Way back in 2003, the member labels of the RIAA brought lawsuits against a number of individuals for distributing copyrighted works on P2P networks. Massachusetts grad student Joel Tenenbaum was among them and was sued over five years ago. Tenenbaum’s case went to trial in 2009 — one of only two to reach trial, the other being Capitol v Thomas-Rasset — and the jury returned a verdict for $675,000 in statutory damages for infringing 30 sound recordings.

The District Court reduced the award the following year to $67,500 on the grounds that the jury’s award violated the Due Process Clause of the US Constitution. Both parties appealed (I looked at the issues on appeal in a previous post). The First Circuit held that the court erred when it did this — under the doctrine of constitutional avoidance, it should have considered the common law doctrine of remittitur before examining the award under constitutional grounds. The original $675,000 jury award was reinstated, and the Circuit Court remanded to the District Court to consider the motion for remittitur. (My previous post on the First Circuit decision here.)

Now, roughly a year later (during that time, Tenenbaum appealed the decision to the Supreme Court, but the petition was not granted), the District Court has considered the issue of remittitur and released its decision. In short, it found remittitur is not appropriate here and the original jury award does not violate due process, so the original $675,000 verdict stands.

Remittitur

The court begins by noting the high standard needed to grant remittitur: “A damage award must stand unless it is ‘grossly excessive, inordinate, shocking to the conscience of the court, or so high that it would be a denial of justice to permit it to stand.'” Under this standard, the court found “no basis” to reduce the award.

The jury was thoroughly instructed on factors it should consider when considering the amount of damages to award, as well as the harms that result from unauthorized filesharing. The jury also heard evidence revealing the scope and scale of Tenenbaum’s conduct — he downloaded and distributed thousands of files over an eight year period. In addition, the evidence revealed the extent that Tenenbaum acted willfuly, as he received multiple warnings from various sources during this time about infringement and personally knew that other individuals were facing lawsuits for the same conduct. Finally, the evidence showed that Tenenbaum destroyed evidence, lied during legal proceedings, and only grudgingly admitted responsibility for his acts.

In spite of this, the court notes, the jury award was not only at the low end of the statutory range for willful infringement, it was even below the statutory maximum for non-willful infringement.

Due Process

The court next considered Tenenbaum’s due process challenge to the award. Just a note: many people assume that the Eighth Amendment’s ban on “excessive fines” is at issue here. However, the Eighth Amendment only applies to criminal fines, while this is a civil lawsuit. 1Browning-Ferris Industries of Vt., v Kelco Disposal, 492 US 257 (1989). Instead, the challenge here had come under the Fifth Amendment, which says that “No person shall be …  deprived of life, liberty, or property, without due process of law.” The argument is essentially that the damage award is “so grossly excessive as to amount to a deprivation of property without due process of law.” 2See Waters-Pierce Oil v Texas (No. 1), 212 US 86, 111 (1909).

The district court here begins by noting that the First Circuit suggested that the proper standard to evaluate a due process challenge to statutory damage awards is the one from St. Louis, IM & SR v Williams. 3251 US 63 (1919). Tenenbaum had argued that the court should follow the standard set out by the Supreme Court in punitive damages cases, specifically BMW v Gore, 4517 US 559 (1996). a far less deferential standard. But as the First Circuit noted, and the court here reiterates, the factors set out in Gore — aimed at due process concerns over the lack of notice over the amount of otherwise unconstrained punitive damages — are simply not relevant when a statute constrains the amount of damages that a defendant can face.

Under Williams, the court states, “a statutory damages award comports with due process as long as it “cannot be said to be so severe and oppressive as to be wholly disproportioned to the offense or obviously unreasonable.” As noted above, this standard is highly deferential — Congress has wide latitude in setting the amount of damages for legal violations, and too close review of such awards by courts raise separation of powers concerns. The district court concluded that the jury award here did not violate due process under the Williams standard.

What’s next?

Some have suggested that an appeal from Tenenbaum is likely. But his arguments have repeatedly been rejected at the District and Circuit court levels, so it is unlikely he will have any success for any future challenge.

Still left to watch is the only other RIAA filesharing case to make it to trial, Capitol v Thomas-Rasset. That case is one step ahead of Tenenbaum: after a second trial resulted in a jury verdict of $80,000 for each of 24 songs at issue (a verdict in the earlier trial had been vacated on a procedural error), the district court judge remitted the award to $54,000 total, or $2,250 a song. The record labels exercised their Seventh Amendment rights to reject the remitted award, and a third trial, solely on damages, resulted in a jury verdict of $62,500 per song. This time, the judge reduced the award on constitutional grounds. Thus, when that reduction was appealed to the Eighth Circuit, the court was not confronted with the question of whether remittitur was required before constitutional review of award, as the First Circuit was, since the lower court had already gone through with remittitur.

On appeal, the court is confronted with the question of which standard to review the award under — Williams or Gore. 5As well as a preserved appeal of the question of whether making a work available on a P2P network is a violation of a copyright holder’s distribution right. The Eighth Circuit heard oral arguments in Capitol this past June, so a decision should be forthcoming in the next few months.

References   [ + ]

1. Browning-Ferris Industries of Vt., v Kelco Disposal, 492 US 257 (1989).
2. See Waters-Pierce Oil v Texas (No. 1), 212 US 86, 111 (1909).
3. 251 US 63 (1919).
4. 517 US 559 (1996).
5. As well as a preserved appeal of the question of whether making a work available on a P2P network is a violation of a copyright holder’s distribution right.