Court Opinion

ID: 3017189
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:16:45.665849+00
Date Added: 2024-06-11T11:47:03.694398
License: Public Domain

___________

                                  No. 95-2304
                                  ___________

Cass County Music Company;            *
Red Cloud Music Company,              *
                                      *
           Appellees,                 *
                                      *   Appeal from the United States
     v.                               *   District Court for the
                                      *   Eastern District of Arkansas.
C.H.L.R., Inc.; Jeffrey C.            *
Jones; Stanford P. Glazer;            *
John L. Marks, originally sued        *
as John L. Marx,                      *
                                      *
           Appellants.                *

                                  ___________

                   Submitted:     January 10, 1996

                         Filed:   July 8, 1996
                                  ___________

Before RICHARD S. ARNOLD, Chief Judge, JONES,* District Judge, and BOWMAN,
      Circuit Judge.

                                  ___________

BOWMAN, Circuit Judge.

     C.H.L.R., Inc., Jeffrey C. Jones, John L. Marks, and Stanford P.
Glazer (collectively, C.H.L.R.) appeal from decisions of the District Court
granting summary judgment to Cass County Music Company and Red Cloud Music
Company on the music companies' copyright infringement claim and denying
C.H.L.R. a jury trial.   We affirm in part and reverse and remand in part.

     *The HONORABLE JOHN B. JONES, United States District
     Judge for the District of South Dakota, sitting by
     designation.
                                     I.

     C.H.L.R. is a corporation that operates Stanford's Comedy House in
Little Rock, Arkansas, among other enterprises.   Jones, Marks, and Glazer
are officers, directors, and shareholders of C.H.L.R., and Jones was day-
to-day manager of the Comedy House in Little Rock.       Cass County Music
Company and Red Cloud Music Company own the copyrights to the four songs
at issue in this dispute, and are members of the American Society of
Composers, Authors and Publishers (ASCAP).    ASCAP is a performing rights
society, a nonexclusive licensee of the nondramatic public performance
rights of its members.1    Broadcast Music, Inc. v. Columbia Broadcasting
Sys., Inc., 441 U.S. 1, 5 (1979).

     The Comedy House in Little Rock opened in September 1993.   Before and
after its comedy shows, for perhaps thirty to forty-five minutes, the
Comedy House played recorded and radio music over a stereo system.    Soon
after the Comedy House opened, ASCAP contacted Jones to advise him of the
need for an ASCAP license if ASCAP sound recordings were to be played at
the club.   Negotiations on an appropriate fee for the license ensued, and
subsequently broke down.

     C.H.L.R. then instituted a "no-ASCAP" music policy at the Comedy
House.   That is, a list of ASCAP music was obtained, music tapes were made
that included no ASCAP recordings, and the staff was instructed to play
only the recorded non-ASCAP tapes when the club was open for business.
Notwithstanding these precautions, ASCAP advised C.H.L.R. more than once
that the Comedy House, when open to the public, persisted in playing music
copyrighted by ASCAP members.    ASCAP continued to recommend licensing to
avoid legal

     1
      ASCAP, being a nonexclusive licensee of the music
companies' compositions, is not a party to this suit. As will be
seen, however, ASCAP was a key player in the events leading up to
the lawsuit.

                                    -2-
action on a copyright infringement claim.                      On May 6, 1994, an ASCAP
investigator visited the Comedy House and documented the public performance
over the stereo system before the comedy show of four songs owned by ASCAP
members, the music companies that are appellees here.                    C.H.L.R. contends
that    any   copyright    infringements      were       the   result   of   its    employees'
inadvertence and were unknown to management, but acknowledges that it
cannot refute the allegation that the violations did occur.

        In August 1994, the music companies filed suit alleging copyright
infringement based on the May 6, 1994, investigator's report, seeking an
injunction, statutory damages, and costs and attorney fees.                           C.H.L.R.
demanded a jury trial, which the District Court denied.                 In March 1995, the
court    granted    summary   judgment   to        the    music   companies,       permanently
enjoining C.H.L.R. from engaging in infringing activities, awarding $1000
in statutory damages for each of the four infringements, and awarding $1119
in costs and $5469 in attorney fees.

        For its appeal, C.H.L.R. does not challenge the injunction (it has
since    obtained    a    license   issued    by     Broadcast     Music,     Inc.,    another
performing rights society) or "the District Court's conclusion that as a
matter of law an infringement occurred for which the defendants are jointly
and severally liable."         Brief for Appellants at 2 n.1.                The five issues
C.H.L.R. does raise can be summarized as follows:                 The District Court erred
in determining the infringements were "knowing," the court erred in
rejecting C.H.L.R.'s jury demand, and the award of costs and attorney fees
was error.

                                             II.

        C.H.L.R. claims that a grant of summary judgment was precluded
because there was a genuine issue of material fact on the question whether
the infringements were "knowing."            C.H.L.R. correctly

                                             -3-
acknowledges that the state of mind of the copyright infringer is of no
consequence to liability, so whether or not there is a genuine issue on the
question is equally inconsequential to liability.                "Once a plaintiff has
proven that he or she owns the copyright on a particular work, and that the
defendant has infringed upon those `exclusive rights'"--that is, he has
proven the two key elements of copyright infringement, which are not at
issue    here--"the    defendant   is    liable    for   the    infringement    and     this
liability is absolute."     Pinkham v. Sara Lee Corp., 983 F.2d 824, 829 (8th
Cir. 1992).      The state of mind of the infringer is relevant, if at all,
only to the award of damages.         Although it is not entirely clear from the
way the argument is structured in C.H.L.R.'s brief, we will assume that the
contention is that there is a genuine issue of material fact (or that
C.H.L.R. was not on notice that it should offer evidence to show one) on
the question whether the infringements were unknowing, that is, "innocent,"
rather than knowing or "willful."          "Innocent" and "willful" are terms of
art in copyright law.        If proved, innocence or willfulness may have a
bearing on the amount of statutory damages awarded but cannot affect
liability.

        If "the copyright owner sustains the burden of proving, and the court
finds,    that   infringement   was     committed    willfully,     the    court   in    its
discretion may increase the award of statutory damages to a sum of not more
than $100,000."       17 U.S.C. § 504(c)(2) (1994).            Although C.H.L.R. claims
that "[t]he ASCAP members contended that the infringement was knowing and
willful," Brief of Appellants at 16, their prayer for damages in the
complaint was for an amount between $500 and $20,000 per infringement, the
statutory damages range when neither willful infringement nor innocent
infringement is proved, and the District Court awarded only $1000 per
infringement.       Thus   to   the   extent      C.H.L.R.     equates    "knowing"     with
"willful," its argument is a nonstarter, since no willful violation was
alleged by the music companies or found by the District Court.

                                          -4-
     On the other hand, copyright law also provides that the court in "its
discretion may reduce the award of statutory damages to a sum of not less
than $200" when the "infringer was not aware and had no reason to believe
that his or her acts constituted an infringement of copyright."        17 U.S.C.
§ 504(c)(2).    If C.H.L.R., with its argument that there is a genuine issue
of fact on whether its behavior was "knowing," is trying to fit its actions
into the requirements for this statutory mitigation of damages for innocent
infringement, we must conclude that there is no genuine issue of material
fact for trial.

     Before May 6, 1994, there were extensive conversations and written
correspondence between ASCAP and C.H.L.R. regarding the purchase of an
ASCAP license.    It is clear from the record that ASCAP advised C.H.L.R.--
and that C.H.L.R. understood--that the Comedy House's unlicensed public
performance of music in which ASCAP members owned performance rights would
be a violation of law and could precipitate a lawsuit.        C.H.L.R. opted not
to purchase an ASCAP license (or any other license at that time), and
instead decided to institute a policy, of questionable efficacy from the
very beginning, that no ASCAP music was to be played at the Comedy House.
That policy failed, as ASCAP advised C.H.L.R. on several occasions after
the implementation of the "no-ASCAP" policy and before the filing of this
lawsuit.    The fact that there was such a policy and that it evidently was
violated by employees of the club without management's notice is not
relevant.      C.H.L.R. and the individual defendants are liable for the
copyright    infringements,   notwithstanding   that    the   infringements   were
perpetrated by their employees and without their knowledge, because
C.H.L.R. had the right and ability to supervise those employees, and
because C.H.L.R. had a financial interest in the use of the copyrighted
songs.     See Pinkham, 983 F.2d at 834 (setting out the test for vicarious
liability in copyright infringement actions).          As a matter of law, based
on the undisputed facts in this record, C.H.L.R.'s copyright infringements
were not innocent.    In fact,

                                      -5-
with the repeated notices of ongoing infringement that ASCAP gave C.H.L.R.,
the apparent deliberate ignorance by management of the fact that violations
continued even with the "no-ASCAP" policy in place, and the somewhat
acrimonious "course of dealing between the parties," the music companies
may have given C.H.L.R. a break by not seeking enhanced damages for willful
infringement.   Chi-Boy Music v. Charlie Club, Inc., 930 F.2d 1224, 1227-28
(7th Cir. 1991) (discussing notice, deliberate ignorance, and past dealings
between the parties as relevant to finding of willful infringement).

      As we intimated above, C.H.L.R. argues that it had inadequate
opportunity to develop the record on this issue, because it was unaware
that the issue would be decided on summary judgment.   We find this argument
specious.   The music companies' motion for summary judgment specifically
asked the court to find "defendants liable for copyright infringement" and
to   award "plaintiffs statutory damages of $5,000 per infringement."
Plaintiffs' Motion for Summary Judgment and Permanent Injunction at 2.
C.H.L.R. knew it had been denied a jury trial, so if C.H.L.R. could
demonstrate no genuine question of fact on the question of liability then
all that remained was for damages to be assessed by the court.      C.H.L.R.
admittedly had nothing to counter the evidence that unequivocally showed
copyright infringements.    So the only issue that remained to be decided--
and the only issue on which C.H.L.R. could even hope to demonstrate a
genuine issue of material fact--was the appropriate amount of statutory
damages to be assessed.    We reject the contention that the District Court's
decision caught C.H.L.R. unawares, but we note that Part III of this
opinion renders the argument a moot point in any case.

                                     III.

      C.H.L.R. argues that the District Court erred in striking its jury
demand.   The court held that the relief requested--an injunction, statutory
damages, and costs and attorney fees--was

                                     -6-
equitable in nature and therefore the case would be properly decided by the
court without a jury.   Whether either party is entitled to a jury trial in
a copyright infringement action is a question of first impression in this
Circuit.   See, e.g., National Football League v. McBee & Bruno's, Inc., 792
F.2d 726, 729 n.4 (8th Cir. 1986).

     The answer to that question in this appeal turns on whether a request
for statutory damages in a copyright infringement case entitles a party in
such a case to a jury trial, either because the statute compels it or
because the Constitution requires it.      The statute, in pertinent part,
reads:

     [T]he 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, or for which any two
     or more infringers are liable jointly and severally, in a sum
     of not less than $500 or more than $20,000 as the court
     considers just.

17 U.S.C. § 504(c)(1) (1994).       The relevant constitutional amendment
provides that "[i]n Suits at common law . . . the right of trial by jury
shall be preserved."    U.S. Const. amend. VII.

     Our research has revealed many cases wherein the parties and the
courts apparently have assumed without deciding that copyright infringement
actions either are for the court without a jury, or, less frequently, are
for a jury.    We begin with a survey of circuit court cases that have
squarely addressed the question, and examine the legal analysis, if any,
employed in each.2

     2
      The cases we cite throughout our opinion construe both the
1909 and 1976 versions of the Copyright Act's infringement
damages statute. 17 U.S.C. § 101(b) (1976) (1909 Act); 17 U.S.C.
§ 504(c) (1994) (1976 Act). The relevant statutory language
relied upon in the pre-1976 cases concerning the court's
discretion remains essentially the same. E.g., 17 U.S.C.
§ 101(b) ("as to the court
shall appear to be just," "the court may, in its discretion"); 17
U.S.C. § 504(c) ("as the court considers just," "the court in its

                                     -7-
                                           A.

      When confronted with the question in 1912, the Second Circuit said:

     [W]e do not think that by the use of the word "court" it is
     required that the judge acting by himself shall assess the
     damages when a case is presented calling for an award under the
     minimum damage clause. We think it the better view that the
     statute permits him to direct the jury to assess the damages
     within the prescribed limits.

Mail & Express Co. v. Life Publishing Co., 192 F. 899, 901 (2d Cir. 1912).
The court went on to say that even if its conclusion was wrong there was
no error because the judge would have assessed damages anyway, given the
way in which he instructed the jury.

     Many years later, without reference to Mail & Express, the Second
Circuit   read    the    statute    quite       differently     and    concluded,   "The
determination of statutory damages, including a fivefold increase in the
maximum   award   if    the   plaintiff    proves   and   the    court   finds   willful
infringement, is assigned by statute to the judge rather than the jury."
Oboler v. Goldin, 714 F.2d 211, 213 (2d Cir. 1983).                   Unlike the Mail &
Express court, which found the statutory language "somewhat obscure," Mail
& Express, 192 F.2d at 901, the Oboler court evidently found the statute
definitive and performed no constitutional analysis.

     In   1957,   the    First   Circuit    decided    that     the   entire   copyright
infringement case before the trial court, including the request for
statutory damages, "was equitable in nature, as to which the defendant had
no constitutional or statutory right to a jury

discretion may"). It is apparent that the 1976 Act was not
intended to change this part of the statute.

                                          -8-
trial."    Chappell & Co. v. Palermo Cafe Co., 249 F.2d 77, 79 (1st Cir.
1957).    The court, however, concluded that statutory "in lieu" damages were
no different from actual damages, which the defendant "concede[d] that the
district court as a court of equity would have been free to determine and
award . . . as incidental to the relief by way of injunction against future
infringements."     Id. at 81.      Thus the court held that the resolution of
factual issues by the court hearing the equitable claim for an injunction
precluded a jury trial on "the pending claim for damages," the legal claim.
Id.   Since that decision, however, the Supreme Court has said "that only
under the most imperative circumstances, circumstances which in view of the
flexible procedures of the Federal Rules we cannot now anticipate, can the
right to a jury trial of legal issues be lost through prior determination
of equitable claims."        Beacon Theatres, Inc. v. Westover, 359 U.S. 500,
510-11 (1959) (footnote omitted).           So the First Circuit's rejection of a
"distinction between a claim for actual damages from the infringement, and
a claim for just damages in lieu of proof of actual damages or profits
resulting from the infringement," Chappell & Co., 249 F.2d at 82, actually
now supports the position that damages for copyright infringement are legal
and therefore trigger the right to trial by jury, whether the damages
sought are actual or statutory.
      The Ninth Circuit has held that the statutory damages provision
"expressly directs the court to use its discretion in the determination of
`in   lieu' damages."        Sid & Mary Krofft Television Prods., Inc. v.
McDonald's    Corp.,   562 F.2d 1157,    1177   (9th   Cir.   1977)   (Sneed,   J.,
concurring, in a supplemental opinion for the court).             The court evidently
did not consider that the word "court" need not refer to the judge sitting
without a jury, and did no constitutional analysis.

      A few years later, in a short opinion without any real analysis, the
Fifth Circuit concluded, "The whole case before the Court"--which included
a prayer for minimum statutory damages--"was

                                        -9-
equitable in nature as to which the appellant had no constitutional or
statutory right to a jury trial."   Twentieth Century Music Corp. v. Frith,
645 F.2d 6, 7 (5th Cir. Unit B May 1981) (per curiam).

     That same year, the Fourth Circuit took a different approach. That
court thought the statutory language concerning the award of statutory
damages, "[i]f anything, . . . enforces rather than detracts from an
interpretation requiring a jury trial, but it is not sufficiently clear to
mandate either a bench trial or a jury trial."     Gnossos Music v. Mitken,
Inc., 653 F.2d 117, 119 (4th Cir. 1981).     The court therefore went on to
consider the right to a jury trial under the Seventh Amendment.   The court
concluded that an action for copyright infringement was analogous to a
common-law action for tortious interference with a property right and "is
basically an action for the enforcement of a legal right."      Id. at 120.
The court further held that the remedy of statutory damages "is analogous
to the ancient civil action for debt" and, regardless of the amount sought
(within the statutory range), is "a remedy recoverable in an action at
common law."   Id.   Thus, according to the court, the parties were entitled
to a jury trial on demand.     Courts within the Fourth Circuit continue to
allow claims for statutory damages for copyright infringement to be tried
to a jury.   See Superior Form Builders, Inc. v. Dan Chase Taxidermy Supply
Co., 74 F.3d 488, 496 (4th Cir. 1996) ("Thus, if the jury was presented
with evidence justifying a finding of willful infringement, it is given
broad discretion to award up to $100,000 for each work copied."), petition
for cert. filed, 64 U.S.L.W. 3765 (U.S. Apr. 29, 1996) (No. 95-1765).

     The Eleventh Circuit, following the Fifth (as it would) and relying
upon Twentieth Century Music, held "that the latitude granted the district
court's great discretion in awarding statutory damages does not entitle
defendants to a jury or bench trial as to an award of damages within the
statutory limits . . . provided that the parties may submit all of their
supporting evidence to the

                                    -10-
district court."    Cable/Home Communication Corp. v. Network Prods., Inc.,
902 F.2d 829, 853 (11th Cir. 1990) (emphasis added).

     The Seventh Circuit has concluded that a party to a copyright
infringement   suit    is   entitled   to    a   jury    trial    on   the    question   of
infringement, even if the only damages sought are statutory.                 Video Views,
Inc. v. Studio 21, Ltd., 925 F.2d 1010, 1017 (7th Cir.), cert. denied, 502
U.S. 861 (1991).    But, to the Seventh Circuit, it is "clear that it is for
the district court and not for a jury to determine the appropriate award
of statutory damages, within the limits prescribed."              Id. at 1014; see also
Mongram Models, Inc. v. Industro Motive Corp., 492 F.2d 1281, 1283 (6th
Cir.) ("[t]he issue of infringement was submitted to a jury" but the judge
determined the amount of statutory damages in Sixth Circuit case where
jury-trial issue was not before the court on appeal), cert. denied, 419
U.S. 843 (1974).    The Video Views court went on to explain, however, that
the question of willfulness, a finding of which is required for an
assessment of statutory damages outside the usual range, is for the jury
along with the question of infringement.           Video Views, 925 F.2d at 1017;
see also Chi-Boy Music, 930 F.2d at 1227 ("district court's finding of
willfulness is a factual determination").

     Given the diverging opinions of our sister circuits, we now consider
for ourselves whether a party is entitled to a jury trial in a copyright
infringement suit when the plaintiff seeks statutory damages as a remedy.

                                            B.

     Before    we     address   the    question         whether    a   jury     trial    is
constitutionally required, we must consider whether Congress provided for
jury trial when enacting the copyright laws.              If our inquiry leads us to
conclude that it did, we can and will avoid the constitutional question.
Lorillard v. Pons, 434 U.S. 575, 577

                                       -11-
(1978).

      Statutory damages, within a range, are to be assessed in an amount
"as the court considers just."       17 U.S.C. § 504(c)(1) (emphasis added).
Further, if "the court finds" that the infringement was willful or
innocent, "the court in its discretion" may go outside the statutory range,
within certain limits, and increase or decrease the amount of statutory
damages.     Id. § 504(c)(2) (emphasis added).      The fact that Congress gave
discretion to the "court," however, does not mean that the decision on the
amount of statutory damages vests automatically in the trial judge instead
of a jury.      See, e.g., Curtis v. Loether, 415 U.S. 189 (1974).          On the
other hand, although Congress obviously intended statutory damages to be
an   award    of   money,   traditionally   a   legal   remedy,   see   Woodell   v.
International Bhd. of Elec. Workers, Local 71, 502 U.S. 93, 97 (1991), the
Supreme Court has not gone "so far as to say that any award of monetary
relief must necessarily be `legal' relief," Curtis, 415 U.S. at 196.          Thus
we do not find the answer in the statute.               Likewise, the legislative
history    of the statute is silent on the question of congressional intent
to require trial by jury when statutory damages are sought in a copyright
action.3     We turn therefore to the constitutional

      3
      The legislative history accompanying the Semiconductor Chip
Protection Act of 1984, Pub. L. No. 98-620, 98 Stat. 3347
(codified as amended at 17 U.S.C. §§ 901-14) does contain this
interesting statement:

           Section 911(c) provides statutory damages, in
      terms generally analogous to 17 U.S.C. § 504(c), but
      the discretionary amount that can be awarded to the
      plaintiff is raised to $250,000. . . . In using the
      term "court" in Sections 911(b) and (c) it is the
      intent of the Committee, as under 17 U.S.C. § 504(c),
      that there be a right to a jury where requested.

H.R. Rep. No. 781, 98th Cong., 2d Sess. 27, reprinted in 1984
U.S.C.C.A.N. 5750, 5776 (emphasis added).

     This is arguably "revisionist" legislative history, is from
a
later Congress, and pertains to a different statute. We
therefore do not rely on it.

                                      -12-
question.

                                      C.

     "In Suits at common law, where the value in controversy shall exceed
twenty dollars, the right of trial by jury shall be preserved . . . ."
U.S. Const. amend. VII.    The Supreme Court teaches that the phrase "Suits
at common law" refers to those in which legal rights are sought to be
adjudicated and legal remedies are imposed, as compared with those suits
where the rights and the remedies are equitable.       Granfinanciera, S.A. v.
Nordberg, 492 U.S. 33, 41 (1989).         To resolve the question whether an
action is legal or equitable, "we examine both the nature of the issues
involved and the remedy sought."     Woodell, 502 U.S. at 97.        To determine
the nature of the issues involved, we consider analogous "18th-century
actions brought in the courts of England prior to the merger of the courts
of law and equity."   Id. (quoting Chauffeurs, Teamsters & Helpers Local No.
391 v. Terry, 494 U.S. 558, 565 (1990)).      But the other inquiry, the legal
or equitable nature of the remedy sought, ordinarily is the more important
of the two, id., and certainly proves to be so in this case.

     The Supreme Court has held that modern patent infringement actions
derive "from the infringement actions tried at law in the 18th century, and
there is no dispute that infringement cases today must be tried to a jury."
Markman v. Westview Instruments, Inc., 116 S. Ct. 1384, 1389 (1996).
Patent   and   copyright   infringement   actions   find   their   constitutional
derivation in the same provision, wherein Congress is delegated the power
"[t]o promote the Progress of Science and useful Arts, by securing for
limited Times to Authors and Inventors the exclusive Right to their
respective Writings and Discoveries."      U.S. Const. art. I, § 8, cl. 8.    The

                                     -13-
Supreme Court treats patent and copyright the same when looking at the
purposes behind the constitutional provision and the laws thereby enacted.
See, e.g., Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141,
162   (1989) ("One of the fundamental purposes behind the Patent and
Copyright Clauses of the Constitution was to promote national uniformity
in the realm of intellectual property."); Sony Corp. v. Universal City
Studios, Inc., 464 U.S. 417, 429 (1984) ("The copyright law, like the
patent statutes, makes reward to the owner a secondary consideration.")
(quoting United States v. Paramount Pictures, Inc., 334 U.S. 131, 158
(1948)); Zacchini v. Scripps-Howard Broadcasting Co., 433 U.S. 562, 576
(1977) ("[T]he protection [afforded by state law] provides an economic
incentive for [the performer] to make the investment required to produce
a performance of interest to the public.   This same consideration underlies
the patent and copyright laws long enforced by this Court.").     Moreover,
the elements that must be proved for liability to attach in patent and
copyright infringement cases are functionally the same.     Notwithstanding
the difficulty and the often "abstruse historical inquiry" required to
apply the test, Ross v. Bernhard, 396 U.S. 531, 538 n.10 (1970), we think
patent and copyright infringement actions are sufficiently analogous to
conclude that, as patent infringement is a legal action to be tried to a
jury, so is copyright infringement.

      We proceed then to the related question:       whether the remedy of
statutory damages is legal or equitable.   "The Seventh Amendment is silent
on the question whether a jury must determine the remedy in a trial in
which it must determine liability."   Tull v. United States, 481 U.S. 412,
425-26 (1987).    But if the award of statutory damages by a jury is
"necessary to preserve the `substance of the common-law right of trial by
jury,'" then a jury trial is constitutionally required.         Id. at 426
(quoting Colgrove v. Battin, 413 U.S. 149, 157 (1973)).    We hold that the
assessment of damages, whether actual or statutory, is such a function and
is easily performed by a jury in the ordinary copyright infringement case.

                                   -14-
Cf. id. at 427 (holding no right to jury trial for calculation of civil
penalties       under     the    Clean      Water    Act        where    "highly      discretionary
calculations that take into account multiple factors are necessary" to
assess the penalties, and "are the kinds of calculations traditionally
performed by judges").           Statutory damages, whatever else they may be, are
unquestionably money damages and, as we have noted above and as bears
repeating here, the assessment of money damages by a jury is a fundamental
component of common-law trial by jury.                "[W]e will find an exception to the
general rule and characterize damages as equitable" only if the damages
sought have "the attributes" of an equitable remedy.                          Terry, 494 U.S. at
570.   Consideration of such attributes convinces us that these statutory
damages are legal in character.

       The      first    attribute       considered        by    the     Terry      Court    was    the
restitutionary          nature   of    the    relief,       "such       as   in     `action[s]      for
disgorgement of improper profits'".              Id. at 570 (quoting Tull, 481 U.S. at
424) (alteration in Terry).            The Court has always spoken of the "in lieu"
nature of statutory damages in copyright infringement cases.                                See, e.g.,
                                                                         4
Douglas v. Cunningham, 294 U.S. 207, 208 (1935).                              That is, they are
awarded instead of actual damages and profits, 17 U.S.C. § 504(c)(1), and
so   may   be    characterized,        at    least    in    part,       as   restitution.          "The
phraseology of the [statutory damages] section was adopted to avoid the
strictness of construction incident to a law imposing penalties, and to
give the owner of a copyright some recompense for injury done him, in a
case where the rules of law render difficult or impossible proof of damages
or discovery of profits."             Douglas, 294 U.S. at 209.               And

       4
      Although the Court in Douglas v. Cunningham said that the
"trial judge may allow such damages as he deems to be just," 294
U.S. 207, 210 (1935) (emphasis added), this was in fact a pre-
merger "suit in equity," id. at 207, where injunctive relief and
an accounting also were sought, and so the equity court heard the
entire case. The question of whether the parties might have been
entitled to a jury trial on demand was not an issue.

                                               -15-
notwithstanding that the amount of statutory damages assessed may go beyond
literal restitution, given that statutory damages are by definition a
substitute for unproven or unprovable actual damages, statutory damages are
arguably the quintessential equitable remedy, invoked when the legal remedy
is inadequate.    But our analysis does not end here.         We next consider a
more recently articulated rationale justifying the award of statutory
damages in copyright infringement cases.

       In a case decided since the merger of the courts of law and equity
in 1938, Fed. R. Civ. P. 2, the Supreme Court has concluded that statutory
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."    F.W. Woolworth Co. v. Contemporary Arts,
Inc., 344 U.S. 228, 233 (1952).5         "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."        Id. (emphasis added).   Thus it is plain
that   another   role   has   emerged    for   statutory   damages   in   copyright
infringement cases:     that of a punitive sanction on infringers, and the
award of punitive damages traditionally is a jury matter.                 "Remedies
intended to punish culpable individuals, as opposed to those intended
simply to extract compensation or restore the status quo, were issued by
courts of law, not courts of equity."          Tull, 481 U.S. at 422.      Because
statutory damages have evolved and now are intended not only to put the
plaintiff in the position he would have been but

       5
      We note that the Court in F.W. Woolworth Co. v.
Contemporary Arts, Inc., 344 U.S. 228, 232, 234 (1952), like the
Court in Douglas, spoke of "judicial discretion" in the
assessment of statutory damages for copyright infringement. We
do not consider such language decisive, however, given that the
question of whether statutory damages should be decided by judge
or jury was not before the Court.

                                        -16-
for the infringement, but also, and arguably preeminently, to punish the
defendant (especially where, as here, the music companies had very little
actual damage and C.H.L.R. reaped few profits from the infringements), we
think it especially appropriate to leave the decision to the jury's
"discretion and sense of justice."          F.W. Woolworth Co., 344 U.S. at 232
(quoting L.A. Westermann Co. v. Dispatch Printing Co., 249 U.S. 100, 106
(1919)).

      As for other equitable attributes that we might ascribe to an award
of statutory damages, "a monetary award `incidental to or intertwined with
injunctive relief' may be equitable."          Terry, 494 U.S. at 571 (quoting
Tull, 481 U.S. at 424).         Notwithstanding that there is just one set of
facts supporting the liability in this case--essential to the imposition
of   any   remedy--the    two    remedies   easily   could   have   been   awarded
independently of one another, the injunction by the trial judge, the
damages by the jury.     In that sense, the two are not intertwined.       Further,
a prayer for damages in the amount of $5000 per infringement for four
infringements--$20,000, a substantial amount--indicates to us that the
music companies did not seek these statutory damages as "incidental" to any
other relief.

      Having carefully weighed the legal attributes of the statutory
damages remedy against its equitable attributes, we conclude that, as is
true with most money damages, statutory damages for copyright infringement
are a legal remedy.

      Further, we are not persuaded that Congress, by setting a range
within which statutory damages are to be awarded, intended that there be
no fact-finding involved in fixing a damage award within the range, nor
that the fact-finding is of such difficulty

                                       -17-
that it must be performed by the court.6          "[T]he law commits to the trier
of   facts, within the named limits, discretion to apply the measure
furnished by the statute . . . ."          Douglas, 294 U.S. at 210 (emphasis
added).    The jury is, of course, the traditional fact-finder.           C.H.L.R. has
alleged facts that a jury might well find relevant in selecting a figure
between $500 and $20,000--quite a wide range even in the absence of proof
of willfulness or innocence.7         For example, C.H.L.R. makes much of its
assertions that the Comedy House was not profitable when first opened, when
ASCAP was pressuring it to purchase a license; that the proposed ASCAP
license fee was considerably higher than that of Broadcast Music, Inc.,
which C.H.L.R. ultimately purchased; and that the Comedy House plays music
only as filler, not as the primary source of entertainment.              A party should
be entitled to have a jury make factual findings relevant to determining
the amount of damages to be assessed, whether they are actual damages or
statutory damages.    "Maintenance of the jury as a fact-finding body is of
such   importance    and   occupies   so   firm   a   place   in   our    history   and
jurisprudence that any seeming curtailment of the right to a jury trial
should be scrutinized with the utmost care."          Beacon Theatres, 359 U.S. at
501 (quoting Dimick v. Schiedt, 293 U.S. 474, 486 (1935)).

       6
      The Supreme Court has "identified `the practical abilities
and limitations of juries' as an additional factor to be
consulted in determining whether the Seventh Amendment confers a
jury trial right," in addition to the nature of the cause of
action and the legal or equitable nature of the remedy.
Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 42 n.4 (1989). We
are satisfied that neither the determination of liability nor the
assessment of damages in the ordinary copyright case is beyond a
jury's ability.
       7
      In view of our holding regarding the legal nature of
statutory damages in copyright cases, it necessarily follows that
the willful or innocent nature of the infringement, and the
concomitant adjustment of the amount of statutory damages, also
would be jury questions.

                                       -18-
                                       D.

     We hold that either party in a copyright infringement suit is
entitled   under   the   Seventh   Amendment   to   a   jury   trial   on   demand.
Accordingly, the District Court erred in striking C.H.L.R.'s jury demand,
and C.H.L.R. is entitled to a new trial, with jury, on the music companies'
claim for statutory damages.

                                      IV.

     C.H.L.R. also has appealed the award of attorney fees and costs.            In
view of our disposition of the jury-trial issue, the award must be, and is,
vacated.

                                       V.

     To sum up, the judgment of the District Court granting summary
judgment on the question of C.H.L.R.'s liability for copyright infringement
is affirmed.   The court's decision to strike the jury demand is reversed,
and the case is remanded for further proceedings on the claim for statutory
damages.   The award of attorney fees and costs is vacated.

     A true copy.

            Attest:

                   CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.

                                      -19-