Monday, January 25, 2010

Judge Davis' remittitur order: The 'Groundhog Day' problem

The more I think about Chief Judge Michael Davis' order reducing the jury's award in the Jammie Thomas-Rasset case from $80,000 per song down to $2,250, the less I can make sense of it.

The issue currently causing me the most befuddlement is the choice the order presents to the record label plaintiffs:
Plaintiffs are directed to either accept the remittitur or to schedule a new trial on the issue of damages. Plaintiffs shall file a notification of their decision regarding remittitur no later than seven days from the date of this Order. The Court will defer amending the Judgment pending notification of Plaintiffs’ position with regard to remittitur.
I get what happens if the labels accept the reduced award: the case is over (other than the possibility of appeals, which is a whole other complicated issue). But I'm baffled as to how things would play out if the labels opt for a new trial on damages. Keep in mind that the court, in its Jan. 22 order, has already determined that $2,250 per work "constitutes the maximum amount a jury could reasonably award to both compensate Plaintiffs and address the deterrence aspect of the Copyright Act." Order at 25-26. So what happens if there's a new trial and the jury again comes back with an award greater than $2,250 per song? (Note that all three juries to have sat in individual peer-to-peer cases have awarded much higher than that: $9,250 (Thomas-Rasset #1); $80,000 (Thomas-Rasset #2); and $22,500 (Joel Tenenbaum).) Does the court then grant another remittitur, giving plaintiffs the same choice? Can this go on ad infinitum? Is this a real-life Groundhog Day?

And from the plaintiffs' perspective, what's the point of a new trial anyway? If a new jury awards greater than $2,250 per work, presumably Judge Davis will remit again; he's already said $2,250 is the upper limit, and its difficult to imagine that any facts presented at a new trial would cause him to alter his view. And if a jury awards less than that, then the labels are worse off from a financial perspective -- though I suppose that would mean that, unlike if they accept the reduced award, they could finally appeal the remittitur ruling. See Donovan v. Penn Shipping Co., 429 U.S. 648 (1977) (noting "settled rule that a plaintiff who has accepted a remittitur may not appeal to seek reinstatement of the original verdict.").

And how would a new damages trial actually work? Would the judge instruct the jury that the maximum they can award is $2,250 per work? Would such an instruction -- which seems to fly in the face of the statute, which permits statutory damages of up to $150,000 per work -- be allowed? And if the plaintiffs knew that the instruction would indeed restrict the jury to a maximum award of $2,250 per work, then what incentive would they have to opt for a new trial at which they could only end up with a lower award than the one placed on the table by the court?

Readers are invited to attempt to cure my befuddlement in the comments.

Update: thanks to readers/commenters who have alerted me to academic treatments of this very subject. It turns out that people who have spent much more time thinking about this issue than I have come to the same conclusion, namely that it makes little or no sense for a plaintiff confronted with the choice between a reduced award and a new trial to opt for the new trial. As professor Suja Thomas explains in her article Re-Examining the Constitutionality of Remittitur Under the Seventh Amendment, 64 Ohio St. L.J. 731 (2003):
Indeed, this article's study of remittitur in the federal district courts for the ten years from 1991 through 2000 demonstrates that remittitur effectively eliminates the plaintiff's constitutional right to have damages tried by a jury because the alternative of a new trial is not truly an option for the plaintiff. The study found that when judges remit-ted jury verdicts, in 98% of the cases the plaintiff either accepted the remittitur (in 71% of the cases) or settled the case (in 27% of the cases). In only 2% of the cases did the plaintiff take the new trial. It is noteworthy that federal judges use this unconstitutional practice to reduce uncertain damages, damages that cannot be calculated with mathematical certainty, for example, emotional distress damages. Of the remitted cases studied, 68% included un-certain damages as a component, 46% of which were emotional distress damages and 50% of which were in civil rights cases. In this subset of cases which involve uncertain damages, the study again shows that the new trial option is illusory. In 98% of these cases, the plaintiff accepted the remittitur or settled.
Similarly, Joseph B. Kadane writes in his article Decision Analysis on Whether to Accept a Remittitur:
Given that a committed plaintiff is faced with the possibility of an unending sequence of damage trials until a jury is found that will return a damage award low enough to please the judge, it is not surprising that many plaintiffs choose to settle or to accept the remittitur, whether or not they perceive it as fair. The decision analysis shows that the choice of a new trial is only theoretical. As a practical matter, the judge imposes a damage award smaller than that awarded by the jury, and the plaintiff has little choice but to accept whatever the judge says.
(footnote omitted).


  1. Ben,

    Who knows? This is a very puzzling case.

  2. There seems to be a recent paper addressing this issue generally (remittitur generally, not specifically in the copyright context), which apparently concludes that taking the new trial option is usually a bad idea.

    But all I've read is the abstract.

  3. Fascinating as usual.

    A non-lawyer asking a question here. It seems rulings are able to be appealed in court cases. Can't the plaintiff appeal the judicial ruling on the reduction. In other words don't they have a third option to either a new trial or acceptance of the reduced award?

  4. @Anonymous 4:38:

    No -- the Supreme Court has said that if a plaintiff accepts a reduced award, it cannot appeal:

  5. Isn't the question an academic one in the worst sense in this case? First, the award seemed ridiculously out of proportion to the wrong. Second, why in the world would the RIAA want more than the amount it can now accept? It won't collect more. It looks terrible seeking more. So if I apply decision analysis in any way that would even permit the RIAA to get more than the judge's imposed limit, there's no upside to seeking that greater amount. In short, while I follow your logic, it's all really moot.

  6. @Peter:

    I think it's important to keep in mind that this case isn't just about this case. It's also about the precedent it will set for other cases. There are at least 2 rulings that the plaintiffs are not happy about, and that they would like to figure out how to get off the books: 1) the court's order on the "making available" issue; and 2) this new order stating that a court has the power to reduce a jury's statutory damages award on common-law remittitur grounds, even if that award falls within the statutory limit.

  7. It's indeed interesting. Such is the case, though when astronomical awards are allowed in cases like this. We ought to remember, too, that these awards were based on the number of infringed works. If JTR were found to have infringed all 1700 works and a 4 million dollar award were given (at roughly 2250 per work), I'd bet we'd be back to square one - that even that award (and rightly so IMO) would be considered grossly excessive.

  8. @anonymous

    The real problem is that the statutory awards were originally designed in anticipation of someone copy a handful of works, and simply doesn't scale given the level of infringement that the technology facilitates. Today someone can quite easily and at no cost make available 1000s of works and allow them to be distributed to 1000s of people in a very short space of time.

  9. Why can't they reject the remittitur and ask for an interlocutory appeal or stay pending appeal? Seems absurd that they wouldn't be able to challenge this ruling in anyway. It really would be a massive loophole if the Judge was to essentailly make an unappealable decision because they have to choose not to appeal or take a groundhog day scenario.

    Last question: Let's say we go around this ten more times and they get ten more jury verdicts above $2250. At what point does the Judge actually apply the part of the law of remittitur where you look for comparable jury outcomes, and say, "hey, every jury to ever decide this issue thinks I'm wrong and it's MY award that is outside the normal scope; maybe I should stop reducing the award."

  10. Again, Ben, how about applying a little logic here, not just law. Doesn't it make sense that the plaintiffs in this case should have an option to turn down this judge's bizarre remittitur and request that he recuse himself in any new trial.

    Are we talking justice here, or just plain "ego"?

    Clearly, what he has done has negatively impacted their rights ... whether you look at this case logically or simply by following the law.

    I am like you, Ben. What was this man thinking?

    George Riddick
    Imageline, Inc.

  11. It seems to me that the "judicial activism" critics should be all over this one.


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