Case 1:04-cv-09466-RMB-HBP Document 53 Filed 06/29/07 Page 1 of 24
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`-----------------------------------X
`JOAN JETT, KENNETH LAGUNA and
`:
`CARIANNE MUSIC, INC.,
`:
`Plaintiffs,
`:
`-against-
`:
`THOMAS FICARA, d/b/a "Reach
`:
`Entertainment," REACH
`ENTERTAINMENT, INC.,
`:
`ENTERTAINMENT UK, LTD.,
`SONY MUSIC ENTERTAINMENT UK,
`:
`BERTUS DISTRIBUTIE and MSI
`MUSIC CORP., d/b/a "MSI of Miami,"
`:
`Defendants.
`:
`-----------------------------------X
`
`04 Civ. 9466 (RMB)(HBP)
`REPORT AND
`RECOMMENDATION
`
`PITMAN, United States Magistrate Judge:
`
`TO THE HONORABLE RICHARD M. BERMAN, United States
`District Judge,
`
`I. Introduction
`
`On February 24, 2005, the Honorable Richard M. Berman,
`United States District Judge for the Southern District of New
`York, referred this matter to me to conduct an inquest and to
`issue a report and recommendation concerning plaintiff's damages.
`Although no default had been entered as to any defendant prior to
`the Order of Reference, the reference was issued while there was
`a pending motion, brought on by an Order to Show Cause issued by
`Judge Berman on January 13, 2005, for a default judgment as to
`
`
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`-----------------------------------X
`JOAN JETT, KENNETH LAGUNA and
`:
`CARIANNE MUSIC, INC.,
`:
`Plaintiffs,
`:
`-against-
`:
`THOMAS FICARA, d/b/a "Reach
`:
`Entertainment," REACH
`ENTERTAINMENT, INC.,
`:
`ENTERTAINMENT UK, LTD.,
`SONY MUSIC ENTERTAINMENT UK,
`:
`BERTUS DISTRIBUTIE and MSI
`MUSIC CORP., d/b/a "MSI of Miami,"
`:
`Defendants.
`:
`-----------------------------------X
`
`04 Civ. 9466 (RMB)(HBP)
`REPORT AND
`RECOMMENDATION
`
`PITMAN, United States Magistrate Judge:
`
`TO THE HONORABLE RICHARD M. BERMAN, United States
`District Judge,
`
`I. Introduction
`
`On February 24, 2005, the Honorable Richard M. Berman,
`United States District Judge for the Southern District of New
`York, referred this matter to me to conduct an inquest and to
`issue a report and recommendation concerning plaintiff's damages.
`Although no default had been entered as to any defendant prior to
`the Order of Reference, the reference was issued while there was
`a pending motion, brought on by an Order to Show Cause issued by
`Judge Berman on January 13, 2005, for a default judgment as to
`
`
`
`Case 1:04-cv-09466-RMB-HBP Document 53 Filed 06/29/07 Page 2 of 24
`
`defendants Ficara and Reach Entertainment, Inc. ("Reach") (Docket
`Item 13). Based on this sequence of events, both plaintiffs'
`counsel and I understood the Order of Reference to refer this
`matter for an inquest as to defendants Ficara and Reach.
`Pursuant to the Order of Reference, I issued Schedul-
`ing Orders to Ficara and Reach, both dated April 28, 2005,
`directing plaintiffs to serve and file proposed findings of fact
`and conclusions of law as to each by June 30, 2005 and directing
`Ficara and Reach to submit responsive materials by July 29, 2005.
`Each of my April 28, 2005 Scheduling Orders further provided that
`if the defendant to whom it was directed:
`(1) FAIL[ED] TO RESPOND TO PLAINTIFFS' SUBMISSIONS, OR
`(2) FAIL[ED] TO CONTACT MY CHAMBERS BY JULY 29, 2005
`AND REQUEST AN IN-COURT HEARING, IT IS MY INTENTION TO
`ISSUE A REPORT AND RECOMMENDATION CONCERNING DAMAGES ON
`THE BASIS OF PLAINTIFFS' WRITTEN SUBMISSIONS ALONE
`WITHOUT AN IN-COURT HEARING. See Transatlantic Marine
`Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d
`105, 111 (2d Cir. 1997); Fustok v. ContiCommodity
`Services Inc., 873 F.2d 38, 40 (2d Cir. 1989) ("[I]t
`[is] not necessary for the District Court to hold a
`hearing, as long as it ensured that there was a basis
`for the damages specified in a default judgment.")
`(Emphasis in original).
`A copy of the April 28, 2005 Scheduling Order that was
`directed to Ficara was sent to him at 211 Priority Point Street,
`Henderson Nevada, 89012. A copy of the April 28, 2005 Scheduling
`Order that was directed to Reach was mailed to it at 1631 Eques-
`trian Drive, Henderson, Nevada 89015. Neither has been returned
`to my chambers as undeliverable.
`
`2
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`On plaintiffs' application, the date for plaintiffs'
`submissions was subsequently extended to July 13, 2005 and the
`date for the responses of Ficara and Reach was extended to August
`12, 2005. The Orders extending these dates contained the same
`admonition quoted above. A copy of the Order applicable to
`Ficara was mailed to him at 211 Priority Point Street, Henderson
`Nevada, 89012. A copy of the Order applicable to Reach was
`mailed to it at 1631 Equestrian Drive, Henderson, Nevada 89015.
`Neither of these two Orders has been returned to my chambers as
`undeliverable.
`Plaintiffs timely submitted proposed findings of fact
`and conclusions of law supported by evidentiary material.
`Neither Ficara nor Reach has made any written submission to me,
`nor has either contacted my chambers in any way.
`Accordingly, on the basis of plaintiffs' written
`submissions alone, I respectfully recommend that plaintiffs'
`motion for a default judgment be granted as to Ficara and Reach,
`that each be permanently enjoined from infringing the plaintiffs'
`copyrighted works and that judgment be entered in plaintiffs'
`favor against Ficara and Reach, jointly and severally in the
`amount of $250,000.
`
`3
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`II. Findings of Fact
`
`A. Nature of Action
`
`1. This is an action for copyright infringement of
`plaintiffs' registered musical works.1
`
`B. The Parties
`
`2. Plaintiff Carianne Music, Inc. (hereinafter
`"Carianne") is a corporation organized and existing under the
`laws of the state of New York, with its principal place of
`business at 636 Broadway, New York, New York 10012 (Compl. ¶ 3 ).2
`3. Plaintiff Joan Jett is a citizen of the state of
`New York (Compl. ¶ 4).
`
`In their complaint, plaintiffs also asserted claims against
`1
`Ficara and Reach for unfair competition in violation of Section
`43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and common law
`unfair competition. Since plaintiffs' proposed findings of fact
`and conclusions of law do not address these latter two claims in
`any respect, I deem them to be abandoned.
`As a result of Ficara and Reach's default, all the
`2
`allegations of the Petition, except as to the amount of damages,
`must be taken as true. Bambu Sales, Inc. v. Ozak Trading Inc.,
`58 F.3d 849, 854 (2d Cir. 1995); Greyhound Exhibitgroup, Inc. v.
`E.L.U.L. Realty Corp., 973 F.2d 155, 158-59 (2d Cir. 1992); Trans
`World Airlines, Inc. v. Hughes, 449 F.2d 51, 69-70 (2d Cir.
`1971), rev'd on other grounds, 409 U.S. 363 (1973); Wing v. E.
`River Chinese Rest., 884 F. Supp. 663, 669 (E.D.N.Y. 1995);
`Deshmukh v. Cook, 630 F. Supp. 956, 959 (S.D.N.Y. 1986).
`4
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`4. Jett is a famous musician and performer. Jett has
`become a figurehead for several generations of musical perform-
`ers, especially female performers (Compl. ¶ 15).
`5. Jett first achieved fame as a member of the musical
`group known as "The Runaways" which was formed in or about 1975
`(Compl. ¶ 16).
`6. As a solo artist, Jett has written and recorded
`numerous popular songs since the early 1980’s. Jett has been
`featured on television shows, in movies, and starred in the
`Broadway musical The Rocky Horror Picture Show. Jett's songs
`have been prominently featured in a variety of movies, such as
`Shrek, Dazed and Confused, Days of Thunder and Striptease and
`most recently, Bridget Jones, The Edge of Reason. Jett's songs
`have been prominently featured in advertisements for banks as
`well as national sporting events (Compl. ¶ 17).
`7. Jett has released albums and continued to perform
`at all times since 1975 (Compl. ¶ 18).
`8. Jett regularly performs for various charities and
`governmental organizations, ranging from local firefighting
`companies to appearances for overseas United States troops
`stationed in Afghanistan (Compl. ¶ 19).
`9. Plaintiff Kenneth Laguna is a citizen of the state
`of New York (Compl. ¶ 5).
`
`5
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`10. Laguna is also a songwriter and performer (Compl.
`
`¶ 20).
`
`11. Laguna's career began as an artist, songwriter and
`producer for well known acts such as The Ohio Express, The Lemon
`Peppers, Bill Medley, Jay and the Americans, Tony Orlando, Edwin
`Star and Darlene Love. Laguna is also a member of the band Tommy
`James and the Shondels (Compl. ¶ 21).
`12. Defendant Thomas Ficara d/b/a Reach Entertainment
`is an individual with an address at 211 Priority Point,
`Henderson, Nevada 89012, and business address at 1631 Equestrian
`Drive, Henderson, Nevada 89015 (Compl. ¶ 6).
`13. Upon information and belief, Ficara has been doing
`business as Reach Entertainment for more than ten (10) years
`(Compl. ¶ 22).
`14. Defendant Reach is an entity organized and exist-
`ing under the laws of the state of Nevada, with an address at
`1631 Equestrian Drive, Henderson, Nevada 89015 and 2901 Colanthe
`Ave., Las Vegas, Nevada 89102 (Compl. ¶ 7).
`15. Reach is owned, operated and controlled by Ficara
`(Compl. ¶ 23).
`16. Reach is merely used as the instrument of Ficara
`(Compl. ¶ 24).
`
`6
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`17. With respect to all acts described herein, the
`acts of Reach are also the acts of its officers, and vice versa
`(Compl. ¶ 25).
`
`C. Facts Underlying
` Plaintiffs' Claims
`
`18. At the end of the 1970's, Laguna began working
`with Jett as a producer, collaborator and musician (Declaration
`of Kenneth Laguna in Support of Default Judgment, dated July 14,
`2005 ("Laguna Decl."), ¶ 9).
`19. Laguna knew Jett as a member of the group The
`Runaways. Although The Runaways did not have huge commercial
`success in the United States, their music was very successful in
`other countries and was well regarded in the music industry.
`Jett was the group's guitarist, singer and songwriter (Laguna
`Decl. ¶ 10).
`20. Despite the success of The Runaways, no major
`record labels were willing to sign Jett to a recording contract.
`Jett and Laguna used their personal savings to press records and
`set up their own system of independent distributors. In 1980
`they released an album entitled Joan Jett (Laguna Decl. ¶ 11).
`3
`
`Some of the copyrighted works discussed in this report and
`3
`recommendation are individual songs. Other copyrighted works are
`what used to be referred to as albums, i.e. a collection of songs
`recorded on one or more discs and sold as a single unit. Some of
`the songs discussed have the same name as the albums on which
`(continued...)
`
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`21. Joan Jett was a commercial success and resulted in
`a contract among Jett, Laguna and Boardwalk Records, Inc.
`("Boardwalk"). Boardwalk re-released Joan Jett under the title
`Bad Reputation. Bad Reputation was also a commercial success
`(Laguna Decl. ¶ 12).
`22. In December 1981, Boardwalk issued a second album
`by Jett entitled I Love Rock 'N' Roll. The album reached the Top
`Five of the BillBoard charts (Laguna Decl. ¶ 13).
`23. Jett and Laguna initially owned the copyright to
`all the recordings on the album Joan Jett. These rights were
`transferred to Boardwalk when the album was re-released as Bad
`Reputation (Laguna Decl. ¶ 14).
`24. Boardwalk also originally owned all of the copy-
`rights to the recordings on the album I Love Rock 'N' Roll
`(Laguna Decl. ¶ 15).
`25. In May 1983, Jett and Laguna decided to leave
`Boardwalk and entered into an agreement under which Boardwalk's
`copyrights in Bad Reputation and I Love Rock 'N' Roll would be
`transferred to a company named Jett Lag, Inc. ("JLI"). JLI was
`wholly owned by Jett and Laguna (Laguna Decl. ¶¶ 16-17).
`
`(...continued)
`3
`they are recorded. To avoid confusion, I refer to an individual
`song, I enclose the title in quotation marks; when I refer to an
`album, I underline the title.
`
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`26. The total value of the consideration provided to
`Boardwalk for the option to purchase the copyrights and for the
`copyrights themselves was $3,310,000 (Laguna Decl. ¶ 23).
`
`1. The Sound Recording
` Copyrights in Issue
`
`27. The album Bad Reputation included recordings of
`the following compositions:
`(a) "Bad Reputation"
`(b) "Make Believe"
`(c) "You Don't Know What You've Got"
`(d) "You Don't Own Me"
`(e) "Too Bad on Your Birthday"
`(f) "Do You Want Touch Me (Oh Yeah)"
`(g) "Let Me Go"
`(h) "Doing All Right With the Boys"
`(i) "Shout"
`(j) "Jezebel"
`(k) "Don't Abuse Me"
`(l) "Wooly Bully"
`(Laguna Decl. ¶ 33).
`28. All of the recordings on Bad Reputation were
`registered with the Copyright Office by Registration SR-28-227
`which was issued to Boardwalk (Laguna Decl. ¶ 34 and Exhibit 7
`thereto).
`
`29. The individual recordings of "Do You Want to Touch
`Me (Oh Yeah)" and "Victim of Circumstance" were also registered
`with the Copyright Office by Registration SR-36-457, also issued
`to Boardwalk (Laguna Decl. ¶ 35 and Exhibit 8 thereto).
`
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`30. The individual recordings of "You Don't Own Me"
`and "Jezebel" were also registered with the Copyright Office by
`Registration SR-24-799, also issued to Boardwalk (Laguna Decl. ¶
`36 and Exhibit 9 thereto).
`31. Through a series of assignments, the foregoing
`copyrights were ultimately assigned to Carianne (Laguna Decl. ¶¶
`37-38).
`
`32. In 1992 Blackheart Records, Inc. ("Blackheart")
`re-released the album Bad Reputation; this release of the album
`included the songs listed above along with additional sound
`recordings (Laguna Decl. ¶¶ 39-40).
`33. The 1992 re-release of Bad Reputation was also
`registered with the Copyright Office by Registration SR-196-477
`which was ultimately transferred to Carianne (Laguna Decl. ¶ 41)
`34. The album I Love Rock 'N' Roll included recordings
`of the following compositions:
`(a) "I Love Rock 'N' Roll"
`(b) "(I'm Gonna) Run Away"
`(c) "Love is Pain"
`(d) "Nag"
`(e) "Crimson and Clover"
`(f) "Victim of Circumstance"
`(g) "Bits And Pieces"
`(h) "Be Straight"
`(i) "You're Too Possessive"
`(j) "Little Drummer Boy"
`(Laguna Decl. ¶ 24).
`
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`35. All of the recordings on I Love Rock 'N' Roll were
`registered with the Copyright Office by Registration SR-32-394,
`issued to Boardwalk (Laguna Decl. ¶ 25 and Exhibit 3 thereto).
`36. The individual recordings of "I Love Rock 'N'
`Roll" and "You Don't Know What You've Got" were also registered
`with the Copyright Office by Registration SR-32-501, also issued
`to Boardwalk (Laguna Decl. ¶ 26 and Exhibit 4 thereto).
`37. The individual recordings of "Crimson and Clover"
`and "Oh, Woe is Me" were also registered with the Copyright
`Office by Registration SR-32-501, also issued to Boardwalk
`(Laguna Decl. ¶ 27 and Exhibit 5 thereto).
`38. Through a series of assignments, the foregoing
`copyrights were ultimately assigned to Carianne (Laguna Decl. ¶
`29; see Compl. ¶ 44).
`39. In 1992, Blackheart re-released the album I Love
`Rock 'N' Roll; this release of the album included the songs
`listed above along with additional sound recordings (Laguna Decl.
`¶¶ 30-31).
`
`40. The 1992 re-release of I Love Rock 'N' Roll was
`also registered with the Copyright Office by Registration SR-193-
`813 and was ultimately transferred to Carianne (Laguna Decl. ¶
`32).
`
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`2. The Musical Composition
` Copyrights in Issue
`
`41. Jett and Laguna also authored, in whole or in
`part, the following musical compositions which were recorded on
`the album indicated and recorded with the Copyright Office by the
`registration indicated:
`Composition
`"Be Straight"
`
`Registration
`PA 130-932
`
`Album
`I Love Rock 'N'
`Roll
`I Love Rock 'N'
`Roll
`Bad Reputation
`
`"Victim of Circum-
`stance"
`"Bad Reputation"
`
`PA 130-931
`
`PA 101-071, PA
`133-023
`PA 133-025
`
`Bad Reputation
`
`"You Don't Know
`What You've Got"
`PA 133-026
`Bad Reputation
`"Let Me Go"
`PA 133-027
`Bad Reputation
`"Jezebel"
`(Laguna Decl. ¶¶ 44, 45, 49, 51-53 and Exhibits 11, 12, 16, 19-
`21, thereto).
`42. Jett authored the following musical compositions
`which were recorded on the Album indicated and registered with
`the Copyright Office by the registration indicated:
`Composition
`Album
`Registration
`"Love Is Pain"
`I Love Rock 'N'
`PA 130-930
`Roll
`I Love Rock 'N'
`Roll
`
`"Oh Woe Is Me"
`
`PA 130-918
`
`12
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`"(I'm Gonna) Run
`Away"
`"Don't Abuse Me"
`
`I Love Rock 'N'
`Roll
`Bad Reputation
`
`PA 130-929
`
`PA 101-074
`
`(Laguna Decl. ¶¶ 46-48, 54 and Exhibits 13-15, 22, thereto).
`43. In addition to the foregoing, Jett and Laguna also
`purchased the copyright to the composition "Make Believe" which
`was recorded on the album Bad Reputation and registered with the
`Copyright Office by registration PA 133-024 (Laguna Decl. ¶ 50
`and Exhibit 18 thereto).
`
`3. The Commercial Success of
` Certain of the Works in Issue
`
`44. Certain of the works in issue have enjoyed sub-
`stantial commercial success. Authoritative publications in the
`music industry reported that the song "I Love Rock 'N' Roll" was
`a number one hit for seven weeks and was listed on BillBoard's
`Top 40 Charts in 1982 for a total of sixteen weeks. Similarly,
`Jett's recording of "Crimson and Clover" reached the number seven
`position and was on BillBoard's Top 40 Charts in 1982 for a total
`of ten weeks. Jett's recording of "Do You Wanna Touch Me (Oh
`Yeah)" reached the number twenty position and was on BillBoard's
`Top 40 Charts for a total of seven weeks, also in 1982 (Laguna
`Decl. ¶59 and Exhibit 23 thereto).
`45. Jett's recording of "I Love Rock 'N' Roll" was the
`27th top selling recording for the period from 1955 through 1986
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`and was the fifth best selling recording between 1980 and 1986
`(Laguna Decl. ¶ 60).
`46. Jett is widely known and the recordings from the
`albums Bad Reputation and I Love Rock 'N' Roll have been featured
`on television shows and commercials and have been included in
`several compilations (Laguna Decl. ¶ 63).
`
`4. Ficara and
` Reach's Misconduct
`
`47. In the late 1990's, Ficara and Reach began falsely
`advising people that they owned the then-defunct Boardwalk
`Records and that they, therefore, owned Jett's recordings,
`including the albums Bad Reputation and I Love 'Rock 'N' Roll
`(Laguna Decl. ¶¶ 65-66).
`48. A few years after 1999, Ficara and Reach informed
`third parties that they owned the rights to the albums Bad
`Reputation and I Love Rock 'N' Roll and attempted to license the
`rights to these albums to these third parties. This conduct
`prevented Carianne from granting licenses to these recordings and
`the underlying compositions (Laguna Decl. ¶ 68).
`49. Carianne's attorneys wrote to Ficara and explained
`to him why he could not have the right he claimed to have (Laguna
`Decl. ¶ 69 and Exhibit 24 thereto).
`50. In February 2004, Carianne learned that parts of
`the albums Bad Reputation and I Love Rock 'N' Roll were being
`
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`included in compilation recordings. The parties responsible for
`the compilation recordings claimed to have rights to the albums
`through Ficara (Laguna Decl. ¶¶ 70-71 and Exhibits 25-26
`thereto).
`
`51. Several other parties have also exploited the
`albums Bad Reputation and I Love Rock 'N' Roll. Plaintiff has
`not, however, offered any evidence that these other parties claim
`rights through Ficara or Reach or that the conduct of Ficara or
`Reach has any relationship to their misconduct (Laguna Decl. ¶ 72
`and Exhibit 27 thereto).
`52. Plaintiffs also contend that the confusion in the
`market place created by the activities of Ficara and Reach caused
`plaintiffs to lose two deals for the manufacture and distribution
`of the albums Bad Reputation and I Love Rock 'N' Roll. Plain-
`tiffs, however, offer no explanation to support their conclusion
`that Ficara and Reach's conduct caused these negotiations to
`fail. For example, plaintiff does not claim that the other
`parties to the negotiations cited Ficara and Reach or their
`putative licensees as the reasons for their unwillingness to
`close. In addition, no detailed information is provided concern-
`ing the nature of the proposed transactions or how much revenue
`they would have generated for plaintiffs (Laguna Decl. ¶ 73). In
`short, plaintiff's theory that Ficara and Reach's conduct caused
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`these transactions to fail is entirely unsubstantiated and
`speculative.
`
`5. Ficara and
` Reach's Default
`
`53. According to the docket sheet in this matter,
`Ficara and Reach were served in December 2004. To date, the
`docket sheet does not indicate that either had answered or moved
`with respect to the complaint. Accordingly, both Ficara and
`Reach are in default for a period in excess of two years.
`
`III. Conclusions of Law
`
`A. Jurisdiction and Venue
`
`54. This Court has subject matter jurisdiction over
`plaintiffs' claims pursuant 28 U.S.C. §§ 1331 and 1338(a).
`55. Venue is proper in this District pursuant to 28
`U.S.C. § 1391(b) because either all, or a substantial part of,
`the acts and omissions giving rise to plaintiffs' claim arose in
`this District.
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`B. Ficara and Reach
` Have Committed
` Copyright Infringement
`
`56. 17 U.S.C. § 501(a) provides, in pertinent part:
`Anyone who violates any of the exclusive rights of
`the copyright owner as provided by sections 106 through
`118 . . . is an infringer of the copyright . . . ."
`57. 17 U.S.C. § 106 provides, in pertinent part:
`Subject to sections 107 through 120, the owner of
`copyright under this title has the exclusive rights to
`do and to authorize any of the following:
`(1) to reproduce the copyrighted works in
`copies or phonorecords;
`* * *
`(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 . . . .
`(Emphasis added.)
`58. Authorizing another to exploit the copyrights-in-
`suit also is copyright infringement. As stated by the Supreme
`Court:
`
`the Copyright Act grants the copyright holder "exclu-
`sive" rights to use and to authorize the use of his
`work in five qualified ways, including reproduction of
`the copyrighted work in copies. Id., § 106. . . .
`"Anyone who violates any of the exclusive rights
`of the copyright owner," that is, anyone who trespasses
`into his exclusive domain by using or authorizing the
`use of the copyrighted work in one of the five ways set
`forth in the statute, "is an infringer of the copy-
`right." Id., § 501. . . .
`
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`Sony Corp. of America v. Universal City Studios, Inc., 464 U.S.
`417, 432-33 (1984) (emphasis added). See also Tuff-N-Rumble
`Mgmt., Inc. v. Sugarhill Music Publ'g Inc., 75 F. Supp.2d 242,
`246-247 (S.D.N.Y. 1999).
`59. Thus, by purporting to authorize the manufacture
`and distribution of the albums Bad Reputation and I Love Rock 'N'
`Roll, Ficara and Reach have committed copyright infringement.
`
`C. Damages for
` Copyright Infringement
`
`60. Because Ficara and Reach have defaulted and
`plaintiffs have, therefore, been unable to conduct discovery,
`there is no evidence in the record concerning Ficara and Reach's
`profits nor is there any other information available from which
`actual damages could be estimated. Accordingly, plaintiffs have
`elected to seek statutory damages.
`61. 17 U.S.C. § 504 provides, in pertinent part:
`(c) Statutory Damages.--
`(1) Except as provided by clause (2) of
`this subsection, the copyright owner may
`elect, at any time before final judgment is
`rendered, to recover, instead of actual dam-
`ages and profits, an award of statutory dam-
`ages for all infringements involved in the
`action, with respect to any one work, for
`which any one infringer is liable individu-
`ally, or for which any two infringers are
`liable jointly and severally, in a sum of not
`less than $750 or more than $30,000 as the
`court considers just. For the purposes of
`
`18
`
`
`
`Case 1:04-cv-09466-RMB-HBP Document 53 Filed 06/29/07 Page 19 of 24
`
`this subsection, all parts of a compilation
`or derivative work constitute one work.[4]
`(2) In a case where the copyright owner
`sustains the burden of proving, and the court
`finds, that infringement was committed will-
`fully, the court in its discretion may in-
`crease the award of statutory damages to a
`sum of not more than $150,000. . . .
`62. The Court has broad discretion, within the statu-
`tory limits, in awarding statutory damages. Fitzgerald Publ'g
`Co. v. Baylor Publ'g Co., 807 F.2d 1110, 1116 (2d Cir. 1986); NFL
`v. PrimeTime 24 Joint Venture, 131 F. Supp.2d 458, 472 (S.D.N.Y.
`2001).
`
`63. In making such an award, the Court is required to
`consider various factors, including the expenses saved and
`profits reaped by the defendants, the revenues lost by the
`plaintiffs, the value of the copyright, the deterrent effect of
`the award on other potential infringers, and factors relating to
`individual culpability. Fitzgerald Publ'g Co. v. Baylor Publ'g
`Co., supra, 807 F.2d at 1117; Getaped.com, Inc. v. Cangemi, 188
`F. Supp.2d 398, 403 (S.D.N.Y. 2002); Guess?, Inc. v. Gold Center
`Jewelry, 997 F. Supp. 409, 411 (S.D.N.Y. 1998); Schwartz-Liebman
`
`In plaintiffs' proposed findings of fact and conclusions of
`4
`law, plaintiffs' counsel oddly omits the last sentence of
`subsection 504(c)(1) notwithstanding the critical relationship of
`this sentence to the calculation of statutory damages. Given the
`unmistakable importance of this sentence, the conclusion is
`inescapable that counsel's omission of this sentence was
`intentional. This type of conduct serves no purpose except to
`diminish the credence and reliance the Court affords to counsel's
`statements.
`
`19
`
`
`
`Case 1:04-cv-09466-RMB-HBP Document 53 Filed 06/29/07 Page 20 of 24
`
`Textiles v. Last Exit Corp., 815 F. Supp. 106, 108 (S.D.N.Y.
`1992).
`
`64. The default judgment in this case, as well as the
`facts and circumstances described in Plaintiffs' complaint and
`the declaration of Kenneth Laguna submitted herewith support the
`inference that Ficara and Reach are willful infringers. In
`particular, their continued infringement after notice of plain-
`tiffs' rights is compelling evidence of willfulness. Power Lift,
`Inc. v. Lang Tools, Inc., 774 F.2d 478, 482 (Fed. Cir. 1985)
`(patent infringement).
`65. Defendants infringed two albums to which plain-
`tiffs owned the copyrights -- Bad Reputation and I Love Rock 'N'
`Roll. Plaintiffs seek a separate award of statutory damages for
`each performance copyright and each composition copyright appli-
`cable to the recordings on the two infringed albums. This
`methodology is, however, defective as a matter of law. As
`explained by the Honorable Jed S. Rakoff, United States District
`Judge, in Country Road Music v. MP3.com, Inc., 279 F. Supp.2d
`325, 332 (S.D.N.Y. 2003):
`[P]laintiffs raise, apparently for purposes of any
`appeal, their disagreement with this Court's repeated
`prior rulings that statutory damages should be calcu-
`lated on a "per-CD," and not a "per-composition,"
`basis. See TVT, 134 F. Supp.2d at 548; UMG Recordings,
`Inc. v. MP3.com, Inc., 109 F. Supp.2d 223 (S.D.N.Y.
`2000). But the Copyright Act unambiguously provides
`that a "compilation," although composed of "separate
`and independent works," 17 U.S.C.A. § 101 (West Supp.
`2003), "constitute[s] one work" for purposes of calcu-
`
`20
`
`
`
`Case 1:04-cv-09466-RMB-HBP Document 53 Filed 06/29/07 Page 21 of 24
`
`lating statutory damages, 17 U.S.C.A. § 504(c)(1) (West
`Supp. 2003). Thus, each CD that defendant copied to
`its servers constitutes one work and the basis for one
`statutory damage award, even though it might contain
`multiple copyrighted musical compositions. Cf. Xoom,
`Inc. v. Imageline, Inc., 323 F.3d 279, 285 (4th Cir.
`2003). Accordingly, as this Court has previously held,
`any statutory damages will be calculated on a per-CD
`basis.
`Accord King Records, Inc. v. Bennett, 438 F. Supp.2d 812, 864-66
`(M.D. Tenn. 2006); Arista Records, Inc. v. Flea World, Inc., 03-
`2670 (JBS), 2006 WL 842883 at *21-*22 (D.N.J. Mar. 31, 2006);
`Rocking Chair Enter. L.L.C. v. Macerich SCG Ltd. P'ship, 407 F.
`Supp.2d 1263, 1268-69 (W.D. Okla. 2005). Accordingly, I conclude
`that only two "works" were infringed here -- the albums Bad
`Reputation and I Love Rock 'N' Roll -- and that plaintiffs are,
`therefore, entitled to statutory damages for the infringement of
`two works only.
`66. I conclude that plaintiffs are entitled to an
`award of statutory damages of $125,000 for each infringed work
`for a total of $250,000. Defendants' conduct was clearly willful
`and was clearly an attempt to profit from Jett's popularity.
`These factors weigh in favor of an award of damages toward the
`higher end of the applicable range. On the other hand, plain-
`tiffs' inability to offer any evidence at all on the volume of
`the infringing sales suggests that the infringement was less than
`massive. Notwithstanding the default of Ficara and Reach, if the
`infringing recordings were being sold in every CD outlet in the
`
`21
`
`
`
`Case 1:04-cv-09466-RMB-HBP Document 53 Filed 06/29/07 Page 22 of 24
`
`country or even in a substantial number of CD outlets, plaintiffs
`would be able to provide this information notwithstanding the
`default of Ficara and Reach. Plaintiffs' failure to offer any
`evidence regarding the volume of sales of the infringing record-
`ings suggests that their sales were not huge. This factor weighs
`in favor of a limited decrease in the amount of statutory damages
`awarded.
`
`IV. Conclusion
`
`Accordingly, for all the foregoing reasons, I respect-
`fully recommend that plaintiffs' motion for a default judgment as
`to Ficara and Reach be granted and that final judgment be entered
`against Ficara and Reach permanently enjoining them from further
`infringing plaintiffs' copyrighted works and awarding plaintiffs'
`judgment against Ficara and Reach, jointly and severally, in the
`amount of $250,000.
`
`V. Objections
`
`Pursuant to 28 U.S.C. § 636(b)(1)(C) and Rule 72(b) of
`the Federal Rules of Civil Procedure, the parties shall have ten
`(10) days from the date of this Report and Recommendation to file
`written objections. See also Fed.R.Civ.P. 6(a) and 6(e). Such
`objections (and responses thereto) shall be filed with the Clerk
`of the Court, with courtesy copies delivered to the chambers of
`
`22
`
`
`
`Case 1:04-cv-09466-RMB-HBP Document 53 Filed 06/29/07 Page 23 of 24
`
`Case 1:O4—cv—O9466—RMB—HBP Document 53 Filed 06/295 07 Page 23 of 24
`
`the Honorable Richard M. Berman, United States District Judge,
`
`500 Pearl Street, Room 650, New York, New York 10007, and to the
`
`chambers of the undersigned, 500 Pearl Street, Room 750, New
`
`[6
`York, New York 10007. Any requests for an exten ion of time for
`
`B
`filing objections must be directed to Judge Berm n.
`
`FAILURE TO
`
`OBJECT WITHIN TEN (10) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS
`
`AND WILL PRECLUDE APPELLATE REVIEW.
`Thomas V. ggn, 474 U.S. 140
`(1985);
`IUE AFL-CIO Pension Fund v. Her mann, 9 F.3d 1049, 1054
`
`(2d Cir. 1993); Frank V. Johnson, 968 F.2d 298, 800 (2d Cir.
`
`1992); We
`
`1 k V. Canadair Ltd., 838 F.2d 55, 57r591(2d Cir.
`
`1988); Mggarthy v. Manson, 714 F.2d 234, 237-38 K2d,Cir. 1983).
`
`Dated:
`
`New York, New York
`June 29, 2007
`
`Respectfully submitted,
`
`I
`
`HENRY EETMAN
`United States,Magistrate Judge
`
`Copy transmitted to:
`
`Oren J. Warshavsky, Esq.
`Troutman Sanders LLP(NYC)
`
`405 Lexington Avenue
`New York, New York
`
`10174
`
`Copies mailed to:
`
`Mr. Thomas Ficara
`
`211 Priority Point Street
`Henderson, Nevada
`89012.
`
`23
`
`
`
`Case 1:O4—cv—O9466—RMB—HBP Document 53 Filed O6/29;/O7 Page 24 of 24
`Case 1:04-cv-09466-RMB-HBP Document 53 Filed 06/29/07 Page 24 of 24
`
`Inc.
`each Entertainment,
`1631 Equestrian Drive
`Henderson, Nevada
`89015
`
`;
`i
`I
`
`24
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