Essex County historic courthouse detailOriginally published on July 22, 2011; see update at bottom!)

It can only mean one thing when you read this in a news article:

On Friday morning, the RIAA released a brief statement; “We disagree with this decision and are considering our next steps.”

That’s right:  It means U.S. District Court Judge Michael Davis has once again — for a third time — knocked down a jury’s copyright verdict against  Jammie Thomas-Rasset for the unlawful act of uploading other people’s music to the Internet so others could have it for free.  This time the remitittur was from $62,500 to $2,250 per song.  Yes, per song.

I’ve never suggested that’s uploading music to the Net okay.  It’s not, and consistent with what I said yesterday, whether it’s just plain disregard for other folks’ rights and property or ideologically-tinged civil disobedience, if it’s unlawful it should be punished.

But as I also said in a post called “‘Infinity Dollars’ — IP damages and the jury” a while back, where is the sense of proportion among people, the so-called “peers” of the defendant, who could possibly vote for such a preposterous verdict?  Is its source news reports about free-money-type verdicts given out like Pez candies to all kinds of legal claimants, utterly out of proportion to the damages suffered?  Is it some kind of reverse weird class consciousness punishment thing that I can’t begin to comprehend?  Is the distortion caused by allowing the jury to consider the punitive and seemingly arbitrary range of statutory damages available in copyright?

Well, it sure isn’t found in the law or the Constitution, not according to me or according to Judge Davis, who wrote, this time around:

The court is intimately familiar with this case. It has presided over three trials on this matter and has decided countless motions. It has grappled with the outrageously high verdict returned in a case that was the first of its kind to go to trial. The court is loath to interfere with the jury’s damages decision. However, the Constitution and justice compel the Court to act. . . .

To protect the public’s interest in enforceable copyrights, to attempt to compensate plaintiffs, and to deter future copyright infringement, Thomas-Rasset must pay a statutory damages award,” Davis wrote. “Plaintiffs have pointed out that Thomas-Rasset acted willfully, failed to take responsibility, and contributed to the great harm to the recording industry inflicted by online piracy in general. These facts can sustain the jury’s conclusion that a substantial penalty is warranted. However, they cannot justify a $1.5 million verdict in this case.

And here we go again.

Judges can’t fix this; it isn’t even their job.  Congress, for its part, is running in the completely opposite (wrong) direction.

It’s the Kopyright Krackup all right.  Coming soon to a streaming server far, far from you… and right in your living room.

UPDATE:  And the First Circuit sends it right back — the infinite loop continues!  As Venkat explains:

The $625,000 award in favor of Sony is reinstated, and Judge Gertner has to give Sony the choice between accepting a lower award ($62,500) or a new trial. Judge Gertner’s analysis of the Due Process limits on statutory damages and the feelings of Congress about peer-to-peer file sharing, while interesting, are swept aside (for now). The million dollar question, and one I wish the court had answered, is whether Sony can immediately appeal the reduced award or whether it has to proceed in the trial court. Will Sony be trapped in an “endless loop” of going through trials resulting in a damage awards that the court reduces on the basis that the awards are “excessive”? (See Ben Sheffner’s post about the Thomas-Rasset case: “Labels reject remittitur, opt for third trial on damages in Jammie Thomas-Rasset case.”)

The other question that the First Circuit’s opinion raised but didn’t address is: if statutory damages are to be determined by the jury, why does the trial court get to take this decision away from the jury and reduced it via a remittitur? What is the effect of Feltner on the common law practice of reducing damage awards? Where an award is within the statutory range, it seems odd for the court to have authority to reduce it via a remittitur–isn’t this the point of Feltner?

UPDATE 2013:  Supreme Court doesn’t want to get involved; verdict stands.

By Ron Coleman

I write this blog.

5 thoughts on “Infinite loop (updated and bumped)”
  1. Maybe the whole statutory damages scheme is too confusing for the jury to follow. First they have to set an amount that they feel is just within a broad range. Then that amount is multiplied on a “per work” (here per song) basis. (In trademark cases, on a per-trademark/type of good basis.) $62,500 is not so unreasonable if you forget the multiplier. That is what pumps it up so high.

    In my experience, in bench trials, the judge ususally first figures out how much he or she wants to sock it to the defendant, and then works backwards to figure out how to justify that award. Maybe juries should be instruct to do the same.

  2. Further to my last post on this, another thing the jury seems to be missing is the concept of diminishing marginal culpability. When I used to practice white collar criminal law, a big issue for many financial crimes was applying the Sentencing Guidelines. While anyone who commits a fraud gets a certain base number, to this would be added an additional number to reflect how much was defrauded/stolen by the defendant. The more you stole, the more is added onto your sentence. However, that marginal addition is not proprtionate. Meaning, that as between someone who defrauded $1 Million and someone who defrauded $2 Million, the latter does not receive a double sentence, because stealing the second million is not twice as culpable. Most of the culpability is reflected in the decision to commit a fraud (or embezzlement or whatever) in the first place. The fact that one defendant managed to steal twice as much as the other is mostly a matter of luck than criminal cuplability. So the $2 Million defendant might get a sentence that is only 10% greater.

    Same applies here. Willful copyright infringement deserves some sanction. The fact that the person did it repeatedly and systematically makes it worse. But after, say, the first 5 downloads, the additional downloads are only slightly worse, at most. (What do the studios charge nowadays for a legitimate download of a copyright song — $10? $20?) It’s more a matter of how early the person was caught than anything else.

    In other words, as between a willful infringer who downloaded 5 songs and one who downloaded 100 songs, the difference in culpability is minor. But the way the statutory damages section is structured, the jury will end up multiplying its base number by 100. What it should do is only add maybe 10% to the number for the first 5 downloads.

    I know this is a bit rambling, but I think there is a kernel of an intelligent idea here.

  3. Tal, great points. You have, I think, really developed a very cogent argument about how juries and statutory damages seem not to make a lot of sense together.

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