Cherry Auction, Inc. (Cherry Auction) (defendant) hosted a swap meet in Fresno, California, where individual vendors sold various merchandise to customers. Cherry Auction charged each vendor a daily rental fee and collected additional fees from customers for admission, parking, and food. In 1991, a raid by the local sheriff’s office uncovered more than 38,000 counterfeit recordings from vendors at Cherry Auction’s swap meet. Following the raid, the local sheriff’s office made a lawful request for Cherry Auction to provide information about vendors prior to a swap meet, but Cherry Auction failed to do so. In 1993, Fonovisa, Inc. (Fonovisa) (plaintiff) determined that counterfeit versions of Fonovisa’s copyrighted recordings were still being sold at Cherry Auction’s swap meet, and Fonovisa filed suit against Cherry Auction for copyright infringement. The district court granted Cherry Auction’s motion to dismiss for failure to state a claim, and Fonovisa appealed the dismissal of its claims for vicarious and contributory copyright infringement.