Sony BMG Music Entertainment et al v. Tenenbaum

Filing 82

Judge Rya W. Zobel: ORDER entered granting 75 Motion to Strike ; granting 81 Motion to Strike (Urso, Lisa)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

CIVIL ACTION NO. 07-11446-RWZ

SONY BMG MUSIC ENTERTAINMENT, et al.
v.
JOEL TENENBAUM
ORDER
August 23, 2012

ZOBEL, D.J.

This copyright infringement case is before me on remand from the First Circuit.
See Sony BMG Music Entm’t v. Tenenbaum, 660 F.3d 487 (1st Cir. 2011). Plaintiffs,
recording companies Sony BMG Music Entertainment, Warner Brothers Records, Inc.,
Atlantic Recording Corporation, Arista Records LLC, and UMG Recordings, Inc.
(collectively, “Sony”), brought this action for statutory damages and injunctive relief
under the Copyright Act, 17 U.S.C. § 101 et seq. They alleged that defendant, Joel
Tenenbaum, willfully infringed the copyrights of thirty music recordings by using peerto-peer file-sharing software to illegally download and distribute such works. For
brevity, I incorporate the First Circuit’s discussion of the factual and procedural history,
id. at 490-96, and summarize only that which is relevant to disposition of the issues on
remand.
I.

Background

After a five-day jury trial, District Judge Nancy Gertner partially granted Sony’s
motion for judgment as a matter of law, holding that plaintiffs owned the thirty
copyrights at issue and that Tenenbaum infringed those copyrights through his
downloading and distribution activities. The jury found that Tenenbaum’s infringement
was willful as to each of the thirty copyrighted works, and returned a verdict within the
statutory range1 of $22,500 per infringement, for a total damages award of $675,000.
Tenenbaum moved for a new trial or remittitur, arguing that the court should
remit the award to the statutory minimum because its excessiveness both offended due
process and merited common law remittitur. Judge Gertner bypassed the issue of
common law remittitur, and reduced the jury award by a factor of ten on the basis that
the award was unconstitutionally excessive under the standard for evaluating punitive
damage awards enumerated in BMV v. Gore, 517 U.S. 559 (1996).2 See Sony BMG
Music Entm’t v. Tenenbaum, 721 F.Supp.2d 85, 103 (D. Mass. 2010).
The First Circuit affirmed Judge Gertner’s findings on liability and the grant of
injunctive relief.3 It also rejected Tenenbaum’s arguments “that the Copyright Act is

1

The Copyright Act permits recovery of either actual damages and profits, or statutory damages.
17 U.S.C. § 504(a). The statute establishes an award range of $750 to $30,000 for each act of nonwillful infringement, and a range of $750 to $150,000 for each act of willful infringement. Id. § 504(c).
2

Gore involved a Fourteenth Amendment due process challenge to a $2 million punitive
damages award. In laying out the standard for finding a punitive damages award unconstitutional, the
Supreme Court reasoned that the Constitution requires that a person “received fair notice not only of the
conduct that will subject him to punishment, but also of the severity of the penalty that a State may
impose.” 517 U.S. at 574. The Court established three “guideposts” for evaluating whether a defendant
received adequate notice: (1) the degree of reprehensibility of the defendant’s conduct; (2) the ratio of
the punitive award to the actual or potential harm inflicted on the plaintiff; and (3) the disparity between
the punitive award and the civil or criminal penalties authorized in comparable cases. Id. at 574-75.
3

See Amended Judgment, July 9, 2010 (Docket # 48) (discussing injunctive relief).

2

unconstitutional under Feltner [v. Columbia Pictures Television, Inc., 523 U.S. 340
(1998)], that the Act exempts so-called ‘consumer copying’ infringement from liability
and damages, that statutory damages under the Act are unavailable without a showing
of actual harm, that the jury’s instructions were in error, and his various trial error
claims.”4 Tenenbaum, 660 F.3d at 515. The court of appeals vacated Judge Gertner’s
ruling that the damages award violated due process, however, holding that the doctrine
of constitutional avoidance required the district court to consider whether common law
remittitur was appropriate before it considered Tenenbaum’s due process challenge.
Id. at 490, 515. It reinstated the original damages award, and remanded “for
consideration of defendant’s motion for common law remittitur based on
excessiveness.” Id. at 515. Tenenbaum filed a petition for writ of certiorari, which was
denied on May 12, 2012. Tenenbaum v. Sony BMG Music Entm’t, 132 S.Ct. 2431
(2012).
II.

Discussion
A.

Common Law Remittitur

Remittitur is appropriate only if the award exceeds “any rational appraisal or
estimate of the damages that could be based on the evidence before the jury,” where
such evidence is reviewed in the light most favorable to the prevailing party. Smith v.
Kmart Corp., 177 F.3d 19, 30 (1st Cir. 1999) (quoting Milone v. Moceri Family, Inc., 847
F.2d 35, 36 (1st Cir. 1988)). See also E. Mountain Platform Tennis, Inc. v. Sherwin-

4

Plaintiff raises many of these same issues on remand. The First Circuit has already rejected
them, see Tenenbaum, 660 F.3d at 496-508, and this court will not address them further.

3

Williams Co., Inc., 40 F.3d 492, 502 (1st Cir. 1994). “‘[T]he obstacles which stand in
the path of’ such claims of excessiveness ‘are formidable ones.’” Kmart, 177 F.3d at 30
(quoting Wagenmann v. Adams, 829 F.2d 196, 215 (1st Cir. 1987)). A damage award
must stand unless it is “grossly excessive, inordinate, shocking to the conscience of the
court, or so high that it would be a denial of justice to permit it to stand.” Correa v.
Hosp. San Francisco, 69 F.3d 1184, 1197 (1st Cir. 1995) (quoting Segal v. Gilbert
Color Sys. Inc., 746 F.2d 78, 81 (1st Cir. 1984)); Kmart, 177 F.3d at 30.
Under this stringent standard, there is no basis for common law remittitur. The
jury was given a list of non-exhaustive factors to consider in issuing its award,
including:
the nature of the infringement; the defendant’s purpose and intent, the profit
that the defendant reaped if any, and/or the expense that the defendant
saved; the revenue lost by the plaintiff as a result of the infringement; the
value of the copyright; the duration of the infringement; the defendant’s
continuation of infringement after notice or knowledge of copyright claims
and the need to deter this defendant and other potential infringers.
Tenenbaum, 660 F.3d at 503-04. Tenenbaum did not object to these instructions.
In light of these factors, a rational appraisal of the evidence before the jury,
viewed in the light most favorable to the verdict, supports the damages award. The jury
learned that music recording companies’ primary source of revenue stems from their
exclusive rights to copy and distribute the musical works of their contracted artists. Id.
at 491. It learned about the operation of peer-to-peer file-sharing networks and how
such networks facilitated “the unauthorized and illegal downloading and distribution of
copyrighted materials – especially music recordings. . . .” Id. The jury also heard

4

evidence from which it could rationally conclude that the value of a blanket license to
upload music recordings to the internet for public consumption would be “enormous.”
Id. at 491 and n.3 (quoting testimony by a representative from Universal Music Group
which suggested the grant of a such a license would result in the record companies
losing complete control over their assets and drive them out of business). See also
Kmart, 177 F.3d at 30 (“Translating legal damage into money damages is a matter
‘peculiarly within a jury’s ken’. . . .”).
There was further evidence about the scope and scale of Tenenbaum’s
infringement activities. His illegal conduct lasted for at least eight years, from 1999 to
2007. Id. at 492-93. During that time, he not only downloaded but also distributed
thousands of copyrighted works to users of peer-to-peer file-sharing networks. Id. at
493.
The trial evidence also supports the jury’s determination that Tenenbaum
willfully infringed plaintiffs’ copyrights. He conducted his infringing activities while
knowing that lawsuits were being brought against individuals who downloaded and
distributed music without authorization. Id. He personally received multiple warnings
from various sources – including his father in 2002, his college in 2003, and plaintiffs in
2005 – and he was warned that his activities could subject him to liability of up to
$150,000 per infringement. Id. at 493-94. In spite of these warnings, he continued to
download and distribute copyrighted materials; indeed, even after receiving Sony’s
2005 cease and desist letter, trial evidence shows that defendant continued his
activities for two more years, until Sony filed this lawsuit against him. Id. at 495.
5

Plaintiffs’ 2005 letter also informed Tenenbaum about the impact of his activities
on the music industry and instructed him to preserve all evidence of his activities,
including any recordings he made available for distribution; yet in spite of these
instructions, Tenenbaum had his operating system on his laptop reinstalled and its hard
drive reformatted. Id. at 494-95 and n.7. Furthermore, as the First Circuit noted,
“[s]trong evidence established that Tenenbaum lied in the course of these legal
proceedings in a number of ways.” Id. at 495. At trial, Tenenbaum admitted that he
lied in responding to Sony’s discovery requests about the scope of his conduct using
online media distribution systems, his use of peer-to-peer networks, and the installment
of such networks on his computer. Id. When he was confronted at trial with his
attempts to shift blame for his actions to others – including a foster child living in his
family’s home, his sisters, a family house guest, and burglars – Tenenbaum finally
admitted responsibility. Id. at 496. In short, there was ample evidence of willfulness
and the need for deterrence based on Tenenbaum’s blatant contempt of warnings and
apparent disregard for the consequences of his actions. In spite of the overwhelming
evidence from which the jury could conclude that Tenenbaum’s activities were willful,
the award of $22,500 per infringement not only was at the low end of the range – only
15% of the statutory maximum – for willful infringement, but was below the statutory
maximum for non-willful infringement. Considering all of the aforementioned evidence,
the jury’s damage award was not so excessive as to merit remittitur.
B.

Due Process Challenge

I turn now to defendant’s due process challenge. See Tenenbaum, 660 F.3d at
6

515 n.28 (“If the district court determines that the jury’s award does not merit common
law remittitur, the court and the parties will have to address the relationship between
the remittitur standard and the due process standard for statutory damage awards,
should the issue continue to be raised.”).
1.

Standard

The First Circuit vacated the earlier due process analysis and strongly
suggested, without deciding, that the standard for evaluating the constitutionality of
statutory damages established in St. Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S. 63
(1919) – rather than the Gore standard – should govern analysis of the constitutional
issue. It noted that, in Gore, the Supreme Court did not overrule Williams, and that the
Supreme Court has not “suggested that the Gore guideposts [for evaluating punitive
damage awards] should extend to constitutional review of statutory damage awards.”
660 F.3d at 513. Further, the First Circuit explained that “concerns regarding fair
notice to the parties of the range of possible punitive damage awards present in Gore
are simply not present in a statutory damages case, where the statute itself provides
notice of the scope of the potential award.” Id. Finally, the court observed that the only
other circuit court to directly decide the issue applied the Williams test instead of Gore.
Id. (citing Zomba Enters., Inc. v. Panorama Records, Inc., 491 F.3d 574, 587 (6th Cir.
2007)). See also Capitol Records, Inc. v. Thomas-Rasset, 799 F.Supp.2d 999, 1004
(D. Minn. 2011) (concluding that Williams, and not Gore, should govern the standard of
review for due process challenge to a statutory damages award under the Copyright
Act); Lowry’s Reports, Inc. v. Legg Mason, Inc., 302 F.Supp.2d 455, 460 (D. Md. 2004)
7

(declining to apply Gore in due process challenge to statutory damages award under
Copyright Act, noting: “The unregulated and arbitrary use of judicial power that the
Gore guideposts remedy is not implicated in Congress’ carefully crafted and reasonably
constrained statute.”).
Other courts have applied Williams to evaluate the constitutionality of statutory
damages provisions and awards. Centerline Equip. Corp. V. Banner Pers. Serv., Inc.,
545 F.Supp.2d 768, 777-78 (N.D. Ill. 2008) (applying Williams to uphold due process
challenge to the statutory damages provision of Telephone Consumer Protection Act);
Accounting Outsourcing, LLC v. Verizon Wireless Pers. Commc’ns, L.P., 329
F.Supp.2d 789, 808-09 (M.D. La. 2004) (same); Texas v. Am. Blastfax, Inc., 121
F.Supp.2d 1085, 1090-91 (W.D. Tex. 2000) (same); Verizon California Inc. v.
OnlineNIC Inc., No. 08-2832, 2009 WL 2706393, at * 6-7 (N.D. Ca. Aug. 25, 2009)
(applying Williams to uphold statutory damages award under AntiCybersquatting
Consumer Protection Act).
Moreover, two of the three Gore “guideposts,” supra note 2, do not logically
apply in the statutory damages context. The third guidepost – disparity between the
punitive award and comparable civil penalties – is wholly inapplicable where the award
is within the statutory range authorized by Congress. See Thomas-Rasset, 799
F.Supp.2d at 1006 (“The Copyright Act’s explicit damages range is, itself, the very
guidepost that the Supreme Court urges this Court to heed. Thus, comparing an inrange statutory damages award to the authorized statutory damages range is
unhelpful.”). It is likewise inappropriate to consider the second guidepost – the ratio of
8

punitive damages to actual damages. Congress gave a Copyright Act plaintiff the right
to elect statutory in lieu of actual damages, in part because it recognized that actual
damages are extremely difficult to measure and prove in a copyright case. See F.W.
Woolworth Co. v. Contemporary Arts, 344 U.S. 228, 224-25 (1952); Lowry’s Reports,
302 F.Supp.2d at 460. Furthermore, the Supreme Court has instructed that the validity
of a statutory damages award is “not to be tested” by comparing it to the actual
damages suffered. Williams, 251 U.S. at 67.
Defendant offers no case that has held that a statutory damages award must be
reviewed under Gore, nor one that has applied defendant’s proposed “intelligent
amalgam” due process standard. Def. Opening Br. on Remand at 8. Thus, I evaluate
the constitutionality of the damages award under Williams.
2.

Application of Williams Standard

Under Williams, which involved a challenge to a state statute setting an award
range for railroads that overcharged passengers, a statutory damages award comports
with due process as long as it “cannot be said to be so severe and oppressive as to be
wholly disproportioned to the offense or obviously unreasonable.” 251 U.S. at 67. The
constitutionality of the award must be assessed “with due regard for the interests of the
public, the numberless opportunities for committing the offense, and the need for
securing uniform adherence to” law. Id. The Williams standard is highly deferential.
Id. at 66-67 (noting “wide latitude of discretion” afforded to state legislatures in setting
damages awards). See also Zomba, 491 F.3d at 587 (describing review under Williams
as “extraordinarily deferential – even more so than in cases applying abuse-of9

discretion review.”) (citing Douglas v. Cunningham, 294 U.S. 207, 210 (1935)); cf.
Browning-Ferris Indus. v. Kelco Disposal, Inc., 492 U.S. 257, 281 (1989) (Brennan, J.,
concurring) (noting that the Supreme Court’s “scrutiny of awards made without the
benefit of a legislature’s deliberation and guidance would be less indulgent than our
consideration of those that fall within statutory limits.”). The court is also sensitive to
the separation of powers issues raised by a challenge to a statutory damages range
determined by Congress. See Tenenbaum, 660 F.3d at 513 (noting that Congress is
authorized to set awards of damages under its Article I powers, and that concerns
could be raised by “intrusion” into that power).
Statutory damages have been available as a federal remedy for copyright
infringement since the Copyright Act of 1790. Act of May 31, 1790, ch. 15, §§ 2,6, 1
Stat. 124, 125. See also Feltner, 523 U.S. at 349-51 (discussing history of award of
statutory damages for copyright infringement). As discussed above, Congress elected
to give copyright holders the option of collecting statutory damages rather than actual
damages because of the difficulty of measuring and proving the latter. In amending the
Copyright Act’s statutory damages provision in 1999, Congress found that infringement
causes public harms including “lost U.S. jobs, lost wages, lower tax revenue, and
higher prices for honest purchasers of copyrighted [works].” H.R. Rep. No. 106-216
(1999), 1999 WL 446444, at *3. The 1999 amendments, which increased penalties for
willful infringement, were expressly designed to address behavior like that of
Tenenbaum. See Tenenbaum, 660 F.3d at 500 (citing legislative history of the Digital
Theft Deterrence and Copyright Damages Improvement Act of 1999, Pub. L. No. 10610

160, 113 Stat. 1774, which increased the minimum and maximum awards available
under section 504(c)).5
Given the deference afforded Congress’ statutory award determination and the
public harms it was designed to address, the particular behavior of plaintiff in this case
as explained above, and the fact that the award not only is within the range for willful
infringement but also below the limit for non-willful infringement, the award is neither
“wholly disproportioned to the offense” nor “obviously unreasonable.” It does not
offend due process.
III.

Conclusion
The verdict and damages award, as reinstated by the First Circuit, stand.

Plaintiff’s Motion to Strike, or in the Alternative, to Disregard Defendant’s Reply Briefs
(Docket # 75) is ALLOWED to the extent that the court disregards facts and arguments
that are improperly raised. Plaintiffs’ Motion to Strike Defendant’s Amended Further
Submission (Docket # 81) is ALLOWED for failure to comply with LR 7.1(b)(3) and

5

The relevant portion of the House Report reads:

By the turn of the century the Internet is projected to have more than 200 million users, and
the development of new technology will create additional incentive for copyright thieves to
steal protected works. The advent of digital video discs, for example, will enable individuals
to store far more material than on conventional discs and, at the same time, produce perfect
secondhand copies . . . . Many computer users are either ignorant that copyright laws apply
to Internet activity, or they simply believe that they will not be caught or prosecuted for their
conduct. Also, many infringers do not consider the current copyright infringement penalties
a real threat and continue infringing, even after a copyright owner puts them on notice that
their actions constitute infringement and that they should stop the activity or face legal
action. In light of this disturbing trend, it is manifest that Congress respond appropriately
with updated penalties to dissuade such conduct. H.R. 1761 increases copyright penalties
to have a significant deterrent effect on copyright infringement.
H.R. Rep. No. 106-216 (1999), 1999 WL 446444, at *3.

11

because defendant has had ample opportunity for briefing and argument on the issue.

August 23, 2012
DATE

/s/Rya W. Zobel
RYA W. ZOBEL
UNITED STATES DISTRICT JUDGE

12