United States District Court, E.D. Washington
ORDER GRANTING PLAINTIFF'S RENEWED MOTION FOR DEFAULT JUDGMENT AND PERMANENT INJUNCTIONS
THOMAS O. RICE, District Judge.
BEFORE THE COURT is Plaintiff's Renewed Motion for Default Judgment and Permanent Injunctions Against Defendants D. & B. Barnett, Housden, Lint, Rodriguez, Torres and Williams (ECF No. 122). This matter was submitted for consideration without oral argument. The Court has reviewed the motion and the record and files herein and is fully informed.
This is an action concerning alleged copyright infringement of a motion picture. Plaintiff Elf-Man, LLC, is a limited liability company that produced the motion picture at issue in this matter, Elf-Man. Elf-Man has been registered with the United States Copyright Office by the author, Elf-Man, LLC, Registration No. PAu X-XXX-XXX. Defendants, originally identified as Does, are individual computer users, identified by their IP addresses assigned by Internet Service Providers ("ISPs") on the date and time at which the infringing activity was observed.
Plaintiff alleges that Defendants used BitTorrent, an interactive peer-to-peer file transfer technology protocol to copy, download, share, and upload Plaintiff's motion picture, or permitted, facilitated, or promoted such conduct by others. Peer-to-peer networks, in their most common form, are computer systems enabling users to make files stored on each user's computer available for copying by other users, to search for files stored on other users' computers, and to transfer exact copies of the files from one computer to another via the internet. The complaint alleges that Plaintiff has recorded each Defendant identified as actually copying and publishing Plaintiff's motion picture via BitTorrent, as Plaintiff's investigator has downloaded the motion picture from each Defendant. Plaintiff alleges that, upon information and belief, each Defendant was a willing and knowing participant in the file transfer "swarm" at issue and engaged in such participation for the purpose of infringing Plaintiff's copyright.
Plaintiff sued Defendants, claiming copyright infringement, contributory infringement, and indirect infringement of copyright. Plaintiff's First Amended Complaint requests damages of $30, 000 from each Defendant pursuant to 17 U.S.C. § 504(c)(1) for its claims of infringement and contributory infringement and, in the alternative, damages of $750.00 on its indirect infringement claim. Plaintiff also requested entry of permanent injunctions enjoining each Defendant from directly, contributorily, or indirectly infringing Plaintiff's rights in Plaintiff's motion picture, and reasonable costs and attorney fees.
On December 3, 2013, the Clerk of Court entered orders of default for all Defendants named in the instant motion. Despite being properly served, the nonappearing Defendants have not filed an answer or moved to set aside their default. In response, Plaintiff moved for default judgment and permanent injunctions against Defendants D. & B. Barnett, Housden, Lint, Rodriguez, Torres, and Williams. This Court subsequently denied Plaintiff's motion with leave to renew. In its Order, this Court directed Plaintiff to brief and provide evidence supporting its substantive claims and the amount of damages against each defaulting Defendant separately.
Plaintiff now renews its motion for default judgment and permanent injunctions seeking the relief requested in its First Amended Complaint.
A. Default Judgment
Motions for entry of default judgment are governed by Federal Rule of Civil Procedure 55(b). Rule 55(b)(1) provides that the Clerk of Court may enter default judgment when the plaintiff's claim "is for a sum certain or a sum that can be made certain by computation." Fed.R.Civ.P. 55(b)(1). When the value of the claim cannot be readily determined, or when the claim is for non-monetary relief, the plaintiff must move the court for entry of default judgment. Id. at 55(b)(2). In such circumstances, the court has broad discretion to marshal any evidence necessary in order to calculate an appropriate award. See id. at 55(b)(2)(A)-(D). At the default judgment stage, well-pleaded factual allegations are considered admitted and are sufficient to establish a defendant's liability, but allegations regarding the amount of damages must be proven. Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977); Microsoft Corp. v. Lopez, 2009 WL 959219 (W.D.Wash. 2009). The court must ensure that the amount of damages is reasonable and demonstrated by the evidence. See Fed.R.Civ.P. 55(b); Getty Images (US), Inc. v. Virtual Clinics, 2014 WL 358412 (W.D.Wash. 2014).
The entry of default judgment under Rule 55(b) is "an extreme measure." Cmty. Dental Servs. v. Tani, 282 F.3d 1164, 1170 (9th Cir. 2002). "As a general rule, default judgments are disfavored; cases should be decided upon their merits whenever reasonably possible." Westchester Fire Ins. Co. v. Mendez, 585 F.3d 1183, 1189 (9th Cir. 2009). In determining whether to enter default judgment, a court should consider the following factors: "(1) the possibility of prejudice to the plaintiff; (2) the merits of the plaintiff's substantive claim; (3) the 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." Eitel v. McCool, 782 F.2d 1470, 1471-72; see also United States v. VanDenburgh, 249 F.Appx. 664, 665 (2007).
The Court considers each of the factors in turn.
1. Possibility of Prejudice to Plaintiff
Despite having been properly served, the non-appearing Defendants have failed to plead or otherwise defend. As a result, Plaintiff's claims against them cannot move forward on the merits, and Plaintiff's ability to obtain effective relief has been prejudiced. This factor weighs in favor of entering default judgment.
2. Merits of Plaintiff's Substantive Claims
Plaintiff's First Amended Complaint alleges copyright infringement, contributory infringement, and indirect infringement of copyright for Defendants' alleged participation in a BitTorrent "swarm." In its September 3, 2014 Order, this Court expressed serious doubts about the merits of Plaintiff's substantive claims based on concerns raised in a separate action, Elf-Man, LLC v. Lamberson, 2:13cv-395-TOR, which was ultimately severed from this case. In response, Plaintiff has responded to each allegation in an effort to demonstrate the merit of its claims against Defendants.
First, in response to the allegation that Plaintiff "purposely released Elf-Man into the bit torrent environment knowing, authorizing, and inviting its copying and distribution" in order to create potential claims upon which to sue, Plaintiff states that such an allegation is "nonsensical." ECF No. 122 at 4. Plaintiff contends Elf-Man was never released by Plaintiff or anyone under Plaintiff's control into the "BitTorrent environment;" rather, Plaintiff focused its time and expense on commercially marketing and releasing the film. Id. at 5. In support, Plaintiff provides a declaration from producer and director, Mr. Kurt Uebersax, who asserts the following:
When Elf-Man was completed the final cut was not uploaded to anyone or anywhere by Elf-Man as the final product was placed on a hard drive and then hand delivered to the distributor. Elf-Man was never released by us or anyone under our control other than through legitimate commercial channels, and it was never "seeded" into BitTorrent distribution. There is absolutely no motivation for us to upload pirated versions of our work on BitTorrent while simultaneously incurring the time and expense to commercial market and release our film, as well as funding these types of enforcement lawsuits. Our revenue is from the commercial release of our films, not from lawsuits. Intentionally seeding our movies would cause us to incur more damage to our business.
ECF No. 124 at 3.
Second, in response to the allegation that Plaintiff "produced Elf-Man on DVD without significant anti-copying measures, " Plaintiff states that not only are anti-copying measure decisions made by third party distributors, there are no effective anti-copying measures for DVDs. ECF No. 122 at 5. In support, Mr. Uebersax states the following:
In the release and distribution of Elf-Man, the management and decisions related to manner of DVD production and release are business decisions made by a third party distributor. Neither myself, nor Elf-Man are involved in the decision process related to any encoding or attempts to place copy protection on the final DVD product that is offered for sale. While I understand this is being questioned, regardless of what choices the third party distributor may have made I am not aware of any technology that would prevent any DVD from being copied. To the best of my knowledge there is simply no such technology available.
ECF No. 124 at 3-4.
Third, in response to the allegation that Plaintiff "brought no lawsuits making direct accusations against an individual or organization of initially seeding the work into the bit torrent, " Plaintiff responds that not only is the source of initial seeding unknown but likely overseas and beyond the reach of U.S. law. ECF No. 122 at 5-6. Accordingly, Plaintiff chose to pursue the end-user, a party it could readily identify and over which it could obtain jurisdiction. Id. at 7.
Fourth, in response to the allegation that Plaintiff has "not issued any takedown notices, " Plaintiff responds that copyright alert systems are known to be expensive and ineffective, with many ISPs requiring multiple separate instances to be detected and reported before taking meaningful action. Id. Moreover, Plaintiff asserts that there is "zero value" in issuing takedown notices ...