Appeals Court upholds jury award of $222,000 in music piracy case

Jamie Thomas-Rasset was accused by six music labels of illegally pirating 24 songs

In the second major legal victory for music labels in recent weeks, the U.S. Court of Appeals for the Eight Circuit has upheld a jury award of $222,000 against a woman accused of pirating 24 songs over a peer-to-peer file sharing network.

In arriving at the decision the appellate court ruled that the damages of $9,250 per infringed song was neither unreasonable nor unconstitutional in the context of the case.

"We conclude that an award of $9,250 per each of 24 works is not 'so severe and oppressive as to be wholly disproportional to the offense'," appellate Judge Steven Colloton wrote, quoting from a previous Supreme Court ruling on the fairness of statutory damages.

This is the second time a court has come to a near identical conclusion in a music piracy case. In August, the U,S. District Court for the District of Massachusetts refused to set aside a fine of $675,000 assessed by a jury against a former Boston university doctoral student accused of pirating 30 songs.

The ruling this week is the latest twist in a multiyear saga involving Minnesota native Jammie Thomas-Rasset and six recording companies that have accused her of downloading and distributing a total of more than 1,700 songs. The copyright laws under which Thomas-Rasset was sued allow for statutory damages of up to $150,000 per infringement.

The companies, which include Sony BMG, Arista Records and Warner Brothers, first sued Thomas-Rasset in 2006 using a representative sample of just 24 of those songs. Since then, the fight between the two sides has gone before three federal juries each one of which has arrived at slightly different decisions.

The first jury to hear the case in 2007 found Thomas-Rasset liable for willful infringement of copyrighted works and awarded the music companies a total of $222,000 in damages.

That verdict was later set-aside on a legal technicality and the case went before a second jury in 2009. This time, the jury slapped Thomas-Rasset with a stunning $1.92 million in statutory damages, or $80,000 per infringed work.

The District Court judge presiding over the case reduced the amount to $54,000 after Thomas-Rasset's argued that the damages were totally out of line with any actual damages the music labels might have suffered as the result of her activities.

This time, the recording companies appealed the verdict arguing among other things that the relevant copyright laws in the case provided for the much higher damages originally awarded by the jury.

In 2010, the third jury to hear the case awarded the music companies damages of $62,500 per song for a total $1.5 million. That fine too was reduced to $54,000 by a district court judge who held the amount was the maximum permissible under the Due Process Clause. The clause basically holds that punitive damages must be not be unreasonably excessive and must always be proportional to the actual damages suffered by an entity.

The Recording Industry Association of America (RIAA), which represents the music labels in such lawsuits, filed an appeal with the Eight Circuit asking for the original $222,000 from the first trial to be reinstated. In its appeal, the RIAA argued that the Due Process Clause should not be used to limit the statutory damages available to an entity under law.

The Eight Circuit's ruling upholds that view. "It makes no sense to consider the disparity between "actual harm" and an award of statutory damages when statutory damages are designed precisely for instances where actual harm is difficult or impossible to calculate," the court held.

The ruling evoked groans of dismay from some quarters. In a blog post, the Electronic Frontier Foundation, which filed a brief on behalf of Thomas-Rasset in the case, criticized the verdict.

"Frighteningly, the court suggested that statutory damages awarded by a judge or jury don't need to have ANY connection to the harm actually suffered by a copyright owner," EFF said in its blog.

Ray Beckerman, a New York attorney who has represented clients in RIAA lawsuits called the decision "superficial, careless, and wrong.".

"Unfortunately, the only thing left to do is make a motion for rehearing en banc or file a petition for certioriari to the U.S Supreme Court," Beckerman said. "Unfortunately, the Supreme Court grants very, very few certiorari petitions, so it may be that folks in the 8th Circuit will be stuck with this ruling for awhile."

A spokeswoman from the RIAA expressed satisfaction with the ruling. ?We are pleased with the appellate court's decision and look forward to putting this case behind us," she said via email.

Jaikumar Vijayan covers data security and privacy issues, financial services security and e-voting for Computerworld. Follow Jaikumar on Twitter at @jaivijayan or subscribe to Jaikumar's RSS feed. His e-mail address is jvijayan@computerworld.com.

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