Marohn v. Qingjun Yu

NATHAN MAROHN, Plaintiff, v. QINGJUN YU, Defendant.

No. 1:22-cv-01070-ADA-SAB

United States District Court, E.D. California

December 29, 2022

FINDINGS AND RECOMMENDATIONS RECOMMENDING GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT

ORDER REQUIRING SERVICE ON DEFENDANT WITHIN THREE DAYS

(ECF No. 10)

OBJECTIONS DUE WITHIN FOURTEEN DAYS

I. INTRODUCTION

Currently before the Court is Plaintiff Nathan Marohn's (“Plaintiff”) motion for default judgment, filed on November 18, 2022. (ECF No. 10 (“Mot.”).) Plaintiff seeks default judgment against Defendant Qingjun Yu (“Defendant”). No opposition to the motion was filed. On December 28, 2022, the Court held a hearing on the motion for default judgment. Joel B. Ard appeared by videoconference on behalf of Plaintiff. No appearance was made on behalf of Defendant. Having considered the moving papers, the declarations and exhibits attached thereto, the nonappearance of Defendant at the hearing, as well as the Court's file, the Court issues the following findings and recommendations recommending granting Plaintiff's motion for default judgment.

II. BACKGROUND

A. Procedural History

Plaintiff filed this action on August 24, 2022, bringing a cause of action for copyright infringement. (ECF No. 1.) On October 21, 2022, Plaintiff filed a request for entry of default; however, on October 24, 2022, the Clerk of the Court declined to enter default as the summons had not been returned to the Court as executed. (ECF Nos. 4, 5.) On October 25, 2022, Plaintiff filed an executed summons and a renewed request for entry of default, and the Clerk of the Court entered default against Defendant. (ECF Nos. 6, 7, 8.)

On November 18, 2022, Plaintiff filed the instant motion for default judgment, setting the hearing before the District Judge on December 5, 2022. (ECF No. 10.) Because the motion was set before the District Judge rather than before the Magistrate Judge, and because the motion was only filed with seventeen (17) days' notice, the Court reset the hearing and required Plaintiff to serve the defaulted Defendant at their last known address. (ECF No. 11.) The Court's order noted that, while service is not strictly required for motions for default judgment,^[1] based on the Court's review of the proffers in the complaint,^[2] as well as the manner of substituted service at the address referenced in the complaint,^[3] the Court deemed it prudent to order Plaintiff to serve the motion with this order resetting the hearing date on Defendant at the last known address, and ordered that service may be effectuated in the manners contemplated by Federal Rule of Civil Procedure 5. (ECF No. 11.)

On November 25, 2022, Plaintiff filed a declaration attesting to service of the order resetting the motion hearing date on Defendant. (ECF No. 12.) On December 28, 2022, the Court held a hearing on the motion for default judgment. (ECF No. 13.) Joel B. Ard appeared on behalf of Plaintiff. No appearances were made on behalf of Defendant.

B. Plaintiff's Factual Allegations in the Operative Complaint

Plaintiff alleges he sells printed posters and other motivational work on Amazon.com, Inc. (“Amazon”). (Compl. ¶ 2, ECF No. 1.) Plaintiff created the at-issue copyrighted work, a wholly original motivational poster, titled “7 Rules of Life” (the “Copyrighted Work”), in 2014; it was first published in 2015, and registered on May 18, 2022 with the United States Copyright Office as United States Copyright Registration No. VA 2-300-156. (Compl. ¶¶ 3, 11, 12, 13; Ex. B, ECF No. 1-1 at 3-4.) Plaintiff is the exclusive owner of the Copyrighted Work and holds all rights, title, and interest, including all rights under copyright in the Copyrighted Work. (Compl. ¶¶ 4, 12.) Plaintiff sells the Copyrighted Work on Amazon at the ASIN B016QVRI06.^[4] (Compl. ¶ 16; Ex. A, ECF No. 1-1 at 1-2); see also www.amazon.com/Rules-Life-motivational-poster-print/dp/B016QVRI06 (last visited Dec. 28, 2022). Plaintiff directly fulfills all orders pertaining to the Copyrighted Work and has never authorized others to sell the Copyrighted Work. (Compl. ¶ 30.)

Plaintiff alleges that, after he registered his copyright, Defendant caused itself to be listed as an additional seller of the Copyrighted Work on Amazon at ASIN B016QVRI06, which enabled Defendant to be listed as one of the “Other Sellers on Amazon” of the Copyrighted Work, to sell the very same work, under the exact same ASIN as Plaintiff, and to receive profits from selling the Copyrighted Work. (Compl. ¶¶ 17, 18, 32.) Plaintiff alleges Defendant sold the Copyrighted Work, under the same ASIN as Plaintiff, without Plaintiff's authorization, consent, or knowledge, and without providing any compensation to Plaintiff. (Compl. ¶¶ 32, 33.)

After discovering the alleged infringement, Plaintiff filed a “takedown request” with Amazon pursuant to the Digital Millennium Copyright Act (“DMCA”).^[5] (Compl. ¶ 19.) However, on August 12, 2022, Amazon notified Plaintiff that Defendant had filed a counter notice under the DMCA. (Compl. ¶ 20; Ex. C, ECF No. 1-1 at 5-6.) Pursuant to the counternotice, which was electronically signed and submitted to Amazon by Defendant under penalty of perjury, Defendant indicated it “ha[d] a good faith belief that the material identified in the Notice of Infringement was removed or disabled as a result of mistake or misidentification of the material to be removed or disabled” and requested Amazon to replace and/or no longer disable the material, so as to reinstate Defendant as a seller of the Copyrighted Work at ASIN B016QVRI06. (Compl. ¶ 29; Ex. C.) Due to Defendant's counternotice, Plaintiff alleges Amazon will restore Defendant as an additional seller of the Copyrighted Work, thus necessitating the instant lawsuit.^[6] (Compl. ¶ 34.)

C. Relief Sought

While the Complaint initially seeks an accounting, injunctive and monetary relief, including maximum statutory penalties, damages, and attorneys' fees, the Court notes the instant motion for default judgment expressly requests only an award of statutory damages in the amount of $15,000. (Mot. 4.) Plaintiff maintains this amount “is sufficient to make him whole for the costs he has incurred and will continue to incur in filing this suit, pursuing Defendant, procuring default, and attempting to find assets against which to execute the judgment.” (Id.)

III. LEGAL STANDARD FOR DEFAULT JUDGMENT

“Our starting point is the general rule that default judgments are ordinarily disfavored,” as “[c]ases should be decided upon their merits whenever reasonably possible.” NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606, 616 (9th Cir. 2016) (quoting Eitel v. McCool, 782 F.2d 1470, 1472 (9th Cir. 1986)). Pursuant to Federal Rules of Civil Procedure 55, obtaining a default judgment is a two-step process. Entry of default is appropriate as to any party against whom a judgment for affirmative relief is sought that has failed to plead or otherwise defend as provided by the Federal Rules of Civil Procedure and where that fact is made to appear by affidavit or otherwise. Fed.R.Civ.P. 55(a). After entry of default, a plaintiff can seek entry of default judgment. Fed.R.Civ.P. 55(b). Federal Rule of Civil Procedure 55(b)(2) provides the framework for the Court to enter a default judgment:

(b) Entering a Default Judgment.

(2) By the Court. In all other cases, the party must apply to the court for a default judgment. A default judgment may be entered against a minor or incompetent person only if represented by a general guardian, conservator, or other like fiduciary who has appeared. If 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. The court may conduct hearings or make referrals--preserving any federal statutory right to a jury trial--when, to enter or effectuate judgment, it needs to:

(A) conduct an accounting;

(B) determine the amount of damages;

(C) establish the truth of any allegation by evidence; or

(D) investigate any other matter.

Fed. R. Civ. P. 55.

The decision to grant a motion for entry of default judgment is within the discretion of the court. PepsiCo, Inc. v. Cal. Sec. Cans, 238 F.Supp. 1172, 1174 (C.D. Cal. 2002). The Ninth Circuit has set forth the following seven factors (the “Eitel factors”) that the Court may consider in exercising its discretion:

(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiffs substantive claim, (3) the 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.

Eitel, 782 F.2d at 1471-72.

Generally once default has been entered, “the factual allegations of the complaint, except those relating to damages, will be taken as true.” Garamendi v. Henin, 683 F.3d 1069, 1080 (9th Cir. 2012) (quoting Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)); see also Fed.R.Civ.P. 8(b)(6) (“An allegation-other than one relating to the amount of damages-is admitted if a responsive pleading is required and the allegation is not denied.”). Accordingly, the amount of damages must be proven at an evidentiary hearing or through other means. Microsoft Corp. v. Nop, 549 F.Supp.2d 1233, 1236 (E.D. Cal. 2008). Additionally, “necessary facts not contained in the pleadings, and claims which are legally insufficient, are not established by default.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (internal citation omitted). The relief sought must...