Constitutional Challenge to (File Sharing) Damage Award Rebuffed

The U. S. Court of Appeals for the First Circuit was less sympathetic than the district court to a Boston College graduate student who was found to have used file sharing software to distribute copyrighted music, concluding that the district court erred in reducing the damage award based on due process concerns.  Sony BMG Music Entertainment v. Joel Tenenbaum, Case Nos. 10-1833, -1947, -2052 (1st Cir. Sept. 16, 2011) (Lynch, J.).

Sony, along with several other record labels, sued a Boston University graduate student for sharing copyright songs using a peer to peer service such as Kazaa.  After the judge found liability, a jury awarded the record companies damages of $675,000 (in between the maximum statutory award of $4.5 million and the minimum statutory award of $22,500).  The district court cut the award by 90 percent, down to $67,500, noting that the student made no profit by his infringements and reasoning that Congress did not intend to impose the high statutory damages of the copyright law in such circumstances and that the high award was punitive, violated due process and was therefore unconstitutional.  Both sides appealed.

Tenenbaum argued that that statutory award was arbitrary and unconstitutional.  The United States interviewed and argued that the district court should have used common law remitter principles if it believed the award was too high—rather than impose a ruling based on constitutional principles.

The 1st Circuit, citing the principle of “constitutional avoidance” rejected Tenenbaum’s argument and concluded that the district court erred by ruling on the constitutionality (under due process) of the jury award without first considering common law remitter principles.  The 1st Circuit also wondered whether it was time for Congress to take a look at the statutory damages provision of the Copyright Law, but ultimately vacated the reduction in damages, reinstated the jury award and remanded the case for consideration of the remitter issue.

Practice Note:   The district court in this case was influenced by the actions of the record label in the earlier case in Capital Records v. Thomas-Rasset where, after remitter was granted to the defendant to reduce a $1.5 million jury award, the record label opted for a new trial.  Here, the district court opted to go straight to the constitutional issue.