Appeals Court Sides With RIAA Over File-Sharing Verdict
A federal appellate court has reversed a judge's groundbreaking decision setting aside a six-figure award for file-sharing.
The 1st Circuit Court of Appeals ruled late last week that U.S. District Court Judge Nancy Gertner prematurely decided the $675,000 verdict against grad student Joel Tenenbaum was unconstitutionally high. The court ruled that Gertner should have instead considered whether to slash the verdict under the concept of "remittitur," which allows judges to propose an award lower than that returned by the jury.
"It was not necessary for the district court to reach the constitutional question of whether the jury's award of $22,500 per infringement was so excessive as to violate due process," the 1st Circuit wrote. "If the district court had ordered remittitur, there would have been a number of possible outcomes that would have eliminated the constitutional due process issue altogether, or at the very least materially reshaped that issue."
The appeals court also rejected Tenenbaum's argument that he should not have been found liable for violating copyright based on allegations of file-sharing.
The ruling means that the case will return to Gertner for a decision about whether to allow the jury's verdict to stand or reduce it under the remittitur concept. If Gertner does slice the damage award, the record labels can reject the reduced award and demand a new trial on damages.
Two years ago, a jury found Tenenbaum liable for copyright infringement for sharing 30 tracks on a peer-to-peer network and ordered him to pay $675,000. Gertner last July ruled that the award was unconstitutional because it was "grossly excessive" and reduced it to $67,500. The copyright statute provides for damages ranging from $750 to $150,000 per work infringed.
At the time, she said that slashing the verdict under the remittitur concept would be futile, given that the record labels had indicated they would reject a reduction. The labels urged Gertner to order Tenenbaum to pay the six-figure award, while Tenenbaum argued that damages of more than $30 -- the cost of 30 tracks on iTunes -- were too high.
It's not yet clear whether Gertner will now reduce the award under her remittitur power or, if she does, whether the new figure will meet with the RIAA's approval.
Either way, should the case end up at the 1st Circuit again, Tenenbaum could face an uphill battle. Although the judges on the appellate panel reinstated the verdict on procedural grounds, they also expressed criticism of Tenenbaum.
The appellate judges wrote that Tenenbaum was warned repeatedly that file-sharing could infringe on copyright. In addition, the court wrote, Tenenbaum appears to have lied during the course of the case. He "attempted to shift responsibility for his conduct to other individuals by claiming they could have used his computer in order to illegally download and distribute the copyrighted works," the appellate judges wrote. "These individuals included a foster child living in his family's home, burglars who had broken into the home, his family's house guest, and his own sisters."
The judges also specifically rebuffed his argument that he shouldn't have to pay a high damage award because he was a noncommercial file-sharer.
The law "does not make the distinctions he urges between 'consumer' and 'non-consumer' infringement," the judges wrote. The appeals court added that Tenenbaum "widely and repeatedly copied works belonging to Sony and then illegally distributed those works to others, who also did not pay Sony."
Jennifer Pariser, senior vice president for litigation and legal affairs at the Recoding Industry Association of America, praised the appellate opinion. "We are pleased the court agreed with us that the finding of liability was correct and that the District Court erred in finding the verdict unconstitutional," she stated.
Tenenbaum's representatives didn't respond to a request for comment.
Tenenbaum was one of two defendants sued for file-sharing by the RIAA who took his case to a jury. Many of the other 18,000 people accused of file-sharing by the RIAA paid four-figure settlements. The other person to contest the charges at trial was Jammie Thomas-Rasset. She was found liable for copyright infringement and hit with a $1.5 million jury verdict for sharing 24 songs on Kazaa. U.S. District Court Judge Michael Davis later reduced that award to $54,000. The RIAA is appealing that move.
The RIAA stopped filing new lawsuits against non-commercial users in December 2008.