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Capitol Records Inc., et al. v. Thomas-Rasset

In peer-to-peer copyright infringement action, court grants defendant’s motion for remittitur and reduces jury’s statutory damage award from $1,920,000 to $54,000 after holding that jury’s statutory damages award is shocking and unjust; court concludes that treble the minimum statutory damages amount of $750 per song is the maximum amount the jury could properly have awarded.

In October, 2007, a jury returned a verdict that defendant Jammie Thomas-Rasset willfully infringed plaintiff record companies’ copyrights by downloading 24 songs using the Kazaa peer-to-peer network, awarding statutory damages in the amount of $9,250 for each willful infringement, for a total of $222,000. After the court vacated the verdict and granted a new trial based on an erroneous jury instruction, in June 2009 the jury returned a verdict finding that defendant had willfully infringed all 24 sound recordings and awarded statutory damages in the amount of $80,000 per song, for a total verdict of nearly $2 million. Plaintiffs chose statutory damages instead of actual damages. The Copyright Act provides that statutory damages can be between $750 and $30,000 for each infringement, but allows the court to increase the award of statutory damages to $150,000 in cases of willful infringement. 17 U.S.C. § 504(c).

Defendant moved for a new trial, remittitur (i.e., reducing a judgment awarded by a jury without ordering a new trial), and to alter or amend the judgment. The court rejected plaintiff’s argument that it did not have the authority to remit an award of statutory damages and that the jury alone has the authority to determine statutory damages. The court did say, however, that plaintiffs have the right to reject remittitur and seek a new jury trial on the issue of statutory damages. The court held that the jury’s statutory damages award was shocking and unjust and granted defendant’s motion for remittitur, reducing the damages award to $2,250 per song – three times the statutory minimum.

According to the court, a statutory damages award has a deterrent and compensatory component, and, while plaintiffs were not required to prove their actual damages, a statutory damages award must bear some relation to actual damages suffered. The court acknowledged that it would be difficult to determine actual damages resulting from peer-to-peer downloading of plaintiffs’ songs, and that such activity had caused widespread harm to the music industry. The court also acknowledged that the jury found that the defendant willfully infringed plaintiffs’ copyrights and that she was aware that downloading songs using peer-to-peer networks was illegal. Nonetheless, the court held that the jury’s almost $2 million award was “monstrous and shocking”.

The court said it would not substitute its judgment for the jury’s judgment but instead would determine the maximum amount that the jury could properly have awarded. The court concluded that treble the minimum statutory damages amount was appropriate considering that the defendant’s infringement was willful, that defendant was not infringing plaintiffs’ copyrights for profit, the need to deter others from engaging in music piracy, the loss to the music industry caused by illegal downloading and that other statutes (such as the Digital Millennium Copyright Act and the Lanham Act) provide for treble damages for willful violations. The court thus reduced the jury’s award to $2,250 per song for a total statutory damages award of $54,000. The court also granted plaintiffs’ request to amend the judgment by adding a permanent injunction.