Opinion
Civil Action No. 3:03-CV-2018-L.
June 22, 2004
FINDINGS, CONCLUSIONS, RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
Pursuant to the District Court's Order of Reference, filed June 3, 2004, Plaintiffs' Motion for Entry of Default Against Defendant Cedric Lyons and Brief in Support, filed May 26, 2004, was referred to the undersigned United States Magistrate Judge for hearing, if necessary, and to submit proposed findings and recommendation for disposition of the motion. Defendant did not file a response to the motion.
The Court held a hearing on this matter on Monday, June 21, 2004, at 10:00 a.m. Defendant did not personally appear as ordered, but his counsel was present. Based on the motion, the oral arguments, and the applicable law, the Court is of the opinion that Plaintiff's Motion for Entry of Default Against Defendant Cedric Lyons should be GRANTED.
I. BACKGROUND
This is an action for copyright infringement arising out of the alleged unauthorized copying and distribution of Plaintiffs' copyrighted sound recordings. Plaintiffs allege that without their permission, Defendant used an online media distribution system to download copyrighted recordings, to distribute those recordings, and/or to make those recordings available for distribution to others.Plaintiffs served Defendant with discovery requests, including interrogatories, requests for admissions, and requests for production of documents. Although Plaintiffs agreed to an extension of the time for response to the discovery requests, Defendant failed to respond by the agreed deadline. Subsequently, on April 9, 2004, Plaintiffs filed a motion to compel responses and to have the requested admissions deemed admitted for failure to timely respond. According to the certificate of conference in Plaintiffs' motion, Defendant's counsel had advised Plaintiffs' counsel that Defendant had not been responding to calls and letters. By Order dated April 13, 2004, this Court set a hearing on the motion and ordered Defendant to file a written response prior to the hearing. The April 13, 2004 Order expressly directed Defendant to personally appear at the hearing and warned that his failure to attend would result in appropriate sanctions.
Defendant did not file a response to the motion or appear in person at the May 6, 2004 hearing as ordered. Defendant's counsel did appear at the hearing and advised the Court that his client had not returned his calls and letters. Counsel verified that he had sent a copy of the Court's Order to the address on Harvell Drive in Cedar Hill, Texas, which had been provided by his client. Counsel also advised that he had moved to withdraw from the case based on his inability to communicate with his client.
By Order dated May 6, 2004, the Court granted Plaintiffs' motion to compel and ordered Defendant to respond to Plaintiffs' discovery requests no later than May 20, 2004. The Court also entered an order that the requested admissions be deemed admitted. Finally, the Court directed the Clerk of Court to serve the May 6, 2004 Order on Defendant at the Harvell Drive address via certified mail, return receipt requested, and regular mail. On May 12, 2004, the Clerk filed the return receipt bearing Defendant's signature on May 8, 2004.
On May 26, 2004, Plaintiffs filed the instant motion for entry of default judgment based on Defendant's failure to serve responses by May 20, 2004 in accordance with the Court's order. By Order dated June 4, 2004, this Court again set a hearing on the motion, ordered a written response, and ordered that Defendant appear in person at the hearing. The Order expressly warned Defendant that his failure to attend the hearing would result in appropriate sanctions. The Order also directed the Clerk of Court to serve the Order on Defendant at the Harvell Drive address via certified mail, return receipt requested, and regular mail.
Defendant failed to file a response to the motion or to appear at the June 21, 2004 hearing (either in person or through counsel) as ordered. Although the docket does not reflect the filing of a return receipt, neither does it reflect that the regular mail was returned as undeliverable.
II. ANALYSIS
A. Default Judgment
Plaintiff moves under FED. R. CIV. P. 37(b)(2) for an order rendering a default judgment against Defendant. Pursuant to Rule 37(b)(2)(C), a court may award default judgment if a party fails to obey an order of the court or permit discovery. See FED. R. CIV. P. 37(b)(2). While Rule 37 allows for the entry of a default judgment as a sanction, "[l]itigation-ending sanctions are, by their very nature, the last resort." Fuqua v. Horizon/CMS Healthcare Corp., 199 F.R.D. 200, 204 (N.D. Tex. 2000) (citing FDIC v. Conner, 20 F.3d 1376, 1380 (5th Cir. 1994)). "Nevertheless, in certain circumstances, they are justified `not merely to penalize those whose conduct may be deemed to warrant such a sanction, but to deter those who might be tempted to such conduct in the absence of such a deterrent.'" Id. (citing National Hockey League v. Metropolitan Hockey Club, 427 U.S. 639, 643 (1976)). "[W]here a district court awards default judgment as a discovery sanction, two criteria must be met." United States v. $49,000 Currency, 330 F.3d 371, 376 (5th Cir. 2003) (citing Batson v. Neal Spelce Associates, Inc., 765 F.2d 511, 514 (5th Cir. 1985) (discussing the criteria to be used when reviewing a district court's dismissal of a claim as a Rule 37 sanction)). "First, the penalized party's discovery violation must be willful." Id. "Also, the drastic measure is only to be employed where a lesser sanction would not substantially achieve the desired deterrent effect." Id. "The reviewing court may also consider whether the discovery violation prejudiced the opposing party's preparation for trial, and whether the client was blameless in the violation." Id.
Rule 37(b)(2)(C) states
If a party . . . fails to obey an order to provide or permit discovery, . . . the court in which the action is pending may make such orders in regard to the failure as are just, and among others the following:
. . .
(C) An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party[.]
Based on the facts of this case, the Court finds that Defendant's conduct is willful. On April 13, 2004, this Court clearly ordered Defendant to file a written response and to personally appear at the May 6, 2004 hearing to explain his failure to respond to Plaintiffs' discovery requests. Despite the Court's order, Defendant failed to appear. Defendant's counsel appeared at the hearing and stated that his client would not return his calls and correspondence. This Court's May 6, 2004 Order required Defendant to provide responses to written discovery requests by May 20, 2004. Despite Defendant's personal receipt of this Order, as evidenced by his signature on the receipt, Defendant has failed to provide such discovery to date. Moreover, the Court ordered Defendant to file a response and to appear in person for the hearing on the instant motion; Defendant failed to do so. Based on the procedural history of this case, there is no reason to believe that Defendant's failures to follow the Court's orders were due to anything other than Defendant's own decisions and actions. Defendant's willful disregard of this Court's orders satisfies the first criterion for entering a default judgment against him. See $49,000 Currency, 330 F.3d at 376.
Next, the Court considers whether a less drastic sanction than entering a default judgment against Defendant would "substantially achieve the desired deterrent effect." Id. First, the Court's April 13, 2004 and June 4, 2004 orders specifically put Defendant on notice that sanctions would be entered for failure to comply. After Defendant's failure to comply with the April 13, 2004, the Court imposed less drastic sanctions by ordering that the requests for admissions be deemed admitted. Nevertheless, Defendant subsequently disregarded two more orders of this Court, i.e., the May 6, 2004 order to provide responses by May 20, 2004 and the June 4, 2004 order to file a response and to appear in person at the hearing, without explanation. Based on Defendant's continued willful recalcitrance and blatant disregard of court orders, the Court finds that a lesser sanction than default judgment would not substantially achieve the necessary deterrent effect. See Fisher, 105 F.R.D. at 519 ("willful disregard and misconduct justified dismissal"). In this case, dismissal is necessary not only to penalize Defendant for his conduct, "but to deter those who might be tempted to such conduct in the absence of such a deterrent.'" Fuqua, 199 F.R.D. at 204. The ineffectiveness of a lesser sanction satisfies the second criterion. See $49,000 Currency, 330 F.3d at 376.
In addition, the Court also considers blame as a factor. See id.; McLane Foodservice, Inc. v. Hawkins, 2004 WL 350667, *2 (N.D.Tex. Feb. 25, 2004). It is apparent, and the Court so finds, that Defendant is solely to blame for the discovery violations. Despite an order transmitted to him directly from the Court, he failed to personally appear as directed to explain his failures to participate in discovery. Moreover, he has refused, and apparently continues to refuse, to communicate with his counsel, thereby obstructing counsel's efforts to file discovery responses on Defendant's behalf. Accordingly, a lesser sanction would not substantially achieve the necessary deterrent effect in this case, and default judgment is appropriate.
B. Damages Attorneys' Fees
Plaintiffs' motion for entry of default judgment does not specify the amount of damages which Plaintiffs seek nor provide any evidence in support. In their complaint, Plaintiffs seek injunctive relief, "statutory damages for each infringement of each Copyrighted Recording pursuant to 17 U.S.C. § 504," costs, and reasonable attorneys' fees. Complaint at 4-5. "If, in order to enable the court to enter [default] judgment or to carry it into effect, it is necessary to take an account or to determine the amount of damages . . . the court may conduct such hearings or order such references as it deems necessary and proper." FED. R. CIV. P. 55(b)(2); see also James v. Frame, 6 F.3d 307, 310 (5th Cir. 1993); Frame v. S-H, Inc., 967 F.2d 194, 204 (5th Cir. 1992). "In general, statutory damages should not be awarded by default judgment absent a hearing or detailed affidavits establishing the necessary facts and that the amount claimed is a liquidated sum or one capable of mathematical precision." Kingvision Pay-Per-View, Ltd. v. Valles et al., 2001 WL 682205, * 1 (W.D. Tex. Mar. 30, 2001) ( citing United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir. 1979); see also James, 6 F.3d at 310.
Because the Court has no evidence or affidavits before it regarding the amount of damages to be awarded in this case, applications for damages, costs and fees shall be submitted as directed below. After receipt of the applications and responses, if any, the Court will determine whether an evidentiary hearing is required: Accordingly, it is hereby
ORDERED that Plaintiffs shall submit an application for damages supported by citations to relevant authorities, detailed affidavits and documentary evidence no later than July 6, 2004. Plaintiffs shall also submit applications for costs and reasonable expenses and attorney's fees supported by citations to relevant authorities, affidavits and billing records no later than July 6, 2004. Finally, Plaintiffs shall also submit a proposed form of judgment to the Court no later than July 6, 2004. It is further
ORDERED that Plaintiffs shall serve the applications and proposed judgment form on Defendant personally at 1218 Harvell Drive, Cedar Hill, Texas 75104 both certified mail, return receipt requested, and regular mail, in addition to service on Defendant's counsel. It is further
ORDERED that Defendant may file responses supported by citations to relevant authorities, affidavits and evidence to the applications for damages and costs and fees no later than July 16, 2004. Defendant may also submit a proposed form of judgment no later than July 16, 2004. It is
ORDERED that a file-stamped copy of any filed pleading must be hand-delivered on the same day it is filed to the undersigned U.S. Magistrate Judge's chambers on the 15th Floor, Room 1567. Hand-delivery ensures that the Court's receipt of the pleading is not delayed for any reason. It is also ORDERED that the U.S. District Clerk's Office shall serve a copy of these Findings, Conclusions and Recommendations on Defendant CEDRIC LYONS via regular mail and certified mail, return receipt requested, at his current address: 1218 Harvell Drive, Cedar Hill, Texas 75104.