Appeals court rules $222,000 in damages for sharing 24 songs “not obviously unreasonable”

September 13, 2012

Jammie Thomas-Rasset DamagesOn Tuesday, the Eighth Circuit Court of Appeals added the latest chapter in the saga of Jammie Thomas-Rasset.

Thomas-Rasset is the woman sued by the recording industry for sharing 24 songs on KaZaA (a now-defunct peer-to-peer file-sharing service).

Several different jury trials all resulted in verdicts against her, with damages ranging from as low as $54,000 to as high as $1,920,000.

How did the jury come up with these numbers?

Congress, in its infinite wisdom, established a statutory damages range for copyright infringement, starting as low as $750 per work infringed, and going up as high as $30,000 – or, $150,000, if the infringement was “willful” (of course, the statute sets a rebuttable presumption that the infringement was willful, so let’s just say that $150,000 is the upward limit for simplicity’s sake).

The last decision before this one set the damages at $54,000 down from the jury’s “shocking” (in the trial court’s own words) verdict of $1,500,000.

This appeals court ruling racked Thomas-Rasset’s damages back up to $222,000.

So, to sum up, because she made available 24 songs for other people to download (though there was no evidence that anyone actually downloaded these songs), Thomas-Rasset had to pay $9,250 per song that was shared.

Why were there so many trials, and what was the appeals court reviewing from the latest one of these trials?

The first retrial was granted because of faulty jury instructions, and the second retrial was granted because the recording industry refused to accept the remitted award of $54,000 down from $1,920,000.

At the third trial (the second retrial), the judge again reduced the jury award to $54,000 down from $1.5 million, and the record companies appealed, seeking more money (specifically, $222,000 – the amount of damages awarded against Thomas-Rasset at the first trial).

The issue on appeal essentially came down to whether the damages and what amount thereof violated Thomas-Rasset’s due process rights.

The appeals court ended up finding that an award of $222,000 didn’t violate Thomas-Rasset’s due process rights.

In making this determination, the court looked to a 1919 Supreme Court case, St. Louis, I.M. & S. Ry. Co. v. Williams.

Williams held that damages awarded pursuant to a statute violate due process only if they are “so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.”

The appeals court found that an award of $9,250 for each song shared was perfectly in line with Williams’ holding.

The court deferred to Congress’ judgment in making the determination of statutory damages, citing several public policy factors, including the recording industry’s fish story that their 50% decline in revenue between 1999 and 2006 was due almost exclusively to online piracy.

In addition, the court found that the $222,000 was reasonable because it was on the “lower end” of the statutory damages range (had the maximum statutory damages been allowed, Thomas-Rasset would have been looking at paying $3.6 million in damages).

Let’s review.

An individual receives an adverse judgment in the amount of $222,000 for sharing 24 songs.

The individual didn’t share these songs for commercial purposes, and there was no evidence introduced that any of the songs were actually downloaded by others.

This individual isn’t wealthy by any measure.

Somehow, the appeals court finds that her being forced to pay $222,000 isn’t “obviously unreasonable” or “wholly disproportioned to the offense.”

Okay, what?

I’m not defending the online sharing of copyright-protected material, but the court seems to believe Thomas-Rasset’s offense to be far more serious than it actually is.

And $222,000 is not severe and oppressive?

This award is more than Thomas-Rasset would likely spend on a house in her hometown.

10% of the award would be severe and oppressive.

The court seems to put a lot of stock in the argument that Congress set up this damages scheme to serve as a deterrent to infringers.

Fair enough.

But in Thomas-Rasset’s case, something more like $2,000 (less than 1% of the actual damages amount) would have been enough to deter her and others like her.

Instead, she’s stuck with a $222,000 lien that she’s unlikely to pay off in her lifetime.

Justice for all, indeed.