Unicolors, Inc. v. Joy 153, Inc.

          ORDER RE: APPLICATION FOR DEFAULT JUDGMENT BY THE COURT AGAINST DEFENDANT JOY 153, INC. [19]

          Honorable Ronald S.W. Lew Senior U.S. District Judge

         Now before this Court is Plaintiff Unicolors Inc.'s ("Plaintiff") Application for Default Judgment by Court Against Defendant Joy 153, Inc. ("Defendant") ("Application") [19]. The present Application stems from a copyright infringement action against Defendant. Plaintiff alleges Defendant has sold unauthorized reproductions of one if its proprietary textile designs entitled "OH118" (hereinafter the "Subject Design"). Upon review of the present Motion and all relevant papers, this Court GRANTS Plaintiff's Application for Default Judgment, and in doing so, GRANTS Plaintiff's request for statutory damages, costs, and attorneys' fees.

         I. BACKGROUND

         A. Factual Background

         Plaintiff composed the Subject Design, an original, two-dimensional design, for use on textiles. Compl. ¶ 11, ECF No. 1. At all relevant times, Plaintiff was the exclusive owner of the Subject Design. Id. Thereafter, Plaintiff applied for and received a United States Copyright Registration for the Subject Design. Id. at ¶ 12. Prior to this action, Plaintiff sampled and sold fabric bearing the Subject Design to numerous parties in the fashion and apparel industries. Id. at ¶ 13. Plaintiff agreed that Defendant would be granted the right to exploit the Subject Design on a certain amount of product in exchange for Defendant obtaining permission to do so and tendering a royalty payment to Plaintiff. Id. at ¶ 14. Defendant's right to exploit the Subject Design was conditioned on the making of this payment, which Plaintiff alleges, was never made. Id.

         Plaintiff alleges that Defendant, along with other Defendants that have since been dismissed, "created, sold, manufactured, caused to be manufactured, and distributed garments comprised of fabric featuring designs which are identical to or substantially similar to the Subject Design (hereinafter ‘Infringing Garments') to at least one retailer . . . that then sold the garments to the public." Id. at ¶ 18. Plaintiff seeks statutory damages pursuant to Section 504(c)(2) of the Copyright Act, attorneys' fees, and costs. Id. at ¶ 25; Appl. for Default Judg. ("Appl.") 10:2-14:9, ECF No. 19.

         B. Procedural Background

         Plaintiff filed its Complaint on November 3, 2015 [1]. On November 12, 2015, Plaintiff filed a Notice of Dismissal, dismissing from the action without prejudice Defendants Nordstrom, Inc. and Lush Clothing Company, LLC [8]. The action continues against Defendant Joy 153, Inc. On February 9, 2016, Plaintiff requested that the clerk of Court enter default against Defendant [16]. On February 10, 2016, the clerk of Court entered default against Defendant [17]. On April 1, 2016, Plaintiff filed the present Application [19]. The Application was set for hearing on May 3, 2016. The Court found the Application suitable for decision without oral argument, and accordingly took the Application under submission on April 28, 2016 [22].

         II. ANALYSIS

         A. Legal Standard

         1. Application for Default Judgment

         Default judgment is within the discretion of the district court. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980); see Fed.R.Civ.P. 55. A party applying to the Court for default judgment must satisfy both procedural and substantive requirements.

         Procedurally, the requirements set forth in Federal Rules of Civil Procedure Rules 55 and 56, and Local Rule 55-1 must be met. See Vogel v. Rite Aid Corp., 992 F.Supp.2d 998, 1006 (C.D. Cal 2014). Local Rule 55-1 provides: "When an application is made to the Court for a default judgment, the application shall be accompanied by a declaration in compliance with Fed.R.Civ.P. 55(b)(1) and/or (2) and include the following: (a) When and against what party the default was entered; (b) The identification of the pleading to which default was entered; (c) Whether the defaulting party is an infant or incompetent person, and if so, whether that person is represented by a general guardian, committee, conservator or other representative; (d) That the Service Members Civil Relief Act, 50 U.S.C. § 521, does not apply; and (e) That notice has been served on the defaulting party, if required by Federal Rule of Civil Procedure 55(b)(2)." L.R. 55-1.

         Substantively, the Ninth Circuit has directed that courts consider the following factors, referred to as the Eitel factors in deciding whether to enter default judgment: "(1) the possibility of prejudice to plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action, (5) the possibility of a dispute concerning the material facts, (6) whether defendant's default was the product of excusable neglect, and (7) the strong public policy favoring decisions on the merits." See Vogel, 992 F.Supp.2d at 1005; see also Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). Additionally, "[w]hen entry of judgment is sought against a party who has failed to plead or otherwise defend, a district court has an affirmative duty to look into its jurisdiction over both the subject matter and the parties." In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999).

         In analyzing these factors, the Court may base its judgment entirely upon the affidavits submitted by the parties. Davis v. Fendler, 650 F.2d 1154, 1161 (9th Cir. 1981). If the Court determines that the defendant is in default, "‘the factual allegations of the complaint, other than those relating to damages, are taken as true.'" Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (quoting Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977)). Additionally, "[w]hen entry of judgment is sought against a party who has failed to plead or otherwise defend, a district court has an affirmative duty to look into its jurisdiction over both the subject matter and the parties." In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999).

         B. Analysis

         1. Application for Default Judgment

         a. Jurisdiction and Service of Process are Proper

         In considering whether to enter default judgment against a party for failing to plead or otherwise defend itself in an action, a district court must first determine whether it has jurisdiction over the subject matter and the ...