Broadcast Music, Inc. v. GT Leesburg 2014, LLC

          REPORT AND RECOMMENDATION

          THERESA CARROLL BUCHANAN UNITED STATES MAGISTRATE JUDGE

         THIS MATTER comes before the Court on Plaintiffs' Motion for Default Judgment (Dkt. 21). After representatives for Defendants failed to respond to Plaintiffs' motion or to appear at the hearing on June 28, 2019, the matter was taken under advisement.^[1] For the reasons stated below, the undersigned U.S. Magistrate Judge recommends that Plaintiffs' Motion for Default Judgment be GRANTED.

         I. INTRODUCTION

         A. Background

         On January 9, 2019, Broadcast Music, Inc. ("BMI") along with four (4) other entities (together, the "Plaintiffs") filed this lawsuit against GT Leesburg 2014, LLC ("GT Leesburg"), Brent Byer, David Byer, ^[2] and Darlene Byer (together, the "Defendants"), alleging four claims of copyright infringement. (Compl. ¶ 24.) The alleged infringement all took place at an establishment known as The Green Turtle, located at 603 Potomac Station Drive, Leesburg, VA 20176 (the "Establishment"). (Id. ¶¶ 9, 22-23.) Plaintiffs now seek an entry of default judgment that awards them monetary damages, attorney's fees and costs, interest, and injunctive relief.^[3] (Pl's. Mem. Supp. at 5.)

         B. Jurisdiction and Venue

         Before the Court can render default judgment, it must have both subject-matter jurisdiction and personal jurisdiction over the defaulting parties, and venue must be proper.

         The Court has subject-matter jurisdiction over this action. A federal district court has original jurisdiction when an action involves a civil action "arising under the Constitution, laws, or treatises of the United States." 28 U.S.C. § 1331. In this case, Plaintiffs assert copyright infringement claims against Defendants pursuant to the Copyright Act, a federal statute. (Compl. ¶ 1.) Accordingly, the Court has subject-matter jurisdiction over the copyright infringement claims against Defendants pursuant to 28 U.S.C. §§ 1331 and 1338(a).

         The Court has personal jurisdiction over Defendants in this action. The inquiry to find personal jurisdiction requires either specific jurisdiction "based on conduct connected to the suit" or general jurisdiction based on "continuous and systematic" activities in the forum state. Tire Eng'g & Distrib., LLC v. Shandong Linglong Rubber Co., 682 F.3d 292, 301 (4th Cir. 2012) (quoting ALS Scan, Inc. v. Dig. Serv. Consultants, Inc., 293 F.3d 707, 711 (4th Cir. 2002)).

         GT Leesburg, a Virginia limited liability company, maintains and operates the Establishment, which is located in this district. (Compl. ¶ 9.) Therefore, GT Leesburg has "continuous and systematic" activities within Virginia to be subject to general jurisdiction. Cf. Daimler AG v. Bauman, 571 U.S. 117, 137 (2014) (corporations subject to general jurisdiction in places where they are "fairly regarded as at home" (quotations omitted)). On the other hand, Plaintiffs failed to specifically allege the residency or domicile of Defendant David "Brent" Byer. Nonetheless, the undersigned finds that the Court also possesses personal jurisdiction over Brent Byer under the specific jurisdiction inquiry as he owns GT Leesburg, operates, maintains, and controls the Establishment, and is directly involved with the harmful conduct alleged in the Complaint. (Compl. ¶¶ 12-14, 18-20, 22-30.) Moreover, the undersigned also notes that personal jurisdiction might also be appropriate as Brent Byer was personally served while within this judicial district. See Burnham v. Superior Court, 495 U.S. 604, 610-11 (1990); Blackson v. Blackson, 579 S.E.2d 704, 711-12 (Va. Ct. App. 2003).

         For similar reasons, the undersigned finds that Venue in this action is proper in this Court pursuant to 28 U.S.C. §§ 1391(b)(2) and 1400(a).

         C. Service of Process

         Before the Court can render default judgment, it must be satisfied that all defaulting parties have been properly served. Pursuant to Federal Rule of Civil Procedure 4(e)(2)(A), an individual within a judicial district of the United States may be served by delivering a copy of the summons and complaint to the individual personally. For corporations, partnerships, or associations, Federal Rule of Civil Procedure 4(h)(1)(A) provides that service may be effected in the manner prescribed in Rule 4(e)(1) for serving individuals. Rule 4(e)(1) provides that service may be effected pursuant to the laws of the forum state. Virginia law provides that service on a limited liability company may be effected by serving its registered agent. Va. Code § 13.1-1018. Rule 4(h)(1)(B) provides that service upon a business entity may be effected by serving an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process.

         On January 16, 2019, Plaintiffs' process server personally served David "Brent" Byer both individually and as the registered agent for GT Leesburg. (Dkts. 14-16.) Therefore, the undersigned finds that Defendants were properly served with the summons and complaint.

         D. Grounds for Default Judgment

         The entry of default judgment may be appropriate when a defendant has failed to appear in a case. See Fed. R. Civ. P. 55. To date, Defendants have not appeared or otherwise participated in these proceedings. On May 3, 2019, Plaintiffs filed their Request for Entry of Default, seeking entries of default for Defendants GT Leesburg and David "Brent" Byer. (Dkt. 19.) On May 7, 2019, the Clerk of the Court issued the Entry of Default for those Defendants. (Dkt. 20.) On May 23, 2019, Plaintiffs filed their Motion for Default Judgment. The undersigned U.S. Magistrate Judge then held a hearing on Plaintiffs' Motion for Default Judgment on June 28, 2019, at which no representative for Defendants appeared. Finding the matter uncontested, the undersigned took the matter under advisement to issue this Report and Recommendation. (Dkt. 26.)

         II. FINDINGS OF FACT

         Upon a full review of the pleadings and the record in this case, the undersigned finds that Plaintiffs established the following facts.

         Plaintiff BMI is a Delaware corporation with its principal place of business in New York, New York. (Compl. ¶ 3.) The other Plaintiffs are a mixture of corporations, unincorporated business associations, and trusts. (Id. ¶¶ 5-8.) The other Plaintiffs own the copyrights in the musical compositions that are the subject of this suit. (Id. ¶ 4; Williams Decl. ¶ 4.)

         BMI, through agreement with copyright owners, acquires non-exclusive performance rights to musical compositions. (Compl. ¶¶ 3-4; Williams Decl. ¶ 2.) BMI has been granted the right to license the public performance rights in fourteen (14) million copyrighted musical compositions ("BMI Repertoire"). (Compl. ¶ 3; Mem. Supp. at 2.) Upon acquiring those rights, BMI then grants broadcasters and the owners and operators of public establishments such as concert halls and restaurants, the right to publicly perform any of the works in BMI's Repertoire through "blanket license agreements." (Williams Decl. ¶ 2.) BMI operates as a non profit-making performing rights organization; all money it collects in license fees is distributed as royalties to the copyright owners after deducting operating expenses and reasonable reserves. (Id. ¶ 3.) The Plaintiffs in this case granted BMI the right to publicly perform their copyrighted music compositions and to issue public performance license agreements to music users. (Id. ¶ 5.)

         Defendant GT Leesburg is a Virginia limited liability company that operates, maintains, and controls The Green Turtle, located at 603 Potomac Station Drive, Leesburg, Virginia 20176. (Compl. ¶ 9; Mullaney Decl. ¶ 3.) Brent Byer is an owner of GT Leesburg. (Compl. ¶¶ 13, 19.) He is responsible for the operation and management of both GT Leesburg and the Establishment- having a direct financial interest in both. (Id. ¶¶ 12-14, 18-20.)

         Prior to June 2016, BMI learned that the Establishment publicly performed copyrighted music works in BMI's Repertoire without permission. (Compl. ¶ 22; Mullaney Decl. ¶ 3.) On June 1, 2016, BMI sent a letter to Defendants, advising them that a license was necessary in order to perform music in BMI's Repertoire. (Mullaney Decl. ¶ 3.) BMI included an informational brochure and a license agreement with the June 1st correspondence. (Id.) Defendants never responded. (Id.)

         Over the next several months, BMI sent additional letters to Defendants. (Id. ¶ 4.) Defendants similarly did not respond to any of those letters either. (Id.)

         On December 12, 2016, BMI sent Defendants a cease and desist letter instructing them to stop all public performances of BMI-licensed music. (Id. ¶ 5.) BMI followed up that initial letter with approximately twelve (12) additional cease and desist letters. (Id. ¶¶ 5-7.)

         In addition to the letters, BMI licensing personnel contacted or attempted to contact Defendants on numerous occasions. (Id. ¶¶ 8-9.) Specifically, BMI personnel visited the Establishment on at least one (1) occasion and telephoned on twenty-seven (27) other occasions. (Id. ¶ 9.) On several of these occasions, BMI licensing personnel spoke with personnel associated with the Establishment's operation. (Id.) Irrespective of BMI's concerted efforts, ...