Virgin Records America, Inc. v. Lacey

Brief Fact Summary.

Plaintiffs filed an action in federal district court against Defendant alleging copyright infringement.  Defendant failed to answer, appear or otherwise acknowledge the lawsuit or for three months after being served. Plaintiffs obtained a default judgment, and a copy of the entry of default was mailed to Defendant at the same address at which service was made. Defendant did not respond; no further activity  in the matter occurred in the next 30 days. Plaintiffs moved for entry of the default judgment.

Synopsis of Rule of Law.

The effect of a default judgment is an admission of facts cited in the complaint which may or may not be sufficient to establish a defendant’s liability.

Facts.

Plaintiffs, music copyright holders, filed an action in federal district court against Defendant, alleging that Defendant infringed the music copyrights by using an online media distribution system to download or distributed copyrighted music recordings. Defendant was served with process in accordance with federal procedural rules; thereafter, failed to answer, appear or otherwise acknowledge the lawsuit or for three months. Plaintiffs obtained a default judgment against Defendant for failure to plead or otherwise defend. A copy of the entry of default was mailed to Defendant at the same address at which service was made. Defendant did not respond; no further activity  in the matter occurred in the next 30 days. Plaintiffs moved for entry of the judgment, and sought statutory damages, injunctive relief, and costs.

Issue.

What is the legal effect of Defendant’s failure to appear and the clerk’s subsequent entry of default?

Held.

The effect of the default is an admission of facts cited in the complaint.

Discussion.

The complaint in this case asserted detailed facts against Defendant regarding the use of copyrighted recordings without Plaintiffs’ permission sufficient to state a claim for relief. The effect of the default, occasioned by Defendant’s failure to file an answer or otherwise appear, is an admission of facts cited in the complaint. In determining the remedy, the court could grant judgment only for such relief as could lawfully be granted on the allegations contained in the complaint; in this case, statutory damages, an injunction, and costs.