The court has reviewed Magistrate Judge Joseph C. Spero’s report and recommendation regarding plaintiffs’ motion for default judgment. The report and recommendation was filed on October 6, 2014. During the intervening time, plaintiffs Au-tomattic, Inc. (“Automattic”) and Oliver Hotham (“Hotham”) have been attempting to serve defendant Nick Steiner (who resides in the United Kingdom) with a copy of the report and recommendation, but have to date been unsuccessful.
Although defendant was not served with the report and recommendation, and thus did not file any objections, the court is satisfied by Judge Spero’s detailed findings that the summons and complaint were properly served on defendant. There is no clear requirement in 28 U.S.C. § 636(b) that a report and recommendation be served on the opposing party. However, the court normally requests that the moving party do so, out of an abundance of caution. In this case, given that defendant was properly served (notwithstanding the difficulty of service in the U.K. under the Hague Convention) yet chose to default, the court will require no further expenditure of resources.
The court finds the report correct, well-reasoned and thorough, and adopts it in every respect. Accordingly, plaintiffs’ motion for default judgment is GRANTED. Judgment shall be entered for the plaintiffs, and the court awards plaintiffs damages in the amount of $960.00 for Hot-ham’s work and time, $1,860.00 for time spent by Automattic’s employees, and $22,264.00 for Automattic’s attorney’s fees, for a total of $25,084.00.
IT IS SO ORDERED.
REPORT AND RECOMMENDATION RE MOTION FOR DEFAULT JUDGMENT
Dkt. No. 22
I. INTRODUCTION
This action arises under subsection (f) of the Digital Millennium Copyright Act, 17 U.S.C. § 512 (“DMCA”), which provides a cause of action against any person who “knowingly materially misrepresents” that material or activity infringes a copyright to utilize the DMCA’s takedown notice procedures. See 17 U.S.C. § 512(f). Plaintiffs Automattic Inc. (“Automattic”) and Oliver Hotham (“Hotham”) allege that Defendant Nick Steiner (“Defendant”) violated subsection 512(f) by knowingly misrepresenting that Hotham published material on Automattic’s website that infringed Defendant’s copyright. Defendant has not filed an answer or otherwise responded to this action, and default has been entered by the clerk. Docket No. 21.
On May 22, 2014, Plaintiffs filed a Motion for Default Judgment (“Motion”). A hearing was held at which the Court requested supplemental evidence regarding damages. For the reasons explained below, it is recommended that Plaintiffs’ Motion for Default Judgment be GRANTED.
II. BACKGROUND
A. Digital Millennium Copyright Act (“DMCA”),
Congress passed the DMCA in 1998, adding § 512 to Title 17 of the U.S.Code. See 17 U.S.C. § 512. The purpose of the DMCA was to create an environment that
The DMCA also creates liability for individuals who abuse the takedown notice system by filing meritless claims of infringement. 17 U.S.C. § 512(f). Subsection 512(f) provides that any person who makes knowing, material misrepresentations in filing a DMCA takedown notice “shall be liable for any damages, including costs and attorneys’ fees[ ] incurred by the alleged infringer ... or by a service provider ...” Id.
B. Factual Allegations & Evidence re Takedown Notices
Hotham is a student journalist residing in London who maintains a blog on Word-Press.com, a web-publishing platform operated by Automattic. Compl. ¶¶ 10, 12-13. Automattic is a corporation based in San Francisco that operates WordPress as an open source for users to “work on, change or contribute to” in an effort to “empower a community of bloggers.” ■ Sie-minski Decl. (Dkt. 22-6) ¶¶ 13-14. While Automattic’s free and user-friendly hosting of digital content promotes expression, it also creates potential for copyright infringement. See Doe v. Getter,
In May or June of 2013, Hotham read an article about an organization called Straight Pride UK on the blog BuzzFeed. Compl. ¶21. On July 26, 2013, Hotham contacted Straight Pride UK, identifying himself as “a student and freelance journalist.” Compl. ¶ 22. Hotham asked if he could send Straight Pride UK “some ques-' tions about [the] organisation ... to find out a bit about who’s involved and what [it] hope[d] to accomplish.” Id.
On July 29, 2013, a staffer from Straight Pride UK responded affirmatively, and Hotham promptly sent a list of questions. Compl. ¶¶ 23-24. Defendant responded to Hotham’s questions on August 1, 2013. Compl. ¶25. In his email response, Defendant identified himself as the “Press Officer” for Straight Pride UK, and attached a PDF file named “Press Statement — Oliver Hotham.pdf” Compl. ¶26, Ex. A (“Press Statement”).
On August 3, 2013, Hotham posted an article to his blog on WordPress in which he discussed the information provided by Straight Pride UK in the Press Statement. Hotham wrote:
There has never been a better time to be gay in this country. LGBTI people will soon enjoy full marriage equality, public acceptance of homosexuality is at an all time high, and generally a consensus has developed that it’s really not that big of a deal what consenting adults do in the privacy of their bedrooms. The debate on Gay Marriage in the House of Commons was marred by a few old reactionaries, true, but generally it’s become accepted that full rights for LGBTI people is inevitable and desirable. Thank God.
But some are deeply • troubled by this unfaltering march toward common decency, and they call themselves the Straight Pride movement.
*1018 Determined to raise awareness of the “heterosexual part of our society”, Straight Pride believe that a militant gay lobby has hijacked the debate on sexuality in this country, and encourage their members, among other things, to “come out” as straight, posting on their Facebook page that:
“Coming out as Straight or heterosexual in todays politically correct world is an extremely challenging experience. It is often distressing and evokes emotions of fear, relief, pride and embarrassment.” I asked them some questions.
Compl. ¶ 29. Hotham also posted the questions he sent to Straight Pride UK and the corresponding answers in the Press Statement. Compl. ¶ 30.
On the same day that Hotham posted the article on the blog at WordPress, Defendant sent an email to both Hotham and Automattic with the subject line:- “Digital Millennium Copyright Act — Removal Request”. Compl. ¶ 31. Defendant wrote:
Digital Millennium Copyright Act — Removal Request
This letter is official notification under the provisions of Section 512(c) of the Digital Millennium Copyright Act (“DMCA”) to effect removal of the above-reported infringements.
It is requested that you immediately remove any posts and or images including this one http://oliverhotham. wordpress.com/2013/08/03/its-great-when-youre-straight-yeah/ and http:// oliverhotham.files.wordpress.com/2013/ 08/straight-pride-website.jpg from your website, it is advised that this post and image is ‘Powered by Wordpress.’
User http://oliverhotham.wordpress.com did not have my permission to reproduce this content, on Wordpress.com or twitter account or tweets, no mention of material being published was made in communications.
Copies of this page have been taken and you shall receive a formal letter should this post not be removed within 24 hours from your blog. A DMCA has also submitted with a copyright breach to your website company.
Please be advised that law requires you, to “expeditiously remove or disable access to” the infringing photographs, images and blog text upon receiving this notice. Non-compliance may result in a loss of immunity for liability under the DMCA and will result in legal action for Copyright Breach and possible defamation.
It is of good faith belief that use of the material in the manner complained of here is not authorized by me, the copyright holder, or the law. The information here is accurate to the best of my knowledge. It is hereby sworn under penalty of perjury that the copyright holder of the said text, article and image that are in the website post and format. Please send at the address noted below a prompt response indicating the actions you have taken to resolve this matter. Sincerely,
For the Straight Forward Project
Gratz Decl. (Dkt. 22-1) Ex. B.
Automattic responded to Defendant and informed him that the “DMCA Takedown Notice has been received and reviewed for completeness,” and that Automattic “disabled access to the material identified as infringing.” Id. Automattic also informed Defendant that Hotham would have an opportunity to formally challenge this removal. Id. Plaintiffs allege that Automattic disabled access to Hotham’s blog post in reliance on Defendant’s takedown notice. See Compl. ¶ 36 (“But for those misrepresentations, Automattic would not have disabled access to the post identified in the notice.”).
Following the removal of his blog post, it appears that Hotham posted more content
WordPress.com is in no position to arbitrate content disputes or make any form of legal judgment on allegations or claims. Please provide us with a formal court order including a court’s decision regarding this particular content; if any content is found to be defamatory or illegal by a court of law, it will be removed immediately from the Word-Press.com service.
Id.
On August 14, 2014, Defendant sent a third email asking Automattic again to take down certain content posted by Hoth-man. Gratz Deck, Ex. D. Defendant wrote that he had “a good faith belief that use of the copyrighted materials described above as allegedly infringing is not authorized by the copyright owner, its agent, or the law.” Id. In response to Defendant’s third email, Automattic informed Defendant that “the DMCA Takedown Notice you have submitted is incomplete,” and asked Defendant to resubmit the takedown notice with additional information. Id.
Plaintiffs allege Automattic expended staff time and resources in reviewing the takedown notices, disabling Hotham’s posts, notifying Hotham of the takedown notices, handling requests for comment from press, and pursuing the instant action. Compl. ¶¶'37-38. Plaintiffs also allege that Hotham expended time and resources corresponding with Automatitic about the takedown notice and addressing this dispute. Id. ¶¶ 39. Further, Hotham alleges that his free speech rights have been chilled. Id. ¶ 40.
C. Procedural History
Plaintiffs filed this action for misrepresentation under 17 U.S.C. § 512(f) against Defendant on November 21, 2013. On December 10, 2013, Plaintiffs filed a Motion for an Extension of Time to serve Defendant in the United Kingdom. Dkt. No. 10. The court granted Plaintiffs’ motion, and Plaintiffs served Defendant on December 23, 2013. See Dkt. No. 14 (Summons); Gratz Deck, Exs. B, D.
Defendant’s answer was due on January 13, 2014. See Fed. R. Civ. P. 12(a)(l)(A)(i). Defendant has not filed an answer to the Complaint or otherwise appeared in this action. On May 20, 2014, the Clerk entered default against Defendant. Dkt. No. 21. On May 22, 2014, Plaintiffs filed a Motion for Default Judgment against Defendant. Dkt. No. 22. The Court held a hearing, and Plaintiffs have since submitted supplemental declarations.
III. DISCUSSION
A. Adequacy of Service
Courts must determine the adequacy of service of process on a motion for default judgment. Bank of the West v. RMA Lumber Inc., No. 07-6469 JSW,
Nick Steiner
New House
67-68 Hatton Garden
London, England EC1N8JY
Mat 1 (Summons); see also Dkt. No. 14-2. This was the address of The Straight Forward Project that was provided by Defendant in his communications with Automattic. See Gratz Deck, Exs. B, D. There is no indication from those communications that this address is Defendant’s personal residence.
Service outside of the United States must be done in accordance with Rule 4(f) of the Federal Rules of Civil Procedure. Rule 4(f)(1) provides that an individual “may be served at a place not within any judicial district of the United States ... by any internationally agreed means of service that is reasonably calculated to give notice, such as those authorized by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents.” Fed. R. Civ. P. 4(f)(1).
In Brockmeyer v. May, the Ninth Circuit wrote that “Rule 4(f)(1) authorizes service by those methods of service authorized by international agreements, including the Hague Convention.”
The Hague Convention affirmatively authorizes service of process through the Central Authority of a receiving state. Rule 4(f)(1), by incorporating the Convention, in turn affirmatively authorizes use of a Central Authority. However, Rule 4(f)(1) does not go beyond means of service affirmatively authorized by international agreements.
Id. Because it was “undisputed that Brockmeyer did not use either the Central Authority under the Hague Convention or any other internationally agreed means for accomplishing service,” the court found that Rule 4(f)(1) did not provide a proper basis for service. See id.
The Hague Convention provides that “[e]ach Contracting State shall designate a Central Authority which will undertake to receive requests for service coming from other contracting States.” Hague Convention Art. 2. “The Central Authority then may serve the document itself, or have it served by a method prescribed by its internal law for the service of documents in domestic actions upon persons within its territory.” Id. at art. 5. The Central Authority must complete a certificate confirming the “method, the place and the date of service and the person to whom the document was delivered.” Id. at art. 6.
Plaintiffs present three documents to support that Defendant was served in compliance with the Federal Rules of Civil Procedure and the Hague Convention. First, the American Proof of Service shows that a process server, Rick Hamilton of ABC Legal Services, sent the Complaint, Summons and other relevant documents to the “English Authorities,” which in turn served the documents by “posting them through defendant’s letterbox.” Dkt. No. 14 at 2 (Proof of Service). Next, Plaintiffs provide a copy of the USM-94, Request for Service Abroad of Judicial or Extrajudicial Documents. Dkt. No. 14-1. Use of this form accompanying American judicial process is a recognized procedure by foreign Central Authorities for a “private litigant who wishes to effect service in a foreign country pursuant to the Hague Convention.”
Further, the Certificate complies with Article 6 because it states the “method, the place and the date of the service and the person to whom the document was delivered.” Id. at art. 6. The Certificate provides that on December 23, 2013, the documents were served “by posting them through the defendant’s letterbox” to the address of The Straight Forward Project that was provided by Defendant in his communications with Automattic. Dkt. No. 14-2; see Gratz Deck, Exs. B, D. In the Ninth Circuit, a Certificate accurately executed by Central Authority “constitutes prima facie evidence of valid service which can only be overcome by strong and convincing evidence.” Oak Point Partners, Inc. v. Lessing, No. 11-3328-LHK,
The Court finds that Plaintiffs adequately served the Defendant through use of a designated Central Authority under article 18 of the Hague Convention in compliance with Rule 4(f)(1) of the Federal Rules of Civil Procedure.
B. Personal Jurisdiction
When entry of judgment is sought against a party who has failed to plead or otherwise defend, a district court has the affirmative duty to determine whether it has jurisdiction over the subject matter and the parties. In re Tuli,
i. Consent by Agreement to the WordPress Terms of Service
Plaintiffs present evidence that Defendant consented to personal jurisdiction when he accepted the WordPress Terms of Service in order to file his takedown notice. Plaintiffs state that Defendant’s second and third takedown notices show that Defendant was logged in as a Word-Press.com user. Sieminski Decl. ¶ 12; Gratz Deck, Exs. C, D. Plaintiffs further state that Defendant could not have become a WordPress.com user without accepting the WordPress.com terms of service. Id.
Plaintiffs present evidence that Word-Press’s terms of service include a forum-selection clause identifying “state and federal courts located in San Francisco County, California” as the “proper venue for disputes arising” from use of WordPress. Gratz Deck, Ex. A ¶20. Plaintiffs argue that acceptance of a forum-selection clause is evidence of consent to personal jurisdiction in that forum, and the Court may therefore properly exercise jurisdiction over the Defendant. Mot. at 7.
Here, Defendant’s conduct of accepting the terms of service is sufficient to constitute consent to personal jurisdiction in California. See Ross,
ii. Specific Jurisdiction
Plaintiffs also argue that the Court’s exercise of personal jurisdiction over Defendant is proper because the Defendant has sufficient minimum contacts in California. Mot. at 8. Plaintiffs argue that Defendant purposefully directed his activities toward California in filing a takedown notice pursuant to the DMCA, a United States law, against Plaintiff Automattic, a California-based company. Id. Plaintiffs contend that their claim arises out of Defendant’s action in California because he sent his allegedly fraudulent takedown notice to Automattic, and Automattic is located in California. Id. Plaintiffs argue that because Defendant invoked the laws of the United States to allegedly commit fraud upon Automattic in California, it is reasonable to exercise jurisdiction over the Defendant. Id. at 9.
“Because California’s long-arm jurisdictional statute is coextensive with federal due process requirements, the jurisdictional analyses under state law and federal due process are the same.” Dole Food Company, Inc. v. Watts,
(1) the non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;
(2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and
(3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.
“The first prong of the specific jurisdiction test refers to both purposeful direction and purposeful availment.” Mavrix Photo, Inc. v. Brand Technologies, Inc.,
To determine whether a defendant “purposefully directs his activities at a forum state,” courts apply the “effects” test from the Supreme Court’s decision in Colder v. Jones.
In the Ninth Circuit, the intentional act element requires “an intent to perform an actual, physical act in the real world, rather than an intent to accomplish a result or consequence of that act.” Brayton,
The second element of the “effects” test requires “something more” than a “foreign act with foreseeable effects in the forum state” to justify the assertion of personal jurisdiction. Bancroft,
In Bancroft, the defendant sent a letter to the Virginia headquarters of plaintiff, a California-based corporation, requiring that plaintiff sue defendant or lose rights to their domain name. Bancroft,
Here, the Court finds that Defendant’s sending the takedown notice to Au-tomattic with the knowledge and purpose that it would induce Automattic to remove content from Wordpress “individually targeted” Automattic and thus constituted conduct “expressly aimed” at California. The plain text of each takedown notice demonstrates that Defendant emailed each directly to Automattic with the purpose of forcing Automattic to remove content from Wordpress. See Gratz Decl. Exs. B, C, D. The first takedown notice contained the subject line “Digital Millennium Copyright Act — Removal Request.” Id. Ex. A. The body of the request identified specific “posts and or images” hosted by Word-press and expressly requested Automattic promptly remove them or face potential “liability under the DMCA.” Id. The subsequent takedown notices similarly requested Automattic remove specific content or face legal liability. See id. Exs. C, D. Like the letter sent to plaintiff in Bancroft, Defendant’s clear attempt to force action by Automattic or face legal consequences “individually targeted” Auto-mattic, and thus constituted “something more” than an act with merely foreseeable effects in California. See Bancroft,
The final element of the Calder “effects” test is satisfied if Plaintiff can show that “a jurisdietionally sufficient amount of harm is suffered in the forum state.” Yahoo! Inc. v. La Ligue Contre Le Racisme Et L’Antisemitisme,
Having found that Plaintiffs have met their burden in establishing the first prong of specific personal jurisdiction, the Court considers whether the claim is “one which arises out of or relates to the defendant’s forum-related activities.” Dole Food,
Because Plaintiffs have satisfied the first two prongs of the specific jurisdiction analysis, “the burden then shifts to the defendant to ‘present a compelling case’ that the exercise of jurisdiction would not be reasonable.” Id. (quoting Burger King Corp. v. Rudzewicz,
As a final point, Plaintiffs correctly distinguish the instant case from Getter, where the Northern District declined to exercise specific personal jurisdiction over a foreign defendant who sent a DMCA takedown notice to a California-based company. See Getter,
C. Motion for Default Judgment i. Legal Standard
After default has been entered against a party, a court may grant default judgment in its discretion. If the court is satisfied that jurisdiction is proper and that service of process upon the defendant was adequate, courts are instructed to consider several factors in determining whether to grant default judgment;
(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiffs substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action, (5) the possibility of a*1026 dispute concerning material facts, (6) whether the default was due to excusable neglect, and (7) the strong policy-underlying the Federal Rules of Civil Procedure favoring decisions on the merits.
Eitel v. McCool,
ii. Eitel Analysis
a. Sufficiency of Complaint
In considering the sufficiency of the complaint, the Court looks to the Plaintiffs’ allegations to determine whether they “state a claim on which the [plaintiff] may recover.” See Kloepping v. Fireman’s Fund, No. 94-2684 TEH,
Any person who knowingly materially misrepresents under this section—
(1) that material or activity is infringing, or
(2) that material or activity was removed or disabled by mistake or mis-identification,
shall be liable for any damages, including costs and attorneys’ fees, incurred by the alleged infringer, by any copyright owner or copyright owner’s authorized licensee, or by a service provider, who is injured by such misrepresentation, as the result of the service provider relying upon such misrepresentation in removing or disabling access to the material or activity claimed to be infringing, or in replacing the removed material or ceasing to disable access to it.
17 U.S.C. § 512(f) (emphasis added). Thus, to state a claim for misrepresentation under § 512(f), Plaintiffs must allege that Defendant “knowingly and materially misrepresented]” that copyright infringement has occurred, that Automattic “relied” on such misrepresentations, and that Plaintiffs have been “injured” as a result. See Online Policy Grp. v. Diebold, Inc.,
“[K]nowingly means that a party actually knew, should have known if it acted with reasonable care or diligence, or would have had no substantial doubt had it been acting in good faith, that it was making misrepresentations.” Diebold, Inc.,
Defendant’s misrepresentations must have also been “material,” which means that the misrepresentation affected Automattic’s response to the takedown notices. Diebold, Inc.,
Plaintiffs also allege that Automattic relied on Defendant’s misrepresentations, and that they have been injured as a result. See Compl. ¶¶ 36-40. These allegations are presumed true on a motion for default judgment. Accordingly, the' Court finds the Complaint to be sufficient, and that this factor weighs in favor of default judgment.
b. Merits of the § 512(f) Claim
The fact Defendant made his misrepresentations in London and not in the United States may present a challenge to the merits of Plaintiffs’ § 512(f) claim. “It is a ’longstanding principle of American law that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.” Morrison v. Nat’l Australia Bank Ltd.,
In Morrison, the Supreme Court' considered whether section 10(b) of the Securities and Exchange Act of 1934 applied extraterritorially. Morrison,
Emphasizing the presumption against extraterritorial application of domestic laws, the Court found that the plaintiffs did not have a cause of action under section 10(b). Id. at 273,
A court from the Central District of California considered the application of Morrison in the context of a statute prohibiting the trafficking of people into the United States. See Tanedo v. E. Baton Rouge Parish Sch. Bd., C-10-1172 JAK,
In line with Morrison and Tanedo, the focus of § 512(f) is not where the fraudulent misrepresentation originated, rather where the reliance, wrongful removal, and the resulting injury occurred. The text of § 512(f) specifically provides remedy for the party “who is injured by such misrepresentation, as the result of the service provider relying upon such misrepresentation in removing or disabling access to the material or activity claimed to be infringing, or in replacing the removed material or ceasing to disable access to it.” 17 U.S.C. § 512(f). The object of § 512(f), titled “Limitations on liability relating to material online[,]” is to not only regulate the removal of digital content, but also to protect the liability of web service providers. See id.
Here, the object of § 512(f) involves Au-tomattic’s removal of the article from WordPress, or potential threat of legal liability under the DMCA, both which occurred or would have occurred in California. Like in Tanedo, the application of the statute is not extraterritorial because the object of § 512(f) of the DMCA, the prohibition on misrepresentations to effect the removal and liability relating to digital material, is present. Moreover, key elements of the cause of action were performed in California. The material at issue was hosted by Automattic, a California corporation, and Defendant’s takedown notice was directed to Automattic in the California. Automattic’s reliance on Defendant’s misrepresentation and resulting injury also both occurred in California.
Further, this reasoning is consistent with Crunchyroll, where this Court held that copyright infringement that commenced abroad but was complete in the United States was not wholly extraterritorial, and thus, the Copyright Act covered the defendant’s conduct. See Crunchyroll,
c. Remaining Eitel Factors
Having found that the sufficiency of the complaint and merits of the § 512(f) claim weigh in favor of default judgment, the Court considers the remaining Eitel factors. Because Defendant has failed to respond to the complaint or otherwise appear in this action, Plaintiffs will be left without a remedy, and therefore prejudiced, if default judgment is not granted. The sum of money at stake, while not insignificant, is justified by the evidence proffered by Plaintiffs establishing damages, as discussed further below. Defendant was properly served, and there is no indication that default is due to excusable neglect. Defendant could conceivably dispute some of the material facts if he were to appear, but he has failed to do so, and the communications between Plaintiffs and
iii. Damages
Section 512(f) provides that any person who makes knowing, material misrepresentations in filing a DMCA takedown notice “shall be liable for any damages, including costs and attorneys’ fees[] incurred by the alleged infringer ... or by a service provider....” 17 U.S.C. § 512(f). The Court previously determined that Plaintiffs proof of damages was insufficient and requested supplemental evidence. Plaintiffs have filed supplemental declarations supporting their claims to damages under § 512(f), including: (1) time and resources expended in dealing with the takedown notice; (2) damages for reputational harm; (3) damages for Hotham’s emotional harm; (4) damages for Hotham’s chilled speech; and (5) costs and attorneys’ fees incurred by Automattic. Hotham requests $4,960 for lost time, reputational harm, emotional distress, and chilled speech. Hotham Supp’l Deck (Dkt. 27) ¶ 16; Compl. ¶ 40. Automattic requests $8,860 for lost time, costs of media relations, and reputational harm. Sieminski Supp’l Decl. ¶ 28. Plaintiffs also request $22,264 for attorneys’ fees. Gratz Supp’l Deck (Dkt. 26) ¶ 13.
a. Expenditure of Resources Dealing with Takedown Notice
Hotham claims that he spent “substantial time corresponding” with Automattic representatives about his permission to publish the content in the Press Statement, and then regarding the counter-notice he filed in accordance with the DMCA. See Hotham Deck (Dkt. 22-7) ¶ 6. General Counsel for Automattic, Paul Sieminski, states that the company “spent significant staff time and resources in reviewing [the] takedown notices, disabling access to the posts, notifying Hotham, reviewing Hotham’s response, dealing with press inquiries surrounding the takedown and reinstating of the post, and ultimately pursuing this litigation.” Sieminski Deck ¶ 11. Plaintiffs contend that this use of time and resources in response to Defendant’s knowing misrepresentation under § 512 entitles them to damages. Pis.’ Mot. at 9.
This district construes damages under § 512(f) broadly, as the statute’s use of “any damage” in its language “suggests strong Congressional intent that recovery be available for damages even if they do not amount to ... substantial economic damages.” Lenz v. Universal Music Corp., No. 5:07-cv-03783-JF,
Here, Plaintiffs’ recovery of damages for time and resources incurred in dealing with Defendant’s takedown notices is consistent with the Lenz court’s interpretation of § 512(f). Like in Lenz, Plaintiffs expended time researching and working on their computers and telephones, and thus incurred at least minimal expenses in “bills, and the like.” Id. Recovery of damages for lost time and resources is also consistent with the legislative intent of § 512(f) in deterring knowingly false allegations of infringement because it gives wrongfully accused internet users the incentive to bring a claim. Id. at *10.
Plaintiffs’ initial evidence regarding the expenditure of resources, however, was too general and ambiguous. Instead of attempting to quantify the resources each Plaintiff actually expended in dealing with Defendant’s takedown notices, Plaintiffs merely presented evidence that they spent “substantial” time and resources. Hotham Decl. ¶ 6; Sieminski Deck ¶ 11. Plaintiffs did not attempt to estimate the amount of damages that should granted for the expenditure of resources, instead estimating aggregate values of damages for time, resources, reputational harm, and chilled speech. Hotham Deck ¶ 15; Sieminski Deck ¶ 11. At the July 11 hearing, the Court requested a more specific explanation of Plaintiffs’ time and resources spent responding to Defendant’s takedown notices.
Plaintiffs have each submitted supplemental declarations regarding their damages. Hotham declares that he spent approximately sixteen hours researching the validity of the takedown notice, determining how to proceed, and responding to media inquiries
Automattic submitted a supplemental declaration of its general counsel, Paul Sie-minski. Automattic seeks to recover for
Automattic also seeks to recover for time spent by its outside public relations firm, Brew Media Relations (“Brew”). See id. ¶¶ 17-22. Automattic pays Brew a monthly retainer rather than on an hourly basis. Id. ¶¶ 19. Steiner’s Supplemental Declaration provides the approximate amount of time that Brew spends per month on issues for Automattic, and the approximate amount of time Brew’s employees spent as a result of Defendant’s takedown notices. Id. ¶ 20. Based on these estimates, Automattic seeks damages equal to a percentage of the monthly retainer (submitted under seal) that it pays Brew. Without more detail regarding Brew’s work and billing arrangements, however, it is not clear that the time Brew spent on the takedown notices represents any loss to Automattic. But for Defendant’s takedown notices, would Brew have provided other benefits to Automattic instead of dealing with the fallout of Defendant’s notices? Would Automattic have paid less, or been able to reduce its retainer for future billing cycles? The evidence Automattic has submitted leaves these questions unanswered. The damages Au-tomattic claims for Brew’s time are therefore speculative and should be denied,
b.Damages for Reputational Harm
Hotham states that Defendant’s fraudulent takedown notice has been “substantially harmful to [his] reputation for journalistic integrity[,]” that it comes during his “formative time as a joumalist[,]” and that as a result, it has been “more difficult to find work.” Hotham Decl. ¶¶ 12, 14. Automattic also alleges that the removal of lawful content compelled by Defendant’s fraudulent takedown notice caused “damages to [Automattic’s] reputation for allowing its users to use WordPress.com for any lawful purpose.” Sieminski Deck ¶ 15.
Plaintiffs make no real effort to justify the values they have assigned to this purported reputational harm. They are, based on the evidence submitted, speculative. Such damages are therefore unavailable.
c.Hotham’s Emotional Distress
Hotham’s Supplemental Declaration estimates “the emotional harm from this debacle to be $2000,” because “[t]his whole process has been incredibly upsetting and demoralizing.” Hotham Supp’l Deck ¶¶ 8, 11. While the Court sympathizes with Hotham’s undoubtedly unpleasant experience, the Court is aware of no authority holding that emotional distress damages are available under § 512(f).
d.Hotham’s Chilled Speech
Hotham alleges that Defendant’s fraudulent takedown notices were an abuse of the
Plaintiffs attempt to distinguish Lenz by noting that the plaintiff “did not care” that YouTube did not want to host her video, and therefore, did not show that her speech had been chilled. Mot. at 13; see id. Plaintiffs’ distinction is insufficient. Because all parties in the instant case are private actors, Hotham’s claim for chilled speech is analogous to Lenz. Thus, Hot-ham is not entitled under the DMCA to damages for his chilled speech as a result of Defendant’s takedown notices.
e. Automattic’s Attorneys’ Fees and Costs of Suit
Automattic is entitled to recover a reasonable award of attorneys’ fees under the DMCA. 17 U.S.C. § 512(f). To determine a reasonable award of attorneys’ fees, courts employ the “lodestar” figure, which is calculated by multiplying the number of hours reasonably expended on the litigation by the reasonable hourly rate. Gonzalez v. City of Maywood,
To determine the number of hours reasonably expended on the litigation, courts must consider whether “the time could reasonably have been billed to a private client.” Moreno v. City of Sacramento,
“Once the district court sets the compensable hours, it must determine a reasonable hourly rate considering the experience, skill, and reputation of the attorney requesting fees.” Schwarz v. Sec’y of Health & Human Servs.,
The evidence initially submitted in support of Automattic’s request for attorneys’ fees was insufficient. Automattic relied solely on the chart presented by its counsel, Joseph Gratz, outlining “major tasks” performed in connection to Plaintiffs’ case, but failing to indicate which attorney worked on each task. Gratz Decl. ¶ 8. At the July 11 hearing, the Court requested more detailed justification of Automattic’s requested award of fees.
Automattic has now submitted a more comprehensive explanation of its attorneys’ fees, including billing records for the three attorneys who worked on this case. See Gratz Supp’l Decl. Ex. C. The Court has reviewed these records and finds that the time spent prosecuting this action was reasonable.
IV. CONCLUSION
For the foregoing reasons, it is recommended that the Motion for Default Judgment be GRANTED, and that judgment be entered for Plaintiffs. The undersigned recommends awarding damages of $960 for Hotham’s lost work and time, $1,860 for time spent by Automattic’s employees, and $22,264 for Automattic’s attorneys’ fees, for a total of $25,084. This case shall be reassigned to a United States District Court judge. Any objections to this Report and Recommendation shall be filed within fourteen (14) days.
Dated: October 6, 2014
Notes
. U.S. Marshals Service, The U.S. Dept, of Justice, http://www.usmarshals.gov/process/ foreign_process.htm (last visited July 8, 2014).
. See Hague Conference: United Kingdom— Central Authority & practical information, Authorities, http://www.hcch.net/index_en. php?act=authorities.details&=aid=278 (last visited July 29, 2014).
. The Court finds no reason to exclude time responding to media inquiries from Plaintiffs’ damages, where such inquiries were “the result of [Automattic] relying upon [Defendant’s] misrepresentation in removing or disabling access to the material ... claimed to be infringing.” See 17 U.S.C. § 512(f); see also Lenz,
. To the extent that damages for Sieminski and Zhu’s time could be construed as a request for attorneys’ fees, the Court finds that their time and compensation was reasonable under the “lodestar” analysis applicable to attorneys’ fees, discussed in more detail below in the context of Automattic’s outside counsel's fees.
. Automattic does not seek to recover a significant amount of fees for the time spent preparing supplemental declarations to correct the deficiencies identified by the Court at the