Capitol Records v. Thomas-Rasset: Trial Three

Not only was the landmark peer-to-peer file-sharing trial involving Northern Minnesotan Jammie Thomas-Rasset the first of its kind to reach trial; Thomas-Rasset’s file-sharing litigation will likely come to its third trial on November 2, 2010. Thomas-Rasset downloaded 24 pop hits of the 1980s and 1990s and was found liable in 2007 for $222,000 in statutory damages. Judge Michael Davis threw out the previous trial’s jury verdicts. In 2009, there was a second trial where the damages awarded increased to $1.92 million. Judge Davis reduced the award to $2,250 per song, totaling $54,000, under the power of a district judge to remit statutory damages.  In so doing, he rejected the plaintiff’s argument that the U.S. Supreme Court’s decision in Feltner v. Columbia Pictures TV, 523 U.S. 340 (1998) restricts that authority if the damage award is within the statutory range. The $2,250 per song liability imposed by Judge Davis is based on a legal theory that treble damages (triple the minimum in this case) are appropriate for willful behavior.

It is not under dispute that the plaintiff willfully infringed the plaintiff’s copyright through use of KaZaA, a peer-to-peer network, as decided by a previous trial (See Jury Instructions) (PDF). The defendant’s attorneys moved to include a jury instruction on “reasonable damages” and also sought after the court to consider the constitutionality of statutory damages (even at the minimum level) as a due process violation. The court denied both motions. As to the instruction, the judge declined the defendant’s suggestions that the statutory damage award must bear a reasonable relationship to the actual damages, and, rather, instructed the jury that statutory damage for this offense is between $750 and $150,000 per work. (The defendant claims the actual damages are merely $.05 per work.)  Typically, the maximum statutory damage per act of infringement is $30,000. The decided fact that the defendant’s conduct was willful increases potential liability as “[the jury] consider[s] just” (Jury Instruction No. 24) (PDF). Jury Instruction No. 24 does call for some thought on the part of the jury, not simply compelling the maximum amount of damages for the plaintiff:

In determining the just amount of statutory damages for an infringing defendant, you may consider the willfulness of the defendant’s conduct, the defendant’s innocence, the defendant’s continuation of infringement after notice or knowledge of the copyright or in reckless disregard of the copyright, the effect of the defendant’s prior or concurrent copyright infringement activity, whether profit or gain was established, the value of the copyright, the need to deter this defendant and other potential infringers, and any mitigating circumstances.

At the October 12, 2010 pretrial hearing (PDF), though rejecting the request to instruct the jury that a “reasonable relationship” between damages and harm is required, the court clarified that there is room for review of statutory damages to ensure that the award comports with due process. See generally Zomba Enters., Inc. v. Panorama Records, Inc., 491 F.3d 574, 587 (6th Cir. 2007) (citing St. Louis, I.M. & S.Ry. Co. v. Williams, 251 U.S. 63, 66-67 (1919)). Judge Gertner (from SONY v. Tenenbaum) did agree with the defendant that “an award of statutory damages that is intended to punish in order to deter must be reviewed under the same standard that applied to common-law punitive damages…” Case No 06-cv-1497, Defendant’s Motion to Reconsider Remittitur Order ¶2. See BMW v. North America, Inc. v. Gore, 517 U.S. 559 (1996). If the defendant did prevail on the constitutional challenge and achieve a reduction in damages, under Ross v. Kanasas City Power & Light Co., 293 F.3d 1041, 1049-50 (8th Cir. 2002) there would be no 7th Amendment right for the plaintiff to get a new trial on that issue. If the trial phase ended, then the appeals process could begin. However, no errors of law or fact were found on January 22, so the Judge Davis denied the defendant’s motion to reconsider the remittitur order. See generally Hagerman v. Yukon Energy Corp., 839 F.2d 407, 413 (8th Cir. 1988).