Joel Tenenbaum today filed a reply brief in support of his motion to reduce the jury's verdict of $675,000 for downloading and distributing 30 songs over the KaZaA peer-to-peer network.
Defendant's Reply Re New Trial Motion
While this brief is better argued, better written, and better supported than any other papers I've seen from Team Tenenbaum, the very first sentence contains a blatant falsehood that no court should tolerate. The brief states that the plaintiffs' opposition to Tenenbaum's motion contains the "assertion that Joel Tenenbaum caused them 'billions of dollars' of damages in lost revenue, Pl. Opp. at 28, with respect to the thirty songs which are the subject of this action." That is an egregious mischaracterization of what the plaintiffs' brief actually says. The plaintiffs' brief does not say that Tenenbaum caused billions of dollars in damages. Rather, it refers to "the billions of dollars of lost revenues and the mass layoffs in the record industry as a result of file-sharing," clearly referring to the overall phenomenon, rather than that perpetrated by Tenenbaum himself. (My emphasis.) Indeed, plaintiffs' expert economist Stanley Liebowitz testified that it was impossible to calculate how much damage Tenenbaum himself caused.
Elsewhere in the brief, Tenenbaum maintains that the actual damages he caused are at most $21, calculated by multiplying 30 songs by the 70 cents the labels would have received from Apple for an authorized iTunes download. But Judge Michael Davis' recent order in the Jammie Thomas-Rasset case (which Tenenbaum relies on as authority for other points) explicitly rejected such a calculation as "inadequate" while reducing the jury's award in that case from $80,000 to $2,250 per work. See order at 21-22.
Tenenbaum does claim to have found a single case where a court has "reduced a statutory damage award that was within the statutory maximum." Br. at 7 (citing Hennessy v. Penril Datacomm Networks, Inc., 69 F.3d 1344 (7th Cir. 1995)). But the damages at issue in Hennessy were punitive damages -- not statutory damages. It is true that 42 U.S.C. § 1981a(b)(3) caps such awards, in this case at $100,000. But I don't believe that punitive damages become statutory damages just because a statute imposes a cap on those punitive damages -- and Tenenbaum's brief does not cite any cases saying that they do.
A hearing on Tenenbaum's motion is set for February 23 before Judge Nancy Gertner.
Thursday, February 18, 2010
12 comments:
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However, defendant may argue that the statutory damages in this case were excessively punitive in nature and so should be treated as if they were punitive damages though.
ReplyDeleteI've been a reader of this blog for a while. It's a great read and it's good to see some solid analysis of the merits of the RIAA cases.
ReplyDeleteAnother thing which is noteworthy about this motion, is the reference to Romano v U-Haul 233 F.3d 655 (1st Cir. 2000). Ray Beckerman's appears to make a great deal of this describing it as the case that Judge Gertner MUST follow. Isn’t this a fundamental misreading of the case by both him and Tenenbaum's lawyers?
The quote from the Motion (at page 9) states:
‘First Circuit Cases. In Romano v. U-Haul Int’l, 233 F.3d 655 (1st Cir. 2000), an employment discrimination case, the plaintiff won an award of statutory damages under 42 U.S.C. § 1981a.Not only did the Court view BMW v. Gore as applicable, but it explicitly “subject[ed] the $285,000 award to the BMW three-guidepost analysis,” concluding that:
In this case, the ratio between punitive and compensatory damages was 19 to 1. Given the low actual damages due to appellee’s short period of employment and the difficulty in measuring actual damages in a case involving “primarily personal” injury, we hold that this is a constitutionally acceptable ratio between punitive and compensatory damages. ‘
However, it's looks from the case that this isn't right because the damages in question were punitive damages not statutory/compensatory damages! The jury had already provided an award of $15,000 for compensatory damages. The Court is considering a claim by U-Haul as follows:
“C. U-Haul's final argument is that the punitive damages award is grossly excessive and violates the Fifth and Fourteenth Amendments. The jury award of $625,000 was reduced to $285,000 by the district court to conform with the punitive damages cap imposed by 42 U.S.C. 1981a(b)(3). Appellants allege that the 19 to 1 ratio between punitive and compensatory damages cannot stand when measured by the three guideposts identified by the Supreme Court in BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996).”
Thus the reference to BMW v Gore appears to me to be solely about the $285,000 award of punitive damages that happen to be allowable and limited by statute, rather than being “statutory” damages per se. I’m not sure that one can distill any principle from the Court other than the standard BMW v Gore test continues to apply when assessing punitive damages awarded in the same case as statutory /compensatory damages.
Interested in any comments – the law I know relates to the other side of the pond!
Ben (and Hari B)-
ReplyDeleteHaving assisted Professor Nesson with the post-trial briefing, I wanted to respond to the argument that 1981a damages are somehow not "statutory," but are instead "punitive damages" but with statutory caps. In fact, these damages are affirmatively authorized by the statute, as both the Plaintiffs and the courts explicitly acknowledge. In their opposition brief at p. 33, the Plaintiffs say: "Moreover, while Congress has specifically directed courts not to instruct juries as to the limits of statutory damages in other contexts, see, e.g., The Civil Rights Act of 1991, 42 U.S.C. § 1981a(c)(2), Congress enacted no such provision in regards to statutory damages under the Copyright Act." Their statement comports with the language the Seventh Circuit used in Hennessy, when it said that the trial judge "was following the new statutory damage scheme in the 1991 Civil Rights Act" when it reduced the damages to the capped amount.
Thanks, as always, for the incisive commentary.
-Jason Harrow, HLS student
When the majority of your brief is citing from Ray Beckerman's website, you know you're in trouble.
ReplyDeleteAs I read the briefs this afternoon, I found myself both pleased and disappointed with the defendant's briefs. I was pleased that the quality had clearly increased, especially given the extreme difficulty of the arguments he had to make and the virtual likelihood that they'll be denied. I was disappointed because, had the briefs been of this par before and during the trial, perhaps it would've been a more interesting and fruitful litigation.
ReplyDeleteI was more disappointed that defendant wasted so much time on issues that were either waived before trial or wholly irrelevant to the issues - ex. "DRM made me do it" or trying to create mythic fair use factors like "I took responsibility for it." I believe these issues, including the redacted confession, will be denied outright.
As to the constitutionality of 504, the defendant ushers forth a litany of case law in support of the notion that courts "ha[ve] [] reduced a statutory damage award that was within the statutory maximum." Except he hasn't.
Most of the cases cited are district court cases, which immediately renders them of little precedential weight. Even more fatal to their ability to persuade is that all of the statements on which the defendant relies are pulled from dicta. Using "Parker v. Time Warner" as an example, the court uses the word "may" 7 times in a paragraph of 4-5 sentences when straining to hypothesize about a set of facts in which due process might, but not necessarily would, be implicated. Similar tentative language is repeated in UMG v. Lindor, Atlantic Recording v. Brennan, and In re Napster.
Additionally, most of the cases on which defendant relies involve actual, unbounded punitive damages, including Hennessy, the case cited for the proposition that courts have the authority to modify statutory damage awards (there, the jury exceeded its statutory authority by awarding punitive damages of $300,000 when the statute only authorized a maximum damage award of $100,000).
The fact is, the plaintiffs are correct when they assert that defendant can cite to no case supporting a due process challenge to an award of statutory damages in a copyright case that doesn't involve mere passing speculation in dicta. I have a feeling that is why their brief worked soooooo hard to distinguish plaintiffs' cases on even seemingly minor differences.
I can't speak to remittitur except to say that I don't believe it is appropriate in a well-crafted statutory damages scheme, nor do I have any foresight into the likelihood of a new trial. Eventually, an appellate body is going to have to resolve this question, and I think they will have no choice but to affirm the constitutionality of 504, especially given Congress's repeated revisiting and refinement of the statutory damages, combined with an express recognition of the potential harm from internet users who feel they can infringe and get away with it, which is exactly the conduct in the cases like this.
I have seen posters here and elsewhere say that there is no precedent for reviewing statutory damage awards for reasonableness. It seems to me that the Supreme Court's decision in Williams is such a precedent.
ReplyDeleteThe Court there upheld the damage award but reviewed it for gross excessiveness. There was just one award in that case, not many, so I am not sure the ratio of actual to statutory damages there is going to be categorically acceptable even when many awards are imposed.
In keeping with that idea, Tenenbaum any his team would probably be fine with Judge Gertner imposing a statutory damages award within the statutory range (say $1000, by remittitur) for one work and then reducing the award for the remaining works below the statutory minimum under the Due Process Clause. That way, Williams is respected and the total award is not grossly excessive. (And it seems that the Williams standard of gross excessiveness is sufficiently similar to articulations of the excessiveness standard in the BMW v. Gore line of cases that those cases can be informative.)
I read both of the law review articles cited in the Tenenbaum response. One of them provided another authority for reducing a minimum statutory damages award -- the Blastfax decision in Texas. The court there upheld a statutory damages award when it was imposed one time, but reduced the award below the statutory minimum when it was imposed many times.
I have seen posters here and elsewhere say that there is no precedent for reviewing statutory damage awards for reasonableness. It seems to me that the Supreme Court's decision in Williams is such a precedent.
ReplyDeleteThe Court there upheld the damage award but reviewed it for gross excessiveness. There was just one award in that case, not many, so I am not sure the ratio of actual to statutory damages there is going to be categorically acceptable even when many awards are imposed.
In keeping with that idea, Tenenbaum any his team would probably be fine with Judge Gertner imposing a statutory damages award within the statutory range (say $1000, by remittitur) for one work and then reducing the award for the remaining works below the statutory minimum under the Due Process Clause. That way, Williams is respected and the total award is not grossly excessive. (And it seems that the Williams standard of gross excessiveness is sufficiently similar to articulations of the excessiveness standard in the BMW v. Gore line of cases that those cases can be informative.)
I read both of the law review articles cited in the Tenenbaum response. One of them provided another authority for reducing a minimum statutory damages award -- the Blastfax decision in Texas. The court there upheld a statutory damages award when it was imposed one time, but reduced the award below the statutory minimum when it was imposed many times.
I agree with anonymous in the first posting. Punitive damages must be reasonable and not excessive even though they are designed to punish the party for whatever wrong they committed. However, punitive damages must still be tied rationally to compensatory damages. The traditional rule seem to be no more that an 9:1 ratio in most cases. The legal blog I linked with my name has a pretty interesting discussion about punitive damages if you want to take a look at it and participate: http://lawblog.legalmatch.com/
ReplyDeleteStan -
ReplyDeleteYour analysis only holds true when there are actual compensatory damages to which you can compare the punitive damages. In a copyright case, where the actual economic harm may be nominal or even possibly incalculable, how do you go about making your multiplier calculation?
Your argument would require a violation of both the maxims of statutory construction as well as the separation of powers doctrine to essentially rewrite Section 504 to necessitate proof of actual damages when Congress deliberately provided a path to an award where no such proof was needed. Plus, you would frustrate the purpose of copyright law by shuttering the doors of the courthouse to copyright holders seeking to vindicate their rights, but who lack the proof of actual damages, or whose damages would be so nominal under your framework that the costs of maintaining a suit would outweigh any recovery. How do you reconcile that?
For all the discussion about Gore, how quickly people forget that it was a highly divided court that issued the majority opinion, with Justices Scalia, Thomas, Ginsburg and Rehnquist dissenting.
ReplyDelete"How do you reconcile that?"
ReplyDeleteYou say no harm, no foul and move on with life?
Anonymous 12:46 -
ReplyDeleteJust so I understand, to you, having a district court judge usurp Congress's intentions and the very purpose of copyright law to rewrite the damages provision is "no harm, no foul?" Care to explain?