Court Will Examine The Constitutionality Of RIAA Fines

from the a-big-loss-for-the-RIAA dept

Fri, Nov 10th 2006 3:12am — Mike Masnick

When the RIAA sues people for unauthorized uploading of songs, they usually put a price between $750-per-song to $30,000-per-song in losses. Many have argued that this seems rather excessive -- especially considering how much the songs are actually sold for. A year and a half ago, there was a scholarly paper that examined whether the RIAA's excessive loss claims were unconstitutionally excessive. With that in mind, it wasn't that surprising earlier this year to see one defendant in an RIAA suit question the constitutionality of the $750 number that was trotted out in her case. At the time, we stated that the reasoning used to back this up seemed much weaker than the reasoning in the law review article, but as lawyer Ray Beckerman (who is involved in the case) explained, the filing was limited in length and only needed to serve a specific purpose. It also looks like they were later able to submit either the law review article we mentioned, or other supporting documents. No matter what happened, the judge has now ruled that it is a perfectly legitimate question, and will be included as part of the case. The judge tossed out all of the RIAA's objections, noting that the defendant actually backed up their claim with case law and law review articles. The RIAA, on the other hand, could offer no similar case law to explain why the constitutionality of the fines couldn't be questioned. Of course, who knows how the case will turn out, but should the RIAA lose, it would be pretty damaging for them. They use the threat of the $750/song (or higher) fines as a way to bully people into just settling, rather than fighting -- even if they know they're innocent.

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41 Comments

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Michael Long, 10 Nov 2006 @ 3:47am

Preventitive
Why can I potentially go to jail for a year for stealing a $10 CD?

If the "fine" for stealing a $10 CD was related to the actually cost, or just $10, then more people would try to steal them, since, at the worst, you'd only have to pay what you'd have paid anyway should you be caught in the act.

And at best, you get away with a free CD.

The idea that the punishment is always greater than the cost of obeying the law is supposed to act as a deterent.
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The infamous Joe, 10 Nov 2006 @ 4:03am

Re: Preventitive
Right you are Mr. Long, that's pretty much the thought behind most fines, for my example I'll use littering. Usually around $500 but I've seen some pretty crazy ones driving here and there in this country.

However, let's say you were pulled over near a wadded up TPS Coversheet and the police decided that you threw it away because you're the closest person near it, and then they take a good look at the area and see a few scraps of chewing gum wrapper and a lottery ticket. THEN they look in your car, and see a bunch of Burger King cups, and decide that chances are you were about to throw that away, so they'll fine you for that too.

Now pretend that it's not the cops, but it's the guy next door, who is rich and has a few dozen lawyers and all the money needed to keep those lawyers on your case until well into the next century.

Then Mr. Guy Next Door says that he'll settle for a few grand. Most of us Joe's will be so afraid at being fined $720,000 that we'll suck it up and settle.

It's bullying people who may or may not have commited a crime into settling-- because they've seen enough Law and Order to know that expensive lawyers do to the truth what little bald children in The Matrix do to spoons (or lack thereof) and don't want to take that chance.

It's just silly, and I'm not exactly holding my breath for it to stop. Eventually we'll get a judge that wanted to be a computer programmer back in college, and knows his ass from a IP address.
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CounterPoint, 10 Nov 2006 @ 4:09am

However...
If said fine for the $10 CD were $100,000, and the cost to make it was $3, then the deterrent would be considered to be excessive. There are no catastrophic financial losses if you consider the fact that most people still pay for music in one form or another.
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databyss, 10 Nov 2006 @ 4:21am

Stealing != Copyright Infringement
Stealing a CD should have a heavier fine than pirating music. You're breaking a law. Breaking laws have criminal penalties and jail time and fun stuff like that.

In these cases of copyright infringement, the RIAA & MPAA are only allowed financial damages that they is supposed to prove.

If you are found guilty of pirating music/movies you do not go to jail and you do not have a criminal record, you just pay the fines.
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Anonymous Coward, 10 Nov 2006 @ 4:53am

Re: Preventitive
The fines you are referring to are criminal fines, meant to deter a crime. The fines the RIAA are collecting are monetary damages to their corporation so that it is a civil court issue rather than a criminal court issue.

In the example of stealing a CD from a store, you may be fined $100, $1000, do jail time, be put on probation or whatever the law allows by the criminal court, but the store will not see that money; they have to take you to civil court and prove the damages in order to collect anything.
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Ray Beckerman, 10 Nov 2006 @ 5:10am

Legal authorities
Dear Mike,
If you're aware of any legal authorities that we left out of our memornadum of law or reply memorandum, links to which are listed near the bottom in our November 9th post, please let us know so that we may include them next time we brief this issue.
Thank you.
Keep up the good work.
Sincerely yours,
Ray
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Sanguine Dream, 10 Nov 2006 @ 5:31am

Realistically speaking...
If I hire a construction agency to do some repairs on my house for me and I try not to pay then the agency takes me to civil court to make me pay. And once they prove that I do indeed owe them the money I will be ordered to pay the bill for the repairs.

In that instance the agency will have clear cut proof of losses (in building supplies and emplyoee worktime) to show the civil court that I owe them x amount of money. The RIAA doesn't seem to be able to prove (at least not to the general public) that they lost $750 - $30,000 per song or else we wouldn't be talking about it.

$750 - $30,000. Thats just ridiculous. These jerks really think that one song is worth somewhere between a month's rent and a brand new SUV?

Math time: $750 - $30,00 per song at 15 songs per album is $11,250 - $450,000. So that means that one album can be worth somewhere between a new compact car to more than the president's annual salary according to these guys.
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Stevo, 10 Nov 2006 @ 5:54am

also saying that they are loosing money assumes that the person who downloaded the song was going to buy it. and for the song to get on the net somebody did buy it. and they can not say the person was selling the music because that's a criminal offence and the person would have to be found guilty of piracy and distribution before before u can claim in a civil court that that's what they where doing because there would be no proof of that. so it looks to me like all this loss of money thing is speculation and no hard figures. if i steal a cd the shop owner is already out of pocket as he has had to buy that cd.
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Anonymous Coward, 10 Nov 2006 @ 6:22am

Re:
Not necessarily, Stevo. A lot of the music that gets released to the internets gets there from promotional and advance copies that get sent to radio stations and magazines and such. It would be theoretically possible for a CD to get to everyone in the world without anybody footing the cost except the band or the record label.
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Anonymous Coward, 10 Nov 2006 @ 6:32am

Re: Realistically speaking...
I agree that 750-30000 is excessive, but what most people commenting don't seem to understand is that their thought on the value seems to be a little less than what it actually is. They are not suing because you have a copy of a song for people to download. They are suing because of the amount of people who downloaded that song that didn't pay for it. For all you know that song got downloaded over 1,000 times and not one of those people paid for it. At that point you have caused a 1,000 dollar loss for distributing that song. Of course you are not the only person at fault, but I am just pointing out that some people are not looking at the big picture.
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Ap, 10 Nov 2006 @ 6:39am

Civil Suits
Civil suits are filed in an attempt to make the plaintif 'whole' again. So the plaintif can recover his or her losses if and when those losses are shown to have been the fault of the defendant. Punitive damages may be awarded as well, of course but for that to happen I believe the defendant must be worthy of punishment beyond the amount of the plaintif's loss. I believe that punitive damages are seperate from actual losses and as are awarded or imposed (all depends on your point of view I suppose) at the discretion of the court. So where does the RIAA get their numbers? Yes the Sun never shines there. Are their (RIAA) lawyers ever able to convince a jury that their requested compensation is realistic? I really don't understand why this question of a defensible amount of damages hasn't been brought up before by any of the defendant's lawyers.
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Khidr, 10 Nov 2006 @ 6:49am

# 10
That assumes that the individual was sharing, which has been the backbone of many of the RIAA's suits, but they have begun suing individuals simply for downloading, and asking for access to the HDD to see if they could find additional non-shared files on the drive to ask for damages in.

Personally I'm of the opinion that the RIAA should have to prove damages, showing exactly how many people received how much of the file from that individual, and damages just for downloading in a CIVIL context, should be limited, merely to the price of the file.
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s, 10 Nov 2006 @ 6:54am

retroactive
I hope the new value is retroactive, because it should be.
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Anonymous Coward, 10 Nov 2006 @ 6:58am

Poster 10: It is up to the RIAA to prove how many people downloaded it and what the ACTUAL cost is. There in lies the problem, our courts do allow for a small percentage of speculation, but our courts also REQUIRE evidence that someone actually did download it from someone elses computer. Herein lies the next problem, if the person who downloaded it NEVER intended to buy it and only receieved it because it was available, it may have LESS WORTH than someone who decided not to buy the CD but downloaded for convenience only.

Quite honestly, this could be the SINGLE BIGGEST break in all this crap. The RIAA will have to perform real investigative work, which they cannot do, and this could seal the coffin shut.
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A. Lloyd Flanagan, 10 Nov 2006 @ 7:19am

Re: Re: Preventitive
Joe, that's by far the best analogy of this situation I've ever seen. Nice job.
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Anonymous Coward, 10 Nov 2006 @ 7:41am

I really think the fine base was meant for a different kind of pirate - someone who was copying en masse and distributing for their own profit. $750 per song doesn't seem too unreasonable then.

The fines need to be re-evaluated and split to differentiate between a mass distributor of pirated material and Joe Schmoe who may have been sharing MP3s on the internet.
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Anonymous Coward, 10 Nov 2006 @ 7:54am

god
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JGramze, 10 Nov 2006 @ 8:39am

Re: Preventitive
While the punishment probably should be greater than the damages in many cases, it should not be the case that the party suing gets that overly large sum. If you throw a rock through my window intentionally, you have to pay me for the replacement of the window. Any additional penalties do not go to me, but will be fines paid to the court or jail time served.
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Anonymous Coward, 10 Nov 2006 @ 8:45am

I am not proud to say this but I was caught shoplifting at a walmart last winter. I was caught with $100 in merchandise. My lawyer said that was outrageous but technically the laws of NY say a retailer can request up to 6 times the retail value of the stolen merchandise.

I realize that the RIAA has some legitimacy in their cases here, now they take them way too far and do some pretty horrible things but perhaps there should be copyright fine policies such as these. Get caught downloading X amount of songs, pay 6 times the value of the media. Granted you have to have a strict statute of limitations so the RIAA cannot sit and watch an IP address for 3 months, as that is entrapment.

Until this can be settled legally, we need a way to make sure these cases are being carried about ethically. Yes they have a right to complain, but no they do not have a right to bully and force innocent people into paying for dead relatives supposed sins.
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Poster #10, 10 Nov 2006 @ 9:14am

Re: post 14
I agree with all that you say except for placing worth on what the person that downloaded intended to do with it (buying or not). If it was downloaded and not purchased from a person that is just sharing the song with no rights to it the law has been broken, period. That doesn't change the value of the song to the company that produced it, just to the individual that wants it or wants to preview it. Now I am all for being able to preview songs, but downloading them on the net form a peer to peer system is still not a legal means of doing so unless the law gets changed, no matter what you or anybody else thinks about it. Heck, you are technically breaking the law just by letting a friend barrow a CD let alone share it on a peer to peer network. However, lets not open that can, we are talking about the RIAA suing for unjust amounts of money. I agree that no matter what... the RIAA should have to prove their case and that it isn't right to flash an expensive lawyer and a high price to get you to break.
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Sanguine Dream, 10 Nov 2006 @ 9:35am

Re: Re: Preventitive
Thats the problem right there. The RIAA claims to be doing this for the artists. Does this mean that the money that they get after a shakedown is split fairly between the artists, producers, writers, people in the manufacturing plants the make the CDs, the distribution agency that would have sold the album to some chain store, and themselves? I doubt it and that would be why they try to get so much money out of these poeple. I would pay to find out how those "damages" are divided.
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Gene Hoffman, 10 Nov 2006 @ 9:51am

The $750 is from Copyright Law
All,

Look at Title 17 Section 504 (c) (1)
http://www.law.cornell.edu/uscode/html/uscode17/usc_sec_17_00000504----000-.html

(c) Statutory Damages.—
(1) Except as provided by clause (2) of this subsection, the copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally, in a sum of not less than $750 or more than $30,000 as the court considers just. For the purposes of this subsection, all the parts of a compilation or derivative work constitute one work.

That's why the RIAA asks for $750 to $30K.

-Gene
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Anonymous Coward, 10 Nov 2006 @ 10:37am

Re: Re: post 14
"Heck, you are technically breaking the law just by letting a friend barrow[sic] a CD"

Absolutely false.
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Sanguine Dream, 10 Nov 2006 @ 10:48am

Re: The $750 is from Copyright Law
That would explain why they won't try to figure out acutal damages.
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Mike (profile), 10 Nov 2006 @ 12:03pm

Re: The $750 is from Copyright Law
Gene,

Yes, though the point is that the amount in Title 17 may be unconstitutional... which is addressed in the law review paper.
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satan, 10 Nov 2006 @ 1:20pm

Re: Preventitive
If the music was good enough on that cd I would pay for it. If it's shit like most music today I wouldn't bother.
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Brian G, 10 Nov 2006 @ 1:45pm

Buy Music but RICO
People should just buy music. If they don't want to buy it then they should get a radio or sat.

That being said, I wish four people would group their counter action against RIAA together and file a Federal Criminal RICO (racketeering) charge against the RIAA and personally name each attorney in the suit.

Maybe the Dems being back in power may change the RIAA minds a little bit.
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Adam Knapp, 10 Nov 2006 @ 3:12pm

Re: Re: Re: Preventitive
has anyone considered the injustice and theft that's already going on against the artists BY the RIAA? A record contract doesn't make an artist rich, and can in fact put them into debt. A record can cost over 50,000 dollars to produce, paying for studio time, staff, backup musicians, etc. The record company does not pay for this, it merely loans the money to the musician.

When the CD is cut and sells for 15.00 or so, the majority of the money from the store goes back to the record company (there is a very small profit margin on new CD's). This is about 13 dollars. Of that, 10 goes directly into the record company and the pockets of its executives. about 2 goes into the pockets of the A&R and legal staff that directly work with the band, and 50 cents or so goes into directly related expenses. 50 cents per CD or even much less actually goes to the band. From this 50 cents the band must pay for their living expenses, much of the arrangements for their tours, their agent (who gets a large cut) and of course, the studio time that recorded the CD.

For a band to make even a little profit from a CD, the album has to get very popular, sometimes making Gold or even platinum before a single dime is seen.
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Heidi Nelle, 10 Nov 2006 @ 3:13pm

Re:
"and for the song to get on the net somebody did buy it" Not nessicarily. I downloaded a band's CD 3 weeks before it came out into stores. I don't think anyone had to buy anything in order to put it on the net.

Also, if you take a 2 headed headphone jack, put one end in your speaker and one end in your mic, you can use a program to record music that's being played on Napster, without ever having to buy it.
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Adam Knapp, 10 Nov 2006 @ 3:15pm

Re: Re: Re: Preventitive
has anyone considered the injustice and theft that's already going on against the artists BY the RIAA? A record contract doesn't make an artist rich, and can in fact put them into debt. A record can cost over 50,000 dollars to produce, paying for studio time, staff, backup musicians, etc. The record company does not pay for this, it merely loans the money to the musician.

When the CD is cut and sells for 15.00 or so, the majority of the money from the store goes back to the record company (there is a very small profit margin on new CD's). This is about 13 dollars. Of that, 10 goes directly into the record company and the pockets of its executives. about 2 goes into the pockets of the A&R and legal staff that directly work with the band, and 50 cents or so goes into directly related expenses. 50 cents per CD or even much less actually goes to the band. From this 50 cents the band must pay for their living expenses, much of the arrangements for their tours, their agent (who gets a large cut) and of course, the studio time that recorded the CD.

For a band to make even a little profit from a CD, the album has to get very popular, sometimes making Gold or even platinum before a single dime is seen.
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Gene Hoffman, 10 Nov 2006 @ 4:54pm

Re: Re: The $750 is from Copyright Law
Mike,

The problem with the law review article is that it is confusing issues. It is making a claim that copyright statutory damages are punitive. In fact, there is another section lower that talks about punitive damages

This comment thread goes to prove why Congress spoke on this issue. Statutory damages are there because proving the actual damages (unlike proving the $4000 damages in BMW) is non trivial.

The law review's logic may be applicable in a case like MP3.com's, but in the average file sharer's case, $750 multiplied by the number of files being shared illegally isn't outrageous.

In BMW, the punitive damages on the $4K of actual damages were initially $4M, reduced to $2M by the State Supreme Court, and then affirmed by the US Supreme Court.

The law review is playing a bit loose with the comparisons there. It is awfully convenient for the writer to assume that the RIAA knows that the actual damages are $1. The writer blithely skips over the simple question of the plaintiffs not having knowledge of how many times the shared file in question has been downloaded. It certainly could be more than 750 times for many files and its not like the file sharers or the file sharing software writers want to keep an incriminating log. If they didn't mind having a log, they could just run a webserver.

-Gene
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Anonymous Coward, 10 Nov 2006 @ 10:49pm

You have it easy in the US...
You guys have it easy... at least you could try to fight it if you could afford it... check out what happened to Singaporeans after their government signed a Free Trade Agreement with the US...

It seems that copyright violations can be considered a criminal offence in Singapore.
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Anonymous Coward, 10 Nov 2006 @ 10:55pm

When I download stuff I use the Azureus bittorrent client and it shows a "Share Ratio" basically how much I have uploded compared to what I have downloaded. It is easy therefore to see how many times I have infringed and I generally stop sharing it when it gets to around 2 (ie uploded 2* what I downloaded) so they could easily prove how much I had uploaded from those files but not prove I had ever uploaded other files unless they were the ones downloading them in which case I believe it would be entrapment.

So at least if they sue anyone using Azureus it's trivial to find out how much things were uploaded, not sure if there are similar features in other filesharing programs.

By the way I almost never download music as I didn't even listen to any before a friend gave me some mp3's (that piracy obviously cost the industry a lot!!!) of a band that he liked, after which I bought 2 of their albums (after having allready downloaded the songs in them). In this case filesharing has made the industry some money without the cost of advertising to reach me. (I have never heard of the band anywhere by accident, I have only found anything about it when I specifically searched for it). I have also given this music to friends, some of whome have bought several more of the band's albums, again without anyone having to pay advertising fees.
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James, 12 Nov 2006 @ 5:13pm

RE: Comment 31
RE: Comment 31

most artists that people are even intrested in downloading illegally have huge houses, cars, bank accounts, and come out of nothing you tell me how Bono or Sting have so much freaking money
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James, 12 Nov 2006 @ 5:16pm

to many people use p2p sites to sue all of them would cost probally as much as the RIAA would get in fines :-)
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|333173|3|_||3, 12 Nov 2006 @ 5:56pm

Encryption
When ppl start to have the sense to use encryption on everything, then they have no chance of proving anything. Just think- instead of wasitng grunt on Aero, you could use a good real-time encryption engine instead. Anyway, you could use IP over DNS to access the file sharing anyway, which they will find harder to watch. The files on your disk can be stored using a multi-password encryption which I will sell once it is finished, which is impossible to decrypt the whole thing at once, and which if you try the wrong password it returns valid files of junk data, such as a JPEG with random pixels, or a movie of crap, or a valid but useless DOCX. good luck to the RIAA or the police to wade through all this randomly generated crap to find the real data. The total size does not help, because some of the file is filled with random crap.
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Sanji Himura, 13 Nov 2006 @ 8:17am

You have all overlooked something.
The argument isn't that she downloaded songs, but the question is did she do so legally in good faith.

She is proving that the RIAA is a cartel, thus violating numerous FEDERAL anti-trust laws, misuse of copyrights by combining cases together, and settling them together.

She is also trying to link RIAA and a group called Settlement Support Center LLC to a defrauding scheme; "by conducting ex parte “John Doe” lawsuits which they have no intention of pursuing, but in which they interact with Judges, Magistrates, and other officials on a daily basis, without notice or opportunity to be heard being offered to defendants; by bringing the “John Doe” lawsuits in jurisdictions far removed from the domiciles of the “John Does” so that they have no meaningful opportunity to be heard or to retain counsel of their own choosing; and by other unconscionable conduct."

She is also trying to prove that $750 PER SONG is unconstitutional, and that the industry sells recordings to online retailers for 70 cents per song, that is 1,071 times the actual damages suffered. You telling me that the total is fair, especially since Lindor produced affidavits stating that the industry's number came from stock reports that is carbon-copy generated in every case they try.
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teknosapien, 13 Nov 2006 @ 12:50pm

how can they even get away with 1/2 of what they a
So let me ask something here (it maybe a bit off topic)I have thousands (that’s correct 1000’s) of Albums CD's and tapes, If I encode these in to MP3s or manage to get my hands on an already MP3'd copy does that place me at risk. I own the original releases. What If I place these recording on my home media server (password protected of course) and I stream it to my place of work or to a friends party is that something that would raise the flag with these people ?

I'm also curious as to how far they go into invading your privacy. Does it break any laws - how are they getting access to your hard drive or are they just making accusations and taking it to court – I always though there needed to be “Just Cause” for something like this to happen ? Just because something is marked Mysong.mp3 by the Rich Fabulous Bastards doesn't mean that that’s actually what is in a file. I have yet to see how they are making their claims or even getting the right to invade your privacy to search for incriminating evidence.

The whole thing just makes me sick and tired of the greedy bastards that don’t support the arts but rather support the music industries puppets. Most commercial music is nothing more than a poor attempt to make money on something that has absolutely no artistic value what so ever

Meanwhile at archive.org many a new musician gets my support. If I like something I will defiantly support the artist, buy, go see them perform and purchase their stuff.

If it quacks like a duck and hops like a frog, what the hell is it
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Sanji Himura, 14 Nov 2006 @ 11:06am

Re: how can they even get away with 1/2 of what th
It's fair use. Let's take this as an example:

You put music on a media stream. Now I want to listen to the stream. I can do that under fair use. How the RIAA will get you is that you send a copy of the file to my PC.
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monaa, 1 Mar 2008 @ 10:23am

international
I would just like to say that when I download something off the internet like a song or something it is because it would be otherwise unattainable. if I want to listen to a CD that was only released in say... Germany or Japan, what am I supposed to do? get on a plane and pay airfare just so I can buy a single CD?

also I don't think that the recording industry of AMERICA should have any right to enforce the copyright on anything but American material. if other countries want their own bogus company's working off record companies losses they can start their own. simple
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