RIAA's Tenenbaum Verdict Cut From $675k To $67.5k

NewYorkCountryLawyer writes "In SONY BMG Music Entertainment v. Tenenbaum, the Court has reduced the jury's award from $675,000, or $22,500 per infringed work, to $67,500, or $2,250 per infringed work, on due process grounds, holding that the jury's award was unconstitutionally excessive. In a 64-page decision (PDF), District Judge Nancy Gertner ruled that the Gore, Campbell, and Williams line of cases was applicable to determining the constitutionality of statutory damages awards, that statutory damages must bear a reasonable relationship to the actual damages, and that the usual statutory damages award in even more egregious commercial cases is from 2 to 6 times the actual damages. However, after concluding that the actual damages in this case were ~ $1 per infringed work, she entered a judgment for 2,250 times that amount. Go figure." That $2,250 per infringed work figure should look familiar from Jammie Thomas-Rassett's reduced damages judgment — $54,000 for 24 songs.

Comments

What difference does it make?

[Zironic]

Isn't that still way more then most people can reasonably pay and completely disproportionate to the actual damages caused? He'll probably still have to declare bankruptcy.

Re:What difference does it make?

[MozeeToby]

It's more than most people have liquid but it's certainly not more than most people can reasonably pay. After all, most adults have a house, a car, and if necissary wages for the next 10 years. It's not like they expect you to write out a check the day after the trial is over. Yes, it's still wildly disproportionate, but at least it I am mentally capable of imagining it is an amount the people who wrote the law might have expected; something that I can't say about the original award.

Re:What difference does it make?

[Monkeedude1212]

Isn't that still way more then most people can reasonably pay and completely disproportionate to the actual damages caused? He'll probably still have to declare bankruptcy.

While completely disproportionate to actual damages, that is easily within a payable range (though not all at once).

It's less than a house, and there are people who can afford two of those. If they make him do monthly installments over 6 years he should be able to pull it off.

Re:What difference does it make?

[MozeeToby]

No, the lawmakers established a range of $350 - $250,000 per song, depending on the circumstances of the infringement. I refuse to believe that they intended for the top end of that spectrum to be applied to situations such as these. While this was clearly not the most innocent type of infringement (something like burning a mix CD would qualify in my mind (not that I agree that it should be against the law, only that according to the law that is infringement and if it must be punished should be punished with the smallest award legally applicable)). At the same time it is far from the most heinous infringement (something like a major bootlegging operation selling thousands of copies at a profit).

Re:What difference does it make?

[BonquiquiShiquavius]

Read the decision. The judge agrees with you. She finds the original award unconstitutionally excessive, and thus has grounds to reduce it; however, she still must still respect the findings of the jury, who were "going for broke" in her words. In this case, determining the size of the award fell to the jury, not the court. There's only so much she could do.

Actually there's probably only so much the jury could do as well, given that Tenenbaum not only admitted to years of copyright infringement, but also admitted to lying about it to authorities when caught. No jury likes a weasel.

Re:What difference does it make?

[Lloyd_Bryant]

... an amount the people who wrote the law might have expected

Not really. The lawmakers established a fine of $250,000 per song. They'd probably be disappointed to see it reduced to just over $2000

I doubt it. When the law was written, it was written to cover commercial infringement, as at that time there was no technology that would have allowed for the wide-spread non-commercial infringement that is commonplace today.

The law really needs to be rewritten to differentiate between the two, with reasonable (if any) penalties for P2P type infringement. However, given the current influence of the media corporations with government, maybe we should leave well enough alone...

Re:What difference does it make?

[NecroPuppy]

It's a 750 dollar minimum with, as I recall, a few criteria that can allow for triple damages, such as willfull infringement.

So really, that is, by law, the miminum he could have been hit for.

Ultimately, if the RIAA decides to go back on the "sue-em-all" bandwagon, they'll just start raising the number of songs. Instead of going after someone for 24 songs, they'll instead go after them for 100 songs.

Re:What difference does it make?

[RobertM1968]

It's more than most people have liquid but it's certainly not more than most people can reasonably pay. After all, most adults have a house, a car, and if necissary wages for the next 10 years.

So, you are saying that because someone is capable of selling their house and car to pay $67,000 for sharing 24 songs, that it is a reasonable expectation?

It's not like they expect you to write out a check the day after the trial is over.

Are you sure about that? Most companies I have ever seen (ones far less evil than the RIAA) expect, on determination of a judgment amount, that you will do exactly that or they take other measures to collect said judgment - all while adding exorbitant interest and fees (legal, collection and otherwise) to the amount. As a matter of fact, such practices were part of the reason for the Homestead law in Florida (and similar ones elsewhere) because such "collection" activities often included going after such personal property as one's house and car.

Yes, it's still wildly disproportionate, but at least it I am mentally capable of imagining it is an amount the people who wrote the law might have expected; something that I can't say about the original award.

Well, I am sure that the people who lobbied for and/or sponsored those penalties as defined in the law (the RIAA and MPAA and their members) definitely imagined and hoped for such amounts - and obviously more (based on the original judgment amount) when they pushed for this. I suspect that those who wrote the law went in to it fully expecting such amounts as well, fully knowing what the **AA's expectations were on the matter. That has nothing to do with whether either judgment fits the "crime" though. So... I guess I concede that point to you. ;-)

Re:What difference does it make?

[flaming error]

> it's certainly not more than most people can reasonably pay
Perhaps most people in your social circle could pay that, but not most people in America.

Median income is around $50K/year.

The average amount of "disposable income" that is saved lately varies between -2% and +2%.

Paying off $7K/year would require 14% of the median income. I suppose one can survive on that, if one cuts back on luxuries like clothes, meat, and gasoline. And pirates their music.

Re:What difference does it make?

[Solandri]

I doubt it. When the law was written, it was written to cover commercial infringement,

Yes, that's a very important point to remember. The laws were written to discourage commercial pirates. If they made and sold 10,000 illegal copies of a CD, they made 10,000x as much money as if they only sold one. The more copies they could sell, the more they would benefit. So a fine like $250,000 per song made sense to discourage them.

But on the same token, it makes absolutely no sense to apply that fine to personal copyright infringement. By definition, the personal infringer is only interested in one copy. S/he cannot benefit from making nor providing more than one copy (indeed, as many filesharing networks have found out, the incentive to leave the network as soon as they've gotten their one copy gives rise to "leechers"). So just fining them for the one illegal copy is disincentive enough. Figure $25 for a CD, treble damages for willful infringement, and a little extra for the copyright holder's and government's time and effort, and you're in the $100-$200 range per CD.

This gets into another aspect of this whole thing which is just wrong. The *AA are essentially double-dipping. When they bring a file-sharer to trial, they bemoan how the lone person made the song available to thousands of other people, and so the fine should reflect all those copies. But if that's their reasoning, then the moment they get a judgment for $54,000 against one person, that should indemnify all the people who got files from her from further prosecution. After all, by the *AA's own argument, the fine she's paying is for all those copies, not just hers. So the defendant(s) has been punished and fined, and the *AA recompensed for those thousands of copies and made whole. But no, they go right on filing lawsuits against all those other people.

Either haul one person to court and make them pay these huge fines, and indemnify the rest of the people from prosecution for that infringement. Or try each person in court for their single infringement. You cannot have it both ways and fine every single person for his/her infringement plus the infringement of every other filesharer, and do the same for every other filesharer. Much like if you file suit against a commercial pirate, the people who bought CDs from that pirate are not liable for infringement.

Re:What difference does it make?

[PopeRatzo]

While completely disproportionate to actual damages, that is easily within a payable range (though not all at once).

Is this the new standard for corporate extortion? "It's completely disproportionate, but if he's willing to give up his life and future he can pay it".

It's bad enough that the system in the US (and most western countries) has become a simple matter of re-distributing wealth from the working class to the ownership class, but this is simply economic terrorism. Create a penalty that is so disproportionate that it frightens anyone who might consider not giving money to the corporation. Make it so that people are afraid to post their own original work to YouTube because the RIAA is likely to send a C&D letter "just in case". Send C&D letters when people use Creative Commons to make sure they learn who's boss. Make everyone pay and pay until they're willing to open their wallets, just to be left alone. Have the corporate media repeat the notion that anyone who believes in the public domain, anyone who might consider alternatives to old-fashioned copyrights is labeled a "pirate" or "anti-copyright radical".

Make public libraries emblematic of "big government" and "socialism" so that municipalities who withdraw funding for those libraries seem patriotic. Equate regulation of business with tyranny.

The new corporatism is much, much more dangerous to our society than terrorism.

Re:What difference does it make?

[gnasher719]

A mix CD is *NOT* infringement. That's an obvious case of Fair Use.

Copyright law disagrees with you. "Fair use" would be a CD on which you record your own one hour blog about the evolution of rock music from 1960 to 2010 and add a few ten second samples to clarify the points that you are making. A mix CD containing _complete_ songs or large parts of songs is definitely not "Fair use".

Re:What difference does it make?

[Joe Snipe]

One thing to keep in mind: The RIAA cannot afford to keep trying these cases if they keep getting such paltry sums. The lawyers alone are expecting to earn more than that.

Re:What difference does it make?

[flaming error]

Why is "inconvenient" in quotes? I never used that word, nor did parent.

But I would argue that a penalty of 3 months in prison for copying $24 worth of songs is bat-shit insane.

Re:What difference does it make?

[cynyr]

I don't know, I think I'd take 3 months in jail over a 675k or even a 67.5k "fine". Seems like I would need to be making over 240k/year for it to be more expensive(overall), and thats just the 67.5k award, or 2.7million/year for the larger award.

I would argue against the 3 month sentence, as i can drive home drunk, physically endangering hundreds of people and get far less than that for a first time offense.Maximum penalty for a first time offender with no aggravating factors, with no priors, is 30 days and/or $1000, and goes up to 3000 and 1 year for two+ aggravating factors, in the state of Minnesota[1]. So yes, sharing 24 songs a few hundred times, for no commercial gain, seems to me to be less of an issue than driving with a .19 BAC by yourself home from the bar. Think of how many traffic lights are between your bar, and home. How well could you drive with a .19BAC(0.08BAC is the limit in Minnesota). Now i'm not saying that driving below .08 is legal, it's just a DUI instead of a DWI[1]. Your second offense in 10 years is 2 days in jail/workhose and 8hours community service per day less than 30 days in jail[2].

So yes, a basicly harmless act(at most a few hundred dollars of losses, counting the cost of each album shared* number of times shared to a unique computer), is getting someone a 67.5K fine, but no jail time, and no community service. You would need to pay back around 7k a year to pay it off, with interest, in ten years.

Not stating that drunk driving is good, to be honest I think the penalties aren't harsh enough, but then if you take away a license to drive in the USA you really have no other option. Go us not wanting to pay for anything that someone else might use.

[1] http://dwi-minnesota.com/mn-penalties.html
[2]http://dwi-minnesota.com/mandatoryminimum.html

Re:What difference does it make?

[shutdown -p now]

It's a 750 dollar minimum with, as I recall, a few criteria that can allow for triple damages, such as willfull infringement.

The lower bound is the same - $750 - regardless of whether the infringement was willful or not. However, the upper bound changes from $30k to $150k in the case of willful infringement.

However, it's interesting to read the actual reasoning by which the judge arrived to the given figure (which is $750 x 3). Seriously, RTFA!

For the reasons I discuss below, I reduce the jury’s award to $2,250 per infringed work, three times the statutory minimum, for a total award of $67,500. Significantly, this amount is more than I might have awarded in my independent judgment. But the task of determining the appropriate damages award in this case fell to the jury, not the Court. I have merely reduced the award to the greatest amount that the constitution will permit given the facts of this case.

There is no question that this reduced award is still severe, even harsh. It not only adequately compensates the plaintiffs for the relatively minor harm that Tenenbaum caused them; it sends a strong message that those who exploit peer-to-peer networks to unlawfully download and distribute copyrighted works run the risk of incurring substantial damages awards. Tenenbaum’s behavior, after all, was hardly exemplary. The jury found that he not only violated the law, but did so willfully.

Reducing the jury’s $675,000 award, however, also sends another no less important message: The Due Process Clause does not merely protect large corporations, like BMW and State Farm, from grossly excessive punitive awards. It also protects ordinary people like Joel Tenenbaum.

In other words, she started from the figure provided by the jury, and then tried to reduce it as much as possible. She seems to be doing this specifically by looking at numerous other cases in which punitive damages were awarded to arrive at the reasonable absolute figure, as well as a reasonable ratio of punitive amount to compensation for the plaintiff:

Notice of section 504(c)’s extraordinarily broad statutory damages ranges, standing alone, does not in any meaningful sense constitute “fair notice” of the liability that an individual might face for file-sharing. In a case of willful infringement such as this one, the maximum damages per infringed work -- $150,000 -- are 200 times greater than the statutory minimum of $750. Since the jury found that Tenenbaum willfully infringed thirty copyrights, its award could have ranged from a low of $22,500 to a high of $4,500,000. For anyone who is not a multi-millionaire, such “notice” is hardly more illuminating than the notice that BMW and State Farm had that their fraudulent conduct might lead to the imposition of a punitive damages award ranging from $0 to infinity.

Since section 504(c) failed to provide Tenenbaum with fair notice of the liability he could incur for filesharing, it is imperative that I review other copyright cases to determine whether the jury’s $675,000 award here fell within a discernible pattern of awards of which Tenenbaum could have taken note, or was instead an unforeseeable outlier. ...

I conclude that an award of $2,250 per song, three times the statutory minimum, is the outer limit of what a jury could reasonably (and constitutionally) impose in this case

Then the explanation as to why the 3x multiplier over the minimal amount of $750: ... there is a long tradition in the law of allowing treble damages for willful misconduct. ... Given the record before me, I conclude that the most reasoned approach is to reduce the jury’s award to three times the statutory minimum. Although this decision will not be entirely satisfactory to some, it at least has the virtue of finding some basis in the long history of courts and legislators sancti

Re:What difference does it make?

[flosofl]

I think what you're describing (the charging for distribution) is called criminal copyright infringement. It has much steeper fines and could involve jail time.

Making a mix tape (or CD) and giving it to a friend gratis, is still copyright infringement, but I believe it's only a civil matter at that point. Tanenbaum was sued in civil court, (the RIAA's mentions 10 jurors in their response to the ruling). It's only when you start charging money when it becomes criminal (and the federal government attacks your ass).

I could be wrong, but I'm fairly sure that's how it currently works (or rather doesn't work IMHO).

Re:What difference does it make?

[Securityemo]

I don't care about what the law says - putting someone into financial ruin for such a petty crime is clearly horrendously evil. Nitpicking only serves to obfuscate the basic injustice of it. The law (your law, I don't live in the US) is corrupt.

Re:What difference does it make?

[shaitand]

I could literally walk in a store and steal a $24 item in front of a cop and get no jail time and walk away with a $100 fine.

Re:What difference does it make?

[adolf]

My first house was $65,000, 3 bedrooms, 1,200 square feet, nicely finished.

My current house was $55,000, 5 bedrooms, 2,200 square feet, not quite done yet.

Perhaps you live somewhere that housing expenses (and median income) is greater, but I would not have been able to pay either of them off in six years.

Re:What difference does it make?

[WillDraven]

The new corporatism is much, much more dangerous to our society than terrorism.

Not only that, but one could make the argument that it breeds actual terrorism. As we have learned in the middle east, if you ruin enough peoples lives eventually some of them will decide to come and TAKE yours.

So

[afidel]

We have tort reform which limits doctors liability when they screw up someones life, we have oil company liability limited to $75M, but if you trade some bits you are responsible for a months takehome pay for an average US family, sounds about right.

Re:So

[drinkypoo]

Should the company survive it's just more proof that the Libertarian model of letting everyone run wild and the market decide things is fundamentally flawed.

Under the anarchic model (let's face it, that's what libertarians really want; a system of anarchy where they can create their own feudal societies) someone or some group would take up the task of assassinating BP executives, destroying their equipment, et cetera. But under THIS model such a thing is illegal and will get you in a whole lot of trouble. Of course, it wouldn't really solve anything. Instead of civil war there would be corporate war. But libertarians never seem to realize that they are anarchists. Then again, we're just sitting here bagging on libertarians when none of them have even cropped up to say anything ignorant.

go figure?

[nomadic]

Go figure.

Or read the opinion, which will obviate the need for figuring. She explains her justification for the damages figure (3 times the statutory minimum) quite thoroughly. She also points out that, like Thomas in the Jammie Thomas-Rasset case, the defendant willfully violated the law then lied under oath to try to escape it, which seems to inform her decision that some sort of serious punishment is justified.

Re:go figure?

[nomadic]

I would disagree. Perjury, like contempt of court, is a criminal matter entirely separate from the primary (or whatever the sharkspeak word is) case.,/i>

That's why I said informed, not based. While you are correct that perjury is generally a criminal matter separate from the case in chief, it is not necessarily completely disconnected. For example, perjury can be grounds for dismissing an action. Here, she seemed to interpret his failure to tell the truth under oath (I'm not saying he actually did, just her conclusion was that he did) goes to the willfulness of his misconduct, and willfulness is definitely a factor in damages here.

Re:go figure?

[NewYorkCountryLawyer]

Come on, 2250 times the actual damages for copying music. Here the court (and the law I might add) is out of balance. The law should treat each case on merits and what damages there actually were, having the punishment fit the crime. Our system of justice is not supose to treat people as examples, without regard to what the effect of the judgement is going to be on the individual, the punishment to the individual needs to fit the crime, Here it does not. Corporate profits have trumped our laws and our politics. We need a change.

I don't think this result was consistent with existing law. The judge conceded that under existing law a copyright infringement statutory damages claim should not exceed 2 to 6 times the actual damages. Had she applied that principle to her overly generous appraisal of the actual damages as being $1 per infringed work, and had she decided to "throw the book" at Mr. Tenenbaum and award 6 times the actual damages, the total judgment would be $180.

Re:go figure?

[NewYorkCountryLawyer]

2250 times what exactly? The price of an mp3 or the value of unlimited international distribution rights?

There was no evidence of an actual "distribution" with in the meaning of the Copyright Act, let alone of him acting as a dispenser of "unlimited international distribution rights".

Re:go figure?

[Hatta]

Or read the opinion, which will obviate the need for figuring. She explains her justification for the damages figure (3 times the statutory minimum) quite thoroughly

When statutory damages are 750 times actual damages, the statutory damages are clearly unconstitutional. There's no explaining that.

If the defendant provably lied under oath, prosecute them for perjury. Tacking damages onto another judgment is wrong.

Re:go figure?

[NewYorkCountryLawyer]

When statutory damages are 750 times actual damages, the statutory damages are clearly unconstitutional. There's no explaining that.

No there is no explaining it. The decision never makes a rational transition to its conclusion.

1.Law: statutory damages should be 2 to 6 times actual damage
2.Actual damage found to be $1
3. ??????????
4. $2,250 profits for RIAA.

I for one welcome the administration of justice by our corporatist overlords.

Re:go figure?

[nomadic]

Where was this in the opinion? I see where she says "Nevertheless, the awards in such cases are generally no more than "two to six times the license fees defendants 'saved' by not obeying the Copyright Act"--a ratio of statutory to actual damages far lower than the ratio present in this case" (pages 40-41) where she'd discussing the disparity between public performance cases and this one, but I do not see where she concludes as a matter of law the statute only permits that range for the instant case, just that the disparity suggests egregiousness.

Infinite Resources

[DIplomatic]

The real problem here is that computer data (here referring to song files) is the only truly infinite resource that has ever existed on the planet. A digital copy of a CD could be copied an infinite number of times without any loss of quality. How do you regulate that? It would be like if you had a device that cloned Ferraris and with the push of a button you created a dozen perfect Ferraris out of thin air for you and all of your friends. The guy who owns a Ferrari dealership is going to be pissed, but you didn't do anything to him. You didn't take anything from him. You can't erase file-sharing from the planet. The technology exists, so there must now be a new model of business and new rules by which to regulate it.

He won't be declaring bankrupcy

[rsilvergun]

you can't any more, not for something like this. They'll garnish his wages.

When UMG is sued limit is 2x; when suing 2250x

[NewYorkCountryLawyer]

When UMG was sued for copyright infringement, the punitive damages were reduced from 10x actual damages to 2x actual damages.

But when it is suing some kid for copyright infringement, it's allowed to collect 2250x actual damages.*

Doesn't sound like equal justice to me.

* Even Judge Gertner's $1 actual damages figure is wildly overstated. 70 cents lost revenue minus 35 cents saved expenses = lost profit of 35 cents, IF you wanted to assume that every unuathorized download represents a lost sale, which it certainly does not. Most likely the real actual damages is 5 or 10 cents on an mp3 download.

[disclaimer: I am aware of microbreweries, TVM]

[Hognoxious]

You pay >100x more for toner than you do for the same amount of beer.

If you live in the US, the toner not only contains 100x more alcohol but tastes 100x better.

Re:Dont pirate music, simple as that.

[0123456]

Why is everyone bitching that the guy got in trouble for downloading free music. I was taught "don't do the crime if you cant do the time." These guys broke the law and committed a felony. They are lucky they are not going to prison. I would gladly pay $60k and keep my ass out of the prison shower room.

I think the complaint is the disproportionate punishment for the crime. He apparently downloaded 30 songs, which is about 3 CDs worth... if he'd walked into a CD store and stolen three CDs with no previous criminal record, do you really think he'd be fined $67,000 or sent to jail?

Penalty less than iTunes?

[stimpleton]

I live outside of the US. Lets say, as in the summary, I was fined US$1 per infringed work then:

Currently, I pay NZ$1.50 per iTunes song.

At its worst exchange rate a couple years back it was NZ$2.12 per song(I didnt purchase many at that time).

If I had taken these songs instead, extradited to the US, fined, I would have to pay, lets see....US$340. Potentially less than the legitimate purchase price.

PS: I take no moral stand, I work, have limited time outside work hours, and take the shortest path for various things even if it means paying.

Re:Amateur Lawyers

[NewYorkCountryLawyer]

You quoted from the summary. The summary was written by NewYorkCountryLawyer, who is (if I remember correctly) an actual lawyer.

Unfortunately, you are right about that. I probably should have been a computer programmer, but I was a little intimidated by those tall machines with whirring wheels and punch cards, which they had in those days.

Re:I think this was intentionally stupid

[Krahar]

Read the opinion. The amount is stupid because the jury was stupid and there is only so much the judge can do about it.

Car analogy

[mangu]

See that FBI/INTERPOL message in the front of every video or DVD? When you copy it, you're making a risk assessment that if you get caught they're not going to put the full weight of the statutory limit against you

Yes, I see that -- unconstitutional -- message. In essence, what the statutory limit says is that, if I get caught I have to pay for all those who weren't caught.

It's like if the highway patrol said, "we will only catch one in a million speeder, but he will have to pay for all the million speeders we didn't catch".

If I have one copy of a song, all the damage i have caused to the copyright owner is the lowest cost at which I could have got that song. Incidentally, for most songs this cost is zero, since they are available on the radio. Radio is paid by advertisement, and advertisement cost is bundled into the price of every product I buy.

However, let's ignore that and assume that I couldn't have listened to that song in the radio, the price I would have had to pay would still be $1 or $2 at most. If a thousand other people downloaded, well, sue them and get $1 or $2 from each.