Thomas-Rasset: I owe nothing; labels seek injunction; court to Nesson: you're no amicus of mine

Several developments in the case of Jammie Thomas-Rasset following the third jury's award of $1.5 million to the major record labels in their copyright infringement suit:

• Thomas-Rasset is seeking to have the award reduced to zero, on constitutional grounds. She is explicitly forgoing an argument based on common-law remittitur, the means by which the court reduced the second jury's award of $1.92 million down to $54,000. The court's decision on this motion -- which I expect him to grant, at least in part -- will allow one or both sides to appeal immediately to the Eighth Circuit, mercifully sparing all parties a fourth trial.
• The labels are seeking an injunction against further infringement by Thomas-Rasset via peer-to-peer or other means.
• The court told Harvard Law Professor Charles Nesson "thanks, but no thanks," rejecting his proposed amicus brief attacking the jury's award. "The proposed brief would not be of assistance to the Court," ruled Chief Judge Michael Davis of the District of Minnesota. " "Not so much as a thank you for the effort," lamented Nesson, adding, ":<("

Third Thomas-Rasset verdict: $1.5 million

The third time was not the charm for Jammie Thomas-Rasset.

The jury in the third copyright trial of the Brainerd, Minnesota woman has just returned a verdict of $1.5 million in statutory damages, or $62,500 for each of the 24 songs that she downloaded and "shared" over the KaZaA peer-to-peer network.

The award is significantly higher than the $222,000 award in her first trial (which was thrown out when the judge determined the jury instructions to be flawed), and a bit lower than the $1.92 million award in the second, which was reduced by the judge to $54,000 under the common-law doctrine of remittitur. After the second trial, Thomas-Rasset -- who denied downloading any music over peer-to-peer networks -- rejected a settlement offer of $25,000 from the record label plaintiffs, who said they would donate the amount to a music-related charity.

The RIAA said in a statement after the verdict:

We are again thankful to the jury for its service in this matter and that they recognized the severity of the defendant's misconduct. Now with three jury decisions behind us along with a clear affirmation of Ms. Thomas-Rasset’s willful liability, it is our hope that she finally accepts responsibility for her actions.

This is far from the end of the road in this case. Thomas-Rasset is expected to challenge the size of the award again, and the judge has already determined that $54,000 is the maximum acceptable size for an award given the evidence in the case.

I'll update as more information becomes available.
Jammie Thomas-Rasset Verdict

Nesson seeks to join Thomas-Rasset trial fray

The third trial of Jammie Thomas-Rasset may have just gotten a lot more interesting:
Nesson motion for pro hac vice

Trial is set to begin Tuesday, Nov. 2, and will concern only damages.

(Headline changed. Nesson sought to represent Harvard's Berkman Center, not to formally join Thomas-Rasset's defense.)

Third Jammie Thomas-Rasset trial: Game on

The third trial of Jammie Thomas-Rasset for downloading and "sharing" songs over the Internet without permission from copyright holders will proceed as scheduled Nov. 2. Today Judge Michael Davis denied the defendant's motion for reconsideration of the court's earlier order reducing the verdict in the second trial on common-law remittitur grounds. Thomas-Rasset had sought to have the court void or reduce the $1.92 million jury award in the second trial on constitutional grounds, which would have permitted an immediate appeal to the Eighth Circuit. But in his brief order today, he concluded that his remittitur order "contain[]ed no manifest errors of law or fact." The third trial will focus only on damages; Thomas-Rasset's liability for willfully infringing 24 songs has already been established.
Order denying motion for reconsideration

Labels, government oppose Thomas-Rasset's attempt to avoid third trial

The record label plaintiffs case have filed their brief opposing Jammie Thomas-Rasset 's last-minute attempt to avoid a third trial in the peer-to-peer copyright case. The labels argue that such a late motion for reconsideration -- the trial, which will involve damages only, is scheduled to start Nov. 2 -- is procedurally improper, and that there is no compelling reason to disturb the court's previous ruling reducing the previous jury's $1.92 million award on common-law remittitur (i.e., non-constitutional) grounds.

The Justice Department, which has intervened in the case in defense of the constitutionality of the statutory damages provision of the Copyright Act, also filed a brief opposing reconsideration, citing the long-standing doctrine that courts should avoid ruling on constitutional issues where possible.

With trial set to begin in less than two weeks, I expect a fairly quick ruling from Judge Michael Davis of the District of Minnesota. I'm told that at a hearing last week Judge Davis expressed serious interest in such a motion for reconsideration, but it's far from certain that he will grant it.

Judge in Thomas-Rasset case may scuttle third trial

The judge in the Jammie Thomas-Rasset case is considering canceling the third trial in this long-running litigation brought by the major record labels against an individual peer-to-peer user.

The parties are preparing for a new trial starting Nov. 2, to focus only on damages, following the court's remittitur of the $1.92 million verdict handed down by a Minneapolis jury in 2009. But Judge Michael Davis indicated at a pre-trial hearing on Tuesday that he will give serious consideration to a defense request to modify his order so that it would instead rest on constitutional grounds. That would bring a degree of finality to the case, at least in the district court, and allow for an immediate appeal by one or both sides. I'm told that at the hearing, Judge Davis actually alluded several times to the movie Groundhog Day, referencing the scenario where he would repeatedly remit jury awards, only to have that remittitur refused by the plaintiffs, necessitating yet another trial, and ad infinitum.

Today the defense filed its brief seeking such reconsideration. It cites to the order issued by Judge Nancy Gertner in the Joel Tenenbaum case, which reduced the jury's award from $675,000 to $67,500 on constitutional grounds. In his original order, Judge Davis declined to reach the constitutional issues, citing United States v. Allen, 406 F.3d 940, 946 (8th Cir. 2005) (“When we are confronted with several possible grounds for deciding a case, any of which would lead to the same result, we choose the narrowest ground in order to avoid unnecessary adjudication of constitutional issues.).” In her order in the Tenenbaum case, Judge Gertner concluded that avoiding the constitutional issues was impossible essentially because of the Groundhog Day problem.

I'm told that the labels' plan to oppose Thomas-Rasset's motion for reconsideration; their response is due Wednesday, Oct. 20.

Defendant's Motion for Reconsideration

Third Thomas-Rasset trial moved to Nov. 1

Round three in the record labels' copyright suit against Jammie Thomas-Rasset has been moved from Oct. 4 to Nov. 1. This third trial will focus only on damages, after the court granted the defense's motion for remittitur, slashing the jury's award in the second trial from $1.92 million down to $54,000. The labels opted for a third trial rather than accepting the reduced amount.

No more court-ordered settlement talks in Thomas-Rasset case

The judge in the Jammie Thomas-Rasset case today granted the parties' joint motion for relief from the court's previous order to participate in settlement talks. A third trial in the peer-to-peer infringement case, which will consider only the issue of damages, remains set for October 4.

Labels and Thomas-Rasset agree: We won't settle!

The major record labels and Jammie Thomas-Rasset don't agree on much, but they have come together in perfect harmony to tell the court: Hell no, we won't settle. Or can't. Or refuse to. Or, in the words of the joint motion they filed with the court today:

[T]he parties have concluded that a settlement of the present case is not possible. Any further settlement efforts would be futile, wasting the time and resources of the parties and the Special Master.

According to the motion, the parties tried to settle, both on their own and with the assistance of the special master the court appointed in June, to no avail. So it appears there really will be a third trial on October 4, this one addressing only the issue of damages. At last summer's second trial, the jury awarded the labels a total of $1.92 million for illegally downloading and "sharing" 24 songs, but the court later remitted the verdict down to $54,000. The labels opted for the new trial on damages rather than accepting the reduced award.
Joint motion re settlement

Court appoints mediator to facilitate settlement in Jammie Thomas-Rasset case

In the Jammie Thomas-Rasset case, Judge Michael Davis has appointed a special master to help facilitate settlement. The special master is Jonathan Lebedoff, who stepped down as Chief Magistrate Judge of the District of Minnesota in 2005. It's unclear from the order whether Judge Davis took this step sua sponte or at the urging of the parties; I have inquiries in to the attorneys and will update if I hear back.
Order appointing special master in Capitol v. Thomas-Rasset

As of now, a third trial, which will consider only the issue of damages, is set for October 4. At the second trial, held last summer, the jury awarded the record labels $80,000 per work infringed, but the court later remitted the award down to $2,250 per work. In January of this year, the labels offered to settle the case for $25,000, to be donated to a music charity, but Thomas-Rasset declined the offer; her attorney said, "Jammie will not accept anything offer that requires her to pay money to or on behalf of the Plaintiffs."

Update: I've learned that the court appointed the special master on its own, not at the request of the parties. Also, Thomas-Rasset appears to have backed down from her position that she "would...rule out any settlement asking her to pay damages." Thomas-Rasset attorney Joe Sibley told Wired that his client "might agree to settle for the statutory minimum $750 a track," which would work out to a total of $18,000 for the 24 songs at issue. But he was considerably less confident of a settlement when he spoke with CNET:

"I'm not optimistic," Sibley told CNET. "I think that the case has been analyzed enough by the record industry and they know what they will accept. If they didn't want to accept the judgment on [the reduced damages award], I don't think there is anything we would have to offer them that they would accept now."

Lebedoff certainly has his work cut out for him.

Third Jammie Thomas-Rasset trial set for Oct. 4

The third trial of Jammie Thomas-Rasset, whom two separate juries have found liable for using the KazAa peer-to-peer network to download and "share" music, has been set for October 4, 2010, in Minneapolis. Per Judge Michael Davis' January 22 order, the third trial will concern only damages; the fact of Thomas-Rasset's willful infringement of 24 of the major labels' songs has already been established.
Jammie Thomas-Rasset Trial Notice

As I've pointed out, there remain many questions about just what the third trial will look like, including whether the parties will be able to add additional witnesses on damages, and whether the court will instruct the jury that the maximum allowable award in the case is $2,250 per work, which Judge Davis found "constitutes the maximum amount a jury could reasonably award to both compensate Plaintiffs and address the deterrence aspect of the Copyright Act." Judge Davis reduced the second jury's award of $80,000 per work -- a total of $1.92 million -- under the common law doctrine of remittitur, finding that the verdict was "monstrous and shocking." The first jury awarded $9,250 per work, totaling $222,000, but that verdict was thrown out on grounds unrelated to the size of the award.

In January of this year, the labels offered to settle the case for $25,000, to be donated to a music charity, but Thomas-Rasset declined the offer; her attorney said, "Jammie will not accept anything offer that requires her to pay money to or on behalf of the Plaintiffs."

Labels reject remittitur, opt for third trial on damages in Jammie Thomas-Rasset case

The record label plaintiffs have opted for a third trial against Jammie Thomas-Rasset rather than accept the court's decision to reduce the jury's award from $1.92 million to $54,000. In a six-page notice filed late today, the labels said they "find it impossible to accept a remittitur that could be read to set a new standard for statutory damages – essentially capping those damages at three times the minimum statutory amount of $750 (or $2,250) for any 'noncommercial individuals who illegally download and upload music.' (Id. at 2, 25.) This far-reaching determination is contrary to the law and creates a statutory scheme that Congress did not intend or enact."
Plaintiffs' Notice of Decision re remittitur in Capitol v. Thomas-Rasset

Given the labels' decision -- presented to them in the court's January 22 order cutting the Minneapolis jury's award by 97 percent, from $80,000 to $2,250 per song -- there will be a third trial, though this one will concern only damages. The jury in the first trial in 2007 awarded $9,250, totaling $222,000 for 24 songs, but that verdict was thrown out after Judge Michael Davis determined that one of his jury instructions was improper.

It remains unclear exactly what a third trial will look like. As I've noted:

[T]he 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?... Can this go on ad infinitum?

Also unclear is how the court will instruct the jury. Will he tell them that $2,250 per work is the maximum, or will they once again be permitted to return with a verdict of up to $150,000 for each infringed song? If, as seems likely, the jury once again returns with a verdict of over $2,250 -- which the court would presumably remit again -- it appears only the Eighth Circuit can save us all from a real-life Groundhog Day.

Update: here's the RIAA's statement about the current state of affairs:

We have done everything within our power to resolve this case on fair terms. The defendant is someone who knowingly distributed hundreds upon hundreds of unauthorized songs without any regard for those who created them, likely bent on the brazen assumption that she’d never get caught. During both trials she lied about her actions while under oath. Ironically, Ms. Thomas-Rasset claimed during the trials what an ordeal this has been. Meanwhile, every move she and her counsel have made has been with the intent to prolong this case while refusing every reasonable settlement offer. Unfortunately, despite two jury decisions against her and a federal court’s affirmation of her liability and irresponsible behavior, Ms. Thomas-Rasset even refused a settlement offer that was less than half of the judge's remitted amount and that would have been donated to a charity for struggling musicians. In fact, Ms. Thomas-Rasset has asserted that she never intends to pay a penny to settle the case. With the benefit of free counsel, she now seeks to gut the laws that she has repeatedly and blatantly violated.

American taxpayers should not have to bankroll a publicity campaign that the defendant and her counsel apparently seek. But if another trial is what is needed to close the book on this case once and for all, then we are left with no choice but to reject the Court's remittitur and proceed to a new trial on damages.

Class action vs. record labels over peer-to-peer suits hanging by a thread

Last summer, when Kiwi Camara and Joe Sibley took over the defense of Jammie Thomas-Rasset, they vowed not only to get her off the hook, but to launch a counter-attack to "get the $100 million that [the labels] stole" in the course of their litigation campaign against individual peer-to-peer users. They, along with Harvard Law School professor Charles Nesson, would do that, Camara told Ars Technica, by "fil[ing] a class-action lawsuit against the industry at some point after the conclusion of the Thomas-Rasset case in an effort to make the labels pay back all monies taken in from settlements with file-sharers." Well, the Thomas-Rasset case isn't over yet (and may never be), and the Camara/Sibley/Nesson class action has yet to materialize (though Camara told Ars last week that it's still coming).

But little noticed is that a whole separate putative class action lawsuit attacking the labels' litigation tactics has been winding its way through federal court in Portland, Oregon. And due to a series of rulings over the past few months, the case appears to be on its last legs.

The case, Andersen v. Atlantic Recording Corp., started out routinely. As with all of their lawsuits, the labels first had to identify the proper target. They began only with an IP address and the KaZaA user ID "gotenkito," detected by investigators at MediaSentry, who spied this user "sharing" 1,288 song files. The labels then sued the "Doe" assigned to that IP address, and issued a subpoena to Verizon, the ISP that provided the Internet service to that subscriber. Verizon coughed up the name Tanya Andersen, and the labels filed a new lawsuit against her in her home state of Oregon.

Unlike the vast majority of defendants, Andersen didn't settle. She's "absolutely, positively, 100% innocent," her attorney Lory Lybeck told me back in November, when I wrote about this case for Billboard. The labels took depositions and examined her computer, but they couldn't definitively tie Andersen to the illegal downloading. And so they dropped the case, just before their opposition to her summary judgment motion was due. The judge, obviously miffed that the labels had put Andersen through the wringer but couldn't prove their claims, awarded her $103,175 in attorneys' fees -- one of only two cases in which the labels have had to make such payments.

But Andersen still wouldn't let go. She sued the labels (plus the RIAA and MediaSentry) right back, alleging a massive conspiracy to abuse the federal courts by suing innocent individuals with no probable cause. And she sought class action status, purporting to represent all of those "who were sued ... or were threatened with suit by [the major labels], for copyright infringement . . . who have not engaged in violation of copyright laws." Andersen's theory was that an IP address coupled with a folder "sharing" songs is insufficient evidence even to file a complaint, let alone prevail. (Here's the operative Fourth Amended Complaint.)

Judge Anna Brown dealt a major blow to Andersen's case last November 12, when she granted summary judgment for the defendants on all claims arising out of the allegedly wrongful investigation and initiation of their claims against her in the underlying lawsuit. The evidence gathered by the labels and MediaSentry "was strong enough to support 'a chance' that the defendants had correctly identified an individual engaged in wrongful activity," she wrote, citing the relevant legal standard. And more broadly, "The court ... concludes on this record that plaintiff has not established defendants filed a series of lawsuits based on a policy of initiating legal proceedings without regard to the merits," wrote Brown. Still left, however, were claims that the labels had continued to maintain their suit past the point they allegedly knew they were targeting the wrong person -- in other words, that they should have dismissed sooner.

The labels won another round earlier this month when Judge Brown denied Andersen's motion for class certification -- eliminating, at least for now, the possibility of a huge judgment against them -- and also rejected her attempt to file a Fifth Amended Complaint to add new class representatives. Andersen is seeking to file a new motion for class certification (the motion for leave has been filed under seal), presumably based on a purported class of individuals against whom the labels continued to litigate after they should have dropped the cases. I'm extremely skeptical that a court could properly certify such a class; individualized issues of what happened in each particular case would certainly predominate, making a class action a poor vehicle for litigating such claims. And the labels have asked for permission to file a summary judgment motion on Andersen's remaining claims, for abuse of process and negligence under Oregon law, related to their conduct after their suit against Andersen was filed. In their preview of their actual summary judgment arguments, the labels argue, persuasively in my view, that they were acting within the law to protect their copyrights, and cannot be held liable for exercising their right to litigate (even if they ultimately lost). (And even if the labels were to lose on the remaining claims, it's unclear what damages Andersen could recover, given that she has already been awarded her attorneys' fees in the underlying case.)

So could Camara and his team file a separate class action based on a similar theory, even if, as I expect, the labels ultimately prevail in the Andersen case? My understanding is that the answer is yes; principles of res judicata or collateral estoppel wouldn't bar new plaintiffs from bringing the same claims. But the Andersen experience, and the precedent it has established, very likely would lead to the same result. And it's hard to imagine the attorneys would want to take on such a case, while they are likely not being paid along the way, faced with such uncertain prospects of recovery.

Labels offer to settle Thomas-Rasset case for $25,000 donation to charity, vacatur of remittitur order; Thomas-Rasset promptly rejects [UPDATED]

The record label plaintiffs have offered to settle the Jammie Thomas-Rasset case for a $25,000 donation by the defendant to "an appropriate charity benefiting musicians" and vacatur of the court's Jan. 22 order remitting the jury's award of $80,000 per song down to $2,250. The letter from plaintiffs' counsel Timothy Reynolds also indicates that if a settlement is not reached, the labels intend to reject the remitted amount, which would send the case back to the Minneapolis courtroom of Chief Judge Michael Davis for a third trial on damages.

But less than an hour after receiving the offer, Thomas-Rasset's attorney Joe Sibley rejected the offer -- and indeed any offer that involves the defendant paying money:

Jammie will not accept anything offer that requires her to pay money to or on behalf of the Plaintiffs. Thus, your offer of settlement is rejected.

Added Sibley in an email to C&C:

[A]s our response makes clear, Jammie is standing on principle here, and will not accede to payment demands that the RIAA is making thru an unconstitutional statutory scheme (that they lobbied for the creation of) and we will ride this train to it's appellate end no matter how many future remittiturs are rejected.

In response to Thomas-Rasset's rejection of the offer, RIAA spokeswoman Cara Duckworth confirmed that the labels will reject the remitted award of $54,000 and proceed to a third trial:

It is a shame that Ms. Thomas-Rasset continues to deny any responsibility for her actions rather than accept a reasonable settlement offer and put this case behind her. Given this, we will begin preparing for a new trial.

Letter from labels re settlement of Thomas-Rasset case
Added RIAA General Counsel Steven Marks in a statement:

After two unprecedented trials and a wave of national attention, there should be no doubt that illegal downloading is wrong and that there should be real consequences for those who ignore the law. The message is resoundingly clear. This case helped affirm the important principles of accepting responsibility for one's actions and compensating the people who create great music and bring it to the public. We've accomplished what we set out to do, and now we seek to resolve this matter fairly and expeditiously. We hope Ms. Thomas-Rasset accepts our offer.

Under the current schedule, the labels must inform Judge Davis of their choice between the reduced award or a third trial by this Friday, though they have asked for a ten-day extension. But given Thomas-Rasset's rejection of the offer, the extra time may no longer be necessary. Update: the deadline has been extended until Monday, February 8.

Updated to reflect Thomas-Rasset's rejection of offer.

Labels: We need more time to ponder remittitur decision in Thomas-Rasset case

When Chief Judge Michael Davis slashed the jury's award against Jammie Thomas-Rasset from $80,000 to $2,250 per song, he gave the record label plaintiffs two choices: 1) accept the reduced award; or 2) return to Minnesota for a new trial on damages. And he gave them seven days to tell him their decision. Well, it looks like they're having a bit of trouble making up their minds, and are now asking for an additional ten days to mull it all over:
Plaintiffs' request for extension re remittitur decision

Interestingly, for reasons I explained yesterday, plaintiffs faced with such a choice almost never choose a new trial. According to this academic study of cases from 1991-2000, "when judges remitted 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." The labels' motion indicates that Thomas-Rasset does not oppose the request for an extension.

Update: the court has granted the motion, giving the plaintiffs until Monday, Feb. 8 to make their choice.

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).

Did Judge Davis have the authority to remit the Thomas-Rasset award? Authority is remarkably thin.

Since juries last summer returned the huge verdicts against Jammie Thomas-Rasset and Joel Tenenbaum for their use of peer-to-peer networks to download and "share" music, attention has been focused on the question whether the massive awards ($1.92 million and $675,000, respectively) were unconstitutionally excessive. That is, did these awards of statutory damages pass muster under the Supreme Court's limits on punitive damages established in BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), or the more deferential standard in St. Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S. 63 (1919)?

It was thus a bit of a surprise that last week's decision by Chief Judge Michael Davis of the District of Minnesota reducing the Thomas-Rasset award by 97 percent -- from $80,000 per song down to $2,250 -- rested on the common-law doctrine of remittitur, avoiding the constitutional issue altogether. But did the court actually have the authority to employ remittitur to reduce an award of copyright statutory damages within the range established by 17 U.S.C. § 504(c)? I admit I haven't done much independent research on this issue. But having read the cases cited in support of the authority for remittuitur here, in both Thomas-Rasset's briefs and the court's order, I was struck by the extremely thin support for the notion that a court may remit an award of copyright statutory damages within the statutory range.

Thomas-Rasset's 13-page post-trial motion to reduce the award devotes a single paragraph to the issue. See Br. at 10. This paragraph cites two cases regarding remittitur, and highlights their holdings that "Remittitur is appropriate where the result on a verdict 'is monstrous or shocking.'" Id. (citing Thorne v. Welk Investment, Inc., 197 F.3d 1205, 1211–12 (8th Cir. 1999); Jenkins v. McLean Hotels, Inc., 859 F.2d 598, 600 (8th Cir. 1988)). But Thorne (a sexual harassment case) and Jenkins (a personal injury case), neither of which involved statutory damages, let alone copyright statutory damages, do not address the issue here: whether, where Congress has established a statutory damages range, and the jury's award falls within it, the court has the authority to reduce an award it finds excessive. The Department of Justice's brief defending the Thomas-Rasset award on constitutional grounds also takes the position that the court has the power to remit on common-law grounds. See Br. at 7-8. DoJ's brief cites a copyright case, Superior Form Builders, Inc. v. Chase Taxidermy Supply Co., 74 F. 3d 488, 496-97 (4th Cir. 1996), in support of this argument. But I think Superior Form Builders is weak authority for this point. First, that case merely seems to assume, but does not actually analyze whether, a judge may reduce a jury's award that falls within the statutory range. And it notes that "if the jury was presented with evidence justifying a finding of willful infringement, it is given broad discretion to award up to $100,000 [then the statutory maximum] for each work copied." Moreover, it declines to reduce the award.

The labels' brief in defense of the Thomas-Rasset award does argue that the court lacks the authority to remit a copyright statutory damages award. See Br. at 21-22. Their argument is that the Supreme Court's Feltner opinion clearly held that the jury -- not the judge -- determines the proper amount of statutory damages within the range established by Congress:

Feltner does not hold nor contemplate that a judge has the right to alter a jury’s statutory damage award if that award falls squarely within the statutory damage range prescribed by Congress. See also SESAC, Inc. v. WPNT, Inc., 327 F. Supp. 2d 531, 532 (W.D. Pa. 2003) (rejecting request for remittitur of statutory damages for copyright infringement because "[t]he court should not interfere lightly with a carefully crafted statutory scheme by substituting its judgment for that of the legislature").

Their brief notes, however, that "Plaintiffs might accept a remittitur under certain circumstances," including adequate recognition of Thomas-Rasset's wrongdoing, in the interest of "finality." Id. at 22-24. Thomas-Rasset's reply brief does not even mention remittitur, focusing solely on the constitutional issues.

Judge Davis' order addresses the issue of his authority to remit on pages 7-8. It does not cite any cases holding that a judge has the power to remit a copyright statutory damages award. Rather, it simply notes Feltner, acknowledges that deference must be paid to the jury's decision, and concludes that "there is no authority for Plaintiffs’ assertion that the Court does not have the power to remit an award of statutory damages." The order then cites Thorne and Corpus v. Bennett, 430 F.3d 912, 917 (8th Cir. 2005) (Section 1983 police excessive force case) as authority for the proposition that a judge may remit a jury's damages award even where the plaintiff has a Seventh Amendment right to a jury trial. (Feltner's holding was based on the Seventh Amendment.) But again, I don't think this answers the question whether a judge has the authority to reduce a jury's award where that award falls within a statutory range specifically spelled out by Congress. Neither Thorne nor Corpus involved a statutory damages range.

The bottom line is that, as far as I am aware, Judge Davis' decision is without precedent; it stands alone as the first and only decision ever to reduce an award of copyright statutory damages, on any ground, common-law or constitutional. I realize it's hard to prove a negative (i.e., that there are no other such decisions), but the failure of either Thomas-Rasset's highly competent attorneys, or Judge Davis, to find one, is telling. See Pls.' Br. at 17 ("In fact, Plaintiffs have not located a single case, in the nine decades since Williams was decided, in which a court relied on Williams to reduce or eliminate an award of statutory damages because of a due process violation. See, e.g., Colleen P. Murphy, Judicial Assessment of Legal Remedies, 94 Nw. U. L. Rev. 153, 202 (1999) (noting that in the context of the Copyright Act, '[n]o reported decision has reduced a litigated award that was within the appropriate statutory range')").

The labels now have some difficult decisions to make. Do they take their $54,000, declare victory, and go home? That might be the best PR move, but it would appear to result in their forfeiting of the right to appeal the damages 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."). Or do they reject it, so that they can argue to the Eighth Circuit that Judge Davis lacked authority to remit? From a long-term strategic perspective, it is surely not helpful to have a case on the books holding that a trial judge does have the authority to reduce a jury's statutory damages award. (Pursuant to Judge Davis' order, the labels have until Friday, Jan. 29 to decide whether to accept the reduced award or head back to Minnesota for a third trial.)

It will also be interesting to see what the labels argue in their brief in opposition to Joel Tenenbaum's motion seeking a reduction in the jury's award against him. Tenenbaum's brief barely even mentions common-law remittitur; it discusses the issue only in a short paragraph at the very end, see Br. at 25-26, which cites two cases, neither of which is about copyright or statutory damages. See Correa v. Hosp. San Francisco, 69 F.3d 1184, 1197 (1st Cir. 1995) (claim under Emergency Medical Treatment and Active Labor Act (EMTALA), 42 U.S.C. § 1395dd); Milone v. Moceri Family, Inc., 847 F.2d 35, 37 (1st Cir. 1988) (maritime personal injury case). Judge Gertner will surely have read Judge Davis' opinion, and no doubt will be tempted to follow its mode of analysis, i.e., to declare that the award shocks her conscience, and thus to remit on common-law grounds, thus avoiding the constitutional issue. The labels' brief, in which they are likely to try to convince her otherwise, is due this Thursday, January 28.

Update: Thomas-Rasset's counsel Kiwi Camara sent me the following email, which he gave me permission to post here:

Ben:

I read your two blog posts on Judge Davis's order. Another interesting point: we challenged statutory damages as unconstitutional all the way to the minimum. We argued that even if Judge Davis were to remit to the minimum, the resulting statutory damages would still be unconstitutional. See M. at 4.

This means that the RIAA cannot avoid the constitutional issue even if they accept the remittitur. Of course, accepting the remittitur may put them in a better position to defend the constitutionality of the award of statutory damages on appeal since the reduced award is less objectionable than the original award, though still in our view unconstitutional.

Kiwi

Camara also told me that if the labels accept the reduced award, Thomas-Rasset still intends to appeal on the grounds that the award of $2,250 per work is unconstitutionally excessive.

Court reduces award in Jammie Thomas-Rasset case to $2,250 per song; avoids constitutional issue; enjoins further infringement

The court in the Jammie Thomas-Rasset case today reduced the jury's award of $80,000 per song to just $2,250, concluding that the "verdict [of] $2 million for stealing 24 songs for personal use is simply shocking." The court grounded its decision to reduce the total award to $54,000 -- slashing the jury's verdict by 97 percent -- in the common-law doctrine of remittitur, thus avoiding the issue whether the jury's verdict was unconstitutionally excessive.
Order on Jammie Thomas-Rasset's motion for new trial

Judge Michael Davis of the District of Minnesota gave the plaintiffs (the major record labels) seven days to decide whether to accept the reduced award, or to go back for a third trial, which would be limited to the issue of damages (liability having already been determined in the plaintiffs' favor, and undisturbed by this order). (The first trial ended with a verdict of $9,250 per work (totaling $222,000), but the court granted a new trial after determining that one of his jury instructions was improper.) It's my understanding that if the labels accept the reduced award, they may not then challenge it on appeal. 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").

The court also rejected Thomas-Rasset's motion for a new trial on other grounds, including her challenge to MediaSentry's evidence-gathering procedures, and to the admission of non-certified copies of the 24 sound recordings on which the labels pursued damages. And it enjoined Thomas-Rasset from further infringement (both downloading and distributing), and ordered her to destroy all copies of the plaintiffs songs that she obtained without permission.

A similar motion to reduce the jury's verdict of $22,500 per song is pending in the Joel Tenenbaum case. While Judge Nancy Gertner is under no obligation to follow Judge Davis' ruling, it will certainly give her cover, and legal grounds, to similarly remit the award against Tenenbaum, which totaled $675,000.

(Updated.)

Scribd moves to strike class allegations from copyright suit; warns of potential for 'horrendous, possibly annihilating punishment'

Scribd.com, the document storage site sued for copyright infringement by an author who alleged that her book was uploaded and displayed without her permission, has responded to the complaint, filing an answer and moving to strike the class allegations or, in the alternative, deny class certification.
Motion to Strike Class Allegations in Scott v. Scribd

Scribd's papers make clear that its primary defense will be the safe harbor found at Section 512(c) of the DMCA. It opposes class certification on various grounds, primarily that individual issues of knowledge, copyright registration, and infringement would predominate over questions common to all members of the purported class of copyright owners whose rights are alleged to have been violated by Scribd. Scribd also argues that certification of a class of plaintiffs seeking statutory damages would violate its due process rights, resulting in a "horrendous, possibly annihilating punishment" that could "bankrupt" Scribd for the "inconsequential infringement of one out-of-print book." Interestingly, plaintiff Elaine Scott's counsel Kiwi Camara has made similar arguments in defense of his client Jammie Thomas-Rasset, where a constitutional challenge to the jury's award of $1.92 million for Thomas-Rasset's infringement of 24 songs is fully briefed and awaits a decision by Judge Michael Davis in Minneapolis.

Scribd is represented by Barry Flynn of Gordon & Rees' Houston office.

Labels to Tenenbaum: 'complain, lobby, or blog' all you want; just quit infringing our copyrights

The plaintiffs in the Joel Tenenbaum case have filed a reply in support of their motion for entry of judgment (including a request for an injunction prohibiting Tenenbaum from further infringement) following their July 31 trial victory over the admitted peer-to-peer infringer. The labels decline to address the various irrelevancies Tenenbaum argued in his opposition, and make crystal clear that -- contrary to the overheated rhetoric in Tenenbaum's brief -- they are not seeking to bar the Boston University grad student from expressing his views on copyright and his litigation opponents:

Contrary to Defendant’s contention, Plaintiffs are not seeking to limit or prevent Defendant or his counsel from discussing this case or the perceived policy issues implicated by this case in any forum they choose.... Plaintiffs...are not trying to stifle any debate Defendant wishes to engage in and the proposed injunction does not seek to limit his First Amendment right to complain, lobby, or blog about anything he likes.

Once Judge Gertner enters judgment, Tenenbaum is expected to file a motion to reduce the jury's $675,000 award on the grounds that it is constitutionally excessive. A ruling on a similar motion by Jammie Thomas-Rasset, who was ordered by a Minneapolis jury to pay the labels $1.92 million for similar infringement, could come any day.
Reply Re Motion for Entry of Judgment