” Id. at 164
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`(citations omitted). The court noted that Strike 3 could not withstand a 12(b)(6)
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`motion; more extensive discovery would be required to establish that defendant actually
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`did the infringing. “Strike 3’s requested subpoena thus will not—and may never—
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`identify a defendant who could be sued.” Id. The name of the individual who
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`subscribes to the IP address did not provide the Strike 3 court with confidence that the
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`subscriber downloaded the copyrighted material himself—as opposed to someone else
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`with access to the network.
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`Judge Lamberth concluded his opinion with the following reprimand of the
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`plaintiff-media company:
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`Armed with hundreds of cut-and-pasted complaints and boilerplate discovery
`motions, Strike 3 floods this courthouse (and others around the country) with
`lawsuits smacking of extortion. It treats this Court not as a citadel of justice,
`but as an ATM. Its feigned desire for legal process masks what it really seeks:
`for the Court to oversee a high-tech shakedown. This Court declines. Id. at
`166.
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`The Ninth Circuit relied on similar reasoning in Cobbler Nevada LLC v. Gonzalez,
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`901 F.3d 1142, 1145 (9th Cir. 2018), albeit the case involved neither adult films nor
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`alleged “patent trolls.” There, the plaintiff owned the copyright to a mainstream film,
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`and identified the IP address that downloaded and distributed its movie via BitTorrent.
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`Id. The defendant-subscriber operated an adult foster care home, where internet was
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`accessible to numerous residents and visitors alike. The Ninth Circuit affirmed the
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`district court’s finding that plaintiff had not plausibly stated a claim for direct
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`infringement based solely on linking the IP address to its subscriber. Id. at 1146-47. The
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`court explained:
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`Although copyright owners can often trace infringement of copyrighted
`material to an IP address, it is not always easy to pinpoint the particular
`individual or device engaged in the infringement. Internet providers, such as
`Comcast or AT&T, can go so far as to identify the individual who is registered
`to a particular IP address (i.e., an account holder) and the physical address
`associated with the account, but that connection does not mean that the
`internet subscriber is also the infringer. The reasons are obvious—simply
`establishing an account does not mean the subscriber is even accessing the
`internet, and multiple devices can access the internet under the same IP
`address. Identifying an infringer becomes even more difficult in instances like
`this one, where numerous people live in and visit a facility that uses the same
`internet service. While we recognize this obstacle to naming the correct
`defendant, this complication does not change the plaintiff's burden to plead
`factual allegations that create a reasonable inference that the defendant is the
`infringer. Id.
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`The Cobbler court therefore concluded that the claims for copyright infringement
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`
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`were properly dismissed, because plaintiff had not alleged facts that were “above a
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`speculative level.” Id. at 1147. “Because multiple devices and individuals may be able
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`to connect via an IP address, simply identifying the IP subscriber solves only part of
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`the puzzle. A plaintiff must allege something more to create a reasonable inference that
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`a subscriber is also an infringer.” Id. at 1145.
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`
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`Following Cobbler, Judge Ellis of the Northern District of Illinois dismissed a
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`lawsuit filed by Malibu Media accusing a John Doe IP address subscriber of torrenting
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`copyrighted works. Malibu Media, LLC v. Doe, 2018 WL 6446404 (N.D. Ill. Dec. 10,
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`2018) (“Doe”). The court found that Malibu Media had not “sufficiently tied Doe to
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`the alleged infringing conduct to support a copyright claim” and dismissed the
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`complaint pursuant to Rule 12(b)(6). Id. at 3. The decision found that the ruling in
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`Cobbler was not limited to situations where multiple residents and visitors could access
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`an IP address. Id.
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`In this District, Judge Vazquez summarized the preceding cases and, persuaded
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`by their reasoning, found that Malibu Media “will have to show something more than
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`merely tying [d]efendant to an IP address in order to sufficiently establish copyright
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`infringement.” See Malibu Media v. Park, 2019 WL 2960146, at *3-6 (Vazquez. J.)
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`(“Park”). He agreed with Cobbler’s finding that the link between a subscriber and his IP
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`address does not permit the inference that the subscriber is the infringer; quoting
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`Cobbler, Judge Vazquez wrote that “[t]he reasons are obvious—simply establishing an
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`account [through an ISP] does not mean the subscriber is even accessing the internet,
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`and multiple devices can access the internet under the same IP address.” Id. at *6
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`(quoting Cobbler, 901 F.3d at 1146-47). He further noted the evidentiary concerns raised
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`by the Strike 3 court—including “virtual private networks,” “onion routing spoof IP
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`addresses,” and the danger that “a geolocation service might randomly assign addresses
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`to some general location if it cannot more specifically identify another[.]” Id. Judge
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`Vazquez recognized that technology’s limitations inevitably burden the plaintiff seeking
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`to identify an infringer, but concluded that “such that limitations do not relieve a
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`plaintiff of alleging sufficient facts so that a court can reasonably infer that the named
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`defendant is the actual infringer.” Id. This Court finds Judge Vazquez’s reasoning very
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`persuasive.
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`This District offers another case where the judicial officer raised concerns. In
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`another of its lawsuits, Strike 3 had requested a Rule 26(f) subpoena from Magistrate
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`Judge Joel Schneider, who preliminarily ordered the parties to show cause why the court
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`should not adopt and follow the decision of Judge Lamberth discussed above. Strike 3
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`Holdings, LLC v. Doe, 2019 WL 5446239, at *1 (Strike 3 II). Following a “deep dive into
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`Strike 3’s practices,” Judge Schneider eventually denied the company’s request for
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`expedited discovery, agreeing with Judge Lamberth’s ruling, but emphasizing a different
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`reason for finding that good cause did not exist.
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` Despite [Strike 3’s] admitted lack of knowledge of who downloaded its works,
`whether the subscriber lives at the identified address, and who lives at the
`address, Strike 3’s complaints unequivocally aver in conclusory fashion that the
`listed subscriber to the identified IP address directly infringed its copyrights….
`Strike 3 makes these unequivocal averments even though it recognizes the
`subscriber may not have downloaded its works. Id. at 4.
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`Judge Schneider acknowledged that the court was not deciding a motion to
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`dismiss, but denied Strike 3’s request because the company did not plead a cognizable
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`claim. Id. at 6. As pleaded, the complaint was futile; Strike 3 could not make out a
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`prima facie claim of copyright infringement based solely on the connection between an
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`IP address and its subscriber.
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`Strike 3’s complaints are devoid of facts sufficient to show it is entitled to relief
`from the named John Doe/IP subscriber. The only material fact pleaded in
`Strike 3’s complaints is that the listed IP address is associated with the
`downloading of Strike 3’s works and the John Doe is the subscriber of the
`address. All other material averments in Strike 3’s complaints, e.g., that the
`John Doe subscriber downloaded Strike 3’s works, are conclusory statements,
`not facts. If Strike 3’s complaints are stripped of their conclusory statements,
`they are left with the notion that merely subscribing to an IP address that
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`

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`downloaded copyrighted works is sufficient to make out a cause of action for
`copyright infringement. This is not sufficient. Id. at 7.
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`Judge Schneider acknowledged Strike 3’s argument that it may not be able to
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`
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`identify the alleged copyright infringer without the requested discovery, but stated that
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`“the fact that the law lags behind technology is not an ill the Court can cure.” Id. at 9.
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`The Court adopts the reasoning in Strike 3, Cobbler, Doe, Park, and Strike 3 II and
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`echoes Judge Vazquez’s conclusion that “[Malibu Media] will have to show something
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`more than merely tying Defendant to an IP address in order to sufficiently establish
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`copyright infringement.” Park, 2019 WL 2960146, at *6. Because Malibu Media has
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`not made a sufficient showing to conclude that Peled in fact infringed its copyright, the
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`Court denies the request for default judgment.2
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`V. Conclusion
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`For the reasons set forth above, Malibu Media’s motion for default judgment is
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`denied. An appropriate order will be entered.
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`Dated: February 20, 2020
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`
`
`/s/ Katharine S. Hayden
`Katharine S. Hayden, U.S.D.J.
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`
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`
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`2 The Court need not reach any damages analysis because it has denied default judgment.
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`