Sunday, January 24, 2010

Judge slashes "monstrous" P2P award by 97% to $54,000

Judge Michael Davis is the senior federal jurist in Minnesota. He presides over the gleaming 15th floor courtroom where, earlier this year, P2P user Jammie Thomas-Rasset was slapped with $1.92 million in damages for sharing 24 songs. Davis made no comment on the amount of the award and showed no emotion as it was read out.

But now we know how he rely feels about the jury's work in that case: it led to a "monstrous and shocking" damage award that veered into "the realm of gross injustice."

Davis used his power of remittitur today to slash the damage award by 97.2 percent, from $1.92 million down to $54,000—and he suggested that even this lower amount was too high.

Thomas-Rasset, the first defendant to take an RIAA-backed P2P lawsuit all the way to trial, turned out not to be an especially sympathetic defendant.

In recounting the case today, Davis went over the changing history of Thomas-Rasset's testimony. "Thomas‐Rasset previously provided sworn interrogatory answers that there had never been any type of online media distribution on her computer in the three years before the Complaint was filed and that she did not contend that anyone else was responsible for the infringement," he wrote.

"Despite never implicating others during her depositions or testimony in the previous trial, in this second trial, she suddenly leveled new accusations against her children and ex‐boyfriend, asserting that they might have committed the infringement. Thomas‐Rasset’s refusal to accept responsibility for her actions and her decision to concoct a new theory of the infringement casting possible blame on her children and ex‐boyfriend for her actions demonstrate a refusal to accept responsibility and raise the need for strong deterrence."

Later, he refers to the moment when "Thomas‐Rasset lied on the witness stand by denying responsibility for her infringing acts and, instead, blamed others, including her children, for her actions."

Davis also notes that statutory damages, which range from $750 up to $150,000 per infringement in copyright cases, have both a deterrent and a compensatory purpose. It's no good to argue that a damage award is too high simply because it's higher than actual damages suffered; that's part of the point.

But there are limits, and $80,000 per song exceeded them. "Although Plaintiffs were not required to prove their actual damages, statutory damages must still bear some relation to actual damages," Davis wrote.

In his capacity as a judge, Davis is allowed to alter damage awards in some cases, though not verdicts. (Update: a reader notes that, in some circumstances, a judge can in fact issue a new judgment at odds with the verdict.) He chose to do so in this case by reducing the award to three times the minimum level of $750, setting it at $2,250 per song. This amount is still "significant and harsh" and is a "higher award than the Court might have chosen to impose in its sole discretion, but the decision was not entrusted to this Court."

Instead, Davis simply reduced the jury award to the maximum reasonable level before it veered into "monstrous and shocking" territory.

He noted the difference between what Thomas-Rasset did and the commercial infringement the statutory damage laws were written to stop. "In the case of individuals who infringe by using peer‐to‐peer networks, the potential gain from infringement is access to free music, not the possibility of hundreds of thousands—or even millions—of dollars in profits," he wrote. "The need for deterrence cannot justify a $2 million verdict for stealing and illegally distributing 24 songs for the sole purpose of obtaining free music."

Because of the Seventh Amendment's guarantee to a trial by jury, Davis' decision to change the damage award means the RIAA has to make a choice: it can accept the new $54,000 award or it can exercise its right to go back to a jury for a third full trial.

We asked the RIAA for comment, but the music trade group and its members will only say that they are weighing their options. Davis has given them one week to decide.


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