September 21, 2011
Tenenbaum File-Sharing Case Reversed on Procedure, Otherwise the Verdict Stands
One of the cases I’ve been covering from time to time is the copyright infringement case of Joel Tenenbaum. When we last left Mr. Tenenbaum and his lawyer, Harvard professor Charles Nesson, a jury had found liability against Mr. Tenenbaum and awarded damages of $675,000 or $22,500 for each of the 30 copyrights at issue. These were well within the statutory guidelines. Judge Nancy Gertner reduced damages from that amount to $67,500 on the basis that the larger award violates Tenebaum’s due process rights under the Constitution. Both sides appealed.
Tenenbaum argued that the Copyright Act was unconstitutional under the Supreme Court precedent of Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340 (1998). Congress had originally provided for judges to determine the damages award and Feltner said the Seventh Amendment required a jury to make the determination. The Court noted that the argument was not presented to the District Court and was waived. Nonetheless, the Court considered its merits and rejected it, saying that the Act is not invalid. The correct procedure under subsequent precedent would be for a jury to determine damages. That happened in this case.
Tenenbaum’s second argument is that he is not liable because Congress never intended the Copyright Act to impose liability or statutory damages on a “consumer-copier.” The Court notes that argument was not presented to the District Court as well, and waived. Again, the Court considered the merits and rejected it. Tenenbaum is hardly a consumer-copier as “he widely and repeatedly copied works belonging to Sony and then illegally distributed those works to others, who also did not pay Sony.”
Tenenbaum’s third argument is that Sony (the plaintiff) did not really suffer any harm. The Court responded that the Act gave Sony the option of pursuing actual damages or statutory damages. As such, harm is not an issue when the election is statutory damages. The Court does state in a footnote (12) that Tenenbaum did not claim his activity was fair use which foreclosed that analysis at the appellate level.
There was a fourth, related challenge to the jury instructions, all but one, which were not preserved through objection at the time. The challenge the Court considered was that rather than giving the jury the range of statutory damages, the trial court should have instructed that damages be “just” and then adjusted the figure to fall within the statutory guidelines. The Court said that the jury instruction was an accurate statement of the law and there was no error. The Court did consider the other unpreserved objections and rejected them without much discussion.
The Court reversed the case solely on the issue that the District Court did not consider common law remittitur before it reached the Constitutional issue. The trial court assumed that the Constitutional question was inevitable. The Court said that was not the case as each side had options they could pursue whether in accepting the result or strategically in a new trial. In any event, the District Court needed to follow the doctrine of constitutional avoidance. Back to you, Judge Gertner.
There is a lot of commentary on this case. Tenenbaum is not exactly the poster child for a change in the Copyright laws on damages for file sharing. The punishment may not exactly fit the liability, but the facts show that Tenenbaum was warned about his file sharing by the labels, who detected it, and by his parents who were concerned about his activities. He ignored warnings, continued his conduct, then lied about it during depositions, and then admitted he lied. I can agree that the statutory damages are excessive in relation to the activity, but I can also see the labels arguing to Congress that Tenenbaum was exactly the type of person the statute would cover. I can easily see Congress agreeing.
One point worth making is the Court's statement early on in the opinion that the subject of the case is such that Congress may want to examine the issue ("We comment that this case raises concerns about application of the Copyright Act which Congress may wish to examine.") That sentiment did not stop the Court from wholesale rejection of Tenenbaum's arguments. That sentence reflected the only sympathy Tenenbaum received from the Court.
I predict that Congress is not going to change the damages portion of the statute based on this case, or on the basis of the Thomas-Rasset case where a jury found willful infringement for 24 songs and awarded $1.92 million. These cases are both working their way through the courts. It’s likely that legislation will only come when the matters are concluded and Congress disagrees with the result. Still, few, if any, members of Congress have expressed any kind of concern over these awards. I don’t see any change, based on past activity to strengthen copyright enforcement and the continued lobbying effort (read big bucks) mounted by the trade associations.
The First Circuit’s opinion is here. [MG]