On Friday, a federal judge slashed the verdict awarded  by a jury against illegal downloader Jammie Thomas-Rasset last November.

This decision brings a mix of good news and bad news for copyright owners. It also represents a somewhat striking departure from judicial deference to Congress’s authority to set damages in civil cases by statute.

To put it another way, this decision and last year’s decision against Joel Tenenbaum represent the first time in history that a US court has found a substantive due process limit on damages set by statute. Regardless of how much one agrees with the result of the courts’ decisions, one should appreciate the need for caution when those courts depart dramatically from historical practice and enter new constitutional territory.

Judge Davis, sitting in the District Court of Minnesota, called the $1.5 million verdict for stealing 24 songs “appalling” and reduced it to $54,000 on constitutional grounds. This is similar to last July’s ruling in Sony v. Tenenbaum, where Judge Gertner, in the District Court of Massachusetts, reduced a $675,000 verdict against the college student for downloading and distributing 31 songs on constitutional grounds (though Judge Gertner reached her conclusion using a different standard than Judge Davis used, as explained below). Both parties in Tenenbaum have appealed that decision; that appeal is currently pending in the First Circuit.

The Tale of Thomas-Rasset

This is the second time Judge Davis has reduced a jury award against Thomas-Rasset. The history of Capitol v. Thomas-Rasset 1Although the plaintiffs include six record labels, I’ll be referring to the plaintiff as Capitol to keep things simple. is a bit involved, so it’s worth reviewing it. 2For more background, I highly recommend Ben Sheffner’s posts at Copyrights and Campaigns on the Thomas-Rasset and Tenenbaum lawsuits.

On October 4, 2007, a jury award damages of $222,000, or $9,250 per song. The verdict was vacated after the court held it had erred in one of the jury instructions, and a new trial was set. On June 18, 2009, the jury in the second trial returned an award of $1,920,000 against Thomas-Rasset, $80,000 per song. The court reduced that award under the common-law doctrine of remittitur. Capitol rejected the remitted award and a third trial, solely to determine the amount of damages, was set. 3Under the Seventh Amendment, a plaintiff has the right to reject a remitted award, see Hetzel v. Prince William County, 523 US 208, 211 (1998). This time, the jury awarded $1,500,000 against Thomas-Rasset, or $62,500 a song.

After this judgment, both parties moved to amend the verdict. It’s on this motion that Judge Davis reduced the verdict on constitutional grounds.

The court’s exact holding was that in copyright cases “involving a first-time willful, consumer infringer who committed illegal song file-sharing for her own personal use”, the maximum award that due process allows is three times the statutory minimum, or $2,250 per song.

Before looking at the decision in more detail, I think it’s important to note three things.

First, since this decision come from a district court, it is not binding precedent. Other courts may find Judge Davis’s reasoning persuasive if they are ever faced with a similar case, but no court is required to follow his holding.

Second, whether one agrees or disagrees with the court’s holding, it should be pointed out that this is a very limited holding. It would seem that it doesn’t apply if a defendant was found liable for distributing a copyrighted work rather than just reproducing it. For various reasons, during their end-user litigation campaign, the record labels relied largely on the theory that simply making a copyrighted work available (by using a program like Kazaa that, by default, shares a user’s music files with other users) constitutes distribution. The Minnesota District Court ultimately rejected this theory, so Thomas-Rasset was only found liable for reproduction. Many other courts, however, have adopted the “making available” approach. 4See Peter S. Menell, In Search of Copyright’s Lost Ark: Interpreting the Right to Distribute in the Internet Age (October 08, 2010).

Joel Tenenbaum, by the way, was found liable for distribution after admitting to it at trial.

Finally, I don’t want to minimize concerns about the size of statutory damage awards in copyright cases, especially cases like these. It’s certainly an important policy issue. But the fact remains that this verdict was rendered by a jury and falls within the range set by Congress through law. The question here is not whether one personally thinks the award is too high, but rather whether something in the Constitution limits an award rendered in this manner.

Setting the Standard

The decision in full:

[scribd id=60635512 key=key-1rvopby119r8d3nonrmi mode=list]

Most people would (understandably) assume that a decision like this was made under the Eighth Amendment of the Constitution, which states that excessive fines shall not be imposed. But that’s not the case. A “fine” is a payment “directly imposed by, and payable to, the government.” 5Browning-Ferris Industries of Vt. v. Kelco Disposal, 492 US 257, 268 (1989). A jury award is not a fine since it is imposed by a private plaintiff and payable to that plaintiff.

The basis for this decision is instead the Fifth Amendment, which says “No person shall … be deprived of life, liberty, or property, without due process of law.” Due process limits “grossly excessive” damages awards based on notions of “fundamental fairness.” 6TXO Production Corp. v. Alliance Resources Corp., 509 US 443, 454-55 (1993). But note that not everyone is convinced that due process does any such thing. Justice Scalia, in particular, has been consistently skeptical of the Supreme Court’s adoption of a “substantive due process” approach in its punitive damages jurisprudence; see BMW v. Gore, 517 US 559, 598-607 (1996) (Scalia, J., dissenting in judgment); TXO v. Alliance Resources Corp, 509 US 443, 470 (1993) (Scalia, J., concurring in judgment); Pacific Mut. Life Ins. Co. v. Haslip, 499 US 1, 25-28 (Scalia, J., concurring in judgment).

At the heart of this case and the pending appeal in Sony v. Tenenbaum is which standard should be used to determine the maximum award allowed by due process. In Tenenbaum, the court analyzed the statutory damages award using the standard developed to address excessive awards of punitive damages, specifically BMW of North America v. Gore, 7517 US 559 (1996). Capitol and the government argued, however, that such awards should be analyzed under the far more deferential standard set down in St. Louis, I.M. & S. Ry. Co. v.Williams, which addresses due process limits on damage awards that have been set by statute. 8251 U.S. 63, 67 (1919).

The court sided with Capitol and the government. Punitive damages awards present due process concerns that aren’t present when the amount of damages are set by statute; for example, defendants have notice of their potential liability under statutory damages, while punitive damages theoretically have no upper cap. Leslie Burns notes that this is good news for copyright owners; I imagine it’s not quite as welcome news for Joel Tenenbaum.

Things start to get weird from here, however. Judge Davis begins by stating that Williams “highlighted three factors when analyzing whether the statutory damages award complied with the due process clause: ‘the interests of the public, the numberless opportunities for committing the offense, and the need for securing uniform adherence to established passenger rates.'” He then considers these three factors in the context of this case. However, this consideration seems to be an analysis of the constitutionality of the statute itself, rather than the amount of damages awarded in a particular case. That is, if Judge Davis found these factors weren’t present here, would that mean due process never allows statutory damages in copyright infringement cases?

Nevertheless, the court did find these factors supported an award of statutory damages, and his analysis is very favorable to copyright owners. For the first factor, the court remarked that “There is a significant public interest in vindicating copyright. In fact, ‘the primary object in conferring the monopoly lie[s] in the general benefits derived by the public from the labors of authors.'” There are numberless opportunities for infringing copyright through P2P networks since it is “easy, costless, and quick.” Finally, the need for deterrence is high. Said Judge Davis, “Online infringement is easy to complete; it causes real damage to the copyright holders, and, thereby injures the public by leading to a decrease in the incentive to create artistic works; and it is widespread.”

“Obviously” — You keep using that word…

The court did not think, however, that an award of $1,500,000 for stealing 24 songs was appropriate under the due process clause. It cites only two reasons for its conclusion: (1) Thomas-Rasset is an individual and not a business and infringed for personal use rather than commercial gain; and (2) the statutory damages award is too far away from the actual damages suffered by Capitol. The court may be correct as a matter of policy, but this seems rather flimsy reasoning for saying the damages award is prohibited by the Constitution.

I’m not alone in thinking the court was on shaky ground arriving at this conclusion. Attorney Christopher Harrison notes:

Judge Davis’ entire constitutional due process analysis appears to boil down to, “I personally think this is too high an award.”  There is no further legal support to his position.  In fact, later in the opinion he states “The Court accords deference to the jury’s verdict. Yet an award of $1.5 million for stealing and distributing 24 songs for personal use is appalling. Such an award against an individual consumer, of limited means, acting with no attempt to profit, is so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.”

But the jury’s verdict is quite clearly not obviously unreasonable.  As noted above, the three juries in this case awarded damages of $9,250, $80,000, and $62,500 per song.  The jury in Tenenbaum awarded $22,500 per song.  While that range is pretty wide, the juries have awarded between 4 and 35 times as much as both Judge Davis and Judge Gertner find “obviously unreasonable.”

Indeed, I think you can present more legal support that the court misapplied the Williams standard rather than applying it correctly. For starters, reducing an award of statutory damages is extremely rare — while courts since Williams have stated that due process places a limit on statutory damages, they almost always uphold verdicts. I’ve only been able to come across one previous case where an award hasn’t been upheld.

In Southwestern Telegraph & Telephone Co. v. Danaher, the Supreme Court struck down a damages award against a telephone company on due process grounds in part because it found the company had been acting reasonably. 9238 US 482 (1915). The Court noted, “There was no intentional wrongdoing; no departure from any prescribed or known standard of action, and no reckless conduct.” None of those hold true in this case.

The District Court of Minnesota has broken new ground and entered terra incognita in due process jurisprudence with this decision. It’s difficult to see how a jury award for a willful violation of a law, within the range of damages that Congress has provided by statute, is so “obviously unreasonable” to be unconstitutional.

What happens now? Either side can appeal this decision to the Eighth Circuit Court. This would put appeals in two separate circuit courts on the issue of due process limitations on statutory damages in file-sharing cases. No word yet on whether this will happen.

References   [ + ]

1. Although the plaintiffs include six record labels, I’ll be referring to the plaintiff as Capitol to keep things simple.
2. For more background, I highly recommend Ben Sheffner’s posts at Copyrights and Campaigns on the Thomas-Rasset and Tenenbaum lawsuits.
3. Under the Seventh Amendment, a plaintiff has the right to reject a remitted award, see Hetzel v. Prince William County, 523 US 208, 211 (1998).
4. See Peter S. Menell, In Search of Copyright’s Lost Ark: Interpreting the Right to Distribute in the Internet Age (October 08, 2010).
5. Browning-Ferris Industries of Vt. v. Kelco Disposal, 492 US 257, 268 (1989).
6. TXO Production Corp. v. Alliance Resources Corp., 509 US 443, 454-55 (1993). But note that not everyone is convinced that due process does any such thing. Justice Scalia, in particular, has been consistently skeptical of the Supreme Court’s adoption of a “substantive due process” approach in its punitive damages jurisprudence; see BMW v. Gore, 517 US 559, 598-607 (1996) (Scalia, J., dissenting in judgment); TXO v. Alliance Resources Corp, 509 US 443, 470 (1993) (Scalia, J., concurring in judgment); Pacific Mut. Life Ins. Co. v. Haslip, 499 US 1, 25-28 (Scalia, J., concurring in judgment).
7. 517 US 559 (1996).
8. 251 U.S. 63, 67 (1919).
9. 238 US 482 (1915).

32 Comments

  1. Terry,

    You state that “reducing an award of statutory damages is extremely rare”. I would counter that by saying that trials for copyright infringement against individuals are also rare.

    Judges are supposed to judge. I want them to, especially with regard to punishment and sentencing. I have always been against mandatory sentencing guidelines imposed by congress and this is similar. I realize that the judge is not ruling that the law is unconstitutional, but the effect is similar and therefor I believe he’s well within his bounds.

    He tried to make that clear with his statement: “involving a first-time willful, consumer infringer who committed illegal song file-sharing for her own personal use”. I hope that you never find yourself on the wrong end of a mandatory sentence or fine.

    Sincerely,
    Randy

    • Judges are supposed to judge

      Not true. Judges are supposed to uphold the law, as it is written. That’s their job.
      They do have discretion, but only to the extent of the parameters given by the lawmakers.
      Whether or not this person ‘felt’ one way or another is beside the point.

    • Adding to what James has said, a judge isn’t supposed to rewrite the law if it isn’t to his liking. A judge may interpret how the law is to be applied and may even rule that it conflicts with superior law – such as the Constitution – but even then he is constrained by what the law actually says.

      In this case, the constitutional challenge seems me to rest on rather shaky foundations and judging by opinions from people better informed than myself I am not alone in thinking this.

      The most worrying issue is the “obviously unreasonable” argument. Given that the range of statutory damages has been determined by a democratically elected Congress and that “obviously unreasonable” damages have been awarded by juries on the four separate occasions that this statute has been applied, Judge Davis appears to be taking the position of the “only sane man”. This I feel to be overstepping the bounds of his power.

  2. It is unfortunate that the “size” of what the juries awarded in Tenenbaum and JRT has been used to cloud the real issues at stake. “Size” has nothing to do with it. Whether the award was the statutory minimum or the statutory maximum, the defendants in these two cases do not have the financial means at hand to pay. So, all that is really going on here is the use of judicial resources to reduce a large unpayable amount to a lesser unpayable amount.

    It is also unfortunate that so few people, including the bar, are aware that what is really being argued here is the insistance by each defendant that they should not have to pay anything at all, i.e., that statutory damages should be stripped from the law for any one of a number or reasons urged by their counsel (and a very predictable group of academics). I have not the slightest doubt that even if statutory damages were relegated to the dustbin of history, the argument would then turn to a constitutional challenge of copyright law itself.

    I can only wonder what would have resulted had the trial courts at the outset articulated which case controlled…Williams or Gore…and then instructed the juries accordingly concerning the holding of the controlling case.

  3. Would the court have preferred a ten-year proceeding in which hundreds of songs were at issue and each one was awarded the statutory minimum?

    There’s a reason it’s “only 24 songs”. That was chosen to keep the court activity to a reasonable duration, due to the lengthy process of discovery and entering into evidence the rights trail for each song. That’s precisely why the range of statutory damages goes up so high; it’s so that an appropriate fine can be levied against infringers without requiring everyone to sit in court forever (which would just run up the legal bills that would be assigned to the infringer as an additional penalty.)

    • In 2005, when this matter was kicked off with a letter to JRT, Media Sentry had identified 1,702 music files residing in her KaZaa “share” folder that on the basis of metadata analysis were believed to be unlawful downloads, and not rips from lawfully purchased music.

      The labels did not set out to use her as an example and force her into financial ruin, and anyone suggesting otherwise is simply wrong.. It was she who made the decision to reject an offer of settlement and force a trial in the face of incontrovertible evidence she was a “serial downloader” and “serial source of supply”. The rest is history and a P2P martyr was born.

      The issue was never did she violate the Copyright Act by enagaing in repeated acts of infringment? Copying was readily admitted at trial and was not challenged by her. Instead, the trial turned into a legal circus with her using every trick in the book to raise any and all arguments in a vain attempt to avoid being held responsible for her actions. How can you prove it was really me? My son and my boyfriend had access to my computer. Surely it was one or both of them who used my KaZaa account. Then, of course, there was the inevitalbe “but I am poor victiom of a measpirited proceeding to bleed me dry financially.” Etc., etc., etc.

      It did not work in trial #1 until the judge had a change of heart concerning a claim of “making avaialbe” and declared a mistrial because it could not be determined from the jury verdict if any of the damages awarded were based on “making available”

      Move forward to trial #2 where “making available” was simply cast to the side in favor of simply determining infringement of the reproduction right. Of course, a trial involving the presentation of evidence of 1,702 files would have been pure overkill and a waste of the court’s time. Hence, just 24 files were selected as a representative class common in all material respects to the 1,702 files. The jury heard the case, held that her infringement was willful, and rendered a verdict in an amount that had the blogoshpere, ignorant of the facts, prattling “My God, it was only 24 songs!”

      Of course, the judge was offended use remittitur to reduce the jury’s award significantly, and posited to the labels that if they decided to reject the reduced amount and try to appeal, a new trial would be scheduled. The labels agreed, but with the proviso that the decision would not be published. At this point JRT’s attorneys jumped in and said “No way. It must be published.”

      Hence, trial #3 is held, with the only things asked of the jury was to decide the amount of damages based upon admitted, willful infringment. Once again, another high jury verdict, and once again a judge now on record as “appalled” by the verdict that was returned.

      What will happen. Given important legal issues regarding how the court has gone about interpreting the statutory damages provisons of Title 17, the labels have every reason to appeal. JRT, on the other hand, long ago made it known that her intent was to launch a frontal assault on statutory damages per se.

      I have followed this case since its inception, and given what has transpired over the years, I have no reason to doubt that appeals and cross-appeals loom on the immediate horizon, with at least it being JRT’s ultimate goal to try and get the case before the Supreme Court.

      Sigh, yet another caught with their hand in the cookie jar and then positing “How do you know it was my hand, how do you know it was a cookie jar, how do you know if it even had cookies, maybe it was my son and/or boyfriend who took cookies, etc., etc. ad infinitum.”

      There is a lot to be said for “mea culpa” and working at the outset to try and secure a modified settlement amount if the original amount imposed significant financial hardship.

      • What needs to be stressed is that she was repeatedly offered to settle for a comparitavely very small amount by the record company.

        What ever happened to personal responsibility?

        • Yes, I understand she downloaded and was guilty.

          I have to ask, though, how many times did the RIAA warn her that she would be sued if she didn’t stop downloading and distributing?

          None. She either had to pay the “comparitavely very small amount” or she had to go to trial. Some choice. In fact, that sounds more like extortion.

          Just sayin,
          Randy

      • Maybe getting this before the Supreme Court is a good thing. Statutory damages like $1.5M for 24 songs is absurd. I don’t know that it’s unconstitutional, but I think it’s an important question that’s worth exploring.

        Imagine if she had been liable for 1,702 songs. At $62,500 per song, that’s over a hundred million dollars. That’s insane.

        • Had the trial court decided at the outset that Williams applied, and then in instructing the jury crafted the instructions based upon the holding in Williams, is there any reasonable doubt that the jury would have come back with a different number?

          I lay the circus that this case has become at the feet of only two people, the defendant who disingenuously tried to use every excuse at hand to avoid being held responsible, and a trial court that is supposed to know what law controls before a trial is held, and not after.

  4. I read about this elsewhere and I feel the ruling was just and proper in this case. Davis’ ruling states that he multiplied the minimum fine times three, which he found to be a nominal ruling for cases of willful infringement. I’m not sure since I haven’t actually read the case-file myself but the important aspect here seems to be that this probably means she’s being punished for statutory damages, rather than actual damages, probably because the actual damages are too low to be considered punitive.

    Chapter 5 section 504, paragraph C(4) defines the absolute maximum statutory damages being $30,000 per act of infringement under statutory damages under chapter 5 section 504 paragraph C and it’s obviously not due process of law to rule for over double the maximum awards. As such the judge had to lower the fine to an amount that he deemed more suitable and given that the severity of the case wasn’t very large, the maximum would’ve obviously excessive judgement. So he went to prior precedents to best see how much a nominal fee would’ve been in similar cases of infringement

    The most the plantiffs could hope for without seeking statutory damages is the amount of actual damages under 504 A and again I’d agree with the judge that she’d only be liable for the number of copies she sent out and possibly the number of copies she downloaded since the act of downloading is requesting a copy to be made. At a fair market value of 99c per song, that really couldn’t be very much. That would be scarcely a punitive judgement.

    One needs to keep in mind that once other people have their files, she has no control over what others do with them. This means so moreso their liability than hers provided she neither promotes or aids and abets further downloading to be held liable for contributory charges under Grokester vs. M.G.M. Why should she be held liable for the crimes of others?

    It’s not rocket science and it’s not earth shattering. In fact I’m surprised this case is getting any attention at all. My only note is that the RIAA should probably advance the case a little further to get a clarification that $750×3 isn’t a multiplier that’s set in stone.

    • Sorry for the double post but I didn’t proof read well enough and I’m ever so much more used to forums where you have an edit button for your posts: That’s paragraph C (1). Also here’s a link to the statute in question on the copyright office’s website:

      http://www.copyright.gov/title17/92chap5.html#504

      Chapter 5 on the whole defines how these cases should proceed and may be complimented by several sections in title 18, Part I, Chapter 113 relating to Stolen Property. Yes, copyright infringement may legally be considered stealing folks. That’s what sections 2318-2320 of title 18 part I chapter 113 are all about. I don’t see chapter 18 on copyright.gov but here’s a link from Cornell University Law School:

      http://www.law.cornell.edu/uscode/18/usc_sup_01_18_10_I_20_113.html

    • Chapter 5 section 504, paragraph C(4) defines the absolute maximum statutory damages being $30,000 per act of infringement under statutory damages under chapter 5 section 504 paragraph C and it’s obviously not due process of law to rule for over double the maximum awards.

      That is the maximum unless the infringement is found to be willful. Since that is what the jury found in this case, the maximum statutory damages available were $150,000 per work.

      • After double checking my source it seems I parsed (c) 2 in a terrible manner. I thought whether the plantiff held the burden of proving infringement on the right holder’s behalf was necessary too i.e. making it more difficult than is part of a requirement that leads to greater penalty.

        However it turns out that’s actually part of a separate provision for lowering the maximum statutory damages namely if there was good reason for believing the action to be legal but it isn’t for some extremely technical reason, the minimum damages may be lowered down to $200.

        Which was another factor in my confusion, I figured c (2) necessitated a lower minimum meaning c (1) definitely applied but it only allows for a lower minimum under certain circumstances.

        I don’t necessarily see how this is a due process violation per se, although I’d agree with the court that a total sum of 1.5 million is unjust in proportion to the total effects of the crime committed. Hence it’d still be the judge’s responsibility to lower the sum because “as the courts consider just” is a part of the statute if he, as a member of the presiding court, felt the ruling was out of line with the proceedings.

        Why the fifth amendment is required in this case somewhat escapes me. There is a call for consistent application of the law but this is a case of first impression for the circuit, meaning there’s very little law to be consistent with. I suppose it could be argued that the higher limits are in part meant as a deterrence to parties with more capital, so in a case where a lesser award would have a proportionally equivalent deterring effect one should be substituted but I have nothing to really back that theory up with.

        That willful infringement is a factor, as influenced by knowledge of the law, strikes me as odd though. Isn’t it generally considered everybody’s responsibility to be aware of the law? I mean I suppose elements of vagueness doctrine come into play but in cases that would benefit from that the award should be nulled…

        • I don’t necessarily see how this is a due process violation per se, although I’d agree with the court that a total sum of 1.5 million is unjust in proportion to the total effects of the crime committed. Hence it’d still be the judge’s responsibility to lower the sum because “as the courts consider just” is a part of the statute if he, as a member of the presiding court, felt the ruling was out of line with the proceedings.

          A plaintiff has a right to a jury trial on statutory damages, so if that right is exercised, it is up to what the jury considers just, not the judge.

          The judge can remit the award if he feels it is excessive, and that’s exactly what happened in the previous time. However, remittitur is only constitutional if the plaintiff is given a choice between accepting the remitted award or having a new trial — a judge can’t unilaterally remit an award. In this case, the record labels rejected the remitted award.

          That rejection played a role in Judge Davis concluding that this time around he couldn’t avoid the constitutional question.

          • Terry,

            I’m simply flabbergasted that you think the 1.5 million award is just.

            I truly hope that you never face a similar situation.

            Peace,
            Randy

  5. Justin Levine

    Two flaws immediately pop out to me in your analysis:

    1. You state, “[W]hether one agrees or disagrees with the court’s holding, it should be pointed out that this is a very limited holding. It would seem that it doesn’t apply if a defendant was found liable for distributing a copyrighted work rather than just reproducing it.”

    I don’t understand this conclusion at all on your part. Here is a direct quote from the court’s opinion –

    The Court concludes that an award of $1.5 million for stealing and distributing 24 songs for personal use is appalling. Such an award is so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable. In this particular case, involving a first-time willful, consumer infringer of limited means who committed illegal song file-sharing for her own
    personal use, an award of $2,250 per song, for a total award of $54,000, is the maximum award consistent with due process.

    Emphasis added. The court acknowledged that the defendant “distributed” works via “file sharing”, and yet still found the verdict amount to be unconstitutional. If this case gets affirmed, it would apply to nearly every case of file-sharing out there. So I don’t honestly see how you can characterize this ruling as “very limited”.

    2. The reasoning that attorney Christopher Harrison utilizes (and which you seem to endorse) is a tautological argument. If a jury’s verdict is reasonable as a matter of law simply and purely because the jury made it, then by your reasoning, even BMW v. Gore is wrong. After all, the Supreme Court found punitive damages in that case to be unconstitutional despite the fact that a jury declared it to be fair and just by the very implication of their verdict. If three different juries in BMW v. Gore had come up with the same figure, would that somehow change the analysis? There is nothing in the Gore reasoning to suggest so. What is objectively “reasonable” is not subject to hard democratic votes, but is instead based on standards that lay outside of them.

    I also need to second Randy’s observation that the only reason decisions like these are “rare” is because full copyright trials utilizing jury decisions are rare. If every copyright dispute were litigated to the end, you would see a lot more questioning of damage awards and how fair use concepts are currently applied.

    • 2. The reasoning that attorney Christopher Harrison utilizes (and which you seem to endorse) is a tautological argument. If a jury’s verdict is reasonable as a matter of law simply and purely because the jury made it, then by your reasoning, even BMW v. Gore is wrong. After all, the Supreme Court found punitive damages in that case to be unconstitutional despite the fact that a jury declared it to be fair and just by the very implication of their verdict. If three different juries in BMW v. Gore had come up with the same figure, would that somehow change the analysis?

      The analysis might change because the standard used in BMW is entirely different from the standard in Williams. For punitive damages, a court looks at “the degree of reprehensibility” of the conduct; “the disparity between the harm or potential harm suffered” and the damages awarded; “and the difference between this remedy and the civil penalties authorized or imposed in comparable cases.” Though yes, if three different juries had come up with the same figure of punitive damages, that would weigh in favor of a constitutional verdict under BMW.

      • Justin Levine

        I wasn’t certain if you are still formulating a response to my first point or not (or if you are tacitly conceding it), but you seem to have ignored or misconstrued the reasoning behind my second point.

        Even though there are obviously different standards between BMW and Williams, that is irrelevant to the argument you and Christopher Harrison put forth – that the “reasonableness” of a verdict in terms of its Constitutionality is determined by how many jurors you can get to agree with it. That is nonsense and there is absolutely no passage in BMW which suggests as much.

        The very point of BMW was to guard against the harshness of pure majoritarian whims from juries. Note this passage from the 3 Justice concurrence (emphasis added):

        Legal standards need not be precise in order to satisfy this constitutional concern. See Haslip, supra, at 20 (comparing punitive damages standards to such legal standards as “reasonable care,” “due diligence,” and “best interests of the child”) (internal quotation marks omitted). But they must offer some kind of constraint upon a jury or court’s discretion, and thus protection against purely arbitrary behavior.

        The entire point of having a “constitutional” test of reasonableness is to thwart a jury’s discretion when it gets out of control. If a state’s law allowed for unspecified civil fines for drug use, and a jury of 12 people decide to impose a $200-Billion (with a “b”) fine against someone for smoking a single joint, it would not suddenly become constitutional just because another 24 jurors on two other jury panels concurred with the result for whatever reason they may harbored. It doesn’t matter if you make an analysis under BMW or Williams – the proposition that constitutional reasonableness is subject to the amount of jury support a punishment has is completely false, and has no relation to a “reasonably prudent person” analysis that is found in torts and other areas of the law.

        Therefore, your conclusion that “yes, if three different juries had come up with the same figure of punitive damages, that would weigh in favor of a constitutional verdict under BMW” is completely false, self-serving, and has no basis whatsoever in the decision. If you think it does, please cite me the passage from it.

        • It may be useful to bear in mind that the court’s decision is predicated upon the “due process” provision of the 5th Amendment, and in this matter what it directs itself to is the extent to which a person brought before a court of law receives prior notice of the potential liability they face in the event they engage in infringing conduct.

        • Even though there are obviously different standards between BMW and Williams, that is irrelevant to the argument you and Christopher Harrison put forth – that the “reasonableness” of a verdict in terms of its Constitutionality is determined by how many jurors you can get to agree with it. That is nonsense and there is absolutely no passage in BMW which suggests as much.

          I don’t understand your argument. You seem to be saying that the Williams standard, which is the standard the court used to decide this case, is irrelevant to this case because the BMW standard, which the court didn’t use to decide this case, is different from Williams.

          • While admittedly a gross simplification, I can only smile at the realization that the 5th Amendment is being used to temper rights secured by the 7th Amendment.

  6. From the JRT instructions:

    JURY INSTRUCTION NO. 17

    In this case, each plaintiff has elected to recover “statutory damages” instead of actual damages and profits. A copyright holder may recover statutory damages even if it did not submit evidence regarding actual damages. Under the Copyright Act, each plaintiff is entitled to a sum of not lessthan $750 or more than $30,000 per act of infringement (that is, per sound recording downloaded or distributed without license). Because the defendant’s conduct was willful, then each plaintiff is entitled to a sum of up to $150,000 per act of infringement (that is, per sound recording downloaded or distributed without license), as you consider just. In determining the just amount of statutory damages for an infringing defendant, you may consider the willfulness of the defendant’s conduct, the defendant’s innocence, the defendant’s continuation of infringement after notice or knowledge of the copyright or in reckless disregard of the copyright, the effect of the defendant’s prior or concurrent copyright infringement activity, whether profit or gain was established, harm to the plaintiff, the value of the copyright, the need to deter this defendant and other potential infringers, and any mitigating circumstances. Notwithstanding the foregoing, in no event may the amount you award for the infringement of any individual work exceed three (3) times the minimum of $750 required by statute.

    I believe this is what the court really meant to say.

    • Notwithstanding the foregoing, in no event may the amount you award for the infringement of any individual work exceed three (3) times the minimum of $750 required by statute.

      Up to $150,000 per work, or $2,250 per work, whichever is lesser. 😉

  7. I think it might be educational to do some maths in this case, so I’ve whipped out my calculator and done some sums.

    Let’s just assume for a moment that the ruling will be upheld and that the damages will be limited to three times the minimum statutory rate, giving us $2,250 per work, yes? It may seem all just and fair – certainly not as outrageous as the jury-awarded damages – until we consider the fact that the songs in question represented a miniscule percentage of those that could potentially be litigated over.

    Media Sentry identified 1,702 potentially infringing files. Assuming for a moment that it could be proven that all of them were in fact infringing, the total damages subject to Judge Davis’ cap per work would work out at $3,829,500.

    Oops.

    Even assuming that the absolute minimum per work infringed was awarded, the potential total damages would still clock in at $1,276,500. Substantially more than was awarded following the first trial and only marginally less than the award in the final trial.

    We should also appreciate that a music library numbering in thousands of tracks is not at all uncommon these days. Would it be possible to demonstrate to the court’s satisfaction that over a thousand files had been pirated? I don’t really see why not, it would just take longer.

    I’m curious to know how Judge Davis would respond to a situation where a minimum statutory award per work infringed would still result in over a million dollars in damages (FYI this would require showing that 1,334 songs had been pirated – roughly 112 albums’ worth).

    Ultimately, this latest ruling looks to me as a stop-gap measure that doesn’t address the problem, but does muddy the law.

  8. To: Randy • Posted July 27, 2011 at 12:43 pm

    The comments here are not directed to the “fairness” or “unfairness” of a jury award.

    They are directed only to whether or not a court has properly exercised its judicial function, and this requires the consideration of numerous legal issues having absolutely nothing to do with the amount awarded by the jury.

    • @MLS,

      I understand your point.

      I was reacting to this comment from Terry:
      A plaintiff has a right to a jury trial on statutory damages, so if that right is exercised, it is up to what the jury considers just, not the judge.

      This implies to me that Terry believes that the award was just and *anything* the jury says is by definition correct. I don’t see it that way. I believe that it is a judge’s duty to change the award if appropriate…like it is in this case.

      If you can’t tell, I am not a lawyer or legal scholar or even work in the legal community. I’m simply attempting to apply common sense to this situation. I admit that I don’t support the RIAA’s actions in these proceedings, but hope that I don’t come across as having drunk the anti-RIAA Cool-Aid.

      Peace,
      Randy

      • This implies to me that Terry believes that the award was just and *anything* the jury says is by definition correct. I don’t see it that way. I believe that it is a judge’s duty to change the award if appropriate…like it is in this case.

        Then why even have a jury… if you believe the judge can do whatever he/she wishes? The judge is bound by the law. There’s parameters that give leeway. But the judge can’t just make crap up as they go.

        Whether you feel the award was too much or not isn’t the point here.

        • My presumption would be that it’s the jury’s duty to find out the facts of the case, e.g. whether the defendant is guilty to begin with or not.

          As par the original post here, it’s likely a manner of standing. A plantiff may only bring action to a courtroom when you have suffered a just injury and probable cause to believe the defendant is to be held liable for it, in which case it’s the responsibility of the court to rule over the manner at hand, not any other.

  9. I was flabbergasted by the Judge’s reasoning.

    First, he correctly decides that the Williams standard applies.

    Next, he goes on to hold that each of the Williams factors rates “high” on the continuum of importance.

    Despite finding that each of the Williams factors supports a greater amount of statutory damages, he then goes completely off the rails and discounts 4 prior jury verdicts, holds that the amount rewarded to plaintiffs was “overkill” and, in a completely unsupported statement, says that the verdict is unreasonable. To add insult to injury, he completely rewrites the Copyright Act to hold that no more than the minimum statutory damages can be applies to a consumer infringer, while peppering in some nonsense about treble damages — the notion of which is nowhere to be found in the Act.

    I would assume that, under his logic, an amount of $2251 would be unconstitutional since he is adamant that no reasonable jury can award more than 3 times $750 in any case of consumer infringement, even though the number he chose appears as arbitrary as anything else. And this is despite several previous juries awarding damages all within the same range. So what’s more likely? That 48 unrelated jurors are completely off of the reservation, or that these two judges are?

    • @James_J, Re: “Then why even have a jury…”
      @Jason Smith, Re: “So what’s more likely? That 48 unrelated jurors are completely off of the reservation, or that these two judges are?”

      I want the jury to judge the facts and determine guilt, where they can use common sense and life experiences. I want the judge to set the punishment, since the judge has a *ton* more experience with different cases and defendants. To me it doesn’t make any sense to let someone inexperienced set the award. In other words, I trust that the two judges are more qualified to set the award, rather than the 48 jurors.

      Randy

      • Be that as it may – and you are completely entitled to your opinion – the law at present does not allow for this.

        The award was set by the jury because that’s what the law stipulates.The jury on four separate occasions felt that much higher awards were reasonable. A judge cannot simply step in and say they aren’t simply because it offends his sense of fairness – would you conversely accept the judge coming and saying that the award was too low and should be bumped up to the maximum of $150,000 per work (permissible under the current law). Nah, didn’t think so.

        It’s all splitting hairs anyway, since – as shown in my comment further up – you can get total damages in the millions even if you apply the minimum statutory rate, simply by virtue of not selecting a small portion of the infringed works as an example, but litigating over the whole lot.

        In financial terms this wrangling is stupid, because JTR had been offered numerous opportunities to settle for much lower amounts. In legal terms, this is very important however – because thes cases define the perception of the law, even if they don’t set a binding precedent. I do not appreciate a judge deciding he needs to rewrite the law, because it isn’t to his liking – either he has legal basis for his decision or he must apply the law as it stands.

  10. Pingback: Sony BMG v Tenenbaum: District Court Erred in Reducing Jury Verdict | Copyhype