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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.
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.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
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.
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.
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...
Don't tell me to get a life. I had one once. It sucked.
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.
Ray Beckerman +5 Insightful
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?
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. ;-)
StarTrekPhase2 - The Five Year Mission Continues!
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.
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.
Ray Beckerman +5 Insightful
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