Case 2:16-cv-01853-JAD-VCF Document 25 Filed 11/29/17 Page 1 of 18
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`UNITED STATES DISTRICT COURT
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`DISTRICT OF NEVADA
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`Cell Film Holdings LLC,
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`2:16-cv-01853-JAD-VCF
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`Plaintiff
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`v.
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`Felix Acosta, et al.,
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`Defendants
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`Order Granting Default Judgment Against
`Felix Acosta; Severing and Dismissing
`Claims Against All Other Defendants; and
`Closing Case
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`[ECF No. 21]
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`This is one of three essentially identical cases filed by plaintiff Cell Film Holdings LLC
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`(CFH), in which CFH sues many unidentified Doe defendants—under a single filing fee—for
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`separately infringing its copyright in the film “The Cell” by using BitTorrent software. CFH’s
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`practice in these cases is to move for expedited discovery to identify the defendants, and then
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`systematically dismiss the defendants after failing to serve them or settling with them.1
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`I ordered CFH to show cause why I shouldn’t sever all defendants except Felix Acosta,
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`dismiss all claims against the remaining defendants without prejudice, and quash any subpoenas
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`for discovery to the extent that they pertain to anyone other than Mr. Acosta.2 Despite CFH’s
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`response, I find that this “swarm-joinder” practice is not only judicially inefficient, but improper
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`under Federal Rule 20 because the defendants’ actions do not arise out of the same transaction or
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`occurrence. So I find that CFH did not show cause, I sever and dismiss all claims against all
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`defendants except for Felix Acosta, and I quash any subpoenas for discovery that do not pertain
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`1 See generally docket reports for Cell Film Holdings LLC v. Acosta, 2:16-cv-01853-JAD-VCF;
`Cell Film Holdings LLC v. McCray, 2:16-cv-02089-JAD-NJK; Cell Film Holdings LLC v.
`Galang, 2:16-cv-02142-JAD-VCF.
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`2 ECF No. 23.
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`Case 2:16-cv-01853-JAD-VCF Document 25 Filed 11/29/17 Page 2 of 18
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`to Mr. Acosta.3 I also grant CFH’s motion for default judgment against Acosta, deny its request
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`for default judgment against the other defendants, and close this case.
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`Discussion
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`These copyright-infringement swarm-joinder cases against users of BitTorrent software
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`have significantly increased in popularity nationwide in the past five years with some plaintiffs
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`filing against thousands of defendants in a single action,4 other plaintiffs filing against defendants
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`in groups of roughly 10–1005, and at least one plaintiff filing over one thousand cases against
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`individual defendants.6 The defendants are discovered and targeted by their internet provider (IP)
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`addresses, which register on the BitTorrent tracker when they download the plaintiff’s film.
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`Safety Point Products, LLC v. Does describes the BitTorrent protocol well:
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`BitTorrent is a program that enables users to share files via the
`internet. Unlike other “peer-to-peer” (P2P) file sharing networks
`that transfer files between users or between a user and a central
`computer server, BitTorrent allows for decentralized file sharing
`between individual users who exchange small segments of a file
`between one another until the entire file has been downloaded by
`each user. Each user that either uploads or downloads a file
`segment is known as a “peer.” Peers that have the entire file are
`known as “seeds.” Other peers, known as “leeches” can
`simultaneously download and upload the pieces of the shared file
`until they have downloaded the entire file to become seeds.
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`Groups of peers that download and upload the same file during a
`given period are known as a “swarm,” with each peer being
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`3 I acknowledge counsel’s underlined, bolded desire for oral argument on this issue, but counsel
`has briefed this issue extensively in the LHF cases I ruled on last month, and I have conducted
`my own extensive research on the subject. There are no “other concerns” that I “may raise” for
`counsel to address, so I find this matter suitable for disposition without oral argument. L.R. 78-
`1.
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`4 See, e.g., Nu Image, Inc. v. Does 1–3,932, 2012 WL 1890854 (M.D. Fl. May 10, 2012);
`Entertainment v. Does 1–1,427, 2012 WL 12897376 (E.D. Tex. Mar. 16, 2012).
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`5 See, e.g., Combat Zone Corp. v. Does 1–192, 2012 WL 12897164 (S.D. Tex. Oct. 12, 2012);
`Sunlust Pictures, LLC v. Does 1–75, 2012 WL 3717768 (N.D. Ill. Aug. 27, 2012); Patrick
`Collins, Inc. v. John Does 1–54, 2012 WL 911432 (D. Ariz. Mar. 19, 2012).
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`6 See Malibu Media, LLC v. Doe, 2013 WL 6579338, at *4 n.4 and corresponding text (E.D. Wis.
`Dec. 12, 2013).
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`Case 2:16-cv-01853-JAD-VCF Document 25 Filed 11/29/17 Page 3 of 18
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`identified by a unique series of alphanumeric characters known as
`“hashtag” that is attached to each piece of the file. The swarm’s
`members are relatively anonymous, as each participant is
`identifiable only by her Internet Provider (IP) address. Overseeing
`and coordinating the entire process is a computer or server known
`as a “tracker” that maintains a record of which peers in a swarm
`have which files at a given time. In order to increase the likelihood
`of a successful download, any portion of the file downloaded by a
`peer is available to subsequent peers in the swarm so long as the
`peer remains online.
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`But BitTorrent is not one large monolith. BitTorrent is a computer
`protocol, used by various software programs known as “clients” to
`engage in electronic file-sharing. Clients are software programs
`that connect peers to one another and distributes data among the
`peers. But a peer’s involvement in a swarm does not end with a
`successful download. Instead, the BitTorrent client distributes data
`until the peer manually disconnects from the swarm. It is only then
`that a given peer no longer participates in a given BitTorrent
`swarm.7
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`CFH brought the instant case against 19 initially unidentified defendants. After learning
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`their identities, CFH amended its complaint against 13 named defendants,8 and then CFH
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`proceeded to dismiss them from the case.9 Only five defendants now remain: Felix Acosta, Luis
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`Castaneda, Robrina Howard, Marvin Yap, and Pricz Tattoo (a business).
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`A.
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`The swarm-joinder split of authority
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`Discussion
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`Joining multiple John/Jane Doe participants in a BitTorrent swarm into a single action is
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`commonly referred to as “swarm joinder.”10 Because the defendants are initially unidentified, the
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`plaintiff files an ex parte motion for expedited discovery to subpoena internet providers (ISPs)
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`7 Safety Point Products, LLC v. Does, 2013 WL 1367078, at *1 (N.D. Ohio Apr. 4, 2013)
`(internal citations omitted).
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`8 ECF No. 6.
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`9 See generally docket report case 2:16-cv-01853-JAD-VCF.
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`10 See, e.g., Glacier Films (USA), Inc. v. Turchin, 2016 WL 4251581, at *1 n.1 (D. Or. Aug. 10,
`2016); Malibu Media, LLC v. Reynolds, 2013 WL 870618, at *12 (N.D. Ill. Mar. 7, 2013);
`Patrick Collins, Inc. v. John Does 1 through 34, 2013 WL 593445, at *2 (S.D. Cal. Feb. 13,
`2013).
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`Case 2:16-cv-01853-JAD-VCF Document 25 Filed 11/29/17 Page 4 of 18
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`for the names and addresses of defendants associated with specified IP addresses. The motion
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`raises two issues: (1) whether the defendants are properly joined; and (2) whether the court
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`should permit the expedited discovery.11 “Courts have dealt with the issue in several ways:
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`denying the discovery requests, severing all but the first Doe defendants, delaying the severance
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`decision until after the Does have been identified, or approving both joinder and pre-service
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`discovery.”12
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`The procedural posture of this case tracks the delay-severance-decision option.
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`Magistrate Judge Ferenbach granted CFH’s expedited discovery requests,13 and I then ordered
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`CFH to show cause why the identified defendants shouldn’t be severed from the first defendant
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`and dismissed in each of its cases.14 After considering CFH’s argument, I now determine
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`whether the defendants were properly joined and whether severance is appropriate.
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`There is a major split of authority on this issue. Only one circuit court—the D.C.
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`Circuit—has ruled on the issue, finding that swarm joinder does not satisfy FRCP 20(a)(2)
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`because the defendants’ use of the same BitTorrent protocol to download the same file does not
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`arise out of the same transaction or occurrence.15 The district courts in every other circuit and
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`even the judges within some districts widely disagree on whether to permit swarm joinder. Some
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`11 See Riding Films, Inc. v. John Does I–CCL, 2013 2152552, at *1 (D. Ariz. May 16, 2013).
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`12 Id.; see also Pac. Century Int’l, Ltd. v. Does 1–101, 2011 WL 5117424, at *2 (N.D. Cal. Oct.
`27, 2011) (denying request to issue subpoenas); SBO Pictures, Inc. v. Does 1–3036, 2011 WL
`6002620, at *3–4 (N.D. Cal. Nov. 30, 2011) (severing all but the first Doe defendant and
`allowing discovery for him alone); AF Holdings, LLC v. Does 1–97, 2011 WL 2912909 (N.D.
`Cal. July 20, 2011) (denying discovery request and declining to sever); Camelot Dist. Grp. v.
`Does 1–1210, 2011 WL 4455249 (E.D. Cal. Sept. 23, 2011) (allowing discovery and delaying the
`question of severance); Openmind Solutions, Inc. v. Does 1–39, 2011 WL 4715200, at *5–8
`(N.D. Cal. Oct. 7, 2011) (approving both joinder and pre-service discovery).
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`13 ECF No. 5.
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`14 ECF No. 23.
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`15 AF Holdings, LLC v. Does 1–1058, 752 F.3d 990, 998 (D.C. Cir. 2014).
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`Case 2:16-cv-01853-JAD-VCF Document 25 Filed 11/29/17 Page 5 of 18
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`courts hold that swarm joinder is appropriate under FRCP 20(a)(2).16 Other courts hold as the
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`D.C. Circuit does.17 And still others exercise their discretion to manage their dockets and sever
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`the defendants even if swarm joinder would technically be permissible under the FRCP because
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`other factors outweigh the benefits conferred by joinder: judicial economy, the high burden on
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`the defendants, the risk of inappropriate settlement leverage, and filing-fee evasion.18 The Ninth
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`Circuit has not yet decided the issue, so I am not bound by any authority.
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`My exhaustive research on the issue uncovered no clear majority rule. The D.C. Circuit
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`is the only circuit court to have addressed the issue (it doesn’t allow swarm joinder),19 5 districts
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`16 See, e.g., Elf-Man, LLC v. Does 1-29, 2013 WL 3709235, at *2 (E.D. Wash. July 12, 2013);
`Patrick Collins, Inc. v. Does, 2012 WL 12870254, at *4–5 (N.D. Fl. Oct. 16, 2012).
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`17 See, e.g., Night of the Templar, LLC v. Does 1–116, 2013 WL 4504368, at *3 (E.D. Mo. Aug.
`23, 2013); Riding Films, Inc. v. John Does I–CCL, 2013 WL 2152552, at *3 (D. Ariz. May 16,
`2013); West Coast Prods. v. Swarm Sharing Hash Files, 2012 WL 3560809, at *4 (W.D. La.
`Aug. 17, 2012).
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`18 See, e.g., Breaking Glass Pictures v. Swarm Sharing Hash File SHA1:
`£973F491D02C1E0220DBC534D8F8EDC15FC53FAEF, 2013 WL 2407226, at *3 (D. Mass.
`May 1, 2013) (declining to decide whether swarm joinder satisfies Rule 20(a)(2) because joinder:
`(1) does not promote judicial efficiency considering each defendant may raise a unique defense
`or claim; (2) would be a logistical nightmare because “each defendant would be required to serve
`any motion or other submission on” every other defendant and all defendants “would have a right
`to be present at any deposition or court proceeding”; and (3) would defeat the purposes of the
`filing fee as a revenue raising measure and a barrier to meritless lawsuits); Third Degree Films,
`Inc. v. Does 1–178, 2012 WL 12925674, at *5 (N.D. Cal. Dec. 6, 2012) (holding that swarm
`joinder technically satisfies Rule 20(a)(2) but severing anyway because of the risk of
`inappropriate settlement leverage).
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`19 AF Holdings, LLC v. Does 1–1058, 752 F.3d 990 (D.C. Cir. 2014).
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`Case 2:16-cv-01853-JAD-VCF Document 25 Filed 11/29/17 Page 6 of 18
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`permit swarm joinder under Rule 20(a)(2),20 12 districts do not,21 18 districts have judges on both
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`sides of the debate,22 and the remaining 58 districts have not addressed the issue. Within the
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`20 K-Beech, Inc. v. Doe 37, 2012 WL 12910991 (E.D.N.C. June 12, 2012); Combat Zone Corp. v.
`John/Jane Does 1–5, 2012 WL 5289736 (N.D. Tex. Oct. 26, 2012); Elf-Man, LLC v. Does 1–29,
`2013 WL 3709235 (E.D. Wash. July 12, 2013); LHF Productions, Inc. v. Farwell, 2016 WL
`6948394 (W.D. Wash. Nov. 28, 2016); Patrick Collins, Inc. v. Does, 2012 WL 12870254 (N.D.
`Fl. Oct. 16, 2012).
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`21 AF Holdings, LLC v. Does 1–1058, 752 F.3d 990 (D.C. Cir. 2014); In re BitTorrent Adult Film
`Copyright Infringement Cases, 296 F.R.D. 80 (E.D.N.Y. 2012); Odin’s Eye Entertainment v.
`Does 1–66, 2013 WL 5890408 (D. Del. Oct. 31, 2013); Malibu Media, LLC v. John Does 1–23,
`878 F. Supp. 2d 628 (E.D. Va. 2012); West Coast Prods. v. Swarm Sharing Hash Files, 2012 WL
`3560809 (W.D. La. Aug. 17, 2012); Malibu Media, LLC v. John Does 1–31, 297 F.R.D. 323
`(W.D. Mich. 2012); reFX Audio Software Inc. v. Does 1–97, 2013 WL 3766571 (E.D. Mo. July
`16, 2013); Third Degree Films, Inc. v. Does 1–131, 280 F.R.D. 493 (D. Ariz. 2012); Patrick
`Collins, Inc. v. Does, 2012 WL 12893290 (C.D. Cal. Dec. 14, 2012); Cobbler Nevada, LLC v.
`Cerritos, 2016 WL 7177527 (D. Or. Dec. 9, 2016); Raw Films, Inc. v. Does 1–32, 2011 WL
`6840590 (N.D. Ga. Dec. 29, 2011); Voltage Pictures, LLC v. Does 1–31, 291 F.R.D. 690 (S.D.
`Ga. 2013).
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`22 Compare Digital Sin, Inc. v. Does 1–45, 2013 WL 1289263 (D. Mass. Mar. 28, 2013) (not
`allowing swarm joinder) with Liberty Media Holdings, LLC v. Swarm Sharing Hash File, 821 F.
`Supp. 2d 444 (D. Mass. 2011) (allowing swarm joinder); compare Next Phase Distribution, Inc.
`v. John Does 1–27, 284 F.R.D. 165 (S.D.N.Y. 2012) (not allowing) with Digital Sin, Inc. v. Does
`1–27, 2012 WL 2036035 (S.D.N.Y. June 6, 2012) (allowing); compare Malibu Media, LLC v.
`John Does 1–18, 2014 WL 229295 (D. N.J. Jan. 21, 2014) (not allowing) with Malibu Media,
`LLC v. John Does 1–11, 2013 WL 1504927 (D. N.J. Apr. 11, 2013) (allowing); compare Patrick
`Collins, Inc. v. Does 1–30, 2013 WL 1157840 (E.D. Pa. Mar. 21, 2013) (not allowing) with
`Patrick Collins, Inc. v. John Does 1–11, 2013 WL 395497 (E.D. Pa. Jan. 31, 2013) (allowing);
`compare K-Beech, Inc. v. John Does 1–41, 2012 WL 773683 (S.D. Tex. Mar. 8, 2012) (not
`allowing) with Combat Zone Corp. v. Does 1–192, 2012 WL 12897164 (S.D. Tex. Oct. 12, 2012)
`(allowing); compare Third Degree Films, Inc. v. John Does 1–72, 2013 WL 1164024 (E.D.
`Mich. Mar. 18, 2013) (not allowing) with Third Degree Films v. Does 1–36, 2012 WL 2522151
`(E.D. Mich. May 29, 2012) (allowing); compare Killer Joe Nevada, LLC v. Does 1–12, 2013 WL
`3458197 (N.D. Ohio July 9, 2013) (not allowing) with Voltage Pictures, LLC v. Does 1–43, 2013
`WL 1874862 (N.D. Ohio May 3, 2013) (allowing); compare Dragon Quest Prods. v. Does
`1–100, 2013 WL 4811735 (E.D. Tenn. Sept. 9, 2013) (not allowing) with Sojo Prods. v. Does
`1–67, 2013 WL 1759561 (E.D. Tenn. Apr. 24, 2013) (allowing); compare In re BitTorrent
`Copyright Infringement Cases, 2013 WL 501443 (C.D. Ill. Feb. 11, 2013) (not allowing) with
`Patrick Collins, Inc. v. John Does 1–9, 2012 WL 4321718 (C.D. Ill. Sept. 18, 2012) (allowing);
`compare Malibu Media, LLC v. Reynolds, 2013 WL 870618 (N.D. Ill. Mar. 7, 2013) (not
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`Case 2:16-cv-01853-JAD-VCF Document 25 Filed 11/29/17 Page 7 of 18
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`Ninth Circuit alone, the District of Arizona, the Central District of California, and the District of
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`Oregon do not allow swarm joinder. The Eastern and Western Districts of Washington both
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`permit swarm joinder under Rule 20. The Eastern, Northern, and Southern Districts of California
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`have judges on both sides of the fence. And the Districts of Alaska, Hawaii, Idaho, Montana,
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`and Nevada have not yet addressed the issue. The only thing that is firmly established about this
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`issue is that there is no uniform protocol.
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`B.
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`Rule 20(a)(2) does not permit swarm joinder.
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`In similar cases filed by plaintiff’s counsel over the film “London Has Fallen,” I declined
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`to decide whether Rule 20(a)(2) allowed swarm joinder because, even if it were permitted,
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`swarm joinder would not benefit judicial economy.23 Now, faced with another opportunity to
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`consider the issue, I widen my stance and join those courts that hold that Rule 20 does not permit
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`swarm joinder.
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`FRCP 20(a)(2) allows defendants to be joined if: (1) “any right to relief is asserted against
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`allowing) with First Time Videos, LLC v. Does 1–76, 276 F.R.D. 254 (N.D. Ill. 2011) (allowing);
`compare TCYK, LLC v. Does 1–19, 2013 WL 6578787 (N.D. Ind. Dec. 13, 2013) (not allowing)
`with Malibu Media, LLC v. John Does 1–14, 287 F.R.D. 513 (N.D. Ind. 2012) (allowing);
`compare Malibu Media, LLC v. John Does 1–7, 2012 WL 6194352 (E.D. Cal. Dec. 12, 2012)
`(not allowing) with New Sensations, Inc. v. Does 1–306, 2012 WL 5031651 (E.D. Cal. Oct. 17,
`2012) (allowing); compare Third Degree Films, Inc. v. Does 1–178, 2012 WL 12925674 (N.D.
`Cal. Dec. 6, 2012) (not allowing) with Braun v. Primary Distributor Doe Number 1, 2013 WL
`12142998 (N.D. Cal. Jan. 11, 2013) (allowing); compare Third Degree Films, Inc. v. John Does
`1–4, 2013 WL 3762625 (S.D. Cal. July 16, 2013) (not allowing) with Liberty Media Holdings,
`LLC v. Does 1–62, 2012 WL 628309 (S.D. Cal. Feb. 24, 2012) (allowing); compare PHE, Inc. v.
`Does 1–105, 2013 WL 66506 (D. Colo. Jan. 4, 2013) (not allowing) with Patrick Collins, Inc. v.
`John Does 1–15, 2012 WL 415436 (D. Colo. Feb. 8, 2012) (allowing); compare Malibu Media,
`LLC v. Doe, 923 F. Supp. 2d 1339 (M.D. Fl. 2013) (not allowing) with Nu Image, Inc. v. Does
`1–3,932, 2012 WL 1890854 (M.D. Fl. May 10, 2012) (allowing); compare Liberty Media
`Holdings, LLC v. BitTorrent Swarm, 277 F.R.D. 672 (S.D. Fl. 2011) (not allowing) with AF
`Holdings, LLC v. Does 1–162, 2012 WL 12845359 (S.D. Fl. Jan. 12, 2012) (allowing).
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`23 See LHF Productions, Inc. v. Kabala, 2:16-cv-02028-JAD-NJK; LHF Productions, Inc. v.
`Smith, 2:16-cv-01803-JAD-NJK; LHF Productions, Inc. v. Buenafe, 2:16-cv-01804-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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`them jointly, severally, or in the alternative with respect to or arising out of the same transaction,
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`occurrence, or series of transactions or occurrences;” and (2) “any question of law or fact
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`common to all defendants will arise in the action.”24 And if the plaintiff “has not shown that the
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`defendants satisfy the test for permissive joinder, a court may sever the misjoined parties, so long
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`as no substantial right will be prejudiced by the severance.”25
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`After identifying the unknown defendants, CFH amended its complaint and attached a
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`summary of the defendants’ IP addresses, home addresses, and the dates of their participation in
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`the swarm.26 CFH alleges that “each of the Defendants was part of a series of transactions over
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`the course of a relatively short period of time, involving the exact same piece of the Plaintiff’s
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`copyrighted Work, and was accomplished by the Defendants acting in concert with each other.”27
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`But I do not find that downloading the same copyrighted movie with the same BitTorrent
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`program over a “relatively short period of time” indicates that the defendants acted in concert
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`with each other in the same series of transactions or occurrences.
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`The D.C. Circuit—the only circuit to have decided the issue—uses a particularly
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`illustrative analogy to support its finding that Rule 20 does not permit swarm joinder:
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`[T]wo BitTorrent users who download the same file months apart
`are like two individuals who play at the same blackjack table at
`different times. They may have won the same amount of money,
`employed the same strategy, and perhaps even played with the
`same dealer, but they have still engaged in entirely separate
`transactions. And simply committing the same type of violation in
`the same way does not link defendants together for the purposes of
`joinder.28
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`24 FED. R. CIV. P. 20(a)(2).
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`25 Third Degree Films, Inc. v. Does 1–131, 280 F.R.D. 493, 496 (D. Ariz. 2012) (quoting
`Coughlin v. Rogers, 130 F.3d 1348, 1350 (9th Cir. 1997)).
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`26 ECF No. 6-1.
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`27 ECF No. 6 at 5.
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`28 AF Holdings, LLC v. Does 1–1058, 752 F.3d 990, 998 (D.C. Cir. 2014) (internal quotations
`and citations omitted).
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`CFH’s exhibit provides the IP addresses, names, home addresses, and dates and times of
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`participation for 13 individuals.29 Plotting those home addresses on a map of Las Vegas shows
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`that the defendants lived in all corners of Las Vegas with two of them living in Henderson. Their
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`dates of participation span six days.30 Three participated on June 10, 2016, four on June 12,
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`another four on the 13th, then one each on the 14th and 15th.31 And even the participants on
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`June 10th, for example, participated in the swarm at 3:08 p.m., 8:11 p.m., and 9:14 p.m.32 None
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`of this data suggests to me that these identified defendants acted in concert as part of the same
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`transaction or occurence. I thus hold that Rule 20(a)(2) does not permit swarm joinder, and I
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`sever and dismiss the claims against all defendants other than Felix Acosta.
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`C.
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`Motion for default judgment
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`CFH also moves for default judgment against defendants Acosta, Castaneda, Howard,
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`Yap, and Pricz Tattoo.33 Because I sever and dismiss the claims against Castaneda, Howard,
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`Yap, and Pricz Tattoo from this action for improper joinder, the motion is moot against them,
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`and I deny it for that reason. I now address the motion as it pertains to defendant Acosta only.
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`1.
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`Background
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`After identifying Acosta on August 31, 2016, CFH sent a demand letter informing Acosta
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`of this case and his potential liability.34 Acosta did not respond, so CFH sent him a second
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`demand letter approximately three weeks later.35 CFH filed its first-amended complaint in
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`29 ECF No. 6-1.
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`30 Id.
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`31 Id.
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`32 Id.
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`33 ECF No. 21.
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`34 Id. at 4.
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`35 Id.
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`Case 2:16-cv-01853-JAD-VCF Document 25 Filed 11/29/17 Page 10 of 18
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`November 2016 and sent Acosta a third demand letter.36 Despite adequate service of process,
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`Acosta did not respond to the first-amended complaint or demand letter.37 The Clerk of Court
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`entered default against Acosta on July 19, 2017.38 CFH now moves for default judgment,
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`requesting $15,000 in statutory damages, $3,537.5039 in attorney’s fees and costs, and a
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`permanent injunction to prohibit Acosta from further infringing its copyright directly or
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`indirectly.40
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`2.
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`Default-judgment standard
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`Federal Rule of Civil Procedure 55(b)(2) permits a plaintiff to obtain default judgment if
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`the clerk previously entered default based on a defendant’s failure to defend. After entry of
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`default, the complaint’s factual allegations are taken as true, except those relating to damages.41
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`“[N]ecessary facts not contained in the pleadings, and claims [that] are legally insufficient, are
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`not established by default.”42 The court has the power to require a plaintiff to provide additional
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`proof of facts or damages in order to ensure that the requested relief is appropriate.43 Whether to
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`grant a motion for default judgment lies within the court’s discretion,44 which is guided by the
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`36 Id.
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`37 Id.
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`38 ECF No. 19.
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`39 Counsel moves for $3,575.50 in combined fees and costs, but his math is incorrect. He
`charges $375.00 per hour for his services, has dedicated 7.3 hours to the case, and has spent $800
`in costs. $375.00 * 7.3 hours = $2,737.50; $2,737.50 + $800 = $3,537.50.
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`40 ECF No. 21.
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`41 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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`42 Cripps v. Life Ins. Co., 980 F.2d 1261, 1267 (9th Cir. 1992).
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`43 See FED. R. CIV. P. 55(b)(2).
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`44 Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986).
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`Case 2:16-cv-01853-JAD-VCF Document 25 Filed 11/29/17 Page 11 of 18
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`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.45
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`A default judgment is generally disfavored because “[c]ases should be decided upon their merits
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`whenever reasonably possible.”46
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`3.
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`Evaluating the Eitel factors
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`a.
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`Possibility of prejudice to CFH
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`The first Eitel factor weighs in favor of granting default judgment against Acosta. CFH
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`sent Acosta numerous demand letters and a summons along with the first-amended complaint,
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`but Acosta never responded. CFH claims that Acosta infringed its copyright by downloading its
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`film using BitTorrent software. Given the nature of BitTorrent software, Acosta may be
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`exacerbating CFH’s injury by continuing to seed the file to the BitTorrent swarm.
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`b.
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`Substantive merits and sufficiency of the claims
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`The second and third Eitel factors require CFH to demonstrate that it has stated a claim
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`on which it may recover.47 The first-amended complaint sufficiently pleads CFH’s direct-
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`copyright-infringement, contributory-copyright-infringement, and vicarious-liability claims.
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`To present a prima facie case of direct infringement, CFH must show that: (1) it owns the
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`allegedly infringed material, and (2) the alleged infringers violate at least one exclusive right
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`granted to copyright holders under 17 U.S.C. § 106.48 CFH alleges that it is the owner of the
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`45 Eitel, 782 F.2d at 1471–72.
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`46 Id. at 1472.
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`47 See Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978).
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`48 A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001).
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`Case 2:16-cv-01853-JAD-VCF Document 25 Filed 11/29/17 Page 12 of 18
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`copyright registration for the film “The Cell.”49 CFH also alleges that Acosta willfully violated
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`several exclusive rights granted by 17 U.S.C. § 106, and that those violations caused it to suffer
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`damages.50
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`The contributory-copyright-infringement claim requires CFH to allege that Acosta “had
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`knowledge of the infringing activity” and “induce[d], cause[d,] or materially contribute[d] to the
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`infringing conduct of another.”51 “Put differently, liability exists if the defendant engages in
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`personal conduct that encourages or assists the infringement.”52 Given the nature of BitTorrent
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`technology, BitTorrent-swarm participants who download files compulsorily upload those same
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`files so that other participants may download them at a faster rate. Accordingly, CFH’s
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`allegation that each defendant is a contributory copyright infringer because they participated in a
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`BitTorrent swarm53 is sufficient to satisfy the induced-caused-or-contributed requirement. CFH
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`satisfies the remaining requirements by alleging that each defendant knew or should have known
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`that other BitTorrent-swarm participants were directly infringing on CFH’s copyright by
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`downloading the files that they each uploaded.54
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`CFH also claims that each defendant, as the account holder for the Internet service, is
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`vicariously liable for any infringing activity conducted by other users on its Internet connection.55
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`49 ECF No. 6 at 6, ¶ 11; see also ECF No. 6-2.
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`50 ECF No. 6 at 11–12.
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`51 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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`52 Id. (quoting Matthew Bender & Co. v. West Publ’g Co., 158 F.3d 693, 706 (2d Cir. 1998)).
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`53 ECF No. 6 at 12, ¶ 56.
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`54 Id. at 12–13, ¶¶ 58–61.
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`55 Id. at 14.
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`Case 2:16-cv-01853-JAD-VCF Document 25 Filed 11/29/17 Page 13 of 18
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`“Vicarious infringement is a concept related to, but distinct from, contributory infringement.”56
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`“To state a claim for vicarious copyright infringement, [CFH] must allege that [Acosta] had (1)
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`the right and ability to supervise the infringing conduct and (2) a direct financial interest in the
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`infringing activity.”57
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`CFH’s allegations satisfy the first prong of the vicarious-infringement test. As the court
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`discussed in Dallas Buyers Club, LLC v. Doughty, “the Internet service account holder, appea[rs]
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`to have had exclusive control over use of the Internet service” and the account holder “could
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`have simply secured access to the Internet by creating a password or by changing an already
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`existing password.”58 “Thus, . . . [the account holder] had the capacity to terminate use of his
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`Internet service by any infringing third party if he believed it was being used to violate applicable
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`law.”59
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`CFH also satisfies the direct-financial-interest prong. “The essential aspect of the direct
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`financial benefit inquiry is whether there is a causal relationship between the infringing activity
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`and any financial benefit a defendant reaps, regardless of how substantial the benefit is in
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`proportion to a defendant’s overall profits.”60 “Financial benefit exists where the availability of
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`infringing material acts as a ‘draw’ for customers.”61 “The size of the ‘draw’ relative to a
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`defendant’s 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 ‘draw’ for
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`customers ‘regardless of how substantial the benefit is in proportion to a defendant’s overall
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`56 Perfect 10, Inc. v. Visa Intern. Service Ass’n, 494 F.3d 788, 802 (9th Cir. 2007).
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`57 Id.
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`58 Dallas Buyers Club, LLC v. Doughty, 2016 WL 1690090 (D. Or. Apr. 27, 2016).
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`59 Id. (citing A&M Records, 239 F.3d 1004).
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`60 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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`61 A&M Records, 239 F.3d at 1023.
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`Case 2:16-cv-01853-JAD-VCF Document 25 Filed 11/29/17 Page 14 of 18
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`profits.’”62 CFH alleges that Acosta benefitted from third-party infringement by viewing “The
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`Cell” without paying for it.63 The law is clear that it doesn’t matter how large the financial
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`benefit is: by watching the BitTorrent-downloaded film, Acosta saved the cost of a movie ticket,
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`and that is a direct financial benefit.
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`I therefore find that CFH sufficiently pled each of its claims in the first-amended
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`complaint. I also find that CFH’s claims have substantive merit, subject to any defenses that
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`Acosta could raise.
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`c.
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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 stake in
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`relation to the seriousness of [Acosta]’s conduct.”64 “If the sum of money at stake is completely
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`disproportionate or inappropriate, default judgment is disfavored.”65 CFH asks for statutory
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`damages and attorney’s fees and costs.
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`For statutory damages, CFH requests $15,000 under 17 U.S.C. § 504(c).66 The statute
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`sets a $750 minimum and a $30,000 maximum award of damages for copyright infringement,67
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`and that maximum can be increased up to $150,000 where the infringement was willful.68 I have
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`“wide discretion in determining the amount of statutory damages to be awarded, constrained only
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`62 Perfect 10, 2014 WL 8628031, at *3 (quoting Ellison, 357 F.3d at 1079).
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`63 ECF No. 6 at 14, ¶ 68. There are two ¶ 67s and two ¶ 68s in CFH’s motion for default
`judgment. I cite to the second ¶ 68.
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`64 Twentieth Century Fox Fil