Bertam Music Company et al v. SC.GS & CO., LLC et al, No. 2:2008cv01099 - Document 41 (D. Ariz. 2009)
Court Description: ORDER denying Dfts' 29 Motion to Set Aside Judgment. Signed by Magistrate Judge Mark E Aspey on 07/27/09.(ESL)
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Bertam Music Company et al v. SC.GS & CO., LLC et al 1 Doc. 41 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 BERTRAM MUSIC COMPANY, EMI APRIL MUSIC INC., MUSIC SALES CORP., EMI FULL KEEL MUSIC 10 CO. Plaintiffs, 9 11 vs. 12 13 SC.GS & CO., LLC, SASHA COSIC, DRAGANA COSIC, aka DONNA COSIC, 14 15 Defendants. _____________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) CIV 08-01099 PHX MEA ORDER 16 All of the parties have acquiesced to the exercise of 17 magistrate judge jurisdiction, including the entry of final 18 judgment. 19 In a decision entered September 4, 2008, the Court 20 granted judgment by default in favor of Plaintiffs against 21 Defendants. The Court ordered Defendants to pay statutory 22 damages in the amount of $30,000 and attorneys fees and costs in 23 the amount of $5,891.80. 24 Before the Court is Defendants’ Motion to Set Aside 25 Default Judgment Pursuant to F.R.C.P.60(b)(1) and (b)(6). See 26 Docket No. 29. Plaintiffs filed a memorandum and affidavits in 27 opposition to the motion to set aside the default judgment. See 28 Docket No. 30. Dockets.Justia.com 1 Background 2 Plaintiffs filed a complaint on June 12, 2008, alleging 3 Defendants were liable to Plaintiffs for copyright infringement. 4 Plaintiffs alleged Defendants were the owners of Va Bene, a bar 5 and restaurant located in Phoenix, Arizona. 6 that Defendants allowed four copyrighted works to be performed 7 at Va Bene on a specific date in 2007. 8 were not provided with a royalty for the performance of their 9 copyrighted works either directly to Plaintiffs or through the 10 payment of a license for the performance of copyrighted works to 11 the 12 (“ASCAP”).1 American Society Significantly, 13 of Composers, Plaintiffs Plaintiffs alleged Plaintiffs alleged they Authors alleged and Publishers Defendants had 14 knowingly violated their copyrights for a period of two years. 15 The 16 prohibiting Defendants from authorizing or allowing further 17 infringing performances of Plaintiffs’ copyrighted works. 18 complaint also sought statutory damages pursuant to 17 U.S.C. §§ 19 502(a), 504(c) and 505, and an award of Plaintiffs’ attorneys 20 fees. complaint sought injunctive relief, i.e., an order The 21 22 23 24 25 26 27 28 1 ASCAP is a central administrator utilized by copyright owners to control licensed performance of their copyrighted works. On behalf of the copyright owners, ASCAP negotiates fee agreements, or licenses, allowing nightclubs and restaurants, inter alia, to play or allow the performance of the musical compositions in the ASCAP catalogue. Generally, when ASCAP determines that an establishment is playing copyrighted music the owner of the establishment is notified of the infringement and is offered a chance to purchase a license. See Broadcast Music, Inc. v. Columbia Broad. Sys., 441 U.S. 1, 4-5, 99 S. Ct. 1551, 1554-55 (1979); International Korwin Corp. v. Kowalcyzk, 855 F.2d 375, 376 n.1 (7th Cir. 1988); Morganactive Songs v. K&M Fox Inc., 77 U.S.P.Q. 2d 1064, 1070 (S.D. Ind. 2005). -2- Service of the summons and complaint was executed on 1 See Docket No. 8. Defendants’ 2 Defendants on June 19, 2008. 3 answer to the complaint was due no later than June 30, 2008. 4 Defendants never filed an answer to the complaint. 5 On July 16, 2008, Plaintiffs applied for the entry of 6 Defendants’ default, which was entered by the Clerk of the Court 7 pursuant to Rule 55(a), Federal Rules of Civil Procedure, on 8 July 30, 2008. 9 2008, Plaintiffs moved the Court for the entry of judgment in of See Docket No. 11 & Docket No. 13. Plaintiffs 10 favor 11 Defendants’ default in asserting any 12 Plaintiffs’ claims for relief, citing Rule 55(b)(2), Federal 13 Rules of Civil Procedure. 14 Plaintiffs properly alleged that Defendants’ infringement was 15 willful, which allows the Court to impose a greater amount of 16 damages. Notably, 17 in and the against Defendants On August 7, by virtue of answer or defense to See Docket No. 14. In their motion face of judgment against them, 18 Defendants still did not appear before the Court to assert any 19 defense to the charges or to assert that their infringement was 20 not willful. 21 within its discretion to authorize the statutory damages sought 22 by 23 infringements, i.e., an aggregate of statutory damages in the 24 amount of $30,000. Plaintiffs, Accordingly, the Court concluded that it was i.e., $7,500 for each of the four alleged 25 Judgment was entered on or about September 6, 2008. 26 Defendants took no action after judgment was entered until they 27 filed their motion to set aside the judgment on July 8, 2009, 28 ten months later. Defendants apparently finally appeared in -3- 1 this matter in response to Plaintiffs’ filing motions for 2 judgment debtor examinations of Defendants in an effort to 3 effectuate the Court’s award of damages. Standard for granting a motion to vacate a judgment 4 5 pursuant to Rule 60, Federal Rules of Civil Procedure 6 Defendants move for relief pursuant to Rule 60(b)(1) 7 and 60(b)(6), Federal Rules of Civil Procedure, which provide: 8 Grounds for Relief from a Final Judgment, Order, or Proceeding. On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; *** 6) any other reason that justifies relief. 9 10 11 12 13 14 See also Fed. R. Civ. P. 55(c) (allowing the Court to set aside 15 a default judgment “in accordance with” Federal Rule of Civil 16 Procedure 60(b)); S.E.C. v. Internet Solutions for Bus. Inc., 17 509 F.3d 1161, 1164-65 (9th Cir. 2007). 18 A motion under Rule 60(b)(1) must be made within a 19 “reasonable” time, and not more than one year after judgment was 20 entered. 21 case, Defendants’ motion to set aside judgment by default is not 22 timely because ten months after the judgment was entered is not 23 a “reasonable” time. The Court finds that, given the circumstances of this 24 The Court also finds Defendants are not eligible for 25 relief from judgment pursuant to Rule 60(b)(1) because there is 26 no evidence of mistake, inadvertence, surprise, or excusable 27 neglect. 28 judgment based on Rule 60(b)(6). Rule 60(b)(6), the “catch-all” Defendants are also not entitled to relief from -4- 1 provision that allows relief for a reason not specified in Rule 2 60 subsections (b)(1) through (5), should only be applied in 3 extraordinary circumstances. 4 Supp. 5 demonstrated extraordinary circumstances. 871, 875 (D. See, e.g., Shoen v. Shoen, 933 F. Ariz. 1996). Defendants have not The rule also comports with general principles of fairness. ... The defendant who chooses not to put the plaintiff to its proof, but instead allows default judgment to be entered and waits, for whatever reason, until a later time to challenge the plaintiff’s action, should have to bear the consequences of such delay. 6 7 8 9 10 11 S.E.C. v. Internet Solutions for Bus. Inc., 509 F.3d at 1166. 12 When determining whether to exercise its discretion to 13 reverse a judgment by default, the Court should consider whether 14 the defendant’s culpable conduct led to the default; whether the 15 defendant has a meritorious defense; and whether reopening the 16 default judgment would prejudice the plaintiff. 17 Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 696 (9th Cir. 18 2001). 19 factors favor vacating the judgment. 20 Tenorio, 856 F.2d 1412, 1415 (9th Cir. 1988). 21 has intentionally and repeatedly disregarded court orders the 22 Court does not abuse its discretion by denying a motion to set 23 aside judgment by default. 24 787 (9th Cir. 1989). See, e.g., TCI Defendants bear the burden of demonstrating that these See id.; Cassidy v. Where a defendant See Yusov v. Yusuf, 892 F.2d 784, Defendants do not assert that they had no notice of the 25 26 suit, or the application for entry of default, or the 27 application for the entry of judgment by default, or the entry 28 of judgment by default. Still, Defendants chose not to appear -5- 1 and defend in this matter. The civil docket reflects that 2 Defendants chose not to defend this matter until it became clear 3 that Plaintiffs intended to collect the judgment by servicing 4 notice of judgment debtor exams. Defendants’ conduct was culpable. 5 “If a defendant has 6 received actual or constructive notice of the filing of the 7 action 8 Franchise Holding II, LLC. v. Huntington Rest. Group, Inc. 9 F.3d 922, 926 (9th Cir. 2004). and failed to answer, its conduct is culpable.” 375 Plaintiffs will clearly be prejudiced if the judgment 10 11 is set aside. Plaintiffs would be forced to re-litigate a 12 matter to which Defendants have not proffered a meritorious 13 defense and, accordingly, greater expense of both Plaintiffs’ 14 and judicial resources would be expended to the same eventual 15 outcome. Defendants do not argue that they did not violate 16 17 Plaintiffs’ copyrights, but instead contend the amount of 18 damages was not warranted.2 Defendants’ primary argument is that 19 20 21 22 23 24 25 26 27 28 2 Defendants’ beliefs as to whether they or the performers are responsible for paying for use of copyrighted materials are not a legitimate defense to a charge of infringement. It is well established that the owner and operator of an establishment is liable for copyright infringement which occurs at their establishment. See Leigh v. Sakkaris, 215 U.S.P.Q. 113 (N.D. Cal. 1982); Van Halen Music v. Palmer, 626 F. Supp. 1528 (D. Ark. 1985). Neither can a business owner avoid liability for copyright infringement at their establishment by “hiding [their] head in the sand like an ostrich” and ignoring warnings about infringement. See Chi-Boy Music v. Charlie Club, Inc., 930 F.2d 1224 (7th Cir. 1991). The Court is absolutely not persuaded that Mr. Cosic’s purported deficits in understanding the English language and the legal implications of his actions are as limiting as Defendants assert. Furthermore, even if true, Mr. Cosic’s language difficulties are not a defense to the charges of infringement. Defendants appear to have received or had access to legal advice since the onset of this litigation and, accordingly, ignorance poses no excuse for their lack of diligence in presenting any defense to the complaint. -6- 1 the amount of damages is unrealistic and unfair in light of the 2 actual number and type of copyright violations. Defendants also 3 contend that the Court looked only at Plaintiff’s complaint when 4 determining the amount of damages to award. Defendants have provided no meritorious defenses to 5 6 Plaintiffs’ charges of copyright infringement. Plaintiffs have 7 produced evidence that Defendants had repeated notice not only 8 of this lawsuit, but also of their many acts of copyright 9 infringement. Douglas Jones, ASCAP’s Litigation Administrator, beginning in July 2005, ASCAP contacted Defendants dozens of times, by correspondence, telephone calls and personal visits, to offer Defendants a license for their establishment, Va Bene Restaurant [] As part of these contacts, ASCAP repeatedly explained to Defendants that under the United States Copyright Law they needed to obtain authorization to perform publicly copyrighted songs in the ASCAP repertory. In fact, the letters to Defendants specifically informed them that unauthorized performances of copyrighted musical works in the ASCAP repertory constituted copyright infringement and that Defendants could be liable for damages ranging from $750 to $30,000 for each song they infringed. (Jones Aff. Exhibit A; letters dated September 26, 2006; October 2, 2006; March 14, 2007; and July 19, 2007). 10 11 12 13 14 15 16 17 18 19 20 21 Docket No. at 5. When 22 determining upon the damages the Court to award Plaintiffs 24 whether Defendants willfully violated Plaintiffs’ copyrights. 25 The 26 decision within the discretion of the Court. 27 County Music Co. v. C.H.L.R., Inc., 88 F.3d 635, 641 (8th Cir. 28 1996); Chi-Boy Music v. Charlie Club, Inc., 930 F.2d 1224, 1229 of default, of 23 determination Defendants’ amount whether a -7- violation is considered willful is a See, e.g., Cass 1 (7th Cir. 1991). The finding that the infringement was willful 2 allowed the Court to award damages in the amount of up to 3 $150,000 per infringement. 4 at 641; 17 U.S.C. § 504(c)(2) (2005 & Supp. 2008). See Cass County Music Co., 88 F.3d 5 Infringement is “willful” if the defendants knew their 6 conduct constituted an infringement of a copyright or if they 7 acted in “reckless disregard” of copyrights. 8 Corp. v. Carol Wright Sales, Inc., 18 F.3d 502, 511 (7th Cir. 9 1994). See Wildlife Exp. In making this determination the Court was allowed to 10 consider as a “persuasive” factor whether Defendants had notice 11 that their acts constituted infringement. See Cass County Music 12 Co., 88 F.3d at 637-38; Chi-Boy Music, 930 F.2d at 1227-28; 13 Morganactive Songs v. K&M Fox Inc., 77 U.S.P.Q. 2d 1064, 1069-70 14 (S.D. Ind. 2005). 15 Contrary to Defendants’ statement that the Court did 16 not look beyond the complaint to assess the amount of damages to 17 award, the Court assessed the amount of damages per infringement 18 after examining the entire record, including the affidavits 19 attached to the motion for judgment by default. Defendants were 20 served with the motion for judgment by default and could have, 21 but did not, challenge any of the evidence provided therein 22 going toward a determination of the amount of damages. 23 IV Conclusion 24 Defendants’ motion to set aside judgment by default is 25 not timely, as it was filed ten months after judgment was 26 entered and Defendants offer no legitimate reason for excusing 27 their lack of diligence in asserting any potential defenses to 28 Plaintiffs’ claims even after -8- judgment was entered. 1 Additionally, Defendants have not met the requirements of either 2 subsection (b)(1) or (b)(6) of Rule 60, Federal Rules of Civil 3 Procedure, regarding the setting aside of a judgment and, 4 accordingly, setting aside the judgment by default is not 5 warranted pursuant to Rule 55, Federal Rules of Civil Procedure. 6 Defendants have not met their burden of establishing good cause 7 for their default and have not established that the Court erred 8 in finding their infringement of Plaintiffs’ copyrights willful 9 and in assessing the amount of damages awarded Plaintiffs. 10 11 12 13 IT IS ORDERED that Defendants’ motion [Docket No. 29] to set aside judgment is denied. DATED this 27th day of July, 2009. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -9-
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