Source: https://www.scribd.com/doc/25592555/Thomas-Rasset-Remittatur-Order
Timestamp: 2018-02-22 02:07:41
Document Index: 249047153

Matched Legal Cases: ['§ 504', '§ 504', '§ 504', '§ 1203', '§ 45', '§ 45', '§ 502', '§ 503']

Thomas-Rasset Remittatur Order | Copyright Infringement | Copyright Law Of The United States
Thomas-Rasset Remittatur Order
jury’s application of the statutory damages provision of the Copyright Act is excessive and shocking so the Court should grant a new trial. She also requests a new trial on the ground that there is insufficient evidence to sustain the verdict because the evidence collected by MediaSentry should not have been admitted at trial. Finally, she asserts that the Court erred in permitting Plaintiffs to proceed without producing certified copies of the sound recordings deposited with the Copyright Office. Plaintiffs request that the Court amend the June 19, 2009 Judgment to include a permanent injunction. IV. DISCUSSION A. Remittitur 1. Standard for Remittitur
“[A] district court should order remittitur only when the verdict is so grossly excessive as to shock the conscience of the court. A verdict is not considered excessive unless there is plain injustice or a monstrous or shocking result.” Eich v. Bd. of Regents for Cent. Mo. State Univ., 350 F.3d 752, 763 (8th Cir. 2003) (citations omitted). When deciding a motion for a new trial or remittitur, the Court can rely on its own reading of all of the trial evidence 6
presented. Schaefer v. Spider Staging Corp., 275 F.3d 735, 738 (8th Cir. 2002). The scope of review of a district court’s damage award is extremely narrow and the district court’s award may not be reversed except for a manifest abuse of discretion. In determining whether the trial court abused its discretion in ordering a remittitur, [the appellate court will] analyze whether the remittitur was ordered for an amount less than the jury could reasonably find. Taylor v. Otter Tail Corp., 484 F.3d 1016, 1019 (8th Cir. 2007) (citations omitted). 2. Whether the Court Has the Power to Remit Statutory Damages Awards
Plaintiffs argue that this Court does not have the power to remit an award of statutory damages. They note that the Supreme Court has held that “the Seventh Amendment provides a right to a jury trial on all issues pertinent to an award of statutory damages under § 504(c) of the Copyright Act, including the amount itself.” Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340, 355 (1998). Plaintiffs conclude that the jury, alone, has the authority to determine the amount of statutory damages within the statutory range. The Court is hesitant to interfere with the jury’s role in determining the proper amount of damages. And the Court is cognizant that Congress chose the range of statutory damages available for copyright infringement, within which the jury’s decisionmaking was bounded. However, despite the Court’s 7
reluctance to interfere, there is no authority for Plaintiffs’ assertion that the Court does not have the power to remit an award of statutory damages. Moreover, the fact that Plaintiffs have a Seventh Amendment right to a jury trial regarding damages under the Copyright Act does not prevent the Court from ordering remittitur. Rather, the Seventh Amendment merely requires that, if this Court does order remittitur, it also offer Plaintiffs the option of choosing to reject the remittitur and exercise their right to a new jury trial solely on the issue of damages. Corpus v. Bennett, 430 F.3d 912, 917 (8th Cir. 2005); Thorne v. Welk Inv., Inc., 197 F.3d 1205, 1212 (8th Cir. 1999). 3. Whether the Award Is Grossly Excessive a. Statutory Damages Framework
The Copyright Act provides that “an infringer of copyright is liable for either . . . the copyright owner’s actual damages and any additional profits of the infringer . . . or . . . statutory damages.” 17 U.S.C. § 504(a). The statute further provides: (1) Except as provided by clause (2) of this subsection, the copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually . . . 8
damages under § 504(c).” Feltner, 523 U.S. at 355. A plaintiff can recover statutory damages even though it did not submit evidence regarding actual damages, such as lost profits: [S]tatutory damages for copyright infringement are not only “restitution of profit and reparation for injury,” but also are in the nature of a penalty, “designed to discourage wrongful conduct.” “The discretion of the court is wide enough to permit a resort to statutory damages for such purposes. Even for uninjurious and unprofitable invasions of copyright the court may, if it deems it just, impose a liability within statutory limits to sanction and vindicate the statutory policy.” Cass County Music Co., 88 F.3d at 643 (quoting F.W. Woolworth Co. v. Contemporary Arts, Inc., 344 U.S. 228, 233 (1952)) (footnote and emphasis omitted). b. Relationship Between Statutory Damages and Actual Damages
Thomas‐Rasset argues that the ratio of the statutory damages award to actual damages in this case, when measured in songs, is 1:62,015. She bases this calculations on a cost of $1.29 per song online. She further argues that, based on a cost of $15 per album, the ratio is still 1:5,333. (Alasdair McMullan, the executive vice president of legal affairs for EMI Music North America, testified that Richard Marx’s “Now and Forever” probably retailed for $1.29 on iTunes 10
and the album probably cost less than $20.00 in a retail store.) Thomas‐Rasset concludes that these ratios are monstrous and shocking. Plaintiffs accurately point out that, because they chose to seek statutory damages rather than actual damages, they were not required to present proof of the actual damages caused by Thomas‐Rasset’s infringement. See, e.g., Cass County Music Co., 88 F.3d at 643 (“[S]tatutory damages are by definition a substitute for unproven or unprovable actual damages.”); Lowry’s Reports, Inc. v. Legg Mason, Inc., 302 F. Supp. 2d 455, 459 (D. Md. 2004) (“Because statutory damages are an alternative to actual damages, there has never been a requirement that statutory damages must be strictly related to actual injury.”) (citations omitted). However, because statutory damages have, in part, a compensatory purpose, “assessed statutory damages should bear some relation to the actual damages suffered.” Bly v. Banbury Books, Inc., 638 F. Supp. 983, 987 (E.D. Pa. 1986). c. Factual Support for Actual Damages Inflicted
Thomas‐Rasset asserts that, at most, she was a single mother who merely downloaded and shared music when she had already lawfully bought CDs of much of that music and had no commercial motive to infringe. Defendant notes 11
exponential sales for that song. He testified that, generally, online piracy has caused the recording industry to lose billions of dollars in the last several years and has caused the layoffs of thousands of employees. Leak further testified that the cost of obtaining a license to engage in Thomas‐Rasset’s conduct would be prohibitive. Specifically, he testified that, in order to obtain an unlimited license to distribute music online for free, a person would have to buy the entire recording company and shut it down. As Defendant notes, Leak could not quantify the harm caused to Sony by Thomas‐ Rasset, because he could not determine how many times the recordings were downloaded from her share file by other Kazaa users. Thomas‐Rasset argues that it would be unconstitutional to punish her for the harms caused by illegal music downloading in general. d. Evidence of Willfulness and the Need for Deterrence
As the Court instructed the jury, factors other than the damages caused and gains obtained by the defendant’s infringement are relevant to the decision of the proper amount of statutory damages. Facts that go to the deterrence aspect of statutory damages, such as a defendant’s willfulness or innocence, and incorrigibility, are also relevant. Here, the jury found that Thomas‐Rasset acted 13
Need for Remittitur
Although Plaintiffs highlight valid reasons that Thomas‐Rasset must pay a statutory damages award, these facts simply cannot justify a $2 million verdict in this case. Thomas‐Rasset was not a business acting for profit. Instead, she was an individual consumer illegally seeking free access to music for her own use. Congress set a high maximum for statutory damages in order to ensure that damages awards could be large enough to outweigh the potential gain from infringing. As the Court noted in its September 2008 Order, in the case of commercial actors, the potential gain in revenues is enormous and enticing to potential infringers. 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. 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. Similarly, the damage to Plaintiffs cannot support this verdict. While Plaintiffs were not required to prove their actual damage, the possible actual damage weighs in the Court’s analysis. One purpose of statutory damages under the Copyright Act is to act as a substitute for actual damages when they are 15
impediments to identifying and pursuing infringers. However, despite the combination of these justifications and the Court’s deference to the jury’s verdict, $2 million for stealing 24 songs for personal use is simply shocking. No matter how unremorseful Thomas‐Rasset may be, assessing a $2 million award against an individual consumer for use of Kazaa is unjust. Even Plaintiffs admit that Thomas‐Rasset is unlikely to ever be able to pay such an award. Having determined that the current verdict is so shocking that it must be remitted, the Court next faces the task of assessing the proper amount of remittitur. 4. Proper Amount of Remittitur
Thomas‐Rasset requests that the Court remit the statutory damages award to $18,000, which consists of the statutory minimum, $750, per song. Plaintiffs assert that there is no basis for remittitur. However, they represent that they will consider a remittitur, so long as it takes into account Defendant’s willful conduct, the substantial damage cause by her actions, and the significant number of copyright sound recordings upon which she infringed. a. The Court’s task is not to choose the statutory damages amount it thinks Standard for Determining Proper Amount of Remittitur
Evidence of Other Jury Verdicts
Plaintiffs argue that the Court should look to other jury verdicts in similar cases to determine the amount of the remittitur. They point out that, in the first trial in this case, the jury awarded $9,250 for each of the 24 infringed works. In the recent similar trial in the District of Massachusetts, the jury awarded $22,500 for each of 30 works infringed. (Sony BMG Music Entm’t v. Tenenbaum, Case No. 07‐cv‐11446‐NG, July 31, 2009, Jury Verdict.) In evaluating the propriety of remittitur, the Eighth Circuit has held that comparing jury verdicts for similar injuries in different cases is “not greatly helpful because each case must be evaluated as an individual one, within the framework of its distinctive facts.” Vanskike v. Union Pac. R.R. Co., 725 F.2d 1146, 1150 (8th Cir. 1984) (citation omitted). Additionally, “[e]ach case is evaluated by a different, randomly selected group of individual jurors.” Id. In this case, the previous jury award was vacated by this Court and, in the Tenenbaum case, the court has not yet decided the pending motion to reduce the damages award. Therefore, although the Court is aware of these other two awards, it does not consider them to carry weight in its remittitur analysis. c. Request for Reduction to the Statutory Minimum 19
unlike actual damages, statutory damages can include a deterrence component, which can justify a higher award. Based on all of these factors, the jury could reasonably award damages above the statutory minimum of $750 per song in order to achieve deterrence and compensate for large, uncertain damages. The Court must remit the award to the highest part of the range that the jury could reasonably have chosen. Therefore, the Court concludes that remittitur to the statutory minimum is unsupportable. d. Remittitur to Three Times the Statutory Minimum
The Court concludes that remittitur to $2,250 – 3 times the statutory minimum – per sound recording infringed is appropriate. There is a broad legal practice of establishing a treble award as the upper limit permitted to address willful or particularly damaging behavior. Federal statutes allow for an increase in statutory damages, up to triple statutory damages, when the statutory violation is willful or demonstrates a particular need for deterrence. See, e.g., Digital Millennium Copyright Act, 17 U.S.C. § 1203(c)(3) (providing that “the court may increase the award of damages up to triple the amount that would otherwise be awarded” if the person committed the violation “within 3 years after a final judgment was entered against the person for another such 22
award to both compensate Plaintiffs and address the deterrence aspect of the Copyright Act. This reduced award is significant and harsh. It 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. It was the jury’s province to determine the award of statutory damages and this Court has merely reduced that award to the maximum amount that is no longer monstrous and shocking. 5. Constitutional Challenge
Because the Court determines that remittitur is appropriate in this case, it will not reach the question of the constitutionality of the jury’s damages award. See United States v. Allen, 406 F.3d 940, 946 (8th Cir. 2005) (“When we are confronted with several possible grounds for deciding a case, any of which would lead to the same result, we choose the narrowest ground in order to avoid unnecessary adjudication of constitutional issues.)” (citation omitted). B. Reconsideration of the Court’s Denial of the Motion to Suppress 1. The Court’s Previous Ruling
In the Court’s June 11, 2009 Order on the motions in limine, the Court denied Thomas‐Rasset’s motion to suppress evidence gathered by MediaSentry. Defendant had asserted that MediaSentry violated the Minnesota Private 26
Detectives Act (“MPDA”) by acting as a detective although it held no Minnesota private detective license. The Court held that MediaSentry was not subject to the MPDA because it did not operate within the state of Minnesota. The Court further noted that “[a]lthough Defendant has vaguely alluded to private detective licensing laws from other states, there is no evidence or legal argument before the Court upon which the Court could conclude that MediaSentry was subject to and violated another state’s private detective law in this case.” (June 11 Order at 10‐11.) The Court also held that, even if “MediaSentry had incidentally violated a private detective licensing statute from some other state,” it did not act “for the purpose of committing a tort or crime,” so the federal Wiretap Act would not apply. (Id. at 11.) 2. Defendant’s Current Motion for a New Trial
In the current motion for a new trial, Defendant reasserts her previous
Rasset’s computer. Defendant asserts that New Jersey has private investigator and wiretap statutes that were violated when Media Sentry had operated in that state. She cursorily cites to N.J. Stat. §§ 45.19, 2A:156A‐2. She concludes that Media Sentry’s actions were illegal under New Jersey law, and, therefore, all of the evidence gathered by Media Sentry should have been suppressed. She argues that, without that evidence, there would have been insufficient evidence to support a verdict of liability. Therefore, the Court should grant a new trial under Rule 59. 3. Conclusion
The Court denies Thomas‐Rasset’s motion for a new trial based on the suppression issue. New Jersey Statute § 45:19‐10 provides that if a private detective business fails to obtain a private detective license, it is guilty of a misdemeanor. However, Defendant points to no New Jersey case or statute that holds that evidence obtained by an unlicensed private detective is subject to suppression. Furthermore, while Defendant reprints her cursory argument from her reply to the motions in limine, she provides no substantive legal argument or factual analysis of whether the New Jersey statute would apply at all in this case. As for New Jersey’s wiretap statute, New Jersey is a single‐consent state, 28
Plaintiffs request that, under Federal Rule of Civil Procedure 59(e), the Court amend the Judgment in this case to include an injunction, as requested in Plaintiffs’ Complaint. The Copyright Act provides: Any court having jurisdiction of a civil action arising under this title may . . . grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright. 17 U.S.C. § 502(a). “Injunctions regularly are issued pursuant to the mandate of Section 502, because the public interest is the interest in upholding copyright protections.” Taylor Corp. v. Four Seasons Greetings, LLC, 403 F.3d 958, 968 (8th Cir. 2005) (citation omitted). Additionally, the Court has the equitable power to order destruction of all infringing copies in Defendant’s possession. 17 U.S.C. § 503(b). To determine whether permanent injunctive relief is warranted, [the Court] balance[s] three factors: (1) the threat of irreparable harm to the moving party; (2) the balance of harm between this harm and the harm suffered by the nonmoving party if the injunction is granted; and (3) the public interest. Taylor, Corp., 403 F.3d at 967. a. Irreparable Harm
The parties expend considerable energy debating whether, in light of the
refusal to accept responsibility for her actions, it is reasonable to conclude that an injunction is necessary to prevent future infringement. This threat of repeated infringement, the difficulty of detecting future infringement by Thomas‐Rasset, and the viral aspect of damages weigh in favor of a finding of a threat of irreparable harm. b. Balance of the Hardships
The balance of the hardships favors an injunction. Defendant’s conduct could create exponential harm to Plaintiffs, but the requested injunction would inflict minimal hardship on Thomas‐Rasset. There is no cognizable harm to Defendant from being enjoined from doing something that is against the law and for which she has already been found liable. Thomas‐Rasset fails to identify any hardship that would be inflicted upon her if the injunction is issued. See, e.g., UMG Recordings, Inc. v. Blake, No. 5:06‐CV‐00120‐BR, 2007 WL 1853956, at *3 (E.D.N.C. June 26, 2007) (“As to the consideration of the balance of hardship between Plaintiffs and Defendant, the fact that Plaintiffs’ recordings can be replicated into infinity, for free, establishes that a distinct hardship rests with Plaintiffs. Defendant, on the other hand, faces little, if any, harm. These recordings will still be just as accessible to Defendant; (s)he will have to pay to 34
download them.”). c. Public Interest
Injunctions regularly are issued pursuant to the mandate of section 502, because the public interest is the interest in upholding copyright protections. Since Congress has elected to grant certain exclusive rights to the owner of a copyright in a protected work, it is virtually axiomatic that the public interest can only be served by upholding copyright protections and, correspondingly, preventing the misappropriation of the skills, creative energies, and resources which are invested in the protected work. Taylor Corp., 403 F.3d at 968 (citations omitted). The public interest weighs in favor of an injunction. Defendant is correct that the Supreme Court has noted that parodies or other critical uses of copyrighted works that simply go beyond the fair use of the material may not justify injunctive relief. Campbell v. Acuff‐Rose Music, Inc., 510 U.S. 569, 578 n.10 (1994). There is no allegation that Thomas‐Rasset engaged in parody or other critical use of Plaintiffs’ copyrighted material, and her fair use defense was waived; instead, Defendant engaged in “simple piracy.” Id. (citation omitted). The general rule applies here: the public interest is in favor of upholding copyright protections and the copyright holder’s exclusivity. 2. Conclusion
authorization and shall destroy all copies of those downloaded recordings transferred onto any physical medium or device in Defendant’s possession, custody, or control. 3. Dated: January 22, 2010 s/ Michael J. Davis Michael J. Davis Chief Judge United States District Court Amendment of the Judgment is deferred pending notification of Plaintiffs’ position with regard to remittitur.
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