Supreme Court Lets Stand $675,000 File-Sharing Verdict

Photo: Courtesy of Supreme Court

The Supreme Court on Monday let stand a $675,000 file-sharing damages award that a jury levied against a college student for making 30 music tracks available on a peer-to-peer network.

Without comment, the high court, with Chief Justice John Roberts and Justice Stephen Breyer not participating, declined an appeal brought by former Boston college student Joel Tenenbaum. His petition (.pdf) claimed that Congress did not intend “unrestrained discretionary jury damage awards against individual citizens for copyright infringement.”

The case before the justices, the second file-sharing case the high court has rejected in the Recording Industry Association of America’s now-defunct litigation campaign against individuals, concerned a decision by the 1st U.S. Circuit Court of Appeals.

The appellate court had reversed a federal trial judge who slashed the award as “unconstitutionally excessive.” U.S. District Judge Nancy Gertner of Boston reduced the verdict to $67,500, or $2,250 for each of the 30 tracks defendant Tenenbaum unlawfully downloaded and shared on Kazaa, a once popular popular file-sharing, peer-to-peer service. The 1st Circuit reinstated the award last year.

It was the nation’s second RIAA file-sharing case against an individual to ever reach a jury.

The Obama administration argued in support of the original award, and said the trial judge went too far when addressing the constitutionality of the Copyright Act’s damages provisions. The act allows damages of up to $150,000 a track.

The appeals court agreed with the government, and said the judge should have considered reducing the jury’s verdict under what is known as “remittitur.” That is a little-used power beholden to judges, and they assert it without considering the constitutional basis of the original award.

“The district court should first have considered the non-constitutional issue of remittitur, which may have obviated any constitutional due process issue and attendant issues,” the appeals court wrote last year. “Had the court ordered remittitur of a particular amount, Sony would have then had a choice. It could have accepted the reduced award. Or, it could have rejected the remittitur, in which case a new trial would have ensued.”

If any of that sounds familiar, the same thing happened in the nation’s first jury trial against a file sharer, Jammie Thomas-Rasset. That case has morphed into a Groundhog Day of sorts for the same reason. After a third trial in that case, U.S. District Judge Michael Davis of Minnesota slashed a jury award from $1.5 million to $54,000 for sharing 24 songs on Kazaa.

The jury’s award was “so severe and oppressive as to be wholly disproportionate to the offense and obviously unreasonable,” the trial judge wrote in that case. That decision is on appeal.

In either case, the RIAA maintains that judges do not have the power to reduce damages awards in Copyright Act cases at all.

Monday’s outcome does not address the question of how the legal process would ever end if a judge repeatedly reduced the award on remittitur and the plaintiff refused to accept it. That would mean endless trials, a concept not lost on Tenenbaum’s lawyer, Harvard legal scholar Charles Nesson. He urged the justices to review the case to avoid an “endless litigation rathole.”

The RIAA had sued thousands of individuals for file sharing. Most defendants have settled out of court for a few thousand dollars.

Only two such cases have gone to trial, and now in both, monstrous jury verdicts were reduced by the presiding judges for the same reasons.

The significance of Monday’s action by the Supreme Court, however, appears to be minimal in the music-sharing context. The RIAA has abandoned its litigation campaign and instead is working with internet service providers to warn file sharers or kick them off the internet if they repeatedly engage in online copyright infringement.

But whether judges ultimately have the authority to reduce damages awards in Copyright Act cases, even those not involving music, remains unknown. The Supreme Court on Monday declined (.pdf) to answer that question.