Elohim EPF USA, Inc. v. Karaoke Phoenix Inc ( 2019 )

1 2 3 4 5 6 7 8 United States District Court 9 Central District of California 10 Western Division 11 12 ELOHIM EPF USA, INC., CV 17-00630 TJH (GJSx) 13 Plaintiff, Amended 14 v. Order 15 KARAOKE PHOENIX, INC, et al., and 16 Defendants. Judgment 17 18 19 The Court has considered Plaintiff Elohim EPF USA, Inc.’s motion for default 20 judgment against Defendants Degolmok, Inc. [“Degolmok”] dba Degolmok Noraebang 21 and Jennifer Bittel, together with the moving papers. 22 Elohim is a subpublisher for music publishers in the Republic of Korea. Between 23 December, 2013, and September, 2016, Elohim copyrighted 24 Korean language songs 24 with the United States Copyright Office [“Copyrighted Songs”]. Various night clubs 25 in Los Angeles have been using the Copyrighted Songs in their karaoke machines 26 without paying royalties to Elohim. Elohim filed this copyright infringement action 27 against five unrelated night clubs and various individuals. 28 Degolmok does business as Degolmok Noraebang [“Noraebang”], a karaoke bar Amended Order and Judgment – Page 1 of 6 1 in Los Angeles. Bittel is, allegedly, Degolmok’s Chief Executive Officer and directs, 2 controls, and ratifies the operation and management in Noraebang. 3 Noraebang charges customers a fee to use the karaoke machines in its 4 establishment. On February 16, 2016, Elohim’s Chief Executive Officer, Chong Yun 5 Cha, visited Degolmok and either personally observed or participated in a karaoke 6 performance of each of the Copyrighted Songs, which were listed in Noraebang’s song 7 book. Elohim averred that it did not grant any of the Defendants the right to publicly 8 perform or display the Copyrighted Songs. 9 On December 16, 2016, Elohim sent Noraebang a cease and desist letter 10 regarding the Copyrighted Songs. 11 On January 26, 2017, Elohim filed this action against, inter alia, Degolmok and 12 Bittel for: (1) Direct copyright infringement, in violation of 17 U.S.C. §§ 106(4) and 13 (5); (2) Contributory copyright infringement, in violation of 17 U.S.C. §§ 105(4) and 14 106(5); Vicarious copyright infringement, in violation of 17 U.S.C. §§ 105(4) and 15 106(5); and (4) Inducing copyright infringement. Elohim alleged that the Defendants 16 willfully and knowingly infringed on its copyrights in the Copyrighted Songs. 17 On January 27, 2017, Elohim served Degolmok and Bittel. On July 5, 2018, the 18 Clerk of Court entered their defaults. 19 On January 7, 2019, Elohim filed this motion for default judgment against 20 Degolmok and Bittel, seeking a permanent injunction, statutory damages, and 21 attorneys’ fees and costs. 22 Elohim has satisfied the procedural requirements for default judgment under Fed. 23 R. Civ. P. 55(b) and Local Rule 55-1. 24 When considering a motion for default judgment, the Court must weigh the 25 following factors: (1) The possibility of prejudice to Elohim; (2) The merits of 26 Elohim’s claims; (3) The sufficiency of the complaint; (4) The amount of money at 27 stake; (5) The possibility of a dispute concerning material facts; (6) Whether default 28 was due to excusable neglect; and (7) The strong policy of favoring a decision on the Amended Order and Judgment – Page 2 of 6 1 merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). 2 The possibility of prejudice to Elohim is high because if the motion for default 3 judgment is denied, Elohim will have no alternative recourse against either Degolmok 4 or Bittel. See Elektra Entm't Grp. Inc. v. Crawford, 226 F.R.D. 388, 392 (C.D. Cal. 5 2005). 6 With regard to the second and third factors, the Court must accept the factual 7 allegations in the complaint regarding liability as true. Geddes v. United Fin. Grp., 8 559 F.2d 557, 560 (9th Cir. 1977). To establish a prima facie case of direct copyright 9 infringement, Elohim must demonstrate: (1) Ownership of a valid copyright; and (2) 10 The use of the copyrighted material without permission. See Feist Publications, Inc. 11 V. Rural Telephone Service Co., Inc., 499 U.S. 340, 361 (1991). Elohim provided the 12 Court with copies of the copyright registrations for the Copyrighted Songs and a 13 declaration from Cha that he personally witnessed the unauthorized use of each of the 14 Copyrighted Songs at Noraebang. Accordingly, Elohim has established liability for its 15 claim of direct copyright infringement. See Feist, 499 U.S. at 361. Further, because 16 Elohim alleged that Bittel directs, controls, and ratifies the operation and management 17 of Noraebang – and the Court must accept that allegation as true – Elohim has 18 established that Bittel either directly, contributorily, or vicariously infringed on 19 Elohim's copyrights. 20 With regard to the fourth factor, the Copyright Act provides for, and Elohim is 21 seeking, statutory damages. See 17 U.S.C. § 504. Under § 504, the minimum 22 statutory damage amount per copyright infringed is $750.00, while the maximum 23 statutory damage amount per copyright infringed is $150,000.00. 24 With regard to the fifth factor, the possibility of a dispute over material facts is 25 low, here, because the Court must accept the factual allegations in the complaint 26 regarding liability as true and Degolmok and Bittel did not oppose this motion. See 27 Geddes, 559 F.2d at 560. 28 With regard to the sixth factor, it is unlikely that Degolmok’s and Bittel’s Amended Order and Judgment – Page 3 of 6 1 absence were due to excusable neglect as this case was initiated two years ago, 2 Degolmok and Bittel were served, and this motion was filed six months after default 3 was entered. Degolmok and Bittel had adequate time to defend themselves. 4 Accordingly, there is nothing in the record to support a finding of excusable neglect. 5 With regard to the seventh factor, while public policy favors decisions on the 6 merits, the Eitel factors weigh in favor of the Court entering default judgment against 7 Degolmok and Bittel. See Eitel, 992 F. Supp. 2d at 1472. 8 Permanent Injunction 9 The Copyright Act provides the Court with the authority to issue a permanent 10 injunction on terms it deems reasonable to prevent continued copyright infringement. 11 See 17 U.S.C. §502(a). A permanent injunction is appropriate where: (1) Elohim 12 would be irreparably harmed, (2) Monetary damages are inadequate; (3) The balance 13 of hardships favors Elohim; and (4) That an injunction would benefit the public interest. 14 See eBay Inc. V. MercExchange LLC, 547 U.S. 388, 391-92 (2006). 15 Here, without an injunction, Elohim would be irreparably harmed because 16 Degolmok and Bittel could continuously violate Elohim's copyrights. See generally, 17 eBay, 547 U.S. at 391-92. Although the Copyright Act provides for statutory damages, 18 Elohim would have to file additional lawsuits for future infringements to vindicate its 19 rights. Accordingly, after weighing the factors, an injunction is warranted. See eBay, 20 547 U.S. at 391-92. 21 Statutory Damages 22 A copyright owner is entitled to recover either actual or statutory damages for 23 an infringement. 17 U.S.C. § 504(a). If there is no evidence of willful infringement, 24 the minimum statutory damage per copyright infringed is $750.00, and the maximum 25 statutory damage is $30,000.00. See 17 U.S.C. §504(c)(1). If the infringement was 26 committed wilfully, the maximum statutory damage increases to $150,000.00 per 27 copyright infringed. See 17 U.S.C. § 504(c)(2). 28 The Court has wide discretion in determining the amount within the statutory Amended Order and Judgment – Page 4 of 6 1 range and must consider what is just in each case based on the circumstances of each 2 infringement. See Peer Int'l Corp. v. Pausa Records, Inc., 909 F.2d 1332, 1336 (9th 3 Cir. 1990). Notably, the statutory damage range was designed not only to compel 4 restitution of profit and reparation for injury, but, also, to discourage wrongful 5 conduct. See F. W. Woolworth Co. v. Contemporary Arts, 344 U.S. 228, 233 (1952). 6 Here, Elohim alleged that Degolmok and Bittel willfully infringed its copyrights 7 and seeks $3,600,000.00 in statutory damages – $150,000.00 for each of the 8 Copyrighted Songs. Because Elohim specifically alleged that Degolmok and Bittel 9 acted willfully, the Court may accept this fact as true. See Aries Music Entm't, Inc. 10 v. Angelica's Record Distributors, Inc., 506 F. App'x 550, 552 (9th Cir. 2013). 11 However, Elohim failed to provide the Court with any argument or evidence regarding 12 its usual and customary licensing fees for its songs. See F. W. Woolworth, 344 U.S. 13 at 233. Given the facts and circumstances of this case, a fair statutory damage award 14 would be $2,000.00 per copyright infringed. Given that there were 24 copyrights 15 infringed, the total statutory damage award would be $48,000.00. 16 Pre-Judgment Interest 17 The Court has discretion to award Elohim pre-judgment interest to compensate 18 it for its lost ability to use lost profits. See Polar Bear Prods., Inc. v. Timex Corp., 19 384 F.3d 700, 716 (9th Cir. 2004). However, Elohim failed to substantiate its own 20 significant time delays in this case, namely the amount of time between the date of 21 service and the date defaults were requested, and the time between the date defaults 22 were entered and the date this motion was filed. Accordingly, pre-judgment interest 23 will not be awarded. 24 Attorneys' Fees and Costs 25 The Court has authority to grant the recovery of full costs and reasonable 26 attorney's fees to Elohim as the prevailing party. See 17 U.S.C. §505. Elohim seeks 27 $75,600.00 in attorneys fees and $330.00 of costs from Degolmok and Bittel. 28 However, pursuant to Local Rule 55-3, which sets forth a schedule for reasonable Amended Order and Judgment – Page 5 of 6 1 | attorneys' fees with regard to default judgments, Elohim is entitled to $3,480.00 in 2 || reasonable attorneys’ fees. 3 Elohim is entitled to recover only those costs recoverable under 28 U.S.C. § 4 | 1920. See Rimini Street, Inc. vy. Oracle USA, Inc. , 139 U.S. 873 (2019). Elohim may 5 || submit a bill of costs to the Clerk of Court. 7 Accordingly, 9 It ig Ordered that the motion for default judgment be, and hereby is, Granted 10 || as to Defendants Degolmok, Inc. and Jennifer Bittel. 11 12 It is further Ordered, Adjudged and Decreed that Judgment be, and hereby 13] is, Entered in favor of Plaintiff Elohim EPF USA, Inc. and jointly and severely 14 || against Defendants Degolmok, Inc., dba Degolmok Noraebang, and Jennifer Bittel in 15 || the amount of $51,480.00. 16 Date: August 12, 2019 ae 19 fer J. Hatter, HK 50 Senior Cited States District Judge 21 22 23 24 25 26 27 28 Amended Order and Judgment —- Page 6 of 6