Bit Parts

A magistrate for the U.S. District Court for the Southern District of New York adopted an intermediate date for determining prejudgment interest for breach of a digital music distribution contract. Orchard Enterprises NY Inc. v. Megabop Records Ltd., 09-9607. Orchard Enterprises had obtained a default judgment in a suit it filed against the U.K.-based Megabop for payment of $175,039.69 that Megabop allegedly owed Orchard for digital download sales of sound recordings. Magistrate Gabriel W. Gorenstein initially noted: “The Second Circuit [in which the Southern District of New York resides] has held that an inquest into damages may be held on the basis of documentary evidence alone, 'as long as [the court has] ensured that there was a basis for the damages specified in [the] default judgment.' ' Orchard Enterprises' submissions include an affidavit and attached documentary evidence. Because these submissions provide a basis for an award of damages, no hearing is required.” In Orchard's request for the nine percent pre-judgment interest allowed under New York law, Magistrate Gorenstein found: “Because the record is not clear as to when Megabop paid Orchard Enterprises $20,000 [of a total $195,039.69 owed], it cannot be determined when Orchard Enterprises began to incur damages from each individual invoice [Orchard submitted to Megabop]. Thus, the Court will compute prejudgment interest upon all of the damages from a single reasonable intermediate date. Orchard Enterprises has proposed [Dec.] 31, 2007 as such a date, as that is the date 'when approximately half of the amount claimed had already been invoiced.' Megabop has not challenged plaintiff's proposal of [Dec.] 31, 2007. Accordingly, we will accept that date as reasonable.” However, the magistrate denied Orchard's request for attorney fees and costs by noting that “Orchard Enterprises provides no admissible evidence to support its claim for these categories.”

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