It is fascinating to see the different reactions to the decision by District Court Judge Nancy Gertner to reduce the damages assessed against Joel Tenenbaum for sharing unauthorized digital files of music from $675,000 (or $22,500 per song) to $67,500 (or 2,250 per song). There is a relatively impartial description of the issue here on the Law Librarian blog, but other reactions have been all over the map. Some have decried the ruling as a “lose/lose situations” because Tenenbaum has said that he still cannot pay the judgment and the RIAA has announced that it will not accepted the revised judgment either. On the CNET blog the decision was called “A copyright ruling that no one can like.” The Electronic Frontier Foundation, however, does like the decision, congratulating Judge Gertner for helping to “restore sanity” to copyright damages.
These reactions beg for a close reading of the decision in order to judge for oneself if it is a disaster for copyright law or a victory over the Evil Empire, and I postponed my own comments until I had had the opportunity to make such a reading. My reaction was more muted, not to say boring, than those I had read. I have no desire to defend large-scale sharing of music or movie files without authorization, and I fear that more legitimate uses of the fair use defense will be undermined if it is raised too often in these cases. But I am glad to see the issue of whether statutory damages in a copyright case are susceptible to due process limitations teed up for appeal as cogently as Judge Gertner has done.
In her ruling, Judge Gertner explicitly states that she did not take the same legal route as was taken to reduce the damages in the other high profile file-sharing case, the equitable doctrine of remittur. Had she taken that course, there is little doubt that the RIAA would request a new trial and the same issues would be rehashed again. Instead, by ruling that the award was an unconstitutional violation of the Fifth Amendment right to due process, Gertner has forced the RIAA to appeal to a higher court, where the Constitutional issue will be squarely faced.
It is well established that punitive damages — those designed to punish and deter a defendant, and others, from repeating the actions for which they were found liable, are subject to checks imposed by the promise of due process. Basically, a defendant cannot be held liable for amounts of money that are wildly out-of-line with the harm the caused. Four million dollars for failing to disclose that a “new” car had actually been repainted is the classic example (from the BMW case the Judge discusses at length). The question has been whether this analysis can be applied even in situations, like copyright, where a range statutory damages are specified in the law and serve to cabin in the discretion of juries, who tend to get emotional when awarding punitive damages.
Judge Gertner has held that the due process concerns outlined in BMW and other cases do apply to copyright, even though there is a statutorily-mandated range for damages. She distinguishes the procedural issue — does the defendant have reasonable notice of how much his behavior may cost him — from the substantive issue of fairness. Even though the procedural due process issue is off the table in a statutory damages situation, the Judge holds that substantive due process concerns can still provide Constitutional grounds for reducing an award that is within the mandated range in specific circumstances.
One of the most interesting aspects of her decision is Judge Gertner’s exploration of the legislative history of the statutory damages provision. In both comments and actions taken by Senators Orrin Hatch and Patrick Leahy, who sponsored legislation in 2000 to increase the range of statutory damages for copyright infringement, the Judge finds evidence that they never imagined private individuals engaged in non-commercial conduct would be subject to the heaviest weight of the damages. At one point Judge Gertner writes:
Since the jury’s award in this case fell within the range set forth in section 504(c), there is identity between the damages authorized by Congress and the jury’s award. Nevertheless, it is far from clear that Congress contemplated that a damages award as extraordinarily high as the one assessed in this case would ever be imposed on an ordinary individual engaged in file-sharing without financial gain. Just because the jury’s award fell within the broad range of damages that Congress set for all copyright cases does not mean that members of Congress who approved the language of section 504(c) intended to sanction the eye-popping award imposed in this case.
There is even a remarkable passage in the ruling where the Judge recounts an incident that occurred during a hearing on the bill to raise the statutory damages ceiling in which Senator Leahy himself announced he was downloading a song as he spoke, and dismissed concerns that he could be subject to the very damages he was proposing.
Judge Gertner’s ruling is clear and well-reasoned. I confess that I find her argument compelling, since the extraordinary scope of statutory damages in copyright has a chilling effect on non-commercial and even educational uses. More clarity on when the highest level of damages should, or should not, be in play is badly needed. I cannot say for sure that the Judge got this right, but she has provided a solid record for review and an excellent basis upon which the higher courts can consider this important issue.