

The $22,500 MP3: Does The Constitution Protect People Or Just Corporations? - brlewis
http://www.litigationandtrial.com/2009/08/articles/litigation/ideas/the-22500-mp3-does-the-constitutional-protect-people-or-just-corporations/

======
URSpider94
The statutory damages for copyright infringement were put into place when
peer-to-peer infringement was unimaginable. They were clearly intended to
dissuade businesses from engaging in wholesale copyright infringement for
profit, say by selling pirated movies.

Nonetheless, the law is the law, and I can't foresee even a committed grass-
roots effort convincing lawmakers to reduce the statutory damages for willful
infringement. The best bet would be to get a high court to determine that
willful infringement doesn't apply when there is no profit motive for the
infringer.

~~~
vaksel
Napster's fines amounted to a grand total of little more than 1000 songs
shared based on this compensation.

~~~
jacquesm
Exactly. This is way out of proportion. Professional pirates that operate a
for-profit business were the reason these amounts were set, and their height
is reflected by the potential profits of those pirates.

To use those same penalties against ordinary citizens acting without a profit
motive is madness.

------
joshfinnie
I feel this whole issue needs to be explained more clearly. It isn't that
these people downloaded the songs that are getting them in trouble. It is the
fact that they allowed other people to download them from their shared
libraries. If you could get in trouble for downloading illegally, then this
person's argument makes sense, but he is comparing apples to oranges!

~~~
MaxwellKennerly
I'm the author of the article. Let me clarify (this is hinted at with the
asterisk footnote at the bottom of the post) what happened here: the record
company elected, under the copyright statute, not to prove any actual damages
and instead use "statutory damages." At that point, they didn't need to prove
anything at all other than "infringement," which would include his own use of
the music and of his making them available to others, regardless of how much
infringement there really was.

That's part of what's so preposterous about our copyright regime: it permits
copyright holders to elect, at their discretion, to pursue an amorphous claim
with fantastically huge damages that doesn't require they prove much.

It's like if a slip and fall plaintiff could elect "statutory damages" of
millions of dollars if they proved nothing more than that the defendant
spilled something on the floor. Such would be swiftly declared
unconstitutional.

~~~
seertaak
> At that point, they didn't need to prove anything at all other than
> "infringement," which would include his own use of the music and of his
> making them available to others, regardless of how much infringement there
> really was.

Your logic is wrong. While it is true that all the plaintiffs needed was
unauthorized reproduction, that doesn't mean that finding additional
infringements won't cause a jury to award higher statutory damages: indeed,
the jury is specifically _instructed_ to take into account the nature of the
infringements.

~~~
MaxwellKennerly
See my response to you below. You're confusing multiple issues. For purposes
of my discussion about the constitutionally-permissible compensatory-to-
punitive ratio, the sole question is what actual damages were proven. At
trial, the defendants only proved $0.99 actual damages for each song.

Your argument about other unproven damages has already been rejected by the
'Philip Morris' Supreme Court case, which explicitly said jurors could only
consider, when deciding on punitive damages, actual damages proven in court.
(In that case, the jurors had considered damage to other smokers in the state
who weren't plaintiffs in the actual case.)

~~~
seertaak
> At trial, the defendants only proved $0.99 actual damages for each song.

I suspect you mean the plaintiffs. In any case, it really doesn't matter; the
damages in this case _are not separable into punitive and compensatory parts_.
You can argue that this is unconstitional, but you can't argue that that
damages awarded are unconstitutional on the basis of _your_ or the
_defendant's_ estimate of the compensatory damages, seeing as those aren't
what the jury used in their determination of damages. So your $0.99 "actual
damages" is a red herring. Had there been more of an onus on the record
companies to provide more evidence of actual damages, they would almost surely
have been able to provide at least rough estimates, using studies that were
cited in the expert testimony of Stanley Liebowitz. There was however, no onus
to do so, so it was reasonable for the plaintiffs not to go in greater detail
here.

> Your argument about other unproven damages

What argument about "unproven damages"? I have not used that language, please
don't put words in my mouth. It's fine for you to quote me; please don't
misparaphrase me.

~~~
MaxwellKennerly
I was referring to the unproven damages you wrote about above, the unproven
distribution damages. Fact is, at trial, the only actual damages proven was
the unauthorized personal use of a $0.99 song.

"Had there been more of an onus on the record companies to provide more
evidence of actual damages, they would almost surely have been able to provide
at least rough estimates ..." Yet, it looks like they didn't, likely because
they would have been much, much lower than the $150,000 per infringement
available under the statute, and they wanted the jury to think big numbers. It
was a tactical gamble, the same type made daily in trials across the country.

Like I wrote in the post, Congress can't simply call a duck a goose and get
around the due process protections established by the Gore, Philip Morris, and
Campbell cases. The statute's language does not trump due process and the
fundamental fact that we have actual damages proven at trial (~$0.99 per song)
and a grossly excessive award ($22,500.00 per song) awarded by way of a
punitive element ("willful"). They are "punitive" damages by any measure.

That undoubtedly triggers due process protections.

~~~
seertaak
> Fact is, at trial, the only actual damages proven was the unauthorized
> personal use of a $0.99 song.

Wrong, as I've pointed out to you numerous times. Defence did not have any
expert testimony on damages (this was indeed one of big blunders of the
Tenenbaum team, and was due to their basing the case on whimsical fair-use
arguments). Plaintiffs did have an expert on damages (Stanley Liebowitz), but
neither he nor any of the plaintiffs witnesses contributed any proof of the
"actual damages." If you wish to persist in making this claim, please provide
documentary evidence.

> Yet, it looks like they didn't, likely because they would have been much,
> much lower than the $150,000 per infringement available under the statute,
> and they wanted the jury to think big numbers. It was a tactical gamble, the
> same type made daily in trials across the country.

They didn't because they didn't need to, as I've said elsewhere. Everything
else is pure speculation on your part.

> the fundamental fact that we have actual damages proven at trial (~$0.99 per
> song)

Show me evidence of your "fundamental fact". I submit that you can't: _there
was no determination of actual (or compensatory) damages_.

~~~
MaxwellKennerly
You're making my argument: "neither he nor any of the plaintiffs witnesses
contributed any proof of the "actual damages.""

That's not entirely true, as the record companies did briefly call their own
lawyers to testify as to ownership of the songs, thereby establishing
Tenenbaum's wrongful (i.e., unpaid) use of them. Ergo, $0.99 actual damages.

Otherwise, that's the whole point: we have a $22,500 award (per song) on $0.99
proven damages. That means the vast majority of the award -- over 20,000-to-1
-- is for punitive damages, triggering Gore/Campbell due process concerns.

What part of that don't you get? The fact that a statute says this is okay is
meaningless: the constitution prevails.

~~~
seertaak
Your argument is just plain silly. Since the plaintiffs didn't have to "prove"
the amount of damages due to unauthorized distribution, you unilaterally and
rather brazenly set the figure at zero. You then use the figure used during a
separate demonstration (by the defendants, I might add) of how easy it is to
download music legally, along with the courts determination that unauthorized
reproduction took place, to get to your 20,000-to-1 ratio. You do see that
this is preposterous, don't you?

Essentially, your logical flaw is to apply a court case that has nothing to do
with copyright to one that is purely about copyright. In the case you
reference, it is in theory possible to determine the damages caused: just sum
the quantities spent by each of the plaintiffs on doctors' fees and other
medical expenses. It is impossible to do that in the context of unauthorized
distribution of copyrighted material. This is why the statutes give the courts
leeway in this domain -- as you have acknowledged elsewhere.

If we take your argument it its logical conclusion, the maximum damages for
sharing a song should be $4, since one can never "prove" the quantity of
damages resulting from unauthorized distribution. Do you really think that
damages of this size are going to deter anyone from filesharing?

------
grellas
This is a classic case where a law passed to deter certain very serious
activity (willful copyright infringement) now finds itself being applied to
new circumstances where it falls with a particularly heavy and disproportional
hand.

The remedy needs to be tailored to the nature of the wrong - that is, the law
needs refinement, not jettisoning. This can come from Congress or perhaps from
judicial refinements via statutory interpretation.

It will _not_ come from some wild approach striking down the concept of
statutory damages as unconstitutional. The article is way off on this.

~~~
MaxwellKennerly
It's not as "off" as you think. Punitive damages limitations have already been
applied to common law copyright cases, and numerous courts have considered,
but not ruled on, their application to the statutory regime.

But there's a more basic issue: it doesn't matter if the damages arise by
statute or common law, the constitution protects the defendant all the same.
Congress has no power to override a due process protection.

~~~
grellas
I obviously agree with the basic issue that Congress has no power to override
a due process protection. I just don't think this approach to the problem is
going anywhere.

 _Mea culpa_ (and apologies), however, for overstating my point. There are two
sides to this.

------
seertaak
The author mistakes "downloading" for "sharing", and it all goes downhill from
there. Based on this and a series of other false assumptions and deductions,
he arrives at the conclusion that the award of $675,000 for the plaintiffs is
unconstitutional.

This is pretty silly stuff, especially from someone claiming to be a lawyer.

~~~
MaxwellKennerly
Please see my reply below -- your distinction isn't relevant, because the
record company elected statutory damages, thereby eliminating the need to
prove any actual damages from "sharing." The downloading itself is all they
needed.

~~~
seertaak
> your distinction isn't relevant, because the record company elected
> statutory damages, thereby eliminating the need to prove an actual damages
> from "sharing."

a) The plaintiff is not a "record company", it is: SONY BMG Music
Entertainment, Warner Bros. Records, Inc., Atlantic Recording Corporation,
Arista Records LLC, and UMG Recordings, Inc. If you can't even get the basic
facts of the case right, how can you be trusted in your opinion as to whether
the damages awarded are constitutional, or anything else regarding the case,
for that matter?

b) While it's true that downloading is all that is "needed" for eliciting
statutory damages in a case like this (being a form of copyright
infringement), it is not true to say that the "distinction" isn't relevant. As
you ought to know, the jury is left considerable discretion in its decision of
how large to make the damages. The nature of the infringement has an impact on
the damages awarded (this wide leeway for statutory damages exists _precisely
because_ the impact of copyright infringement is hard to measure and varies
widely according to circumstances), so it is ridiculous to claim that Mr.
Tenenbaum's sharing of the files had nothing to do with the damages awarded.
Just to underscore this point, look at Judge Gertner's order granting the
plaintiffs' rule 50 motion on liability:

<snip>4 Judge Nancy Gertner: Electronic ORDER entered with respect to
reconsideration of rule 50 motion: The Court has reviewed the transcript of
the defendant's testimony, which had not been before the Court at the time of
the earlier ruling. The last question asked by Mr. Reynolds on direct
examination was Question: "Mr. Tenenbaum, on the stand now, are you now
admitting liability for downloading and distributing all 30 sound recordings
that are at issue and listed on Exhibits 55 and 56 of the exhibits?" Answer:
"Yes." Notwithstanding the protestations of Tenenbaum's counsel, Tenenbaum's
statement plainly admits liability on both downloading and distributing, does
so in the very language of the statute (no "making available" ambiguity) and
does so with respect to each and every sound recording at issue here. Thus,
the Court reverses its earlier ruling; Rule 50 motion is granted with respect
to infringement. The only issues for the jury are willfulness and damages.
(Gertner, Nancy) </snip>

Note that the order specifically mentions "distributing"; not just
"downloading". You can find the instructions for the jury at
[http://beckermanlegal.com/pdf/?file=/Lawyer_Copyright_Intern...](http://beckermanlegal.com/pdf/?file=/Lawyer_Copyright_Internet_Law/sony_tenenbaum_090731JuryInstructions.pdf)
. The nature of the infringement is mentioned in the instructions, as well as
the financial impact on the plaintiff. How could sharing the file possibly be
irrelevant to this?

~~~
MaxwellKennerly
Obviously, you shouldn't "trust" my "opinion" at all. It's just an opinion on
the internet from someone you never met.

You should, however, think about the underlying issues. Fact is, the plaintiff
proved only $0.99 in actual damages per song from Tenenbaum's use and
apparently (I write "apparently" because I have not seen the transcripts, just
the report I linked to in the post) chose not to present any evidence of
actual damages arising from distribution. It's in the court order, but the
actual damages (which is the relevant issue for a 'Campbell' due process
analysis) proven were solely from his personal use.

Your "hard to measure" argument is a good one, and the one that the RIAA will
raise on appeal. Yet, damages in every case are "hard to measure" and that
doesn't stop courts from routinely limiting those damages on constitutional
grounds. Can Congress grant copyright holders a presumption in court --
without proving anything at all -- that, for each song made available online
for any amount of time in any capacity, the defendant suffered up to $15,000
in actual damages? That's not so clear to me. And you haven't said why it's
clear to you.

(I chose "$15,000" because it's the only way the statutory $150,000 could be
constitutional under the Campbell case's "single-digit" punitive ratio.)

~~~
seertaak
> the plaintiff proved only $0.99 in actual damages per song from Tenenbaum's
> use and apparently

The plaintiff didn't "prove" "$0.99 in actual damages per song", or any other
figure, for that matter. It was in fact the defence that brought in the expert
witness who demonstrated downloading the song via AmazonMP3 (this turned out
to be counter-productive, because it showed just how easy and cheap it was to
behave legally).

Let me say that again: Plaintiffs did _not_ prove any figure for "actual
damages", whether $0.99 or otherwise. When asked this specific question by the
defence, the plaintiff's experts and witnesses repeatedly stated that it is up
to the jury to determine the statutory damages.

You _cannot_ separate the awarded damages into the compensatory and punitive
damages, because the jury hasn't given you the information to do so. Therefore
your argument on the constitutionality of the compensatory/punitive damage
ratio falls apart.

If you think I'm wrong, the right way to proceed at this point is to provide
evidence from court materials, not other cases that you think are relevant or
your guesses. All the information is freely available, so there's really no
excuse for you to be more specific in relation to the facts of the case. In
particular, if you can provide me with evidence from court documents that the
jury used or was instructed to use a certain figure as the "compensatory
damage" figure and told to derive a punitive one on top of that, then you will
have proved that you are correct.

Otherwise, you're just another lawyer emitting hot air -- rather like
Professor Nesson.

~~~
MaxwellKennerly
See my reply above. The record companies did indeed prove unauthorized use of
the songs by Tenenbaum, and thus the approximately $0.99.

Your "cannot separate" argument completely misses the point: just because
Congress lumps compensatory and punitive damages together in one statute
doesn't mean constitutional protections don't apply. If that were the case,
Congress would easily legislate its way around every Supreme Court ruling by
lumping issues together.

Are you arguing there is no punitive element at all to the statutory damages?
If so, then why are the damages raised for the exact same conduct if it is
"willful?"

~~~
seertaak
> The record companies did indeed prove unauthorized use of the songs by
> Tenenbaum, and thus the approximately $0.99.

a) "and thus" is a deduction that you form yourself. At no point did the
plaintiffs assert this to be their figure for the financial damages resulting
from the defendant's actions. If you can find such a statement in the
transcripts, please produce it.

b) Even assuming the plaintiffs had made a statement of fact regarding the
financial damages wrought by the defendant's unauthorized reproduction of the
copyrighted material, there is the significant unknown of the financial
damages wrought by the defendant's unauthorized distribution of the material.
You conveniently assume that by not providing evidence as to the size of this
figure, the plaintiffs, defendants and jury have valued it at zero. This is of
course completely wrong.

c) Since the financial damages wrought by the defendant's behaviour is the sum
of the financial damages wrought by each individual infraction, and the damage
of one of those infractions hasn't been determined by either the plaintiffs or
the defendants, and moreover, the jury hasn't provided us with the formula
they used to arrive to their value of the damages, we have no way of knowing
the punitive/compensatory ratio, and your argument breaks down.

To look at it somewhat differently, supposing the plaintiffs had only filed
suit for unauthorized distribution. What happens to your argument then?
Answer: depending on how dim-witted you are, you'll either argue that the
ratio is infinite or (more sensibly) you'll acknowledge that the ratio is
indeterminate, whence one can't draw any conclusions as to its
constitutionality.

> Are you arguing there is no punitive element at all to the statutory
> damages?

Of course not. It is right and proper that there is a punitive element to the
statutory damages, simply to deter further unauthorized distribution. All I'm
saying is that you're not in a position to say that this quantity is (total
damages awarded) - $1.

~~~
MaxwellKennerly
"You conveniently assume that by not providing evidence as to the size of this
figure, the plaintiffs, defendants and jury have valued it at zero."

It's irrelevant what they valued it at: no evidence means no damages. Period.
Cases are dismissed every day for failing this fundamental requirement.

But, you say, there's a statute that presumes some level of damages. That's
true. What's also true is that the statute authorizes punitive damages, lumped
together with actual damages.

That's a problem under recent due process / punitive damages jurisprudence.
Per the Campbell case, you cannot have punitive damages that grossly exceed
the actual damages. Here, actual damages appear to be a single person's use of
30 songs, yet the jury awarded $675,000. There is, quite obviously, a large
punitive element.

You are not in a position to argue these punitives were only a small fraction
of the award, since, as noted above, actual damages proven were, at most, $30.

Your argument is that Congress can simply sweep these issues aside, lump them
together in a statute, and be done with it.

That's not how constitutional law works.

~~~
seertaak
> It's irrelevant what they valued it at: no evidence means no damages.
> Period.

...

> That's a problem under recent due process / punitive damages jurisprudence.
> Per the Campbell case, you cannot have punitive damages that grossly exceed
> the actual damages.

...

> Your argument is that Congress can simply sweep these issues aside, lump
> them together in a statute, and be done with it.

> That's not how constitutional law works.

But if we adopt such an uncompromosing position, the maximum possible
"constitutional" penalty by your own criteria is surely not more than $5 (for
each song).

I submit that your constitutional arguments would lead inexorably to a
situation in which it is, in effect, impossible uphold copyright ownership.
The deterrent to unauthorized distribution is for all practical purposes
removed. Moreover, litigation simply due to the costs, becomes economically
irrational, removing the only vehicle of redress for any damages inflicted.

You are, in other words, proposing to use a relatively expansive
constitutional interpretation of due process in order to usurp another
_explicit_ constituional right, namely that provided by Article I, Section 8,
Clause 8: "To 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."

I think this stretches constitutional law too far (I would go so far as to say
that it makes a mockery of constitutional law -- but, hey, I'm an adherent of
originalism). And I would certainly hope and expect that were the supreme
court to be presented with such an argument it would reject it as frivolous.

~~~
MaxwellKennerly
An adherent of "originalism" would have supported Lessig in the Eldred case;
your "original" view is at odds with the understanding of copyright at the
time of the Constitution, yet oddly consistent with the understanding of
copyright by the RIAA and MPAA.

More importantly, your objection is ridiculous. Of course Congress has ample
authority to regulate copyright. That doesn't mean unfettered authority to
impose excessive punitive damages in civil cases in violation of the due
process clause.

You act like a clash of constitutional clauses has never occurred in the
history of the Republic. The constitution was designed with "checks and
balances," a phrase you may have heard before. The bill of rights (including
the due process clause) is a check on the powers of the government (including
to regulate copyright).

------
quoderat
Nominally, it protects both.

But because some corporations have vastly more money and resources than the
people they wish to bully (individuals, in this case), the outcomes are
distorted, not to mention the lobbying power of a corporation vs. that of an
individual.

~~~
jacquesm
It's especially the latter that is the cause of a lot of problems.

Lobbying has its uses but for the most part it is simply a channel that ought
not to even exist. I don't recall any modern democracy that includes a 'right
to lobby' in its charter. Corporations already have an edge over us 'regular
humans', they're immortal. Lobbying skews it to the point where there
effectively is class justice, corporations can pay to get their laws passed
and the general people get to vote who passes the laws.

It's like being able to inject something after the filtering function has
already been applied.

