Opinion
22-CV-6786 (PAE) (RWL)
06-20-2023
MICHAEL STOKES, Plaintiff, v. MILKCHOCOLATENYC LLC, Defendant.
REPORT AND RECOMMENDATION TO HON. PAUL A. ENGELMAYER:
DEFAULT JUDGMENT
ROBERT W. LEHRBURGER, United States Magistrate Judge.
Plaintiff Michael Stokes (“Plaintiff” or “Stokes”), a professional photographer, filed this copyright infringement case against Defendant MilkChocolateNYC LLC (“Defendant” or “MilkNYC”), claiming that MilkNYC copied, displayed, and used one of Stokes' photographs without authorization. MilkNYC failed to answer the Complaint or otherwise appear. Stokes now moves for entry of default judgment awarding him injunctive relief, statutory damages, attorney's fees and costs, and pre-judgment interest. For the reasons set forth below, I recommend that the Court enter default judgment awarding the relief requested with the exception of pre-judgment interest.
The facts are drawn from the Complaint (Dkt. 1) (“Compl.”), the Declaration of Plaintiff Michael Stokes, dated February 24, 2023 (Dkt. 19) (“Stokes Decl.”); and the Declaration of Craig B. Sanders, Plaintiff's counsel, dated February 27, 2023 (Dkt. 18) (“Sanders Decl.”).
Stokes is a successful professional photographer. (See generally Stokes Decl. ¶¶ 4-16.) Although he has occasionally licensed his photographs, his business does not rely primarily on ad hoc licensing. (Id. ¶ 8.) Instead, Stokes has focused on creating books of photographs. (Id. ¶ 9.) For the last decade, Stokes has photographed amputeeveterans, with the goal of casting amputee-veterans in a positive light as an inspiration to others and a means of raising money for charities that offer assistance to wounded veterans and their families. (Id. ¶¶ 11-15.) His work has been reported on and recognized by reputed media, including, for example, CNN, Buzzfeed, Redbook, MTV, The Tonight Show, and the View. (Id. ¶ 16.)
Stokes took the photograph at issue in the instant case (the “Photograph”). The Photograph, created in 2014, depicts a person named Raciel Castro in firefighter gear. (Id. ¶ 20.) There is no indication that Stokes is an amputee or a veteran, likely because it was taken some time ago when Stokes was less “selective” about his subject matter. (Compl. ¶ 41.) In the Photograph, Castro's head is tilted downward, his torso is bared, and his pants are not fully closed at the top. (See Compl. Ex. 1.) Stokes obtained a copyright registration for the Photograph on October 21, 2015. (Stokes Decl. ¶ 21 and Ex. 1.)
Stokes has not licensed or authorized Defendant to copy, use, or otherwise exploit the Photograph, and would not have done so if asked. (Id. ¶ 29.) Nonetheless, Defendant has copied and used the Photograph on Twitter to promote its business catering to gay men, including hosting “hot events for sexy-cool men of flavas [sic.] in NYC, Ft Lauderdale, DC & Seattle,” among others. (Id. ¶ 22; see also id. ¶¶ 26-27; Compl. Ex. 2 (screenshots).) Defendant's Twitter posts prominently display the Photograph with superimposed text promoting Defendant's events, such as “MilkChocolateNYC.com hosts INTERRACIAL MEAT” in Washington, DC and “Naked vs Jockstraps/Briefs” in Manhattan. (See Compl. Ex. 2.)
Stokes' original Photograph bore a watermark with his business logo. (Stokes Decl. ¶ 35; see Compl. Ex. 1.) Defendant's display of the Photograph does not include the watermark, which appears to have been cropped out. (Stokes Decl. ¶ 35; see Compl. Ex. 2.)
Stokes is concerned that MilkNYC's exploitation of the Photograph will adversely impact his reputation and livelihood. As Stokes explains, “I would lose all credibility with my models and military contacts if they came to believe that I had approved Defendant's use of the Photograph.” (Stokes Decl. ¶ 30.) That is because Stokes' models expect that his photographs of them will be “tasteful” and “published [with] discretion,” rather than “sold off piecemeal, for another's commercial purpose ... particularly so where, as here, my Photograph has been expropriated and captioned with pornographic words to appeal to prurient interests.” (Id.)
Procedural Background
Stokes commenced this action on August 9, 2022, alleging Defendant's infringement of the Photograph in violation of the Copyright Act, 17 U.S.C. § 501, et seq. (Dkt. 1.) A copy of the summons and Complaint was served on Defendant by delivery to its registered agent on September 16, 2022 and by certified mail to Defendant's place of business on September 23, 2022. (See Dkts. 8-9 (affidavits of service); see also Sanders Decl. ¶ 5.) On December 15, 2022, the Court issued an Order noting that Defendant had failed to answer, and requested a status update from the parties by December 20, 2022. (Dkt. 10.) On December 19, 2022, Plaintiff's counsel responded to the Court, explaining that they had not heard anything from Defendant and that they therefore would move for default judgment. (Dkt. 14.) That same day Stokes applied for a certificate of default, which the Clerk of Court issued on January 27, 2023. (Dkts. 12-13, 15.)
On February 27, 2023, Stokes filed the instant motion for default judgment and a certificate of service of same by mail. (Dkts. 17-22.) The District Judge then referred the motion to me for a report and recommendation. (Dkt. 23.) On February 28, 2023, I issued an order directing that any response to the motion must be filed by March 17, 2023 and that, absent a response, the Court would resolve the motion on the existing record. (Dkt. 24.) Stokes filed a certificate indicating service of the Court's order on Defendant by mail the same day it issued. (Dkt. 25.) Defendant did not file any response and has not appeared since.
Legal Standards
When a party seeking judgment or affirmative relief shows by affidavit that the opposing party has failed to plead or otherwise defend, the Clerk of Court must enter a default. Fed.R.Civ.P. 55(a). The non-defaulting party may then apply to the court to obtain default judgment. Fed.R.Civ.P. 55(b).
“In determining whether to grant a motion for default judgment, a court within this district considers three factors: ‘(1) whether the defendant's default was willful; (2) whether defendant has a meritorious defense to plaintiff's claims; and (3) the level of prejudice the non-defaulting party would suffer as a result of the denial of the motion for default judgment.'” Nespresso USA, Inc. v. Africa America Coffee Trading Co. LLC, No. 15-CV-5553, 2016 WL 3162118, at *2 (S.D.N.Y. June 2, 2016) (quoting Indymac Bank, F.S.B. v. National Settlement Agency, Inc., No. 07-CV-6865, 2007 WL 4468652, at *1 (S.D.N.Y. Dec. 20, 2007)); Mason Tenders District Council v. Duce Construction Corp., No. 02-CV-9044, 2003 WL 1960584, at *2 (S.D.N.Y. Apr. 25, 2003). Ultimately, the entry of a default judgment is entrusted to the sound discretion of the district court. Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993).
The court also “must determine whether the plaintiff has pleaded facts supported by evidence sufficient to establish the defendant's liability with respect to each cause of action.” Nespresso USA, 2016 WL 3162118 at *2; accord Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) (“[A district court] is also required to determine whether [plaintiff's] allegations establish [defendant's] liability as a matter of law”). “It is an ancient common law axiom that a defendant who defaults thereby admits all well-pleaded factual allegations contained in the complaint.” City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) (internal quotation marks omitted). A factual allegation will be deemed not well-pled “only in very narrow, exceptional circumstances.” Ideavillage Products Corp. v. Bling Boutique Store, No. 16-CV-9039, 2018 WL 3559085, at *2 (S.D.N.Y. July 24, 2018) (internal quotation marks and citation omitted). That said, a court “must still satisfy itself that the plaintiff has established a sound legal basis upon which liability may be imposed.” Jemine v. Dennis, 901 F.Supp.2d 365, 373 (E.D.N.Y. 2012) (citing Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)).
Once liability is determined, the plaintiff bears the burden of establishing an amount of damages with reasonable certainty. RGI Brands LLC v. Cognac Brisset-Aurige, S.A.R.L., No. 12-CV-1369, 2013 WL 1668206, at *6 (S.D.N.Y. Apr. 18, 2013) (collecting cases), R&R adopted, 2013 WL 4505255 (S.D.N.Y. Aug. 23, 2013); see also Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997). The court is charged with “‘determining the proper rule for calculating damages ... and assessing plaintiff's evidence supporting the damages.'” Tiffany (NJ) Inc. v. Luban, 282 F.Supp.2d 123, 124 (S.D.N.Y. 2003) (quoting Credit Lyonnais Securities (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)). The damages award on a default judgment “must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed.R.Civ.P. 54(c).
In determining damages after default judgment, the Court need not hold a hearing and may rely on affidavits, documentary evidence, and other evidence “as long as it ensured there was a basis for the damages specified in the default judgment.” Transatlantic Marine Claims Agency, Inc., 109 F.3d at 111. No party has requested a hearing, and the Court concludes that none is needed given the evidence before the Court.
Discussion
I. Jurisdiction
The Court first addresses the threshold question of jurisdiction. The Court has both subject matter jurisdiction over this case and personal jurisdiction over Defendant. Federal subject matter jurisdiction exists over Plaintiff's copyright infringement claim pursuant to 28 U.S.C. § 1331 (federal question jurisdiction) and § 1338 (jurisdiction over trademark, copyright, and patent claims). The Court has personal jurisdiction over Defendant under principles of general jurisdiction, being a New York Limited Liability Company with a principal place of business at 20 River Rd., Apt. 9N, New York, New York. (Compl. ¶ 6.) See generally N.Y. C.P.L.R. § 301.
Whereas on default judgment a district court must assure itself of subject matter jurisdiction, it may but is not required to do so with respect to personal jurisdiction. See Sinoying Logistics Pte Ltd. v. Yi Da Xin Trading Corp., 619 F.3d 207, 213 n.7 (2d Cir. 2010) (“We need not - and explicitly do not - address here whether a district court must investigate its personal jurisdiction over defendant before entering a default judgment. We leave that issue for another day and hold only that a court may raise personal jurisdiction sua sponte when a defendant has failed to appear”); CKR Law LLP v. Anderson Investments International, LLC, 544 F.Supp.3d 474, 479-80 (E.D.N.Y. 2021) (declining to inquire into personal jurisdiction over defaulting defendant).
II. Default Judgment
Default judgment against MilkNYC is warranted. First, MilkNYC willfully defaulted. It never appeared in the action. It has not responded to either the Complaint, or the motion for default judgment. Second, there is no evidence before the Court to suggest that MilkNYC has a meritorious defense. Third, denying MilkNYC's motion for default judgment would be prejudicial to Stokes because he would be left without recourse with respect to MilkNYC's continuing liability and recovery of any damages.
III. MilkNYC's Liability
Plaintiff's Complaint and other submissions establish a sound legal basis for finding MilkNYC liable for willful infringement of Stokes' copyright in the Photograph.
A. Liability For Copyright Infringement
The Copyright Act provides the owner of a copyright the “exclusive rights to do and to authorize any of the following: (1) to reproduce the copyrighted work in copies ...; (2) to prepare derivative works based upon the copyrighted work; (3) to distribute copies ... of the copyrighted work ...; and (5) ... to display the copyrighted work publicly.” 17 U.S.C. § 106. To prevail on a claim of copyright infringement, a plaintiff must establish (1) ownership of a valid copyright and (2) infringement of that copyright by the defendant. See Feist Publications, Inc. v. Rural Telephone Services Co., 499 U.S. 340, 361, 111 S.Ct. 1282, 1296 (1991); Arista Records, LLC v. Doe 3, 604 F.3d 110, 117 (2d Cir. 2010). Registered copyrights are presumed valid. Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 109 (2d Cir. 2001). Demonstrating infringement requires the copyright owner to show (1) that the defendant has actually copied the owner's work and (2) that a substantial similarity exists between the defendant's work and the protectable elements of the owner's work. Id. at 110. Actual copying may be shown by direct evidence or indirect evidence; “[i]f the two works are so strikingly similar as to preclude the possibility of independent creation, copying may be proved without a showing of access.” Lipton v. Nature Co., 71 F.3d 464, 471 (2d Cir. 1995) (internal quotation marks and citation omitted). Substantial similarity, in turn, hinges on “whether an average lay observer would recognize the alleged copy as having been appropriated from the copyrighted work.” Hamil America, Inc. v. GFI, 193 F.3d 92, 100 (2d Cir. 1999).
Here, the requisite elements of copyright infringement are readily met. Stokes owns the copyright in the Photograph. Validity of his copyright is assumed based on his having obtained federal copyright registration of the Photograph. The Complaint alleges that MilkNYC willfully posted the Photograph on its Instagram account, thus demonstrating actual copying. (Compl. ¶ 28.) And, in any event, the photograph appearing on the Instagram posts appears to be identical and indisputably strikingly similar to the Photograph, thus precluding the possibility of independent creation by MilkNYC and establishing substantial similarity of the Photograph's protectable elements. (Compare Compl. Ex. 1 with Compl. Ex. 2.) Accordingly, Stokes has established MilkNYC's liability for copyright infringement.
B. Willful Misconduct
MilkNYC is deemed to have acted willfully, merely by virtue of its default, and consequent failure to controvert the evidence of willful misconduct alleged in the Complaint. Kelly Toys Holdings, LLC v. alialialiLL Store, 606 F.Supp.3d 32, 51 (S.D.N.Y. 2022); North Face Apparel Corp. v. Moler, No. 12-CV-6688, 2015 WL 4385626, at *6 (S.D.N.Y. July 16, 2015) (citing Lane Crawford LLC v. Kelex Trading (CA) Inc., No. 12-CV-9190, 2013 WL 6481354, at *3 (S.D.N.Y. Dec. 3, 2013) (collecting cases), R&R adopted, 2014 WL 1338065 (S.D.N.Y. Apr. 3, 2014)), R&R adopted, 2015 WL 5472939 (S.D.N.Y. Sept. 16, 2015).
Even putting the fact of default aside, the conduct set forth in the Complaint and supporting evidence demonstrate that MilkNYC willfully infringed. Copyright infringement is “willful” if the plaintiff shows “(1) that the defendant was actually aware of the infringing activity, or (2) that the defendant's actions were the result of ‘reckless disregard' for, or ‘willful blindness' to, the copyright holder's rights.” Island Software & Computer Services, Inc. v. Microsoft Corp., 413 F.3d 257, 263 (2d Cir. 2005). For “the purpose of awarding enhanced statutory damages,” the knowledge component of willfulness “need not be proven directly but may be inferred from the defendant's conduct.” N.A.S. Import, Corp. v. Chenson Enterprises, Inc. 968 F.2d 250, 252 (2d Cir. 1992); see also Otto v. Hears Communications, Inc., 345 F.Supp.3d 412, 435 (S.D.N.Y. 2018) (“In other words, defendant's knowledge may be inferred from his or her conduct”).
The conduct alleged demonstrates MilkNYC's willful misconduct. As Stokes attests, posting of the Photograph cropped out the portion of the Photograph bearing Stokes' watermark and business logo. (Stokes Decl. ¶ 35.) See Reilly v. Commerce, No. 15-CV-5118, 2016 WL 6837895, at *9 (S.D.N.Y. Oct. 31, 2016) (R&R) (willfulness established on default because, as alleged in the complaint, defendant “accessed the Photograph ... copied it, cropped it so as to remove the watermark or notice, and then displayed it”). It certainly is possible that Stokes copied the Photograph from some source that already had cropped out the copyright information and thus unknowingly violated Stokes' copyright, but that is pure speculation and there is no basis in the record to make that inference. Moreover, MilkNYC apparently did not remove its infringing uses of the Photograph even after filing and service of the summons and Complaint in this action. (Stokes Decl. ¶ 43.) See Philpot v. Music Times LLC, No. 16-CV-1277, 2017 WL 9538900, at *5 (March 29, 2017) (stating that a defendant acts with actual awareness or reckless disregard where he “engages in infringing activity after receiving warning that the activity constitutes infringement”), R&R adopted, 2017 WL 1906902 (May 9, 2017).
In short, Stokes has established MilkNYC's legal liability for willful copyright infringement.
IV. Statutory Damages
The Copyright Act permits a plaintiff to recover either its actual damages and the infringer's profits, or, in the alternative, statutory damages. 17 U.S.C. § 504(a). In the instant case, Stokes seeks statutory damages of $30,000 for MilkNYC's infringement. Stokes may do so because his work was registered prior to Defendant's infringement. See 17 U.S.C. § 412.
A. Law Applicable To Statutory Damages Under The Copyright Act
A plaintiff who elects statutory damages under the Copyright Act is entitled to an award of between $750 and $30,000 per work infringed, “as the court considers just.” 17 U.S.C. § 504(c)(1). For willful infringement, the maximum permissible award per infringed work rises to $150,000. Id. § 504(c)(2). “District courts enjoy wide discretion in setting statutory damages.” Castillo v. G&M Realty L.P., 950 F.3d 155, 171 (2d Cir. 2020) (citing Bryant v. Media Right Productions, Inc., 603 F.3d 135, 143 (2d Cir. 2010)); accord Fitzgerald Publishing Co., Inc. v. Baylor Publishing Co., Inc., 807 F.2d 1110, 1116 (2d Cir. 1986).
In the Second Circuit, courts are guided by several factors to determine an appropriate amount of statutory damages for copyright infringement. Those factors include: “(1) the infringer's state of mind; (2) the expenses saved, and profits earned, by the infringer; (3) the revenue lost by the copyright holder; (4) the deterrent effect on the infringer and third parties; (5) the infringer's cooperation in providing evidence concerning the value of the infringing material; and (6) the conduct and attitude of the parties.” Bryant, 603 F.2d at 144 (citing N.A.S. Import Corp., 968 F.2d at 252-53).
“Awards of statutory damages serve two purposes - compensatory and punitive.” Fitzgerald Publishing Co., Inc., 807 F.2d at 1117. At the punitive end of the scale, the statutory maximum is typically reserved for “truly egregious conduct such as where a defendant has been adjudged to have willfully infringed, yet continued the same pattern of behavior in contravention of court order.” EMI April Music Inc. v. 4MM Games, LLC, 2014 WL 325933, at *5 (S.D.N.Y. Jan. 13, 2014), R&R adopted, 2014 WL 1383468 (S.D.N.Y. Apr. 7, 2014); accord Miller v. Netventure24 LLC, No. 19-CV-7172, 2021 WL 3934262, at *7 (S.D.N.Y. Aug. 6, 2021), R&R adopted, 2021 WL 3931928 (S.D.N.Y. Sept. 2, 2021) (quoting EMI April Music); Myeress v. Elite Travel Group USA, No. 18-CV-340, 2018 WL 5961424, at *3 (S.D.N.Y. Nov. 14, 2018) (“Cases where high statutory damages are awarded typically involve defendants who profit significantly despite repeated notices that they are infringing on the plaintiff's copyright”).
B. Analysis Of The Relevant Factors
The factors relevant to determining statutory damages collectively point to a substantial award of statutory damages.
With respect to the second, third, and fifth factors, MilkNYC's conduct - including its failure to appear, answer, or otherwise respond to the Complaint - have made it impossible to determine MilkNYC's profits, quantify any expenses that MilkNYC may have saved by infringing the Photograph, or assess revenues lost by Stokes as a result of MilkNYC's infringement. As such, the Court may, and does, infer that MilkNYC financially benefitted to some extent from using the Photograph in its advertising. See Skyrocket, LLC v. Comeyun, No. 19-CV-11623, 2021 WL 9314807, at *7 (S.D.N.Y. May 6, 2021), R&R adopted, 2022 WL 2712852 (S.D.N.Y. July 13, 2022) (finding that, when the defaulting defendants failed to appear, answer, or otherwise respond to the complaint, it was “impossible to determine the Defaulting Defendants' profits,” and so “the Court may, and does, infer that the Defaulting Defendants financially benefitted to a significant degree”) (citing AW Licensing, LLC v. Bao, No. 15-CV-1373, 2016 WL 4137453, at *3 (S.D.N.Y. Aug. 2, 2016)). Given that the Photograph served as background advertising for MilkNYC's products and services, however, the financial benefit from using the photograph, as opposed to some other photograph that may be in the public domain, is no doubt modest. Moreover, as Stokes acknowledges, he has not licensed the Photograph and typically does not license his photographs for ad hoc uses. (Stokes Decl. ¶¶ 8-9, 29, 34.) Further, the Photograph, copyrighted in 2014, appears to have preceded Stokes' focus on and success in photographing amputee veterans and creating books of those photographs. On the other hand, Stokes' has presented evidence supporting a reasonable inference that MilkNYC's particular infringing use of the Photograph could well damage the reputation Stokes has built over the last several years and, consequently, the value of his work and his ability to profit from it. (Stokes Decl. ¶¶ 30-33, 39-41.)
The remaining factors - defendant's state of mind, need for deterrence, and conduct of the parties - support a meaningful statutory damages award. As explained above, MilkNYC's misconduct was willful, demonstrated not only by its default, but also by removal of Stokes' watermark and logo from the Photograph and by continuing infringement even after service of the lawsuit. An award significant enough to deter MilkNYC from continuing its infringement and engaging in future infringement, and to deter others from similar conduct, is well warranted. Finally, nothing in the record indicates any untoward conduct by Stokes or innocent conduct by MilkNYC to counter its lack of cooperation and admission of willfulness by default.
C. The Amount Awarded
“Case law reflects a wide range of awards” of statutory damages for infringement of copyrights in photographs. Burch v. Nyarko, No. 06-CV-7022, 2007 WL 2191615, at *3 (S.D.N.Y. July 31, 2007). However, they tend to be at the lower end, even for defaulting defendants who are found to have acted willfully. See Sadowski v. Yeshiva World News, LLC, 2023 WL 2707096, at *5 (E.D.N.Y. March 16, 2023) (stating that “[c]ourts in this Circuit have typically awarded statutory damages between $1,000 and $5,000 in cases of single use copyright infringement” and awarding $7,500 for willful infringement by defaulting defendant even though plaintiff sought $22,500 in statutory damages), R&R adopted, 2023 WL 2742157 (E.D.N.Y. March 31, 2023); Burch, 2007 WL 2191615 at *3 (awarding $15,000 for infringement of each of four photographs instead of $150,000 per photograph sought by plaintiff against defaulting defendant found to have acted willfully); Wilen v. Alternative Media Net, Inc., No. 03-CV-2524, 2004 WL 2823036, at *2 (S.D.N.Y. Dec. 3, 2004) (awarding $20,000 per photograph where defaulting defendant copied seven of plaintiff's photographs, removed copyright information, and sold photographs as plaintiff's own), R&R adopted, 2005 WL 167589 (S.D.N.Y. Jan. 26, 2005).
In some photograph cases where defendants have not defaulted, courts formulate a statutory damages award based on a multiple, typically three to five times, what the copyright holder likely would receive as a license fee for use of the copyrighted photograph. See Mango v. Buzzfeed, Inc., 316 F.Supp.3d 811, 814 (S.D.N.Y. 2018) (“Second Circuit case law ... reflects that courts in this Circuit commonly award, in cases of non-innocent infringement, statutory damages of between three and five times the cost of the licensing fees the defendant would have paid”) (internal quotations marks and citations omitted). That measure is less relevant to the instant context involving a defaulting defendant and continuing infringer, thus reflecting a greater degree of willfulness and need for deterrence. Moreover, a royalty-based measure cannot be applied here as Stokes has not previously licensed the Photograph and there is no evidence before the Court of whether he has licensed comparable photographs and, if so, for what amounts.
Stokes has requested statutory damages in the amount of $30,000. That amount is the upper end of statutory damages for non-willful infringement but only one fifth the maximum award for willful infringement. Stokes cites several cases in which courts awarded $30,000 per infringed copyright where the defendant defaulted. Putting aside the fact that none of those cases involved photographs, all of those cases save two, have an important distinguishing feature: The infringing conduct involved the sale or distribution of the infringing work as a product unto itself rather than the collateral use to promote the sale of services and products that have no connection to the copyrighted work. The instant case would be more like those cases if Defendant had been offering the Photograph for sale. That is not to say such collateral use may not merit a high statutory damages award, but it is important to bear in mind the use made of the copyrighted work. Here, the collateral use of the Photograph weighs against an overly aggressive award because there is a likelihood that Defendant could have obtained the same benefit by substituting a different background photograph in the public domain.
See Lucerne Textiles, Inc. v. H.C.T. Textiles Co., No. 12-CV-5456, 2013 WL 174226 (S.D.N.Y. Jan. 17, 2013) (sale of garments made with infringing fabric), R&R adopted, 2013 WL 124911 (S.D.N.Y. March 26, 2013); Microsoft Corp. v. Computer Care Center, Inc., No. 06-CV-1429, 2008 WL 4179653 (E.D.N.Y. Sept. 10, 2008) (sale of counterfeit software); Peer International Corp. v. Max Music & Entertainment, Inc., No. 03-CV-996, 2004 WL 1542253 (S.D.N.Y. July 9, 2004) (R&R) (sale of music records infringing copyright compositions); Stevens v. Aeonian Press, Inc., No. 00-CV-6330, 2002 WL 31387224 (S.D.N.Y. Oct. 23, 2002) (sale of copyrighted literary works). The two cases cited by Plaintiff that do not fit that same mold are nevertheless equally distinguishable. See Tokar v. 8 Whispering Fields Associates, Ltd., No. 08-CV-4573, 2011 WL 7445062 (E.D.N.Y. Dec. 13, 2011) (house built with replicated copyrighted architectural plans), R&R adopted, 2012 WL 688468 (E.D.N.Y. March 2, 2012); Getaped.com v. Cangemi, 188 F.Supp.2d 398, 403 (S.D.N.Y. 2002) (replication of entire website and source code).
At the same time, the Court acknowledges Stokes' reputational concern. That concern is logical and grounded in the particular facts of this case despite there being no proof of actual reputational damage. Although some of Stokes' photographs may be considered risque, his more current work, and the work underlying his reputation and success, is based on, in his own words, tasteful photographs of amputee-veterans. (See Compl. ¶ 41 and Stokes Decl. ¶ 5.) The Court accepts that affiliating Stokes' photographic images with overtly sexual terminology and portrayal of male flesh as “interracial meat” rather than something to be venerated and embraced despite imperfection poses a significant risk of injury to his reputation.
Stokes notes that although he is opposed to the unauthorized use of his copyrighted work to advertise bars and party events and in connection with words that he considers “pornographic and/or disrespectful,” he is not disapproving of “anyone's lifestyle, sexuality, orientation, or other personal choices.” (Stokes Decl. ¶ 39.)
In sum, the Court finds that, in this case, an amount of $30,000 is a reasonable and appropriate amount for statutory damages in light of the relevant factors discussed above. Accordingly, the Court recommends a statutory damages award of $30,000 in favor of Stokes.
V. Injunctive Relief
Stokes asks for injunctive relief prohibiting MilkNYC from further infringement. A court may grant “final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.” 17 U.S.C. § 502(a). Here, “Plaintiff has met the threshold inquiry of actual success on the merits; that success is based on Defendant['s] default and the Court's subsequent determination of liability.” Gogo Apparel, Inc. v. Daruk Imports, Inc., No. 19-CV-5701, 2020 WL 4274793, at *8 (S.D.N.Y. June 11, 2020), R&R adopted, 2020 WL 4271694 (S.D.N.Y. July 23, 2020). Once success on the merits is established, “[a] plaintiff seeking a permanent injunction ... must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.” Salinger v. Colting, 607 F.3d 68, 77 (2d Cir. 2010) (quoting eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 391, 126 S.Ct. 1837, 1839 (2006)). In copyright cases, “[c]ourts routinely ... award injunctive relief ... where liability is established and there is a threat of continuing infringement.” Gogo Apparel, Inc., 2020 WL 4274793 at *7 (internal brackets omitted) (quoting Conan Properties International LLC v. Sanchez, No. 17-CV-00162, 2018 WL 3869894, at *6 (E.D.N.Y. Aug. 15, 2018)).
All four factors weigh in favor of issuing a permanent injunction here. First, “courts issue injunctions in copyright cases because it is notoriously difficult to prove the loss of sales due to infringement and the threat of continuing violations establishes the necessary irreparable harm.” Sadowski, 2023 WL 2707096 at *8 (internal quotation marks and citations omitted); accord Ideavillage Products Corp. v. Bling Boutique Store, No. 16-CV-09039, 2018 WL 3559085, at *5 (S.D.N.Y. July 24, 2018) (“Defaulting Defendants' refusal to defend this action creates a threat that they will continue to infringe ... unless permanently enjoined from doing so”). Stokes has established a threat of continuing violations, both because MilkNYC has not appeared in this lawsuit and has continued to display the Photograph. “Defendant's continuing infringement” also “establishes the second required element because a plaintiff has no adequate remedy at law where, absent an injunction, the defendant is likely to continue infringing its copyright.” Sadowski, 2023 WL 2707096 at *8 (internal quotation marks and citations omitted).
Third, “[t]he balance of hardships favors Plaintiff since it is the aggrieved party whose copyrighted design is being infringed,” Gogo Apparel, Inc., 2020 WL 4274793 at *8, and “Defendant has failed to appear and thus identify any legitimate hardship.” Sadowski, 2023 WL 2707096 at *8 (internal quotation marks and citations omitted). Indeed, the Court reasonably infers that MilkNYC would suffer no more than minimal hardship in swapping out a background image in place of the Photograph for its Instagram promotions. Finally, “enjoining Defendant from using the Photograph would not disserve the public interest as the public has a compelling interest in protecting copyright owners' marketable rights to their work so as to encourage the production of creative work.” Id. (internal quotation marks, citations, and alterations omitted); accord Gogo Apparel, Inc., 2020 WL 4274793 at *8 (“the public interest will be served by enjoining the infringement of a design protected by copyright”).
All four factors required for injunctive relief are satisfied. Accordingly, the Court recommends entry of a permanent injunction enjoining Defendant from continuing to infringe Plaintiff's copyright in the Photograph.
VI. Attorney's Fees And Costs
Plaintiff requests an award of $4,583 in attorneys' fees and $576 for costs. (Sanders Decl. ¶¶ 13-15.) Those amounts should be awarded.
A. Availability Of Attorney's Fees To A Prevailing Party
There is no automatic right to an award of attorney's fees to prevailing parties in copyright cases. Rather, in addition to costs, “the court may also award a reasonable attorney's fee to the prevailing party as part of the costs.” 17 U.S.C. § 505. Attorney's fees thus may be awarded “only as a matter of the court's discretion.” Fogerty v. Fantasy, Inc., 510 U.S. 517, 534, 114 S.Ct. 1023 (1994). In exercising its discretion, the court considers a number of nonexclusive factors, such as “frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.” Id. n.19; accord Bryant, 603 F.3d at 144.
Stokes is the prevailing party and, in exercise of the Court's discretion, should be awarded his reasonable attorney's fees and costs. “Given that [MilkNYC] has failed to respond to [Stokes]'s complaint, there are no defenses or claims for the Court to assess - leaving only compensation and deterrence as factors for the Court to consider.” Whitehead v. Mix Unit, LLC, No. 17-CV-9476, 2019 WL 384446, at *5 (S.D.N.Y. Jan. 31, 2019), R&R adopted, 2019 WL 1746007 (S.D.N.Y. Apr. 18, 2019). Particularly in cases of default and willful infringement, courts have found it appropriate to award attorney's fees both for purposes of compensation and deterrence. See, e.g., Hollander Glass Texas, Inc. v. Rosen-Paramount Glass Co., 291 F.Supp.3d 554, 560 (S.D.N.Y. 2018) (granting attorney's fees and costs where defendant defaulted in copyright infringement case); Myeress v. Elite Travel Group USA, No. 18-CV-340, 2018 WL 5961424, at *4 (S.D.N.Y. Nov. 14, 2018) (same). There is ample ground to do so here.
B. Determination Of The Fee Award
The traditional approach to determining a fee award is the “lodestar” calculation, which is the number of hours expended multiplied by a reasonable hourly rate. See Healey v. Leavitt, 485 F.3d 63, 71 (2d Cir. 2007). The Second Circuit has held that “the lodestar ... creates a ‘presumptively reasonable fee.'” Millea v. Metro-North Railroad Co., 658 F.3d 154, 166 (2d Cir. 2011) (quoting Arbor Hill Concerned Citizens Neighborhood Association v. County Of Albany, 522 F.3d 182, 183 (2d Cir. 2008), and then citing Perdue v. Kenny A. Ex Rel. Winn, 559 U.S. 542, 552, 130 S.Ct. 1662, 1673 (2010)); see also Stanczyk v. City Of New York, 752 F.3d 273, 284-85 (2d Cir. 2014) (reaffirming Millea). To arrive at a lodestar calculation, “[t]he party seeking an award of fees should submit evidence supporting the hours worked and rates claimed.” Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939 (1983). Plaintiff has submitted such evidence here, including a declaration from counsel and copies of contemporaneous records of time expended by specific attorneys and paralegals. (Sanders Decl. ¶ 24 and Ex. 4.)
Hourly Rates: Courts assess the reasonableness of a proposed hourly rate by considering the prevailing market rate for lawyers in the district in which the ruling court sits. Polk v. New York State Department Of Correctional Services, 722 F.2d 23, 25 (2d Cir. 1983). “The rates used by the court should be current rather than historic hourly rates.” Reiter v. Metropolitan Transportation Authority Of New York, 457 F.3d 224, 232 (2d Cir. 2006) (internal quotation marks and citations omitted). “[C]ourts may conduct an empirical inquiry based on the parties' evidence or may rely on the court's own familiarity with the rates if no such evidence is submitted.” Wong v. Hunda Glass Corp., No. 09-CV-4402, 2010 WL 3452417, at *2 (S.D.N.Y. Sept. 1, 2010) (internal quotation marks and citations omitted). Additionally, “the range of rates that plaintiff's counsel actually charge their clients ... is obviously strong evidence of what the market will bear.” Rozell v. Ross-Holst, 576 F.Supp.2d 527, 544 (S.D.N.Y. 2008); see also Lilly v. County Of Orange, 910 F.Supp. 945, 949 (S.D.N.Y. 1996) (“The actual rate that counsel can command in the market place is evidence of the prevailing market rate”).
Plaintiff is represented in this action by the Sanders Law Group and seeks reimbursement of fees for work performed by three attorneys, two paralegals, and one “law clerk.” (Damages Stmt. ¶¶ 19-22.) Craig B. Sanders is the founding member of his firm and has almost 30 years of experience in handling complex copyright matters. (Id. ¶ 19.) His billing rate for the instant matter is $700 per hour. (Id.; Sanders Decl. Ex. 4 at 2.) Jonathan M. Cader, a senior associate, graduated from law school in 2001 and has over 16 years of experience in complex federal litigation, including intellectual property law. (Damages Stmt. ¶ 20.) His billing rate is $500 per hour. (Id.; Sanders Decl. Ex. 4 at 2.) Renee Aragona graduated law school in 2011 and has 10 years of practice experience. (Damages Stmt. ¶ 21.) Her billing rate was $500 per hour. (Id.; Sanders Decl. Ex. 4 at 2.) The paralegals billed time at $125 per hour. (Sanders Decl. Ex. 4 at 2.) Finally, the law clerk was billed at $250 per hour. (Damages Stmt. ¶ 22; Sanders Decl. Ex. 4 at 2.)
“Damages Stmt.” refers to Plaintiff's Statement of Damages, dated February 27, 2023 (Dkt. 20).
The Statement of Damages indicates that one paralegal had a rate of $125 per hour and the other $100 per hour. (Damages Stmt. ¶ 22.) The $100 reference, however, appears to be in error. Sanders' sworn statement of time expended by his firm shows that both paralegals were billed at an hourly rate of $125 (Sanders. Decl. Ex. 4 at 2), and the total $4,583 sought in attorneys' fees is based on both paralegals having billed at $125 per hour (see Sanders. Decl. Ex. 4 at 2).
The Court recommends approval of the requested rates as they fall within the reasonable range of rates for experienced attorneys performing similar work in copyright cases. See BMaddox Enterprises LLC v. Oskouie, No. 17-CV-1889, 2023 WL 1418049, at *4 (S.D.N.Y. Jan. 6, 2023) (stating “Courts awarding attorneys' fees in copyright cases have regularly found rates in the range of $400 to $750 an hour for partners to be reasonable,” and collecting cases), R&R adopted, 2023 WL 1390275 (S.D.N.Y. Jan. 30, 2023); Beastie Boys v. Monster Energy Co., 112 F.Supp.3d 31, 56 (S.D.N.Y. 2015) (approving junior associate rates between $461 and $505 per hour, even though they were “higher than those typically approved for associates in this District,” because counsel provided data showing that rates were comparable to New York City billing rates and tasks performed were “relatively demanding and complex rather than quotidian (e.g., document review)”). The rates are particularly reasonable in this instance given the efficiency and delegation of work noted next.
Hours Worked: To determine the compensable hours, “the court must examine the hours expended by counsel and the value of the work product of the particular expenditures to the client's case.” Tlacoapa v. Carregal, 386 F.Supp.2d 362, 371 (S.D.N.Y. 2005) (citing Gierlinger v. Gleason, 160 F.3d 858, 873, 876 (2d Cir. 1998)). “In making this examination, the district court does not play the role of an uninformed arbiter but may look to its own familiarity with the case and its experience generally as well as to the evidentiary submissions and arguments of the parties.” Gierlinger, 160 F.3d at 876 (internal quotation marks and citation omitted). “The relevant issue ... is not whether hindsight vindicates an attorney's time expenditures, but whether, at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures.” Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992); see also Mugavero v. Arms Acres, Inc., No. 03-CV-5724, 2010 WL 451045, at *6 (S.D.N.Y. Feb. 9, 2010) (same). A court thus should exclude from the lodestar calculation “excessive, redundant or otherwise unnecessary hours.” Quaratino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir. 1999); see also Luciano v. Olsten Corp., 109 F.3d 111, 116 (2d Cir. 1997) (“If the district court concludes that any expenditure of time was unreasonable, it should exclude these hours from the lodestar calculation”).
The time records submitted reflect that Stokes' attorneys and other billed personnel worked a total of 13.1 hours. (Sanders Decl. Ex. 4 at 2.) The Court has reviewed the records and finds the time spent to be reasonable. The work performed primarily included drafting the Complaint, researching information about MilkNYC; and preparing the papers in support of the motion for default judgment. The hours spent, broken down by each individual and supported by contemporaneous documentation, were all reasonably necessary for the litigation of Plaintiff's claims. The attorney with the highest billing rate accounts for only 1.1 hours, while the lowest billing attorney accounted for the most hours of any timekeeper with 5.2 hours. Based on the distribution of hours among all billers, the Court concludes that work was appropriately delegated. The work also appears to have been conducted efficiently, both with respect to time devoted to particular tasks and the overall amount of time spent.
Having determined that the fees sought are reasonable, the Court finds that Plaintiff should be awarded fees of $4,583.
C. Costs
Plaintiff seeks $576 in costs comprised of the $402 case filing fee and $174 for process server fees. (Sanders Decl. ¶¶ 14-15.) Counsel has submitted copies of invoices for the process server fees (Id. Ex. 5), and the Court takes judicial notice of payment of the filing fee. Those expenses are routinely recoverable. See e.g., Malletier v. Artex Creative International Corp., 687 F.Supp.2d 347, 365 (S.D.N.Y. 2010) (costs such as filing fees, shipping costs, and research fees are “typically awarded when a defendant defaults”) (citing Arbor Hill Concerned Citizens Neighborhood Association v. County of Albany, 369 F.3d 91, 98 (2d Cir. 2004)); Tips Exports, Inc. v. Music Mahal, Inc., No. 01-CV-5412, 2007 WL 952036, *11 (E.D.N.Y. Mar. 27, 2007) (reimbursing plaintiff for process servers and postage); Shannon v. Fireman's Fund Insurance Co., 156 F.Supp.2d 279, 305 (S.D.N.Y. 2001) (reimbursing plaintiff for filing fees and shipping costs). Moreover, costs associated with docket fees, service of process fees, and other miscellaneous fees may also be recovered pursuant to Local Civil Rule 54.1. See S.D.N.Y. Local Rule 54.1(c)(10). The Court has reviewed Plaintiff's submissions and finds the costs set forth are recoverable. Accordingly, Stokes should be awarded $576 in costs.
VII. Pre-Judgment Interest
“The Copyright Act neither allows nor prohibits an award of pre-judgment interest.” Capitol Records, Inc. v. MP3tunes, LLC, No. 07-CV-9931, 2015 WL 13684546, at *4 (S.D.N.Y. Apr. 3, 2015). District courts thus have the discretion to award or not award pre-judgment interest in copyright cases and cases where other federal law is similarly neutral. Compare Capitol Records, 2015 WL 13684546 at *4 (declining to award prejudgment interest in light of sizeable award “far exceed[ing] actual damages” and because plaintiff prolonged the case) with Broadcast Music, Inc. v. R Bar of Manhattan, Inc., 919 F.Supp. 656, 661 (S.D.N.Y. 1996) (“Although an award of prejudgment interest in cases under the Copyright Act is discretionary with the court, ... this is a case where it would be appropriate to further the goals of the Act.”). As the Capitol Records court explained, “[s]ome courts have declined to award pre-judgment interest for willful copyright infringement, finding that pre-judgment interest should be reserved for ‘exceptional' circumstances, and concluding that damages for willfulness have already been factored into an award of maximum statutory damages. ... Other courts have determined that prejudgment interest is appropriate to help deter willful copyright infringement.” 2015 WL 13684546 at *4 (citations omitted).
Here, the Court recommends, in its discretion, that pre-judgment interest not be awarded. This is not a case where, for instance, Stokes has been deprived of a licensing fee that should and would have been paid at an earlier time. By Stokes own admission, he would not have licensed the Photograph for the use made MilkNYC. As explained above, that very reason, together with the risk of reputational damage and other factors, justify the substantial damages fee award of $30,000. Awarding both that amount of statutory damages and attorney's fees sufficiently meet the need for deterrence and to make Stokes whole. See, e.g., Johnson v. Tennyson, 2023 WL 2747025, at *8 (S.D.N.Y. March 8, 2023) (declining to award pre-judgment interest on top of an award of enhanced damages), R&R adopted, 2023 WL 2744659 (S.D.N.Y. March 31, 2023); John Wiley & Sons, Inc. v. Book Dog Books, LLC, 327 F.Supp.3d 606, (S.D.N.Y. 2018) (declining to award pre-judgment interest despite jury finding of willful conduct because “[t]he sizable damages already levied against [Defendants], without the addition of pre-judgment interest, are sufficient to fully compensate Plaintiffs for their injuries”) (internal quotation marks and citations omitted).
Conclusion
For the foregoing reasons, I recommend that the Court enter judgment in favor of Plaintiff against Defendant awarding Plaintiff statutory damages pursuant to 15 U.S.C. § 504(c) in the amount of $30,000; attorney's fees in the amount of $4,583; costs in the amount of $576; and no pre-judgment interest. Additionally, I recommend issuing a permanent injunction enjoining Defendant from further infringing conduct.
Procedure For Filing Objections
Pursuant to 28 U.S.C. § 636(b)(1) and Rules 72, 6(a), and 6(d) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days to file written objections to this Report and Recommendation. Such objections shall be filed with the Clerk of Court, with extra copies delivered to the Chambers of the Honorable Paul A. Engelmayer, United States Courthouse, 40 Foley Square, New York, New York 10007, and to the Chambers of the undersigned, United States Courthouse, 500 Pearl Street, New York, New York 10007. FAILURE TO FILE TIMELY OBJECTIONS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW.
Plaintiff shall serve Defendant with this Report and Recommendation within the next two days.
Respectfully submitted,