Stross v. Smith Rock Masonry Co., Case No. 6:19-cv-01394-AA

Alexander Stross, Plaintiff, v. Smith Rock Masonry Company, LLC Defendant.

Case No. 6:19-cv-01394-AA

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON EUGENE DIVISION

June 16, 2021

OPINION AND ORDER

AIKEN, District Judge:

Plaintiff Alexander Stross brought this action for damages against defendant Smith Rock Masonry Company, LLC alleging claims for copyright infringement under the Copyright Act, 17 U.S.C. § 101 et seq. A default was entered against defendant on May 7, 2020. Docs. 16, 17. Plaintiff now moves for default judgement against defendant and for attorney fees and cost pursuant to Federal Rules of Civil Procedure 55 and 54. Doc. 15. For the reasons discussed below, plaintiff's Motion is GRANTED.

BACKGROUND

Plaintiff is a professional photographer who licenses his photographs to print and online media. Plaintiff is the sole author and exclusive rights-holder to a photograph (the "Photograph"), which is attached as Exhibit A to the Complaint (doc. 1).

Defendant Smith Rock Masonry Company, LLC is a domestic Oregon limited liability company with its principal place of business in Redmond, Oregon. Defendant is in the business of contracting masonry work, examples of which it advertises and displays on its website https://www.facebook.com/smithrockmasonry/ (the "Website") (doc. 1).

The Photograph is an image of a home with a rock façade. Plaintiff registered the Photograph with the U.S. Copyright Office on December 15, 2008, under the registration number VAu 989-644. Compl. ¶ 10; Doc. 10. On February 6, 2020 defendant uploaded an image virtually identical to the Photograph to the Website. Doc. 1. Plaintiff did not license the Photograph to defendant and did not give it permission or consent to publish the Photograph to the Website. An image of defendant's Website featuring Plaintiff's Photograph is attached to the Complaint as Exhibit B.

Plaintiff commenced this action on August 30, 2019. Doc. 1. Defendant was served but did not appear or otherwise defend in this action. Plaintiff sought entry of default, which was granted on May 7, 2020. Docs. 16, 17. Plaintiff has now filed this Motion for Default Judgment (doc. 24).

LEGAL STANDARD

Pursuant to Federal Rule of Civil Procedure 55(a), the Clerk of Court is required to enter an order of default if a party against whom affirmative relief is sought has failed timely to plead or otherwise defend an action. "The general rule is that upon default the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true." Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977) (citations omitted); See also Derek Andrew, Inc. v. Poof Apparel Corp., 528 F.3d 696, 702 (9th Cir. 2008).

Rule 55 "provides that after the clerk's entry of default against a defendant, a court may enter default judgment against that defendant." FirstBank P.R. v. Jaymo Props., LLC, 379 F. App'x 166, 170 (3d Cir. 2010). "The district court's decision whether to enter a default judgment is a discretionary one." Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In exercising its discretion, district courts in the Ninth Circuit consider the factors articulated in Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986). The Eitel factors are: (1) the possibility of prejudice to the plaintiff; (2) the merits of the plaintiff's substantive claims; (3) the sufficiency of the operative complaint; (4) the sum of money at stake in the litigation; (5) the possibility of 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. The "starting point" of the district court's analysis, however, "is the general rule that default judgments are ordinarily disfavored." Id. at 1472.

DISCUSSION

In his Motion for Default Judgment, plaintiff seeks $10,000 in damages as well as $950 in attorney's fees and costs. To grant default judgement, the Court must first address the appropriateness of a default judgement pursuant to the factors laid out in Eitel, 782 F.2d at 1471-72. The Court then assesses damages pursuant to 17 U.S.C. § 504 and reasonable attorney's fees and costs pursuant to 17 U.S.C. § 505.

I. Eitel Factors

A. Possibility of Prejudice to Plaintiff

The first Eitel factor addresses whether the plaintiff will suffer prejudice if the Court does not grant default judgment. Denial of default judgment leads to prejudice when, as here, it leaves a plaintiff without a remedy or recourse to recover compensation. See PepsiCo, Inc. v. California Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002). Accordingly, the Court finds that this factor favors default judgment.

B. Merits of Plaintiff's Substantive Claim and Sufficiency of the Complaint

The second and third Eitel factors are often analyzed together and address the substantive merits of the claim and the sufficiency of the complaint. PepsiCo, 238 F. Supp. 2d at 1175. For the purposes of default judgment, all well-pleaded allegations in the complaint, except those relating to damages, are assumed to be true. Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977).

Plaintiff alleges one claim of willful copyright infringement against defendant under 17 U.S.C. § 101 et seq. To prevail on a claim of copyright infringement, a "plaintiff must show ownership of the copyright and copying by the defendant." Fox Broad. Co., Inc. v. Dish Network LLC, 747 F.3d 1060, 1066-67 (9th Cir. 2014) (internal quotation marks and citation omitted). A plaintiff may prove copying through direct evidence, or through circumstantial evidence that the defendant had access to the copyrighted work prior to creation of defendant's work and that there is substantial similarity in the general ideas and expressions of the copied work. See Unicolors, Inc. v. Urb. Outfitters, Inc., 853 F.3d 980, 984 (9th Cir. 2017). Where there is no evidence of access, a "striking similarity between the works may allow an inference of copying." Id. at 985 (internal quotation marks and citation omitted). Where a plaintiff has factually pleaded willful infringement, "the district court's default judgment includes an implied finding of willfulness." Aries Music Entm't, Inc. v. Angelica's Record Distributors, Inc., 506 F. App'x 550, 552 (9th Cir. 2013).

To establish a prima facie case of willful infringement plaintiff must demonstrate that defendant was aware, or should have been aware, that his activities were infringing. Hearst Corp. v. Stark, 639 F.Supp. 970, 979-80 (N.D.Cal.1986). Here, plaintiff alleges that he is the sole and exclusive rights-owner to the Photograph. Compl. ¶ 8-10. This includes the copyright to the Photograph under registration number VAu 989-644. Compl. ¶ 10; Doc. 10. Plaintiff further alleges that defendant, without plaintiff's consent or permission, and without licensing the Photograph from plaintiff, ran the Photograph on the Website in a manner "willful,intentional, and purposeful, in disregard of and indifference to Plaintiff's rights." Compl. ¶ 11, 17.

Although plaintiff does not allege facts showing defendant's access, given that the image on the Website is virtually identical to plaintiff's Photograph, the Court finds that plaintiff has sufficiently pled copying. Plaintiff has not, however, sufficiently alleged willfulness. Plaintiff has demonstrated that defendant's Website used his Photograph but does not allege any facts or present evidence indicating that defendant was or should have been aware of any copyright, nor that defendant continued to infringe on the copyright after being notified of it. Plaintiff's assertion that defendant willfully infringed is merely a legal conclusion for which the Court finds no factual support in the record.

Therefore, the Court finds that plaintiff has failed to establish willfulness. Nonetheless, taking all factual allegations pleaded as true, plaintiff has sufficiently and meritoriously pleaded a claim for non-willful copyright infringement and so the Court concludes that these factors favor default judgment.

C. Sum of Money at Stake

The Eitel factors require courts to assess whether the recovery sought is proportional to the harm caused by the defendant's conduct. Eitel, 782 F.2d at 1471-72. While the allegations in a complaint are taken to be true for the purposes of default judgment, courts must make specific findings of fact in assessing damages. Fair House. Of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002).

Under the Copyright Act, a plaintiff may elect an award of statutory damages "in a sum of not less than $750 or more than $30,000" per infringement in lieu of an award of representing actual damages. 17 U.S.C. § 504(c)(1). Where a plaintiff chooses to recover statutory damages, actual damages need not be proven. Columbia Pictures Tel., Inc. v. Krypton Broad. of Birmingham, Inc., 259 F.3d 1186, 1194 (9th Cir. 2001). If the court determines that the "infringement was committed willfully, the court in its discretion may increase the award of statutory damages of not more than $150,000." 17 U.S.C. § 504(c)(2).

Here, plaintiff seeks statutory damages in the amount of $10,000 under 17 U.S.C. § 504, as well as reasonable attorney's fees and costs, pursuant to 17 U.S.C. § 505, in the amounts of $510 and $440 respectively. As discussed below, the Court finds that an award of $10,000 is unreasonable given the nature of the infringement, and plaintiff's failure to establish willfulness. However, because this Court may adjust the damages award, the fourth Eitel factor does not weigh against entry of default judgment.

D. Possibility of a Dispute as to Material Facts

On entry of default, the general rule is that all factual allegations of the complaint, except those relating to damages are taken as true. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). The possibility of a dispute as to material facts is unlikely...