Facebook, Inc. v. Fisher et al, No. 5:2009cv05842 - Document 81 (N.D. Cal. 2011)

Court Description: ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT. Signed by Judge Jeremy Fogel on January 26, 2011. (jflc1S, COURT STAFF) (Filed on 1/26/2011) (Entered: 01/26/2011)
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Facebook, Inc. v. Fisher et al Doc. 81 1 2 **E-Filed 1/26/2011** 3 4 5 6 7 8 IN THE UNITED STATES DISTRICT COURT 9 FOR THE NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION 11 12 FACEBOOK, INC., a Delaware Corporation, Plaintiff, 13 v. 14 15 16 17 JEREMI FISHER; PHILIP POREMBSKI; RYAN SHIMEALL; and JOHN DOES 1-25, individuals; and CHOKO SYSTEMS LLC; HARM, INC.; PP WEB SERVICES LLC; iMEDIA ONLINE SERVICES LLC, and JOHN DOES 26-50, corporations, 18 Case Number C 09-05842 JF (PSG) ORDER1 GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT [Re: Docket No. 75] Defendants. 19 20 21 22 Plaintiff Facebook, Inc. (“Facebook”) seeks default judgment against Defendants Philip 23 Porembski and PP Web Services LLC2. Facebook failed initially to send these Defendants 24 notice of the instant motion. However, Defendants received notice at their addresses of record 25 26 27 28 1 This disposition is not designated for publication in the official reports. 2 Defendants Jeremi Fisher, Ryan Shimeall, Choko Systems LLC, Harm, Inc., and iMedia Online Services LLC previously stipulated to the entry of permanent injunctions and have separately executed consent judgments. Case No. C 09-05842 JF (PSG) ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT (JFLC1) Dockets.Justia.com 1 on November 19, 2010, pursuant to this Court’s order.3 As of the date of this order, Defendants 2 have not filed opposition papers. The Court concludes that this motion is appropriate for 3 determination without oral argument. See Civ. L.R. 7-1(b). For the reasons discussed below, the 4 motion will be granted. 5 6 I. BACKGROUND A. Factual History 7 Facebook owns and operates a well-known social networking website located at 8 http://www.facebook.com. Facebook users must register with the website and agree to 9 Facebook’s Statement of Rights and Responsibilities (“SRR”). Upon registration, users are 10 given unique usernames and passwords to access their own user profiles as well as the profiles of 11 their “friends.” Only registered users have the ability to send messages to each other through the 12 Facebook website. Facebook maintains strict policies against spam or any other form of 13 unsolicited advertising. The SRR prohibits any activity that would impair the operation of 14 Facebook’s website, including the use of data mining “bots” to gain access to users’ login 15 information, the posting of unsolicited advertising on the website or circulation of such 16 advertising via e-mail, or any commercial use of the Facebook website without Facebook’s prior 17 authorization. 18 Facebook alleges that Defendant Porembski is a registered Facebook user who is bound 19 by the SRR. Porembski allegedly created PP Web Services LLC and was the sole person to act 20 on its behalf. Since October 2008, Defendants allegedly have obtained login credentials for at 21 least 116,000 Facebook accounts without authorization, and they have sent more than 7.2 million 22 spam messages to Facebook users. According to Facebook, the messages ask recipients to click 23 on a link to a “phishing” site designed to trick users into divulging their Facebook login 24 3 25 26 27 28 Order Directing Notice of Plaintiff’s Motion for Default Judgment, at Dkt. 78. As the Court explained, under Fed. R. Civ. P. 55(b)(2), “[i]f the party against whom a default judgment is sought has appeared personally or by a representative, that party or its representative must be served with written notice of the application at least 7 days before the hearing.” Defendants previously appeared through counsel by means of a stipulated order. Although Defendants’ counsel later withdrew, it was incumbent upon Facebook to serve notice upon Defendants themselves pursuant to Fed. R. Civ. P. 55(b)(2). 2 Case No. C 09-05842 JF (PSG) ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT (JFLC1) 1 information. Once users divulge the information, Defendants use it to send spam messages to 2 the users’ friends, repeating the cycle. In addition, certain spam messages allegedly redirect 3 users to websites that pay Defendants for each user visit. 4 As further evidence of this scheme, Facebook points to the discovery by the Sacramento 5 County Sheriff’s Department of a computer that is believed to have belonged to Porembski, 6 containing more than 160,000 Facebook login credentials as well as computer scripts designed to 7 access Facebook and create automatic messages. Facebook’s inspection of the hard drive 8 revealed that Porembski created files to circumvent the technical measures implemented by 9 Facebook to end Defendants’ spam campaign.4 10 11 B. Procedural History On December 14, 2009, Facebook filed this action against Porembski, PP Web Services 12 LLC, and several other Defendants, asserting that Defendants’ phishing and spamming activities 13 are in violation of (1) the Controlling the Assault of Non-Solicited Pornography and Marketing 14 Act (“CAN-SPAM Act”), 15 U.S.C. § 7701 et seq.; (2) the Computer Fraud and Abuse Act 15 (“CFAA”), 18 U.S.C. § 1030 et seq.; (3) Cal. Penal Code § 502; and (4) Cal. Bus. & Prof. Code 16 § 22948. Facebook also asserts that Defendants’ activities constitute a breach of contract under 17 the SRR. 18 On December 21, 2009, the Court issued a Temporary Restraining Order (“TRO”), 19 enjoining Defendants from engaging in the alleged phishing and spamming activities. On 20 January 7, 2010, the Court issued a preliminary injunction enjoining the alleged misconduct. 21 Facebook subsequently obtained a Clerk’s entry of default against Defendants. The instant 22 motion was filed on September 21, 2010, seeking a permanent injunction and statutory damages 23 under the CAN-SPAM Act and Cal. Bus. & Prof. Code § 22948. 24 25 26 27 28 4 On June 29, 2010, the Court authorized Facebook to obtain a copy of the hard drive for discovery purposes. Amended Order Granting Plaintiff’s Request for Order Directing Release of Computer, at Dkt. 61. 3 Case No. C 09-05842 JF (PSG) ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT (JFLC1) 1 2 II. DISCUSSION A. Statutory Damages 3 Upon default, the well-pleaded allegations in a complaint are deemed true and sufficient 4 to establish a defendant’s liability. Benny v. Pipes, 799 F.2d 489, 495 (9th Cir. 1986) amended, 5 807 F.2d 1514 (9th Cir.1987) (citing Thomson v. Wooster, 114 U.S. 104, 114 (1884)); Chanel, 6 Inc. v. Doan, No. C 05-03464-VRW, 2007 WL 781976, at *2 (N.D. Cal. Mar. 13, 2007). 7 However, “the allegations of the complaint regarding the amount of damages suffered are not 8 controlling.” Kingvision Pay-Per-View, Ltd. v. Backman, 102 F. Supp. 2d 1196, 1197 (N.D. Cal. 9 2000). “The district court has ‘wide discretion in determining the amount of statutory damages 10 to be awarded, constrained only by the specified maxima and minima.’” DirecTV, Inc. v. Le, 267 11 Fed.Appx. 636, 636 (9th Cir. 2008) (citing Harris v. Emus Records Corp., 734 F.2d 1329, 1335 12 (9th Cir.1984)). However, a statutory damages award may violate the due process rights of a 13 defendant “where the penalty prescribed is so severe and oppressive as to be wholly 14 disproportioned to the offense and obviously unreasonable.” United States v. Citrin, 972 F.2d 15 1044, 1051 (9th Cir. 1992) (quoting St. Louis, Iron Mt. & S. Ry. Co. v. Williams, 251 U.S. 63, 16 66-67 (1919)). 17 Facebook seeks the maximum penalty available under the CAN-SPAM Act–an award of 18 $100 for each of Defendants’ 7.2 million violations–as well as aggravated damages, resulting in 19 a total award of $2,160,000,000 under that Act. Facebook also seeks damages in the amount of 20 $500,000 under the Cal. Bus. & Prof. Code § 22948 and asks that the Court impose treble 21 damages for a total award of $1,500,000. 22 The record demonstrates that Defendants willfully and knowingly violated the statutes in 23 question by engaging in the circumvention of Facebook’s security measures as described above. 24 Nonetheless, it does not appear that an award in excess of $2 billion is proportionate to the 25 gravity of Defendants’ acts. Without deciding whether such an award would violate Defendants’ 26 due process rights, the Court in the exercise of its discretion declines to award the full amount of 27 damages requested by Facebook. Instead, it will award statutory damages of $50.00 per 28 violation of the CAN-SPAM Act, for a total award of $360,000,000 under that Act. The Court 4 Case No. C 09-05842 JF (PSG) ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT (JFLC1) 1 also will award statutory damages of $500,000 pursuant to Cal. Bus. & Prof. Code § 22948.2. 2 The total amount of statutory damages against Defendants thus is $360,500,000. Given the 3 magnitude of this award, the Court declines to award treble damages. 4 B. Injunctive Relief 5 Facebook contends that Defendants’ violation of the CAN-SPAM Act and the CFAA 6 supports entry of a permanent injunction. The CAN-SPAM Act specifically authorizes the Court 7 to grant a permanent injunction, “to enjoin further violation by the defendant.” 15 U.S.C. 8 § 7706(g)(1)(A). Likewise, the CFAA provides that, “[a]ny person who suffers damage or loss 9 by reason of a violation of [§ 1030] may maintain a civil action against the violator to obtain 10 compensatory damages and injunctive relief or other equitable relief.” 18 U.S.C.A. § 1030(g). 11 As a result of Defendants’ spam campaign, Facebook has received more than 8,000 user 12 complaints, and more than 4,500 Facebook users have deactivated their accounts. Additionally, 13 Facebook has expended large financial and professional resources to upgrade its security 14 measures. Defendants have demonstrated a willingness to continue their activities without 15 regard for Facebook’s security measures or cease and desist requests.5 Thus, it is appropriate 16 that Defendants be permanently enjoined from accessing and abusing Facebook services. 17 III. ORDER 18 Accordingly, for good cause shown, 19 (1) Facebook’s motion for default judgment is GRANTED; statutory damages of 20 $360,500,000 are awarded against Defendants, and Facebook’s request for 21 permanent injunctive relief is GRANTED. 22 (2) 23 As Facebook already has settled its claims with all other Defendants, the Clerk of the Court is directed to CLOSE THE FILE. 24 25 26 27 28 5 Facebook indicates that Defendants have continued their spamming and phishing activities even after receiving a cease-and-desist letter from Facebook. The letter clearly stated that Facebook had gathered evidence that Defendants were responsible for the spam messages, and that spamming was against the SRR. Motion for Default Judgment at 17 n. 5. 5 Case No. C 09-05842 JF (PSG) ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT (JFLC1) 1 2 DATED: January 26, 2011 __________________________________ JEREMY FOGEL United States District Judge 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 Case No. C 09-05842 JF (PSG) ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT (JFLC1)