Record Labels Basically Admit That Statutory Damages Out Of Proportion As They Ask For Third Jammie Thomas Trial

from the groundhog-day dept

Thu, Feb 11th 2010 12:37pm — Mike Masnick

I guess it's fitting that this happens in early February. Slashdot points us to the news that, as was widely expected, the record labels have opted for a third trial of Jammie Thomas-Rasset, rather than accept the reduced award of $2,250 per song, as set by the judge. Not surprisingly, the labels are doing this because they disagree with the precedent of a judge changing the jury award, and the new trial is limited solely to the damages question. But, honestly, the whole thing is a bit weird. If the judge can reduce the older jury award, and a new jury sets a higher rate, can the judge just reduce it again, and we go through this entire process for the fourth time? The Slashdot post, written by Ray Beckermann claims that the labels "could only win a verdict that is equal to, or less than, $54,000," in the new trial, but I'm not sure why he says that. Is it because the judge would reduce it again? This is not at all clear.

Still, the actual filing from the RIAA's lawyers has some interesting claims (pdf):

While Plaintiffs do not believe that either verdict was improper under the law, or that the second verdict should be remitted, they would have considered accepting a remittitur simply so that this case could finally come to an end. However, any remittitur must otherwise be consistent with the law and be guided by what actual juries have awarded under similar circumstances. Unfortunately, Plaintiffs 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.

It's a bit of a stretch to claim that this would be a cap on "any" unauthorized noncommercial file distribution. I would imagine that any court still has the right to take into account the specific circumstances to make sure the award is proportionate to the rights being violated. The labels' lawyers are stretching what the judge said here.

Indeed, Congress has spoken on this very topic. Congress deliberately and purposefully established a range of statutory damages that applies without regard to the commercial motivation of the defendant.

I find this statement funny, because they then cite what Congress said way back in 1999. Fair enough, Congress (which basically just took RIAA talking points and put them into the Congressional record) did make those comments -- but these are the same entertainment industry lawyers who supported a "secondary liability" or inducement standard in the Grokster case, even though Congress had specifically rejected an attempt to put an inducement standard into the law. And when confronted, how does the RIAA explain that? Well, they say "the situation changed." Ah, so it's okay to have the courts change copyright law when the situation changes in one direction, but not the other?

What the judge was doing here was recognizing that the amount the jury awarded was clearly out of proportion to the actual infringement -- just as the courts in Grokster supposedly recognized that an inducement standard made sense in shutting down third parties (something I disagree with, but it's how the court felt). It seems that the RIAA and its lawyers have a massive double standard here.

A rule that the maximum permissible award in cases involving so-called "noncommercial" infringers is three times minimum statutory damages also ignores the harm caused by such infringers. From an economic perspective, individuals who give away copyrighted works illegally can cause as much harm as those who sell those works illegally, particularly when the so-called "non-commercial" infringer uses a P2P service. The notion that an infringer who does not make a profit should automatically be entitled to better treatment than an infringer who does make a profit is found nowhere in the law. The "not for profit" infringer is hardly entitled to special protection, which is why Congress conferred no such protection.

Again, Congress also conferred no such thing as an inducement liability, but the courts -- at the urging of the RIAA -- conferred exactly that via the courts. Why such a double standard?

The Court's cap would set a new ceiling such that no copyright owner could effectively enforce their rights unless they could and did sue on numerous works. No copyright owner would be motivated to enforce its rights where it could only sue on a handful of works because the potential recovery would be too limited. Congress set a wide range of statutory damages for copyright cases precisely because plaintiffs need to be incentivized to bring appropriate cases to enforce their rights -- even those who own a small number of copyrights or those who only have a limited number of works infringed. Conversely, the Court's artificially depressed cap compels parties with a large number of copyrights at stake to sue on all of them, rather than a more modest number. This serves only to increase the discovery and trial burdens on parties and courts. Yet the Court's inflexible "three times" cap would invariably penalize plaintiffs with a small number of works at issue, and would force those with a lot of works to add to their complaints unnecessarily.

Woe is the RIAA. If the awards for unauthorized sharing of a $1 song that might help promote their artists and help them make more money (if only the RIAA were to adapt to a changing market place) might "only" be 2,250 times the market price of the song? Cry me a river. And, even more ridiculous is the claim that this is some undue burden on the RIAA that it might have to actually sue over all of the songs someone distributed in an unauthorized manner, rather than just selecting a handful as it does now. This is a major issue. Technically, the RIAA has been able to just pick a couple dozen songs and sue over those, knowing that the totally disproportionate statutory damages will "cover" the rest. But does that seem right to anyone? The idea that rather than proving the actual harm done by the actual distribution, the RIAA is allowed to just pick a "sampling" and without proof get back many times the price without even presenting any actual evidence of the wider damage or the wider distribution of more files?

It seems perfectly reasonable to expect the RIAA should have to actually include what they claim was infringed, rather than being able to just pick a handful, knowing that the totally out of proportion statutory damages will "cover" the rest.

In fact, the paragraph above is effectively the RIAA admitting that it knows the statutory damages are out of proportion, but it believes it's fair because the RIAA is too cheap and too lazy to actually sue people for what it claims they infringed on.

Talk about a sense of entitlement.

Still, as we've said for a while now, this is a really bad case all around. It's pretty clear that Thomas-Rassett was involved in widespread infringement, and then lied about it. If people are going to challenge ridiculous statutory rates and other aspects of copyright law, this is really bad case to do that (ditto for the Tenenbaum case). This is one where it seems like she really might have been better off settling early and moving on. And the oddity of the judge reducing the jury award just makes this whole case into something of a circus...

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Filed Under: appeal, constitution, copyright, jammie thomas, jammie thomas-rasset, settlement, statutory damages
Companies: riaa

27 Comments

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yozoo, 11 Feb 2010 @ 12:56pm

confused
"I find this statement funny, because they then cite what Congress said way back in 1999. Fair enough, Congress (which basically just took RIAA talking points and put them into the Congressional record) did make those comments"

Were they comments are is there actual statutory law codifying minimal damages here. It seem rediculous to me that an institution as inept and impotent as the US Congress could actually get anything that specfifically detailed done.
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Overcast (profile), 11 Feb 2010 @ 12:58pm

Don't know why she would bother to even worry about all this, lol.

I'd let them sue until they are tired of suing, then let them sue again.. Once it's all said and done, I'd slap down a Chapter 7 and not worry about it.
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Anonymous Coward, 11 Feb 2010 @ 1:05pm

RIAA lawsuits, the gift that keeps on giving.
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rorybaust (profile), 11 Feb 2010 @ 1:07pm

why not
I think that this is more about showing the greed, Jamie has nothing to loose. Every time the judge looks a lit harder the awarad goes down. The Lawyers are pro bono , its on every tech news site.

Its just more bad press for the RIAA, plus it makes people angry so I like it.
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Killer_Tofu (profile), 11 Feb 2010 @ 1:08pm

Rights Holders Enforcement
Congress set a wide range of statutory damages for copyright cases precisely because plaintiffs need to be incentivized to bring appropriate cases to enforce their rights

Once upon people sued because something had to be done to stop something bad and wrong. These days we try to create as many reasons to sue as possible. It means more money for us and our cushy living can continue. - RIAA lawyers paying politicians (or RLPP)

Seriously though, why should holders have to be incentivized to sue? That makes no sense. They need incentives to create. They need incentives to sue. What next? Incentives to retire? Or is that the whole goal of trying to remove the right of first sale? "Without this right they can never retire, zomg"
The lawyers make them sound like artists are the most lazy people on the planet.
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Anonymous Coward, 11 Feb 2010 @ 1:25pm

The Well
Slashdot points us to the news that, as was widely expected, the record labels have opted for a third trial of Jammie Thomas-Rasset, rather than accept the reduced award of $2,250 per song, as set by the judge.

So, do they get to just keep going back to the well until they get what they want?
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Marcus Carab (profile), 11 Feb 2010 @ 1:39pm

I am a big fan of the quote that the first commenter on Slashdot added to this story:

"The code of tribal wisdom says that when you discover you are riding a dead horse, the best strategy is to dismount.

In law firms, we often try other strategies with dead horses, including the following: buying a stronger whip; changing riders; saying things like 'this is the way we have always ridden this horse'; appointing a committee to study the horse; arranging to visit other firms to see how they ride dead horses; increasing the standards to ride dead horses; declaring that the horse is better, faster, and cheaper dead; and finally, harnessing several dead horses together for increased speed."

-- Judge Thomas Penfield Jackson, 16 February 1999, in the courtroom after lunch on the second day of testimony from Microsoft's Brad Chase.

It's doubly applicable to the music industry.
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M-H, 11 Feb 2010 @ 2:07pm

What gets me, is the argument "So and so shared the song, so the damages cannot be capped at what they did. We must sue for this huge amount, because those who downloaded it also shared it, and created a chain effect." IF we were to believe this, and they were suing for all the potential damage the one upload caused, then should we not, as reasonable men and woman who seek to make whole and not reward with a bonanza, declare with the cash reward, that the song, no so damage and spread out, is entirely upon the one pair of shoulders, and may never be again actioned against in the court of law?

Otherwise, we may give them opening to not only sue the first up-loader, but then the second, with the same rational, and the third, and fourth, each time, even if two three and four all downloaded from the first, and therefore were already considered, and money granted, for the actions of the first?

To claim any beyond the download or PROVABLE DIRECT UPLOADS, should therefore require the relinquishment of any and all copyrights upon the lyrics, music, and recording, in regards to personal file sharing. Without this, we give them free reign to collect many times over for the same event, using the same arguments.

Or... you know, they can stop using that argument.
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Sergio, 11 Feb 2010 @ 2:08pm

I don't understand
How could we have created a system where if someone steals a king sized candybar from a store, worst thing is they get a legal slap on the wrist (don't do it again) and they have to give back/pay for the candybar. If someone downloads a song (not steal since it's still available for someone else) that normally sells for $1 or less (since most 15 track CDs sell for like $10), they can be on the hook for $2,250. Is everyone taking crazy pills. Why isn't there mass uproar. The government works for the people, not the other way around! If the vast majority of people stood up and said "No" to the RIAA, what could they do?
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:Lobo Santo (profile), 11 Feb 2010 @ 2:13pm

Re: I don't understand
Government for the people? What crack are you smoking?! It's: government for the government/industry consortium, not the people.
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Hephaestus (profile), 11 Feb 2010 @ 2:17pm

Re:
"Don't know why she would bother to even worry about all this, lol."

Because you dont understand that this is a law that is finally being challenged. It is an undue burden and way out of proportion with the actual losses incured. It is a case that will get to the supreme court eventually. If argued correctly it will remove this as a tool for RIAA to use. It was implememnted into law by lobbyists wanting a tool for intimidation.

You pay us now for these infringing songs. If you go to trial it will cost you your house and we have a press release to educate (read - intimidate) people with.

ACTA is the same sort of agreement. It is meant to be a tool for intimidation and control, not justice. If you read TechDirts archives you will see that pretty much everything RIAA, MPAA, etc are trying to get implemented on a small scale is slowly being shot down legally around the world. Which is why I only worry about ACTA and its little brother the UK's Digital Economy Bill short term. In ten to fifteen years the landscape of news agencies, artists, film makers, authors, and musicians will have changed radically. The technology and software will have matured. The old school will be gone and something new will have emerged.

The catalyst for this change is actually the weapon against change that is being drafted ... it is ACTA.

Most people only see short term goals. The record labels and studios see quarterly results and live in a bubble. ACTA is being drafted in in much the same way in a vacuum. Only people who are of the choosen can see it. Only people want the same things can contribute. Isolated group dynamics are a very cool subject. You dont have to be stuck in the wilderness for them to kick in. It happens alot in board rooms WCOM and Enron and here is a list of many more.

I am very good at seeing the "Unintended Consequences" and the outcomes of peoples actions. In this case it is not the thrill of victory that will occur, but the agony of defeat.
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Anonymous Coward, 11 Feb 2010 @ 2:22pm

Re:
But moreso the recording industry?
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Anonymous Coward, 11 Feb 2010 @ 2:23pm

Re: Re: I don't understand
It's a funny game that they are playing against the people. I wonder if it will end well?
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Marcus Carab (profile), 11 Feb 2010 @ 3:38pm

Re: Re:
You are right of course. The conflation of "recording" and "music" is quite insidious - I've even seen Mike let it slide once or twice.
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The Anti-Mike (profile), 11 Feb 2010 @ 4:28pm

Re: I don't understand
Sergio, the issue isn't the download, it's the upload.

The minimum by law if I remember correctly is $750. Treble damages, and you get $2250.

This is important I think for the labels, because they know they have little to lose at this point. A judge would pretty much have to ignore the amounts set in law to lower the amounts. Ms Thomas has been caught, convicted, and there is no doubt about the issue, she did it. We are only talking dollars here. At this point, the copyright holders have little to lose, everything to gain.

Ms thomas? Well, let's just say that IMHO, she appears to be getting some pretty horrible legal advice, she should have long since settled and called it a day. If you are a file trader, people like her and Joel Tenenbaum are the worst legal cases possible, because they will continue to beat their heads against the wall until this ends up in the Supreme Court, where they are pretty much both assured of a loss. The only questions that would be there would be amounts, and the Supreme Court isn't likely to turn amounts set in law upside down without some very, very good reason, and there appears to be none forthcoming.

Basically, Ms Thomas knows she did it, has been found guilty of doing it, and the courts set her with the lowest possible award under the circumstances, yet this goes on. She hasn't accepted any other offer from the copyright holders for amounts signicantly lower than that (at one point, I remember reports of an offer in the $5000 range total for everything). I don't things are going to get better for her from here.
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Rekrul, 11 Feb 2010 @ 5:04pm

Re: I don't understand
How could we have created a system where if someone steals a king sized candybar from a store, worst thing is they get a legal slap on the wrist (don't do it again) and they have to give back/pay for the candybar. If someone downloads a song (not steal since it's still available for someone else) that normally sells for $1 or less (since most 15 track CDs sell for like $10), they can be on the hook for $2,250.

Nobody has ever gotten in trouble for DOWNLOADING. They get in trouble for UPLOADING. P2P programs automatically upload everything you download, so you can't do one without the other. Clueless news media organizations don't know the difference and claim that people are getting sued for "downloading".

The government works for the people, not the other way around! If the vast majority of people stood up and said "No" to the RIAA, what could they do?

Politicians will work for whoever dumps the most money in their campaign fund. Contribute a few million dollars and a politician will happily vote for whatever you tell him/her. Until then, they'll do whatever the large corporations want.
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:), 11 Feb 2010 @ 5:54pm

Re: Re: I don't understand
I think she is standing up to bullies that is just priceless.

I think she may really believe she did nothing wrong and should not be punished and I'm inclined to agree.

I like her even though people keep saying she tried to pass the guilt to others and so own. Well if I was her and was scared with the possibility of a uncertain future with certain hardship I could see how many people would lie and I don't think of little people less for it I just think they are human beings although it is not good to lie or even good to shift the guilt, the mom in Germany did the same thing, does it make it right to punish someone to extremes? nope.

Does make her a criminal? no, it makes her a victim of bad laws.

Wouldn't anyone scared try to cast doubt on who did it or not?

She pointed to others who lived with her but didn't say it was them, what she said was it could have been the children or her fiancé and could have worked, well maybe she should work on the delivery speech side of things but if there is doubt about who committed what then there can not be a trial could it? Unfortunately she lied and was caught doing so by other evidence. Does that mean she doesn't love her child I doubt, in a small house everyone knows what the other one is doing is harder to keep secrets and probably the children dit it too, maybe it was the children and she is covering up for them we will never know for certain, but we can see what she stands for by her acts.

She could have give the RIAA everything they wanted, now she has nothing to loose she already lost everything and the other side painted her as a monster, would anybody else stop fighting?

If it was me I am going out with a bang, the other side will have to fight for every inch(2.54cm for the metric system people) and I find it inspiring that some people do that.
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Bugs Bunny, 11 Feb 2010 @ 5:59pm

"Nobody has ever gotten in trouble for DOWNLOADING. "

Are you quite positive about that ?
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The Anti-Mike (profile), 12 Feb 2010 @ 5:13am

Re:
All of the cases you see are people who have been caught sharing files, not specifically downloading. Thomas and Tenenbaum are both sharers, example.

The only people who are getting in trouble for downloading are people who are downloading from the honeypot sites. Even then, they are mostly dealing with the infamous "pre-settlement" letters. I don't think any of those have actually gone to court.

Also as noted, people who download also tend to share (reseeding) which means that once they download something, you just ask for a piece back, and you have them as a downloader as well, which is the real key offense in the US, the one with the most power in the courts.
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mrharrysan (profile), 12 Feb 2010 @ 8:15am

Re: Re:
Proud of you TAM, for not sounding too crazy on this thread.
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Anonymous Coward, 12 Feb 2010 @ 9:40am

Re: Re: Re: I don't understand
Short term, yes. Long term, no.
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Anonymous Coward, 12 Feb 2010 @ 9:41am

Re: Re: Re: I don't understand
in the long run the RIAA et al will lose.
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Mike Masnick (profile), 12 Feb 2010 @ 11:35am

Re: Re: Re:
Proud of you TAM, for not sounding too crazy on this thread.

Not sounding crazy, but wrong. He's right that Thomas and Tenenbaum were *caught* for uploading, but at least with Thomas she was found guilty of *both* uploading and downloading (I don't recall if Tenenbaum was found guilty of both as well).

Uploading is seen as a violation of the distribution right. Downloading can be a violation of the copying right.
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Anonymous Coward, 12 Feb 2010 @ 12:14pm

Re: Re: Re: Re:
Both were found liable for copying and distributing, with Tenenbaum being particularly cheeky since he continued to do so even after the lawsuit against him was filed.

As a practical matter it is not the copying that is so problematic...it is the distribution.
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Rekrul, 12 Feb 2010 @ 6:46pm

Re: Re: Re: Re:
Not sounding crazy, but wrong. He's right that Thomas and Tenenbaum were *caught* for uploading, but at least with Thomas she was found guilty of *both* uploading and downloading (I don't recall if Tenenbaum was found guilty of both as well).

Uploading is seen as a violation of the distribution right. Downloading can be a violation of the copying right.

True, however it's doubtful that either case would have gotten anywhere near a courtroom if uploading hadn't been involved.

Uploading or "sharing" files allows the media companies to claim that since they can't know exactly how many people may have downloaded copies from that person, there's no way to calculate exact damages. Therefore, they have to sue for statutory damages instead.

If a person has only been caught downloading, the exact damages can be proven. I'm not a lawyer and I wouldn't even know how to find out for sure, but I'd be willing to bet that any damage award for a single infringing copy would be lower than for unauthorized distribution. Even if the damages go by the same amounts, I think it's unlikely that a jury would ever award more than the minimum amount for each infringement. This would make taking that person to court highly unprofitable for any company. Not to mention the bad publicity of dragging someone into court and subjecting them to verbal beatings by lawyers, all for the "crime" of downloading a pirated copy of something.

Of course if anyone knows differently, I'd be interested to hear about it.
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Anonymous Coward, 13 Feb 2010 @ 7:32am

"From an economic perspective, individuals who give away copyrighted works illegally can cause as much harm as those who sell those works illegally"

From a common sense perspective, no one owes you a monopoly on anything and as such, any time someone buys a piece of work from you that you have copy privileges on, they are giving you UNOWED money. and all the money that you claim they should pay you for infringement is UNOWED. and all the money that courts grant you from those who infringe on your privileges is UNOWED money. We shouldn't allow your privilege to collect unowed money to get in the way of our rights.

and the RIAA certainly should not be allowed to inflict cruel and unusual punishment on anyone just to collect unowed privilege money.
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Monarch (profile), 15 Feb 2010 @ 2:53pm

Please, OH PLEASE LORD, Let me get on that JURY!!!!
Because if I get on that JURY, the award will only be 3 times the actual damage done. And I'll even be generous, I'll use the newer rate of 3x $1.29 for each of the 26 counts!!!

AND.., I'll be so convincing to the other members of the Jury, that they'll feel like complete morons if they don't go along with me.
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