Cook Productions, LLC v. Lei et al, No. 2:2017cv00069 - Document 19 (D. Nev. 2018)
Court Description: ORDER Granting in Part and Denying in Part Plaintiff's 18 Motion for Default Judgment. Plaintiff is awarded $1,500 in statutory damages and $2,606.25 in reasonable attorney's fees and costs for a total of $4,106.25. A permanent injunction is not issued against Gregory Branthley. The Clerk of Court is directed to enter Judgment in favor of Cook Productions, LLC and against Gregory Branthley in the total amount of $2,606.25 and close this case. Signed by Judge Jennifer A. Dorsey on 6/1/2018. (Copies have been distributed pursuant to the NEF - SLD) (Main Document 19 replaced to correct party name Matthew Branthley to Gregory Branthley on 6/1/2018) (SLD).
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Cook Productions, LLC v. Lei et al Doc. 19 1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 4 Cook Productions, LLC, Case No.: 2:17-cv-00069-JAD-GWF 5 Plaintiff Order Granting in Part Motion for Default Judgment 6 v. 7 Gregory Branthley, [ECF No. 18] Defendant 8 9 This case is modeled after the LHF Productions and Cell Film Holdings cases—brought 10 by the same attorney—that I ruled on,1 where the plaintiffs sued many defendants under a 11 swarm-joinder theory for separately infringing their copyright in a film by using BitTorrent 12 software. All of these cases follow the same litigation model: the plaintiff sues several 13 unidentified Doe defendants for separately infringing its copyright in a film by downloading and 14 uploading it through the same BitTorrent software. Then the plaintiff moves for expedited 15 discovery to identify the defendants, files a first-amended complaint naming them, and then 16 systematically dismisses the claims against them after failing to serve or settling with them.2 Gregory Branthley is this case’s sole remaining defendant, and he has failed to appear— 17 18 let alone participate—in these proceedings. The Clerk of Court entered default against him on 19 September 15, 2017,3 and Cook Productions, LLC moved for default judgment two weeks later.4 20 Eight months have passed, and Branthley continues to avoid this action. So, I grant Cook’s 21 motion in part. 22 1 See, e.g., LHF Productions, Inc. v. Wilson, 2:16-cv-02368-JAD-NJK; LHF Productions, Inc. v. Kabala, 2:16-cv-02028-JAD-NJK; LHF Productions, Inc. v. Buenafe, 2:16-cv-01804-JAD-NJK; 23 LHF Productions, Inc. v. Boughton, 2:16-cv-01918-JAD-NJK; LHF Productions, Inc. v. Smith, 2:16-cv-01803-JAD-NJK; Cell Film Holdings LLC v. McCray, 2:16-cv-02089-JAD-NJK; Cell 24 Film Holdings LLC v. Galang, 2:16-cv-02142-JAD-VCF; Cell Film Holdings LLC v. Acosta, 25 2:16-cv-01853-JAD-VCF. 2 26 See generally docket reports for the cases cited in note 1. 3 ECF No. 17. 4 ECF No. 18. 27 28 1 Dockets.Justia.com Discussion 1 2 A. Default-judgment standard 3 Federal Rule of Civil Procedure 55(b)(2) permits a plaintiff to obtain default judgment if 4 the clerk previously entered default based on a defendant’s failure to defend. After entry of 5 default, the complaint’s factual allegations are taken as true, except those relating to damages.5 6 “[N]ecessary facts not contained in the pleadings, and claims [that] are legally insufficient, are 7 not established by default.”6 The court has the power to require a plaintiff to provide additional 8 proof of facts or damages in order to ensure that the requested relief is appropriate.7 Whether to 9 grant a motion for default judgment lies within my discretion,8 which is guided by the seven 10 factors outlined by the Ninth Circuit in Eitel v. McCool: 11 (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.9 12 13 14 15 A default judgment is generally disfavored because “[c]ases should be decided upon their merits 16 whenever reasonably possible.”10 17 B. The BitTorrent protocol 18 A brief description of the BitTorrent protocol is helpful to contextualize my Eitel 19 analysis. Safety Point Products, LLC v. Does describes it well: 20 21 5 Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987) (per curiam); FED. R. 22 CTelevideo IV. P. 8(b)(6) (“An allegation—other than one relating to the amount of damages—is admitted 23 if a responsive pleading is required and the allegation is not denied.”). 6 24 Cripps v. Life Ins. Co., 980 F.2d 1261, 1267 (9th Cir. 1992). 7 See FED. R. CIV. P. 55(b)(2). 8 Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). 9 Id. at 1471–72. 25 26 27 10 28 Id. at 1472. 2 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. 1 2 3 4 5 6 7 Groups of peers that download and upload the same file during a given period are known as a “swarm,” with each peer being 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. 8 9 10 11 12 13 14 15 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.11 16 17 18 19 20 21 22 C. Evaluating the Eitel factors 23 1. 24 The first Eitel factor weighs in favor of granting default judgment against Branthley. Possibility of prejudice to Cook 25 Cook sent Branthley numerous demand letters and a summons along with the first-amended 26 27 11 Safety Point Products, LLC v. Does, 2013 WL 1367078, at *1 (N.D. Ohio Apr. 4, 2013) (internal citations omitted). 28 3 1 complaint, but Branthley never responded.12 Cook claims that Branthley infringed its copyright 2 by downloading its film using BitTorrent software. Given the nature of BitTorrent software, 3 Branthley may be exacerbating Cook’s injury by continuing to seed the file to the BitTorrent 4 swarm. 5 2. Substantive merits and sufficiency of the claims 6 The second and third Eitel factors require Cook to demonstrate that it has stated a claim 7 on which it may recover.13 The first-amended complaint sufficiently pleads Cook’s direct8 copyright-infringement, contributory-copyright-infringement, and vicarious-liability claims. To present a prima facie case of direct infringement, Cook must show that: (1) it owns 9 10 the allegedly infringed material, and (2) the alleged infringers violate at least one exclusive right 11 granted to copyright holders under 17 U.S.C. § 106.14 Cook alleges that it is the owner of the 12 copyright registration for the film “London Has Fallen.”15 Cook also alleges that Branthley 13 willfully violated several exclusive rights granted by 17 U.S.C. § 106, and that those violations 14 caused it to suffer damages.16 The contributory-copyright-infringement claim requires Cook to allege that Branthley 15 16 “had knowledge of the infringing activity” and “induce[d], cause[d,] or materially contribute[d] 17 to the infringing conduct of another.”17 “Put differently, liability exists if the defendant engages 18 in personal conduct that encourages or assists the infringement.”18 Given the nature of 19 BitTorrent technology, BitTorrent swarm participants who download files compulsorily upload 20 12 ECF No. 18 at 4. 13 See Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978). 14 A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001). 15 ECF No. 9 at 10, ¶ 46; see also ECF No. 9-2. 16 ECF No. 9 at 10–11. 21 22 23 24 25 17 A&M Records, 239 F.3d at 1019 (quoting Gershwin Publ’g Corp. v. Columbia Artists Mgmt., 26 443 F.2d 1159, 1162 (2d Cir. 1971) and citing Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 264 (9th Cir. 1996)). 27 18 Id. (quoting Matthew Bender & Co. v. West Publ’g Co., 158 F.3d 693, 706 (2d Cir. 1998)). 28 4 1 those same files so that other participants may download them at a faster rate. Accordingly, 2 Cook’s allegations that each defendant is a contributory copyright infringer because they 3 participated in a BitTorrent swarm19 is sufficient to satisfy the induced-caused-or-contributed 4 requirement. Cook satisfies the remaining requirements by alleging that Branthley knew or 5 should have known that other BitTorrent-swarm participants were directly infringing on Cook’s 6 copyright by downloading the files that they each uploaded.20 Cook also claims that Branthley, as the account holder for the Internet service, is 7 8 vicariously liable for any infringing activity conducted by other users on his internet 9 connection.21 “Vicarious infringement is a concept related to, but distinct from, contributory 10 infringement.”22 “To state a claim for vicarious copyright infringement, [Cook] must allege that 11 [Branthley] had (1) the right and ability to supervise the infringing conduct and (2) a direct 12 financial interest in the infringing activity.”23 Cook’s allegations satisfy the first prong. As the court discussed in Dallas Buyers Club, 13 14 LLC v. Doughty, “the Internet service account holder, appea[rs] to have had exclusive control 15 over use of the Internet service” and the account holder “could have simply secured access to the 16 Internet by creating a password or by changing an already existing password.”24 “Thus, . . . [the 17 account holder] had the capacity to terminate use of his Internet service by any infringing third 18 party if he believed it was being used to violate applicable law.”25 Cook also satisfies the direct-financial-interest prong. “The essential aspect of the direct 19 20 financial benefit inquiry is whether there is a causal relationship between the infringing activity 21 19 ECF No. 9 at 11, ¶ 56. 20 Id. at 12, ¶¶ 58–61. 21 Id. at 14. 22 Perfect 10, Inc. v. Visa Intern. Service Ass’n, 494 F.3d 788, 802 (9th Cir. 2007). 23 Id. 24 Dallas Buyers Club, LLC v. Doughty, 2016 WL 1690090 (D. Or. Apr. 27, 2016). 25 Id. (citing A&M Records, 239 F.3d 1004). 22 23 24 25 26 27 28 5 1 and any financial benefit a defendant reaps, regardless of how substantial the benefit is in 2 proportion to a defendant’s overall profits.”26 “Financial benefit exists where the availability of 3 infringing material acts as a ‘draw’ for customers.”27 “The size of the ‘draw’ relative to a 4 defendant’s overall business is immaterial. A defendant receives a ‘direct financial benefit’ from 5 a third-party infringement so long as the infringement of third parties acts as a ‘draw’ for 6 customers ‘regardless of how substantial the benefit is in proportion to a defendant’s overall 7 profits.”28 Cook alleges that Branthley benefitted from third-party infringement by viewing “Mr. 8 Church” without paying for it.29 The law is clear that it doesn’t matter how large the financial 9 benefit is: by watching the BitTorrent-downloaded film, Branthley saved the cost of a movie 10 ticket, and that is a direct financial benefit. I therefore find that Cook sufficiently pled each of its claims in the first-amended 11 12 complaint. I also find that Cook’s claims have substantive merit, subject to any defenses that 13 Branthley could raise. 14 3. Sum of money at stake 15 The sum-of-money factor requires me to consider “the amount of money at stake in 16 relation to the seriousness of [Branthley’s] conduct.”30 “If the sum of money at stake is 17 completely disproportionate or inappropriate, default judgment is disfavored.”31 Cook asks for 18 statutory damages and attorney’s fees and costs. 19 20 21 26 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)). 22 27 A&M Records, 239 F.3d at 1023. 23 28 Perfect 10, 2014 WL 8628031, at *3 (quoting Ellison, 357 F.3d at 1079). 29 ECF No. 9 at 13, ¶ 68. 24 25 30 Twentieth Century Fox Film Corp. v. Streeter, 438 F. Supp. 2d 1065, 1071 (D. Ariz. 2006) 26 (quoting PepsiCo. Inc v. California Security Cans, 238 F. Supp. 2d 1172, 1176 (C.D. Cal. 2002)). 27 31 Twentieth Century Fox, 438 F. Supp. 2d at 1071. 28 6 For statutory damages, Cook requests $15,000 under 17 U.S.C. § 504(c).32 The statute 1 2 sets a $750 minimum and a $30,000 maximum award of damages for copyright infringement,33 3 and that maximum can be increased up to $150,000 where the infringement was willful.34 I have 4 “wide discretion in determining the amount of statutory damages to be awarded, constrained only 5 by the specified maxima and minima.”35 Given Branthley’s numerous opportunities to respond to Cook’s demand letters, first- 6 7 amended complaint, and this motion, coupled with Cook’s unopposed allegations that I take as 8 true, the factual showing before me indicates that Branthley is a willful copyright infringer. But 9 I do not find that $15,000 is necessary to compensate Cook for its injury and to deter Branthley 10 and other BitTorrent users. Although I acknowledge that other courts have awarded $15,000 for 11 the same offense, I am not persuaded by their actions. After considering the lost-profits movie 12 ticket sales, the cost of identifying infringers and pursuing litigation, and the boundaries 13 provided by § 504(c), I determine that $1,500 is the appropriate damage award. This amount 14 adequately accomplishes the goals of § 504(c) to protect copyrighted works and deter 15 infringement. This amount is also not excessive because it is only 1% of the statutory maximum 16 for willful infringement. The Copyright Act also allows courts to award the recovery of full costs and reasonable 17 18 attorney’s fees to the prevailing party as part of those costs.36 Cook, in applying the lodestar 19 method,37 moves for $2,126.25 in attorney’s fees38 and $480 in costs, for a total of $2,606.25. 20 21 32 ECF No. 18 at 8. 22 33 17 U.S.C. § 504(c)(1). 23 34 17 U.S.C. § 504(c)(2). 24 35 Peer Int’l Corp. v. Pausa Records, Inc., 909 F.2d 1332, 1336 (9th Cir. 1990) (quoting Harris v. Emus Records Corp., 738 F.2d 1329, 1335 (9th Cir. 1984)). 25 36 17 U.S.C. § 505 (2012). 26 37 See Camacho v. Bridgeport Financial, Inc., 523 F.3d 973, 978 (9th Cir. 2008). 38 This number is based on a rate of $375.00 per hour for 5.67 hours. 27 28 7 1 The total sum of money at stake, then, is $4,106.25, and I find that this factor weighs in favor of 2 default judgment. 3 4. Possibility of a dispute concerning material facts 4 Next I consider the possibility that material facts are disputed. Cook adequately alleged 5 three copyright-infringement claims against Branthley. Branthley failed to appear or otherwise 6 respond, so he admitted as true all of the material facts alleged in Cook’s complaint. Because 7 those facts are presumed true and Branthley failed to oppose this motion, no factual disputes 8 exist that would preclude the entry of default judgment against him. 5. 9 Excusable neglect Under this factor, I consider whether Branthley’s default may have resulted from 10 11 excusable neglect. Cook sent Branthley two demand letters roughly eight and five weeks prior to 12 filing its first-amended complaint. Branthley did not respond to either of them. Then Cook filed 13 its first-amended complaint on June 1, 2017, and sent Branthley a third demand letter. He didn’t 14 respond to that letter either. Cook served Branthley with process on July 24, 2017,39 and 15 Branthley failed to appear or file an answer to the first-amended complaint. Three months later, 16 Cook moved for entry of default against Branthley, and two weeks after that motion was granted, 17 Cook moved for default judgment.40 Branthley has never appeared or responded. Branthley has 18 demonstrated a habit of ignoring Cook, so I can only conclude that his default was not the 19 product of excusable neglect. This factor thus weighs in favor of entering default judgment. 20 6. Favoring decisions on the merits 21 “Generally, default judgments are disfavored because cases should be decided upon their 22 merits whenever reasonably possible.”41 Because Branthley has failed to respond to anything at 23 all in this action, it is not possible to decide this case on its merits, so this factor, too, weighs in 24 25 39 ECF No. 15. 40 ECF Nos. 16, 17, 18. 41 Eitel, 782 F.2d at 1472. 26 27 28 8 1 favor of default judgment. As every factor weighs in favor of entering default judgment, I grant 2 Cook’s motion. 3 D. Permanent injunction 4 As its final claim for relief, Cook asks for a permanent injunction enjoining Branthley 5 from “directly or indirectly infringing [its] rights” over its film “including[,] without limitation[,] 6 using the Internet to reproduce, to distribute, to copy, or to publish the motion picture.”42 The 7 Copyright Act allows me to “grant temporary and final injunctions on such terms as [I] may 8 deem reasonable to prevent or restrain infringement of a copyright.”43 The Supreme Court held 9 in eBay Inc. v. MercExchange, L.L.C. that a plaintiff must satisfy a four-factor test to receive a 10 permanent injunction in a patent-infringement case.44 Cook must demonstrate: “(1) that it has 11 suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are 12 inadequate to compensate for that injury; (3) that, considering the balance of hardships between 13 the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest 14 would not be disserved by a permanent injunction.”45 This test also applies to copyright15 infringement cases.46 Cook argues that “[m]onetary damages alone are simply inadequate” because “absent 16 17 injunctive relief to force the deletion of each torrent file from [Branthley’s] computer[] . . . 18 infringement will continue unabated in exponential fashion.”47 But I conclude that a monetary 19 judgment of $4,106.25 is sufficient to compensate Cook for any infringement injury and likely to 20 sufficiently deter Branthley from further infringing Cook’s copyright, so Cook fails to satisfy the 21 second factor of the permanent-injunction test, and I deny its request for injunctive relief. 22 42 ECF No. 18 at 12. 43 17 U.S.C. § 502(a). 44 eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006). 45 Id. 46 Flexible Lifeline Sys., Inc. v. Precision Lift, Inc., 654 F.3d 989, 995–96 (9th Cir. 2011). 47 ECF No. 18 at 11. 23 24 25 26 27 28 9 1 Conclusion 2 Accordingly, IT IS HEREBY ORDERED that Cook’s motion for default judgment 3 against Gregory Branthley [ECF No. 46] is GRANTED in part and DENIED in part. I award 4 Cook $1,500 in statutory damages and $2,606.25 in reasonable attorney’s fees and costs for a 5 total of $4,106.25. I decline to issue a permanent injunction against Branthley. 6 The Clerk of Court is directed to ENTER JUDGMENT in favor of Cook Productions, 7 LLC and against Gregory Branthley in the total amount of $2,606.25 and CLOSE THIS CASE. 8 Dated: June 1, 2018 _______________________________ U.S. District Judge Jennifer A. Dorsey 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10
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