Opinion
C/A No.: 3:15-4862-MGL-SVH
02-26-2018
James A. Wilson, Plaintiff, v. National Bikers Roundup Inc., Columbia SC Roundup Committee, Rozell Nunn d/b/a R&R Enterprise and Rozell Nunn, individually, Albert Butler, and Sheldon Mickens, Defendants.
REPORT AND RECOMMENDATION
This matter comes before the court on the motions of James A. Wilson ("Plaintiff") for: (1) default judgment against Albert Butler ("Butler") [ECF No. 72]; and (2) summary judgment against Sheldon Mickens ("Mickens) [ECF No. 73]. All pretrial proceedings in this case were referred to the undersigned pursuant to the provisions of 28 U.S.C. § 636(b)(1)(B) and Local Civ. Rule 73.02(B)(2)(e) (D.S.C.). Because the motions for summary judgment and default judgment are dispositive, this report and recommendation is entered for the district judge's consideration.
For the reasons that follow, the undersigned recommends the district court grant the motions. I. Factual and Procedural Background
Plaintiff initially filed this action against Rozell Nunn d/b/a R&R Enterprise ("R&R") and in his individual capacity ("Nunn"), National Bikers Roundup, Inc. ("NBR"), and Columbia SC Roundup Committee ("CRC") (together with Butler and Mickens, "Defendants") on December 8, 2015, to recover damages arising from the sale at a motorcycle festival held in Darlington, South Carolina, on August 5, 2015 ("Festival"), of shirts that included infringements of Plaintiff's graphic designs. Compl. ¶¶ 10-30 (ECF No. 1). Specifically, Plaintiff asserts a copyright for a graphic design (the "Wilson Design") that was used on the shirts without his permission. Id. ¶¶ 16, 25-26, 28-30; [ECF Nos. 1-1, 1-2]. Together with his complaint, Plaintiff submitted Registration Certificate No. VA 1-976-227 issued by the United States Copyright Office on October 28, 2015, for the Wilson Design ("Certificate"). [ECF No. 1-3].
By order filed June 20, 2017, the court entered judgment against NBR, CRC, R&R, and Nunn for $12,500 in attorneys' fees and $150,000 in statutory and enhanced damages, for a total monetary award of $162,500, joint and several against them collectively. [ECF No. 67]. The court also granted Plaintiff's request for a permanent injunction. Id.
Plaintiff alleges Nunn was the owner and operator of R&R and was an integral part of organizing and planning the Festival, including having been involved in NBR's and CRC's process of approving items for Festival souvenirs. Id. ¶¶ 8, 18. Plaintiff states that, in preparation for the Festival, NBR and CRC sought a graphic design for Festival souvenir items, including for the sale of 7,500 shirts, with an anticipated revenue of $120,000. Id. ¶ 15; Wilson Aff. ¶¶ 3-5 (ECF No. 38-4). Plaintiff states he submitted the Wilson Design in a proposal to NBR and CRC and was informed that it had been selected for use on the souvenirs. Id. ¶¶ 16-19. Plaintiff states that NBR and CRC then reversed their position and told him that they would not need his services in producing the souvenir shirts or in using his design. Id. ¶¶ 19-21. Plaintiff alleges NBR and CRC nevertheless contracted with Nunn and R&R to produce and sell shirts at the Festival that included prominent elements of the Wilson Design. Id. ¶¶ 22-23; Answer of Nunn (ECF No. 16) ("I only printed what South Carolina Roundup Committee as [sic] to be printed.").
Plaintiff filed and served this lawsuit on CRC on December 17, 2015, and on NBR and R&R and Nunn on December 10, 2015. [ECF Nos. 8-11]. During motions briefing, Nunn alleged that Butler and Mickens actively participated in his acts of copyright infringement. Thereafter, Plaintiff filed an amended complaint on March 7, 2017 [ECF No. 51], adding Butler and Mickens as defendants. Proofs of service of the summons amended complaint on Butler and Mickens were filed [ECF Nos. 54 and 55], and after they failed to file an answer or otherwise appear, the Clerk entered default against them [ECF No. 58]. After the entry of default against Mickens, counsel appeared on his behalf and filed an answer and counterclaim [ECF No. 59, 60].
Plaintiff now seeks default judgment pursuant to Fed. R. Civ. P. 55 against Butler [ECF No. 72] and summary judgment pursuant to Fed. R. Civ. P. 56 against Mickens [ECF No. 73]. In each motion, Plaintiff requests an award of statutory damages, attorneys' fees and costs, as well as a permanent injunction to prevent Butler and Mickens from further infringing his copyrights.
On November 3, 2017, the court advised Butler of the default judgment procedures and the possible consequences if he failed to respond adequately to Plaintiff's motion by December 4, 2017. [ECF No. 74]. By mistake of the Clerk of Court, that order was mailed to a Ridgemoore Drive address and was returned as undeliverable. [ECF Nos. 75 and 76]. The order was then mailed to Butler's address on Winding Road and directed that he respond to Plaintiff's motion by January 3, 2018. [ECF Nos. 77 and 78]. On January 8, 2018, Butler filed a response [ECF No. 79], and on January 16, 2018, Plaintiff filed a reply [ECF No. 80].
Despite representation by counsel, Mickens failed to file a response to the motion for summary judgment.
Having considered the motions and the record in this case, the undersigned recommends that the court grant Plaintiff's motion for summary judgment against Butler and default judgment against Mickens. II. Discussion
A. Summary Judgment Standard
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "[S]ummary judgment will not lie if the dispute about a material fact is 'genuine,' that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. At the summary judgment stage, the court must view the evidence in the light most favorable to the non-moving party and draw all justifiable inferences in its favor. Id. at 255.
The moving party has the burden of proving that summary judgment is appropriate. Once the moving party makes this showing, however, the opposing party may not rest upon mere allegations or denials, but rather must, by affidavits or other means permitted by the rules, set forth specific facts showing that there is a genuine issue for trial. See Fed. R. Civ. P. 56(e).
B. Analysis
To prevail on an action for copyright infringement, "a plaintiff must show first that he owned the copyright to the work that was allegedly copied, and second, that the defendant copied protected elements of the work." Bouchat v. Baltimore Ravens, Inc., 241 F.3d 350, 353 (4th Cir. 2001). Copying may be shown by direct evidence or circumstantial evidence. If the plaintiff relies on circumstantial evidence, the "plaintiff may prove copying by circumstantial evidence in the form of proof that the alleged infringer had access to the work and that the supposed copy is substantially similar to the author's original work." Id. at 353-54.
It is undisputed that Plaintiff owns the Wilson Design. Copyright registration certificates issued by the United States Copyright Office enable an author to verify to others his ownership of a work. Barring a showing of a certificate's invalidity, pursuant to 17 U.S.C. § 410(c), the document represents prima facie evidence that Plaintiff owns a valid copyright to a work. See Serv. and Training, Inc. v. Data Gen. Corp., 963 F.2d 680, 688 (4th Cir. 1992) (certification of copyright is "prima facie evidence of the validity of the copyright"). The allegations of the Complaint against Butler and Mickens are deemed admitted because they defaulted on their obligations to defend the litigation.
In his late, one-paragraph response opposing default judgment, Butler states as follows:
In this matter this is my opposition to James A. Wilson (Plaintiff) motion for default judgement. I Albert Butler (Defendant) respectfully disagree with James A. Wilson (Plaintiff) that I
infringed on his t-shirt design. The design in question was scanned from the internet as an image of the South Carolina State flag and the use of the Palmetto tree. The tree branches were used to include the club names on them. I Albert Butler (Defendant) as a average person do not fully understand this litigation so I'm now obtaining legal counsel. I Albert Butler (Defendant) respectfully request the court to review my case and give me time to prepare. Enclosed are a few documents to review.[ECF No. 79]. Attached to Butler's response appear to be email between him and Mickens, along with Plaintiff's invoice to Butler, as Chairman of the CRC, for $7,250.00 for the Wilson Design. Id.
In his reply, Plaintiff notes that Butler "has ignored his obligation [to participate in the litigation of this case] until the eleventh hour." [ECF No. 80]. Plaintiff notes that Butler has still not responded to any discovery requests or submitted any admissible evidence, instead asking that his conduct be excused based on his denials of involvement. Plaintiff notes Butler has had substantial time to respond to the complaints against him and chose to wait until ten months after he was served the amended complaint—and more than two years after being served the original complaint—to request time to seek legal counsel. Plaintiff argues that because Butler had an adequate opportunity to fully respond to the amended complaint and participate in discovery and failed to do so, the court should disregard any statement of his that is not supported by evidence in the record.
Further, Plaintiff notes that the very documents Butler submitted as attachments to his response corroborate Plaintiff's account of the facts and do not support Butler's claim of innocence. Specifically, in the email attached to the response, Butler states "both Sheldon and I, we realize that your art work was chosen. . . Regrettably we want[sic] be going forward with your artwork." Id. Plaintiff argues this statement is additional proof that Butler knew that the artwork belonged to Plaintiff and that he was an active participant in the decision-making process. The court agrees.
The court cannot approve of a litigant ignoring the rules of civil procedure and court orders and at the last minute requesting the court's grace to not be held accountable for his willful failure to comply with the court's repeated warnings of the consequences of failing to abide by the rules and orders. Additionally, because Mickens has also failed to respond to the motion for summary judgment against him, the court finds that both Butler and Mickens are liable for copyright infringement as a matter of law in this action.
In the absence of a response, the court decides the motion on the record, which in this case is comprised primarily of evidence provided by Plaintiff. See Local Civ. Rule 7.06 (D.S.C.).
Statutory damages for copyright infringement
The Copyright Act encourages registration, which then allows copyright holders to seek statutory damages in situations such as the present one where the apportionment of damages under § 504(b) becomes complex or relief is unavailable. In this case, Plaintiff failed to register his copyright prior to the infringement and is therefore limited in the damages that he may seek—only actual damages and infringer's profits pursuant to § 504(b). Dash v. Mayweather, No. 3:10-CV-1036-JFA, 2012 WL 1658934, at *4 (D.S.C. May 11, 2012), aff'd, 731 F.3d 303 (4th Cir. 2013).
Nevertheless, Plaintiff argues that because he does not seek damages in an amount certain, the court must ascertain the amount of damages to award. Ahava (USA), Inc. v. J.W.G., Ltd., 286 F. Supp. 2d 321, 323-24 (S.D.N.Y. 2003). Plaintiff argues he has been denied the opportunity to conduct discovery to determine the full extent of Defendants' infringement and the amount of actual damages he has suffered based on Defendants' profits. Therefore, Plaintiff argues that the court should award him statutory damages available under the Copyright Act as a sanction for Butler and Mickens' failures to participate in this litigation. See Update Art Inc. v. Modin Publ'g, Ltd., 843 F.2d 67, 72 (2d Cir. 1988) (upholding the imposition of damages as a sanction for a discovery order violation and noting that the calculation of damages was just where the information defendants failed to provide went to the issue of damages); Sara Lee Corp. v. Bags of N.Y., Inc., 36 F. Supp. 2d 161, 165 (S.D.N.Y. 1999) (awarding statutory damages after defendants failed to appear and defend).
The Copyright Act has a provision authorizing an award of statutory damages in lieu of actual damages. Statutory damages are provided under the Copyright Act for up to $30,000 per copyright violation, whether willful or not, and enhanced damages up to $150,000 per copyright if the infringement is willful. 17 U.S.C. § 504(c). Statutory damages are fitting in default judgment cases due to infringer nondisclosure. See Sara Lee Corp., 36 F. Supp. 2d at 165; see also Tiffany Inc. v. Luban, 282 F. Supp. 2d 123, 124 (S.D.N.Y. 2003); Philip Morris USA, Inc. v. Castworld Prods., Inc., 219 F.R.D. 494 (C.D. Cal. 2003); Lorillard Tobacco Co. v. Montrose Wholesale Candies and Sundries, Inc., No. 03 C 5311 & 4844, 2007 WL 2580491, at *2 (N.D. Ill. Sept. 10, 2007) (statutory damages were "particularly appropriate" in a case where default was granted as a Rule 37 sanction after defendants' pervasive discovery abuse).
The amount of statutory damages awarded to a plaintiff within the range provided does not depend on actual damages. Courts have held that even where there are no actual damages, or only nominal damages to the plaintiff, a plaintiff may nevertheless recover enhanced statutory damages because of the difficulty in proving actual damages and the policy favoring deterrence of infringement. Peer Int'l Corp. v. Pausa Records, Inc., 909 F.2d 1332 (9th Cir. 1990) (statutory damages appropriate regardless of proof of actual damages or defendant's profits); Wilson Corp. v. Tierra Computer, Inc., 184 F. Supp. 2d 1329, 1333 (N.D. Ga. 2001) (rejecting defendant's argument that plaintiff must prove actual damages before it can recover statutory damages); Superior Form Builders, Inc. v. Dan Chase Taxidermy Supply Co., Inc., 74 F.3d 488, 496 (4th Cir. 1996) (upholding an award of maximum statutory damages in a case where the plaintiff argued that the defendant established no actual damages). "Statutory damages have been made available to plaintiffs in infringement actions precisely because of the difficulties inherent in proving actual damages and profits, as well as to encourage vigorous enforcement of the copyright laws." Sara Lee Corp., 36 F. Supp. 2d at 165-66.
Maximum amount of statutory damages for willful infringement
A court may infer that a defendant's infringement is willful from the defendant's failure to defend. See Tiffany, 282 F. Supp. 2d at 124 ("By virtue of the default, the [defaulting party's] infringement is deemed willful."). In addition to this inference, it appears that the infringement was willful. Butler and Mickens appear to have consciously decided to solicit and use Plaintiff's design without his permission for profit.
To sanction Butler and Mickens for their willful infringement, and to deter them and others from future infringing behavior, the undersigned recommends granting Plaintiff's request for the maximum statutory damages of $150,000. See Getty Images (US), Inc. v. Virtual Clinics, No. C13- 0626JLR, 2014 WL 1116775 (W.D. Wash. Mar. 20, 2014) (awarding maximum statutory damages for the willful infringement of two photographs); Teri Woods Publ'g, L.L. C. v. Williams, No. 12-4854, 2013 WL 6179182 (E.D. Pa. Nov. 25, 2013) (awarding maximum statutory damages for infringement of a literary work); Graduate Mgmt. Admission Council v. Raju, 267 F. Supp. 2d 505, 511 (E.D.Va.2003) (finding maximum statutory damages appropriate for willful infringement of test forms).
Permanent injunction
Plaintiff also seeks a permanent injunction to prevent any future infringement of his copyright. The Copyright Act permits the issuance of permanent injunctions to prevent future violations. 17 U.S.C. § 502(a). "[W]hen a claim of copyright infringement has been proven, a permanent injunction prohibiting further infringements is appropriate and routinely entered." M.L.E. Music v. Kimble, Inc., 109 F. Supp. 2d 469, 472-73 (S.D.W.Va. 2000). The Copyright Act permits a court to "grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright." 17 U.S.C. § 502(a). Where, as here, the willful and unauthorized use of Plaintiff's copyright was for commercial gain, a likelihood of future harm may be presumed. Nat'l Football League v. McBee & Burno's Inc., 792 F.2d 726, 729 (8th Cir. 1986) (citing Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 451 (1984)). "Injunctions are regularly issued pursuant to the mandate of Section 502, because the public interest is in the interest in upholding copyright protections." Arista Records, Inc., 298 F. Supp. 2d at 1314 (internal quotations omitted). "Courts also regularly issue injunctions as part of default judgments." Id.
The undersigned recommends the Court grant Plaintiff's request for a permanent injunction prohibiting Butler and Mickens further copying, use, or distribution of the Wilson Design and requiring destruction of any shirt, souvenir, data file, or other materials containing the Wilson Design.
Attorneys' fees and costs
The Copyright Act authorizes the court to award Plaintiff his reasonable costs and attorneys' fees. 17 U.S.C. § 505. The Copyright Act authorizes an award of costs and attorneys' fees to the prevailing party and such are awarded pursuant to the court's discretion. Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994) (prevailing party fees are to be awarded pursuant to the court's discretion); see also Jasperilla Music Co., M.C.A., Inc., 837 F. Supp. at 162 ("[Awards of] attorneys' fees in copyright actions are 'the rule rather than the exception.'"). In this case, in light of the willfulness of defendants' infringement and their failure to properly defend, an award of attorneys' fees and costs is warranted. Plaintiff submits the declaration of counsel in support of his request for reasonable attorneys' fees and costs he incurred in prosecuting this action against Butler and Mickens in the amount of $10,000. [ECF Nos. 72-2, 73-2].
In determining what constitutes a reasonable number of hours and the appropriate hourly rates (i.e., in calculating the lodestar fee), the court must consider the following factors: (1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorney's opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorney's expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation, and ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between attorney and client; and (12) attorneys' fees awards in similar cases. Barber v. Kimbrell's, Inc., 577 F.2d 216, 226 (4th Cir. 1978); Jackson v. Estelle's Place, LLC, No. 09-1700, 2010 WL 3190697, *4 (4th Cir. Aug. 12, 2010). Although the court must consider all twelve of the factors, the court is not required to rigidly apply these factors, as not all may affect the fee in a given case. "[T]hese factors should be considered in determining the reasonable rate and the reasonable hours, which are then multiplied to determine the lodestar figure which will normally reflect a reasonable fee." E.E.O.C. v. Serv. News Co., 898 F.2d 958, 965 (4th Cir. 1990). In determining whether a rate is reasonable, the court is to consider "prevailing market rates in the relevant community." Rum Creek Coal Sales, Inc. v. Caperton, 31 F.3d 169, 175 (4th Cir. 1994) (quoting Blum v. Stenson, 465 U.S. 886, 895 (1984)). Further, this court's Local Civ. Rule 54.02(A) provides that attorneys' fee petitions must comply with Barber "and shall state any exceptional circumstances and the ability of the party to pay the fee." Local Civ. Rule 54.02(A) (D.S.C.).
The information Plaintiff provided, coupled with the court's knowledge of rates in work of this type in this district, supports the $10,000 in fees submitted on behalf of Plaintiff. Based on the information and supporting documents before the court, the undersigned recommends that judgment against defendant include an award of costs and attorneys' fees in the amount of $10,000. III. Conclusion and Recommendation
The undersigned recommends summary judgment be entered against Defendants and that they be found liable for willful violation of Plaintiff's copyright in the Wilson Design. As a result of such violation, the undersigned recommends Plaintiff be awarded judgment against Butler and Mickens for $150,000 in statutory and enhanced damages. It is recommended that this judgment be made joint and several against the Defendants collectively. In addition, it is recommended that Plaintiff be awarded an $10,000 in attorneys' fees against Butler and Mickens.
IT IS SO RECOMMENDED. February 26, 2018
Columbia, South Carolina
/s/
Shiva V. Hodges
United States Magistrate Judge
The parties are directed to note the important information in the attached
"Notice of Right to File Objections to Report and Recommendation."
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. "[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must 'only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'" Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed. R. Civ. P. 72 advisory committee's note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); see Fed. R. Civ. P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk
United States District Court
901 Richland Street
Columbia, South Carolina 29201
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).