June 18, 2009 | By Fred von Lohmann

Record Labels' $1.9 Million Win in Thomas Retrial Constitutional?

The jury in the retrial of Ms. Jammie Thomas-Rasset deliberated only a few hours today before concluding that she had willfully infringed the copyrights of 24 songs and awarding $1.92 million in statutory damages ($80,000 per recording) to the record label plaintiffs. The verdict represents a huge increase over the $220,000 award in the original trial, which was overturned by the judge based on a faulty jury instruction pushed by the record labels. Ms. Thomas-Rasset has said she doesn't have the money to pay this award (those wondering whether bankruptcy might protect her should consult EFF's 2007 memo covering the intersection of copyright verdicts and bankruptcy law, as well as In re Barboza, 545 F.3d 702 (9th Cir. 2008)).

Given the size of the statutory damages award, Ms. Thomas-Rasset's legal team will likely be seriously considering a constitutional challenge to the verdict. A large and disproportionate damage award like this raises at least two potential constitutional concerns.

First, the Supreme Court has made it clear that “grossly excessive” punitive damage awards (e.g., $2 million award against BMW for selling a repainted BMW as "new") violate the Due Process clause of the U.S. Constitution. In evaluating whether an award "grossly excessive," courts evaluate three criteria: 1) the degree of reprehensibility of the defendant’s actions, 2) the disparity between the harm to the plaintiff and the punitive award, and 3) the similarity or difference between the punitive award and civil penalties authorized or imposed in comparable situations. Does a $1.92 million award for sharing 24 songs cross the line into "grossly excessive"? And do these Due Process limitations apply differently to statutory damages than to punitive damages? These are questions that the court will have to decide if the issue is raised by Ms. Thomas-Rasset's attorneys.

Second, recent Supreme Court rulings suggest that a jury may not award statutory damages for the express or implicit purpose of deterring other infringers who are not parties in the case before the court. In other words, the award should be aimed at deterring this defendant, not giving the plaintiff a windfall in order to send a message to others who might be tempted to infringe. It's hard to know without having been in the courtroom, but if the record industry lawyers urged the jury to "send a message" to the millions of other American file-sharers out there, they may have crossed the constitutional line.

For more on the details of these constitutional doctrines, I recommend a recent article by Prof. Pamela Samuelson & Tara Wheatland, Statutory Damages in Copyright Law: A Remedy in Need of Reform (full disclosure: Prof. Samuelson is a member of EFF's board of directors). For those who want a shorter summary of the debate in podcast form, I recommend Prof. Douglas Lichtman's IP Colloquim episode entitled Statutory Damages and the Tenenbaum Litigation. While I disagree with some of Prof. Lichtman's conclusions, his guests do a wonderful job summarizing the relevant cases and concepts.

I assume these arguments will first be submitted to the trial judge in post-trial motions. After all, this judge has already indicated that he found the previous $220,000 award to be "unprecedented and oppressive."

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