Case 6:05-cv-00931-AA Document 56 Filed 10/26/06 Page 1 of 8 Page ID#: 551
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`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF OREGON
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`Civ. No. 05-931 AA
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`OPINION AND ORDER
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`ELEKTRA ENTERTAINMENT GROUP,
`INC., a Delaware corporation;
`UMG RECORDINGS, INC., a
`Delaware corporation; SONY
`BMG MUSIC ENTERTAINMENT, a
`Delaware partnership; WARNER
`EROS. RECORDS INC., a Delaware
`corporatlon; VIRGIN RECORDS
`AMERICA, INC., a California
`cdrporatlon; and BMG MUSIC, a
`New York general partnership,
`
`Plaintiffs,
`
`" - z
`2 , KELLIE PEREZ;
`F
`ANTHONY PEREZ; and CLAIRE
`P E R E Z ,
`
`Defendants
`
`Kennetn R. Davls, I1 and
`W ~ l l l a m T. Patton
`Lane Powell PC
`, - d W S e c o n d A v e n u e , S ~ l t e 2100
`Portland, OR 97204
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`1 - OPINION AND ORDER
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF OREGON
`
`Civ. No. 05-931 AA
`
`OPINION AND ORDER
`
`ELEKTRA ENTERTAINMENT GROUP,
`INC., a Delaware corporation;
`UMG RECORDINGS, INC., a
`Delaware corporation; SONY
`BMG MUSIC ENTERTAINMENT, a
`Delaware partnership; WARNER
`EROS. RECORDS INC., a Delaware
`corporatlon; VIRGIN RECORDS
`AMERICA, INC., a California
`cdrporatlon; and BMG MUSIC, a
`New York general partnership,
`
`Plaintiffs,
`
`" - z
`2 , KELLIE PEREZ;
`F
`ANTHONY PEREZ; and CLAIRE
`P E R E Z ,
`
`Defendants
`
`Kennetn R. Davls, I1 and
`W ~ l l l a m T. Patton
`Lane Powell PC
`, - d W S e c o n d A v e n u e , S ~ l t e 2100
`Portland, OR 97204
`
`1 - OPINION AND ORDER
`
`
`
`Case 6:05-cv-00931-AA Document 56 Filed 10/26/06 Page 2 of 8 Page ID#: 552
`
`James Ruh and
`Nadia A. Sarkis
`Yolrne Roberts & Owen LLP
`1700 Lincoln Street, Suite 4100
`Denver, CO 80203
`Attorneys for plaintiffs
`
`Stephen A. Hutchinson
`Hutchinson, Cox, Coons,
`DuPriest, Orr & Sherlock, PC
`'777 High Street, Suite 200
`Eugene, OR 97401
`Attorney for defendants
`
`AZKEN, Judge:
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`This copyright infringement case arises out of the alleged
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`illegal downloading and sharing of music files by defendants Dave
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`Perez and members of his family.
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`Plaintiffs are recording
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`companies who own copyrights in the sound recordings defendants
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`allegedly downloaded and shared
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`Currently before the court are competing motions to dismiss
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`defendant Dave Perez (I'defendantl1) from this suit. Specifically,
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`defendant moves for dismissal with prejudice under Federal Rule of
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`Civil Procedure 12(b)(6) for failure to state a claim. Defendant
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`also moves for attorneys' fees. In turn, plaintiffs move to
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`voluntarily dismiss defendant without prejudice under Federal Rule
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`of Civil Procedure 41 (a) (2) .
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`For the reasons stated below,
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`plaintiffs' motion to dismiss without prejudice is granted, and
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`defendant's motions for dismissal and attorneys' fees are denied.
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`I . Backqround
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`Plaintiffs filed suit for copyright infringement following an
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`investigation which allegedly revealed violations of their
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`2 - OPINION AND ORDER
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`
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`Case 6:05-cv-00931-AA Document 56 Filed 10/26/06 Page 3 of 8 Page ID#: 553
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`copyrighted material. Plaintiffs learned that someone with the
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`name "perez@KaZaA1' was using a software program called ITKazaa" to
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`make a number of music files available for distribution over the
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`internet. Among the hundreds of music files being shared by
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`"perez@KaZaAH were at least eight songs to which plaintiffs claim
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`to own a copyright. Through the investigation, plaintiffs were
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`able to identify only the user's Internet Protocol ("IP") address,
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`a unique identifier associated with a computer.
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`Plaintiffs initially brought an action for copyright
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`Infringement against "John Doe." Following discovery In their
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`"John Doe" suit, plaintiffs identified defendant as the owner of
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`the internet account providing service to the computer with the IP
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`address identified during the initial investigation. Plaintiffs
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`t n e i l dlsrnlssed the sult against "John Doe" and filed this action
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`against defendant. Subsequently, plaintiffs amended the complaint
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`and added other members of the Perez family as defendants.
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`11. Defendant's Motion to Dismiss With Preiudice
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`Defendant moves to dismiss plaintiffs' claim against him
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`y3:u-s7L13nt to Rule 12 (b) ( 6 ) , which permits dismissal of an action for
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`"failure to state a claim upon which relief can be granted[.]"
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`When ruling on such a motion, the court must accept all facts
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`alleged in a well-pleaded complaint as true and construe them in a
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`light most favorable to the plaintiff. -- See Karam v. City of
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`B;irbank, 352 F.3d 1188, 1192 (9th Cir. 2003) (citing Zimmerman v.
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`Clty of Oakland, 255 F.3d 734, 737 (9th Cir. 2001)).
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`A
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`well-pleaded complaint requires only that a complaint provide "a
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`3 - OPINION AND ORDER
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`
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`Case 6:05-cv-00931-AA Document 56 Filed 10/26/06 Page 4 of 8 Page ID#: 554
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`short and plain statement of the claim showing that the pleader is
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`entitled to relief." Fed. R. Civ. P. 8 (a) .
`
`In a copyright infringement case, plaintiffs must 1) show
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`ownership of the allegedly infringed material and 2) demonstrate
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`that the alleged infringer violated at least one exclusive right
`
`
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`granted to copyright holders under 17 U.S.C. § 106. - - See A&M
`
`Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir.
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`2001) . Therefore, as long as plaintiffs allege these two elements
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`consistent with Rule 8(a), their claim against defendant will
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`survive a Rule 12 (b) (6) motion to dismiss.
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`Defendant first argues that plaintiffs' claim is deficient
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`because it does not specify the copyrighted works allegedly
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`lnfrlnged upon. I disagree. Plaintiffs' Amended Complaint refers
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`to and includes an attachment labeled "Exhibit A. " This exhibit is
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`a list of eight copyrighted recordings to which plaintiffs claim to
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`own a copyright. Pursuant to Federal Rule of Civil Procedure
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`10(c), " [a] copy of any written instrument which is an exhibit to
`
`a pleading is a part thereof for all purposes." Plaintiffs'
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`Amended Complaint and Exhibit A , taken together, clearly identify
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`copyrighted works allegedly infringed upon by defendant.
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`Defendant next argues that plaintiffs' claim is deficient
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`because it does not specify the alleged infringing activity.
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`However, plaintiffs' Amended Complaint alleges that defendant used
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`ac onllne media distribution system, among other things, to make
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`the copyrighted recordings available for distribution to others.
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`Additionally, plaintiffs' Amended Complaint refers to "Exhibit B"
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`4 - OPINION AND ORDER
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`
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`Case 6:05-cv-00931-AA Document 56 Filed 10/26/06 Page 5 of 8 Page ID#: 555
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`attached to the complaint, which allegedly represents music files
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`belng shared by user "perez@KaZaAH at the time plaintiffs1
`
`investigator conducted the investigation. Although defendant
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`disagrees that Exhibit B is such a representation, I must construe
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`all allegations in the light most favorable to plaintiffs. I find
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`that Exhibit B , in the context of the allegations in the Complaint,
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`supports plaintiffs1 allegation that defendant made copyrighted
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`materials available for distribution.
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`In sum, plaintiffs1 amended complaint alleges the necessary
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`elements of a copyright infringement action pursuant to the
`
`Copyright Act. Defendant's motion to dismiss is denied.
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`1 1 1 . Plaintiffs' Motion to Dismiss Without Preiudice
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`Plaintiffs move to voluntarily dismiss defendant from this
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`action without prejudice. Plaintiffs explain that their initial
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`investigation led them to believe defendant infringed their
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`copyrights by sharing protected music file:; over the internet.
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`However, discovery in this suit now leads plaintiffs to believe
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`that other members of defendant's family are responsible for the
`
`alleged infringement. Those family members were recently added to
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`the suit as defendants, and plaintiffs state there is no need to
`
`keep defendant as a party. Defendant argues plaintiffs are not
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`entitled to voluntary dismissal under Rule 41(a) (2).
`
`" A district court should grant a motion for voluntary
`
`dismissal under Rule 41(a) (2) unless a defendant can show that it
`
`wlll suffer some plain legal prejudice as i2 result. "
`
`Smith v.
`
`Lenches, 263 F.3d 972, 975 (9th Cir. 2001). I find that defendant
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`5 - OPINION AND ORDER
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`
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`Case 6:05-cv-00931-AA Document 56 Filed 10/26/06 Page 6 of 8 Page ID#: 556
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`will not suffer some plain legal prejudice as a result of dismissal
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`and therefore grant plaintiffs' motion.
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`Defendant relies on a Tenth Circuit case to demonstrate he
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`will suffer a legal prejudice if plaintiffs' motion is granted. In
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`Ohlander v. Larson, 114 F.3d 1531, 1537 (1997), the Tenth Circuit
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`set forth four non-exclusive factors to determine whether a party
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`will suffer legal prejudice. Those factors are: 1) the opposing
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`party's effort and expense in preparing for trial; 2) the lack of
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`u i l i y e r i c e on the part of the movant; 3) the sufficiency of the
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`explanation for dismissal; and 4) the present stage of litigation.
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`Id. Defendant argues those four factors are met here because he
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`has lncurred great expense in defending against plaintiffs'
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`allegations; plaintiffs should have dismissed him from the suit a
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`year ago; plaintiffs have no explanation for dismissing him now;
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`and that it is too late to grant this motion because the discovery
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`period in this case has already concluded.
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`However, the Ninth Circuit does not employ a multi-factor test
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`and instead defines legal prejudice as "prejudice to some legal
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`~ n t e r e s t , some legal claim, some legal argument." Westlands Water
`Gist. v. U . S . , 100 F.3d 94, 97 (1996) . In fact, the Ninth Circuit
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`rejected the first Ohlander factor by holding that expenses
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`lncurred in defending a lawsuit do not constitute legal prejudice.
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`See id. (citing Hamilton v . Firestone Tire & Rubber Co., 679 F.2d
`- -
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`143, 146 (9th Cir. 1982). In the present case, defendant makes no
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`argument that he possesses a legal interest, claim, or argument
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`that will be prejudiced if plaintiffs' motion is granted.
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`6 - OPINION AND ORDER
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`
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`Case 6:05-cv-00931-AA Document 56 Filed 10/26/06 Page 7 of 8 Page ID#: 557
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`Defendant also argues that this court is precluded from
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`granting plaintiffs' motion to dismiss, because defendant filed a
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`counterclaim for attorneys1 fees with his original answer to the
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`rcmplaint. "If a counterclaim has been pleaded by a defendant
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`nrlor to the service upon the defendant of the plaintiff's motlon
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`L O dlsmlss, the actlon shall not be dlsmlssed agalnst the
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`defendant's objection unless the counterclaim can remain pending
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`for independent adjudication by the court. " Fed.R.Civ. P. 41 (a) (2) .
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`Plaintiffs respond that defendant's counterclaim is deficient,
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`because a request for fees in this case is appropriate only if the
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`request is made by motion.
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`I agree. Fe'deral Rule of Civil
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`Procedure 54(d) (2) (A) provides that claims for attorneys' fees
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`"shall be made by motion unless the substantive law governing the
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`action provides for the recovery of such fees as an element of
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`damages to be proved at trial."
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`In this case, the Copyright Act allows the recovery of fees at
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`che court's discretion, not as an element of a claim. See 17
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`U.S.C. § 505. In fact, defendant subsequently filed a motion for
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`an award of attorneys' fees under § 505 if he is dismissed from
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`~111s case. Further, In hls response to plaintiff's argument,
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`defendant provides no authority allowing a counterclaim for fees
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`under the Copyright Act. As such, defendant's "counterclaim" does
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`not preclude voluntary dismissal of defendant from this suit.
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`IV. Defendant's motion for attorney fees
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`F i r m l l y , defendant seeks attorneys' fees. Defendant argues he
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`is entitled to attorneys' fees because he is a prevailing party
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`7 - OPINION AND ORDER
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`Case 6:05-cv-00931-AA Document 56 Filed 10/26/06 Page 8 of 8 Page ID#: 558
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`under the Copyright Act, and because he meets the factors
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`established by the Supreme Court for collecting attorneys' fees as
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`rrie prevalllng party. See Fosertv v. Fantasv, Inc., 510 U.S. 517
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`(1994). Defendant also maintains that the court has discretion to
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`condition his dismissal under Rule 41 (a) (2) upon an award of
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`attorneys' fees.
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`Under the Copyright Act, "the court may also award a
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`reasonable attorney's fee to the prevailing party as part of the
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`costs." 17 U.S.C. § 505. Defendant's argument fails because he is
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`not a prevailing party under S 505. The court has not yet
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`addressed or ruled on any of the merits of this case, and in the
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`absence of such a ruling, I find no basis to award attorneys' fees
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`based on status as a prevailing party. Furthermore, as discussed
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`above, defendant is being dismissed from this case without
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`prejudice. I do not find that the circumstances warrant an award
`oi attorneys' fees under Rule 41 (a) (2) .
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`Conclusion
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`For the reasons stated above, plaintiffs' motion to dismiss
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`defendant Dave Perez without prejudice (doc. 34) is GRANTED,
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`defendant's motion to dismiss with prejudice (doc. 38) is DENIED,
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`and defendant's motion for attorneys' fees (doc. 39) 1s DENIED.
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`IT IS SO ORDERED.
`l j a i r d ihls 6?5 day of October, 2006.
`
`Ann Aiken
`United States District Judge
`
`8 - OPINION AND ORDER
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