Halnat Pub. Co. v. LAPA, INC.

• Decision Date: 26 May 1987
• Docket Number: CIVIL 4-86-856.
• Citation: 669 F. Supp. 933
• Parties: HALNAT PUBLISHING CO., Bruce Springsteen, Milene-Opryland Music, Inc., Lodge Hall Music, Inc. and Wenaha Music Co., Plaintiffs, v. L.A.P.A., INC., Fay Sandvig and Raymond Sandvig, Defendants.
• Court: U.S. District Court — District of Minnesota

669 F. Supp. 933

HALNAT PUBLISHING CO., Bruce Springsteen, Milene-Opryland Music, Inc., Lodge Hall Music, Inc. and Wenaha Music Co., Plaintiffs, v. L.A.P.A., INC., Fay Sandvig and Raymond Sandvig, Defendants.

CIVIL 4-86-856.

United States District Court, D. Minnesota, Fourth Division.

May 26, 1987.

Norman R. Carpenter, Faegre & Benson, Minneapolis, Minn., for plaintiffs.

C. David Nelson, Nelson & Obenland, Glenwood, Minn., for defendants.

MEMORANDUM AND ORDER

MacLAUGHLIN, District Judge.

This matter is before the court on plaintiffs' motion for default judgment. Plaintiffs' motion will be granted.

FACTS

Plaintiffs are owners of copyrights to various musical compositions. Defendant L.A.P.A., Inc. owns, controls, manages, operates and maintains a business for public entertainment, amusement and refreshment known as the Glacial Trail Supper Club in Sunburg, Minnesota. Defendants Fay and Raymond Sandvig are officers of L.A.P.A., Inc. and are jointly responsible for the management, operation and maintenance of the Glacial Trail Supper Club. This is an action for copyright infringement under 17 U.S.C. § 101 et seq. Jurisdiction is pursuant to 28 U.S.C. 1338(a).

Federal copyright law provides that the copyright owner of a musical composition has the exclusive right to perform the copyrighted work publicly and to authorize such performance. 17 U.S.C. § 106(4). Each of the plaintiffs in this action are members of the American Society of Composers, Authors and Publishers (ASCAP). ASCAP licenses the right to perform copyrighted musical compositions owned by members of the Society to third parties. ASCAP has district offices, and the district manager of each office is responsible for contacting establishments in that district where music is played and offering the opportunity to obtain the rights to perform ASCAP musical compositions through licensing agreements. Bowman Aff. par. 2. When ASCAP discovers that an establishment is playing musical compositions copyrighted by an ASCAP member, the owner of the establishment is notified of the copyright infringement and ASCAP offers to license the use of ASCAP music to the establishment. Bowman Aff. par. 3.

In the case at bar, a representative from ASCAP's Minneapolis District Office spoke with Fay Sandvig on June 3, 1984 and again on September 12, 1984 and informed her of the need to enter into a licensing agreement with ASCAP if ASCAP music was to be played at the Glacial Trail Supper Club. ASCAP also sent a letter to L.A. P.A., Inc. stating the same thing on September 17, 1984. Additional letters were sent to the defendants on October 19, 1984, and January 17, February 19, April 2, May 10, June 21, July 15, July 29, August 19, 1985, and January 17, 1986. Additional telephone conversations between ASCAP representatives and Fay Sandvig occurred on January 25, April 23, October 15, and November 6, 1985. Bowman Aff. par. 5. However, defendants refused to pay any license fees, despite the fact that copyrighted music was being performed at the club.¹ ASCAP Minneapolis then retained two investigators, who went to the club on March 1, 1986 at 7:50 p.m. and stayed until 1:00 a.m. March 2, 1986. Music was being played by a live local band known as "Scenario." Among the songs played were the following ASCAP-member musical compositions:

1. "Kansas City"—copyright owned by plaintiff Halnat Publishing Co.;

2. "Glory Days"—copyright owned by plaintiff Bruce Springsteen;

3. "Blue Eyes Crying in the Rain"— copyright owned by plaintiff Milene-Opryland Music, Inc.;

4. "Stranger in My House"—copyright owned by plaintiff Lodge Hall Music, Inc.; and

5. "Centerfield"—copyright owned by Wenaha Music Co.

Complaint, Schedule A. Defendants apparently had no permission or authority from the owners of the copyrights on these works to have them performed at defendants' Club. Bowman Aff. par. 12. Defendants had these performances take place despite the fact that ASCAP had advised them that such performances violated the Copyright Act and would result in legal action being taken against defendants. Id.

Plaintiffs commenced an action for copyright infringement under 17 U.S.C. § 101 et seq. on November 6, 1986, alleging five counts of infringement, each count representing one of the musical compositions noted above that was played at defendants' club on March 1 and March 2, 1986. Defendants failed to plead or otherwise defend in this action, and on March 31, 1987 a clerk's entry of default was entered against them. Plaintiffs now move for an entry of judgment of default, seeking injunctive relief, $5,000 in damages, $500 in attorneys' fees, and $206.32 in disbursements. Defendants filed no answer and made no appearance at the hearing on plaintiffs' motion, but defendants did file a two-page response, in which they move for dismissal of the Sandvigs from this lawsuit on the basis that the Sandvigs are employees and officers of L.A.P.A., Inc. and not personally liable. Defendants also argue that the amount of damages should be less than $1,000 because defendants are small operators.

DISCUSSION

Federal Rule of Civil Procedure 55 provides that:

(a) Entry. When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter his default.

(b) Judgment. Judgment by default may be entered as follows:

....

(2) By the Court.... The party entitled to a judgment by default shall apply to the court therefor.... If the party against whom judgment by default is sought has appeared in the action, he (or, if appearing by representative, his representative) shall be served with written notice of the application for judgment at least 3 days prior to the hearing on such application. If, in order to enable the court to enter judgment or to carry it into effect, it is necessary to take an account or to determine the amount of damages or to establish the truth of any averment by evidence or to make an investigation of any other matter, the court may conduct such hearings or order such references as it deems necessary and proper and shall accord a right of trial by jury to the parties when and as required by any statute of the United States.

A clerk's entry of default upon affidavit of plaintiffs has been properly entered in this case. F.R.Civ.P. 55(a). Additionally, defendants, against whom judgment by default is now sought, have been served with written notice of the application for judgment at least three days prior to the hearing thereon, pursuant to F.R.Civ.P. 55(b).

Defendants' responsive papers on plaintiffs' motion for judgment of default address issues of who is liable and for how much, and do not deny liability itself. Federal Rule of Civil Procedure 8(d) provides that:

Averments in a pleading to which a responsive pleading is required, other than those as to the amount of damage, are admitted when not denied in the responsive pleading....

Therefore, the averments of copyright infringement contained in plaintiffs' complaint are deemed to be admitted, since defendants did not deny them in any responsive pleading. Because defendants have failed to plead or otherwise defend this action, a default judgment is appropriate and should be entered. However, the Court will first consider defendants Fay and Raymond Sandvig's assertion that they are not proper defendants in this action. Additionally, the amount of damages and costs and the propriety of injunctive relief must be determined by the Court pursuant to Rule 55(b)(2).

1. Liability of Fay Sandvig and Raymond Sandvig

Plaintiffs' complaint alleges that the Sandvigs were and are officers of L.A.P.A., Inc. and are jointly responsible for the control, management, operation and maintenance of the affairs of L.A.P.A., Inc. The complaint alleges that the act of copyright infringement were done with the Sandvigs' active assistance, cooperation, acquiescence and procurement. Complaint par. 5. Defendants argue that the Sandvigs are employees of L.A.P.A., Inc. and should not be parties to this action. However, defendants have provided no legal or evidentiary support for this argument.

A person may be liable for copyright infringement even though that individual did not perform the composition himself or herself. Gershwin Publishing Corp. v. Columbia Artists Management, Inc., 443 F.2d 1159, 1161-62 (2d Cir.1971). In fact, the Copyright Act has consistently been held to provide vicarious liability in an infringement action. Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304, 307 (2d Cir.1963); Milene Music, Inc. v. Gotauco, 551 F.Supp. 1288, 1295 (D.R.I.1982); Boz Scaggs Music v. KND Corp., 491 F.Supp. 908, 912 (D.Conn.1980). This vicarious liability extends to corporate officers. Famous Music Corp. v. Bay State Harness Horse Racing and Breeding Association, Inc., 554 F.2d 1213, 1215 (1st Cir. 1977); Milene Music, Inc., 551 F.Supp. at 1295. Moreover, corporate officers are liable even if they had no knowledge of the infringement by other persons or entities. Shapiro, Bernstein & Co., 315 F.2d at 309; Milene Music, Inc., 551 F.Supp. at 1295. As the Milene Music court stated,

defendants cannot for purposes of the Copyright Act evade responsibility by hiding behind ... corporate skirts....

Milene Music, Inc., 551 F.Supp. at 1295.

Therefore, in the case at bar, the Sandvigs cannot evade liability for copyright infringement by trying to pin the blame on the corporate entity L.A.P.A., Inc. The corporate entity itself could not infringe on plaintiffs' copyrights without some individual or individuals taking action on behalf of the corporate entity to commit the infringements. Plaintiffs clearly believed that the Sandvigs were and are the officers in control of L.A.P.A., Inc.'s actions, Complaint par. 5, and the defendants have not offered any evidence to the contrary. Moreover, the ASCAP representatives had,...