United States District Court, E.D. Pennsylvania
Verzella and Christopher Columbus, LLC seek to vacate a $56,
000 default judgment entered against them for copyright
infringement. Defendants showed the Floyd Mayweather/Conor
McGregor boxing match on a yacht that they owned and
operated, despite not having paid the licensing fee to Joe
Hand Promotions. Defendants ignored this litigation for over
a year, answering the bell only when hit with a default
judgment. The Court has reviewed the record and sees no
reason to vacate the default judgment, nor to let Verzella
off the hook for that judgment. However, the Court agrees
that $56, 000 is excessive and will cut that amount to $33,
600, plus costs in the amount of $560.84.
Hand Promotions distributes and licenses sporting events to
commercial establishments like bars, restaurants, and
clubhouses. (Compl. ¶ 4.) Joe Hand was granted the
exclusive right to commercially distribute the Floyd
Mayweather vs. Conor McGregor boxing match, which occurred on
August 26, 2017. (Id. ¶ 5.) “By written
agreement with the owner of the registered copyright of the
[boxing match], Plaintiff was assigned ownership of the right
to distribute . . . and authorize the public performance . .
. of the [boxing match].” (Id. ¶ 6.) Joe
Hand licensed the Mayweather/McGregor fight to over 6, 000
establishments nationwide. (Id. ¶ 10.) Of
course, an establishment could only show the fight after
paying a commercial license fee to Joe Hand. (Id.
was an officer, director, shareholder, member, or principal
of Christopher Columbus, LLC, a business that owned and
operated an establishment known as the Ben Franklin Yacht.
(Id. ¶¶ 7-8.) On fight night, there was an
event on the Ben Franklin Yacht. Specifically, an entity
called “Klutch Kings” advertised a three-hour
cruise on the Ben Franklin Yacht during which it promised,
“THE MAYWEATHER VS MCGREGOR FIGHT WILL BE SHOWN.”
(Pl.'s Mot. For Default J. Ex. A [Screenshot Invite].)
Subsequent screenshots make clear that the fight was indeed
shown on the Ben Franklin Yacht during the cruise.
(Id. Ex. B [Fight pictures].)
however, did not obtain permission to show the fight.
Instead, Defendants rented out the Ben Franklin Yacht for an
event that showed the fight to patrons of the establishment
without paying the licensing fee. Prior to showing the fight,
a copyright/piracy warning appeared on the screen. (Pl.'s
Resp. in Opp'n to Defs.' Mot. For Relief From Default
J. Ex. A [Copyright Notice].) According to Joe Hand,
“Defendants willfully engaged in . . . illegal acts to
receive the [boxing match] for free or at a nominal cost
while Plaintiff's legitimate customers paid several
thousand dollars.” (Compl. ¶ 14.) Joe Hand further
alleges that Defendants intentionally pirated the match for
their own economic gains. According to Joe Hand,
“Defendants exhibited the [boxing match] for the
commercial purpose of attracting paying customers, patrons,
members, and guests, thereby wrongfully benefitting
financially by infringing Plaintiff's rights in the
high-profile event.” (Id. ¶ 15.)
Hand brought a two count Complaint against Defendants. The
first count is a pirating claim and the second count is a
copyright infringement claim. Joe Hand alleges that the
copyright infringement claim was willful. (Id.
¶ 24.) The Complaint was filed on June 1, 2018, and
according to the return of service, service was made on
Verzella on June 28, 2018. Defendants failed to respond to
the Complaint. A default was entered on August 15, 2018. On
January 15, 2019, an attorney entered an appearance on behalf
of Defendants. Silence reigned until Joe Hand filed a motion
for default judgment on September 10, 2019. The Court entered
a default judgment against Defendants on September 17, 2019.
The Court awarded Joe Hand statutory damages of $56, 000 for
Defendants' willful copyright infringement. That figure
constitutes five times the commercial license fee that
Defendants would have been obligated to pay to legally
display the boxing match. The Court also awarded Plaintiff
$560.84 in costs. The default judgment awoke Defendants from
their slumber; Defendants filed a motion to set aside the
default judgment on September 19, 2019.
do not seek to vacate the default itself. Defendants failed
to respond because they did not forward the complaint to
counsel and apparently believed that the matter would be
resolved by the Court without Defendants' participation.
Defendants are not strangers to the legal process, and thus
concede that a motion for relief from the default would be
inappropriate because they should not have allowed the
complaint to languish unaddressed as they did. (Mem. of Law
in Supp. of Defs.' Mot. For Relief From Default J.
[Defs.' Mem.] at 1.) Defendants, however, contend that it
would be unjust to enter judgment against them without an
assessment of damages. (Id.) According to
Defendants, the Court should not have found Defendants'
copyright infringement was willful. (Id. at 1-2.)
Additionally, they argue Verzella should not be individually
liable for damages. (Id. at 2.)
faced with a motion to vacate a default judgment, a court
should decide: (1) whether lifting the default would
prejudice the plaintiff; (2) whether the defendant has a
prima facie meritorious defense; (3) whether the defaulting
defendants' conduct is excusable or culpable; and (4) the
effectiveness of alternate sanctions. Emcasco Ins. Co. v.
Sambrick, 834 F.2d 71, 73 (3d Cir. 1987).
threshold issue in opening a default judgment is whether a
meritorious defense has been asserted.” Hritz v.
Woma Corp., 732 F.2d 1178, 1181 (3d Cir. 1984); see
also DirecTV, LLC v. Alvarez, Civ. A. No. 15-6827, 2017
WL 4284526, at *2 (D. N.J. Sept. 27, 2017) (“In this
case we deal with a default judgment, not an entry of
default. Accordingly, a meritorious defense is treated as a
contend that they have a meritorious defense, arguing that
any social media advertising done for the event was not done
by them, but was done by Klutch Kings, an organization beyond
Defendants' control. (Defs.' Mem. at 4.) The Ben
Franklin Yacht, where the fight was shown, makes space
available to large groups to host various events.
(Id. at 4-5.) It was Klutch Kings, not Defendants,
who controlled the entertainment for the evening.
(Id. at 5.)
Defendants have raised an issue of damages. A limitation on
the amount of damages can qualify as a meritorious defense.
Ferrostaal Metal Corp. v. Carle Shipping Corp., Civ.
A. No. 93-3041, 1994 WL 2517, at *3 (E.D. Pa. Jan. 4, 1994).
Joe Hand, however, disputes that Defendants have a
meritorious defense. Joe Hand argues that Defendants failed
to defend against its copyright infringement claim for over a
year. (Pls.' Resp. in Opp'n to Defs.' Mot. For
Relief From Default J. at 7.) According to Joe Hand, that
fact alone constitutes evidence of willfulness. Moreover,
“the fact that Defendants also ignored conspicuous