25 June 2013


Two interesting appellate decisions today both merit some comment. The one for which I'm more "qualified" to comment requires the least comment, naturally... And by the time you get to the end of this post, you may be wondering why I didn't refer to a different Bowie tune.

The US Court of Appeals for the First Circuit reaffirmed the vitality of statutory damages in copyright actions, rejecting (yet again) an admitted pirate's complaint that years of concerted piracy made a $675,000 statutory damages award against him not just excessive, but unconstitutionally excessive.

To determine whether "the penalty prescribed [against Tenenbaum] is so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable," we will examine the purpose of statutory damages under the Copyright Act, as well as Tenenbaum's behavior.

Statutory damages under the Copyright Act are designed not only to provide "reparation for injury," but also "to discourage wrongful conduct." As we explained in Tenenbaum II, in 1999 Congress increased the minimum and maximum statutory awards under the Copyright Act because of new technologies that would allow Internet users to steal copyrighted works. At trial, Sony presented evidence that Tenenbaum's activities led to the same type of harm that Congress foresaw: loss of the value of its copyrights, reduced income and profits, and job losses.

On appeal, Tenenbaum invites us to assume that he is "the most heinous of noncommercial copyright infringers." We need not go so far as to accept his offer. The evidence of Tenenbaum's copyright infringement easily justifies the conclusion that his conduct was egregious. Tenenbaum carried on his activities for years in spite of numerous warnings, he made thousands of songs available illegally, and he denied responsibility during discovery. Much of this behavior was exactly what Congress was trying to deter when it amended the Copyright Act. Therefore, we do not hesitate to conclude that an award of $22,500 per song, an amount representing 15% of the maximum award for willful violations and less than the maximum award for non-willful violations, comports with due process.

Tenenbaum argues that the award of $675,000 violates due process because it is not tied to the actual injury that he caused, which he estimates to be no more than $450, or the cost of 30 albums at $15 each. But this argument asks us to disregard the deterrent effect of statutory damages, the inherent difficulty in proving damages in a copyright suit, and Sony's evidence of the harm that it suffered from conduct such as Tenenbaum's. More importantly, the Supreme Court held in Williams that statutory damages are not to be measured this way:

Nor does giving the penalty to the aggrieved [party] require that it be confined or proportioned to his loss or damages; for, as it is imposed as a punishment for the violation of a public law, the Legislature may adjust its amount to the public wrong rather than the private injury, just as if it were going to the state.

For these reasons, we find Tenenbaum's arguments unpersuasive.

Sony[-]BMG Music Entertainment, Inc. v. Tenenbaum, No. [20]12–2146 (1st Cir. 25 Jun 2013) (PDF), slip op. at 8–9 (citations and footnotes omitted). The key point is this: What appears excessive as a policy matter, as applied in a particular instance, is often not excessive as a constitutional matter, whether facially or as-applied. This is the fundamental litigation error that Tenenbaum (and his counsel and amici) have made from the first day of this particular case. Tenenbaum has — perhaps, and only perhaps, on these facts as established in the record, even interpreting them most favorably to him — a policy argument that perhaps there should be a cap (still a pretty significant one) placed on statutory damages in cases in which the defendant does not demonstrate not just damages to the defendant, but profit to the infringer. That, however, is not a due process argument, and it certainly is not an equal protection argument. At the constitutional level, it is at best a fundamental fairness argument... and those arguments simply don't hold water outside the Eighth Amendment's "cruel and unusual punishment" prohibition, and seldom even then. This is yet another example of "unwise ≠ unconstitutional" in action — as demonstrated in a disturbing corollary from the Supreme Court this morning.

Consider the fundamental structural error committed by a bare majority of the Supreme Court this morning in reversing in Shelby County, and in particular in denigrating Congressional factfinding in this kind of context. For the majority, Chief Justice Roberts holds that

But a more fundamental problem remains: Congress did not use the record it compiled to shape a coverage formula grounded in current conditions. It instead reenacted a formula based on 40-year-old facts having no logical relation to the present day. The dissent relies on “second generation barriers,” which are not impediments to the casting of ballots, but rather electoral arrangements that affect the weight of minority votes. That does not cure the problem. Viewing the preclearance requirements as targeting such efforts simply highlights the irrationality of continued reliance on the §4 coverage formula, which is based on voting tests and access to the ballot, not vote dilution. We cannot pretend that we are reviewing an updated statute, or try our hand at updating the statute ourselves, based on the new record compiled by Congress. Contrary to the dissent’s contention, we are not ignoring the record; we are simply recognizing that it played no role in shaping the statutory formula before us today.

Shelby Cty. v. Holder, No. [20]12–96 (25 Jun 2013), slip op. at 21 (internal citation omitted). In contrast, Justice Ginsburg's dissent notes that

The Court has time and again declined to upset legisla­tion of this genre unless there was no or almost no evi­dence of unconstitutional action by States. No such claim can be made about the congressional record for the 2006 VRA reauthorization. Given a record replete with examples of denial or abridgment of a paramount federal right, the Court should have left the matter where it belongs: in Congress’ bailiwick.

Instead, the Court strikes §4(b)’s coverage provision because, in its view, the provision is not based on “current conditions.” It discounts, however, that one such condition was the preclearance remedy in place in the covered jurisdictions, a remedy Congress designed both to catch discrimination before it causes harm, and to guard against return to old ways. Volumes of evidence supported Congress’ de­termination that the prospect of retrogression was real. Throwing out preclearance when it has worked and is continuing to work to stop discriminatory changes is like throwing away your umbrella in a rainstorm because you are not getting wet.

Id., slip op. at 63 (Ginsburg, J., dissenting) (citations omitted).

This is a clear disagreement... and it exposes a gaping hole in the Court's overall jurisprudence. Without trying very hard, it's rather easy to point at instances in which this Court (and its predecessors, and lower courts) second-guesses Congressional fact-finding, or not, based on something other than an analytical framework. And that is not the rule of law; it is not respect for sovereignty or separation of powers; it is not, above all, rational. I'm all for a more-searching review of the farce that usually passes for legislative fact-finding, particularly when that legislative process is dominated by corporate lobbyists whose interest is only profit and not the substance of the legislation (as indirectly exposed by the history of statutory damages provisions alluded to in Tenenbaum III). The problem is that such a more-searching review must be done uniformly, and as to all legislative actions — not merely as to those for which the policy options selected by Congress are agreeable to the judge(s) performing the review.

In short, if we're going to second-guess at all, we second-guess everybody. In the near term, that may tie things up more. In the long term, it will force legislative bodies to actually make a record; to avoid back-room deals; to disclose the sources of their data, not just the summaries; to put facts on at least a comparable footing with ideology and reelection. It will be an uncertain and rocky path. But it will avoid the self-inflicted wounds exposed by comparing the legislative factfinding found inadequate in Shelby County to the laughable, nonscientific-but-concerning-science legislative factfinding found adequate in Carhart II — let alone the neglect to find facts at all lurking somewhere near Tenenbaum III (even though the facts were there, had they been sought out).