(PS) Odnil Music Limited et al v. Scheck et al, No. 2:2005cv00545 - Document 72 (E.D. Cal. 2006)
Court Description: FINDINGS of FACT and CONCLUSIONS of LAW signed by Judge William B. Shubb on 7/20/06. The Findings and Recommendations filed 6/14/06 70 are ADOPTED in full. Plaintiffs shall recover from defendants Katharsis LLC, and William Joseph Scheck, jointly a nd severally, statutory damages in the amount of twelve thousands dollars ($12,000.00), which is an award of three thousand dollars ($3,000.00) for each of the four copyrighted musical works infringed at the Owl Club on the night of 9/2/04. Plaintiff shall also recover from Defendants Katharsis LLC, and William Joseph Scheck, jointldy and severally resonable attorneys fees and costs of suit, in an amount to be determined upon Plaintiffs post-trial motion for fees and memorandum of costs. (Mena-Sanchez, L)
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(PS) Odnil Music Limited et al v. Scheck et al Doc. 72 Case 2:05-cv-00545-WBS-EFB Document 72 Filed 07/21/2006 Page 1 of 19 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 EASTERN DISTRICT OF CALIFORNIA 9 ----oo0oo---- 10 ODNIL MUSIC LIMITED and FIFTYSIX HOPE ROAD MUSIC LIMITED, 11 NO. CIV. S-05-0545 WBS JFM Plaintiffs, 12 v. FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER 13 14 15 KATHARSIS LLC, WILLIAM JOSEPH SCHECK and NATHANIEL CHRISTOPHER SCHECK, 16 Defendants. 17 _____________________________/ 18 19 20 ----oo0oo---This matter came on regularly for trial before the 21 court, sitting without a jury, on July 18, 2006. Plaintiffs 22 were represented by Alan M. Steinberg, Esq. 23 Joseph Scheck appeared in propria persona. 24 made on behalf of defendants Katharsis LLC or Nathaniel 25 Christopher Scheck. 26 to appear for trial, and the Magistrate Judge having heretofore 27 made his Findings and Recommendations recommending that default 28 judgment be entered against defendant Katharsis, plaintiffs Defendant William No appearance was Because defendant Nathaniel Scheck failed 1 Dockets.Justia.com Case 2:05-cv-00545-WBS-EFB Document 72 Filed 07/21/2006 Page 2 of 19 1 elected to proceed in this trial against defendant William 2 Scheck only. 3 The court having received and considered the evidence, 4 both oral and documentary, having read and considered the 5 written submissions, and having heard the arguments of the 6 parties, now makes the following Findings of Fact and 7 Conclusions of Law pursuant to Rule 52 of the Federal Rules of 8 Civil Procedure. 9 FINDINGS OF FACT 10 1. The songs “EXODUS,” “JAMMING,” “AMBUSH IN THE 11 NIGHT” and “AFRICA UNITE” (hereinafter collectively referred to 12 as “the Copyrighted Works”) are original works written by the 13 late Bob Marley, afforded protection and properly registered 14 under the copyright laws of the United States, 17 U.S.C. §§ 101, 15 et seq. 16 17 18 2. Plaintiffs Odnil Music Limited and Fifty-Six Hope Road Music Limited own the Copyrighted Works. 3. Plaintiffs are all members of the American Society 19 of Composers, Authors and Publishers ("ASCAP") to which they 20 have granted the non-exclusive right to license nondramatic 21 public performances of the Copyrighted Works. 22 4. Plaintiffs also granted ASCAP a non-exclusive right 23 to enforce the copyrights in plaintiffs’ songs, including but 24 not limited to the Copyrighted Works. 25 5. On behalf of plaintiffs and its other members, 26 ASCAP licenses thousands of music users, including radio and 27 television networks, commercial radio and television stations, 28 restaurants, nightclubs, and other establishments whose owners 2 Case 2:05-cv-00545-WBS-EFB Document 72 Filed 07/21/2006 Page 3 of 19 1 desire to perform lawfully the copyrighted musical compositions 2 in the ASCAP repertory. 3 6. At the time of the events which are the subject of 4 this action, defendant Katharsis, LLC was a California limited 5 liability company that, at all times pertinent, owned, 6 controlled, managed, operated and maintained a place of business 7 for public entertainment, accommodation, amusement and 8 refreshment known as the “Owl Club,” which is located at 109-111 9 Church Street, Roseville, California. 10 11 12 7. The Owl Club commenced operation under the ownership of Katharsis, LLC in January 2003. 8. At all times relevant to this action, defendants 13 William Joseph Scheck and Nathaniel Christopher Scheck were the 14 sole owners, members and managers of Katharsis, LLC. 15 9. At all relevant times, defendants William Scheck 16 and Nathaniel Scheck each had a direct financial interest in the 17 activities conducted at the Owl Club, including but not limited 18 to the performance of musical works. They operated, or intended 19 to operate, Katharsis, LLC and the Owl Club at a profit. 20 10. At all relevant times, defendants William Scheck 21 and Nathaniel Scheck each exercised control over and management 22 of the operations of the Owl Club, including but not limited to 23 direction and supervision of employees, selecting entertainment 24 at the Club, booking bands, and playing music and music videos 25 on audiovisual equipment at the Club. 26 11. At all relevant times, defendants William Scheck 27 and Nathaniel Scheck each had the authority to make decisions 28 concerning the operation of the Owl Club, including the decision 3 Case 2:05-cv-00545-WBS-EFB 1 Document 72 Filed 07/21/2006 Page 4 of 19 whether to obtain an ASCAP license for the Owl Club. 2 12. During the period August 4, 2003 through August 3 17, 2004, representatives of ASCAP repeatedly offered the Owl 4 Club an ASCAP license. 5 13. Also during the period August 4, 2003 through 6 August 17, 2004, ASCAP representatives on numerous occasions 7 contacted defendants by letters, telephone calls, and personal 8 visits as part of ASCAP’s unavailing efforts to persuade 9 defendants to obtain a license for the Owl Club, which would 10 have enabled defendants to perform publicly and lawfully ASCAP’s 11 members’ copyrighted songs, thereby avoiding this litigation. 12 14. ASCAP repeatedly advised defendants that in order 13 to perform lawfully any of the copyrighted musical compositions 14 in the ASCAP repertory at the Owl Club, permission is required 15 from either ASCAP or the individual copyright owners directly. 16 15. Moreover, ASCAP repeatedly reminded defendants of 17 their potential liability under the United States Copyright Law 18 for the unauthorized public performance of copyrighted musical 19 compositions at the Owl Club. Nonetheless, defendants repeatedly 20 ignored and rejected ASCAP’s offers of a license. 21 16. Defendants never obtained permission from ASCAP or 22 plaintiffs to perform the Copyrighted Works, with the result 23 that the performances of musical works in the ASCAP repertory 24 have been, and continue to be, unlicensed. 25 17. The estimated license fees that defendants would 26 have paid if the Owl Club had been properly licensed by ASCAP 27 from August 4, 2003 to present are approximately $3,401.71 28 (including the applicable license fee of $1,224.00 for 2006). 4 Case 2:05-cv-00545-WBS-EFB 1 Document 72 Filed 07/21/2006 Page 5 of 19 18. The out-of-pocket expenses incurred by ASCAP to 2 obtain the evidence of defendants’ infringing conduct on which 3 this action is based is $593.60. In addition, ASCAP incurred 4 expenses of $758.42 in connection with a subsequent 5 investigation to demonstrate defendants’ continued infringing 6 conduct, for a total of $1,352.02 in out-of-pocket expenses. 7 19. ASCAP engaged an independent investigator, Scott 8 Greene, to visit the Owl Club on the night of September 2, 2004 9 when it was open to the public. During the course of his visit 10 to the Owl Club, at approximately 8:30 p.m., Mr. Greene saw the 11 bartender load a DVD into the DVD player located behind the bar. 12 He observed on the television screen that the DVD was “loading.” 13 Mr. Greene then saw and heard the playing of a Bob Marley and 14 the Wailers filmed concert performed publicly for the enjoyment 15 of the Owl Club’s patrons. 16 heard being performed on the Owl Club’s television and speakers, 17 Mr. Greene identified the Copyrighted Works – Bob Marley’s songs 18 entitled “EXODUS,” “JAMMING,” “AMBUSH IN THE NIGHT,” and “AFRICA 19 UNITE.” 20 Among the songs Mr. Greene saw and 20. Later that evening, at approximately 10:45 p.m., 21 Mr. Greene saw defendant Nathaniel Scheck re-start the DVD 22 player and again saw and heard the same Bob Marley concert 23 performed publicly for the enjoyment of the Owl Club’s patrons 24 on the television set and speakers. Mr. Greene saw and heard the 25 four Copyrighted Works publicly performed for a second time 26 before leaving the Owl Club at approximately 12:15 a.m. on 27 September 3, 2004. 28 21. Mr. Greene made written notes of his observations 5 Case 2:05-cv-00545-WBS-EFB Document 72 Filed 07/21/2006 Page 6 of 19 1 at the Owl Club on the night of September 2, 2004, including a 2 list of the titles of all songs performed during his visit to 3 the Club, that he was able to recognize. Thereafter, on 4 September 8, 2004, Mr. Greene prepared an “Investigator’s 5 Report” based upon his notes and recollection. 6 22. Defendants have presented no credible evidence to 7 contradict Mr. Greene’s detailed testimony as to public 8 performance of the Copyrighted Works at the Owl Club on the 9 night of September 2-3, 2004. 10 23. Defendants have also presented no evidence 11 whatsoever, other than the fact that ASCAP is apparently 12 operating under a sixty year old consent decree with the 13 Department of Justice, to support William Scheck's repeated 14 accusation that ASCAP is somehow involved in extortionate or 15 criminal conduct. 16 anything to suggest, that ASCAP is not acting in full compliance 17 with the law. 18 No evidence was presented, nor is there 24. All performances of copyrighted material described 19 above occurred without a license from ASCAP, or permission 20 obtained from either the plaintiffs or anyone acting on their 21 behalf. 22 25. Defendants' conduct in causing the Copyrighted 23 Works to be performed on their premises without a licence was 24 willful. For more than a year before the infringing performances 25 on which this action is based occurred, defendants knew that the 26 Owl Club was not licensed to perform copyrighted musical 27 compositions in the ASCAP repertory, and that the unlicensed 28 performances of such music constituted copyright infringement, 6 Case 2:05-cv-00545-WBS-EFB Document 72 Filed 07/21/2006 Page 7 of 19 1 exposing them to liability and the risk of paying substantial 2 monetary damages. 3 26. Nevertheless, defendants deliberately chose to 4 disregard the rights and protection afforded to plaintiffs under 5 the Copyright Law. Upon receiving the August 4, 2003 letter and 6 license application from ASCAP, defendants discussed and decided 7 not to enter into a license agreement with ASCAP. They persisted 8 in that position despite ASCAP’s repeated efforts to persuade 9 defendants to obtain an ASCAP license. 10 27. Defendant William Scheck did more than simply 11 ignore ASCAP’s entreaties. It is undisputed that he threatened 12 ASCAP representatives with physical bodily harm. On August 12, 13 2004, Tom Janci, an Area Licensing Manager for ASCAP visited the 14 Owl Club to discuss licensing of copyrighted songs. William 15 Scheck became verbally abusive, so Mr. Janci left the Owl Club. 16 William Scheck followed Mr. Janci to his car. Mr. Janci locked 17 himself in his car as William Scheck threatened him with bodily 18 harm and demanded that he get out of his car and fight. Mr. 19 Janci escaped unharmed. A few days later, on August 16, 2004, 20 Dean Demerritt, a Director of Licensing for ASCAP, spoke with 21 William Scheck on the telephone. William Scheck confirmed his 22 intention of harming Mr. Janci and then threatened Mr. Demerritt 23 and any other ASCAP representative that visits the Owl Club with 24 bodily harm. William Scheck admitted to, and reaffirmed his 25 threats in his deposition and trial testimony. 26 28. Defendant William Scheck also wilfully attempted 27 to frustrate plaintiffs’ ability to recover on any judgment 28 against Katharsis LLC in this action, by taking steps to 7 Case 2:05-cv-00545-WBS-EFB Document 72 Filed 07/21/2006 Page 8 of 19 1 dissolve the corporation and transfer its liquor license on June 2 8, 2006, between the time the Magistrate Judge heard the motion 3 to enter the default of Katharsis LLC and the time the 4 Magistrate Judge’ Findings and Recommendations were entered. 5 29. Following commencement of this lawsuit, ASCAP 6 hired another independent investigator, Kevin McDonough, to 7 visit the Owl Club on February 3, 2006. Mr. McDonough heard the 8 playing of musical compositions performed publicly for the 9 enjoyment of Owl Club’s patrons, including the following 10 copyrighted compositions in ASCAP’s repertory: “JUST A LIL 11 BIT” and “CANDY SHOP,” written by Curtis James Jackson and Scott 12 Spencer Storch and recorded by 50 Cent; “PANAMA” and “HOT FOR 13 TEACHER,” written by David Lee Roth, Alex Van Halen and Edward 14 Van Halen and recorded by Van Halen; “BRASS MONKEY,” written by 15 Michael Lewis Diamond, Adam Keefe Horovitz, Rick Rubin and Adam 16 Nathaniel Yauch and recorded by the Beastie Boys; and “WANTED 17 DEAD OR ALIVE,” written by John F. Bongiovi and Richard S. 18 Sambora and recorded by Bon Jovi. 19 30. While the public performances of the Copyrighted 20 Works on the night of September 2, 2004 provide the basis for 21 the four counts of copyright infringement enumerated in the 22 Complaint in this action, those performances coupled with the 23 performances on February 3, 2006, and William Scheck’s threats 24 of violence, demonstrate defendants’ willful disregard of all 25 ASCAP members’ rights, including plaintiffs’, in violation of 26 the Copyright Law. 27 28 CONCLUSIONS OF LAW 1. This is an action for copyright infringement under 8 Case 2:05-cv-00545-WBS-EFB Document 72 Filed 07/21/2006 Page 9 of 19 1 Title 17 U.S.C. §§ 101, et seq. 2 jurisdiction of this action under 28 U.S.C. § 1331 (federal 3 question) and 28 U.S.C. §1338(a) (United States Copyright Law). 4 Venue in this District is proper under 28 U.S.C. § 1400(a). 5 6 This court has subject matter 2. This court has personal jurisdiction over defendants. 7 3. The Copyright Act, 17 U.S.C. §§ 101 et seq., gives 8 a copyright owner the exclusive right to perform its copyrighted 9 song publicly, 17 U.S.C. § 106(4), and those who publicly 10 perform the song without permission from the copyright owner 11 thereby infringe the copyright, id., § 501(a). 12 4. The elements of copyright infringement by 13 unauthorized public performance in violation of 17 U.S.C. §§ 101 14 and 106(4) are: 15 16 17 18 19 20 21 22 23 (a) the originality and authorship of the compositions involved; (b) compliance with the formalities required to secure a copyright Under Title 17, United States Code; (c) plaintiffs’ ownership of the copyrights of the relevant compositions; (d) defendants’ public performance of the compositions; and (e) defendants’ failure to obtain permission from the 24 plaintiffs or their representatives for such performance. 25 Jobete Music Co., Inc. v. Johnson Communications, Inc., 285 F. 26 Supp. 2d 1077, 1082 (S.D. Ohio 2003); see also Almo Music Corp. 27 v. 77 East Adams, Inc., 647 F. Supp. 123, 124 (N.D. 28 Ill. 1986). 9 Case 2:05-cv-00545-WBS-EFB 1 Document 72 Filed 07/21/2006 Page 10 of 19 5. The uncontroverted evidence establishes the 2 originality and authorship of the Copyrighted Works, plaintiffs' 3 compliance with the statutory formalities of Title 17, and 4 defendants' failure to obtain permission from plaintiffs or 5 their representatives to perform those works. 6 6. Although defendant William Scheck has stated that 7 he contests plaintiffs' ownership of the copyrights of the 8 compositions in question, and further denies that those 9 compositions, or any other copyrighted compositions, were 10 performed at the Owl Club, plaintiffs have clearly met their 11 burden of establishing these elements of their claim as well. 12 7. Copyright registration certificates constitute 13 prima facie evidence of the facts stated therein. 17 U.S.C. § 14 410(c). Plaintiffs conclusively establish their ownership of 15 valid copyrights in the four songs in suit by proffering into 16 evidence the copies of copyright registration certificates and 17 other pertinent documents. Flick-Reedy v. Hydro–Line Mfg. Co., 18 351 F.2d 546, 549 (7th Cir. 1965), cert denied, 383 U.S. 958 19 (1966); Interstate Hotel Co. v. Remick Music Corp., 157 F.2d 744 20 (8th Cir. 1946); Flyte Tyme Tunes v. Miszkiewicz, 715 F. Supp. 21 919 (E.D. Wis. 1989) (accepting ASCAP paralegal’s affidavit and 22 copies of copyright documents as proof of plaintiffs’ ownership 23 of valid copyrights). This establishes the first three elements 24 of proof articulated by the court in Jobete Music Co., Inc., 25 supra, 285 F. Supp. 2d at 1082. 26 8. The testimony of ASCAP’s investigator, Scott 27 Greene, proves performances of plaintiffs’ songs at the Owl 28 Club. See, e.g., Flyte Tyme Tunes, supra, 715 F. Supp. at 921; 10 Case 2:05-cv-00545-WBS-EFB Document 72 Filed 07/21/2006 Page 11 of 19 1 Milene Music v. Gotauco, 551 F. Supp. 1288, 1293 (D. R.I. 1982). 2 9. At the time of the performances of plaintiffs’ four 3 songs, none of the defendants had permission from plaintiffs or 4 ASCAP, or any of ASCAP’s members, or anyone acting of their 5 behalf to perform publicly any of the musical compositions in 6 the ASCAP repertory. Defendants concede this point. This 7 establishes that performances of plaintiffs’ songs were 8 unauthorized. See, e.g., Flyte Tyme Tunes, supra, 715 F. Supp. 9 at 921; Milene Music, supra, 551 F. Supp. at 1294. 10 10. Defendants have no excuse for not having obtained 11 proper authorization to use copyrighted music at the Owl Club. 12 Their reliance on Twentieth Century Music Corporation v. Aiken, 13 421 U.S. 151 (1975), is misplaced. That case applies only to the 14 listening of radio broadcasts of copyrighted compositions. 15 Likewise, 17 U.S.C. § 110 is inapplicable to the facts here. 16 That statute makes an exception for the performance or display 17 of musical works ". . . intended to be received by the general 18 public, originated by a radio or television broadcast . . ." 19 The public playing of a DVD is not excepted under either Aiken 20 or § 110. 21 11. ASCAP undertook extensive efforts to inform 22 defendants of their responsibilities under the Copyright Act and 23 their potential liability. In light of ASCAP's numerous contacts 24 with the defendants about the need for permission to perform 25 publicly copyrighted music, and defendants' refusal to obtain a 26 license for any performances of music, defendants’ public 27 performance of the Copyrighted Works on September 2, 2004 was 28 deliberate and willful. International Korwin Corp. v. Kowalczyk, 11 Case 2:05-cv-00545-WBS-EFB Document 72 Filed 07/21/2006 Page 12 of 19 1 855 F.2d 375, 381 (7th Cir. 1988); Swallow Turn Music v. Wilson, 2 831 F. Supp. 575, 579-580 (E.D. Tex. 1993). 3 12. Moreover, defendant William Scheck threatened 4 ASCAP representatives with physical bodily harm on multiple 5 occasions. Mr. Scheck was fully aware of the necessity to 6 obtain permission to perform copyrighted music; yet, he 7 responded to ASCAP’s offers of a license with belligerence and 8 blatant disregard for the Copyright Law. 9 13. “[C]opyright infringement is a tort, for which all 10 who participate in the infringement are jointly and severally 11 liable.” Jobete Music Co., Inc., supra, 285 F. Supp. 2d at 12 1083. 13 14. Liability for copyright infringement extends to 14 those who own or control the premises where the infringing 15 conduct occurred, have the right and ability to supervise those 16 responsible for the infringing conduct, and derive direct 17 financial benefit from infringing performances on those 18 premises. See, e.g., Ellison, supra, 357 F.3d at 1076; A & M 19 Records v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir.2001); 20 Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 239 (9th Cir. 21 1996); Broadcast Music, Inc. v. Blueberry Hill Family 22 Restaurants, Inc., 899 F. Supp. 474, 480-81 (D. Nev. 1995); 23 Milene Music, supra, 551 F. Supp. at 1295. 24 15. In this case, the company defendant, Katharsis, 25 LLC, has failed to make an appearance and default judgment has 26 been requested by plaintiffs. Katharsis, LLC’s liability is 27 nonetheless clear, as defendants admit it has owned and operated 28 the Owl Club since January 2003. See Almo Music, supra, 647 F. 12 Case 2:05-cv-00545-WBS-EFB 1 2 Document 72 Filed 07/21/2006 Page 13 of 19 Supp. 124. 16. Mr. Greene’s testimony establishes that defendant 3 Nathaniel Scheck was responsible for the re-playing of the DVD 4 containing the Copyrighted Works on the night of September 2-3, 5 2004. Defendant William Scheck was present at the Club at that 6 time, and may also be liable for such conduct, even though he 7 did not himself perform the copyrighted work. See, e.g., Boz 8 Scaggs Music v. KND Corp., 491 F. Supp. 908, 913 (D. Conn. 9 1980); Jobete Music, supra, 285 F. Supp. 2d at 1083. 10 17. Defendant William Joseph Scheck has personal 11 liability for the infringing performances of plaintiffs’ 12 Copyrighted Works under the doctrine of vicarious liability, the 13 prerequisites for which are that: (1) the individual has the 14 right and ability to supervise the infringing activity, and (2) 15 the individual has a direct financial interest in such 16 activities. Ellison, supra, 357 F.3d at 1076; see also Gershwin 17 Publ'g Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d. 1159 (2d 18 Cir. 1971); and Jobete Music, supra, 285 F. Supp. 2d at 1083. 19 18. As the sole members and owners of Katharsis, LLC, 20 William and Nathaniel Scheck jointly exercised control over the 21 daily operations of the Owl Club and make all business 22 decisions, including what music is to be performed at the Club. 23 Also, as Katharsis’ sole members and owners, both Schecks earned 24 money from alcohol sales at the Owl Club while music was being 25 performed for the entertainment of the Club's patrons – a direct 26 financial interest in the infringing activities that occurred as 27 part of the operation of the business. Defendant William Scheck 28 is, therefore, jointly liable with his son as an infringer. See, 13 Case 2:05-cv-00545-WBS-EFB Document 72 Filed 07/21/2006 Page 14 of 19 1 e.g., Marvin Music Co. v. BHC Ltd. Partnership, 830 F. Supp. 2 651, 655 (D. Mass. 1993) (the court held that “by virtue of his 3 multiple roles in the club's management and ownership, [the 4 individual defendant] had a substantial financial stake in the 5 infringing activity, which undoubtedly attracted patrons to the 6 Club”); Ellison, supra, 357 F.3d at 1076; A & M Records, supra, 7 239 F.3d at 1013; Fonovisa, Inc., supra, 76 F.3d 239. 8 9 10 11 19. The Copyright Law, 17 U.S.C. § 502(a), provides in pertinent part: Any court having jurisdiction of a civil action arising under this title may . . .grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of copyright. 12 13 20. Recognizing that plaintiffs in this type of action 14 represent all of ASCAP’s members, the courts now routinely 15 enjoin defendants from performing any and all music in the 16 ASCAP repertory. See Sailor Music v. IML Corp., 867 F. Supp. 17 565, 569-570 (E.D. Mich. 1994); Swallow Turn Music, supra, 831 18 F. Supp. at 581. Plaintiffs are entitled to similar relief here. 19 21. The Copyright Act, 17 U.S.C. § 504(c)(1), provides 20 21 22 23 24 in pertinent part: [T]he copyright owner may elect . . . to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in that action, with respect to any one work . . . in a sum not less than $750 or more than $30,000 as the Court considers just. 22. “The court has wide discretion in determining the 25 amount of statutory damages to be awarded, constrained only by 26 the specified maxima and minima.” Harris v. Emus Records Corp., 27 734 F.2d 1329, 1335 (9th Cir.1984); see, e.g., F. W. Woolworth 28 Co. v. Contemporary Arts, Inc., 344 U.S. 228, 231-32 (1952). 14 Case 2:05-cv-00545-WBS-EFB 1 Document 72 Filed 07/21/2006 Page 15 of 19 23. In F. W. Woolworth Co. v. Contemporary Arts, Inc., 2 the United States Supreme Court held that merely awarding 3 plaintiffs damages equal to lost profits does not sufficiently 4 deter infringements. Thus, courts should formulate a damage 5 award that will achieve the deterrent purposes served by the 6 statutory damages provision. The Supreme Court said: 7 8 9 10 11 12 13 14 . . . [A] rule of liability which merely takes away the profits from an infringement would offer little discouragement to the infringers. It would fall short of an effective sanction for enforcement of the copyright policy. The statutory rule, formulated after long experience, not merely compels restitution of profit and reparation for injury but also is designed to discourage wrongful conduct. The discretion of the court is wide enough to permit a resort to statutory damages for such purposes. Even for uninjurious and unprofitable invasions of copyright the court may if it deems it just, impose a liability within the statutory limits to sanction and vindicate statutory policy. Id., 344 U.S. at 233. 15 24. Another court has put it more bluntly: infringers 16 should not be free to “sneer” in the face of the Copyright Act; 17 courts must put defendants on notice that it costs less to obey 18 the Copyright Act than to violate it. International Korwin Corp. 19 v. Kowalczyk, 665 F. Supp. 652, 659 (N.D. Ill. 1987), aff’d, 855 20 F.2d 375 (7th Cir. 1988); see also Flyte Type Tunes, supra, 715 21 F. Supp. at 922 (“a violation of Copyright Law [is] a serious 22 matter requiring deterrence . . .”). Recognizing the important 23 deterrent purpose served by statutory damages, the courts 24 routinely award as statutory damages in cases such as this 25 amounts that are between two and three times license fees. See, 26 e.g., Frank Music Corp. v Metro-Goldwyn-Mayer, Inc., 886 F.2d 27 1545, 1554 (9th Cir. 1989), cert. denied, 494 U.S. 1017 (1990) 28 (“Statutory damages are available in order to effectuate two 15 Case 2:05-cv-00545-WBS-EFB Document 72 Filed 07/21/2006 Page 16 of 19 1 purposes underlying the remedial provisions of the Copyright 2 Act: to provide adequate compensation to the copyright holder 3 and to deter infringement.”); Broadcast Music, Inc. v. Star 4 Amusements, Inc., 44 F.3d 485, 488 (7th Cir. 1995); 5 International Korwin Corp., supra, 855 F.2d 375 (license fees 6 owed would have been approximately $3,500; damages totaled 7 $10,500); and Fermata Int’l Melodies, Inc. v. Champions Golf 8 Club, Inc., 712 F. Supp. 1257, 1264 (S.D. Tex. 1989) (awarding 9 $8,000 when $2,400 in license fees owed); Boz Scaggs Music, 491 10 F. Supp. 908 ($1,000 for each of 23 infringements; license fees 11 would have totaled approximately $6,000). 12 25. In this case, because defendants repeatedly 13 rejected and ignored ASCAP’s offers of a license; acted as if 14 they are not subject to the copyright laws; threatened ASCAP 15 representatives with bodily harm on at least two occasions; 16 wilfully attempted to frustrate plaintiffs’ ability to recover 17 any judgment against Katharsis LLC in this action by taking 18 steps to dissolve the corporation and transfer its liquor 19 license; and have continued to perform copyrighted works in the 20 ASCAP repertory even after the filing of this lawsuit and as 21 recently as February 3, 2006, defendants are willful infringers. 22 26. Given the defendants' blatantly willful conduct, 23 an appropriate statutory damages award in this case is $3,000.00 24 per infringement for a total of $12,000.00 (approximately four 25 times the license fees “saved”) -- well within the statutory 26 range of $750 to $30,000 per infringement under 17 U.S.C. 27 §504(c)(1). This amount will hopefully serve as a deterrent to 28 defendants' further infringing conduct and serves as well the 16 Case 2:05-cv-00545-WBS-EFB Document 72 Filed 07/21/2006 Page 17 of 19 1 other objectives of the Copyright Law. To award less would 2 reward defendants for their deliberate failure to comply with 3 the law and send the wrong message to other potential 4 infringers. 5 6 7 8 9 27. The Copyright Act provides for the imposition of costs and attorneys’ fees in favor of the prevailing party: In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs. 10 11 12 17 U.S.C. § 505. 28. “Plaintiffs in copyright actions may be awarded 13 attorney’s fees simply by virtue of prevailing in the action: no 14 other precondition need be met, although the fee awarded must 15 be reasonable.” Frank Music Corp., supra, 886 F.2d at 1556. See 16 also Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994). 17 18 19 20 21 22 23 29. In Milene Music, Inc., on facts very similar to this case, the Rhode Island District Court concluded that: . . . The defendants have deliberately and knowingly infringed upon plaintiffs’ copyrights; and subsequent to such infringement, have forced the plaintiffs to engage lawyers and to resort to the courts to enforce the proprietary interests in the copyrights. The defendants, in the court’s view, have come forward with no justification for their actions, nor any colorable grounds upon which defense or mitigation could be predicted. The Court believes that this litigation fairly cries out for an award of attorneys’ fees. 24 551 F. Supp. at 1298. 25 30. Here, defendants knowingly and deliberately 26 infringed upon plaintiffs’ copyrights, continue to perform 27 copyrighted materials in the ASCAP repertory, refused to obtain 28 17 Case 2:05-cv-00545-WBS-EFB Document 72 Filed 07/21/2006 Page 18 of 19 1 permission to perform copyrighted materials, threatened ASCAP 2 representatives with bodily harm, and forced this matter to be 3 litigated through trial. Plaintiffs are therefore entitled to 4 recover reasonable attorneys’ fees and costs. 5 31. The precise amount of fees and costs incurred by 6 plaintiffs shall be determined by this court upon plaintiffs’ 7 post-trial motion in accordance with Local Rule 54-293. 8 32. 28 U.S.C. § 1961 specifies that “[i]nterest shall 9 be allowed on any money judgment in a civil case recovered in a 10 district court.” Plaintiffs are entitled to post-judgment 11 interest on the monetary award. 12 IT IS THEREFORE ORDERED THAT: 13 1. The Findings and Recommendations of the Magistrate 14 15 Judge, filed June 14, 2006, are adopted in full. 2. Defendants Katharsis, LLC, and William Joseph 16 Scheck, and all persons in active concert or participation with 17 one or both of them, are hereby permanently enjoined and 18 restrained: 19 (a) from publicly performing, without a license to do 20 so, the musical compositions in the repertory of the American 21 Society of Composers, Authors & Publishers (“ASCAP”), including 22 but not limited to the following four copyrighted musical 23 compositions: 24 “AFRICA UNITE.” 25 “EXODUS,” “JAMMING,” “AMBUSH IN THE NIGHT,” and (b) from causing or permitting any of those musical 26 compositions to be publicly performed, without a license to do 27 so, in, at, or by the Owl Club, or any other business owned, 28 controlled, operated, maintained, or conducted, in whole or in 18 Case 2:05-cv-00545-WBS-EFB 1 2 3 4 5 6 Document 72 Filed 07/21/2006 Page 19 of 19 part, directly or indirectly, by one or more of the Defendants; (c) from aiding or abetting the unlicensed public performance of any of those musical compositions; and (d) from otherwise infringing the copyright in any of those musical compositions. 3. Plaintiffs shall recover from Defendants Katharsis 7 LLC, and William Joseph Scheck, jointly and severally, statutory 8 damages in the amount of twelve thousand dollars ($12,000.00), 9 which is an award of three thousand dollars ($3,000.00) for each 10 of the four copyrighted musical works infringed at the Owl Club 11 on the night of September 2, 2004. 12 4. Plaintiffs also shall recover from Defendants 13 Katharsis LLC, and William Joseph Scheck, jointly and severally, 14 reasonable attorneys’ fees and costs of suit, in an amount to be 15 determined upon plaintiffs’ post-trial motion for fees and 16 memorandum of costs. 17 5. Plaintiffs shall further recover from Defendants 18 Katharsis LLC, and William Joseph Scheck, jointly and severally, 19 interest on the aforementioned statutory damages, costs, and 20 attorneys’ fees from the date of entry of judgment at the 21 applicable statutory rate. 22 23 LET JUDGMENT BE ENTERED ACCORDINGLY. DATED: July 20, 2006 24 25 26 27 28 19
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