Virgin Records America, Inc. v. Lacey

• Court: U.S. District Court — Southern District of Alabama
• Writing for the Court: William H. Steele
• Citation: Virgin Records America, Inc. v. Lacey, 510 F.Supp.2d 588 (S.D. Ala. 2007)
• Decision Date: 23 January 2007
• Docket Number: Civil Action No. 06-0639-WS-M.
• Parties: VIRGIN RECORDS AMERICA, INC., et al., Plaintiffs, v. Bertha LACEY, Defendant.

510 F.Supp.2d 588

VIRGIN RECORDS AMERICA, INC., et al., Plaintiffs, v. Bertha LACEY, Defendant.

Civil Action No. 06-0639-WS-M.

United States District Court, S.D. Alabama, Southern Division.

January 23, 2007.

COPYRIGHT MATERIAL OMITTED

Thomas C. Anderson, Balch & Bingham, Gulfport, MS, for Plaintiffs.

ORDER

WILLIAM H. STEELE, District Judge.

This case is before the Court on plaintiffs' Motion for Entry of Default Judgment (doc. 9).

I. Background.

On October 10, 2006, plaintiffs Virgin Records America, Inc., Motown Record Company, L.P., UMG Recordings, Inc.,¹ Sony BMG Music Entertainment, and BMG Music filed a Complaint for Copyright Infringement (doc. 1) against defendant, Bertha Lacey. In particular, plaintiffs maintained that Lacey had utilized an online media distribution system to download or distribute copyrighted music recordings belonging to plaintiffs, and/or to make such recordings available for distribution to others, thereby infringing on plaintiffs' copyrights and exclusive rights under copyright. On that basis, the Complaint requested the following relief: (1) statutory damages pursuant to 17 U.S.C. § 504(c); (2) attorney's fees and costs pursuant to 17 U.S.C. § 505; and (3) injunctive relief pursuant to 17 U.S.C. §§ 502 and 503, prohibiting Lacey from further infringing conduct and requiring her to destroy all copies of sound recordings made in violation of plaintiffs' exclusive rights.

On November 14, 2006, plaintiffs filed a Return of Service (doc. 5) reflecting that defendant had been served with process by a private process server on October 26, 2006. According to the server's declaration, copies of the summons and complaint were left at Lacey's dwelling house or usual place of abode (6005 Howells Ferry Road, Mobile, AL 36618) and were given to Lacey's son, Brad Lacey.

Notwithstanding service of process in accordance with Rule 4(e), Fed.R.Civ.P., nearly three months ago, Lacey has never filed an answer or otherwise appeared in this action. Upon motion by plaintiffs, a Clerk's Entry of Default (doc. 8) was entered against Lacey on December 13, 2006 for failure to plead or otherwise defend. The Clerk of Court mailed a' copy of that Entry of Default to defendant at the same address at which process was served. Once again, Lacey failed to respond. No further activity occurring in this matter in the subsequent 30 days, plaintiff§ now seek entry of default judgment.

II. Analysis.

A. Propriety of Default Judgment.

In this Circuit, "there is a strong policy of determining cases on their merits and we therefore view defaults with disfavor." In re Worldwide Web Systems, Inc., 328 F.3d 1291, 1295 (11th Cir.2003); see also Varnes v. Local 91, Glass Bottle Blowers Ass'n of U.S. and Canada, 674 F.2d 1365, 1369 (11th Cir.1982) ("Since this case involves a default judgment there must be strict compliance with, the legal prerequisites establishing the court's power to render the judgment."). Nonetheless, it is well established that a "district court has the authority to enter default judgment for failure ... to comply with its orders or rules of procedure." Wahl v. McIver, 773 F.2d 1169, 1174 (11th Cir. 1985).

Where, as here, a defendant has failed to appear or otherwise acknowledge the pendency of a lawsuit against her for some three months after being served, entry of default judgment may be appropriate. Indeed, Rule 55 itself provides for entry of default and default judgment where a defendant "has failed to plead or otherwise defend as provided by these rules." Rule 55(a), Fed.R.Civ.P. In a variety of contexts, courts have entered default judgments against defendants who have failed to defend the claims against them following proper service of process. See, e.g., In re Knight, 833 F.2d 1515, 1516 (11th Cir.1987) ("Where a party offers no good reason for the late filing of its answer, entry of default judgment against that party is appropriate."); Matter of Dierschke, 975 F.2d 181, 184 (5th Cir.1992) ("when the court finds an intentional failure of responsive pleadings there need be no other finding" to justify default judgment); Kidd v. Andrews, 340 F.Supp.2d 333, 338 (W.D.N.Y.2004) (entering default judgment against defendant who failed to answer or move against complaint for nearly three months); Viveros v. Nationwide Janitorial Ass'n, Inc., 200 F.R.D. 681, 684 (N.D.Ga.2000) (entering default judgment against counterclaim defendant who had failed to answer or otherwise respond to counterclaim within time provided by Rule 12(a)(2)). In short, then, "[w]hile modern courts do not favor default judgments, they are certainly appropriate when the adversary process has been halted because of an essentially unresponsive party." Flynn v. Angelucci Bros. & Sons, Inc., 448 F.Supp.2d 193, 195 (D.D.C.2006) (citation omitted).²

The law is clear, however, that Lacey's failure to appear and the Clerk's subsequent entry of default against her do not automatically entitle plaintiffs to a default judgment. Indeed, a default is not "an absolute confession by the defendant of his liability and of the plaintiff's right to recover," but is instead merely "an admission of the facts cited in the Complaint, which by themselves may or may not be sufficient to establish a defendant's liability." Pitts ex rel. Pitts v. Seneca Sports, Inc., 321 F.Supp.2d 1353, 1357 (S.D.Ga. 2004); see also Descent v. Kolitsidas, 396 F.Supp.2d 1315, 1316 (M.D.Fla.2005) ("the defendants' default notwithstanding, the plaintiff is entitled to a default judgment only if the complaint states a claim for relief"); GMAC Commercial Mortg. Corp. v. Maitland Hotel Associates, Ltd., 218 F.Supp.2d 1355, 1359 (M.D.Fla.2002) (default judgment is appropriate only if court finds sufficient basis in pleadings for judgment to be entered, and that complaint states a claim). Stated differently, "a default judgment cannot stand on a complaint that fails to state a claim." Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1370 n. 41 (11th Cir.1997).

Review of the Complaint confirms that it does indeed assert detailed facts against Lacey, including a recitation of eight specific copyrighted recordings that Lacey has used and continues to use an online media distribution system to download and/or distribute without plaintiffs' permission. (Complaint, ¶¶, Exh. A.)³ The Complaint further states that plaintiffs are the copyright owners for those specific recordings. These facts, which are deemed admitted by virtue of Lacey's default, are sufficiently detailed and specific to give rise to a cognizable claim for direct copyright infringement in violation of the copyright laws of the United States, as codified at 17 U.S.C. §§ 101 et seq. See generally In re Aimster Copyright Litigation, 334 F.3d 643, 645 (7th Cir.2003) (explaining that those who make and transmit digital copies of copyrighted music are direct infringers of those copyrights); A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1014 (9th Cir.2001) (prima facie case of direct infringement is shown where plaintiffs establish ownership of allegedly infringed material and demonstrate that alleged infringers are violating at least one exclusive right granted to copyright holders). Accordingly, the Court finds that the Complaint states a claim for relief.

The legal effect of Lacey's default is that she has now admitted the facts recited in the Complaint, which are sufficient to establish her liability to plaintiffs on a theory of copyright infringement.⁴ Moreover, because she has made no attempt to defend this action in the three months since being served with process, despite notice that plaintiffs were moving forward with default proceedings against her, Lacey's course of conduct amounts to a deliberate and intentional failure to respond, which is just the sort of dilatory litigation tactic for which the default judgment mechanism was created. For these reasons, plaintiffs' Motion is granted as to entry of default judgment. Default judgment will be entered against Lacey, in accordance with Rule 55(b)(2), Fed. R.Civ.P. The Court will next consider which remedies which will be awarded to plaintiffs.

B. Remedies.

Plaintiffs seek three forms of relief, to-wit: minimum statutory damages, costs, and a permanent injunction. In considering these requests, the Court bears in mind that, notwithstanding the default against Lacey, "judgment may be granted only for such relief as may lawfully be granted upon the well-pleaded facts alleged in the complaint." Pitts, 321 F.Supp.2d at 1358 (citation omitted).⁵ Each form of relief sought will be considered in turn.

1. Statutory Damages.

A copyright owner whose copyright has been infringed may recover, at his election, either actual damages or statutory damages for the infringing activity. 17 U.S.C. § 504(a)-(c). Where the copyright owner elects the latter option, a court may award, "instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually ... in a sum of not less than $750 or more than $30,000 as the court considers just." § 504(c)(1). Plaintiffs have elected statutory damages, in lieu of actual damages and profits, and seek entry of only the statutory minimum amount of $750 per work for each of the eight works that the Complaint charged Lacey with unlawfully downloading and/or distributing, for a total of $6,000 in statutory damages.

As mentioned above, the entry of default judgment against Lacey in no way obviates the need for determinations of the amount and character of damages. Rule 55(b)(2) specifically provides that if "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." That said, there is no...