Judge Sides With Automakers on AHRA, but Rules Recording Industry Complaint Will Go Forward
Judge Ketanji Brown Jackson “largely agrees” with Chrysler, Ford, General Motors and their suppliers that the CD-copying hard drives shipped in their vehicle infotainment systems fall outside the scope of the Audio Home Recording Act (AHRA) (see 1408010063), she said in a memorandum opinion and order released Friday in the U.S. District Court for the District of Columbia. However, Jackson denied the automakers’ Rule 12 motions under federal court procedures to dismiss the case or render a judgment on the pleadings because the allegations in the complaints by the Alliance of Artists and Recording Companies (AARC) were “sufficient to survive” those Rule 12 motions, her opinion said.
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The opinion, which came more than nine months after Jackson held a hearing on the automakers’ motions, therefore likely left both sides with something to smile about. For the automakers, Jackson’s statutory interpretation that the hard drives don’t fit the AHRA’s definitions of a digital audio recording device (DARD), because they contain computer programs or infotainment software or content that is not related to producing music from them, was vindication of their arguments that the AHRA doesn’t apply in the case. For AARC, the denial of the motions means the case can now proceed to the discovery phase.
If the courts were to ultimately decree that the hard drives fall under the scope of the AHRA, the automakers or their suppliers would be liable for the royalties they owe under the statute on the factory shipment of the products. Jackson has scheduled a “status conference” for April 7 “at which the parties can discuss how they intend to proceed in this matter,” she said Monday in a follow-up "minute order." One prominent Supreme Court blogger has floated the name of Jackson, 45, as a viable nominee to fill Justice Antonin Scalia's vacant seat (see 1602180008).
Through late Monday, none of the parties on either side of the case had commented on Jackson’s Friday opinion. Nor was there comment from CTA, which, when AARC filed the original complaint two summers ago, blasted the litigation as “a cynical attempt by an international royalty collection society to distort the Audio Home Recording Act at the expense of consumers, multipurpose infotainment systems, the CD format and others in the music industry who rely on the CD format.”
It’s “entirely possible,” as the automakers contend, that the output of the hard drives at issue in the case “do, in fact, contain computer programs and other data not incidental to the recorded audio files such that the devices fall outside the AHRA’s DARD definition,” Jackson said in citing case law to explain her rationale for denying the motions. “But this Court is keenly aware that, at this early stage in the litigation, it must take Plaintiff’s well-pled factual allegations as true, and construe all reasonable inferences in its favor,” she said. “And applying that standard, it finds that the AARC’s complaint contains allegations of fact that, along with reasonable inferences drawn in Plaintiffs’ favor, are sufficient to support the conclusion that at least some of the challenged devices can produce DMRs within the meaning of the AHRA,” she said of digital music recordings as they’re defined under the statute to differentiate products that apply under the AHRA from those that don’t.
However, Jackson, in her 30-page opinion, repeatedly sided with the automakers in their interpretation that their hard drives fall outside the scope of the 24-year-old AHRA. “To be sure, it is difficult to say with certainty whether Congress would have intended the AHRA to cover the particular devices at issue in the instant case because audio technology has changed dramatically since 1992,” when the AHRA was enacted by the 102nd Congress, Jackson said. “But uncertainty about what the 102nd Congress might have thought of twenty-first century technology is all the more reason to adhere closely to the carefully negotiated statutory text,” she said.
The various restrictions contained in the definitions section of the AHRA "were most certainly intended to clarify which recording devices should be excluded from the DARD definition pursuant to the compromise that Congress struck to protect the interests of music industry and high tech industry professionals," Jackson said. "However, in practice, the definitions and their limitations raise a host of questions when applied to modern recording technology that did not exist at the time was statute was enacted.”
The digital audio tape recorder was "the prototypical example" of a DARD defined in the AHRA when the law was passed in 1992, she said. But DAT recorders are "no longer widely utilized for making individual copies of copyrighted music, and what is at issue in the instant case is whether the statute’s DARD definition applies to modern audio technology that permits users to copy digital music recordings onto a hard drive for subsequent playback inside an automobile but does not create a new CD or cassette tape.”
Jackson reads the “plain language of the AHRA” to mean that Congress “intended for the statute to cover devices whose recording function is designed and marketed primarily for the purpose of reproducing digital music recordings, as specifically defined in the statute,” she said. “Thus, interpreting the AHRA to require that the material object the device produces must contain only fixed sounds and not computer programs (just like the types of digital audio copied recordings that were commonly known and available at the time of the statute’s enactment) is entirely consistent with that legislative objective.” AARC’s arguments “to the contrary are unpersuasive,” Jackson said.