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Pacific Stock, Inc. v. Kona Kustom Tours LLC

United States District Court, D. Hawaii

November 25, 2014

PACIFIC STOCK, INC., Plaintiff,
v.
KONA KUSTOM TOURS LLC, ET AL., Defendants

For Pacific Stock, Inc., doing business as Kona Kustom Tours, Plaintiff: Dane K. Anderson, J. Stephen Street, LEAD ATTORNEYS, Honolulu, HI.

FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANT KONA KUSTOM TOURS LLC, A HAWAII LIMITED LIABILITY COMPANY, DBA KONA KUSTOM TOURS, AND DEFENDANT PHILIP D. DAVIDSON, AN INDIVIDUAL, AKA PHILIP DAVIDSON [1]

Richard L. Puglisi, United States Magistrate Judge.

Before the Court is Plaintiff Pacific Stock, Inc.'s Motion for Default Judgment Against Defendant Kona Kustom Tours LLC, a Hawaii Limited Liability Company, dba Kona Kustoms Tours, and Defendant Philip D. Davidson, an Individual, aka Philip Davidson (collectively " Defendants"), filed on November 5, 2014 (" Motion"). ECF No. 15. Defendants were served with a copy of the Motion, but did not file an opposition or otherwise respond. See ECF No. 15-6. The Court found the Motion suitable for disposition without a hearing pursuant to Rule 7.2(d) of the Local Rules of Practice of the United States District Court for the District of Hawaii. ECF No. 16. After careful consideration of the Motion, the declarations, exhibits, and the record established in this action, the Court FINDS AND RECOMMENDS that the Motion be GRANTED IN PART and DENIED IN PART.

BACKGROUND

This action arises out of Defendants' alleged unlawful use of fourteen copyrighted photographic works (collectively, " Copyrighted Works") that were created by several photographers who assigned ownership of all rights, title, and interest in the copyrights to their respective photographic works to Plaintiff. Compl. ¶ 10. Plaintiff licenses the Copyrighted Works for commercial and other uses. Compl. ¶ 12.

Between 2011 and 2012, Plaintiff learned that Defendants were using the Copyrighted Works on their commercial website for over two years without obtaining licenses or consents from Plaintiff. Compl. ¶ 13. On February 18, 2014, Plaintiff's counsel sent a cease and desist letter to Defendants requesting Defendants pay a retroactive licensing fee for the use of the Copyrighted Works. Compl. ¶ 14. Despite this cease and desist letter, Defendants continued to use twelve of the fourteen Copyrighted Works on Defendants' commercial website without obtaining licenses or consents from Plaintiff. Compl. ¶ 15.

Plaintiff filed a Complaint against Defendants on July 18, 2014, alleging claims of copyright infringement and violations of the Digital Millennium Copyright Act (" DMCA") based on Defendants' use of the Copyrighted Works on their website and their alteration of Plaintiff's copyright management information on the Copyrighted Works. Compl. ¶ ¶ 20-40; Ex. A to Compl. Plaintiff alleges that Defendant Davidson, the sole owner of Defendant Kona Kustom Tours, is vicariously liable for Kona Kustom Tours's infringing activity. Compl. ¶ 18. The Clerk entered default against Defendants pursuant to Rule 55(a) of the Federal Rules of Civil Procedure on August 29, 2014. ECF No. 12. The present Motion followed.

ANALYSIS

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(b)(1), (2). The granting or denial of a motion for default judgment is within the discretion of the court. Haw. Carpenters' Trust Funds v. Stone, 794 F.2d 508, 511-12 (9th Cir. 1986). Entry of default does not entitle the non-defaulting party to a default judgment as a matter of right. Valley Oak Credit Union v. Villegas, 132 B.R. 742, 746 (9th Cir. 1991). 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). The court should consider the following factors in deciding whether to grant a motion for default judgment:

(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.

Id. 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)). The allegations in the complaint regarding liability are deemed true, but the plaintiff must establish the relief to which it is entitled. Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). Also, " 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) (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)).

A. Jurisdiction

Before considering the merits of default judgment, the Court has an affirmative obligation to determine whether or not it has subject matter jurisdiction over this action and personal jurisdiction over Defendants. See In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999) (" To avoid entering a default judgment that can later be successfully attacked as void, a court should determine whether it has the power, i.e., the jurisdiction, to enter the judgment in the first place."). First, the Court has subject matter jurisdiction over Plaintiff's claims for copyright infringement and violations of the DMCA. See 17 U.S.C. § § 501, 1202; 28 U.S.C. § § 1331, 1338(a). Second, the Court has personal jurisdiction over Defendants because Defendants were personally served with the Summons on July 23, 2014, and the Complaint on August 4, 2014. ...


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