Lee v. RebelsMarket, Inc.

Background

Jackson Lee, a professional photographer, sued RebelsMarket, Inc. for copyright infringement involving two photographs of Kendall Jenner. Lee alleged that RebelsMarket displayed the photographs without a license or permission in an online clothing listing. Lee had registered the photographs with the United States Copyright Office.

RebelsMarket did not answer the complaint or otherwise appear. The Clerk entered default under Federal Rule of Civil Procedure 55(a). RebelsMarket later sent a letter stating that it could not afford legal counsel, but the court explained that a corporation must appear in federal court through licensed counsel. RebelsMarket did not obtain counsel, oppose Lee’s motion for default judgment, or appear at the hearing.

Court’s Analysis

Before considering default judgment, the court examined subject-matter jurisdiction, personal jurisdiction, venue, and service of process. It found that federal-question jurisdiction existed under the Copyright Act, that personal jurisdiction was adequately alleged because RebelsMarket’s principal place of business was alleged to be in San Mateo County, California, venue was proper, and an authorized agent was personally served in California.

The court applied the seven factors used to decide whether default judgment is appropriate. Six factors favored default judgment, while the factor favoring decisions on the merits weighed against it only slightly. The court concluded that RebelsMarket’s failure to participate made a decision through an ordinary contested proceeding impossible.

For the copyright claim, the court stated that Lee had to show ownership of a valid copyright and violation of one of the copyright owner’s exclusive rights. The court found that Lee sufficiently alleged both ownership and that RebelsMarket reproduced and publicly displayed the photographs without permission. Because RebelsMarket had defaulted, the complaint’s factual allegations other than those concerning damages were treated as admitted for purposes of the recommendation.

Recommended Remedies

Lee requested $30,000 in statutory damages, $6,100 in attorneys’ fees, and $503.32 in costs. The court recommended reducing the statutory damages request to $7,180. It used Lee’s median comparable licensing rate of $1,795 per photograph and applied a two-times multiplier. The court did not approve Lee’s proposed five-times multiplier because the record did not show a history of infringement, continued infringement after notice, or other particularly egregious conduct.

The court recommended awarding the full $6,100 in attorneys’ fees. It found the attorneys’ proposed hourly rates and the 11.1 hours spent on the case reasonable. It also recommended awarding $503.32 in costs, consisting of the filing fee and process-server and shipping fees.

Disposition

Magistrate Judge Nathanael M. Cousins recommended that Lee’s motion for default judgment be granted and that the district court enter judgment against RebelsMarket for $13,783.32. Because not all parties had consented to magistrate-judge jurisdiction, the court requested reassignment to a district judge. Lee was ordered to serve the recommendation on RebelsMarket, and any party could object within 14 days after service.