Sued Song Swapper Says Nuts to RIAA Settlement Offer

Jammie Thomas-Rasset, the Minnesota woman who was twice found liable for copyright infringement for sharing two dozen songs using an online file-sharing application, has turned down an offer to settle her US$54,000 penalty for less than half that amount.

The Recording Industry Association of America (RIAA) gave Thomas-Rasset the option of settling the case for $25,000, with the money promised to be donated to a musicians’ charity.

The offer came with the provision that she ask a judge to vacate a recent order that reduced her penalty fee to $54,000. Previously, the fee was nearly $2 million.

Thomas-Rasset, who had vowed to appeal the fine despite its recent reduction, turned down the RIAA’s offer to settle.

The industry association spearheading Thomas-Rasset’s — as well as some others accused of illegally downloading music from the Internet — expressed disappointment that she did not take them up on the deal. The RIAA declined to comment specifically to the E-Commerce Times for this article.

Latest Twist

This offer, and its lightening-quick rejection, is the latest twist in a legal fight that has captured nationwide attention since it began in 2007.

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

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

Instead, he reset the penalty taking into account such factors as 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 damages awarded to the actual damages suffered by the recording companies, bringing the damages to $2,250 per song.

By refusing to settle the case, Thomas-Rasset leaves herself open to an appeals court overturning the judge’s ruling and reinstating her $1.92 million fine. It’s also possible the appeals court could vacate the decision and then call another jury to decide the penalty.

The RIAA has said it will appeal now that Thomas-Rasset has turned down its offer.

Wild Card

The uncertain path from this point may be nearly as dangerous to the RIAA and its representative companies as it is to Thomas-Rasset. Indeed, the financial costs — at least at this point — have likely been greater for the industry, which must pay an expensive team of lawyers. Thomas-Rasset, by contrast, is reportedly receiving her legal assistance pro bono. A new jury just restarts the legal costs.

The case could also bring about long-term legal implications unfavorable to the RIAA. Although the judge’s opinion is non-binding in other courts, it could serve as a powerful weapon for other defendants.

“Without a doubt, the biggest issue the RIAA is facing here is that Judge Davis’s opinion — a very well-reasoned opinion that seems to approach the issues from every angle — is on the books unless Thomas-Rasset agrees to the settlement offer,” Doug Panzer, an attorney with Caesar, Rivise, Bernstein, Cohen & Pokotilow, told the E-Commerce Times.

“Just as the RIAA pointed to the Tenenbaum case trying to justify the large award against Thomas-Rasset, future litigants would point to the Thomas-Rasset opinion to show that awards have to be related to actual damages and that large awards may be unreasonable as a matter of law,” he said.

The Tenenbaum case Panzer referred to is that of Joel Tenenbaum, a student also accused by the RIAA of illegal file-sharing. Last year, a jury awarded $675,000 to the companies the RIAA represents, though Tenebaum reportedly plans to appeal.

Another judge is not obligated to take the case’s outcome into his or her thinking or instruct the jury based on it, but easily can, Panzer said. “And if I have to decide which I think is more persuasive — a thoroughly reasoned opinion of a federal district court judge, or a big-money award from 12 laypeople — I’m putting my money on the judge.”

Poster Child

The worst-case scenario for Thomas-Rasset is that the appeals court will say Judge Davis abused his discretion in reducing the jury award and reinstate the $1.92 million figure, Panzer said.

In the meantime, though, she has become a heroine to people who had decried the RIAA’s tactics of mass lawsuits against individuals they accuse of illegally sharing music.