Will the Supreme Court Review Copyright Damages in Music Downloading Case?

by Foley Hoag LLP - Trademark, Copyright & Unfair Competition

Like Joel Tenenbaum, who has been discussed in prior entries in this blog, Jammie Thomas-Rasset has conducted a long-running battle with the recording industry over how much damages she should pay for her downloading activity.  Like Mr. Tenenbaum, she argues that large statutory damages are unfair against individual “consumer” downloaders who contributed only minimally to the industry’s damages.  She has had a district court judge on her side throughout her odyssey, but was shot down by three successive juries and eventually by the Eighth Circuit.  Most recently, her counsel have petitioned the U.S. Supreme Court to review the latest judgment against her.

A jury initially awarded damages against her of $222,000 ($9,250 per song), after finding her to be a willful infringer (and one juror reportedly calling her “a liar” in the press).  The district court judge in Minnesota called that award “unprecedented and oppressive” and ordered a new trial.  This seeming reprieve merely tossed Ms. Thomas-Rasset out of the frying pan and into the fire, however:  the next jury imposed damages of $80,000 per work, for a total of $1.9 million.  The judge called that verdict “monstrous” and “shocking,” and ordered a remittitur down to $2,250 per song (three times the statutory minimum), or $54,000.  The recording companies refused to accept the remittitur, so a third trial was held.  The third jury, not much more sympathetic than the second, awarded $62,500 per song for a total of $1.5 million.  The district court by this time had apparently had enough with the jury process, as it granted a motion to amend the judgment back to $54,000 in total damages based on violation of the Due Process clause of the U.S. Constitution.

On appeal, the Eighth Circuit concluded that the district court had erred, and reversed.  The issue was what standard is applicable to review of federal statutory damage awards.  The district court had applied the Due Process line of cases applicable to common law punitive damage awards, known as the Gore standards.  The Eighth Circuit held that these standards had no applicability to federal statutory damage schemes, and that a more lenient test known as the Williams standards applied.  Under these standards, the court held that the first jury verdict, for $222,000, was constitutional — thus bringing things full circle.

Ms. Thomas-Rasset’s counsel — apparently not satisfied with a reduction from $1.5 million to $222,000 — have petitioned for certiorari, arguing that the Gore standards should have applied.  They argue that “[t]he First, Second, Third, Seventh, and Tenth Circuits, as well as the leading commentators, agree with Thomas-Rasset that statutory damages must pass muster under Gore,” while only the Sixth Circuit agrees with the Eighth.  With regard to the First Circuit, counsel’s assertion is wrong:  the cited case involves a statutory cap on punitive damages, not a pure statutory damage scheme, and in Tenenbaum, the First Circuit stated that that the applicability of Gore or Williams to copyright actions is an open question.  Indeed, the court hinted strongly that it would lean toward the more lenient standard of review (Williams), since damages under the Copyright Act are set by Congress, and stringent review “raises concerns about intrusion into Congress’ power under Article 1, Section 8 of the Constitution.”  The U.S. Supreme Court may well see things the same way, even if it does grant the certiorari petition.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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