August 17th, 2009
Justice says $1.9 million verdict is constitutional
Jammie Thomas-Rasset was hit with a $1.9 million verdict for filesharing 24 songs — roughly $80,000 per song. Is that even constitutional? Thomas-Rasset’s lawyers filed an appeal saying it’s not. Friday, the Justice Department weighed in with an opinion that it is (PDF).
Under the Copyright Act’s statutory damages provision, the jury had a wide berth to assign damages - anywhere from $750 to $30,000 for standard violations and from $30,000 to $150,000 for “willful violations.” The argument is basically that such high numbers are punitive in nature and punitive damages need to bear some resemblance to actual damages. With actual damages in the realm of $1 per song, the ratios are clearly beyond the pale of “reasonableness.”
In a memorandum to the court, the Justice Department first attacks the defendant’s reliance on the famous BMW v. Gore case, in which the U.S. Supreme Court knocked down a jury’s punitive damages award, finding that at 100 times actual damages the verdict violated due process. The Justice Department’s argument is that the Gore decision only applies to jury awards. A different case - the 1919 case of St. Louis IM&S Ry. Co. v. Williams - controls statutory damages laws like the Copyright Act, the Justice Dept. said.
Under Williams, a courtis to examine whether an award within a statutory range is “so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable” by considering whether Congress has·given “due regard for the interests of the public, the numberless opportunities for committing the offen’se, and the need for securing uniform adherence to [the law].”
The commonsense argument, Justice says, is that the Court never intended the rule in Gore to apply to statutory damages laws because statutory damages are drafted specifically because actual damages are minimal. Statutory damages create a deterrent effect in cases where actual and reasonably related punitives do not. For example, if the actual value of a song is $1, appropriate punitives would only be $4-$5, not enough to discourage people from engaging in the behavior. In such cases, Congress creates statutory damages to make the penalty sufficiently painful. Thus, Justice says, it makes no sense to apply the due process concerns of Gore to the Copyright Act.
In addition, a wrongdoer would have no idea what kind of punitives a jury might come up with. The rule of Gore serves to limit a jury’s discretion to some ratio of actual damages. By contrast, the statutory damages in the Copyright Act are published (and well publicized), so due process concerns don’t apply.
If Justice is correct and Williams controls, the question is whether the Copyright Act’s penalties are “so severe and oppressive” to be obviously unreasonable.” I could argue they are but the standard seems to be whether the legislature has considered the public interest.
In any case, Justice says, the constitutional issue need not even be reached.
