Tenenbaum - First Cir. Appeal - Brief of Sony BMG

Case: 10-1947 Document: 00116129273 Page: 1 Date Filed: 10/29/2010 Entry ID: 5499305
Nos. 10–1883, 10–1947, 10–2052

__________________________________________________________________
__________________________________________________________________
IN THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT
______________________
SONY BMG MUSIC ENTERTAINMENT, ET AL.,
Plaintiffs-Appellants/Cross-Appellees,
v.
JOEL TENENBAUM,
Defendant-Appellant/Cross-Appellant.
______________________
ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS
______________________
PLAINTIFFS-APPELLANTS/CROSS-APPELLEES’ OPENING BRIEF

_____________________
Timothy M. Reynolds Paul D. Clement

Eve G. Burton Jeffrey S. Bucholtz
Holme Roberts & Owen, LLP Erin E. Murphy
1700 Lincoln, Suite 4100 King & Spalding LLP
Denver, CO 80203 1700 Pennsylvania Avenue, N.W.
(303) 861-7000 Washington, DC 20006
(202) 737-0500
Matthew J. Oppenheim Jennifer L. Pariser

The Oppenheim Group, LLP Recording Industry
7304 River Falls Drive Association of America
Potomac, MD 20854 1025 F Street, N.W.
(301) 299-4986 Washington, DC 20004
(202) 775-0101
CORPORATE DISCLOSURE STATEMENT
The undersigned counsel of record provides the following statement under
Fed. R. App. P. 26.1(b): Each Plaintiff-Appellant identifies its parent corporation
and lists any publicly held company that owns 10% or more of its stock:
The ultimate parent corporation of Plaintiff-Appellant Sony BMG Music
Entertainment n/k/a Sony Music Entertainment is Sony Corporation (Japan), which
is publicly traded in the United States.
The ultimate parent corporation of Plaintiff-Appellant Warner Bros. Records
Inc. is Warner Music Group Corp., which is publicly traded in the United States.
Plaintiff-Appellant Arista Records LLC is a Delaware limited liability
company owned by Arista Music (formerly BMG Music), a New York general
partnership, which is not publicly traded.
The ultimate parent corporation of Plaintiff-Appellant UMG Recordings,
Inc., is Vivendi S.A., a publicly held French company.
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TABLE OF CONTENTS
CORPORATE DISCLOSURE STATEMENT ......................................................... i
TABLE OF AUTHORITIES ................................................................................... iii
STATEMENT OF JURISDICTION..........................................................................1
STATEMENT OF THE ISSUE.................................................................................1
STATEMENT OF THE CASE..................................................................................2
STATEMENT OF FACTS ........................................................................................4
SUMMARY OF ARGUMENT ...............................................................................21
ARGUMENT ...........................................................................................................24
I. THE DISTRICT COURT’S ANALYSIS AND CONCLUSIONS

ARE HOPELESSLY FLAWED ...................................................................24
A. The District Court’s Characterization of Tenenbaum’s Conduct

Bears No Relationship to Reality ...........................................................25
B. The District Court Artificially Distorted the Scope of Section

504(c)’s Applicability. ............................................................................30
II. CONSTITUTIONAL REVIEW OF STATUTORY DAMAGES IS

GOVERNED BY WILLIAMS. ......................................................................37
III. THE JURY’S AWARD IS CONSTITUTIONAL ........................................46
A. The Jury’s Award is Constitutional Under Williams..............................46
B. The Jury’s Award is Constitutional Under Gore....................................54
CONCLUSION........................................................................................................57
- ii -
TABLE OF AUTHORITIES
CASES
A&M Records, Inc., v. Napster,
239 F.3d 1004 (9th Cir. 2001) ..............................................................................9
Accounting Outsourcing LLC v. Verizon Wireless Pers. Commc’ns, L.P.,

329 F. Supp. 2d 789 (M.D. La. 2004)...........................................................44, 47
Arcilla v. Adidas Promotional Retail Operations, Inc.,

488 F. Supp. 2d 965 (C.D. Cal. 2007) ................................................................47
Arista Records LLC v. Usenet.com, Inc.,

2010 WL 3629587 (S.D.N.Y. Sept. 16, 2010) ...................................................47
Arrez v. Kelly Servs., Inc.,

522 F. Supp. 2d 997 (N.D. Ill. 2007)..................................................................46
Atlantic Recording Corp. v. Heslep,

2007 WL 1435395 (N.D. Tex. May 16, 2007) ...................................................10
Barnhart v. Sigmon Coal Co.,

534 U.S. 438 (2002)............................................................................................32
BMW of N. Am., Inc. v. Gore,

517 U.S. 559 (1996).................................................................................... Passim
Capitol Records, Inc. v. Alaujan,

593 F. Supp. 2d 319 (D. Mass. 2009)...................................................................3
Capitol Records, Inc. v. Thomas,

579 F. Supp. 2d 1210 (D. Minn. 2008).........................................................17, 56
Capitol Records, Inc. v. Thomas-Rasset,

680 F. Supp. 2d 1045 (D. Minn. 2010).........................................................17, 56
Centerline Equip. Corp. v. Banner Pers. Serv., Inc.,

545 F. Supp. 2d 768 (N.D. Ill. 2008)..................................................................45
Cooper Indus., Inc. v. Leatherman Tool Group, Inc.,

532 U.S. 424 (2001)............................................................................................38
- iii -
Douglas v. Cunningham,
294 U.S. 207 (1935)................................................................................23, 43, 49
Eldred v. Ashcroft,
537 U.S. 186 (2003)......................................................................................47, 50
F.W. Woolworth Co. v. Contemporary Arts, Inc.,

344 U.S. 228 (1952).................................................................................... Passim
Feltner v. Columbia Pictures,

523 U.S. 340 (1998).................................................................................... Passim
In re Aimster Copyright Litig.,

334 F.3d 643 (7th Cir. 2003) ................................................................................9
In re Napster, Inc. Copyright Litig.,

2005 WL 1287611 (N.D. Cal. June 1, 2005)......................................................45
In re Sony BMG Music Entm’t,

564 F.3d 1 (1st Cir. 2009).....................................................................................3
L.A. Westermann Co. v. Dispatch Printing Co.,

249 U.S. 100 (1919)................................................................................ 43, 48-49
Lowry’s Reports, Inc. v. Legg Mason, Inc.,

302 F. Supp. 2d 455 (D. Md. 2004)....................................................................44
Mendez-Matos v. Municipality of Guaynabo,

557 F.3d 36 (1st Cir. 2009).................................................................................55
Metro-Goldwyn-Mayer Studios, Inc., v. Grokster Ltd.,

545 U.S. 913 (2005).................................................................................... 8-9, 25
Murray v. GMAC Mortgage Corp.,

434 F.3d 948 (7th Cir. 2006) ..............................................................................44
Parker v. Gerrish,
547 F.3d 1 (1st Cir. 2008)...................................................................................27
Parker v. Time Warner Entm’t Co.,

331 F.3d 13 (2d Cir. 2003) .................................................................................45
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Propet USA, Inc. v. Shugart,

2007 WL 4376201 (W.D. Wash. Dec. 13, 2007) ...............................................47
Ratzlaf v. United States,

510 U.S. 135 (1994)............................................................................................32
Romano v. U-Haul Int’l,

233 F.3d 655 (1st Cir. 2000)...............................................................................45
Sadowski v. Med1 Online, LLC,

2008 WL 489360 (N.D. Ill. Feb. 20, 2008) ........................................................46
St. Louis, I.M. & S. Ry. Co. v. Williams,

251 U.S. 63 (1919)...................................................................................... Passim
State Farm Mut. Auto. Ins. Co. v. Campbell,

538 U.S. 408 (2003)......................................................................................40, 44
United States v. LaMacchia,

871 F. Supp. 535 (D. Mass. 1994)......................................................................35
Verizon Cal. Inc. v. OnlineNIC, Inc.,

2009 WL 2706393 (N.D. Cal. Aug. 25, 2009) ...................................................46
Zimmerman v. Direct Fed. Credit Union,

262 F.3d 70 (1st Cir. 2001)...............................................................15, 44, 54, 56
Zomba Enters., Inc. v. Panorama Records, Inc.,

491 F.3d 574 (6th Cir. 2007) ........................................................................44, 47
STATUTES
Act of May 31, 1790, 1 Stat. 124.........................................................................4, 47
17 U.S.C. § 504................................................................................................ Passim
28 U.S.C. § 1291........................................................................................................1
28 U.S.C. § 1338........................................................................................................1
Berne Convention Implementation Act of 1988,

Pub. L. No. 100–568, 102 Stat. 2853........................................................6, 48, 51
Copyright Act of 1856 Act, 11 Stat. 138 .................................................................48
-v-
Copyright Act of 1909, § 25(b), 35 Stat. 1075.....................................................48, 51
Copyright Act of 1976, Pub. L. No. 94–553,

90 Stat. 2541, 17 U.S.C. § 1501 et. seq ...................................................... Passim
Digital Theft and Copyright Damages Improvement Act of 1999,

Pub. L. No. 106–160, 113 Stat. 1774 ......................................................... Passim
No Electronic Theft Act,

Pub. L. No. 105–147, 111 Stat. 2678 (1997)......................................................36
OTHER AUTHORITIES
Staff of H. Comm. on the Judiciary, 87th Cong., Copyright Law Revision:
Report of the Register of Copyrights on the General Revision of The U.S.
Copyright Law ...................................................................................4, 27, 43, 49
H.R. Rep. 105–339 (1997).......................................................................................36
H.R. Rep. 106–216 (1999)............................................................................... Passim
U.S. Const. art. 1, § 8 ...............................................................................................47
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STATEMENT OF JURISDICTION
Appellants brought this action in the district court seeking statutory damages
and injunctive relief under the Copyright Act of 1976, 17 U.S.C. § 501 et seq.
against Defendant-Appellee/Cross-Appellant Joel Tenenbaum. Joint Appendix
(“Appx.”) 19-65. 1 The district court had subject matter jurisdiction pursuant to 28
U.S.C. § 1338(a). On July 31, 2009, a jury returned a verdict awarding Appellants
$675,000 in statutory damages. Appx. 70-77. On July 9, 2010, the court entered
an order reducing the damages award to $67,500 and enjoining Tenenbaum from
further infringing Appellants’ copyrights. Addendum (“Add.”) 65-66. Appellants
timely filed a notice of appeal on July 21, 2010. Appx. 80-81. This Court has
jurisdiction pursuant to 28 U.S.C. § 1291.
STATEMENT OF THE ISSUE

Whether the district court erred by holding that the jury’s award of $22,500
per work for willful infringement of 30 copyrighted works violated the Due
Process Clause, even though that award is well within the range of statutorily
prescribed damages awards for willful copyright infringement and even within the
statutory range for non-willful infringement.
1
The docket number for these proceedings is 1:07-cv-11446. Some of the docket entries,
however, are found in 1:03-cv-11661, a consolidated docket for similar cases brought by these
and other recording industry plaintiffs. Documents found in 1:07-cv-11446 are cited as “Doc.
No.,” and documents found in 1:03-cv-11661 are cited as “Consol. Doc. No.”
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STATEMENT OF THE CASE
On August 7, 2007, Appellants Sony BMG Music Entertainment, Warner
Bros. Records Inc., Arista Records LLC, and UMG Recordings, Inc., brought suit
against Appellee in the United States District Court for the District of
Massachusetts (Gertner, J.) seeking damages and injunctive relief for copyright
infringement under 17 U.S.C. § 501 et seq. Appx. 19-65. 2 Although Appellants
had evidence indicating Tenenbaum had willfully infringed thousands of works,
Appellants sought statutory damages for the willful infringement of only 30
copyrighted sound recordings under 17 U.S.C. § 504(c), which authorizes an award
of “not less than $750 or more than $30,000 as the court considers just” for each
work infringed, and an award of “not more than $150,000” if the infringement was
willful. Add. 4.
From the inception, Tenenbaum denied responsibility for the infringements.
Add. 10. Tenenbaum also sought to dismiss Appellants’ claims on grounds that
the statutory damages provision of the Copyright Act is unconstitutional. See Def.
Joel Tenenbaum’s Mot. to Dismiss (Consol. Doc. No. 779). The United States
intervened to defend the constitutionality of the statute. See United States of
America’s Unopposed Mot. to Intervene (Consol. Doc. No. 792). The court denied
2
Atlantic Recording Corporation was initially a plaintiff but was dismissed from the case on July
20, 2009. See Notice of Dismissal of Pl. Atlantic Recording Corporation (Consol. Doc. No.
891).
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Tenenbaum’s motion to dismiss, see June 15, 2009 Order re: Def.’s Mot. to
Dismiss (Consol. Doc. No. 847), and the case proceeded to trial. 3 After
Tenenbaum admitted during his trial testimony that he was responsible for
downloading and distributing all 30 of Appellants’ copyrighted sound recordings,
the court directed a verdict in Appellants’ favor on infringement, leaving the issues
of willfulness and damages for the jury’s consideration. Add. 10. On July 31,
2009, the jury returned a verdict finding that Tenenbaum’s infringement was
willful and awarding statutory damages of $22,500 per infringed work, for a total
award of $675,000. Appx. 70-77. On December 7, 2009, the court entered
judgment on the jury’s $675,000 verdict and enjoined Tenenbaum from further
infringing Appellants’ copyrights. Appx. 78-79.
Tenenbaum subsequently filed a motion for, among other things, a new trial
or remittitur arguing, inter alia, that the jury’s damages award, although authorized
by the statute, was unconstitutionally large. See Def.’s Mot. and Mem. for New
Trial or Remittitur (“Def.’s Mot.”) (Doc. No. 26). The United States again filed a
brief defending the constitutionality of the statute. See United States of America’s
Mem. in Response to Def.’s Mot. for New Trial or Remittitur (Doc. No. 31). On
3
Before the trial began, the district court granted Tenenbaum’s request to make a live webcast of
the proceedings publicly available throughout trial. Capitol Records, Inc. v. Alaujan, 593
F. Supp. 2d 319 (D. Mass. 2009). Appellants petitioned this Court for a writ of mandamus or
prohibition, arguing that the district court’s order violated local court rules prohibiting webcasts
of civil proceedings. The Court agreed and prohibited the webcast. In re Sony BMG Music
Entm’t, 564 F.3d 1 (1st Cir.), cert. denied sub nom. Tenenbaum v. Sony BMG Music Entm’t, 130
S. Ct. 126 (2009).
-3-
July 9, 2010, the court granted Tenenbaum’s motion in part, holding that the
damages award violated the Due Process Clause and reducing damages to $2,250
per song, for a total of $67,500. Add. 1-66. Appellants filed a notice of appeal on
July 21, 2010, Tenenbaum filed a notice of appeal on July 30, 2010, and the United
States filed a notice of appeal on September 3, 2010. Appx. 80-84. This Court
consolidated the appeals on September 17, 2010.
STATEMENT OF FACTS
Statutory Background
Copyright infringement has been subject to statutory damages since 1790.
Act of May 31, 1790, ch. 15, § 2, 1 Stat. 124, 125 (authorizing recovery of “fifty
cents for every sheet which shall be found in [the infringer’s] possession”). The
continuous availability of authorized statutory damages reflects the unbroken
judgment of Congress throughout our Nation’s history that “[t]he value of a
copyright is, by its nature, difficult to establish, and the loss caused by an
infringement is equally hard to determine.” Staff of H. Comm. on the Judiciary,
87th Cong., Copyright Law Revision: Report of the Register of Copyrights on the
General Revision of The U.S. Copyright Law 102 (“1961 Report”) (Comm. Print
1961). Thus, rather than impose upon a copyright owner the often difficult or
impossible burden of establishing the value of the copyright and the amount of
harm caused by the infringement, Congress has long provided that a copyright
-4-
owner may choose between actual damages or statutory damages as recovery for
infringement. The availability of statutory damages not only obviates the need for
difficult or impossible proof, but also deters infringement and ensures appropriate
incentives for the creation of copyrighted works. See F.W. Woolworth Co. v.
Contemporary Arts, Inc., 344 U.S. 228, 232-33 (1952).
In its current form, the Copyright Act provides that, for any act of
infringement, the owner of the copyright may recover either the actual damages
suffered plus any additional profits of the infringer, 17 U.S.C. § 504(b), or in the
alternative “may elect, at any time before final judgment is rendered, to
recover … an award of statutory damages,” § 504(c)(1). The choice belongs
exclusively to the copyright owner. A copyright owner is entitled to statutory
damages for each work infringed of “not less than $750 or more than $30,000 as
the court considers just.” Id. That baseline range for garden-variety non-willful
infringement is subject to two exceptions: If the copyright owner proves that the
infringement was willful, the statutory range increases to “not more than
$150,000” per infringed work. § 504(c)(2). By contrast, if the defendant has not
had access to a copy of the work properly bearing the copyright notice, see
§ 402(d), and the infringer proves that he or she “was not aware and had no reason
to believe that his or her acts constituted an infringement of copyright,” the award
may be reduced to “not less than $200” per work. § 504(c)(2).
-5-
The damages provision of the Copyright Act has existed in the same basic
form since 1976, subject only to amendments to increase the minimum and
maximum amounts of statutory damages available. See Copyright Act of 1976
(“1976 Act”), Pub. L. No. 94–553, § 22, 90 Stat. 2541 (authorizing minimum
damages of $250, maximum damages of $10,000, and maximum for willful
infringement of $50,000); Berne Convention Implementation Act of 1988 (“1988
Act”), Pub. L. No. 100–568, 102 Stat. 2853 (increasing minimum to $500,
maximum to $20,000, and maximum for willful infringement to $100,000); and
most recently the Digital Theft and Copyright Damages Improvement Act of 1999
(“1999 Act”), Pub. L. No. 106–160, 113 Stat. 1774 (increasing minimum to $750,
maximum to $30,000, and maximum for willful infringement to $150,000).
Because the Copyright Act’s statutory damages provisions refer to the
“court,” statutory damages were typically awarded by the judge, rather than the
jury. In Feltner v. Columbia Pictures, 523 U.S. 340 (1998), however, the Supreme
Court held that the Seventh Amendment provides a right to a jury trial on the
amount of statutory damages. Although the Court “discern[ed] no statutory right
to a jury trial” in the language of § 504(c), it concluded that a statutory damages
action is an action at law in which juries have historically had the authority to
determine what amount of damages to award. Id. at 347, 351-52. Accordingly, the
Court held that “[t]he Seventh Amendment provides a right to a jury trial on all
-6-
issues pertinent to an award of statutory damages under § 504(c) of the Copyright
Act, including the amount itself.” Id. at 355.
Since Feltner, Congress has amended § 504(c) but has not altered the
statutory damages scheme under which the jury, not the district judge, has
authority to decide the amount of statutory damages to award within the ranges that
Congress has specified. Indeed, in the wake of Feltner, the only amendment
Congress enacted to the statutory damages regime has been to increase its amounts,
thus substantially increasing the jury’s discretion. See 1999 Act (increasing
minimum to $750, maximum to $30,000, and maximum for willful infringement to
$150,000). Legislative history explains that these amendments were designed to
provide greater deterrence of copyright infringement in light of new technologies
that substantially increase the ease and scale of copying. See H.R. Rep. 106–216,
at 6 (1999).
The Peer-to-Peer Network Problem
A peer-to-peer network allows an individual computer user to copy and
distribute files directly with other users outside of the view of third parties.
Because such networks do not rely on a central service to store shared files,
purveyors of peer-to-peer networks, such as KaZaA, LimeWire, and iMesh, do not
regulate what kind of files are being shared. That absence of oversight has turned
peer-to-peer networks into a hotbed of copyright infringement, particularly of
-7-
popular music. Individuals, acting without authorization, place copyrighted sound
recordings into folders on their computers, then upload the index of those folders
to the peer-to-peer networks, and make their contents available for millions of
other network users to download. See, e.g., Lev Grossman, It’s All Free, Time,
May 5, 2003. Those other users, in turn, download the copyrighted music to their
own shared folders, thereby making it even more readily available to other network
users.
As the Supreme Court has recognized, the vicious cycle made possible by
peer-to-peer networks results in copyright “infringement on a gigantic scale.”
Metro-Goldwyn-Mayer Studios, Inc., v. Grokster Ltd., 545 U.S. 913, 940 (2005).
In 2004, the Department of Justice concluded that peer-to-peer networks are “one
of the greatest emerging threats to intellectual property ownership.” See Report of
the Department of Justice’s Task Force on Intellectual Property, available at
http://www.cybercrime.gov/IPTaskForceReport.pdf at 39 (Oct. 2004). It estimated
that “millions of users access P2P networks,” and that “the vast majority” of those
users “illegally distribute copyrighted materials through the networks.” Id.; see
also Grokster, 545 U.S. at 923 (users employed peer-to-peer networks “primarily
to download copyrighted files”).
This massive copyright infringement has had a devastating effect on the
recording industry. When that effect first became apparent, Appellants and other
-8-
members of the recording industry joined similarly affected industries in seeking to
address this problem by suing the proprietors of the peer-to-peer networks.
Although those litigation efforts succeeded in establishing that use of peer-to-peer
networks to share copyrighted files constitutes unlawful copyright infringement,
see, e.g., Grokster, 545 U.S. at 940; In re Aimster Copyright Litig., 334 F.3d 643,
654-55 (7th Cir. 2003); A&M Records, Inc., v. Napster, 239 F.3d 1004, 1022-24
(9th Cir. 2001), repeated holdings to that effect did little to deter individual file-
sharers. Instead, many individuals persisted in their infringing conduct, shifting
from one peer-to-peer network to another as networks were shut down or
converted to legitimate services operating in compliance with copyright law, and
remaining “disdainful of copyright and in any event discount[ing] the likelihood of
being sued or prosecuted for copyright infringement.” In re Aimster, 334 F.3d at
645. Accordingly, in 2002, the record companies reluctantly decided to commence
a more broadly-based enforcement program designed to identify and pursue
individuals who were unlawfully using peer-to-peer networks to share copyrighted
sound recordings.
The recording companies engaged a firm, MediaSentry, to gather evidence
of infringement associated with users identified by their Internet Protocol (“IP”)
addresses. To perform this task, MediaSentry searched peer-to-peer networks for
individuals distributing infringing files for download and gathered evidence
-9-
concerning that infringement, including the IP address of each individual. Once
those IP addresses had been captured, the record companies commenced “Doe”
actions against the individuals responsible for the IP addresses. The record
companies then used the discovery process to obtain records from internet service
providers (“ISPs”) identifying these individuals. See Atlantic Recording Corp. v.
Heslep, 2007 WL 1435395 at *1-*3 (N.D. Tex. May 16, 2007) (detailing the
industry’s enforcement program). In pursuing these actions, recording companies
routinely offered, and individuals often accepted, the option of settling these
infringement claims for relatively low amounts. As a result, the present action is
one of only two such actions that proceeded to jury trial. See Add. 40.
Tenenbaum’s Infringement and This Action
From 1999 through at least 2007, Joel Tenenbaum engaged in a deliberate
pattern of illegally obtaining and distributing thousands of copyrighted sound
recordings through peer-to-peer networks, among other ways. Add. 9. Tenenbaum
first began illegally obtaining music through Napster, which he used not only to
obtain for free songs that he knew were copyrighted, but also to then make those
songs available to Napster’s millions of other users. Id. After learning that
Napster had been shut down to halt precisely the kind of unlawful conduct in
which he was engaged, Tenenbaum shifted to other peer-to-peer networks,
including AudioGalaxy, iMesh, Morpheus, KaZaA, and LimeWire. Id. In addition
- 10 -
to using these networks to obtain copyrighted music from other network users,
Tenenbaum also uploaded new sound recordings not otherwise available on these
networks, with the express purpose of distributing these copyrighted works to
millions of other users for free. Appx. 169-72. Tenenbaum undertook all these
actions despite being fully aware that obtaining and sharing copyrighted music
through peer-to-peer networks is illegal. Add. 9-10. In fact, his own father warned
him that individuals were being sued for such conduct, but he did not stop. Appx.
117-18.
In September 2005, Appellants sent Tenenbaum a letter informing him that
his actions constituted infringement of their copyrighted sound recordings and that
legal action would be taken if he did not desist. Add. 10; Appx. 150-51. Even that
did not stop Tenenbaum, Add. 10, and Appellants filed suit in August 2007. Appx.
19. Although Tenenbaum infringed upon thousands of their copyrights, Appellants
only pursued damages for infringement of 30 works. Add. 4. Tenenbaum rejected
Appellants’ offer to settle those claims, and instead engaged in a pattern of
repeatedly refusing to take responsibility for his actions. For example, in sworn
discovery answers, Tenenbaum not only denied downloading any of the various
peer-to-peer networks he used to obtain music illegally, but also denied any
knowledge of whether such systems were even present on his two computers.
Appx. 153-57. In his deposition, he blamed any traceable infringement on a
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multitude of individuals he claimed had access to his computer, ranging from his
sisters, to various houseguests, to unidentified “burglars.” Appx. 152, 157-61.
When Appellants sought access to Tenenbaum’s computers to verify the existence
of illegally downloaded songs, Tenenbaum had numerous files removed from one
and falsely maintained that the other had been destroyed years earlier. Appx. 186-
90. 4
During opening statements and throughout Appellants’ case, Tenenbaum
maintained his innocence. Only after Appellants had presented overwhelming
evidence of Tenenbaum’s infringement did he change his tune. On the witness
stand, Tenenbaum admitted that many of his statements made under oath
throughout the course of the litigation had been false or misleading. See Appx.
142-206. He admitted that he had downloaded peer-to-peer client software on his
computers and used a variety of different peer-to-peer networks to obtain and
distribute thousands of copyrighted songs. Appx. 183-86, 195, 206. He also
admitted that he knew use of peer-to-peer networks to share copyrighted music
constituted copyright infringement punishable by up to $150,000 in damages for
4
Tenenbaum’s counsel evinced a similar disregard for both copyright law and judicial
procedures throughout the course of the litigation. A few months before trial, counsel uploaded
seven of the copyrighted works at issue in the case to a publicly accessible Internet site with a
sign that read, “Destroy Capitalism—Support Piracy!” See Ex. A to June 5, 2009 Pls.’ Mot. to
Compel Discovery Responses (Consol. Doc. No. 842). Counsel then refused to comply with
Appellants’ requests for discovery on this further act of infringement and distribution, ultimately
resulting in sanctions from the district court. See June 16, 2009 Order (Consol. Doc. No. 850)
(granting Appellants’ motion to compel discovery); March 2, 2010 Order (ordering Tenenbaum
and his counsel to pay costs of Appellants’ motion to compel).
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each infringed work. Appx. 174-80. He testified that he knew the music he
uploaded could be and was being downloaded by the millions of other users of
peer-to-peer networks. Appx. 149-51, 171-73, 184. Tenenbaum ultimately
admitted that he was directly responsible for downloading and distributing the 30
copyrighted songs that are the subject of Appellants’ lawsuit. Appx. 206. Based
on that admission, the district court directed a verdict in Appellants’ favor on the
question of infringement and reserved to the jury the questions of willfulness and
statutory damages. Add. 10.
Although actual damages for copyright infringement need not be proven
when statutory damages are elected, see 17 U.S.C. § 504(c), Appellants provided
extensive evidence at trial of the devastating effect that infringement through peer-
to-peer networks has had on the music industry. Appellants’ witnesses testified
that the ever-multiplying infringement caused when a song is illegally shared
results in injuries ranging from lost revenues to diminution of copyright value to a
diminished capability to identify and promote new artists to layoffs within the
industry. See, e.g., Appx. 91-92, 123-41. Appellants also demonstrated that the
only legal means by which Tenenbaum could engage in the actions he undertook
would be to obtain a blanket license to reproduce and distribute the 30 songs
without limitation, which would essentially represent the entire value of the
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copyrighted work and vastly outstrip the cost of purchasing a single song or album
for personal use. Appx. 87-88.
The questions of willfulness and appropriate damages were submitted to the
jury. After being instructed to consider “[t]he nature of the infringement,” “the
defendant’s purpose and intent,” lost profits and revenue, the value of the
copyright, the duration of the infringement, whether it persisted after notice, and
the need for deterrence, Appx. 68, the jury returned a verdict finding that
Tenenbaum’s infringement was willful and awarded statutory damages under
§ 504(c) of $22,500 per song, for a total award of $675,000. Appx. 70-77.
Post-Trial Proceedings
After the district court entered judgment on the jury’s findings and verdict,
Tenenbaum filed a motion for new trial or remittitur arguing, inter alia, that the
jury’s statutory damages award violated the Due Process Clause. The United
States intervened to defend the constitutionality of an Act of Congress, but
nonetheless, the district court ultimately agreed with Tenenbaum and held that the
Constitution required the award to be reduced to $2,250 per song, for a total of
$67,500.
The district court began its analysis by concluding that the constitutional
question could not be avoided through the doctrine of remittitur because
Appellants were unlikely to accept any remitted award, and any new trial would
- 14 -
force the court to “confront the very constitutional question that the remittitur
process was intended to avoid.” Add. 16. Turning to the constitutional question,
the court first addressed whether the constitutionality of a statutory damages award
is governed by the Supreme Court’s decision in St. Louis, I.M. & S. Ry. Co. v.
Williams, 251 U.S. 63 (1919), which held that a statutory damages award satisfies
due process so long as it is not “so severe and oppressive as to be wholly
disproportioned to the offense or obviously unreasonable,” id. at 67, or rather by
the three guideposts that have been identified for constitutional review of punitive
damages awards, see BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 575 (1996).
Noting that the Court’s “punitive damages jurisprudence has both procedural and
substantive components,” the district court rejected the principle that the Gore
guideposts are concerned primarily with whether a defendant has fair notice of the
potential penalties for a prohibited action. Add. 28. The district court later
acknowledged that this Court has read the Gore factors as directed to notice,
discussing Zimmerman v. Direct Fed. Credit Union, 262 F.3d 70, 83 (1st Cir.
2001), but “question[ed]” what it deemed a “narrow focus on the issue of ‘fair
notice.’” Add. 39 n.13. In the end, the court concluded that “it is appropriate to
apply the three BMW guideposts to the jury’s award in this case,” while
“remain[ing] cognizant” of the fact that the jury’s award was authorized by
§ 504(c). Add. 31.
- 15 -
After concluding that Gore set forth the relevant test, the court first
examined the third Gore guidepost—the difference between the jury’s award and
authorized civil penalties. Gore, 517 U.S. at 575. The court conceded that “[t]he
plain language of 17 U.S.C. § 504(c) authorizes the jury’s award in this case,” and
that, “[s]ince the jury’s award … fell within the range set forth in section 504(c),
there is an identity between the damages authorized by Congress and the jury’s
award.” Add. 32, 38. Nonetheless, the court mused about post-enactment actions
and statements by Senators who co-sponsored the 1999 amendments to § 504(c) to
question whether Congress intended a damages award of this amount to “be
imposed on an ordinary individual engaged in file-sharing without financial gain.”
Add. 32. The court seemingly disregarded more traditional expressions of
legislative intent, such as the House Report accompanying the 1999 Amendments,
Add. 34, and instead focused on post-enactment statements by two Senators. Add.
36-37. The court recognized that such legislative history would play no role in
interpreting a statute like § 504(c) that the court conceded unambiguously
authorized the jury’s award. Add. 38. Nonetheless, the court found this same
legislative history instructive in applying the third Gore factor and in divining the
kind of defendants Congress had in mind in setting the statutory range. Add. 38.
Based on this analysis, the court concluded that Congress did not foresee
application of § 504(c) to file-sharers, and that it thus “makes no sense” to defer to
- 16 -
§ 504(c) as a congressional determination of the appropriate size of damages in this
case. Add. 36-38. For similar reasons, the court also concluded that “section
504(c) failed to provide Tenenbaum with fair notice of the liability he could incur
for file-sharing.” Add. 39 n.13.
The court also examined whether other jury awards in similar cases have
been comparable to the award in Tenenbaum’s case. Although the court purported
to give deference to the jury’s verdict, it noted that the comparable jury awards
were not before the jury and emphasized that “[u]nlike juries, judges can draw on
their experience of setting awards in other copyright cases, as well as their research
regarding the awards imposed by other judges, in settling on an appropriate
figure.” Add. 39 n.12. The court went on to note that two juries in the case most
similar to Tenenbaum’s awarded statutory damages of $9,250 per song and
$80,000 per song. Add. 40 (citing Capitol Records, Inc. v. Thomas, 579
F. Supp. 2d 1210, 1213 (D. Minn. 2008), and Capitol Records, Inc. v. Thomas-
Rasset, 680 F. Supp. 2d 1045, 1048, 1050 (D. Minn. 2010)). But rather than rely
on those jury determinations, the district court relied on the presiding judge’s
dictum about the awards and viewed the amount of that judge’s remittitur ($2,250
per song) as the appropriate benchmark for comparison. Add. 40. Ignoring the
evidence presented by Appellants at trial of the extensive harm caused by peer-to-
peer infringement, the court compared the jury’s verdict to default judgment cases
- 17 -
in which recording companies sought only the statutory minimum of $750 per
song, and treated that as evidence that such damages provide sufficient
compensation and deterrence. Add. 41. Finally, the court compared the award to
damages awarded against establishments that played copyrighted musical
compositions without first acquiring a license, and maintained that damages in
such cases are typically two to six times the amount of the license fees not paid.
Add. 42-43.
Turning to the second Gore guidepost—the ratio between actual harm and a
punitive damages award—the court paused only briefly to acknowledge that
Congress provided statutory damages as an alternative to proving actual harm and
benefit to the infringer because proving such impacts can often prove difficult or
elusive. Add. 44. The court then went on to ask how much money Appellants lost
as a result of Tenenbaum’s conduct. Add. 46. Ignoring the evidence presented at
trial by Appellants about the billions of dollars of losses in revenue annually from
file-sharing, the court noted that songs can now be purchased on iTunes for $0.99,
and that a full album typically costs about $15. From that, the court concluded that
Appellants’ lost profits were between $21 (a profit margin of $0.70 per song) and
$450 (assuming Tenenbaum might have purchased 30 albums). Add. 46-47.
Although the court acknowledged Tenenbaum’s admission that he downloaded
thousands of copyrighted songs and made them available to millions of other peer-
- 18 -
to-peer network users, it asserted that, “[w]hile file-sharing may be very
economically damaging to [Appellants] in the aggregate, Tenenbaum’s individual
contribution to this total harm was likely minimal” because other network users
“would simply have found another free source for the songs had Tenenbaum never
engaged in file-sharing.” Add. 47.
Turning to the benefit Tenenbaum reaped from his infringement, the court
posited that it was not particularly substantial since “Tenenbaum did not derive any
direct pecuniary gain from file-sharing.” Add. 49. And since a number of services
now permit users to access a large number of songs for a flat monthly fee of $15,
the district judge concluded (presumably based on her own financial judgment as
this fact was not in the record) that “the average customer today would be willing
to pay no more than $1,500 to engage in conduct roughly similar to Tenenbaum’s.”
Add. 50. The court thus concluded that the ratio between the damages awarded
and benefit derived could be no less than 450:1. Add. 51. Although the court also
acknowledged that the losses to Appellants included the costs of detecting
infringement, it asserted that this amount was likely overstated since the cost of
deterrence per song is only “marginal” “once a recording company has decided to
devote the resources necessary to detect one act of infringement by a file sharer.”
Add. 51-52.
- 19 -
Turning to reprehensibility, the court pointed out that Tenenbaum’s conduct
caused economic, not physical, harm; did not evince indifference to health or
safety of others; and did not target the financially vulnerable. Add. 53. But the
court also acknowledged that Tenenbaum engaged in thousands of acts of
copyright infringement with full knowledge that his actions were illegal, and tried
to avoid responsibility by lying under oath and blaming others. Id. The court
observed that in its view, “the reprehensibility of a file sharer’s conduct does not
increase linearly with the number of songs he downloads and shares.” Add. 52.
The court recognized Congress reached a different judgment, but then criticized
that aspect of the statute: “Section 504(c) ignores this issue entirely, providing the
same statutory damages ranges for each infringed work no matter how many works
are infringed.” Id. Although the court stated that among file-sharers, “Tenenbaum
is one of the most blameworthy,” it dismissed his individual conduct and the jury’s
finding of willfulness to find more generally that file-sharing is a “comparatively
venial offen[se]” that “is fairly low on the totem pole of reprehensible conduct.”
Add. 54.
Taking into account its analysis of the three Gore factors, the court held that
the jury’s $675,000 award violated the Due Process Clause under both Gore and
Williams. The court held that “an award of $2,250 per song, three times the
statutory minimum, is the outer limit of what a jury could reasonably (and
- 20 -
constitutionally) impose in this case.” Add. 55. In reaching that judgment, the
district court pointed to different statutory schemes that provide treble damages for
willful conduct. The approved award of $2,250 per work represents three times the
statutory minimum. The court thus reduced the total award to $67,500, an amount
that it deemed “significant and harsh” in light of “the relatively minor harm that
Tenenbaum caused.” Add. 57.
SUMMARY OF ARGUMENT
Joel Tenenbaum illegally and willfully obtained thousands of copyrighted
songs and intentionally distributed those songs and others that he personally
uploaded to millions of other users of peer-to-peer networks. By putting those
copyrighted works onto publicly available networks for free, Tenenbaum
fundamentally undermined the value of those copyrights, the profitability of
Appellants’ business, and the entire statutorily established copyright scheme.
Rather than defer to the jury’s verdict, or even attempt to measure the jury’s award
against the strong public interest in deterring unauthorized distribution of
copyrighted works, the district court simply removed Tenenbaum’s widespread,
indiscriminate distribution from the equation, instead likening his actions to
stealing a few albums from a music store. And rather than acknowledge that any
due process analysis must give great weight to the fact that § 504(c) provided clear
notice of the potential for statutory damages in the amount awarded, the district
- 21 -
court implausibly asserted that neither Congress nor Tenenbaum realized that this
unambiguous statute would apply in this context. In the end, the court’s holding
has little to do with the Due Process Clause and everything to do with the court’s
own belief that the actions of individual file-sharers like Tenenbaum are “fairly
low on the totem pole of reprehensible conduct.” Add. 54. Congress and the jury,
however, have determined otherwise.
The district court’s elevation of its own policy views over those of Congress
is all the more egregious given the Supreme Court’s instruction that the
constitutionality of a statutory damages award must be measured with particular
regard for the fact that such awards represent Congress’s determination of what
constitutes adequate deterrence, punishment, and compensation for the public harm
that they address. As the Court has made clear, such review is highly deferential to
Congress’s judgment: a statutory damages award is constitutional so long as it
“cannot be said to be so severe and oppressive as to be wholly disproportioned to
the offense or obviously unreasonable.” Williams, 251 U.S. at 67.
There is no question that the Copyright Act’s statutory damages provision
and the jury’s award well within that authorized range satisfy that standard.
Statutory damages provisions have long been a feature of copyright law, and the
Supreme Court has repeatedly affirmed application of those provisions without
regard to whether they closely hew to the actual provable damages in a particular
- 22 -
case. Quite the contrary, the Court has expressly recognized that actual damages
caused by copyright infringement can be “difficult or impossible” to prove,
Douglas v. Cunningham, 294 U.S. 207, 209 (1935), and that statutory damages
may be awarded “[e]ven for uninjurious and unprofitable invasions of copyright,”
F.W. Woolworth, 344 U.S. at 233. Moreover, Appellants provided ample evidence
of the enormously detrimental effect that file-sharing has had on the recording
industry, as well as the exceptionally blameworthy conduct of Tenenbaum, with
respect to both his massive willful infringement and his repeated dishonest
attempts to avoid responsibility during this litigation. In short, both Congress’s
carefully crafted statutory damages scheme and the jury’s award—which was
within the range set by Congress for non-willful infringement and nowhere near
even the midpoint of the specified range for willful infringement—are a reasonable
and proportioned response.
Even under the Supreme Court’s ill-fitting punitive damages jurisprudence,
the jury’s award is clearly constitutional. Punitive damages review is designed to
establish whether a defendant had fair notice of the size of a potential award and to
put some outer limit on the jury’s unbounded discretion to impose punitive
damages in any amount. Those concerns are fully addressed here, and in other
contexts covered by the Williams test, by Congress’s specification of a statutory
range of damages. Taking into account the particularly reprehensible nature of
- 23 -
Tenenbaum’s willful infringement and pattern of deceit throughout this litigation;
the award’s reasonable relationship to the harm Tenenbaum caused; the need for
both specific and general deterrence against additional acts of copyright
infringement; and the fact that the award is well within the range of civil penalties
authorized by statute, the jury’s award cannot be said to be grossly excessive. As
such, under any measure, the jury’s $675,000 award easily comports with the Due
Process Clause and should be reinstated.
ARGUMENT
I. THE DISTRICT COURT’S ANALYSIS AND CONCLUSIONS
ARE HOPELESSLY FLAWED.
In the district court’s estimation, noncommercial file-sharing is not a serious
problem. From repeatedly emphasizing the purportedly “relatively minor harm”
Tenenbaum’s actions caused, Add. 8, 57, to describing file-sharers as
“comparatively venial offenders,” Add. 54, the district court made its own policy
views crystal clear. 5 In its quest to enshrine those policy preferences through the
Due Process Clause, the court substantially misjudged the seriousness of
Tenenbaum’s conduct. More fundamentally, the court lost sight of the fact that
Congress has judged willful infringement like Tenenbaum’s to be very serious, and
that the Constitution gives Congress, not the court, the authority to make that
5
The district court also made manifest its hostility to Appellants for pursuing what the court
thought were “comparatively venial offenders.” Add. 54. At one point the court went so far as
to question whether it was ethical to bring suits against individual file-sharers, and informed
Appellants that “it’s terribly critical that you stop” such suits. June 17, 2009 Motion Hearing 11.
- 24 -
determination. Congress and the Supreme Court have also given juries, not trial
judges, the primary role in assessing statutory damages in a particular case. The
district court’s substitution of its own judgment for that of Congress and the jury
was doubly inappropriate.
A. The District Court’s Characterization of Tenenbaum’s Conduct

Bears No Relationship to Reality.
The district court’s opinion considerably understates the serious harms file-
sharing causes, regardless whether engaged in by “an ordinary individual” not
acting for “financial gain.” Add. 32. File-sharing is a particularly dangerous form
of copyright infringement because it essentially places the infringed work into the
public domain. The file-sharer not only downloads a song for personal use, but
also makes that song available for millions of other peer-to-peer network users to
download at their leisure without compensating the copyright holder. 6 As a result,
for each song infringed, the copyright owner is deprived not only of the profit it
would have made had the infringer purchased the song, but also of the profits it
would have made from the unknowable number of other individuals who need not
pay for the work once the infringer distributes it for free. Although it is essentially
impossible to isolate or quantify the loss attributable to a single act of file-sharing,
it is entirely implausible to suggest that it is no more than the “nominal” cost of a

6
Peer-to-peer file-sharing is so pernicious from a copyright perspective because the technology
allows an unlimited number of persons on the network to download and copy a song, then
encourages the viral redistribution of that song. As the Supreme Court recognized in Grokster,
file-sharing thus facilitates “infringement on a gigantic scale.” 540 U.S. at 940.
- 25 -
single individual’s lawful purchase of the work in question, particularly when that
individual readily admits that other users downloaded his illegally obtained works.
Add. 54; see Appx. 149-51, 171-73, 184. The cost of a license for a single
download and a hypothetical license for the massive copying enabled by
Tenenbaum’s conduct are not remotely comparable. Nevertheless, the district
court essentially equated the two.
Rather than take this indisputable and detrimental aspect of file-sharing into
consideration when assessing the constitutionality of the jury’s award, the district
court brushed the issue aside, asserting that other users who obtained music from
Tenenbaum “would simply have found another free source for the songs had
Tenenbaum never engaged in file-sharing.” Add. 47. This is remarkable. Rather
than recognizing that widespread lawlessness and disrespect for copyright
enhanced the need for deterrence or the egregiousness of Tenenbaum’s individual
conduct, the court invoked the “everybody’s doing it” defense as a basis for
minimizing the harm Tenenbaum inflicted on Appellants. Thus, when attempting
to measure that harm, the court insisted that it amounted to no more (and probably
less) than the lost profit margin on either 30 songs, which it estimated at $21, or at
most 30 albums, which it estimated at $450. Add. 46-47. By excluding the most
damaging of Tenenbaum’s actions—his willful distribution to millions of other
network users—from its calculation, the court arrived at the misleading conclusion
- 26 -
that the ratio between statutory damages and actual harm was as high as 22,500:1,
or even 32,143:1.
This reduction of harm to a misguided and formulaic calculation of lost
profits also gave no consideration to such difficult-to-quantify losses as diminution
in value of each copyright infringed, an ever-increasing diminution in the value of
all sound recording copyrights, and a resulting loss in Appellants’ ability to find
new artists and music to record, i.e., to pursue their business, all of which were
facts presented by Appellants at trial. See, e.g., Appx. 85-92, 123-41. The district
court’s approach is particularly unjustifiable given the court’s obligation to view
the evidence in the light most favorable to the plaintiffs and the jury’s verdict. See
Parker v. Gerrish, 547 F.3d 1, 13 (1st Cir. 2008). That general deference is
buttressed here by principles of constitutional avoidance and a respect for the
province of the jury in the wake of the Supreme Court’s decision in Feltner.
More fundamentally, the district court ignored that the difficulty of proving
the actual amount of harm from infringement is the very reason the statutory
damages provision exists. See 1961 Report, at 102 (“The value of a copyright is,
by its nature, difficult to establish, and the loss caused by an infringement is
equally hard to determine.”); H.R. Rep. 106–216, at 3 (noting that use of the
Internet for copyright infringement has resulted in “lost U.S. jobs, lost wages,
lower tax revenue, and higher prices for honest purchasers”). Just as obviously,
- 27 -
the court ignored the primacy of the jury after Feltner. The district court barely
disguised its latent hostility to Feltner. The court went so far as to drop a footnote
emphasizing the advantages of judges over juries in assessing appropriate
damages. See Add. 37 n.12. When it came to the damages suffered by Appellants,
the court did not find a specific flaw in the jury’s deliberation or even attempt to
quantify the cost of detecting file-sharing; instead, it simply hypothesized—
without citation to any supporting evidence—that the jury likely overestimated that
amount. See Add. 52. In the process, the district court ignored ample evidence of
the serious impact of the recording industry, including testimony that in the ten
years since file-sharing became popular, the annual revenue of the recording
industry has decreased by $10 billion. See Appx. 123-41.
The district court similarly missed the point when assessing the benefits
reaped by Tenenbaum. In the first place, the district court inappropriately focused
on the infringer’s benefit. By infringing, the infringer obtains the copyrighted
work for free. Whether, in the absence of infringement, the infringer would have
paid a little or a lot for the work is irrelevant. While a copyright holder can elect to
recover its actual damages plus the benefits obtained by the infringer, statutory
damages are an alternative to both measures. Moreover, rather than considering
how much Appellants would have charged Tenenbaum for a blanket license to
distribute their copyrighted works at will for free—clearly the relevant injury in
- 28 -
light of Tenenbaum’s conduct—the court asked “how much Tenenbaum would
have been willing to pay” to obtain access to each song for personal use. Add. 50.
Since a variety of services now “allow users to access millions of songs … for a
flat monthly fee of less than $15,” the court asserted that the entire benefit
Tenenbaum derived from his actions was no more than $1,500, the cost of
subscribing to such a service for the duration of his infringement. Add. 50-51.
That inquiry is not only legally irrelevant, but also misunderstands the nature of the
“service” Tenenbaum actually “subscribed” to and once again wholly ignores the
most damaging and destructive feature of the type of infringement at issue,
namely, the fact that Tenenbaum did not merely infringe for his personal use but
rather provided thousands of copyrighted songs to millions of other users for free.
The district court pointed to no service that allows users to do that; nor could it,
since the cost of such a service would be so prohibitively expensive that none
exists. See Appx. 86-87.
The district court repeated this error yet again when it compared the
damages award in this case to the awards in cases involving establishments that
played copyrighted musical works without acquiring licenses. See Add. 42-43.
Those cases involve the cost of a license for a single establishment to play or
perform a musical composition at an identified place and time, not a blanket
license to make a sound recording publicly available to all on 24/7 basis for free.
- 29 -
Leaving aside the difference between a sound recording and a musical
composition, the former license preserves the value of the copyright for every other
performance at every other venue, not to mention the full value of the rights of
copying and distribution. A license to make unlimited copies without
compensation to the record company would essentially require the licensee to
purchase the copyright. Obviously that amount is vastly different from the small
fees paid for performance licenses of musical works.
As these examples illustrate, the district court’s opinion distorts the nature
and extent of Tenenbaum’s misconduct and the damage that it caused. Because its
constitutional analysis rested on a demonstrably false premise—that Tenenbaum’s
actions caused little or no harm7 —the court’s review of the jury’s award is
fundamentally flawed under any constitutional standard.
B. The District Court Artificially Distorted the Scope of Section

504(c)’s Applicability.
In addition to dramatically understating the severity of Tenenbaum’s actions,
the district court obscured the most important aspect of the analysis: that the jury’s
award was plainly authorized by § 504(c) and well within the statutory range.
Despite acknowledging that fact, the court nonetheless concluded that Congress
could not really have meant for the statute to cover this conduct and that
7
For his part, Tenenbaum contended that file-sharing of copyrighted music is simply “not
morally wrong.” Def.’s Mot. 16.
- 30 -
Tenenbaum, in turn, could not really have known that he might face this kind of
damages award. See Add. 32, 39 n.13. That attempt to avoid the substantial
deference due to Congress and invade the province of the jury renders the court’s
opinion indefensible.
First, there is simply no legal or factual merit to the district court’s assertion
that “Congress did not contemplate that the Copyright Act’s broad statutory
damages provision would be applied to college students like Tenenbaum who file-
shared without any pecuniary gain.” Add. 7. As the court acknowledged, “[t]he
plain language of 17 U.S.C. § 504(c) authorized the jury’s award in this case.”
Add. 38. From the earliest days of the Republic, copyright statutes have prohibited
infringement by both end-users and commercial enterprises and imposed civil
penalties for both. The current statute unambiguously states that “an infringer of
copyright is liable for … statutory damages, as provided.” 17 U.S.C. § 504(a)(2).
It gives no indication that its damages ranges must be cabined for noncommercial
infringement, peer-to-peer network infringement, infringement by college students,
see Add. 7, or any other type of infringement. As to the particular infringer, the
statute provides only two criteria that warrant deviation from the base-line range:
the maximum may be raised to $150,000 per work for a willful infringer, and the
minimum may be lowered to $200 for an “innocent infringer.” § 504(c)(1).
- 31 -
Notwithstanding that clear statutory directive, the district court embarked on
a textbook illustration of misuse of legislative history to avoid giving due
deference to Congress’s determinations. Legislative history is properly used to
illuminate the meaning of an otherwise ambiguous statutory provision, not to
manufacture ambiguity where none exists. See Ratzlaf v. United States, 510 U.S.
135, 147-48 (1994) (“We do not resort to legislative history to cloud a statutory
text that is clear.”). And it should go without saying that “[f]loor statements from
two Senators cannot amend the clear and unambiguous language of a statute.”
Barnhart v. Sigmon Coal Co., 534 U.S. 438, 456 (2002). Yet the district court
sought to derive Congress’s “true” intentions in § 504(c) by resorting not even to
floor statements made in the context of the legislation’s passage, but to individual
Senators’ remarks and actions during committee hearings held months after
§ 504(c) was amended. See Add. 36-37 (citing remarks and actions of Senators
Hatch and Leahy at committee hearings in July and October 2000). Such post-hoc
statements in committee (even if they were clearly applicable, which they are not)
should have no role in construing a statute, but in all events are manifestly
insufficient to overcome a statute’s unambiguous text. 8
8
Moreover, the statements the district court relied upon are hardly illuminating. At most, they
reflect Senator Leahy’s belief that downloading a song to educate a congressional committee
constitutes protected “fair use,” and Senator Hatch’s admiration for the technological advance
that file-sharing represents. Add. 36-37. Those are slim reeds upon which to rest a conclusion
that even those two Senators—let alone all of Congress—questioned the applicability of § 504(c)
to file-sharing infringers as written and enacted.
- 32 -
The district court’s invocation of this post-enactment colloquy is particularly
bizarre because the court did not even rest its holding on statutory grounds. If the
court were correct that Congress did not intend § 504(c) to apply to noncommercial
file-sharing, or intended the statute’s damages range to be construed (despite the
lack of any textual basis) as limited in that context, the logical holding would be
that the jury’s award violated the statute. Yet the court expressly recognized that
the statute unambiguously authorized the jury’s award. Nonetheless, after
acknowledging that it “must give effect to this clear statutory language,” the court
contradicted itself by stating that § 504(c) “does not embody” any judgment to
which the court could defer. Add. 38. The court’s implausible assertion that a
statute does not embody Congress’s judgment on the matters it plainly addresses is
a transparent attempt to circumvent the deference to legislative judgments required
under Williams. See Williams, 251 U.S. at 66 (due process review is limited by
“the express or tacit qualification that the [legislature] still possess[es] a wide
latitude of discretion” when setting statutory damages); see also Gore, 517 U.S. at
583 (due process review “should accord substantial deference to legislative
judgments concerning appropriate sanctions for the conduct at issue” (internal
quotation marks omitted)).
In any event, even assuming legislative history were relevant to the analysis,
it would be the traditional pre-enactment material, such as the House Report that
- 33 -
the district court noted and then ignored, and not post-enactment colloquies, that
would point the way. The actual legislative history of the last amendment to
§ 504(c) makes clear that Congress did intend the full force of the statutory
damages provision to apply to conduct like Tenenbaum’s. In 1999, Congress
amended § 504(c) to increase the per-work minimum damages from $500 to $750,
maximum damages from $20,000 to $30,000, and maximum damages for willful
infringement from $100,000 to $150,000. See 1999 Act. A committee report
accompanying an earlier version of that act singled out the proliferation of Internet
infringement as the impetus for the increase:
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.…
As long as the relevant technology evolves in this way, more piracy
will ensue.
H.R. Rep. 106–216, at 3.
The report went on to highlight that higher penalties were needed to deter
the kind of ordinary individuals who think their infringing actions are so common
as to be acceptable or undetectable:
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 their activity
or face legal action.
- 34 -
Id. Whether or not Congress specifically anticipated infringement on peer-to-peer
networks, this language leaves no room for doubt that Congress was concerned that
the advent of ever more sophisticated Internet technology threatened the copyright
system and demanded greater penalties. Certainly, it is virtually impossible to read
the 1999 amendments as suggesting the award here is too high: The amendments
increased penalties substantially and the award per violation here is less than a
quarter of the pre-amendment maximum for willful infringement of $100,000.
The district court’s repeated suggestions to the contrary notwithstanding, see
Add. 32, the statutory history of the Act also strongly indicates that Congress fully
intended to punish, deter, and compensate for copyright infringement that does not
result in financial gain to the infringer. Indeed, in one of its most recent
amendments to the Act, Congress expressly rejected a distinction between
commercial and noncommercial infringement, and did so in the particular context
of a college student engaged in file-sharing. In United States v. LaMacchia, 871
F. Supp. 535 (D. Mass. 1994), a college student was charged with wire fraud for
setting up an electronic bulletin board from which other users could download
popular software applications at no cost. Because the criminal provisions of the
Act at the time required infringement to be “willful[] and for purpose of
commercial advantage or financial gain,” the court concluded that the Act barred
LaMacchia’s prosecution. Id. at 540, 545.
- 35 -
Congress responded to LaMacchia in short order. In 1997, it passed the No
Electronic Theft (NET) Act, which revised the Act by defining “financial gain” to
include “receipt, or expectation of receipt, of anything of value, including the
receipt of other copyrighted works.” Pub. L. No. 105–147 § 2(a), 111 Stat. 2678
(1997). A committee report accompanying the bill explained that “[t]he practical
significance of these changes is that they criminalize LaMacchia-like behavior;
that is, ‘computerized’ misappropriation in which the infringer does not realize a
direct financial benefit but whose actions nonetheless substantially damage the
market for copyrighted works.” H.R. Rep. 105–339, at 7 (1997). Given
Congress’s determination that noncommercial computerized copyright
infringement should be subject to the same criminal penalties as infringement
driven by profit, there can be no justification for imposing the district court’s
policy preference for lesser penalties for noncommercial infringers upon the Act’s
civil damages provision. 9
For the same reasons, there is no merit to the court’s conclusion that the
statute did not provide Tenenbaum “fair notice” of the damages he might face for
his infringement. Add. 39 n.13. The statute unambiguously authorizes damages of
$30,000 per work for any act of infringement, and specifically singles out
9
That is particularly true since, as the Supreme Court has pointed out, an infringer’s sale of a
copyright work for little or no profit “might cause more damage to the copyright proprietor than
sales of the infringing article at a higher price.” F.W. Woolworth, 344 U.S. at 232. File-sharing
of the kind engaged in by Tenenbaum is the extreme example of this dynamic: Tenenbaum’s
sharing of Appellants’ works for free essentially placed these works into the public domain.
- 36 -
willfulness as a justification for increasing that amount to $150,000. Congress has
made clear that the copyright infringement provisions govern everyday
infringement by Internet users, and that absence of a profit motive does not make
conduct less culpable. Willfulness, not profit motive, is the touchstone of
enhanced statutory damages, and Tenenbaum’s conduct was nothing if not willful.
What is more, Tenenbaum conceded that he was on actual notice of the maximum
damages he might face, as his university notified him that illegally downloading
music was subject to damages of up to $150,000 per act. Appx. 174-80. Thus,
there is no legal or factual basis for refusing to defer to Congress’s determination
that willful file-sharing infringement is subject to substantial statutory damages
awards or the jury’s determination that an award of $22,500 per violation was
appropriate. 10
II. CONSTITUTIONAL REVIEW OF STATUTORY DAMAGES IS

GOVERNED BY WILLIAMS.
Constitutional review of statutory damages awards is highly deferential: An
award complies with the Due Process Clause so long as it “cannot be said to be so
severe and oppressive as to be wholly disproportioned to the offense or obviously
10
Nor is there any merit to the district court’s assertion that the 200:1 ratio between the statute’s
minimum and maximum damages was so exceptional or unusual as to deprive Tenenbaum of fair
notice. Statutes have long authorized copyright infringement damages in ranges equal to or even
greater than the range in § 504(c). See Feltner, 523 U.S. at 351 (noting early Massachusetts and
Rhode Island statutes authorizing damages within a 600:1 ratio and an early New Hampshire
statute authorizing damages within a 200:1 ratio); 1976 Act, § 504(c) (authorizing damages
within a 200:1 ratio).
- 37 -
unreasonable.” Williams, 251 U.S. at 67. 11 For that reason, the decision below is
virtually unprecedented. Because a statutory damages award is intended to punish
and deter, not just compensate, it may “of course seem[] large” when contrasted
against the actual harm in a particular case. Id. (upholding $75 damages award for
$0.66 overcharge). But the Supreme Court has made clear that the validity of a
statutory damages award “is not to be tested in that way.” Id. Instead, because the
statute itself reflects Congress’s determination of the appropriate amount of
damages for the violation in question, the constitutionality of a statutory damages
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. When comparing the size of an award against the
gravity of the offense, a court must bear in mind that legislatures “still possess a
wide latitude of discretion” when setting statutory damages. Id. at 66.
The Supreme Court’s punitive damages jurisprudence reflects entirely
different concerns that have no relevance in the statutory damages context. In
particular, the Supreme Court’s punitive damages jurisprudence is motivated by
two concerns, neither of which has any application in the context of awards within
a statutory range: the unbounded nature of punitive damages and the resulting lack
of notice. “Elementary notions of fairness enshrined in our constitutional
11
The constitutionality of a damages award is a question of law that this Court reviews de novo.
See Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 434-35 (2001).
- 38 -
jurisprudence dictate that a person receive 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.” Gore, 517 U.S. at 574. Yet, in the typical punitive damages case,
the jury’s discretion is unconstrained, meaning the defendant has no advance
notice of how large an award it might face. In recognition of that fact, the Court
has developed three “guideposts” to determine whether a defendant “receive[d]
adequate notice of the magnitude of the sanction” that might be imposed and to
impose an outer bound on the amount of punitive damages. Id.
As is readily evident, those “fair notice” and unbounded liability concerns
are wholly beside the point in the statutory damages context since the authorizing
statute will always provide notice of the potential award and a statutory range
bounding that award. That is especially true here, where the statute provides not
only a range, but separate ranges for willful and non-willful conduct, and a
possibility of reduction for truly innocent conduct. Section 504(c)(1) states that a
“copyright owner may elect, at any time before final judgment is rendered, to
recover, instead of actual damages and profits, an award of statutory damages.” 17
U.S.C. § 504(c)(1). The statute makes clear that a single damages award will be
assessed for each work infringed, in an amount “not less than $750 or more than
$30,000 as the court considers just.” Id. It also provides that, if the court finds that
the infringement “was committed willfully, the court in its discretion may increase
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the award of statutory damages to a sum of not more than $150,000.” § 504(c)(2).
Thus, there is simply no question that the plain language of the statute provides
clear notice that any act of willful copyright infringement will subject the infringer
to a damages award between $750 and $150,000 for each work infringed. As such,
there is nothing to be gained from subjecting the jury’s statutory damages award,
especially an award below the cap for non-willful infringement, to analysis under
Gore. 12
For precisely that reason, the punitive damages “guideposts” make little
sense when imported into the statutory damages context. The first Gore factor,
reprehensibility, accounts for the fact that punitive damages are usually awarded
under the common law where there is no legislative determination of the public
interest in preventing the offense in question, let alone a legislative quantification
of the appropriate range of penalties. Thus, courts are instructed to examine a
variety of the factors that would typically guide a legislature’s determination of
how severely to punish an offense. See State Farm Mut. Auto. Ins. Co. v.
Campbell, 538 U.S. 408, 419 (2003) (courts should consider whether conduct
caused physical or economic harm, involved indifference to health or safety of
12
That Williams is relevant to punitive damages jurisprudence does not support the district
court’s assumption that the converse must be true as well. Add. 28. It would make little sense to
exempt unconstrained punitive damages awards from the substantive limitations set forth in
Williams; the same cannot be said of applying the stringent procedural components of punitive
damages jurisprudence to review of statutory damages awards.
- 40 -
others, targeted the vulnerable, was isolated or repeated, and involved intentional
malice, trickery, or deceit).
In a statutory damages scheme, by contrast, Congress has already weighed
those and whatever other factors it considers relevant and has determined how
reprehensible the conduct is, so there is no need for a court to ask that question in
the first instance. Such an open-ended inquiry into reprehensibility is a task far
better suited to the legislature than the judiciary. The judiciary has undertaken that
task reluctantly in the punitive damages context because there is no alternative.
But when Congress has made the judgment, the judicial role is more modest: The
court’s role is limited to reviewing the rationality of Congress’s assessment. That
is why Williams instructs courts to examine the reasonableness of Congress’s
determination, giving great deference to its assessment of “the interests of the
public, the numberless opportunities for committing the offense, and the need for
securing uniform adherence to” law. Williams, 251 U.S. at 67.
The second Gore guidepost, which measures the disparity between the
punitive damages award and the actual or potential harm caused, is similarly
incompatible with Williams and Congress’s judgment in the Copyright Act.
Punitive damages awards punish defendants as an adjunct to a case of certain
recovery for an injury inflicted. In that context, a requirement that the punitive
damages award be proportionate to the degree of underlying injury makes sense.
- 41 -
Statutory damages, by contrast, are a legislative response to a “violation of a public
law,” and “may [be] adjust[ed] … to the public wrong rather than the private
injury.” Id. at 66. Thus, a statutory damages award often reflects the legislature’s
determination that any amount of damages tied to the actual harm, or the amount of
harm that may be provable, would bear little relationship to the “the interests of the
public, the numberless opportunities for committing the offense, and the need for
securing uniform adherence to” law. Id. at 67 (affirming award of $75 for
charging $0.66 more than the prescribed fare); see also F.W. Woolworth, 344 U.S.
at 233 (noting that the Copyright Act reflects Congress’s determination that actual
damages “would fall short of an effective sanction for enforcement of the
copyright policy”). For that reason, the Supreme Court has emphatically instructed
that the validity of a statutory damages award “is not to be tested” by comparison
to the actual injury caused by a defendant’s actions. Williams, 251 U.S. at 67; see
also id. (statutory damages need not “be confined or proportioned to [the
plaintiff’s] loss or damages”). Thus, the district court’s extended efforts to
discount the actual damages suffered by Appellants not only ignored relevant
evidence and invaded the province of the jury after Feltner; it was a purposeless
exercise in light of the clear teaching of Williams.
Moreover, unlike punitive damages, statutory damages are awarded in lieu
of, not in addition to, compensatory damages. Indeed, Congress typically
- 42 -
authorizes statutory damages precisely because, as in the copyright context, actual
damages would be “difficult or impossible” to prove. Douglas, 294 U.S. at 209;
see also 1961 Report, at 102 (“The value of a copyright is, by its nature, difficult to
establish, and the loss caused by an infringement is equally hard to determine.”).
Because punitive damages are generally appropriate only if there is an underlying
compensatory award, see 22 C.J.S. Damages § 197, in the punitive damages
context the second Gore guidepost compares two readily-available numbers. Not
so in the statutory context. Since statutory damages exist in large part to relieve
copyright owners of the very burden of demonstrating the metes and bounds of the
actual injury, it would undermine the entire statutory damages scheme to measure
their constitutionality against something that the plaintiff is not required to prove
and that Congress has determined often would be impracticable or impossible to
prove. See L.A. Westermann Co. v. Dispatch Printing Co., 249 U.S. 100, 106
(1919) (“[t]he fact that [statutory] damages are to be ‘in lieu of actual damages’
shows that something other than actual damages is intended”).
The third Gore guidepost—comparing a punitive damages award to
authorized civil penalties—is, if anything, a worse fit because a statutory damages
award is an authorized civil penalty. To the extent the third guidepost is designed
to ensure that damages awards are measured with “substantial deference to
legislative judgments concerning appropriate sanctions for the conduct at issue,”
- 43 -
Gore, 517 U.S. at 583 (internal quotation marks omitted), that feat can be
accomplished for a statutory damages award by examining the statute itself. And
to the extent the third guidepost is intended “to determine whether a particular
defendant was given fair notice as to its potential liability,” Zimmerman, 262 F.3d
at 83, see also Gore, 517 U.S. at 584, that too can be established by resort to the
statute in question. 13 Thus, in a statutory damages case, there is simply no work
for the third Gore guidepost to do.
For all these reasons, courts have repeatedly concluded that constitutional
review of statutory damages awards is governed by Williams, not Gore. See, e.g.,
Zomba Enters., Inc. v. Panorama Records, Inc., 491 F.3d 574, 587-88 (6th Cir.
2007); Accounting Outsourcing LLC v. Verizon Wireless Pers. Commc’ns, L.P.,
329 F. Supp. 2d 789, 808-09 (M.D. La. 2004); Lowry’s Reports, Inc. v. Legg
Mason, Inc., 302 F. Supp. 2d 455, 460 (D. Md. 2004). 14 The Gore guideposts exist
13
This Court held in Zimmerman that the third guidepost exists “solely to determine whether a
particular defendant was given fair notice as to its potential liability for particular misconduct,
not to determine an acceptable range into which an award might fall.” 262 F.3d at 83 (emphasis
added). The district court’s suggestion that Campbell overruled this aspect of Zimmerman is
wholly unfounded. See Add. 39 n.13. Far from doing away with Gore’s emphasis on fair notice,
Campbell reiterates that “fair notice” is “[t]he reason” for the Court’s punitive damages
jurisprudence. Campbell, 538 U.S. at 416.
14
Although the district court posited a split of authority on this issue, see Add. 27 n.10, none of
the cases it cited holds that a statutory damages award must be reviewed under Gore. See
Murray v. GMAC Mortgage Corp., 434 F.3d 948, 954 (7th Cir. 2006) (citing Campbell in dictum
for the proposition that “[a]n award that would be unconstitutionally excessive may be
reduced”); Parker v. Time Warner Entm’t Co., 331 F.3d 13, 22 (2d Cir. 2003) (citing Campbell
and Gore in dictum for the proposition that “the due process clause might be invoked” to reduce
a damages award); Romano v. U-Haul Int’l, 233 F.3d 655, 672-74 (1st Cir. 2000) (applying Gore
guideposts to a capped punitive damages award where no party suggested otherwise); Centerline
- 44 -
to ensure that defendants in punitive damages cases have what statutory damages
provisions clearly provide: fair notice of the bounds of what sanctions they may
face for their actions. Those guideposts have no place in review of a statutory
damages award, which must instead be held constitutional so long as Congress’s
judgment about the appropriate amount or range of damages “cannot be said to be
so severe and oppressive as to be wholly disproportioned to the offense or
obviously unreasonable.” Williams, 251 U.S. at 67.
Finally, the district court’s opinion demonstrates the dangers of applying
Gore, rather than following the Supreme Court’s teaching in Williams. While the
district court acknowledged that legislative history should play no role in
interpreting an unambiguous statute, it used legislative history—post-enactment
history no less—to inform its analysis under the third Gore factor. Add. 38. While
the court acknowledged that statutory damages obviate the need to show the
amount of harm suffered, it engaged in an extensive analysis of that subject under
the guise of applying the second guidepost. Add. 36-38. And while the court
purported to defer to Congress’s judgments about reprehensibility, it rejected the
“proportionate reprehensibility” judgment embodied in § 504(c) (and the first
Equip. Corp. v. Banner Pers. Serv., Inc., 545 F. Supp. 2d 768, 777-88 & n.6 (N.D. Ill. 2008)
(reviewing statutory damages scheme under Williams then noting that Campbell and Gore might
become relevant if punitive damages were awarded); In re Napster, Inc. Copyright Litig., 2005
WL 1287611 at *10-*11 (N.D. Cal. June 1, 2005) (suggesting in dictum that court would apply
analysis “similar to the ‘guideposts’” when reviewing a class action statutory damages award).
- 45 -
copyright act as well). Add. 52. 15 Then, for the non plus ultra, the court looked to
different statutes providing treble damages for willful actions as a basis to
substitute its own legislative determination (that damages of three times the
minimum is the appropriate maximum punishment) for that of Congress. Add. 55-
56. Any test that allows otherwise irrelevant considerations to inform the analysis
and allows a court in a copyright case to give greater weight to Congress’s
judgments in the Telephone Consumer Protection Act than to its judgments in the
Copyright Act has no place in the deferential review called for by Williams.
III. THE JURY’S AWARD IS CONSTITUTIONAL.
A. The Jury’s Award is Constitutional Under Williams.
Applying the deferential Williams standard, courts have repeatedly rejected
due process challenges to awards under numerous state and federal statutory
damages schemes. 16 Courts have also rejected due process challenges to awards
15
The district court proclaimed that “the reprehensibility of a file-sharer’s conduct does not
increase linearly with the number of songs he downloads and shares.” Add. 52. Congress
thought otherwise by imposing statutory damages on each work infringed. The court
acknowledged this contrary judgment, but rather than defer, it criticized: “Section 504(c)
ignores this issue entirely, providing the same statutory damages ranges for each infringed work
no matter how many works are infringed.” Add. 52.
16
See, e.g., Verizon Cal. Inc. v. OnlineNIC, Inc., 2009 WL 2706393 at *6-*7 (N.D. Cal. Aug. 25,
2009) (rejecting due process challenge to $50,000-per-violation statutory damages award under
Anticybersquatting Consumer Protection Act); Sadowski v. Med1 Online, LLC, 2008 WL 489360
at *5 (N.D. Ill. Feb. 20, 2008) (rejecting due process challenge to $500-per-violation statutory
damages authorized by Telephone Consumer Protection Act); Arrez v. Kelly Servs., Inc., 522
F. Supp. 2d 997, 1008 (N.D. Ill. 2007) (rejecting due process challenge to $500 damages for
failure to provide itemized pay statements); Arcilla v. Adidas Promotional Retail Operations,
Inc., 488 F. Supp. 2d 965, 972 (C.D. Cal. 2007) (rejecting due process challenge to $1,000 award
under Fair and Accurate Credit Transactions Act); Accounting Outsourcing, 329 F. Supp. 2d at
- 46 -
under the Copyright Act. See, e.g., Zomba Enters., 491 F.3d at 587-88 ($806,000
award, equal to 44 times actual damages, was “not sufficiently oppressive to
constitute a deprivation of due process”); Arista Records LLC v. Usenet.com, Inc.,
2010 WL 3629587 at *4-*5 (S.D.N.Y. Sept. 16, 2010) ($6,585,000 did not violate
due process); Propet USA, Inc. v. Shugart, 2007 WL 4376201 at *2-*3 (W.D.
Wash. Dec. 13, 2007) ($500,000 statutory damages award for copyright
infringement—“some forty times … actual damages”—not unconstitutionally
excessive). As those decisions reflect, damages awards authorized by the
Copyright Act easily satisfy the deferential Williams standard.
The Constitution expressly authorizes Congress “To promote the Progress of
Science and useful Arts” by securing copyright protection for creators of
intellectual property. U.S. Const. art. 1, § 8. “To comprehend the scope of
Congress’ power under the Copyright Clause, a page of history is worth a volume
of logic.” Eldred v. Ashcroft, 537 U.S. 186, 200 (2003) (internal quotation marks
and citations omitted). Copyright infringement has been subject to statutory
damages since the first Congress passed the first copyright statute in 1790. Act of
May 31, 1790, ch. 15, § 2, 1 Stat. 124, 125 (authorizing recovery of “fifty cents for
every sheet which shall be found in [the infringer’s] possession”). Even before
then, states—at the Continental Congress’s urging—put in place infringement laws
809-10 (rejecting due process challenge to state statute providing $500-per-violation damages for
unsolicited faxes).
- 47 -
with statutory damages provisions with broad damages ranges comparable to
§ 504(c). See Feltner, 523 U.S. at 351 (citing Massachusetts and Rhode Island
statutes authorizing damages between £5 and £3,000 and New Hampshire statute
authorizing damages between £5 and £1,000). Theses statutory damages
provisions have been designed to ensure that “the cost[s] of infringing substantially
exceed the costs of compliance, so that persons who use or distribute intellectual
property have a strong incentive to abide by copyright laws.” H.R. Rep. 106–216,
at 6.
Although Congress has periodically increased the amount of statutory
damages available, “the principle on which [Congress] proceeded—that of
committing the amount of damages to be recovered to the court’s discretion and
sense of justice, subject to prescribed limitations—[has been] retained.” L.A.
Westermann, 249 U.S. at 107. 17 That wide discretion is an appropriate reflection
of the fact that many forms of copyright infringement are easy to accomplish and
difficult to detect. Indeed, “[t]he actual damages capable of proof are often less
than the cost to the copyright owner of detecting and investigating infringements.”
17
See Copyright Act of 1856, 11 Stat. 138 (authorizing “just” damages of “not less than one
hundred dollars for the first, and fifty dollars for every subsequent performance” of a
copyrighted work); Copyright Act of 1909, § 25(b), 35 Stat. 1075 (“1909 Act”) (authorizing “just”
damages of not less than $250 or more than $5,000); 1976 Act, § 504(c) (authorizing “just” per-
work damages of not less than $250 or more than $10,000, or more than $50,000 for willful
infringement); 1988 Act (authorizing “just” per-work damages of not less than $500 or more
than $20,000, or $100,000 for willful infringement); 1999 Act (authorizing “just” per-work
damages of not less than $750 or more than $30,000, or $150,000 for willful infringement).
- 48 -
1961 Report, at 103. That is all the more true since the harms of copyright
infringement are particularly difficult to quantify, and measurement “based solely
on the value of the infringing items … significantly underrepresents the degree of
economic harm inflicted by” infringement. H.R. Rep. 106–216, at 3.
In reviewing statutory damages awards under various copyright
infringement provisions, the Supreme Court has repeatedly referred and deferred to
Congress’s conclusion that such awards need bear little or no relation to any actual
harm proven. For instance, in L.A. Westermann, the Court held that the plaintiff
was entitled to the statutory minimum of $250 for each infringing acts, even
though there was no evidence of any damages or profits and the district court had
determined that only nominal damages of $10 per act were warranted. 249 U.S. at
106-09. In Douglas, the Court reversed a court of appeals’ decision to reduce an
award from the maximum of $5,000 to the minimum of $250, even though the trial
court had found that no actual damages had been shown. 294 U.S. at 208-10. And
in F.W. Woolworth, the Court affirmed a maximum award of $5,000, even though
the defendant’s profits from the infringement were only $900. 344 U.S. at 231-32.
In doing so, the Court expressly validated Congress’s determination that the strong
public interest in preventing copyright infringement warrants harsh penalties for
violations, noting that “a rule of liability which merely takes away the profits from
- 49 -
an infringement would offer little discouragement to infringers … [and] fall short
of an effective sanction for enforcement of the copyright policy.” Id. at 233.
As the foregoing illustrates, to suggest that there is something
unconstitutional about statutory damages awards that are substantially greater than
the quantifiable harm copyright infringement causes would be to suggest not only
that copyright infringement law has been constitutionally suspect for more than a
century, but also that this fact has repeatedly escaped the Supreme Court’s notice.
Quite the contrary, the Court has expressly recognized and affirmed the validity of
Congress’s determination that “[e]ven for uninjurious and unprofitable invasions of
copyright [a] court may, if it deems it just, impose a liability within statutory limits
to sanction and vindicate the statutory policy.” Id. That determination reflects the
Court’s deference to the fact that the Constitution tasks Congress with establishing
copyright policy, and that courts “are not at liberty to second-guess congressional
determinations and policy judgments” in this arena. Eldred, 537 U.S. at 208.
Nor is there any basis to second-guess the damages award that the jury returned
in this case. The jury’s award of $22,500 per work is toward the low end of the range
Congress has authorized for willful infringement (up to $150,000 per work), and is
even toward the low end of the ranges authorized in 1976 and 1988. See 1976 Act
(authorizing up to $50,000 for willful infringement); 1988 Act (authorizing up to
$100,000 for willful infringement). Indeed, taking inflation into account, the award is
- 50 -
even within the range authorized in 1909. See 1909 Act, § 25(b) (authorizing
damages of not less than $250 and not more than $5,000); Bureau of Labor and
Statistics Inflation Calculator, http://www.bls.gov/data/inflation_calculator.htm
($22,500 in 2009 dollars is equivalent to $1,038.28 in 1913 dollars). Given that
infringement awards within comparable ranges have been deemed appropriate “[e]ven
for uninjurious and unprofitable invasions of copyright,” F.W. Woolworth, 344 U.S. at
233, there is little reason to question the appropriateness of a within-range award here.
That is all the more true once the particular circumstances of this case are
taken into account. For the reasons described in Part I, there is no reason to
question Congress’s determination that use of the Internet to engage in widespread
copyright infringement is every bit as detrimental as—if not more detrimental
than—other forms of copyright infringement. As the district court admitted, use of
peer-to-peer networks to steal copyrighted music “is regrettably quite common.”
Add. 54; see also Def.’s Mot. 1 (“Tenenbaum was one of many millions of people
sharing [copyrighted] music.”) And “the potential for this problem to worsen is
great” since “the development of new technology will create additional incentives
for copyright thieves to steal works.” H.R. Rep. 106–216, at 3. Tenenbaum’s own
actions underscore the need for strong deterrents against abuses of new technology:
Tenenbaum willfully infringed upon thousands of copyrights despite full
knowledge that his actions were illegal and subject to substantial monetary
- 51 -
consequences. That Tenenbaum undertook those actions knowing they were
subject to damages awards that he would have difficulty satisfying only confirms
Congress’s assessment that many Internet infringers “simply believe that they will
not be caught.” Id.
The reasonableness of the jury’s award is also confirmed by the fact that
“Tenenbaum is one of the most blameworthy” of file-sharers. Add. 54.
Tenenbaum admitted to obtaining and distributing thousands of copyrighted works
with full knowledge that his actions constituted illegal copyright infringement and
admitted to continuing to infringe after direct notice from Appellants, and even
after Appellants commenced this litigation. Throughout the litigation, Tenenbaum
also repeatedly lied under oath in an attempt to shift blame and avoid responsibility
for his knowingly unlawful conduct. Notably, the jury made its determination
without any suggestion from Appellants that they expected a particular award.
Appellants at all times maintained that they left the determination of damages to
the jury’s sound discretion. See, e.g., Appx. 261-62.
That a jury rather than a judge determined the “just” level of damages is no
reason to question the award’s appropriateness, whether under the statute or under
the Due Process Clause. See Add. 39 n.12 (suggesting that juries are “in need of
additional guidance” from Congress if they are to be “entrusted with the
responsibility of awarding statutory damages”). To the contrary, review under
- 52 -
Williams should involve deference to both the policy judgments of Congress and
the jury’s role as reaffirmed in Feltner. Juries have been entrusted with awarding
statutory damages in copyright infringement cases for hundreds of years. Feltner,
523 U.S. at 351-52. Although Congress may not have originally envisioned that
juries would award damages under § 504(c), if Congress thought juries were not up
to this task, it presumably would have circumscribed the jury’s role, not expanded
the jury’s discretion by expanding the damages range when it amended § 504(c)
one year after Feltner. See 1999 Act. The teaching of Feltner is that the amount
of statutory damages is a fact to be found by the jury in the same way the jury
resolves other factual issues. The district court’s apparent discomfort with
allowing the jury to perform this function, see Add. 39 n.12, is hard to reconcile
with the whole thrust of the Supreme Court’s decision.
Moreover, any suggestion that this particular jury lacked sufficient guidance
to decide an appropriate measure of damages is clearly unfounded. Section 504(c)
makes clear that willfulness, a key aspect of Tenenbaum’s conduct, is a critical
factor in determining whether a higher award is warranted. 17 U.S.C. § 504(c)(2).
And the district court provided the jury with additional factors to guide its
determination, including “[t]he nature of the infringement,” “[t]he defendant’s
purpose and intent,” lost profits and revenue, the value of the copyright, the
duration of the infringement, whether it persisted after notice, and the need for
- 53 -
deterrence. Appx. 68. Of course, if the decision below were correct, the jury
presumably should have been instructed that in no event should it return an award
in excess of $2,250 per willful violation. That only confirms that the decision
below reflects what amounts to a legislative judgment that contradicts Congress’s
own legislative judgment.
In sum, once due regard is given to the strong public interest in preventing
widespread willful file-sharing, the countless opportunities file-sharing presents for
infringement, and the need for adherence to copyright laws, and the particularly
blameworthy conduct of this defendant is taken into account, it is clear that an
award well below what Congress has authorized for willful infringement—indeed,
below what Congress has authorized even for non-willful infringement—“cannot
be said to be so severe and oppressive as to be wholly disproportioned to the
offense or obviously unreasonable.” Williams, 251 U.S. at 67.
B. The Jury’s Award is Constitutional Under Gore.
Even under the ill-suited Gore guideposts, the jury’s award easily withstands
constitutional scrutiny. “When all is said and done, a punitive damages award will
stand unless it clearly appears that the amount of the award exceeds the outer
boundary of the universe of sums reasonably necessary to punish and deter the
defendant’s conduct.” Zimmerman, 262 F.3d at 81. The jury’s award is well
within the statutory range and those bounds.
- 54 -
First, Tenenbaum’s actions are unquestionably reprehensible in the context
of the Copyright Act. See Gore, 517 U.S. at 575. As already discussed, see supra
pp. 10-13, he repeatedly engaged in willful copyright infringement knowing that
his actions were illegal. “[E]vidence that a defendant has repeatedly engaged in
prohibited conduct while knowing or suspecting that it was unlawful would
provide relevant support for an argument that strong medicine is required to cure
the defendant’s disrespect for the law.” Id. at 576-77. Tenenbaum then
exacerbated his willful infringement by engaging in “deliberate false statements,
acts of affirmative misconduct, [and] concealment” of his illegal conduct
throughout the litigation. Id. at 579. As the district court conceded, these
combined actions make Tenenbaum “one of the most blameworthy” of file-sharers.
Add. 54.
Second, the jury’s award bears a “reasonable relationship” to the harm
Tenenbaum caused. Mendez-Matos v. Municipality of Guaynabo, 557 F.3d 36, 54
(1st Cir. 2009). Tenenbaum stole copyrighted songs and made them available to
millions of other users. Those actions deprived Appellants of literally
immeasurable profits they otherwise could have obtained from sales to both
Tenenbaum and the public. By putting copyrighted works in the public domain for
free, Tenenbaum contributed to the continuing decline in the value of copyrighted
sound recordings and exacerbated the threat to Appellants’ viability as companies
- 55 -
that identify and promote continuing and new artists through sales of copyrighted
sound recordings. Given that file-sharing has cost the industry billions of dollars,
there is no basis to question the award here.
Finally, the reasonableness of the jury’s award is reinforced by comparing it
to civil penalties authorized by Congress. Not only is the award well within the
statutory range; it is within the range of damages even for non-willful infringement.
See supra pp. 50-51. To the extent it is relevant, see Zimmerman, 262 F.3d at 83
(comparison to other jury awards is only appropriate when no civil penalties are
authorized), the award is also within the range that two juries have determined
appropriate for comparable conduct. See Thomas 579 F. Supp. 2d. at 1213 ($9,250
per song); Thomas-Rasset, 680 F. Supp. 2d at 1048 ($80,000 per song). 18 Thus,
under no theory of constitutional review can it plausibly be said that the jury’s
award “exceeds the outer boundary of the universe of sums reasonably necessary
to punish and deter the defendant’s conduct.” Zimmerman, 262 F.3d at 81.
18
Although the district court subsequently deemed awards in those amounts excessive, its
reasons for doing so largely track the district court’s reasons here, and are thus fundamentally
flawed for the same reasons as well. See Thomas-Rasset, 680 F. Supp. 2d at 1052-54.
- 56 -
CONCLUSION
For the foregoing reasons, this Court should reverse the district court’s
judgment and reinstated the jury’s $675,000 damages award.
/s/ Paul D. Clement

Timothy M. Reynolds Paul D. Clement
Eve G. Burton Jeffrey S. Bucholtz
Holme Roberts & Owen, LLP Erin E. Murphy
1700 Lincoln, Suite 4100 King & Spalding LLP
Denver, CO 80203 1700 Pennsylvania Avenue, N.W.
(303) 861-7000 Washington, DC 20006
(202) 737-0500
Matthew J. Oppenheim Jennifer L. Pariser

The Oppenheim Group, LLP Recording Industry
7304 River Falls Drive Association of America
Potomac, MD 20854 1025 F Street, N.W.
(301) 299-4986 Washington, DC 20004
(202) 775-0101
October 27, 2010
- 57 -

Tenenbaum - First Cir. Appeal - Brief of Sony BMG

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Case: 10-1947 Document: 00116129273 Page: 1 Date Filed: 10/29/2010 Entry ID: 5499305

Nos. 10–1883, 10–1947, 10–2052

IN THE UNITED STATES COURT OF APPEALS

SONY BMG MUSIC ENTERTAINMENT, ET AL.,

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

PLAINTIFFS-APPELLANTS/CROSS-APPELLEES’ OPENING BRIEF

Timothy M. Reynolds Paul D. Clement

Matthew J. Oppenheim Jennifer L. Pariser

CORPORATE DISCLOSURE STATEMENT

The undersigned counsel of record provides the following statement under

Fed. R. App. P. 26.1(b): Each Plaintiff-Appellant identifies its parent corporation

The ultimate parent corporation of Plaintiff-Appellant Sony BMG Music

Entertainment n/k/a Sony Music Entertainment is Sony Corporation (Japan), which

is publicly traded in the United States.

The ultimate parent corporation of Plaintiff-Appellant Warner Bros. Records

Plaintiff-Appellant Arista Records LLC is a Delaware limited liability

partnership, which is not publicly traded.

The ultimate parent corporation of Plaintiff-Appellant UMG Recordings,

Inc., is Vivendi S.A., a publicly held French company.

CORPORATE DISCLOSURE STATEMENT ......................................................... i

TABLE OF AUTHORITIES ................................................................................... iii

STATEMENT OF THE ISSUE.................................................................................1

STATEMENT OF THE CASE..................................................................................2

STATEMENT OF FACTS ........................................................................................4

SUMMARY OF ARGUMENT ...............................................................................21

I. THE DISTRICT COURT’S ANALYSIS AND CONCLUSIONS

A. The District Court’s Characterization of Tenenbaum’s Conduct

B. The District Court Artificially Distorted the Scope of Section

II. CONSTITUTIONAL REVIEW OF STATUTORY DAMAGES IS

III. THE JURY’S AWARD IS CONSTITUTIONAL ........................................46

A. The Jury’s Award is Constitutional Under Williams..............................46

B. The Jury’s Award is Constitutional Under Gore....................................54

Accounting Outsourcing LLC v. Verizon Wireless Pers. Commc’ns, L.P.,

Arcilla v. Adidas Promotional Retail Operations, Inc.,

Arista Records LLC v. Usenet.com, Inc.,

Arrez v. Kelly Servs., Inc.,

Atlantic Recording Corp. v. Heslep,

Barnhart v. Sigmon Coal Co.,

BMW of N. Am., Inc. v. Gore,

Capitol Records, Inc. v. Alaujan,

Capitol Records, Inc. v. Thomas,

Capitol Records, Inc. v. Thomas-Rasset,

Centerline Equip. Corp. v. Banner Pers. Serv., Inc.,

Cooper Indus., Inc. v. Leatherman Tool Group, Inc.,

F.W. Woolworth Co. v. Contemporary Arts, Inc.,

Feltner v. Columbia Pictures,

In re Aimster Copyright Litig.,

In re Napster, Inc. Copyright Litig.,

In re Sony BMG Music Entm’t,

L.A. Westermann Co. v. Dispatch Printing Co.,

Lowry’s Reports, Inc. v. Legg Mason, Inc.,

Mendez-Matos v. Municipality of Guaynabo,

Metro-Goldwyn-Mayer Studios, Inc., v. Grokster Ltd.,

Murray v. GMAC Mortgage Corp.,

Parker v. Time Warner Entm’t Co.,

Propet USA, Inc. v. Shugart,

Ratzlaf v. United States,

Romano v. U-Haul Int’l,

Sadowski v. Med1 Online, LLC,

St. Louis, I.M. & S. Ry. Co. v. Williams,