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BARRERA v. BROOKLYN MUSIC

June 30, 2004.

JAVIER BARRERA and LYNN BURGOS, Plaintiffs,
v.
BROOKLYN MUSIC, LTD., K-TEL INTERNATIONAL, INC., FRANK BABAR and JOHN and JANE DOES 1 through 10, Defendants.



The opinion of the court was delivered by: KEVIN FOX, Magistrate Judge

REPORT AND RECOMMENDATION

TO THE HONORABLE ROBERT L. CARTER, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

  In this action, plaintiffs Javier Barrera ("Barrera") and Lynn Burgos ("Burgos") (collectively "plaintiffs") allege violation of the Copyright Act of 1976, 17 U.S.C. § 101, et seq. ("Copyright Act"), against Brooklyn Music, Ltd. ("BML") and Frank Babar ("Babar") (collectively "defendants"). Upon the defendants' failure to answer or otherwise respond to the complaint or to the amended complaint, your Honor referred the matter to the undersigned to conduct an inquest and to report and recommend the amount of damages, if any, to be awarded to the plaintiffs against the defendants.

  The Court directed the plaintiffs to file and serve proposed findings of fact and conclusions of law and an inquest memorandum setting forth their proof of damages, the costs of this action, and their attorney's fees. The defendants were directed to file and serve opposing memoranda, affidavits and exhibits, as well as any alternative findings of fact and conclusions of law they deemed appropriate. The defendants were also directed to state whether they wanted a hearing to be held for the purpose of examining witnesses.

  In support of their request for damages, the plaintiffs submitted: (1) an inquest memorandum; (2) the declaration of Barrera, attesting to the facts in the plaintiffs' inquest memorandum; (3) the declaration of an expert in the area of licensing stock photographic works, Gary Elsner ("Elsner"), opining on the plaintiffs' actual damages ("Elsner Declaration"); and (4) the declaration of the plaintiffs' attorney, Nicholas A. Penkovsky ("Penkovsky Declaration").

  The defendants failed to respond to the Court's directive.

  The plaintiffs' submissions aver that they are entitled to $1,512,000.00 in actual damages and profits attributable to the defendants' infringement, as well as to unspecified costs they incurred in bringing this action. Additionally, the plaintiffs seek an order permanently enjoining the defendants from further distribution of the Green Silo #3 photograph ("Photograph"), which is the subject of this action, and an order that the defendants destroy any infringing articles in their possession.

  For the reasons set forth below, I recommend that the plaintiffs be awarded $27,000.00 in actual damages, and that the plaintiffs' application for injunctive relief be granted.

  II. BACKGROUND AND FACTS

  Based on submissions by the plaintiffs, the amended complaint filed in the instant action — the factual allegations of which, perforce of the defendants' default, must be accepted as true, except as they relate to damages, see Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981) — and the Court's review of the entire court file maintained in this action, the following findings of fact are made:

  The plaintiffs are visual artists residing in the state of New York. Defendant BML is a corporation organized and existing under the laws of the state of New York, with its principal office in Kings County. K-tel International, Inc. ("K-tel"), a defendant dismissed from the action following a negotiated disposition of the claims asserted against it, is a Minnesota corporation with an office in New York County. At times relevant to this action, K-tel and BML were each engaged in the business of producing, marketing, distributing, and selling music recordings. Defendant Babar was BML's president.

  In August 1997, the plaintiffs jointly created the Photograph. It is an original abstract photograph of an aged agricultural silo located in Vermont. The Photograph is part of a collection of the plaintiffs' photographs that are available for sale to collectors through art galleries. In November 1997, the plaintiffs showed the Photograph to a designer as part of a portfolio of the work the plaintiffs had created jointly. The plaintiffs left the Photograph with the designer for review only; they did not authorize its reproduction.

  In an agreement dated June 24, 1997 (the "1997 Agreement"), K-tel retained Babar as a consultant. At the conclusion of the 1997 Agreement's one-year term, K-tel, Babar and BML entered into an agreement ("1998 Agreement") under which: 1) K-tel was to provide funding of at least $60,000.00 per month to BML for a period of two years; 2) Babar was to be employed exclusively by BML; and 3) K-tel acquired certain options to purchase a controlling interest in BML. In pertinent part, the preamble to the 1998 Agreement states the following:
* * *
[. . .] K-TEL and BML have previously and will continue to enter into agreements with regard to the exploitation of BML Assets ("Other K-TEL Agreements") including, without limitation, with regard to the following:
a) the distribution by K-TEL of albums produced, recorded, owned or controlled by BML or artists with whom BML has agreements; and b) the licensing by K-TEL of masters, entire ...

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