FSF, with Ray Beckerman serving of counsel, have asked to file an amicus brief in the Sony v. Tenenbaum case. I thought you'd like to read it. The plaintiffs oppose the motion, and Tenenbaum supports it. So that means the court will decide if the amicus will be accepted or not. The purpose of the brief is this: We are submitting this brief to bring to the Court's attention some of the growing body of authority suggesting that the State Farm/Gore due process test applicable to punitive damage awards is likewise applicable to statutory damages, and in particular bars the suggestion that each infringement of an MP3 file having a retail value of 99 cents or less may be punishable by statutory damages of from $750 to $150,000 -- or from 2,100 to 425,000 times the actual damages.1 So it's more support for the concept of proportionality and asking the court to consider the Constitutionality of statutory damages in copyright cases involving noncommercial individuals. [ Update: Ray Beckerman sends a correction. He says the reasoning of the four cases and two law review articles and the brief is equally applicable to commercial copyright infringement defendants.]
Here, first, is the motion followed by the amicus brief, if the court grants the motion:
********************************
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
---------------------------------------x
CAPITOL RECORDS, INC., et al,
Plaintiffs,
-against-
NOOR ALAUJAN,
Defendant.
__________
03-CV-11661-NG
(Lead Docket Number)
------------------------------x
SONY BMG MUSIC ENTERTAINMENT,
et al,
Plaintiffs,
-against-
JOEL TENENBAUM,
Defendant.
_______
07-CV-11446-NG
(Original Docket Number)
------------------------------------x
MOTION OF FREE SOFTWARE
FOUNDATION FOR LEAVE TO
FILE AMICUS CURIAE BRIEF
1. The Free Software Foundation hereby moves the Court for permission to file
the annexed amicus curiae brief in connection with the defendant's motion for dismissal on
constitutional grounds.
2. We have consulted with counsel for plaintiffs and counsel for defendant as to
whether they object.
3. Counsel for defendant consents.
4. Counsel for plaintiffs oppose the filing.
WHEREFORE it is respectfully requested that the within motion be granted.
Dated: Southwest Harbor, Maine
March 20, 2009
Local Counsel:
Theodore G. Fletcher
By: /s/ Theodore G. Fletcher
Attorney at Law
MA Bar Lic. No. 652452
[address, phone, email]
Of Counsel:
RAY BECKERMAN, P.C>
By: /s/Ray Beckerman
Ray Beckerman (Not admitted in this court)
(Member of the bars of SDNY, EDNY,
2d Cir., 3d Cir., US Sup. Ct.)
[address, phone, email]
2
****************************************
****************************************
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
---------------------------------------x
CAPITOL RECORDS, INC., et al,
Plaintiffs,
-against-
NOOR ALAUJAN,
Defendant.
__________
03-CV-11661-NG
(Lead Docket Number)
----------------------------------x
SONY BMG MUSIC ENTERTAINMENT,
et al,
Plaintiffs,
-against-
JOEL TENENBAUM,
Defendant.
_______
07-CV-11446-NG
(Original Docket Number)
------------------------------------x
AMICUS BRIEF OF FREE SOFTWARE FOUNDATION IN CONNECTION WITH
DEFENDANT'S MOTION TO DISMISS ON GROUNDS OF UNCONSTITUTIONALITY
OF COPYRIGHT ACT STATUTORY DAMAGES AS APPLIED
TO INFRINGEMENT OF SINGLE MP3 FILES
Theodore G. Fletcher, Local Counsel
Attorney at Law
[address, phone, email]
The Free Software Foundation (FSF), founded in 1985, is dedicated to promoting
computer users' rights to use, study, copy, modify, and redistribute computer programs. The FSF
promotes the development and use of free (as in freedom) software -- particularly the GNU
operating system and its GNU/Linux variants. The FSF also publishes the GNU General Public
License (GNU GPL), the most popular free software license. As an organization dedicated to the
rights of computer users and their interaction with copyrighted works, we are concerned with the
RIAA's attempt to redefine copyright law through legal proceedings against individuals who are
generally unable to defend themselves.
We are submitting this brief to bring to the Court's attention some of the growing
body of authority suggesting that the State Farm/Gore due process test applicable to punitive
damage awards is likewise applicable to statutory damages, and in particular bars the suggestion
that each infringement of an MP3 file having a retail value of 99 cents or less may be punishable
by statutory damages of from $750 to $150,000 -- or from 2,100 to 425,000 times the actual
damages.1
In Parker v. Time Warner, 331 F.3d 13 (2d Cir. 2003), it was held that the
interplay between two statutes "may expand the potential statutory damages so far beyond the
actual damages suffered that the statutory damages come to resemble punitive damages.....[S]uch
a distortion could create a potentially enormous aggregate recovery for plaintiffs, and thus an in
terrorem effect on defendants, which may induce unfair settlements. And it may be that in a
sufficiently serious case the due process clause might be invoked... to nullify that effect and
reduce the aggregate damage award.".
2
We are aware of three (3) district court cases, and two law review articles, which
applied the reasoning of the Second Circuit in Parker to Copyright Act statutory damages as
applied to peer to peer file sharing of mp3 files.
In In re Napster, 2005 US DIST Lexis 11498, 2005 WL 1287611 (N.D. California
1005)(Patel, J.), it was held that "large awards of statutory damages can raise due process
concerns. Extending the reasoning of Gore and its progeny, a number of courts have recognized
that an award of statutory damages may violate due process if the amount of the award is "out of
all reasonable proportion" to the actual harm caused by a defendant's conduct.[T]hese cases are
doubtlessly correct to note that a punitive and grossly excessive statutory damages award
violates the Due Process Clause....."
In UMG Recordings v. Lindor, 2006 U.S. Dist. LEXIS 83486, 2006 WL 3335048
(E.D.N.Y. 2006)(Trager, J.), a case very like the instant one, brought by more or less the same
group of recording companies against an individual accused of having infringed their sound
recording copyrights by having used Kazaa, defendant sought leave to amend her answer to
assert a defense of the unconstitutionality of plaintiffs' claim for statutory damages, on due
process grounds, due to the excessiveness of the minimum statutory damages of $750. These
same plaintiffs opposed the amendment on the ground that it was "futile". The court granted
defendants' motion: "[P]laintiffs can cite to no case foreclosing the applicability of the due
process clause to the aggregation of minimum statutory damages proscribed under the Copyright
Act. On the other hand, Lindor cites to case law and to law review articles suggesting that, in a
proper case, a court may extend its current due process jurisprudence prohibiting grossly
3
excessive punitive jury awards to prohibit the award of statutory damages mandated under the
Copyright Act if they are grossly in excess of the actual damages suffered....."
In Atlantic Recording Corp. v. Brennan, 534 F. Supp. 2d 278 (D. Connecticut
2008)(Arterton, J.), another RIAA case just like the instant one, the Court rejected the plaintiffs'
motion for default judgment, holding that "[t]he defenses which have possible merit include...
whether the amount of statutory damages available under the Copyright Act, measured against
the actual money damages suffered, is unconstitutionally excessive..."
The two law review articles of which we are aware on the subject, both meriting
the Court's attention, are "Grossly Excessive Penalties in the Battle Against Illegal File-Sharing:
The Troubling Effects of Aggregating Minimum Statutory Damages for Copyright Infringement"
by J. Cam Barker, 83 Texas L. Rev. 525 (2004)(online at http://ssrn.com/abstract=660601) and
"Due Process in Statutory Damages", 3 Geo. J.L. & Pub. Pol'y 601, 627-28 (2005).
In addition to the foregoing authorities specifically dealing with application of the
State Farm/Gore test to Copyright Act statutory damages, we would also like to briefly mention
some other authorities which we feel the Court should take into account.
As we were reminded recently in Yurman Studio, Inc. v. Castaneda, 2009 U.S.
Dist. LEXIS 1386907 (S.D.N.Y. November 19, 2008)(Scheindlin, J.), it is a well settled principle
in copyright law that "'statutory damages should bear some relation to actual damages suffered'
[citing RSO Records v. Peri, 596 F.Supp. 849,862 (SDNY 1984); New Line Cinema Corp. v.
Russ Berrie & Co., 161 F.Supp.2d 293,303 (SDNY 2001); 4 Nimmer Sec. 14.04[E][1] at 14-90(2005)] and 'cannot be divorced entirely from economic reality'". The RIAA's lost profits in
4
the case of an mp3 file are approximately 35 cents. Statutory damages of $750 to $150,000 are
obviously divorced from economic reality, and totally out of proportion to actual damages
suffered.
Also, the Court would do well to note that in common law copyright cases, where
punitive damages are still recoverable, it is well settled that the State Farm/Gore test bars
recoveries which do not bear such a relationship. In fact, relatively recently, one of the record
companies which is a plaintiff in the instant case, when in the position of being a defendant,
argued, and prevailed in convincing the Sixth Circuit Court of Appeals, that punitive damages
which bore a 10:1 ratio to actual damages were unconstitutional, in Bridgeport Music v. Justin
Combs Pub., 507 F.3d 570 (6th Cir.), cert. denied, 2008 U.S. LEXIS 6770 (2008): "The disparity
between compensatory and punitive damages in this case further supports the conclusion that the
punitive damages award is unconstitutional .... Although the Supreme Court has repeatedly
rejected the use of bright-line rules, it has cautioned that "few awards exceeding a single-digit
ratio between punitive and compensatory damages, to a significant degree, will satisfy due
process," State Farm, 538 U.S. at 425, and it has noted that "an award of more than four times
the amount of compensatory damages might be close to the line of constitutional impropriety."
Id. (citing Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 23-24 (1991)); see also Clark, 436 F.3d
at 606...... Here, defendants' conduct, although willful, was not highly reprehensible ..... [A] ratio
of closer to 1:1 or 2:1 is all that due process can tolerate in this case ......"
And in Capitol v. Thomas, 579 F. Supp. 2d 1210 (September 24, 2008)(Davis,
J.)(dictum), an RIAA case against an individual, where an outsized jury verdict was returned,
5
and ultimately set aside on other grounds, the Court reaffirmed the concept of proportionality:
"The Court would be remiss if it did not take this opportunity to implore Congress to amend the
Copyright Act to address liability and damages in peer to peer network cases.... The defendant is
an individual, a consumer. She is not a business. She sought no profit from her acts..... [T]he
damages awarded in this case are wholly disproportionate to the damages suffered by Plaintiffs."
It is indeed logical that the State Farm/Gore test be applied to statutory damages,
since the primary means used by the Supreme Court in formulating that test was to exhaustively
analyze a large number of statutes authorizing statutory damages, to distill from them the fair
range of penalties, and then to apply that range to punitive damages. It is unimagineable that the
Court would not apply the same test to the very source of its rationale.
We take no position on whether at this early stage in the case the Court can do
anything other than uphold the legal sufficiency of the defense, as it is our understanding that
there is no factual record in place from which the Court could determine the plaintiffs' lost
profits, or the degree of reprehensibility of the defendants' conduct, and other factors which
might be necessary to determine whether in fact the remedy sought is excessively
disproportionate.
Neither do we take any position on whether there is a way for the Court to avoid
the constitutional question altogether, by, for example, construing the complaint as alleging a
single copyright infringement, or by finding it insufficient to make out a case for statutory
damages in any event.
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Respectfully submitted,
Local Counsel:
Theodore G. Fletcher
By: /s/ Theodore G. Fletcher
Attorney at Law
MA Bar Lic. No. 652452
[address, phone, email]
Of Counsel:
RAY BECKERMAN, P.C>
By: /s/Ray Beckerman
Ray Beckerman (Not admitted in this court)
(Member of the bars of SDNY, EDNY,
2d Cir., 3d Cir., US Sup. Ct.)
[address, phone, email]
1
We estimate that the lost profits per song file are in the neighborhood of 35 cents,
although this will vary based on variations in wholesale price, or in expenses, especially royalties
payable.
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