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Inc. v. Pagaduan

United States District Court, D. Hawaii

December 28, 2017

ME2 PRODUCTIONS, INC., et al. Plaintiffs,
v.
TRAVIS PAGADUAN, Defendant.

          FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANT TRAVIS PAGADUAN

          Kenneth J. Mansfield, United States Magistrate Judge.

         On October 12, 2017, Plaintiffs ME2 Productions, Inc., Venice PI, LLC, and LHF Productions, Inc. (collectively, “Plaintiffs”) filed their Motion for Default Judgment Against Defendant Travis Pagaduan (“Motion”). See ECF No. 33. Defendant Travis Pagaduan did not file an opposition to the Motion.

         The Court held a hearing on the Motion on November 21, 2017. See ECF No. 40. Kerry S. Culpepper, Esq., appeared on behalf of Plaintiffs. Defendant Travis Pagaduan did not appear at the hearing. See Id. After carefully considering the Motion, arguments of counsel, and the record in this case, the Court FINDS and RECOMMENDS that the district court GRANT IN PART AND DENY IN PART the Motion as set forth below.

         BACKGROUND

         On March 24, 2017, Plaintiff ME2 Productions, Inc. (“ME2”) filed the Complaint against 20 doe defendants, asserting claims for copyright infringement and contributory copyright infringement in violation of 17 U.S.C. § 101, et seq (“Copyright Act”). See ECF No. 1. Through early discovery, Plaintiffs obtained the identity of several doe defendants. See ECF No. 9; ECF No. 16 at ¶¶ 25, 33, 41. For example, Plaintiffs identified doe defendant 18 as Defendant Travis Pagaduan (“Defendant”). ECF No. 16 at ¶ 33. Thus, on September 1, 2017, Plaintiffs filed the First Amended Complaint, naming Defendant, as well as Defendants George Lucas, Kevin Okazaki, and nine doe defendants. See ECF No. 16.

         Plaintiffs allege that (1) ME2 owns the copyright for the film, “Mechanic: Resurrection, ” (2) Plaintiff Venice PI, LLC (“Venice”) owns the copyright for the film, “Once Upon a Time in Venice, ” and (3) Plaintiff LHF Productions, Inc. (“LHF”) owns the copyright for the film, “London Has Fallen.” See Id. at ¶¶ 8, 12, 16. The Court collectively refers to the three subject films as, the “Works.” Plaintiffs allege that that Defendant used the BitTorrent, a peer-to-peer file-sharing protocol, to reproduce, distribute, display, or perform the Works in violation of the Copyright Act. See Id. at ¶¶ 89-92. Plaintiffs also allege that Defendant previously used the BitTorrent protocol to infringe on LFH's copyrights as to “London Has Fallen, ” which was the subject of a separate lawsuit, LHF Productions, Inc. v. Pagaduan, CV 16-00437 JMS-RLP (“LHF I”). Id. at ¶ 35.

         Plaintiffs served Defendant on September 7, 2017. See ECF No. 22. After Defendant failed to appear or otherwise respond to the First Amended Complaint, the Clerk of Court entered default against Defendant on October 5, 2017. See ECF No. 29. Plaintiffs filed the instant Motion on October 12, 2017.

         DISCUSSION

         I. Legal Standard

         Default judgment may be entered for the plaintiff if the defendant has defaulted by failing to appear or otherwise defend against the plaintiff's complaint, 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). Whether to grant or deny a motion for default judgment is within the discretion of the court. Haw. Carpenteres' 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. In re Villegas, 132 B.R. 742, 746 (B.A.P. 9th Cir. 1991). Default judgments are ordinarily disfavored, and cases should be decided on the merits if reasonably possible. Eitel v. McCool, 782 F.2d 1470, 1472 (9th Cir. 1986). Courts may consider the following factors in deciding a motion for default judgment (collectively, “Eitel factors”):

(1) the possibility of prejudice to the plaintiff, (2) the merits of the 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 decision on the merits.

Eitel, 782 F.2d at 1471-72 (citation omitted).

         In deciding a motion for default judgment, “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. Grp., 559 F.2d 557, 560 (9th Cir. 1977)). Although allegations in the complaint regarding liability are taken as true, 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)).

         II. Jurisdiction

         Before considering the merits of the Motion, the Court has an affirmative obligation to determine whether it has subject matter jurisdiction over this action and personal jurisdiction over Defendant. 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.”).

         The Court finds that it has subject matter jurisdiction over the claims in Plaintiffs' First Amended Complaint pursuant to 28 U.S.C. §§ 1331, 1338, and the Copyright Act. The Court also finds that it has personal jurisdiction over Defendant based on Plaintiffs' allegation that Defendant is a resident of the State of Hawai'i and the fact that Defendant was served on September 7, 2017, at his residence in Hawai'i. See ECF No. 16 at ¶¶ 4, [1] 20; ECF No. 22. Accordingly, the Court turns to the merits of the Motion.

         III. Eitel Factors

         Given its determination that jurisdiction is proper, the Court next analyzes whether default judgment is appropriate under the Eitel factors.

         A. The Possibility of Prejudice to Plaintiffs

         The first Eitel factor considers whether Plaintiffs would suffer prejudice if default judgment is not entered. See PepsiCo, Inc. v. Cal. Sec. Cans, 238 F.Supp.2d 1172, 1177 (C.D. Cal. 2002). Here, absent entry of default judgment, Plaintiffs would be without recourse for recovery. Accordingly, the first Eitel factor favors entry of default judgment.

         B. The Merits of Plaintiffs' Substantive Claims

         Under the second Eitel factor, the Court considers the merits of Plaintiffs' substantive claims. As noted above, the allegations in the complaint are taken as true for purposes of determining liability. See TeleVideo Sys., Inc., 826 F.2d at 917-18; Fair Hous. of Martin, 285 F.3d at 906. Taking Plaintiffs' allegations in the First Amended Complaint as true, the Court finds that Plaintiffs have established that they are entitled to default judgment against Defendant on all claims.

         Plaintiffs have made a prima facie showing of copyright infringement and contributory copyright infringement by Defendant. A plaintiff asserting a copyright infringement claim must prove “(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 Plaintiffs' claim for copyright infringement, Plaintiffs allege: (1) they own and have registered their respective copyrighted films, i.e., the Works; (2) Defendant reproduced and distributed the copyrighted works without Plaintiffs' authorization; and (3) Defendants' actions damaged Plaintiffs. See ECF No. 16 at ¶¶ 88-97.

         As to Plaintiffs' 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) (quotation marks and citation omitted) (emphasis and brackets in original). 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. (citation omitted). Here, Plaintiffs allege that, by participating in the BitTorrent protocol, Defendant caused or materially contributed to the direct infringement of Plaintiffs' copyright by other defendants. See Id. at ¶¶ 99-100. Plaintiffs also allege that Defendant knew or should have known that other BitTorrent users were directly infringing on Plaintiffs' Works. See Id. at ¶ 101. The Court finds that, although Plaintiffs' allegations are minimal, they are nevertheless sufficient to state a claim for contributory copyright infringement. See Ellison v. Robertson, 357 F.3d 1072, 1076 (9th Cir. 2004). Accordingly, the merits of Plaintiffs' substantive claims weigh in favor of default judgment.

         C. The Sufficiency of the First Amended Complaint

         For the reasons discussed above, the Court finds that the allegations in the First Amended Complaint are sufficiently pled. Accordingly, the sufficiency of the First Amended Complaint weighs in favor of default judgment.

         D. The Sum of Money at Stake

         Regarding the fourth Eitel factor, Court “must consider the amount of money at stake in relation to the seriousness of the Defendant's conduct.” PepsiCo, Inc., 238 F.Supp.2d at 1176 (citing Eitel, 782 F.2d at 1472). Under the Copyright Act, a plaintiff may elect to seek actual damages attributable to the infringement or statutory damages of “not less than $750 or more than $30, 000.” 17 U.S.C. § 504(b), (c). In the Motion, Plaintiffs seek statutory damages in the total amount of $7, 500, as well as $2, 913.21 for attorneys' fees and costs. See ECF No. 33 at 2. Except for the minimal amount of money Plaintiffs lost and Defendant saved by not purchasing or renting the infringed Works, Plaintiffs did not suffer economic loss nor did Defendant profit from the infringement. The Court finds that Plaintiffs' request is extreme compared to the conduct alleged. Accordingly, this factor weighs against default judgment.

         E. The Possibility of Dispute Concerning Material Facts

         The Court finds that the fifth factor, regarding the possibility of dispute concerning material factors, weighs in favor of default judgment. As noted above, the Court takes the well-pled allegations of the First Amended Complaint as true, except those relating to the amount of damages. TeleVideo Sys., Inc., 826 F.2d at 917-18. Despite being given a fair opportunity to defend against Plaintiffs' claims, Defendant has not done so. Although Plaintiffs personally served Defendant with the First Amended Complaint, Defendant has failed to make an appearance in this action or otherwise ...


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