The $22,500 MP3: Does The Constitution Protect People Or Just Corporations?
litigationandtrial.com
litigationandtrial.com
Nonetheless, the law is the law, and I can't foresee even a committed grass-roots effort convincing lawmakers to reduce the statutory damages for willful infringement. The best bet would be to get a high court to determine that willful infringement doesn't apply when there is no profit motive for the infringer.
To use those same penalties against ordinary citizens acting without a profit motive is madness.
That's part of what's so preposterous about our copyright regime: it permits copyright holders to elect, at their discretion, to pursue an amorphous claim with fantastically huge damages that doesn't require they prove much.
It's like if a slip and fall plaintiff could elect "statutory damages" of millions of dollars if they proved nothing more than that the defendant spilled something on the floor. Such would be swiftly declared unconstitutional.
Your logic is wrong. While it is true that all the plaintiffs needed was unauthorized reproduction, that doesn't mean that finding additional infringements won't cause a jury to award higher statutory damages: indeed, the jury is specifically instructed to take into account the nature of the infringements.
Your argument about other unproven damages has already been rejected by the 'Philip Morris' Supreme Court case, which explicitly said jurors could only consider, when deciding on punitive damages, actual damages proven in court. (In that case, the jurors had considered damage to other smokers in the state who weren't plaintiffs in the actual case.)
I suspect you mean the plaintiffs. In any case, it really doesn't matter; the damages in this case are not separable into punitive and compensatory parts. You can argue that this is unconstitional, but you can't argue that that damages awarded are unconstitutional on the basis of your or the defendant's estimate of the compensatory damages, seeing as those aren't what the jury used in their determination of damages. So your $0.99 "actual damages" is a red herring. Had there been more of an onus on the record companies to provide more evidence of actual damages, they would almost surely have been able to provide at least rough estimates, using studies that were cited in the expert testimony of Stanley Liebowitz. There was however, no onus to do so, so it was reasonable for the plaintiffs not to go in greater detail here.
> Your argument about other unproven damages
What argument about "unproven damages"? I have not used that language, please don't put words in my mouth. It's fine for you to quote me; please don't misparaphrase me.
"Had there been more of an onus on the record companies to provide more evidence of actual damages, they would almost surely have been able to provide at least rough estimates ..." Yet, it looks like they didn't, likely because they would have been much, much lower than the $150,000 per infringement available under the statute, and they wanted the jury to think big numbers. It was a tactical gamble, the same type made daily in trials across the country.
Like I wrote in the post, Congress can't simply call a duck a goose and get around the due process protections established by the Gore, Philip Morris, and Campbell cases. The statute's language does not trump due process and the fundamental fact that we have actual damages proven at trial (~$0.99 per song) and a grossly excessive award ($22,500.00 per song) awarded by way of a punitive element ("willful"). They are "punitive" damages by any measure.
That undoubtedly triggers due process protections.
Wrong, as I've pointed out to you numerous times. Defence did not have any expert testimony on damages (this was indeed one of big blunders of the Tenenbaum team, and was due to their basing the case on whimsical fair-use arguments). Plaintiffs did have an expert on damages (Stanley Liebowitz), but neither he nor any of the plaintiffs witnesses contributed any proof of the "actual damages." If you wish to persist in making this claim, please provide documentary evidence.
> Yet, it looks like they didn't, likely because they would have been much, much lower than the $150,000 per infringement available under the statute, and they wanted the jury to think big numbers. It was a tactical gamble, the same type made daily in trials across the country.
They didn't because they didn't need to, as I've said elsewhere. Everything else is pure speculation on your part.
> the fundamental fact that we have actual damages proven at trial (~$0.99 per song)
Show me evidence of your "fundamental fact". I submit that you can't: there was no determination of actual (or compensatory) damages.
That's not entirely true, as the record companies did briefly call their own lawyers to testify as to ownership of the songs, thereby establishing Tenenbaum's wrongful (i.e., unpaid) use of them. Ergo, $0.99 actual damages.
Otherwise, that's the whole point: we have a $22,500 award (per song) on $0.99 proven damages. That means the vast majority of the award -- over 20,000-to-1 -- is for punitive damages, triggering Gore/Campbell due process concerns.
What part of that don't you get? The fact that a statute says this is okay is meaningless: the constitution prevails.
Essentially, your logical flaw is to apply a court case that has nothing to do with copyright to one that is purely about copyright. In the case you reference, it is in theory possible to determine the damages caused: just sum the quantities spent by each of the plaintiffs on doctors' fees and other medical expenses. It is impossible to do that in the context of unauthorized distribution of copyrighted material. This is why the statutes give the courts leeway in this domain -- as you have acknowledged elsewhere.
If we take your argument it its logical conclusion, the maximum damages for sharing a song should be $4, since one can never "prove" the quantity of damages resulting from unauthorized distribution. Do you really think that damages of this size are going to deter anyone from filesharing?
Punitive damage case law is inapplicable to compensatory damage cases (statutory damages are compensatory, not punitive).
It's like crime: if you commit a crime, you waive due process in regards to the formula used to determine what sentence you serve. Your only protection is what the people, via the legislature, has determined is a fair formula for determining sentencing.
BTW, you should check your case law. Statutory damages have always been upheld by the courts.
There's nothing novel about applying due process limitations to statutory prescriptions. "Always upheld" isn't remotely true; the issue of due process restrictions on punitive elements in statutes has barely been considered even by District Courts (much less appellate courts) in the wake of the Gore and Campbell cases.
Statutory damages are not punitive damages. Statutory damages are compensatory damages, for when calculation of actual harm is impossible or practically so, though harm clearly exists. Here -- it's clear that the record company lost some money from the defendant's file sharing eating into sales, but how much?
Statutory damages are the only compensatory damages that are allowed to account for the legal costs of pursuing action. Attorney's fees are not awarded as part of compensatory damages, and are usually are only available for intentional torts. Finally, Statutory damages are in lieu of all other compensatory damages, and judges will rarely if ever grant punitive damages alongside a statutory election.
In response to your arguments above: Philip Morris is a punitive ("make an example of") damages case. It only applies to punitive damages. It does not apply to compensatory damages.
The remedy needs to be tailored to the nature of the wrong - that is, the law needs refinement, not jettisoning. This can come from Congress or perhaps from judicial refinements via statutory interpretation.
It will not come from some wild approach striking down the concept of statutory damages as unconstitutional. The article is way off on this.
But there's a more basic issue: it doesn't matter if the damages arise by statute or common law, the constitution protects the defendant all the same. Congress has no power to override a due process protection.
Mea culpa (and apologies), however, for overstating my point. There are two sides to this.
As I understand it (which could easily be entirely wrong), barring some invalidation of the law, the plain reading clearly and unambiguously supports the awards the RIAA is getting in this case.
This is pretty silly stuff, especially from someone claiming to be a lawyer.
a) The plaintiff is not a "record company", it is: SONY BMG Music Entertainment, Warner Bros. Records, Inc., Atlantic Recording Corporation, Arista Records LLC, and UMG Recordings, Inc. If you can't even get the basic facts of the case right, how can you be trusted in your opinion as to whether the damages awarded are constitutional, or anything else regarding the case, for that matter?
b) While it's true that downloading is all that is "needed" for eliciting statutory damages in a case like this (being a form of copyright infringement), it is not true to say that the "distinction" isn't relevant. As you ought to know, the jury is left considerable discretion in its decision of how large to make the damages. The nature of the infringement has an impact on the damages awarded (this wide leeway for statutory damages exists precisely because the impact of copyright infringement is hard to measure and varies widely according to circumstances), so it is ridiculous to claim that Mr. Tenenbaum's sharing of the files had nothing to do with the damages awarded. Just to underscore this point, look at Judge Gertner's order granting the plaintiffs' rule 50 motion on liability:
<snip>4 Judge Nancy Gertner: Electronic ORDER entered with respect to reconsideration of rule 50 motion: The Court has reviewed the transcript of the defendant's testimony, which had not been before the Court at the time of the earlier ruling. The last question asked by Mr. Reynolds on direct examination was Question: "Mr. Tenenbaum, on the stand now, are you now admitting liability for downloading and distributing all 30 sound recordings that are at issue and listed on Exhibits 55 and 56 of the exhibits?" Answer: "Yes." Notwithstanding the protestations of Tenenbaum's counsel, Tenenbaum's statement plainly admits liability on both downloading and distributing, does so in the very language of the statute (no "making available" ambiguity) and does so with respect to each and every sound recording at issue here. Thus, the Court reverses its earlier ruling; Rule 50 motion is granted with respect to infringement. The only issues for the jury are willfulness and damages. (Gertner, Nancy) </snip>
Note that the order specifically mentions "distributing"; not just "downloading". You can find the instructions for the jury at http://beckermanlegal.com/pdf/?file=/Lawyer_Copyright_Intern... . The nature of the infringement is mentioned in the instructions, as well as the financial impact on the plaintiff. How could sharing the file possibly be irrelevant to this?
You should, however, think about the underlying issues. Fact is, the plaintiff proved only $0.99 in actual damages per song from Tenenbaum's use and apparently (I write "apparently" because I have not seen the transcripts, just the report I linked to in the post) chose not to present any evidence of actual damages arising from distribution. It's in the court order, but the actual damages (which is the relevant issue for a 'Campbell' due process analysis) proven were solely from his personal use.
Your "hard to measure" argument is a good one, and the one that the RIAA will raise on appeal. Yet, damages in every case are "hard to measure" and that doesn't stop courts from routinely limiting those damages on constitutional grounds. Can Congress grant copyright holders a presumption in court -- without proving anything at all -- that, for each song made available online for any amount of time in any capacity, the defendant suffered up to $15,000 in actual damages? That's not so clear to me. And you haven't said why it's clear to you.
(I chose "$15,000" because it's the only way the statutory $150,000 could be constitutional under the Campbell case's "single-digit" punitive ratio.)
The plaintiff didn't "prove" "$0.99 in actual damages per song", or any other figure, for that matter. It was in fact the defence that brought in the expert witness who demonstrated downloading the song via AmazonMP3 (this turned out to be counter-productive, because it showed just how easy and cheap it was to behave legally).
Let me say that again: Plaintiffs did not prove any figure for "actual damages", whether $0.99 or otherwise. When asked this specific question by the defence, the plaintiff's experts and witnesses repeatedly stated that it is up to the jury to determine the statutory damages.
You cannot separate the awarded damages into the compensatory and punitive damages, because the jury hasn't given you the information to do so. Therefore your argument on the constitutionality of the compensatory/punitive damage ratio falls apart.
If you think I'm wrong, the right way to proceed at this point is to provide evidence from court materials, not other cases that you think are relevant or your guesses. All the information is freely available, so there's really no excuse for you to be more specific in relation to the facts of the case. In particular, if you can provide me with evidence from court documents that the jury used or was instructed to use a certain figure as the "compensatory damage" figure and told to derive a punitive one on top of that, then you will have proved that you are correct.
Otherwise, you're just another lawyer emitting hot air -- rather like Professor Nesson.
Your "cannot separate" argument completely misses the point: just because Congress lumps compensatory and punitive damages together in one statute doesn't mean constitutional protections don't apply. If that were the case, Congress would easily legislate its way around every Supreme Court ruling by lumping issues together.
Are you arguing there is no punitive element at all to the statutory damages? If so, then why are the damages raised for the exact same conduct if it is "willful?"
a) "and thus" is a deduction that you form yourself. At no point did the plaintiffs assert this to be their figure for the financial damages resulting from the defendant's actions. If you can find such a statement in the transcripts, please produce it.
b) Even assuming the plaintiffs had made a statement of fact regarding the financial damages wrought by the defendant's unauthorized reproduction of the copyrighted material, there is the significant unknown of the financial damages wrought by the defendant's unauthorized distribution of the material. You conveniently assume that by not providing evidence as to the size of this figure, the plaintiffs, defendants and jury have valued it at zero. This is of course completely wrong.
c) Since the financial damages wrought by the defendant's behaviour is the sum of the financial damages wrought by each individual infraction, and the damage of one of those infractions hasn't been determined by either the plaintiffs or the defendants, and moreover, the jury hasn't provided us with the formula they used to arrive to their value of the damages, we have no way of knowing the punitive/compensatory ratio, and your argument breaks down.
To look at it somewhat differently, supposing the plaintiffs had only filed suit for unauthorized distribution. What happens to your argument then? Answer: depending on how dim-witted you are, you'll either argue that the ratio is infinite or (more sensibly) you'll acknowledge that the ratio is indeterminate, whence one can't draw any conclusions as to its constitutionality.
> Are you arguing there is no punitive element at all to the statutory damages?
Of course not. It is right and proper that there is a punitive element to the statutory damages, simply to deter further unauthorized distribution. All I'm saying is that you're not in a position to say that this quantity is (total damages awarded) - $1.
It's irrelevant what they valued it at: no evidence means no damages. Period. Cases are dismissed every day for failing this fundamental requirement.
But, you say, there's a statute that presumes some level of damages. That's true. What's also true is that the statute authorizes punitive damages, lumped together with actual damages.
That's a problem under recent due process / punitive damages jurisprudence. Per the Campbell case, you cannot have punitive damages that grossly exceed the actual damages. Here, actual damages appear to be a single person's use of 30 songs, yet the jury awarded $675,000. There is, quite obviously, a large punitive element.
You are not in a position to argue these punitives were only a small fraction of the award, since, as noted above, actual damages proven were, at most, $30.
Your argument is that Congress can simply sweep these issues aside, lump them together in a statute, and be done with it.
That's not how constitutional law works.
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> That's a problem under recent due process / punitive damages jurisprudence. Per the Campbell case, you cannot have punitive damages that grossly exceed the actual damages.
...
> Your argument is that Congress can simply sweep these issues aside, lump them together in a statute, and be done with it.
> That's not how constitutional law works.
But if we adopt such an uncompromosing position, the maximum possible "constitutional" penalty by your own criteria is surely not more than $5 (for each song).
I submit that your constitutional arguments would lead inexorably to a situation in which it is, in effect, impossible uphold copyright ownership. The deterrent to unauthorized distribution is for all practical purposes removed. Moreover, litigation simply due to the costs, becomes economically irrational, removing the only vehicle of redress for any damages inflicted.
You are, in other words, proposing to use a relatively expansive constitutional interpretation of due process in order to usurp another explicit constituional right, namely that provided by Article I, Section 8, Clause 8: "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."
I think this stretches constitutional law too far (I would go so far as to say that it makes a mockery of constitutional law -- but, hey, I'm an adherent of originalism). And I would certainly hope and expect that were the supreme court to be presented with such an argument it would reject it as frivolous.
More importantly, your objection is ridiculous. Of course Congress has ample authority to regulate copyright. That doesn't mean unfettered authority to impose excessive punitive damages in civil cases in violation of the due process clause.
You act like a clash of constitutional clauses has never occurred in the history of the Republic. The constitution was designed with "checks and balances," a phrase you may have heard before. The bill of rights (including the due process clause) is a check on the powers of the government (including to regulate copyright).
But because some corporations have vastly more money and resources than the people they wish to bully (individuals, in this case), the outcomes are distorted, not to mention the lobbying power of a corporation vs. that of an individual.
Lobbying has its uses but for the most part it is simply a channel that ought not to even exist. I don't recall any modern democracy that includes a 'right to lobby' in its charter. Corporations already have an edge over us 'regular humans', they're immortal. Lobbying skews it to the point where there effectively is class justice, corporations can pay to get their laws passed and the general people get to vote who passes the laws.
It's like being able to inject something after the filtering function has already been applied.