Friday, May 29, 2009

Court: no ruling on constitutionality of statutory damages until decision is 'unavoidable'

In Sony BMG v. Cloud, one of the record labels' cases against an individual alleged p2p infringer, the defendant -- just like Joel Tenenbaum -- moved to dismiss the plaintiffs' claim for statutory damages, on the grounds that the maximum of $150,000 per work is constitutionally excessive. The labels and the government opposed.

Today the court denied the motion to dismiss, while declining to rule on the constitutional challenge to statutory damages, "under the doctrine of constitutional avoidance" (citing Spector Motor Co. v. McLaughlin, 321 U.S. 101, 105 (1944) ("If there is one doctrine more deeply rooted than any other in the process of constitutional adjudication, it is that we ought not to pass on questions of constitutionality...unless such adjudication is unavoidable.")).

I agree with the court's decision. As of today, any damages award -- let alone an unconstitutionally excessive one -- is a mere hypothetical possibility. If there is an eventual verdict for the plaintiffs and a subsequent award of statutory damages, the defendant could then move to reduce the damages as constitutionally excessive. And even if the defendant is correct that the BMW/State Farm punitive damages factors apply to statutory damages (a hotly contested issue), the court now has no facts before it to evaluate for alleged reprehensibility. In run-of-the-mill torts cases, courts apply
BMW/State Farm only after trial (and a damages award); I don't see why it should be any different in a copyright case (assuming BMW/State Farm applies at all).

(h/t Recording Industry vs. The People)

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