Opinion
1:23-CV-01247-DII
08-02-2024
BEE CREEK PHOTOGRAPHY, Plaintiff v. FRONKS LLC, Defendant
REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
SUSAN HIGHTOWER, UNITED STATES MAGISTRATE JUDGE
TO: THE HONORABLE DISTRICT COURT
Before the Court is Plaintiff Bee Creek Photography's Motion for Default Judgment, filed April 1, 2024 (Dkt. 12). By Text Order entered April 16, 2024, the District Court referred the motion to this Magistrate Judge for a report and recommendation, pursuant to 28 U.S.C. § 636(b)(1)(B), Federal Rule of Civil Procedure 72, and Rule 1(d) of Appendix C of the Local Rules of the United States District Court for the Western District of Texas (“Local Rules”).
I. Background
On October 17, 2023, Bee Creek Photography sued Fronks LLC, alleging copyright infringement. Complaint, Dkt. 1. Bee Creek is a sole proprietorship operated by a Texas professional photographer, and Fronks is a limited liability company with its principal place of business in Austin, Texas. Id. ¶¶ 5-6.
Rule 17(b)(3) provides that capacity to sue or be sued for a sole proprietorship is determined by the law of the state where the court is located. Texas permits an “individual doing business under an assumed name [to] sue or be sued in its . . . assumed or common name for the purpose of enforcing for or against it a substantive right.” TEX. R. CIV. P. 28. Bee Creek may sue under its assumed name.
Bee Creek alleges that it owns U.S. Copyright Registration No. VAu 1-259-726 for a photograph of the Houston skyline (“Photograph”). Id. ¶¶ 2, 12, 16. Bee Creek alleges that Fronks displayed the Photograph on its Facebook page without permission on June 1, 2017. Id. ¶¶ 23-24. Bee Creek alleges that it discovered the Photograph on Fronks' page on October 9, 2022 and informed Fronks that it was infringing Bee Creek's copyright on January 18, 2023, but Fronks has not removed the Photograph from its Facebook page. Id. ¶¶ 25, 42.
Bee Creek served Fronks on October 23, 2023, and moved to extend Fronks' time to answer on November 10, 2023, stating that the parties were engaged in settlement discussions. Dkts. 6, 7. By Text Order entered November 13, 2023, the District Court granted the motion and extended Fronks' time to answer to December 13, 2023. Fronks has not appeared and has failed to plead, respond, or otherwise defend this case.
The Clerk of Court entered default against Fronks on March 1, 2024. Dkt. 10. Bee Creek now asks the Court to enter a default judgment against Fronks and award $30,000 in statutory damages for willful copyright infringement, $1,260 in attorneys' fees, and $440 in costs. Dkt. 12 at 1.
Bee Creek's motion does not comply with Local Rule CV-7(c), which states: “Any legal authority in support of a motion must be cited in the motion, and not in a separate brief.” The Court reminds Bee Creek that any future noncompliant pleadings will be stricken. Bee Creek Photography v. Lonestar Cap. Holdings LLC, No. 1:23-CV-1271-DII, 2024 WL 3158165, at *1 (W.D. Tex. June 6, 2024), R. & R. adopted, 2024 WL 3152387 (W.D. Tex. June 24, 2024).
II. Legal Standard
Under Rule 55, a default occurs when a defendant fails to plead or otherwise respond to a complaint within the time required. N.Y. Life Ins. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996). After the defendant's default has been entered by the clerk of court, the plaintiff may apply for a judgment based on the default. Id. Even when the defendant technically is in default, however, a party is not entitled to a default judgment as a matter of right. Lewis v. Lynn, 236 F.3d 766, 767 (5th Cir. 2001). There must be a sufficient basis in the pleadings for the judgment entered. Nishimatsu Constr. Co. v. Hous. Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975).
After entry of default, the plaintiff's well-pleaded factual allegations are taken as true, except as to damages. United States v. Shipco Gen., Inc., 814 F.2d 1011, 1014 (5th Cir. 1987); Nishimatsu, 515 F.2d at 1206 (stating that the defendant, by default, “admits the plaintiff's well-pleaded allegations of fact”). But a default “is not treated as an absolute confession by the defendant of his liability and of the plaintiff's right to recover,” and the defendant “is not held to admit facts that are not well-pleaded or to admit conclusions of law.” Nishimatsu, 515 F.2d at 1206.
Entry of a default judgment is within the court's discretion. Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998). Under Rule 55(b)(2), a court may hold a hearing to conduct an accounting, determine the amount of damages, or establish the truth of any allegation, but a hearing is unnecessary if the court finds it can rely on detailed affidavits and other documentary evidence to determine whether to grant a default judgment. James v. Frame, 6 F.3d 307, 310 (5th Cir. 1993). The Court finds that a hearing is unnecessary.
III. Analysis
In considering any motion for default judgment, a court must examine jurisdiction, liability, and damages. Rabin v. McClain, 881 F.Supp.2d 758, 763 (W.D. Tex. 2012).
A. Jurisdiction
When a party seeks entry of a default judgment under Rule 55, “the district court has an affirmative duty to look into its jurisdiction both over the subject matter and the parties.” Sys. Pipe & Supply, Inc. v. M/V VIKTOR KURNATOVSKIY, 242 F.3d 322, 324 (5th Cir. 2001) (citation omitted). Because Bee Creek alleges copyright infringement under the Copyright Act, it invokes the Court's federal question jurisdiction under 28 U.S.C. § 1331.
Generally, a court may exercise general personal jurisdiction over a corporation in (1) the state of incorporation and (2) the state where it has its principal place of business. Frank v. P N K (Lake Charles) L.L.C., 947 F.3d 331, 337 (5th Cir. 2020). This test applies to a limited liability company as well as a corporation. Id. at 337 n.10. The Court has personal jurisdiction over Fronks because Bee Creek alleges that Fronks is a Texas limited liability company with its principal place of business in Texas. Dkt. 1 ¶ 6.
B. Liability
The Court next considers whether a default judgment is procedurally warranted and the Complaint sufficiently sets forth facts showing that Bee Creek is entitled to relief. United States v. 1998 Freightliner Vin #:1FUYCZYB3WP886986 , 548 F.Supp.2d 381, 384 (W.D. Tex. 2008).
1. Default Judgment is Procedurally Warranted
To determine whether default judgment is procedurally warranted, courts consider six factors:
(1) whether material issues of fact are at issue;
(2) whether there has been substantial prejudice;
(3) whether the grounds for default are clearly established;
(4) whether the default was caused by a good faith mistake or excusable neglect;
(5) the harshness of a default judgment; and
(6) whether the court would think itself obliged to set aside the default on the defendant's motion.Lindsey, 161 F.3d at 893.
The Court finds that default judgment is procedurally warranted. First, there are no material facts in dispute because Fronks has not filed an answer or any responsive pleadings. Nishimatsu, 515 F.2d at 1206 (“The defendant, by his default, admits the plaintiff's well-pleaded allegations of fact ....”). Second, Fronks' “failure to respond threatens to bring the entire process to a halt, effectively prejudicing [Bee Creek's] interest.” RLI Ins. v. 2 G Energy Sys., LLC, 581 F.Supp.3d 817, 824 (W.D. Tex. 2020). Third, the grounds for default are clearly established. The Clerk has entered default against Fronks, which was properly served and has “failed to appear and participate at all, much less timely file a responsive pleading.” Can Cap. Asset Servicing, Inc. v. Walker, No. 1:17-CV-1147-RP, 2019 WL 2298703, at *2 (W.D. Tex. May 30, 2019). Fourth, the Court cannot find a good-faith mistake or excusable neglect because Fronks has failed to appear. Fifth, although Bee Creek requests damages, it seeks only statutory damages to which it is entitled under federal law, limiting the harshness of a default judgment. Sixth, “the Court is not aware of any facts that would obligate it to set aside the default if challenged” by Fronks. Id. For these reasons, the Court finds that default judgment is procedurally warranted.
2. There Is a Sufficient Basis for Judgment in the Pleadings
To prevail on its claim for copyright infringement, Bee Creek must prove ownership of a valid copyright and copying of constituent elements of the work that are original. BWP Media USA, Inc. v. T&S Software Assocs., Inc., 852 F.3d 436, 439 (5th Cir. 2017). A certificate of registration is prima facie evidence both that a copyright is valid and that the registrant owns the copyright. Batiste v. Lewis, 976 F.3d 493, 501 (5th Cir. 2020); 17 U.S.C. § 410(c).
To show copying, a plaintiff must prove factual copying and substantial similarity. Amazing Spaces, Inc. v. Metro Mini Storage, 608 F.3d 225, 251 (5th Cir. 2010). A court may infer factual copying from “(1) proof that the defendant had access to the copyrighted work prior to creation of the infringing work and (2) probative similarity.” Peel & Co. v. Rug Mkt., 238 F.3d 391, 394 (5th Cir. 2001). “A strong showing of probative similarity can make up for a lesser showing of access,” and factual copying may be shown without proof of access if the works are “strikingly similar.” Batiste, 976 F.3d at 502. The Copyright Act provides for enhanced damages when the “infringement was committed willfully.” 17 U.S.C. § 504(c)(2). The Fifth Circuit construes “willful” to encompass knowing and reckless infringement. Graper v. Mid-Continent Cas. Co., 756 F.3d 388, 395 (5th Cir. 2014).
Bee Creek alleges that:
(1) It owns a valid copyright in the Photograph, Dkt. 1 ¶¶ 45-46;
(2) Bee Creek published the Photograph on October 6, 2015, id. ¶ 14;
(3) Fronks knowingly displayed the Photograph on its Facebook page without license or permission on June 1, 2017, id. ¶¶ 23, 26, 28, 32; and
(4) Fronks willfully continued to display the Photograph after Bee Creek notified it of the infringement, id. ¶¶ 42-43.Bee Creek attached as exhibits to its Complaint the Photograph (left) and a screen capture of the allegedly infringing photograph on Fronks' Facebook page (right):
(Image Omitted)Dkts. 1-1, 1-2. It also attached the Certificate of Registration to its motion for default judgment. Dkt. 12-5 at 2.
By failing to answer, Fronks has admitted Bee Creek's alleged facts. Nishimatsu, 515 F.2d at 1206. The Court finds that these well-pleaded facts are sufficient to establish that Bee Creek owns a valid copyright in the Photograph and that Fronks copied the Photograph. They also are sufficient to establish that Fronks acted willfully when it infringed Bee Creek's copyright.
C. Relief
Having found that the motion for default judgment should be granted and judgment entered in favor of Bee Creek, the Court must determine the appropriate relief.
1. Statutory Damages
The Copyright Act permits a plaintiff to recover statutory damages “with respect to any one work . . . in a sum of not less than $750 or more than $30,000 as the court considers just.” 17 U.S.C. § 504(c)(1). When, as here, a court finds that the copyright infringement was committed willfully, “the court in its discretion may increase the award of statutory damages to a sum of not more than $150,000.” 17 U.S.C. § 504(c)(2). A court's discretion to set the award is “virtually unfettered.” Gunshowtees.com, LLC v. Rallis, No. 1:18-CV-796-RP, 2019 WL 9654864, at *4 (W.D. Tex. June 28, 2019). Courts may consider both restitution and deterrence to determine a “just” award. Rodriguez v. Avalos, No. 5:19-CV-114-XR, 2019 WL 13472242, at *1 (W.D. Tex. July 1, 2019).
The Court finds that Bee Creek is entitled to statutory damages for Fronks' willful infringement of the Photograph. Bee Creek asks for $30,000 in statutory damages, but offers no evidence of its licensing fees or other actual damages. In two similar recent cases, the Court awarded Bee Creek $3,500 per photograph in statutory damages for willful infringement. Bee Creek Photography v. TexasRealFood, Inc., No. 1:23-CV-1056-RP, 2024 WL 3100762, at *1 (W.D. Tex. June 6, 2024), R. & R. adopted, 2024 WL 3093487 (W.D. Tex. June 21, 2024); Lonestar Cap. Holdings, 2024 WL 3158165, at *1. This Magistrate Judge recommends that the District Court also award Bee Creek $3,500 in statutory damages for Fronks' willful infringement.
2. Attorneys' Fees and Costs
The Copyright Act permits a court in its discretion to award attorneys' fees and costs to a prevailing party. 17 U.S.C. § 505. An award of fees in a copyright case is “the rule rather than the exception.” Virgin Records Am., Inc. v. Thompson, 512 F.3d 724, 726 (5th Cir. 2008) (citation omitted). A court must make a “particularized, case-by-case assessment” and may use “several nonexclusive factors to inform its fee-shifting decisions: frivolousness, motivation, objective unreasonableness, and the need in particular circumstances to advance considerations of compensation and deterrence.” Kirtsaeng v. John Wiley & Sons, Inc., 579 U.S. 197, 202 (2016) (cleaned up). The Court finds that compensation and deterrence warrant a fee award here.
Courts in the Fifth Circuit use the “lodestar method” to calculate an appropriate fee award. Cruz v. Maverick Cnty., 957 F.3d 563, 574 (5th Cir. 2020). The lodestar amount is calculated by multiplying the number of hours an attorney reasonably spent on the case by an appropriate hourly rate: the market rate in the community for the work. Id. “[T]here is a ‘strong presumption' that the lodestar figure is reasonable.” Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 554 (2010). After calculating the lodestar amount, a court may enhance or decrease the amount of fees based on the factors set forth in Johnson v. Ga. Highway Exp., Inc. 488 F.2d 714 (5th Cir. 1974), abrogated on other grounds by Blanchard v. Bergeron, 489 U.S. 87 (1989). The party seeking fees has the burden to show the reasonableness of the hours billed and the exercise of reasonable billing judgment. Walker v. U.S. Dep't of Hous. & Urb. Dev., 99 F.3d 761, 769 (5th Cir. 1996).
The Johnson factors are: (1) the time and labor required; (2) the novelty and difficulty of the issues in the case; (3) the skill requisite to perform the legal services properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee charged for those services in the relevant community; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. Johnson, 488 F.2d at 717-19.
Bee Creek submits records showing that its attorney, Craig B. Sanders, billed 1.8 hours of work at his customary rate for copyright infringement matters of $700 per hour. Dkt. 12-1 ¶¶ 22, 24. Sanders has thirty years of experience in federal litigation, “with a heavy focus on intellectual property matters including copyright and trademark.” Id. ¶ 23. Finding that the rate and hours billed are reasonable and do not warrant a reduction, the Court calculates the lodestar at $1,260 and declines to adjust it.
Bee Creek also asks for $440 in costs: $400 for the filing fee and $40 for private service of process. Dkt. 12-1 at 8. The Copyright Act permits an award of “full costs,” 17 U.S.C. § 505, but does not allow a court to award litigation expenses beyond the categories of costs enumerated in 28 U.S.C. § 1920. Rimini St., Inc. v. Oracle USA, Inc., 586 U.S. 334, 336 (2019).
Bee Creek may recover the filing fee under § 1920(1), which was $402 when it filed its Complaint, but costs for private process servers are not recoverable without a showing of exceptional circumstances. Honestech, Inc. v. Sonic Sol'ns, 725 F.Supp.2d 573, 585 (W.D. Tex. 2010). The Court finds that Bee Creek has not shown exceptional circumstances to justify awarding the private process server fee, so it is entitled to $402 in costs.
IV. Recommendation
This Magistrate Judge RECOMMENDS that the District Court GRANT Plaintiff Bee Creek Photography's Motion for Default Judgment (Dkt. 12) and ENTER DEFAULT JUDGMENT under Rule 55(b) against Defendant Fronks LLC.
This Magistrate Judge FURTHER RECOMMENDS that the District Court award Bee Creek $3,500 in statutory damages, $1,260 in attorneys' fees, and $402 in costs.
It is ORDERED that the Clerk remove this case from this Magistrate Judge's docket and return it to the docket of the Honorable District Court.
V. Warnings
The parties may file objections to this Report and Recommendation. A party filing objections must specifically identify those findings or recommendations to which objections are being made. The District Court need not consider frivolous, conclusive, or general objections. See Battle v. U.S. Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987). A party's failure to file written objections to the proposed findings and recommendations contained in this Report within fourteen (14) days after the party is served with a copy of the Report shall bar that party from de novo review by the District Court of the proposed findings and recommendations in the Report and, except on grounds of plain error, shall bar the party from appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the District Court. See 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140, 150-53 (1985); Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc).