Commentary

Appeals Court Upholds $675K File-Sharing Fine

An order requiring former grad student Joel Tenenbaum to pay a six-figure fine for sharing 30 songs on Kazaa might strike many observers as absurd -- but not federal appellate judges.

This week, a three-judge panel of the First Circuit Court of Appeals upheld the $675,000 verdict, which the Recording Industry Association of America obtained after a copyright infringement trial in 2009. “The jury's award of $675,000 did not violate Tenenbaum's right to due process,” the judges wrote in a 10-page decision. 

The copyright law provides for damage awards ranging from $750 to $150,000 per work infringed. While the award against Tenenbaum was within that range, he argued that the amount nonetheless was unconstitutional because it was astronomically higher than the cost of the music he shared. That figure, he argued, came to no more than $450. (Even that amount seems high, but it's based on the assumption that obtaining each song would have required him to purchase an album for $15.)

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But the appellate judges flatly rejected Tenenbaum's argument. They said that accepting Tenenbaum's theories would require them to “disregard the deterrent effect of statutory damages,” as well as the “inherent difficulty in proving damages in a copyright suit, and [the record labels'] evidence of the harm that it suffered from conduct such as Tenenbaum's.”

The judges also took the opportunity to bash Tenenbaum for his “egregious” copyright infringement. “Tenenbaum carried on his activities for years in spite of numerous warnings, he made thousands of songs available illegally, and he denied responsibility during discovery,” they wrote.

There's plenty of room for disagreement with the 1st Circuit's conclusion. In fact, the trial judge, Nancy Gertner, ruled in 2010 that the $675,000 award was “grossly excessive” and reduced it to $67,500. That ruling was vacated for procedural reasons. Gertner subsequently retired, following which the case was sent to a different trial judge, who reinstated the $675,000 fine.

For now, Tenenbaum's lawyer, Kiwi Camara, says he intends to ask the Supreme Court to take the case. Whether that court will do so remains to be seen; at this point, the prospect seems like a longshot, if for no other reason than that the Supreme Court rejects far more cases than it accepts.

Even if the record labels ultimately win this particular battle, their attempt to end file-sharing by suing individuals like Tenenbaum was a dismal failure. Tenenbaum was among more than 15,000 alleged file-sharers sued by the Recording Industry Association of America between 2003 and 2008. Many defendants resolved the cases by writing four-figure checks, but Tenenbaum took his case to a jury. (The only other defendant to do so, Jammie Thomas-Rasset, also lost after trial.)

In the course of five years, the RIAA lost far more money bringing lawsuits against individuals than it recouped. It also generated more than its share of bad publicity. Yet for all the RIAA's expense and effort, there's never been any evidence that its campaign made the slightest dent in file-sharing.

2 comments about "Appeals Court Upholds $675K File-Sharing Fine".
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  1. steve slattery from freelance, June 26, 2013 at 7:04 p.m.

    Spending millions to bankrupt each young file sharer at a time is an amazing strategy! Alternate article title: "record industry successfully kills one fish in effort to push back ocean with broom."

  2. Pete Austin from Fresh Relevance, June 27, 2013 at 5:26 a.m.

    @steve *was* an amazing strategy. The lawsuits caused a lot of resentment and the RIAA abandoned them about five years ago. http://www.wired.com/business/2008/12/riaa-says-it-pl/ A similar strategy was subsequently adopted up by porn trolls such as Prenda http://www.popehat.com/tag/prenda-law/

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