First Circuit Court of Appeals Upholds 675,000 Judgment in Lawsuit for Illegal Downloading

The First Circuit Court of Appeals has upheld the damages against Joel Tennebaum, a former Boston University Student, in the amount of $675,000. This is stark reminder to all who think that their illegal downloading will go unnoticed by record companies and other copyright holders. While I do agree that the ruling is reasonable and well-grounded in copyright law I do not agree with the First Circuit when the judges ruled that the penalty is not; “so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.”

Joel Tennebaum was like many college students in the early 2000s, he downloaded music and shared it via peer to peer networks. Many of our friends did the same but Joel was unfortunate enough to get a letter that informed him he was going to be sued. According to the facts of the case he knew this conduct was wrong, ignored warnings from his father, his college, and even a letter from the recording companies. Joel nonetheless continued the activity. When faced with a lawsuit from Sony Joel lied about his activities by blaming burglars and a foster child living at his parent’s house for the activity. In the previous court ruling the jury found Joel’s activity willful. In determining the original damages the court said the jury must consider to following factors;

“the nature of the infringement; the defendant’s purpose and intent; the profit that the defendant reaped…the expense the defendant saved, the revenue lost by the plaintiff…the value of the copyright; the duration of the infringement; the defendant’s continuation of infringement after notice of the copyright claims; and the need to deter…other potential infringers.” Sony BMG Music Entertainment v. Joel Tennebaum No. 12-2146 (2013).

The jury awarded $675,000 which was later reduced to $67,000, Sony appealed that reduction and the court of appeals vacated the judgment and remanded to the trial court with instructions to rely on St. Louis, I.M. & S. Ry. Co. v Williams, 251 U.S. 63 (1919) in determining an award of statutory damages. Based on Williams, the original award of damages was reinstated.

Joel Tennebaum asserted the damages were unconstitutional and violated his due process rights, which brings us to the current case. The court of appeals was tasked with answering two questions. First, “[w]hat is the correct standard for evaluating the constitutionality of an award of statutory damages under the Copyright Act? Second, did the award of $675,000 violate Tennebaum’s right to due process?”  Sony BMG Music Entertainment v. Joel Tennebaum No. 12-2146 (2013).

In answering the first question the court decided that Williams is the appropriate standard for determining statutory damages under the Copyright Act. Williams, a decision nearly as old as my grandpa that remembers dirt roads in Minneapolis and when cars became “popular”, held that statutory damages only violate due process “where the penalty prescribed is so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.” Williams at 66-77.

The second question was more fact specific and examined the purpose of damages under the Copyright Act. Apparently the advent of new technology enabled people to easily steal copyrighted works and congress thought it could lead to the loss of the value of copyrights, reduced income and profits, and job losses. The court continued and asserted that Tennebaum’s actions were egregious. His conduct carried on despite “numerous warnings” and he denied responsibility for making thousands of songs available via peer to peer networks. Therefore the court ruled that damages $675,000 did not violate his constitutional rights. Tennebaum argued that Sony suffered no more than $450 in damages. Williams, however, does not rely on calculating actual damages suffered by a party in the context of statutory damages because the damages are meant to be a punishment for the violation of public law and therefore the amount may be adjusted to address the public wrong rather than redress the private injury suffered by the plaintiff.

Discussion

Does this same fair to anyone else? Could this be reasonable application of damages when the Williams standard holds that due process is violated where the penalty is so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable?

True, Joel did infringe on the copyright and Joel did distribute the songs via peer to peer networks, ignored warnings, and knew it was wrong. He did this in a time when copyright law was unsure how to treat these peer to peer networks in terms of contributory infringement and other areas of the Copyright Act.  Do these damages deter others from infringing? Has the industry lost millions of dollars because of it? Did hundreds of people lose their jobs in the music industry due to peer to peer sharing? I haven’t seen news of that and I do not think that is the case.

Protecting Intellectual Property is important, what Joel did is wrong. However, I was taught two wrongs don’t make a right and by the first circuit holding that these damages were not severe, oppressive, and disproportionate to the offense is pretty unreasonable in my eyes. Although I do have less sympathy for Tennebaum after I learned he tried to blame a foster kid living at his parent’s house.

Let’s wait to see what happens with this becase Thomas-Rasset, 692 F.3d 899, is awaiting to be heard before the Supreme Court, well that is if the court says it will hear it, of course.

Full Opinion

Raptorchef