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IP/Entertainment Case Law Updates

Capitol Records, Inc., et al. v. Alaujan, et al.

District court holds that non-commercial defendant’s constitutional challenge to Copyright Act’s statutory damages scheme is premature

In this copyright infringement action brought against several defendants for allegedly downloading sound recordings using a peer-to-peer network, one defendant filed a motion to dismiss in which he asserted that the statutory damages available to private parties under the Copyright Act, 17 U.S.C. § 504(c) – which range from $750 to $150,000 per infringement – are so excessive and punitive in nature that they essentially convert his case into a criminal proceeding and violate his right to due process. The defendant further argued that, by creating a private right of action to enforce copyright protections, the Copyright Act amounts to an unconstitutional delegation of prosecutorial function to private parties, and that the only way to avoid these constitutional infirmities is to interpret § 504(c)’s statutory damages provision as applying only to commercial infringers.

At the outset, the court noted that the issue before it was not whether the instant litigation is good policy, but whether the underlying statutory provision is constitutional. The court then noted that, under the doctrine of constitutional avoidance, courts should refrain from deciding constitutional questions until it is plainly necessary to do so. Accordingly, the court held that defendant’s “due process” challenge based on the purportedly excessive statutory damages was premature, and stated that the defendant could refile such challenge should a jury find liability and award damages against him.

The court rejected defendant’s claim that the Copyright Act represents an unconstitutional delegation where it grants private parties the ability to enforce copyright laws through civil suits, ruling that Congress routinely grants private entities the power to enforce their statutory rights without improperly delegating any inappropriate executive, judicial or legislative functions. However, the court held that, to the extent defendant argues that it is the magnitude of the penalties in relation to actual damages that renders the scheme an unconstitutional delegation of prosecutorial functions, such argument must also await the jury’s verdict for the reasons described above.

Finally, the court also rejected the defendant’s assertion that the court could avoid these alleged constitutional infirmities simply by construing the Copyright Act’s statutory damages provision as applying to commercial plaintiffs, rather than individuals. First, the court noted that, even if § 504(c) applies only to commercial infringers, this would be no basis for dismissal because the provision deals only with the measure of damages, not liability. Second, the court held that there is no sound textual basis in § 504(c) for defendant’s proposed construction – i.e., an interpretation that excludes non-commercial infringers – and that adopting defendant’s proposed construction would effectively amend the statute.

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