DoJ Defends Statutory-Damages Award in P2P Case Before Skeptical Judge
The Justice Department has again waded into the constitutional squabble over whether statutory damages for copyright infringement violate due process. This time it’s facing off against a judge known to be skeptical of the federal law authorizing the $750-to-$150,000 range per infringed work. The department filed a brief Friday defending the range for damages in P2P defendant Jammie Thomas-Rasset’s appeal of a $1.92 million verdict against her.
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DoJ under President Barack Obama first surprised recording industry critics by defending the statutory range following a constitutional challenge in the Tenenbaum P2P case in Boston (WID March 24 p7). That case itself ended with a $675,000 statutory-damages award against Joel Tenenbaum.
Thomas-Rasset’s constitutional challenge cited an improper standard -- Supreme Court precedent on punitive damages -- on which to evaluate statutory-damages awards, DoJ told U.S. District Judge Michael Davis in Minneapolis. Jury discretion in awarding punitive damages is “usually unconstrained,” in contrast to the constraints imposed on statutory damages under the “carefully crafted statute” of the Copyright Act. The Supreme Court’s 1919 Williams standard is the correct one and “significantly less demanding,” only requiring a judge to evaluate whether an award is “wholly disproportionate to the offense and obviously unreasonable,” DoJ said.
The statutory range was raised from $200-to-$10,000 per infringing work to its current range in 1999, with Congress explicitly saying computer users didn’t see those penalties as a “real threat,” the brief said. Thomas-Rasset “ignores the potential multiplying effect of peer-to-peer file sharing” when she argues for damages of $1.29 per infringed song or $15 per infringed album -- common prices in the current digital-music market, DoJ said.
The department challenged Davis’ earlier statement that previous damages awards against “corporate or business defendants” have “limited relevance” to deciding the appropriateness of an award against a person. Davis made an impassioned plea to Congress to revise damages ranges for noncommercial infringement upon throwing out the original verdict against Thomas-Rasset on an unrelated technicality (WID Sept 26 p4). Commercial gain has never been a prerequisite for applying infringement penalties, DoJ said. Davis’ reference to Thomas-Rasset’s P2P sharing as “illegal but common” actually “raises the necessity of providing strong deterrence toward others who think their actions go undetected,” the brief said. “Further, such a cumulative effect creates a great public harm.”
DoJ cited a 2007 study by Stephen Siwek, the go-to economist for the copyright industries in piracy and market studies (WID July 21 p1), that music piracy cost the recording industry $12.7 billion annually. The brief noted support from a judge in the 3rd U.S. Circuit Court of Appeals, which oversees the Minneapolis court, who said in an earlier case that copyright owners were losing up to $20 billion to piracy “before the expansive growth” in P2P sharing. Davis should “defer to Congress’ reasoned judgment,” DoJ said. “The proper place for any policy debate of what should be the level of deterrence resides in the halls of Congress.”