Record Labels Basically Admit That Statutory Damages Out Of Proportion As They Ask For Third Jammie Thomas Trial

Legal Issues

from the groundhog-day dept

I guess it’s fitting that this happens in early February. Slashdot points us to the news that, as was widely expected, the record labels have opted for a third trial of Jammie Thomas-Rasset, rather than accept the reduced award of $2,250 per song, as set by the judge. Not surprisingly, the labels are doing this because they disagree with the precedent of a judge changing the jury award, and the new trial is limited solely to the damages question. But, honestly, the whole thing is a bit weird. If the judge can reduce the older jury award, and a new jury sets a higher rate, can the judge just reduce it again, and we go through this entire process for the fourth time? The Slashdot post, written by Ray Beckermann claims that the labels “could only win a verdict that is equal to, or less than, $54,000,” in the new trial, but I’m not sure why he says that. Is it because the judge would reduce it again? This is not at all clear.

Still, the actual filing from the RIAA’s lawyers has some interesting claims (pdf):

While Plaintiffs do not believe that either verdict was improper under the law, or that the second verdict should be remitted, they would have considered accepting a remittitur simply so that this case could finally come to an end. However, any remittitur must otherwise be consistent with the law and be guided by what actual juries have awarded under similar circumstances. Unfortunately, Plaintiffs find it impossible to accept a remittitur that could be read to set a new standard for statutory damages — essentially capping those damages at three times the minimum statutory amount of $750 (or $2,250) for any “noncommercial individuals who illegally download and upload music.” (Id. at 2, 25.) This far-reaching determination is contrary to the law and creates a statutory scheme that Congress did not intend or enact.

It’s a bit of a stretch to claim that this would be a cap on “any” unauthorized noncommercial file distribution. I would imagine that any court still has the right to take into account the specific circumstances to make sure the award is proportionate to the rights being violated. The labels’ lawyers are stretching what the judge said here.

Indeed, Congress has spoken on this very topic. Congress deliberately and purposefully established a range of statutory damages that applies without regard to the commercial motivation of the defendant.

I find this statement funny, because they then cite what Congress said way back in 1999. Fair enough, Congress (which basically just took RIAA talking points and put them into the Congressional record) did make those comments — but these are the same entertainment industry lawyers who supported a “secondary liability” or inducement standard in the Grokster case, even though Congress had specifically rejected an attempt to put an inducement standard into the law. And when confronted, how does the RIAA explain that? Well, they say “the situation changed.” Ah, so it’s okay to have the courts change copyright law when the situation changes in one direction, but not the other?

What the judge was doing here was recognizing that the amount the jury awarded was clearly out of proportion to the actual infringement — just as the courts in Grokster supposedly recognized that an inducement standard made sense in shutting down third parties (something I disagree with, but it’s how the court felt). It seems that the RIAA and its lawyers have a massive double standard here.

A rule that the maximum permissible award in cases involving so-called “noncommercial” infringers is three times minimum statutory damages also ignores the harm caused by such infringers. From an economic perspective, individuals who give away copyrighted works illegally can cause as much harm as those who sell those works illegally, particularly when the so-called “non-commercial” infringer uses a P2P service. The notion that an infringer who does not make a profit should automatically be entitled to better treatment than an infringer who does make a profit is found nowhere in the law. The “not for profit” infringer is hardly entitled to special protection, which is why Congress conferred no such protection.

Again, Congress also conferred no such thing as an inducement liability, but the courts — at the urging of the RIAA — conferred exactly that via the courts. Why such a double standard?

The Court’s cap would set a new ceiling such that no copyright owner could effectively enforce their rights unless they could and did sue on numerous works. No copyright owner would be motivated to enforce its rights where it could only sue on a handful of works because the potential recovery would be too limited. Congress set a wide range of statutory damages for copyright cases precisely because plaintiffs need to be incentivized to bring appropriate cases to enforce their rights — even those who own a small number of copyrights or those who only have a limited number of works infringed. Conversely, the Court’s artificially depressed cap compels parties with a large number of copyrights at stake to sue on all of them, rather than a more modest number. This serves only to increase the discovery and trial burdens on parties and courts. Yet the Court’s inflexible “three times” cap would invariably penalize plaintiffs with a small number of works at issue, and would force those with a lot of works to add to their complaints unnecessarily.

Woe is the RIAA. If the awards for unauthorized sharing of a $1 song that might help promote their artists and help them make more money (if only the RIAA were to adapt to a changing market place) might “only” be 2,250 times the market price of the song? Cry me a river. And, even more ridiculous is the claim that this is some undue burden on the RIAA that it might have to actually sue over all of the songs someone distributed in an unauthorized manner, rather than just selecting a handful as it does now. This is a major issue. Technically, the RIAA has been able to just pick a couple dozen songs and sue over those, knowing that the totally disproportionate statutory damages will “cover” the rest. But does that seem right to anyone? The idea that rather than proving the actual harm done by the actual distribution, the RIAA is allowed to just pick a “sampling” and without proof get back many times the price without even presenting any actual evidence of the wider damage or the wider distribution of more files?

It seems perfectly reasonable to expect the RIAA should have to actually include what they claim was infringed, rather than being able to just pick a handful, knowing that the totally out of proportion statutory damages will “cover” the rest.

In fact, the paragraph above is effectively the RIAA admitting that it knows the statutory damages are out of proportion, but it believes it’s fair because the RIAA is too cheap and too lazy to actually sue people for what it claims they infringed on.

Talk about a sense of entitlement.

Still, as we’ve said for a while now, this is a really bad case all around. It’s pretty clear that Thomas-Rassett was involved in widespread infringement, and then lied about it. If people are going to challenge ridiculous statutory rates and other aspects of copyright law, this is really bad case to do that (ditto for the Tenenbaum case). This is one where it seems like she really might have been better off settling early and moving on. And the oddity of the judge reducing the jury award just makes this whole case into something of a circus…

Filed Under: appeal, constitution, copyright, jammie thomas, jammie thomas-rasset, settlement, statutory damages
Companies: riaa