HB Prods. v. Faizan

• Decision Date: 07 June 2022
• Docket Number: CIVIL 19-00487 JMS-KJM
• Parties: HB PRODUCTIONS, INC., Plaintiff, v. MUHAMMAD FAIZAN, Defendant.
• Court: U.S. District Court — District of Hawaii

HB PRODUCTIONS, INC., Plaintiff,
v.
MUHAMMAD FAIZAN, Defendant.

CIVIL No. 19-00487 JMS-KJM

United States District Court, D. Hawaii

June 7, 2022

FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANT MUHAMMAD FAIZAN

Kenneth J. Mansfield, United States Magistrate Judge

On March 29, 2022, this Court initially found that it lacks personal jurisdiction over Defendant Muhammad Faizan (“Defendant”) and recommended that the district court deny Plaintiff HB Productions, Inc.'s (“Plaintiff”) Motion for Default Judgment Against Defendant (“Motion”) (“03/29/2022 Findings and Recommendation”). ECF No. 78 at 8, 21.

Plaintiff filed objections to this Court's 03/29/2022 Findings and Recommendation (“Objections”). ECF No. 79. The district court concluded that the court has personal jurisdiction over Defendant for all claims in the Second Amended Complaint. Accordingly, the district court issued an order sustaining Plaintiff's Objections, rejecting this Court's 03/29/2022 Findings and

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Recommendation, and referring to this Court the remaining issues in Plaintiff's Motion (“05/13/2022 Order”). ECF No. 80 at 45.

The Court elects to decide this matter without a hearing pursuant to Rule 7.1(c) of the Local Rules of Practice for the United States District Court for the District of Hawaii. After carefully considering Plaintiff's Motion, the applicable law, and the record in this case, the Court FINDS AND RECOMMENDS that the district court GRANT IN PART AND DENY IN PART the Motion.

BACKGROUND

The 05/13/2022 Order sets forth the factual and procedural background of this matter, which this Court need not repeat except as relevant to deciding this Motion.

On January 19, 2022, the Clerk of Court (“Clerk”) entered default against Defendant for failure to appear or otherwise defend. ECF No. 74. On January 27, 2022, Plaintiff filed this Motion and included a request for an award of $150,000 in statutory damages, $23,895 in attorneys' fees, $1,059.27 in Hawaii General Excise Tax (“GET”),^[1] and $4,714 in taxable costs as final judgment pursuant to Federal Rule of Civil Procedure 55(b)(2). See ECF No. 75. Plaintiff's counsel submitted a declaration in support of the Motion and damages sought by Plaintiff (“Culpepper Declaration”). ECF No. 75-2. Plaintiff served the Motion on Defendant by airmail

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on January 27, 2022. ECF No. 75-9. Defendant did not file an opposition or otherwise respond to the Motion.

DISCUSSION

Since the district court has determined that Plaintiff has established personal jurisdiction over Defendant, this Court will next consider whether default judgment is appropriate.

I. Legal Standard

Default judgment may be entered for the plaintiff if the defendant has defaulted by failing to appear and the plaintiff's claim is for a “sum certain or for a sum which can by computation be made certain[.]” Fed.R.Civ.P. 55(a), (b)(1). The court has discretion to grant or deny a motion for default judgment. Haw. Carpenters' Tr. Funds v. Stone, 794 F.2d 508, 511-12 (9th Cir. 1986) (citation omitted). Default judgments are ordinarily disfavored and cases should be decided on their merits if reasonably possible. Eitel v. McCool, 782 F.2d 1470, 1472 (9th Cir. 1986). Courts may consider the following factors in deciding whether to grant a motion for default judgement (collectively, “Eitel factors”):

(1) the possibility of prejudice to the plaintiff[;] (2) the merits of plaintiff's 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

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NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606, 616 (9th Cir. 2016) (quoting Eitel, 782 F.2d at 1471-72).

On default, “the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.” TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (quoting Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977)). Likewise, “necessary facts not contained in the pleadings, and the 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) (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)).

II. Eitel Factors

Following the district court's conclusion that the court has subject matter jurisdiction over Plaintiff's claims and personal jurisdiction over Defendant, the Court must consider whether default judgment is appropriate under the Eitel factors.

A. Possibility of Prejudice to Plaintiff

The first factor is whether Plaintiff would suffer prejudice if default judgment is not entered. Because Defendant has not appeared to defend this action on the merits, Plaintiff would be prejudiced if judgment is delayed and Plaintiff is forced to prove its claims at trial. Defendant is in default and is not defending this

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case. Under the circumstances, Plaintiff is entitled to a prompt decision by way of this Motion. Accordingly, the first Eitel factor favors default judgment.

B. Merits of Plaintiff's Substantive Claims

Under the second Eitel factor, the Court considers the merits of Plaintiff's substantive claims. As noted, the allegations in the Second Amended Complaint are deemed true to determine Defendant's liability. TeleVideo Sys., Inc. at 917-18; Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). Here, the allegations in Plaintiff's Second Amended Complaint, accepted as true, establish that Plaintiff is entitled to default judgment against Defendant on all claims.

Plaintiff has sufficiently pled claims that Defendant committed copyright infringement and contributory copyright infringement pertaining to the motion picture, Hellboy (the “Work”). A plaintiff asserting copyright infringement must prove two elements: “(1) ownership of the copyright; and (2) infringement-that the defendant copied protected elements of the plaintiff's work.” Three Boys Music Corp. v. Bolton, 212 F.3d 477, 481 (9th Cir. 2000). Regarding Plaintiff's claim for copyright infringement, Plaintiff alleges: (1) Plaintiff owns and has registered the Work, ECF No. 64 at 24 ¶ 85; (2) Defendant, who does not have a license from Plaintiff, distributes the Work by providing “immediate, unrestricted, and unauthorized access to unauthorized copies” of the Work, id. at 35 ¶ 129, 36

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¶¶ 131-32; and (3) Plaintiff has and will be damaged by Defendant's wrongful actions, which hinder legitimate distribution of the Work. Id. at 39 ¶ 152.

As to Plaintiff's claim for contributory copyright infringement, the Ninth Circuit has recognized that “[o]ne who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another may be liable as a ‘contributory' [copyright] infringer.” Ellison v. Robertson, 357 F.3d 1072, 1076 (9th Cir. 2004) (quoting Gershwin Publ'g Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971) (some brackets Gershwin)). The Ninth Circuit has “interpreted the knowledge requirement for contributory copyright infringement to include both those with actual knowledge and those who have reason to know of direct infringement.” Id. (quoting A&M Records v. Napster, Inc., 239 F.3d 1004, 1020 (9th Cir. 2001)).

Plaintiff alleges that by unlawfully furnishing access to unauthorized content through Defendant's websites, Defendant caused or materially contributed to the direct infringement by others of Plaintiff's copyrighted Work. See ECF No. 64 at 36 ¶¶ 131-33. Plaintiff also alleges that Defendant knew or should have known that other BitTorrent users were directly infringing on Plaintiff's Work. See id. at 43 ¶ 175. As likewise concluded by the district court, the Court finds that Plaintiff's allegations are sufficient to state a claim for direct and contributory copyright infringement. See Ellison, 357 F.3d at 1076 (enumerating elements of

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copyright infringement). Accordingly, the merits of Plaintiff's substantive claims weigh in favor of default judgment.

C. Sufficiency of the Second Amended Complaint

As stated, the Court finds that Plaintiff's allegations in the Second Amended Complaint are sufficiently pled. Accordingly, the sufficiency of the Second Amended Complaint weighs in favor of default judgment.

D. Sum of Money at Stake

For the fourth Eitel factor, the Court “must consider the amount of money at stake in relation to the seriousness of Defendant's conduct.” PepsiCo, Inc. v. Cal. Sec. Cans, 238 F.Supp.2d 1172, 1176 (C.D. Cal. 2002) (citing Eitel, 782 F.2d at 1471). Plaintiff seeks $150,000 in statutory damages for willful contributory infringements of the Work. See 17 U.S.C. § 504(c)(2) (authorizing the court to increase the award of statutory damages to a sum of not more than $150,000 for willful infringement). ECF No. 75-1 at 24, 26. The Court finds that the amount of money at stake is significant relative to the cost of continued litigation, especially considering Defendant's location outside of the United States and Plaintiff's alleged actual damages totaling $270,902.58. See ECF No. 64 at 47 ¶ (D). The statutory damages Plaintiff seeks are appropriate and reflect the severity of Defendant's willful infringement of Plaintiff's copyrighted Work, as addressed

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below. The Court thus finds that the sum of money at stake weighs in favor of default judgment.

E. Possibility of Dispute Concerning Material Facts

The fifth factor, the possibility of dispute concerning material facts, weighs in favor of default judgment. The Court takes the well-pled allegations of the Second Amended Complaint as true, except those relating to the amount...