Congress, courts and the skewed punishment of illegal downloaders

By Alison Frankel
September 14, 2012

Should people who illegally download music be subject to more severe punishment for their sins than, say, tobacco companies that lied about the dangers of their products? Or how about companies that colluded to fix prices or engaged in civil racketeering? Or patent thieves who deliberately infringed competitors’ intellectual property?

All of those corporate miscreants can be hit with enhanced damages for their wrongdoing, but for all of them those enhancements are limited. Congress has said that when defendants are found to have violated federal antitrust, racketeering or patent laws, they can be on the hook only for as much as three times the actual damage they caused. Punitive damages, which come into play in product liability, fraud and other state-law cases, have been restricted by the U.S. Supreme Court, which held in 2003′s State Farm v. Campbell that the Due Process Clause means punitives cannot vastly exceed actual damages.

So surely when a single mom in Minnesota is found liable for illegally downloading 24 songs via a file-sharing site, due process should limit her punishment, right? If corporate defendants only have to cough up treble damages when they’re found to have engaged in a pattern of racketeering acts, doesn’t it only makes sense that someone without a commercial motive shouldn’t face a penalty out of all proportion to the harm she caused?

Not according to the 8th Circuit. On Tuesday, a three-judge panel reinstated a jury verdict of $222,000 – a penalty of $9,250 per illegal download — against Jammie Thomas-Rasset, the aforementioned Minnesota mom.

Despite arguments by Thomas-Rasset’s lawyers at Camara & Sibley and by the Electronic Frontier Foundationand other amici that the penalty violates her due process rights, the 8th Circuit said that the music companies that sued Thomas-Rasset are entitled to statutory damages against her. In the Copyright Act, wrote Judge Steven Colloton for a panel that also included judges Diana Murphy and Michael Melloy, Congress determined that copyright violators face liability of $750 to $30,000 for each act of infringement, and up to $150,000 if the violation is willful. The opinion explained that when the U.S. Supreme Court set the rules for deciding whether statutory damages accord with the Due Process Clause way back in 1919′s St. Louis, Iron Mountain & Southern Railway Company v. Williams, the court said that Congress has wide latitude to set statutory damages as long as they’re not “so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.” Thomas-Rasset’s penalty of $9,250, the 8th Circuit said, is near the low end of the range for willful infringers like her. So, given the public interest in deterring illegal downloading, the appeals court found, that penalty complies with the Williams standard.

The 8th Circuit’s decision explicitly rejected the reasoning of U.S. District Judge Michael Davis of Minneapolis, who, after three trials in the Thomas-Rasset case, threw out the jury verdict and imposed a damage award of $54,000, or $2,250 per song. That figure represented three times the statutory minimum of $750 per infringement, which seemed sensible to Davis, who cited the “broad legal practice of establishing a treble award as the upper limit permitted to address willful or particularly damaging behavior.” The 8th Circuit, however, said “broad legal standards” cannot “establish a constitutional rule that can be substituted for a different congressional judgment in the area of copyright infringement.”

The 8th Circuit’s ruling marks the second time a federal appeals court has balked at a trial court’s attempt, under the Due Process Clause, to impose a reasonable penalty on an illegal downloader stung by an outsized jury verdict. A year ago, the 1st Circuit reinstated a $675,000 verdict against serial downloader Joel Tenenbaum, finding that U.S. District Judge Nancy Gertner of Boston erred when she invoked the constitution to cut Tenenbaum’s penalty by 90 percent. (The 1st Circuit said Gertner should not have bypassed remittitur and should have offered Sony a new trial on damages.)

I understand the appeal courts’ legal justifications, but I think the trial judges had the right idea when they tried to align the illegal downloaders’ penalties with their actual wrongdoing. It’s just not fair to hold randomly selected individual downloaders responsible for all that ails the music industry, which was the theory the music companies presented to the juries in the Tenenbaum and Thomas-Rasset cases. I want to be clear: Joel Tenenbaum and Jammie Thomas-Rasset are neither heroes nor martyrs to a just cause. Both indisputably downloaded music that they didn’t pay for, and both tried, implausibly, to shift the blame for their wrongdoing onto other people with access to their computers. (Tenenbaum even proposed that burglars might have entered his family home and illegally downloaded music onto his computer; Thomas-Rasset suggested her sons might have been responsible.) Both downloaded many more songs than they were sued for — thousands more, in Tenenbaum’s case — and both refused opportunities to settle their cases. Thousands of other individual downloaders who were sued in a since-abandoned campaign by the Recording Industry Association of America acknowledged their wrongs and settled without going to trial.

But millions of people who illegally downloaded music (and movies, television shows and other copyrighted content) haven’t been sued, which means that Tenenbaum and Thomas-Rasset are carrying a disproportionate burden for rampant misbehavior. And that misbehavior has continued, despite the enormous jury verdicts against them. Congress intended the heavy penalties for copyright infringement to serve a deterrent effect, and the 8th Circuit cited that intention in Tuesday’s ruling against Thomas-Rasset. But I doubt that any would-be infringer who’s undeterred by the prospect of a $2,250 penalty per song — the treble-damages cap suggested by the judge in Thomas-Rasset’s case and rejected by the 8th Circuit — would be more mindful of the $9,250 per-song penalty the appeals court endorsed. Deterrence is always an elusive goal, as any death penalty opponent would tell you.

The music industry has wised up and learned how to make songs easily and cheaply available to the legions of consumers who want to respect the rights of all the people who create songs. Particularly because it’s now so simple to buy music (and other copyrighted content) legally, there should absolutely be penalties for those who persist in breaking the law and cheating content creators. But almost $10,000 for downloading a song just isn’t reasonable.

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