Craigslist, Inc v. 3Taps, Inc et al, No. 3:2012cv03816 - Document 280 (N.D. Cal. 2015)

Court Description: ORDER Granting Application for Default Judgment by Judge Charles R. Breyer. (crblc2, COURT STAFF) (Filed on 10/11/2015)
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Craigslist, Inc v. 3Taps, Inc et al Doc. 280 1 2 3 4 5 6 7 8 IN THE UNITED STATES DISTRICT COURT 9 FOR THE NORTHERN DISTRICT OF CALIFORNIA United States District Court For the Northern District of California 10 11 12 ORDER GRANTING APPLICATION FOR DEFAULT JUDGMENT Plaintiff, 13 14 No. 3:12-cv-03816-CRB CRAIGSLIST, INC., v. 3TAPS, INC., et al., 15 Defendants. / 16 Plaintiff Craigslist (“Craigslist”) has filed a motion for default judgment against 17 18 Defendant Niessen (“Niessen”). See Motion for Default Judgment (dkt. 277). The Clerk of 19 Court entered a notice of default against Niessen after he failed to respond to the Amended 20 Complaint. See Clerk’s Notice of Default (dkt. 276); see also Amended Complaint 21 (“Complaint”) (dkt. 35). The Court has reviewed Craigslist’s motion and has given the 22 Defendant an opportunity to respond in writing and to appear at a hearing on October 9, 23 2015. See Minute Entry (dkt. 277). Defendant has not responded or appeared. For the 24 reasons outlined below, the Court GRANTS Craigslist’s motion for default judgment. 25 I. Factual Background 26 This section accepts as true the well-pled factual allegations in the complaint 27 regarding liability. See Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). 28 Dockets.Justia.com 1 A. Craigslist and its Terms of Use 2 Craigslist is a Delaware corporation, with its principal place of business and headquarters in San Francisco, California. Compl. ¶¶ 17, 26. It maintains one of the world’s 4 most popular websites, offering a platform for millions of authorized users to seek 5 employment, search for housing, and trade goods and services. Compl. ¶ 25. Craigslist’s 6 Terms of Use (“TOU”) grant users a limited revocable license to access and use Craigslist’s 7 website in accordance with its terms. Compl. ¶ 42; see also Declaration of William C. 8 Powell (dkt. 279) (“Powell Decl.”) ¶¶ 4-6, Exs. E-G. The TOU prohibit, among other things, 9 “[a]ny copying, aggregation, display, distribution, performance or derivative use of craigslist 10 United States District Court For the Northern District of California 3 or any content posted on craigslist whether done directly or through intermediaries,” except 11 in narrow circumstances applicable to general purpose search engines. See Powell Decl. ¶ 4, 12 Ex. E; Compl. ¶ 44. Craigslist users are required to accept the site’s TOU before posting 13 content to it. Compl. ¶ 36. If a user chooses not to accept the TOU, then the user will not be 14 allowed to post. Id. ¶ 37. 15 B. Niessen “Scrapes” Craigslist in Violation of the TOU 16 According to the complaint, Niessen is a self-described “hacker” who remotely 17 accesses and extracts content from websites—including Craigslist—using a process called 18 “scraping.” See Barry Decl. ¶ 3, Ex. B; see also Compl. ¶ 75. Niessen began a relationship 19 with Defendant 3taps1 on April 30, 2010. See Barry Decl. ¶ 3, Ex. B. He responded to a 20 Craigslist post seeking a “Skilled Hacker at Scraping Web Content” and stated that he was 21 already scraping “over 7,500 sites like [c]raigslist, Twitter, Groupon, Zagat, and others.” See 22 id. 3taps commissioned Niessen to identify, source, copy, and redistribute Craigslist content, 23 without authorization, for profit. See Barry Decl. ¶ 4, Ex. C. According to Megumi 24 Nakamura, 3taps’ Chief Operating Officer, Niessen “was already [scraping] sites like 25 craigslist and a bunch of others . . . . And so, to the extent that [Niessen] was already doing 26 this, 3taps was just a new place where he would send the data.” Barry Decl. ¶ 5, Ex. D. 27 28 1 The Court entered an order enjoining 3taps from similarly violating Craigslist’s Terms of Use, among other things, on June 30, 2015. See Permanent Injunction (dkt. 272). 2 1 Craigslist alleges that this scraping and distribution of its content is unlawful, violated its 2 TOU, and has “damaged craigslist, and caused and continue[] to cause irreparable . . . harm 3 and injury to craigslist.” Compl. ¶ 139. Niessen has posted to Craigslist’s website at least 37 4 times, verifying that he has acknowledged and agreed to be bound by Craigslist’s TOU on at 5 least 37 separate occasions. Powell Decl. ¶ 2; Barry Decl. ¶ 6; Compl. ¶ 130-31. 6 C. Procedural History 7 On November 20, 2012, Craigslist filed its Amended Complaint against Niessen and 8 several additional defendants. See Complaint (dkt. 35). Craigslist alleged, among other 9 things, that Niessen was liable for breach of contract for “willfully, repeatedly, and United States District Court For the Northern District of California 10 systematically” violating the TOU in his use of the Craigslist website. Id. ¶¶ 131, 137. 11 Craigslist requested that the Court enjoin Niessen from violating its TOU and scraping its 12 website. Id. ¶ 141. On July 3, 2014, Craigslist located Niessen and served him with the 13 Complaint. See Certificate of Service (dkt. 274). 14 This court has entered Orders of Final Judgment and Permanent Injunction against 15 Niessen’s codefendants. See Lovely Order (dkt. 224); PadMapper Order (dkt. 271); 3taps 16 Order (272). Niessen is the only defendant who has not yet been permanently enjoined in 17 this matter. See Motion for Default Judgment (dkt. 277) at 2. On August 7, 2015, the Clerk 18 of Court entered a notice of default against Niessen after he failed to respond to the 19 Complaint within the time set by Federal Rule of Civil Procedure 12. See Clerk’s Notice of 20 Default (dkt. 276). Craigslist now requests the entry of default judgment against Niessen, 21 permanently enjoining him from violating the Craigslist TOU. See Motion for Default 22 Judgment (dkt. 277) at 2. 23 II. 24 Legal Standard The Court may enter a default judgment upon motion by the Plaintiff after entry of 25 default by the Clerk. See Fed. R. Civ. P. 55(b). Whether to grant a motion for the entry of a 26 default judgment is within the discretion of the trial court. See Lau Ah Yew v. Dulles, 236 27 F.2d 415, 416 (9th Cir. 1956). Upon an entry of default by the Clerk, the factual allegations 28 3 1 of the plaintiff’s complaint will be taken as true, except those relating to the amount of 2 damages. See Derek Andrew, Inc. v. Poof Apparel Corp., 528 F.3d 696, 702 (9th Cir. 2008). 3 In determining whether to enter a default judgment, a court has “an affirmative duty to 4 look into its jurisdiction over both the subject matter and the parties.” In re Tuli, 172 F.3d 5 707, 712 (9th Cir. 1999). The Court has found subject matter jurisdiction over this matter in 6 its prior orders, and regarding Niessen, Craigslist alleges that its TOU provides for 7 jurisdiction in this Court and that Niessen made “systematic and continuous contacts with 8 this judicial district” by accessing Craigslist’s servers and targeted his “wrongful acts at 9 craigslist, which is headquartered in this judicial district.” Compl. ¶ 14-15. This Court thus United States District Court For the Northern District of California 10 has “jurisdiction over both the subject matter and the parties.” Tuli, 172 F.3d at 712 ; see 11 also Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). 12 III. Discussion The Eitel Factors 13 A. 14 This Court examines the following factors in determining whether to enter a default 15 judgment: (1) the possibility of prejudice to the plaintiff; (2) the merits of the plaintiff’s 16 substantive claims; (3) the sufficiency of the complaint; (4) the sum of money at stake in the 17 action; (5) the possibility of a dispute concerning material facts; (6) whether the default was 18 due to excusable neglect; and (7) the likelihood of obtaining a decision on the merits. Eitel v. 19 McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Here, these factors all weigh in favor of 20 granting the injunctive relief requested by Craigslist. 21 Under the first factor, Craigslist would be prejudiced if the court does not enter default 22 judgment against Niessen. See id. Absent the requested injunction, Craigslist would be left 23 without any means to enforce its TOU or protect the content of its website from Niessen’s 24 alleged misappropriation. See Am. Auto. Ass'n, Inc. v. AAA Auto Body & Repair, Inc., No. 25 C14-04131 CRB, 2015 WL 1089746, at *3 (N.D. Cal. Feb. 27, 2015). 26 The second and third factors focus on the merits of Plaintiffs' substantive claim and 27 the sufficiency of the Complaint. See Eitel, 782 F.2d at 1471–72. To state a claim for breach 28 of contract, Craigslist must allege that: (1) a contract exists; (2) it performed its own duties 4 1 thereunder; (3) Niessen breached; and (4) Craigslist suffered damages as a result of the 2 breach. Troyk v. Famers Grp., Inc., 171 Cal. App. 4th 1305, 1352 (2009). Here, Craigslist 3 alleges that the TOU constitute a contract to which Niessen assented. Compl. ¶¶ 130-31. 4 Craigslist further alleges that it has performed its own duties imposed pursuant to the TOU. 5 Compl. ¶ 138. Finally, Craiglist alleges that Niessen willfully, repeatedly and systematically 6 breached the TOU, and that this breach of the TOU damaged Craigslist. Id. ¶¶ 137, 139. 7 Craigslist thus adequately pleads a breach of contract claim against Niessen and satisfies the 8 second and third factors under Eitel. See 782 F.2d at 1471–72. 9 The fourth factor examines the sum of money at stake in the action. Eitel, 782 F.2d at United States District Court For the Northern District of California 10 1471-72. Courts have held that where a plaintiff seeks only injunctive relief, this factor 11 weighs in favor of granting default judgment. See United States v. Broaster Kitchen, Inc., 12 No. CV 14-09421, 2015 U.S. Dist. LEXIS 88403, at *17 (C.D. Cal. May 27, 2015); United 13 States v. Torres, No. 2:12-cv-10530, 2013 U.S. Dist. LEXIS 185079, at *5 (C.D. Cal. Apr. 14 17, 2013). Craigslist solely requests and injunction here, so this factor also weighs in favor 15 of granting default judgment for Craigslist. See Motion for Default Judgment (dkt. 277) at 6. 16 Turning to remaining factors, there is no possibility of dispute over material facts 17 because, upon an entry of default by the Clerk, the factual allegations of the plaintiff’s 18 complaint related to liability will be taken as true. See Derek Andrew, Inc. v. Poof Apparel 19 Corp., 528 F.3d 696, 702 (9th Cir. 2008); Eitel, 782 F.2d at 1471-72. Furthermore, there is 20 no evidence of excusable neglect by Niessen, given that he was properly served with the 21 Complaint over a year ago. See Certificate of Service (dkt. 274); Eitel, 782 F.2d at 1471-72. 22 Finally, although default judgments are generally disfavored because cases should ordinarily 23 be decided on the merits, see Pena v. Seguros La Comercial, S.A., 770 F.2d 811, 814 (9th 24 Cir. 1985), Niessen’s failure to appear has made a decision on the merits impossible. See 25 Eitel, 782 F.2d at 1471-72. Each of the Eitel factors thus weighs in favor of default 26 judgment. 27 28 5 1 B. Injunctive Relief 2 Given that default judgment is warranted in this case, the Court must next determine 3 the appropriate relief. Craiglist requests permanent injunctive relief to prohibit Niessen from 4 violating its TOU and misusing Craigslist web content. See Motion for Default Judgment 5 (dkt. 277) at 9. Injunctive relief is appropriate when a party demonstrates “(1) that it has 6 suffered an irreparable injury; (2) that remedies available at law . . . are inadequate to 7 compensate for that injury; (3) that, considering the balance of hardships between the 8 plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest 9 would not be disserved by a permanent injunction.” N. Cheyenne Tribe v. Norton, 503 F.3d United States District Court For the Northern District of California 10 836, 843 (9th Cir. 2007). Here, Craigslist has alleged irreparable injury from Niessen’s “scraping”activities. 11 12 See Compl. ¶ 139. Craigslist also argues that the clandestine nature of scraping, see Compl. 13 ¶ 75, makes the extent of this injury difficult to calculate and translate into monetary 14 damages, rendering remedies available at law inadequate. See Norton, 503 F.3d at 843. 15 Regarding the balance of hardships, Craigslist asserts that it only requests compliance with 16 its TOU, and thus imposes no hardship on Niessen. See id. Finally, Craigslist asserts that 17 the public interest is not served by Niessen’s breach of its TOU. See id. The Court thus 18 concludes that injunctive relief is appropriate in this case. 19 IV. Conclusion 20 The Court GRANTS the Motion for Default Judgment and ORDERS that: 21 1. breach of contract. 22 23 Judgment is hereby entered against Niessen based on Craigslist’s claim for 2. Niessen and all of his employees, representatives, agents, and all other persons 24 or entities acting in concert with him are hereby permanently and immediately 25 enjoined from: (a) copying, reproducing, distributing, preparing derivative 26 works from, distributing copies to the public, and/or publicly displaying the 27 user-generated postings on craigslist’s website; (b) knowingly and 28 systematically inducing, causing, and/or materially contributing to the 6 1 unauthorized copying, reproduction, preparation of derivative works from, 2 distribution of copies to the public, and/or public displaying the user-generated 3 postings on craigslist’s website; and (c) accessing or using craigslist’s website 4 for any commercial purpose that violates Craiglist’s Terms of Use. 5 6 IT IS SO ORDERED. 7 8 Dated: October 9, 2015 CHARLES R. BREYER UNITED STATES DISTRICT JUDGE 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7