File Sharing Smack Down: First Circuit Rules Against Tenenbaum

In a victory for the record labels, the First Circuit has issued its decision in Sony v. Tenenbaum, finding meritless all of Tenebaum’s arguments against the constitutionality of statutory damage awards in file sharing cases.  The long-awaited decision, released Friday, restores the original jury award of $675,000 and remands back to District Judge Gertner to consider remittitur.

A key argument raised by Tenenbaum (and inherently adopted by the District Court in its opinion) is that the Copyright Act’s statutory damages provisions do not apply to “consumer-copiers” or non-commercial infringement.  The First Circuit quickly and authoritatively rejects that argument.

Tenenbaum is not a “consumer-copier,” a term he never clearly defines. He is not a consumer whose infringement was merely that he failed to pay for copies of music recordings which he downloaded for his own personal use. Rather, he widely and repeatedly copied works belonging to Sony and then illegally distributed those works to others, who also did not pay Sony. Further, he received, in turn, other copyrighted works for which he did not pay. Nor can Tenenbaum assert that his was merely a “non-commercial” use and distribution of copyrighted works as those terms are used elsewhere in the Act.  His use and distribution was for private gain and involved repeated and exploitative copying.

Had Congress intended to limit copyright actions against so-called “consumer infringers” as Tenenbaum hypothesizes, it easily could have done so. … Instead, subject to exceptions not relevant here, it extended liability to “anyone” who violates a copyright owner’s exclusive rights and allowed those owners to pursue actions against “any infringement.”

Where Congress intended to create other exceptions for solely personal or non-commercial use, it did so expressly. In two amendments which do not apply here, it drew such distinctions: (1) the Sound Recording Act of 1971, Pub. L. No. 92-140, 85 Stat. 391, which fully extended federal copyright protections to sound recordings but exempted certain reproductions of sound recordings made for personal use, and (2) the Audio Home Recording Act of 1992 (AHRA), Pub. L. No. 102-563, 106 Stat. 4237, codified at 17 U.S.C. § 1001 et seq., which provided some exemptions in other situations from copyright liability for infringements “based on the noncommercial use by a consumer.”  17 U.S.C. § 1008.  These statutes refute Tenenbaum’s argument [that statutory damages do not apply to “consumer copiers”].

The First Circuit, in remanding back to the district court to consider remittitur, briefly discusses the district court’s reliance on the Gore factors instead of Williams in determining that the jury award was unconstitutional.  Without directly holding that Gore does not apply, the First Circuit makes clear its belief that it is inapplicable here.

We note that in Gore, the Supreme Court did not overrule Williams. See Rivers v. Roadway Express, Inc., 511 U.S. 298, 312 (1994) (hierarchical relationship of Supreme Court to lower courts mandates that where “the Court has spoken, it is the duty of other courts to respect that understanding of the governing rule of law”). Nor has the Supreme Court to date suggested that the Gore guideposts should extend to constitutional review of statutory damage awards. The 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.

In the long-running District of Minnesota Elektra v. Thomas case, Judge Davis followed Judge Gertner’s district court decision in Tenenbaum, finding that the jury award of statutory damages was unconstitutional, but used the Williams factors instead of Gore in reaching his decision.  Judge Davis also tried remittitur once before reaching the constitutional question, so it will be interesting to see how the Eighth Circuit treats the inevitable appeal on the Thomas case.

The First Circuit’s Opinion is below:
[scribd id=65490758 key=key-1mzyriiczt13zzgb8mg6 mode=list]