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Grady v. Nelson

United States District Court, D. Colorado

December 15, 2014

JAMES S. GRADY, d/b/a GROUP FIVE PHOTOSPORTS, Plaintiff,
v.
PETER NELSON, Defendant

For James S. Grady, doing business as Group Five Photosports, Plaintiff: Mollie B. Hawes, LEAD ATTORNEY, Miller & Steiert, P.C., Littleton, CO.

ORDER OF FINAL ENTRY OF JUDGMENT AND PERMANENT INJUNCTION

RAYMOND P. MOORE, United States District Judge.

This matter is before the Court on Plaintiff's Motion for Final Default Judgment, Damages, Attorney's Fees & Costs, and Permanent Injunction Against Defendant Peter Nelson (ECF No. 27) (the " Motion"). For the reasons set forth below, the Court grants the Motion and awards damages as set forth below.

I. BACKGROUND

A. Procedural History

Plaintiff initiated this lawsuit on November 15, 2012, alleging violations of the United States Copyright Act of 1976, 17 U.S.C. § § 101 et seq . (" Copyright Act") and the Lanham Act, 15 U.S.C. § § 1051 et seq . (" Trademark Act"). (ECF No. 1, Complaint, at 1.) Defendant was served with the Summons and Complaint on May 15, 2013. (ECF No. 17.) Defendant, however, failed to answer or otherwise respond to Plaintiff's Complaint. Following Plaintiff's request for entry of default pursuant to Fed.R.Civ.P. 55(a) (ECF No. 25), the Clerk of Court entered default against Defendant on November 12, 2013 (ECF No. 26). Defendant has not responded to the Clerk's entry of default or the present Motion.

B. Factual Allegations

The Court held a hearing on December 10, 2014 and heard the testimony of Plaintiff James S. Grady. Based upon the testimony of Plaintiff and the deemed admissions pursuant to F.R.C.P. Rule 8(b)(6) based upon Defendant's failure to answer the Complaint, the Court makes the following factual findings. Plaintiff is a Colorado resident doing business as Group Five Photosports, which " produces, markets and distributes premium quality entertainment products, including wholly original Internet content, Internet websites, videos, DVDs and photographs." (ECF No. 1 ¶ 14.) Plaintiff is the creator and owner of a group of 762 photographs and videos (the " Photographs" and/or " Videos"). (Id. ¶ ¶ 2, 25.) The Photographs and Videos are all registered with the United States Copyright Office. (Id. ¶ ¶ 15, 25.) They are distributed through the website TrueTeenBabes.com. (Id.¶ 29.) Plaintiff has registered the trademark TrueTeenBabes. (Id. ¶ ¶ 5, 16.) This trademark appears on all of the Photographs and appears at the beginning and end of each Video recording. (Id. ¶ 15.) Plaintiff seeks statutory damages for the registrations list on Exhibit A, which is attached hereto and incorporated by reference herein, in the amount of $7, 188.68 per work qualifying for statutory damages (the " Works").[1] Certain of the registrations for the Works contain multiple photographs, which were not part of a compilation or a derivative work, but were registered on one application pursuant to 37 CFR § 202.3(b)(8), (10). Each photograph, whether registered separately or combined into one registration pursuant to 37 CFR § 202.3(b)(8), (10), has an independent copyright life as each photograph can be exploited separately through Plaintiff's individual sales of the photographs or otherwise.

Defendant is an individual who has supplied Plaintiff's copyrighted Photographs and Videos " to photo, video and DVD trading websites, pay to view websites, online forums, clubs and groups, " some of which are pornographic and/or illegal. (Id. ¶ ¶ 21, 30.) Defendant purchased subscriptions to TrueTeenBabes.com. (Id. ¶ ¶ 12, 29.) Defendant downloaded the Photographs and Videos and then willfully distributed them to others over the Internet. (Id. ¶ ¶ 59-61.) He did so by uploading the Photographs and Videos onto three websites: DarkJB.com, Motherless.com, and Megaupload.com. (Id. ¶ ¶ 30-32, 36-47.) He created forums specifically directing other users of these websites to Plaintiff's illegally uploaded images and videos along with language encouraging other users to similarly upload Plaintiff's works. (Id. ¶ 40.) He instructed viewers on how they could download the Photographs and Videos without compensation to Plaintiff. (Id. ¶ 60.) Defendant sometimes received compensation for sharing the Photographs and Videos in the form of increased access to other sections of Megaupload. ( See, e.g., id. ¶ ¶ 45, 67.) Defendant did not obtain Plaintiff's permission to distribute the Photographs and Videos in any manner. (Id. ¶ ¶ 29, 51, 54.)

Defendant subscribed to TrueTeenBabes.com to obtain access to the Photographs and Videos. (Id. ¶ 29.) In June of 2009, Defendant first registered as a Megaupload contributor. Between November 2010 and July 2011, Defendant illegally provided Megaupload with 19 of the Plaintiff's video works without authorization. (ECF No. 27-1, Plaintiff's Declaration, ¶ 8.) Between August 29, 2009 and January 18, 2012 Defendant uploaded 469 of Plaintiff's works to the website Motherless.com. (Id. ¶ 13.) At some point during or after October 2009, Defendant uploaded an additional 255 photographs and 19 videos to the website known as DarkJb.com. (Id. ¶ ¶ 18, 19.)

In total, Plaintiff identifies 762 instances of unlawful uploading of copyrighted Photographs and Videos by Defendant, including 106 that qualify for statutory damages. Based on these facts, Plaintiff asserts five claims: (1) copyright infringement; (2) contributory copyright infringement; (3) vicarious copyright infringement; (4) trademark infringement--false designation of origin; and (5) trademark infringement-dilution of value. (ECF No. 1 ¶ ¶ 57-92.) Plaintiff seeks statutory damages in the amount of $762, 000.00 plus $5, 571.50 in attorney's fees. (ECF No. 27-2, Declaration of Mollie B. Hawes, at 3.) Plaintiff also seeks injunctive relief " permanently enjoin[ing] Defendant from engaging in any further infringement of Grady-owned copyrighted works." Id. at 2.

II. ANALYSIS

Pursuant to Fed.R.Civ.P. 55(a), default may enter against a party who fails to appear or otherwise defend a lawsuit. Here, entry of default was proper because Defendant failed to respond to Plaintiff's Complaint. Before proceeding with a default judgment, however, the Court must consider whether it has jurisdiction, whether the facts establish a legitimate basis for the entry of judgment, and whether damages can be ascertained.

A. Jurisdiction and Venue

In determining whether a default judgment is warranted, the Court must first consider whether it has jurisdiction over the subject matter and the defendant. Dennis Garberg & Associates, Inc., v. Pack-Tech Int'l Corp., 115 F.3d 767, 772 (10th Cir. 1997); Williams v. Life Sav. & Loan, 802 F.2d 1200, 1202-03 (10th Cir. 1986). The Court must do so in consideration of the well-established rule that " a judgment is void if the court that enters it lacks jurisdiction over either the subject matter of the action or the parties to the action." United States v. 51 Pieces of Real Prop., 17 F.3d 1306, 1309 (10th Cir. 1994).

1. Subject Matter Jurisdiction

Plaintiff asserts that the Court has jurisdiction over this matter because the action arises out of alleged violations of the Copyright Act and the Trademark Act, each of which are federal statutes. (ECF No. 1 at 1.) Federal question jurisdiction is governed by 28 U.S.C. § 1331, which provides in pertinent part that " [t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." Because Plaintiff's causes of action arise under federal law, the Court has jurisdiction over the subject matter of this litigation.

2. Personal Jurisdiction

In addition to subject matter jurisdiction, entry of default judgment in a civil case requires personal jurisdiction over the defendant. Bixler v. Foster, 596 F.3d 751, 761 (10th Cir. 2010).

a. Service

Before finding that the Court has personal jurisdiction over Defendant, the Court must first address the adequacy of service. See Venable v. Haislip, 721 F.2d 297, 300 (10th Cir. 1983). Plaintiff's Complaint identifies Defendant as an individual. (ECF No. 1 ¶ 24.) Therefore, the Court analyzes the adequacy of service in the context of Fed.R.Civ.P. 4(e), which establishes the requirements for service of an individual within a judicial district of the United States. Rule 4(e) provides that service on an individual in a judicial district of the United States is adequate if effected in one of four ways, including by " delivering a copy of the summons and of the complaint to the individual personally." Fed.R.Civ.P. 4(e)(2)(A).

On June 14, 2013, Plaintiff filed a return of service demonstrating that a Sheriff of Lake County, Ohio, where Defendant resides, personally delivered the Summons and Complaint on May 23, 2013 to the Defendant. (ECF No. 17.) Plaintiff subsequently filed the proof of service, obtained entry of default from the Clerk of Court, and filed the present Motion seeking default judgment against Defendant, as outlined above.

Based on the foregoing authority and on the full record of this case, the Court finds that Plaintiff complied with the relevant notice statutes. As such, this Court has personal jurisdiction over the Defendant with respect to this action.

b. Specific Jurisdiction

Plaintiff bears the burden of establishing personal jurisdiction. Intercon, Inc. v. Bell A. Internet Solutions, Inc., 205 F.3d 1244, 1247 (10th Cir. 2000). " [P]laintiff need only make a prima facie showing [of personal jurisdiction] if the motion [for default judgment] is decided only on the basis of the parties' affidavits and other written materials." Dennis Garberg & Assocs., Inc., 115 F.3d at 773.

In Shrader v. Biddinger, 633 F.3d 1235 (10th Cir. 2011), the Tenth Circuit Court of Appeals clarified the law in this Circuit regarding the intersection of personal jurisdiction and the internet. In that case, the court found that evidence that a website forum user posted a message on the website was insufficient to establish either specific or general personal jurisdiction in Oklahoma over the forum user, because the message was geographically neutral and the forum was directed at a world-wide audience of market traders with no inherent interest or tie to Oklahoma. Shrader, 633 F.3d at 1248. The Tenth Circuit took the opportunity to emphasize that, in determining whether personal jurisdiction exists over a particular defendant, " courts look to indications that a defendant deliberately directed its message at an audience in the forum state and intended harm to the plaintiff occurring primarily or particularly in the forum state." Id. at 1241. In other words, " it is necessary to adapt the analysis of personal jurisdiction [to internet activity] by placing emphasis on the internet user or site intentionally directing his/her/its activity or operation at the forum state . . . ." Id. (emphasis in original). Without expressly adopting the test, the Tenth Circuit proceeded to approvingly quote the Fourth Circuit Court of Appeals' discussion on this issue in ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 712 (4th Cir. 2002):

[A] State may, consistent with due process, exercise judicial power over a person outside of the State when that person (1) directs electronic activity into the State, (2) with the manifested intent of engaging in business or other interactions within the State, and (3) that activity creates, in a person within the State, a potential cause of action cognizable in the State's courts. Under this standard, a person who simply places information on the Internet does not subject himself to jurisdiction in each State into which the electronic signal is transmitted and received. Such passive Internet activity does not generally include directing electronic activity into the State with the manifested ...

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