Morrow v. Stay Winning Boutique, LLC

• Court: District Court, E.D. California
• Decided: February 28, 2025
• Docket: 2:23-cv-02167
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 JAMIE MORROW, No. 2:23-cv-2167 WBS AC 12 Plaintiff, 13 v. FINDINGS AND RECOMMENDATIONS 14 STAY WINNING BOUTIQUE LLC, 15 Defendant. 16 17 This matter is before the court on plaintiff’s motion for default judgment. ECF No. 17. 18 The motion was referred to the undersigned pursuant to E.D. Cal. R. 302(c)(19). The motion was 19 taken under submission on the papers. ECF No. 19. For the reasons set forth below, the 20 undersigned recommends plaintiff’s motion be GRANTED, and that judgment be entered in favor 21 of plaintiff although in a reduced amount. 22 I. Relevant Background 23 Plaintiff filed this complaint alleging copyright infringement on December 2, 2023. ECF 24 No. 1. The complaint asserts jurisdiction pursuant to 28 U.S.C. §1331. ECF No. 1 at 2. 25 According to the complaint, plaintiff is a professional photographer who is the legal and rightful 26 owner of certain photographs which plaintiff commercially licenses. ECF No. 1 at 2. Plaintiff 27 obtained active and valid copyright registrations from the United States Copyright Office (the 28 “USCO”) which cover many of plaintiff’s photographs, while many others are the subject of 1 pending copyright applications. Id. At issue is a landscape photograph (“the Photograph”), 2 attached to the complaint as Exhibit 1, which was registered by the USCO with registration No. 3 VAu 1-252-971. Id. at 3. 4 Plaintiff alleges defendant is a clothing company and the owner of a monetized online 5 social media account (“Account”) that advertises merchandise to the public. Id. On or about 6 April 28, 2020, defendant displayed the Photograph on the Account as part of an online story at 7 https://www.facebook.com/StayWinningBoutique/videos/164861504857633. A 8 copy of a screengrab of the Account including the Photograph is attached to the complaint as 9 Exhibit 2. Id. Plaintiff alleges that, without permission or authorization, defendant 10 volitionally copied and/or displayed the copyright protected Photograph on the Account. Id. 11 Plaintiff first observed and actually discovered the Infringement on July 6, 2023. Id. 12 The complaint brings one count of Direct Copyright Infringement under 17 U.S.C. §501 et 13 seq. Id. at 6-7. Plaintiff served the summons and complaint on October 18, 2023. ECF No. 4 at 14 3. The clerk entered default against defendant on May 29, 2024. ECF No. 11. Plaintiff moved 15 for default judgment on January 7, 2025. ECF No 17. Defendant did not respond and has not 16 appeared or taken any action in this case. 17 II. Motion 18 Plaintiff moves for default judgment on the sole count of copyright infringement in the 19 complaint, seeking statutory damages in the amount of $14,275 pursuant to the Copyright Act, 20 An award of costs ($402 in filing fees and $92 in service fees); and an award of attorneys’ fees in 21 the amount of $6,885. ECF No. 17-4. 22 III. Analysis 23 A. Legal Standard 24 Pursuant to Federal Rule of Civil Procedure 55, default may be entered against a party 25 against whom a judgment for affirmative relief is sought who fails to plead or otherwise defend 26 against the action. See Fed. R. Civ. P. 55(a). However, “[a] defendant’s default does not 27 automatically entitle the plaintiff to a court-ordered judgment.” PepsiCo, Inc. v. Cal. Sec. Cans, 28 238 F.Supp.2d 1172, 1174 (C.D. Cal. 2002) (citing Draper v. Coombs, 792 F.2d 915, 924-25 (9th 1 Cir. 1986)); see Fed. R. Civ. P. 55(b) (governing the entry of default judgments). Instead, the 2 decision to grant or deny an application for default judgment lies within the district court’s sound 3 discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In making this 4 determination, the court may consider the following factors:

5 the possibility of prejudice to the plaintiff; (2) the merits of plaintiff's substantive claim; (3) the sufficiency of the complaint; (4) the sum 6 of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to 7 excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. 8 9 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Default judgments are ordinarily 10 disfavored. Id. at 1472. 11 Once default is entered, well-pleaded factual allegations in the operative complaint are 12 taken as true, except for those allegations relating to damages. TeleVideo Sys., Inc. v. 13 Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (per curiam) (citing Geddes v. United Fin. 14 Group, 559 F.2d 557, 560 (9th Cir. 1977) (per curiam)); see also Fair Housing of Marin v. 15 Combs, 285 F.3d 899, 906 (9th Cir. 2002). Although well-pleaded allegations in the complaint 16 are admitted by a defendant’s failure to respond, “necessary facts not contained in the pleadings, 17 and claims which are legally insufficient, are not established by default.” Cripps v. Life Ins. Co. 18 of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 1386, 1388 19 (9th Cir. 1978)); accord DIRECTV, Inc. v. Huynh, 503 F.3d 847, 854 (9th Cir. 2007) (“[A] 20 defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law”) 21 (citation and quotation marks omitted); Abney v. Alameida, 334 F.Supp.2d 1221, 1235 (S.D. Cal. 22 2004) (“[A] default judgment may not be entered on a legally insufficient claim.”). A party’s 23 default conclusively establishes that party’s liability, although it does not establish the amount of 24 damages. Geddes, 559 F.2d at 560; cf. Adriana Int’l Corp. v. Thoeren, 913 F.2d 1406, 1414 (9th 25 Cir. 1990) (stating in the context of a default entered pursuant to Federal Rule of Civil Procedure 26 37 that the default conclusively established the liability of the defaulting party). 27 //// 28 1 B. The Eitel Factors 2 1. Factor One: Possibility of Prejudice to Plaintiff 3 The first Eitel factor considers whether the plaintiff would suffer prejudice if default 4 judgment is not entered, and such potential prejudice to the plaintiff weighs in favor of granting a 5 default judgment. See PepsiCo, Inc., 238 F.Supp.2d at 1177. Here, plaintiff would suffer 6 prejudice if the court did not enter a default judgment because it would be without recourse for 7 recovery. Accordingly, the first Eitel factor favors the entry of default judgment. 8 2. Factors Two and Three: Merits of Claims and Sufficiency of Complaint 9 The merits of plaintiff’s substantive claims and the sufficiency of the complaint are 10 considered here together because of the relatedness of the two inquiries. The court must consider 11 whether the allegations in the complaint are sufficient to state a claim that supports the relief 12 sought. See Danning, 572 F.2d at 1388; PepsiCo, Inc., 238 F.Supp.2d at 1175. Here, the merits 13 of the claims and sufficiency of the complaint favor entry of default judgment. 14 Plaintiff brings a single cause of action for copyright infringement. ECF No. 1. To state a 15 copyright infringement claim, a plaintiff must plausibly allege two things: (1) that he or she owns 16 a valid copyright in the work at issue, and (2) that the defendant copied protected aspects of the 17 plaintiff’s expression. Tangle, Inc. v. Aritzia, Inc., 125 F.4th 991, 995 (9th Cir. 2025). “A 18 copyright registration is prima facie evidence of the validity of the copyright and the facts stated 19 in the certificate.” United Fabrics Int’l, Inc. v. C&J Wear, Inc., 630 F.3d 1255, 1257 (9th Cir. 20 2011) (internal citations omitted). “Under the Copyright Act, the owner of a copyright has the 21 exclusive right to display its work.” Bell v. Wilmott Storage Servs., LLC, 12 F.4th 1065, 1072 22 (9th Cir. 2021) (quoting Perfect 10, Inc. v. Giganews, Inc., 847 F.3d 657, 668 (9th Cir. 2017)). 23 Following entry of default, the court takes the complaint’s well-pleaded allegations regarding 24 liability as true. Fair Housing of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). 25 Here, plaintiff holds a copyright registration for the Photograph and provided the 26 registration number and certificate with the complaint. ECF No. 1-4. The court therefore finds 27 the first element satisfied. Plaintiff alleges defendant used an exact replica of the Photograph on 28 its website. ECF No. 1-1 and 1-2. The court therefore finds the second element satisfied. 1 Accordingly, the court finds that the merits of the case favor entry of default judgment. 2 3. Factor Four: The Sum of Money at Stake in the Action 3 Under the fourth Eitel factor, the court considers the amount of money at stake in relation 4 to the seriousness of defendant’s conduct. The Copyright Act provides that a copyright infringer 5 is liable for either the copyright holder’s actual damages and any additional profits of the 6 infringer, or for statutory damages for all infringements involved in the action, with respect to any 7 one work, in a sum of not less than $750 or more than $30,000. 17 U.S.C. § 504(a), (c)(1). 8 Where willfulness is found, statutory damages award may be increased to as much as $150,000. 9 17 U.S.C. § 504(c)(1)(2). “Willful copyright infringement, for purposes of the award of statutory 10 damages, requires the defendant’s knowledge that his conduct constitutes copyright 11 infringement.” Jackson v. Sturkie, 255 F. Supp.2d 1096, 1101 (N.D. Cal. 2003). In this case, 12 plaintiff seeks statutory damages in the amount of $14,275 ($2,855.00 for what would have been 13 the licensing fee, multiplied by a factor of five by reason of defendant’s willful infringement of 14 the Photograph). ECF No. 17-3 at 16. Especially in light of the court’s determination below that 15 statutory damages in this case should be awarded in the reduced amount of $1,500, this factor 16 favors entry of default judgment. 17 4. Factor Five: Possibility of Dispute Concerning Material Facts 18 The facts of this case are relatively straightforward, and plaintiff has provided the court 19 with well-pleaded allegations supporting its claims. The court may assume the truth of well- 20 pleaded facts in the complaint (except as to damages) following the clerk’s entry of default and, 21 thus, there is no likelihood that any genuine issue of material fact exists. See, e.g., Elektra Entm't 22 Group Inc. v. Crawford, 226 F.R.D. 388, 393 (C.D. Cal. 2005) (“Because all allegations in a well- 23 pleaded complaint are taken as true after the court clerk enters default judgment, there is no 24 likelihood that any genuine issue of material fact exists.”); accord Philip Morris USA, Inc., 219 25 F.R.D. at 500; PepsiCo, Inc., 238 F.Supp.2d at 1177. This factor favors entry of default 26 judgment. 27 //// 28 //// 1 5. Factor Six: Whether Default Was Due to Excusable Neglect 2 Upon review of the record before the court, there is no indication that the default was the 3 result of excusable neglect. See PepsiCo, Inc., 238 F.Supp.2d at 1177. Plaintiff served the 4 defendant with the summons and complaint. ECF No. 4. Moreover, plaintiff served defendant by 5 mail with notice of its application for default judgment. ECF No. 17 at 3. Despite sufficient 6 notice of this lawsuit and plaintiff’s intention to seek a default judgment, defendant failed to 7 defend in this action. Thus, the record supports a conclusion that the defendant has chosen not to 8 defend this action, and not that the default resulted from any excusable neglect. Accordingly, this 9 Eitel factor favors the entry of a default judgment. 10 6. Factor Seven: Policy Favoring Decisions on the Merits 11 “Cases should be decided upon their merits whenever reasonably possible.” Eitel, 782 12 F.2d at 1472. However, district courts have concluded with regularity that this policy, standing 13 alone, is not dispositive, especially where a defendant fails to appear or defend itself in an action. 14 PepsiCo, Inc., 238 F.Supp.2d at 1177; see also Craigslist, Inc. v. Naturemarket, Inc., 694 15 F.Supp.2d 1039, 1061 (N.D. Cal. Mar. 5, 2010). Accordingly, although the court is cognizant of 16 the policy favoring decisions on the merits – and consistent with existing policy would prefer that 17 this case be resolved on the merits – that policy does not, by itself, preclude the entry of default 18 judgment. 19 7. Conclusion: Propriety of Default Judgment 20 Upon consideration of all the Eitel factors, the court concludes that plaintiff is entitled to 21 the entry of default judgment against defendant. What remains is the determination of the terms 22 of judgment. 23 C. Terms of Judgment 24 Having found default judgment appropriate, all that remains is the determination of the 25 terms of judgment. 26 A. Statutory Damages 27 As noted above, plaintiff seeks statutory damages in the total amount of $14,275: 28 $2,855.00 for what would have been the licensing fee, multiplied by a factor of five by reason of 1 defendant’s willful infringement of the Photograph. ECF No. 17-3 at 16. For the reasons that 2 follow, the undersigned concludes that damages should be awarded in a reduced amount. 3 Statutory damages exist to “provide adequate compensation to the copyright holder and to 4 deter infringement.” Desire, LLC v. Manna Textiles, Inc., 986 F.3d 1253, 1271 (9th Cir. 2021) 5 (quoting Frank Music Corp. v. Metro-Goldwyn-Mayer Inc., 886 F.2d 1545, 1554 (9th Cir. 6 1989)). They are intended as a “substitute for profits or actual damages” and “should not provide 7 copyright owners a windfall.” Id. “The Ninth Circuit has not adopted uniform criteria for 8 determining the appropriate amount of statutory damages for willful copyright infringement.” 9 Curtis v. Illumination Arts, Inc., 33 F. Supp. 3d 1200, 1217 (W.D. Wash. 2014). To guide the 10 statutory damages analysis, district courts turn to four factors used by other circuits and by district 11 courts within this circuit. Id. (collecting cases). “The four factors are: (1) the infringers’ profits 12 and the expenses they saved because of the infringement; (2) the plaintiff’s lost revenues; (3) the 13 strong public interest in ensuring the integrity of copyright laws; and (4) whether the infringer 14 acted willfully.” Id. 15 The first two factors go to the value of the Photograph: what defendant would have had to 16 pay to license it plus any profits gained by use, and what plaintiff lost by not receiving that 17 licensing fee. Plaintiff may “seek an award of minimum statutory damages without disclosing 18 any damages calculations but, to avoid a potential windfall, it must provide some evidence of its 19 lost profits or [defendant’s] profits if it seeks an award greater than the statutory minimum.” 20 Atari Interactive, Inc. v. Redbubble, Inc., 546 F. Supp. 3d 883, 888–89 (N.D. Cal. 2021), aff’d in 21 part, appeal dismissed in part, No. 21-17062, 2023 WL 4704891 (9th Cir. July 24, 2023). 22 Plaintiff has not provided any evidence or allegations that defendant profited from the use of the 23 Photograph beyond the money saved by avoiding licensing fees. In an attempt to demonstrate the 24 licensing value of the Photograph, plaintiff provided “a Getty estimate for a similar photograph of 25 the Purace volcano that would be licensed for $2,855 for the same manner of usage as defendant 26 used my Photograph.” ECF No. 17-2 at 3 (emphasis added). Getty Images is a stock photograph 27 agency (www.gettyimages.com). 28 //// 1 The court is unpersuaded by plaintiff’s attempt at licensing valuation. The Getty estimate 2 is not reliable evidence of the licensing value of the Photograph at issue in this lawsuit. The 3 Getty image (ECF No. 17-2 at 6) is an entirely different photograph, presumably taken by a 4 different photographer, bearing little visual similarity to plaintiff’s Photograph. Even taking as 5 true plaintiff’s allegation that both are photographs of the Purace volcano in Columbia (see ECF 6 No. 17-2 at 2, 3), the photographs are distinct in composition, color palette, and overall effect. 7 Where the Getty photograph centrally positions the mountain peaks so as to draw the viewer’s 8 eye and visually dominate the image, plaintiff’s Photograph is dominated by the green hills in the 9 foreground. Compare ECF No. 17-2 at 6 (Getty estimate) with ECF No. 1-1 (the Photograph). 10 The mountain range in the background, which presumably includes the volcano, is visually 11 dominated by the green hills below and blue sky above, which fill most of the Photograph. 12 Though plaintiff does not cite any authority for his “similar image” valuation method, the 13 undersigned has identified cases in which district courts used an image offered for license though 14 Getty to determine the value of an unlicensed photograph in a copyright case. See Morrow v. 15 Travelade, Inc., No. 23-cv-04593-NC, 2024 WL 1511904, at *3 (N.D. Cal. Mar. 1, 2024), report 16 and recommendation adopted, No. 23-cv-04593-BLF, 2024 WL 1946674 (N.D. Cal. Mar. 18, 17 2024); McDermott v. NYFireStore.com, Inc., No. 18-cv-10853 AJN SLC, 2021 WL 952455, at 18 *3 (S.D.N.Y. Jan. 15, 2021), report and recommendation adopted, No. 18-CV-10853 (AJN), 2021 19 WL 950507 (S.D.N.Y. Mar. 12, 2021). While this may be an appropriate method in some cases, 20 the court declines to apply it here because the proffered Getty image is not sufficiently similar to 21 the subject Photograph to support a finding of similar licensing value. 22 Plaintiff makes no showing that the Photograph in this case has ever itself been valued for 23 licensing. Because plaintiff has not proved the licensing value of his Photograph, the minimum 24 amount of statutory damages ($750.00) will be assigned. 25 The third and fourth factors governing assessment of statutory damages go to the public 26 interest in deterring copyright infringement and the egregiousness of the defendant’s conduct, and 27 a finding of willfulness may support a damages multiplier. Plaintiff argues that willfulness can be 28 demonstrated by the act of default. ECF No. 17-3 at 16. While it is true that “[a]llegations of 1 willful infringement are deemed to be true on default,” default alone does not justify a multiplier 2 of five. Reiffer v. Shearwater Pac. Cap. Mgmt. LLC, No. 18-cv-06053-JSW (RMI), 2020 WL 3 7048307, at *8 (N.D. Cal. May 13, 2020) (awarding a multiplier of two on default judgment 4 where the defendant defaulted, but also discontinued use of the work when informed of 5 infringement). For default alone, a multiplier of two, “representing a 2 times the licensing fee 6 (one fee for what Defendant would have paid but for his wrongful conduct and another for the 7 alleged willfulness of his conduct), is more appropriate.” Id. Here, the only inference of 8 willfulness comes from the default itself; there is no allegation that defendant failed to 9 discontinue the use of the Photograph once notified of the infringement. 10 For the reasons set forth above, the undersigned concludes that statutory damages are 11 appropriate in a total amount of $1,500. 12 B. Attorneys’ Fees 13 Plaintiff requests attorneys’ fees and costs as prevailing party. The Copyright Act allows 14 for the award of costs to a prevailing party. 17 U.S.C. § 505. Plaintiff’s demand for costs consists 15 of a demand for $494.00, paid as the filing fee in this action, as well as the sum of $92.00, 16 representing the fee for the service of the summons and complaint, for a total of $494.00. The 17 undersigned finds these costs reasonable and substantiated by the record, and recommends they 18 be awarded in full. 19 The Copyright Act also permits the award of reasonable attorney’s fee to the prevailing 20 party. 17 U.S.C. § 505. To assess fees, courts utilize a lodestar analysis comprised of the number 21 of hours reasonably spent multiplied by a reasonable hourly rate. Grove v. Wells Fargo Fin. Cal., 22 Inc., 606 F.3d 577, 582 (9th Cir. 2010). If the documentation outlining the work is inadequate, 23 the court may reduce the award accordingly. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). 24 Here, plaintiff requests 2.2 hours at the rate of $750 for a senior attorney (30+ years of 25 experience), 9.6 hours at the rate of $500 for a junior attorney (8 years of experience), and 2.9 26 hours at the rate of $150 for paralegal work, for a total request of $6,885.00 in fees. ECF No. 17- 27 3 at 24. Plaintiff submitted adequate billing records to justify the hours expended. ECF No. 17-1 28 at 16-19. 1 As to the rate, the court must be guided by the prevailing market rate in the relevant 2 community; courts refer to the prevailing rate in the community for similar work performed by 3 attorneys of comparable skill, experience, and reputation. Ingram v. Oroudjian, 647 F.3d 925, 4 928 (9th Cir. 2011). While affidavits may provide evidence of the prevailing market rate, they 5 are not conclusive. Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 980 (9th Cir. 2008). Courts 6 must also rely on their own familiarity with the market. Ingram, 647 F.3d at 928. Courts base 7 their awarded rates on the standards of the legal community in which the court sits, Barjon v. 8 Dalton, 132 F.3d 496, 500 (9th Cir. 1997), which in this case means the Sacramento division of 9 the Eastern District of California. 10 Plaintiff’s counsel, who is based in New York, supports the requested rates by citing to 11 cases decided in the Central District of California. ECF No. 17-3 at 22-23. The court finds the 12 requested rates excessive for the Sacramento, California market. Recent cases in this district for 13 suits involving specialized areas of law have awarded less. See, e.g., Love v. Tri-Counties Bank, 14 No. 2:22-cv-01761 TLN CKD PS, 2025 WL 444320, at *6 (E.D. Cal. Feb. 10, 2025) (awarding 15 $690 per hour for an attorney with over 40 years of experience, $480 for an attorney with over 30 16 years of experience, $380 for an attorney with over 10 years of experience in a case involving the 17 Real Estate Settlement Procedures Act, and collecting cases); Unit 53, Inc. v. Run Roadlines, Inc., 18 No. 2:24-cv-01718 DJC CSK, 2025 WL 373637, at *2 (E.D. Cal. Feb. 3, 2025) (awarding $635 a 19 partner with more than sixteen years of experience; $620 for an attorney of almost fifteen (15) 20 years of experience; $370 for an associate with over three (3) years of experience; and $310 for 21 an associate with over two (2) years of experience). 22 Based on a review of recent local rates, the court concludes that plaintiff is entitled to a 23 local rate of $690 for the senior attorney (30+ years of experience) (2.2 hours = $1,518.00), $370 24 for a junior attorney (8+ years of experience) (9.6 hours = $3,552.00), and $150 for paralegal 25 work (2.9 hours = $435.00), for a total award of in $5,505.000 in fees. 26 IV. Conclusion 27 It is RECOMMENDED THAT: 28 1. Plaintiff’s motion for default judgment (ECF No. 17) be GRANTED; 1 2. Plaintiff be awarded $1,500.00 in statutory damages, $494.00 in costs, and $5,505.00 2 || in attorneys’ fees, for a total award of $7,499.00. 3 3. This case be closed. 4 These findings and recommendations are submitted to the United States District Judge 5 || assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1). Within twenty one days 6 || after being served with these findings and recommendations, any party may file written 7 || objections with the court and serve a copy on all parties. Id.; see also Local Rule 304(b). Such a 8 | document should be captioned “Objections to Magistrate Judge’s Findings and 9 || Recommendations.” Any response to the objections shall be filed with the court and served on all 10 || parties within fourteen days after service of the objections. Local Rule 304(d). Failure to file 11 || objections within the specified time may waive the right to appeal the District Court’s order. 12 | Turner v. Duncan, 158 F.3d 449, 455 (9th Cir. 1998); Martinez v. YIst, 951 F.2d 1153, 1156-57 13 | (9th Cir. 1991). 14 | DATED: February 27, 2025 ~ 15 thin Chane ALLISON CLAIRE 16 UNITED STATES MAGISTRATE JUDGE 17 18 19 20 21 22 23 24 25 26 27 28 1]