Judge Slashes File-Sharer’s Penalty From 7 Figures to 5

Minnesota federal judge Michael Davis has reduced the fine imposed on Jammie Thomas-Rasset for illegally sharing music on the Internet from US$1.92 million to $54,000.

Davis, who presided over the trial, said that the original calculations to determine Thomas-Rasset’s penalty — more than $83,000 per song — were “monstrous and shocking.”

Thomas-Rasset has made statements to the media saying she can’t afford the $54,000 either, and that she intends to continue her appeal of the original verdict.

Slap in the Face

Even so, Davis’ motion is a setback for the RIAA, which had reason to believe it was leaving this particular battlefield as the victor. The RIAA signaled about a year ago that it would cease prosecuting individuals for illegally downloading songs from the Internet without copyright holders’ permission. Instead, it is working with Internet service providers to warn violators and then restrict their service.

When it was intent on prosecuting individuals, the RIAA may have had the law on its side, but it quickly lost the battle for public opinion, as hapless individuals — from senior citizens to college students to single mothers — were threatened with the choice of prosecution or settling out of court for a few thousand dollars. Thomas-Rasset was a single mother of four when her original trial took place.

The RIAA’s legal strategy drew even more criticism when it became clear that its accusations were sometimes wide of the mark. There was one reported case of a deceased person being accused by the RIAA of illegally infringing music — an 83-year-old grandmother who, according to the organization, had traded hundreds of rock music tracks under the name “smittenedkitten.” Her family said she had never even owned a computer, according to news accounts.

However, the vast majority of people the RIAA accused opted to settle because of the onerous penalties that could be levied on them if they lost their case — not to mention attorneys’ fees.

The RIAA declined to comment for this article, according to spokesperson Liz Kennedy.

It’s likely that the RIAA will now leave well enough alone, according to Tony Zeuli, an attorney with Merchant & Gould.

“I don’t think the RIAA will challenge this,” he told the E-Commerce Times. “In a way, it is a good result for them, in that the original verdict of $2 million was viewed by the public as excessive — and that was a problem for the RIAA.”

Two Trials, Two Penalties

Among the accused who chose to fight rather than settle was Thomas-Rasset, who first went to trial over the matter in 2007. In that case, the jury rejected the defense arguments and found her liable for damages of $222,000. Her case was overturned when Davis concluded he had erred in instructing the jury that the record companies did not have to prove that someone actually had downloaded the music that Thomas-Rasset was accused of making available.

That decision undermined a key RIAA argument — namely, that merely making copyrighted music available online was unlawful.

In the second trial, however, Thomas-Rasset was once again found liable.

She appealed the decision, arguing in part that the penalty was excessive and out of proportion to the offense — an argument that it seemed Davis would be receptive to. When he overturned the first verdict over erroneous jury instructions, he also said that the penalties were too high and that Congress should rectify that situation.

Whither Joel Tenenbaum?

Davis is not the only judge to have expressed concern over the size of the penalties. In another case that went to trial last year, Joel Tenenbaum, a Boston University student from Providence, R.I., was ordered to pay $675,000 to four record labels for downloading and distributing 30 songs. However, U.S. District Judge Nancy Gertner declined to force him to cease his criticism of the recording industry and copyright laws, despite the recording industry’s request.

Gertner also urged Congress to consider changing copyright law. “There is a deep potential for injustice in the Copyright Act as it is currently written,” she wrote. “There is something wrong with a law that routinely threatens teenagers and students with astronomical penalties for an activity whose implications they may not have fully understood.”

Unclear Ramifications

It is unclear whether Davis’ decision to reduce Thomas-Rasset’s fine will be helpful to Tenenbaum.

As a general rule, these judgments are very fact-specific, Randy M. Friedberg, counselor at White & Williams, told the E-Commerce Times. “What happens in one case doesn’t necessarily have anything to do with another case, even if it appears to be similar.”

The judge was able to reduce the damages in Thomas-Rasset’s case because the parties filed motions after the jury’s decision that put the question in the judge’s hands, Doug Panzer, an attorney with Caesar, Rivise, Bernstein, Cohen & Pokotilow, told the E-Commerce Times.

“The relevant motion in this case, is the a ‘motion for remittitur’ filed by Thomas-Rasset — a motion to reduce damages,” explained Panzer. “In the Eighth Circuit, where the Minnesota courts sit, the court has the ability to grant a motion for remittitur when the damages are ‘excessive and shocking’ and ‘shock the conscience of the court.'”

At the same time, the judge might also have been considering the deterrent effect of a multimillion-dollar fine, Panzer said. “What deterrence results from jury verdicts that are so huge that people simply say ‘well, they’ll never get that from me in a million years, so what’s the big deal?’ By reducing the damages to an amount that Thomas-Rasset can actually be on the hook for, it makes people say ‘that could be me.'”

A New Calculation

When he reset the penalty, the judge didn’t simply pick the number he thought was right, Panzer added. “Judge Davis’ opinion — which is very well reasoned — takes into account the jury’s damage award, the statutory language on damages and on willfulness, Thomas-Rasset’s status as a ‘non-commercial’ party, and the relation of the damage award to the actual damages suffered by the recording companies.”

Davis started with the minimum statutory copyright infringement damages of $750 per song, which he found was not enough because the statute provides for increased damages when the copyright infringement is “willful” and the jury had, indeed, found the infringement to be willful, Panzer said.

“He then looked to a laundry list of statutes — including the Digital Millennium Copyright Act — which increase damages to three times for willful violations. He thought that was reasonable. That brought the damages to $2,250 per song.”

As for the effect this may have on Joel Tennenbaum, Panzer noted that the RIAA pointed to that case as evidence that large awards are reasonable. However, Davis said that while other jury verdicts may be of some interest, you have to take into account that each case is judged on its own facts by a separate jury made up of individual minds.

The Boston litigants may not get too far in trying to use the language in the Minnesota opinion to their advantage, Panzer concluded. “That being said, I wouldn’t be surprised if the new damages award in the Thomas-Rasset case set a standard for any future, similar cases — although, hopefully, we’ve seen the end of this circus. It hasn’t proved to be good for anyone involved.”