UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
January 4, 2006
JOHN WILEY & SONS, INC., AND WILEY PUBLISHING, INC., PLAINTIFFS,
MARCUS STUART D/B/A "STUARTMM," DEFENDANTS.
The opinion of the court was delivered by: Gabriel W. Gorenstein, United States Magistrate Judge
REPORT AND RECOMMENDATION
On July 12, 2005, plaintiffs John Wiley & Sons, Inc., and Wiley Publishing, Inc. (collectively, "Wiley") filed a complaint against defendant Marcus Stuart d/b/a "stuartmm" ("Stuart"). See Complaint, filed July 12, 2005 (Docket #1). The complaint seeks damages and injunctive relief for copyright and trademark infringement and trademark counterfeiting under 17 U.S.C. § 501, 15 U.S.C. § 1114(1), and 15 U.S.C. § 1117, as well as common law unfair competition. See Complaint ¶¶ 12-29. Stuart was served with the complaint, see Affidavit of Service, filed Aug. 26, 2005 (Docket #4), but did not answer. The district court thereafter ordered Stuart to show cause why a default judgment should not be entered against him. See Order to Show Cause, filed Sept. 20, 2005 (Docket #6); Affidavit of Service, filed Sept. 19, 2005 (Docket #5). On September 29, 2005, the district court entered an Order stating that a default judgment would be entered against Stuart and referring the case to the undersigned for an inquest regarding damages. See Order, filed Sept. 29, 2005 (Docket #8).
By Order dated October 7, 2005, this Court directed Wiley to make submissions supporting its request for damages against Stuart. See Scheduling Order for Damages Inquest, filed Oct. 7, 2005 (Docket #9) ("Scheduling Order"), at 1. A copy of the order was mailed to Stuart. In response, Wiley submitted a declaration and Proposed Findings of Fact and Conclusions of Law seeking to recover statutory damages in the amount of $10,000 and attorney's fees and costs in the amount of $3,682.50. See Plaintiff's Proposed Findings of Fact and Conclusions of Law, filed Nov. 16, 2005 (Docket #10) ("Proposed Findings"); Declaration of William Dunnegan in Support of Plaintiff's Proposed Findings of Fact and Conclusions of Law, filed Nov. 16, 2005 (Docket #11) ("Dunnegan Decl."), ¶¶ 6-7. The Court gave Stuart until December 21, 2005, to submit any response, see Scheduling Order at 2, but Stuart did not avail himself of this opportunity.
Neither party requested a hearing on the issue of damages. The Second Circuit has held that an inquest into damages may be held on the basis of documentary evidence "as long as [the Court has] ensured that there was a basis for the damages specified in [the] default judgment." Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989); accord Action S.A. v. Marc Rich & Co. Inc., 951 F.2d 504, 508 (2d Cir. 1991), cert. denied, 503 U.S. 1006 (1992). As Wiley's submissions provide such a basis, no hearing is required. The following findings of fact and conclusions of law are based on those submissions. In addition, in light of Stuart's default, Wiley's properly-pleaded allegations, except those relating to damages, are accepted as true.
See, e.g., Cotton v. Slone, 4 F.3d 176, 181 (2d Cir. 1993) ("factual allegations are taken as true in light of the general default judgment"); Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992), cert. denied, 506 U.S. 1080 (1993); Time Warner Cable of N.Y.C. v. Barnes, 13 F. Supp. 2d 543, 547 (S.D.N.Y. 1998).
II. FINDINGS OF FACT AND CONCLUSIONS OF LAW
Wiley owns the copyrights in its reference books, one of which is FOR DUMMIES.
Complaint ¶ 13. Wiley has received numerous U.S. Copyright Registrations, see Complaint Schedule A, and owns numerous trademarks for general reference books, including FOR DUMMIES, see Complaint Schedule B. Stuart has copied certain of Wiley's reference books, including its FOR DUMMIES line of reference books, into electronic format and sold those infringing copies on eBay. Complaint ¶ 11. Stuart has infringed "at least 6 separate copyrighted works of Wiley." Dunnegan Decl. ¶ 5; Complaint ¶¶ 13-15, Schedule A.
Under 17 U.S.C. § 504(c)(1), Wiley is entitled to statutory damages in an amount of at least $750 per infringing work up to a maximum of $30,000 per infringing work. See 17 U.S.C. § 504(c)(1). In addition, a court may award an enhanced recovery of up to $150,000 per infringing work if the infringement was willful. Id. § 504(c)(2); see, e.g., Viacom International, Inc. v. Fanzine International, Inc., 2001 WL 930248, at *3-*5 (S.D.N.Y. Aug. 16, 2001) ($500,000 in enhanced statutory damages under § 504(c)(2) awarded for defendants' willful infringement of five copyrighted television characters). Because Wiley seeks an award of statutory damages within the range permitted under § 504(c)(1), Wiley is not required to prove willfulness.
The amount sought by Wiley, $1666.67 per infringement, is at the low end of the range permitted by statute. An award in excess of the $750 minimum is appropriate in this case given that Stuart's infringement was conducted for a commercial purpose and Stuart has declined the opportunity to offer any explanation of his conduct in mitigation of damages. In addition, an elevated award is appropriate for deterrence purposes given the ease with which the violation here could be repeated. Accordingly, Wiley's request for a $10,000 award should be granted.
Under the copyright law, a court may in its discretion award costs and reasonable attorneys' fees. See 17 U.S.C. § 505. Given Stuart's default, it is impossible to apply all the factors normally used to guide a court's exercise of discretion in this area. See Knitwaves, Inc. v. Lollytogs Ltd., 71 F.3d 996, 1011 (2d Cir. 1995) (factors include "frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence"). Nonetheless, given the obvious need to compensate Wiley for its attorneys' fees, the importance of deterrence, and the small amount sought in this case, an award of fees is appropriate.
In New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136 (2d Cir. 1983), the Second Circuit held that a party seeking an award of attorneys' fees must support the request with contemporaneous time records that show "for each attorney, the date, the hours expended, and the nature of the work done." Id. at 1148. Wiley's attorneys have offered a summary of contemporaneous time records containing the required elements. See Exs. B, C to Dunnegan Decl. These records reflect costs and attorneys' fees of $3,682.50 in connection with this action. See id.; Dunnegan Decl. ¶ 7. This figure consists of 1.3 hours of Dunnegan's time at $275 per hour, or $357.50; and 20.5 hours of Megan Martin's time at $150 per hour, or $3,075; and costs of $250. Dunnegan Decl. ¶ 7; Exs. B, C to Dunnegan Decl. Based on the statement that Wiley has actually incurred these fees, Dunnegan Decl. ¶ 7, the court will accept that the requested hourly rates are reasonable. See, e.g., Getaped.com, Inc. v. Cangemi, 188 F. Supp. 2d 398, 407 (S.D.N.Y. 2002) ("In this case, the market of willing seller (i.e., provider of legal services) and willing buyer (i.e., the client) is a sufficient test of reasonableness: the requested fee award does not seem out of proportion to the skill and work required and is a relatively small amount compared to modern litigation costs, even in copyright cases.") (citing Nihon Keizai Shimbun, Inc. v. Comline Business Data, Inc., 166 F.3d 65, 74 (2d Cir. 1999); In Design v. Lauren Knitwear Corp., 782 F. Supp. 824, 836-37 (S.D.N.Y. 1991)). The hours sought are also within reason. Accordingly, $3,682.50 in costs and attorneys' fees should be awarded in addition to statutory damages of $10,000.
For the foregoing reasons, Wiley should be awarded judgment against Stuart in the amount of $13,682.50.
PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties have ten (10) days from service of this Report and Recommendation to file any objections. See also Fed. R. Civ. P. 6(a), (e). Such objections (and any responses to objections) shall be filed with the Clerk of the Court, with copies sent to the Hon. John G. Koeltl, 500 Pearl Street, New York, New York 10007. Any request for an extension of time to file objections must be directed to Judge Koeltl. If a party fails to file timely objections, that party will not be permitted to raise any objections to this Report and Recommendation on appeal. See Thomas v. Arn, 474 U.S. 140 (1985).
GABRIEL W. GORENSTEIN United States Magistrate Judge
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