Appeals court raises damages award in music piracy case

Tue Sep 11, 2012 4:24pm EDT

Pirated goods are displayed at a news conference held by U.S. Trade Representative Susan Schwab about two WTO cases against China during a news conference in Washington April 9, 2007. REUTERS/Kevin Lamarque

Pirated goods are displayed at a news conference held by U.S. Trade Representative Susan Schwab about two WTO cases against China during a news conference in Washington April 9, 2007.

Credit: Reuters/Kevin Lamarque

(Reuters) - The music industry won the latest round on Tuesday in its long-running legal battle against a woman accused of illegally downloading and sharing two dozen songs on the Kazaa peer-to-peer network.

The 8th U.S. Circuit Court of Appeals in St. Paul, Minnesota, reinstated a $222,000 jury verdict against Jammie Thomas-Rasset, rejecting her arguments that the damages award was excessive and violated her due process rights under the U.S. Constitution.

The decision is the latest to address the music industry's ability to use the Copyright Act to pursue individuals who illegally download music from the Internet. The law allows copyright owners to recover damages between $750 and $150,000 per infringed work.

Thomas-Rasset, from Brainerd, Minnesota, was one of 18,000 individuals sued by the Recording Industry Association of America between 2003 and 2008 in a legal assault meant to discourage people from illegally downloading songs from sites like Kazaa.

The industry organization accused her of illegally downloading more than 1,700 files. After failing to reach a settlement, the association sued Thomas-Rasset in 2006 over 24 songs on behalf of six major record labels, including Sony BMG Music Entertainment, UMG Recordings Inc and Arista Records.

The case has followed a circuitous path. Thomas-Rasset lost her first trial in 2007 and was ordered to pay $222,000, only to have the court throw out the verdict because of a faulty jury instruction.

At her second trial, Thomas-Rasset testified that her ex-boyfriend or sons, then 8 and 10, were most likely responsible for downloading and distributing the songs. The jury awarded the record labels $1.92 million in damages. But the court lowered the damages to $54,000, calling the jury's award "shocking."

Instead of accepting the lowered amount, the record companies exercised their right to a new trial, and a third jury awarded the music industry $1.5 million in damages. The district court again ruled that the maximum amount allowed by due process was only $54,000. The recording companies appealed.

On Tuesday, a unanimous three-judge panel of the 8th Circuit reinstated the original $222,000 in damages that the first jury had awarded.

The $222,000 award was not "so severe and oppressive" as to violate the Constitution, Judge Steven Colloton wrote for the panel. Rather, the amount, equivalent to $9,250 per song, was at the lower end of the $750 to $150,000 range that Congress established.

Thomas-Rasset argued that if the labels had sued her over 1,000 songs, the damages would be clearly excessive at over $9 million. But the panel refused to extrapolate.

"If and when a jury returns a multi-million dollar award for noncommercial online copyright infringement, then there will be time enough to consider it," Colloton wrote.

Kiwi Camara, a lawyer for Thomas-Rasset, called the $222,000 damages award "punitive" and out-of-line with the U.S. Supreme Court's rulings. He said he would likely appeal the case to the high court.

The Recording Industry Association of America welcomed the court's decision. We "look forward to putting this case behind us," the organization said in a statement. The group has ended its lawsuit campaign, and now sends warning notices to users caught illegally downloading music.

In a separate case in 2011, the 1st Circuit reinstated a $675,000 judgment against Joel Tenenbaum, a former Boston University student, for 30 charges of illegal downloading. That ruling reversed a trial judge's decision to knock the award down to $67,500.

Tenenbaum appealed that case to the Supreme Court, arguing that the Copyright Act was never meant to be applied to individual consumers. But the Supreme Court declined to hear the case in May, allowing the 1st Circuit decision to stand.

The latest 8th Circuit case is Capitol Records Inc et al v. Thomas-Rasset, No. 11-2820.

(Reporting By Terry Baynes; Editing by Tim Dobbyn)

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