Are High Damages Unconstitutional In File-Sharing Cases?

The record labels convinced a jury to award damages of $1.92 million in a file-sharing case against Minnesota resident Jammie Thomas-Rasset and $675,000 in a similar lawsuit against Boston grad student Joel Tenenbaum.

Both Thomas-Rasset and Tenenbaum are now arguing that such awards are unconstitutional. Although the federal copyright statute provides for minimum damages of $750 per track and maximums of $150,000 per track, Tenenbaum and Thomas-Rasset say that law should be invalidated. They argue that damage awards should be proportionate to the economic injury they allegedly caused the record labels -- which they peg at somewhere under $1 per track.

U.S. District Court Judge Michael Davis, who presides over Thomas-Rasset's case, ordered damages reduced to $54,000, saying that a $2 million verdict was "monstrous and shocking." But Davis didn't say that the award was unconstitutional. (That case, however, is now headed for a new trial on the issue of damages because the Recording Industry Association of America rejected the decision to trim the award; the RIAA only took that step after Thomas-Rasset rejected an offer to settle for $25,000.)

The federal judge presiding over the Tenenbaum matter, Nancy Gertner, hasn't yet reached a decision.

Now, a different federal judge, James Ware in the northern district of California, has ruled in a separate case that high damage awards aren't unconstitutional. In that case -- a copyright and trademark infringement lawsuit by Louis Vuitton against the Web host Akamoc -- Ware upheld damages of around $11 million. "There is no requirement that the jury base the award on any evidence of actual damages suffered by plaintiff," Ware wrote.

But, while Ware's decision adds to the roster of cases that uphold large damage awards, the ruling doesn't necessarily bode poorly for Tenenbaum and Thomas-Rasset. After all, legal cases turn on their individual facts. While Akamoc allegedly infringed on copyright and trademark as a result of a business decision, Thomas-Rasset and Tenenbaum were noncommercial Web users at the time they allegedly shared music. Six and seven-figure damage awards against ordinary Web users clearly raise different concerns than imposing large awards on commercial companies.

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