A kind of magic? Tenenbaum damages shrunk by 90%

US District Judge Nancy Gertner has slashed the federal jury award made against convicted file sharer Joel Tenenbaum by 90 percent, ruling that the award of $22,250 per infringed work could not withstand scrutiny under the Due Process Clause and was “unconstitutionally excessive’’ in light of what she described as the modest harm caused to the record labels whose works were infringed. She cut the award to from $675,000 to $67,500, one-tenth of the original sum. Judge Gertner said

“There is no question that this reduced award is still severe, even harsh .... It not only adequately compensates the plaintiffs for the relatively minor harm that Tenenbaum caused them; it sends a strong message that those who exploit peer-to-peer networks to unlawfully download and distribute copyrighted works run the risk of incurring substantial damages awards.’’

Judge Gertner’s maths to get to a figure of $22,250 damages for each act of infringement went like this

- statutory damages must bear a reasonable relationship to the actual damages
- the actual damage sustained by plaintiffs was no more than $30
- the benefit to the defendant was in the neighborhood of $1500
- it was permissible to treble the minimum statutory damages due to defendant's wilfulness

However the Boston Globe reports that the Judge Gertner believes that reduction also sends an equally important message that the constitutional protection against grossly excessive punitive awards in civil suits protects not only big corporations but “ordinary people like Joel Tenenbaum’’. Congress, she said, never envisioned that the Digital Theft Deterrence Act of 1999 would expose people like Tenenbaum to huge statutory damages for violating copyright law through illegal file sharing.

The major label’s trade body, Recording Industry Association of America (RIAA) issued a statement saying, “With this decision, the court has substituted its judgment for that of 10 jurors as well as Congress’’ saying that it would “contest this ruling’’.

Judge Gertner’s decision to reduce jury damages mirrors that in the case against Minnesota single mum, Jammie Thomas-Rasset who faced a jury award of $1.9 million. Earlier this year, the judge in that case reduced a jury award of $1.9 million in favour of the recorded music industry to $54,000 in her second trial, and the industry offered to settle the case with her for $25,000. However, Thomas-Rasset rejected the settlement, and the case is now poised to go to trial for a third time. Whether Tenenbaum decides to appeal is open – his lawyer, Havard law professor Charles Nesson said he is inclined to appeal the $67,500 award as still unconstitutionally excessive to the First Circuit Court of Appeals but must speak first with his client. Tenenbaum to reporters he had not read the decision and whilst he welcomed any reduction but he could not afford $67,500 either.

http://beckermanlegal.com/pdf/?file=/Lawyer_Copyright_Internet_Law/sony_tenenbaum_100709Decision.pdf
http://www.boston.com/news/local/massachusetts/articles/2010/07/10/file_sharing_damages_reduced_tenfold/
and lots of interesting comments here in the blogsphere http://recordingindustryvspeople.blogspot.com/2010/07/675000-verdict-reduced-to-67500-in-sony.html

And see 'A copyright ruling no one can like' at http://news.cnet.com/8301-31001_3-20010428-261.html