First Circuit Rejects Reduction of $675,000 Damages Award in Music File-Sharing Case

The First Circuit has kept alive a dispute, well-publicized in the Boston area and elsewhere, about what statutory damages can properly be assessed against a graduate student who illegally shared files of copyrighted music via file-sharing program Kazaa.  See here for an overview of the case, as well as links to various related content and documents.

Since the defendant, Joel Tenenbaum, eventually admitted his liability for copyright infringement, damages issues predominated in the district court and on appeal. Mr. Tenenbaum was sued for improperly sharing 31 copyrighted songs (although he shared thousands more), which placed the statutory damages between $22,500 and $4.5 million under 17 U.S.C. § 504(c). The jury had awarded the plaintiff record companies $675,000. District court judge Nancy Gertner later held that this amount was arbitrarily high and violated due process under the standard of BMW v. Gore, and ordered the award reduced to $67,500.

On September 16, the First Circuit reversed this holding in an opinion by Chief Justice (and former Foley Hoag partner) Sandra Lynch. The reversal was based on the doctrine of constitutional avoidance: it was not clear that the Gore standard even applied to statutory (as opposed to common law punitive) damage awards, the court held, and Judge Gertner should have avoided this issue by ordering a remittitur – giving the plaintiffs a chance to accept a lower award, failing which there would be a new trial.

Before making this ruling, the court rejected without difficulty a number of Tenenbaum’s challenges to liability. These included his arguments that the Copyright Act was not intended by Congress to apply to “consumer copying,” and that statutory damages were not appropriate where the plaintiff did not prove “actual harm.”

The opinion also included a recitation of the facts “in the light most favorable to the jury’s verdict,” and this was a poor light indeed from Tenenbaum’s perspective. He was faulted for being an aggressive and large-scale infringer, for ignoring repeated warnings that he was breaking the law and could be sued, for initially lying about his file-sharing activities, and for blaming other members of his household (such as his sisters) for using his computer – only to admit later, after they were forced to testify, that they had nothing to do with it.

This saga will continue, and a new district court judge will have to become familiar with it since Judge Gertner recently retired from the federal bench.

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