$675,000 Damage Award Stands in Tenenbaum File-Sharing Case

The most recent order in the Joel Tenenbaum file-sharing case came down yesterday.  It’s a clear win for the plaintiff record labels.  Procedurally, the case was returned to the District Court after the First Circuit overturned Judge Nancy Gertner’s reduction of damages on due process grounds (660 F.3d 487).  The First Circuit reasoned that the District Court should consider common law remittitur before considering the due process arguments.  Judge Rya W. Zobel, hearing the case on remand, said that remittitur is not appropriate and that the due process argument on excessive damages does not apply to a case where the damages are defined statutorily.

The Judge would not entertain a remittitur motion because of the way Tenenbaum handled his file-sharing.  He was warned about his activities by numerous parties, including his father.  He subsequently lied about his file-sharing and tried to blame others for it, finally admitting that he lied.  The order recounts what constitutes Tenenbaum’s wilfullness and concludes:

In short, there was ample evidence of willfulness and the need for deterrence based on Tenenbaum’s blatant contempt of warnings and apparent disregard for the consequences of his actions.  In spite of the overwhelming evidence from which the jury could conclude that Tenenbaum’s activities were willful, the award of $22,500 per infringement not only was at the low end of the range – only 15% of the statutory maximum – for willful infringement, but was below the statutory maximum for non-willful infringement.  Considering all of the aforementioned evidence, the jury’s damage award was not so excessive as to merit remittitur.

Judge Zobel noted that the Supreme Court case of BMW v. Gore, 517 U.S. 559 (1996) did not apply in this case.  Gore reduced an excessive award of punitive damages in light of minor damages to a purchased vehicle.  The District Court used St. Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S. 63 (1919) as the standard, taking the hint from the Second Circuit opinion to that effect.  The Court basically said that Congress has the power to set the range of damages under the Constitution and that Copyright Act provides the notice as to the types of damages available to plaintiffs.  The Williams case affords wide discretion to the legislature to set damages which the Court should not disturb.

I think Judge Zobel’s order is written in a way that it will an uphill climb for Tenenbaum and his lawyers on appeal.  The opinion makes it easy for the First Circuit to simply agree with the reasoning and affirm the result.  The Supreme Court declined to review the original appeal which led ultimately to this order.  A copy of Judge Zobel's order is available here via CNET News.  [MG]