United States Court of Appeals
For the First Circuit
No. 12-2146
SONY BMG MUSIC ENTERTAINMENT, ET AL.,
Plaintiffs, Appellees,
v.
JOEL TENENBAUM,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Rya W. Zobel, U.S. District Judge]
Before
Lynch, Chief Judge,
Torruella and Howard, Circuit Judges.
K.A.D. Camara, with whom Camara & Sibley LLP, Paul J. Pape,
Nicolas M. Rouleau, Pape Barristers PC and Charles R. Nesson were
on brief, for appellant.
Paul D. Clement, with whom Erin E. Murphy, Bancroft PLLC,
Jennifer L. Pariser, Recording Industry Association of America,
Matthew J. Oppenheim, Oppenheim + Zebrak, LLP, Timothy M. Reynolds
and Bryan Cave LLP were on brief, for appellees Sony BMG Music
Entertainment; Warner Bros. Records, Inc.; Arista Records LLC and
UMG Recordings, Inc.
Jeffrey Clair, Attorney, Appellate Staff, Civil Division, U.S.
Department of Justice, with whom Stuart F. Delery, Acting Assistant
Attorney General, Carmen Milagros Ortiz, United States Attorney,
and Scott R. McIntosh, Attorney, Appellate Staff, were on brief,
for appellee United States.
Robert Alan Garrett, R. Reeves Anderson, and Arnold & Porter
LLP on brief for the Motion Picture Association of America, Inc.,
Amicus Curiae.
June 25, 2013
HOWARD, Circuit Judge. Joel Tenenbaum illegally
downloaded and distributed music for several years. A group of
recording companies sued Tenenbaum, and a jury awarded damages of
$675,000, representing $22,500 for each of thirty songs whose
copyright Tenenbaum violated. Tenenbaum appeals the award,
claiming that it is so large that it violates his constitutional
right to due process of law. We hold that the award did not
violate Tenenbaum's right to due process, and we affirm.
I. Background
From 1999 to at least 2007, Tenenbaum downloaded and
distributed copyrighted music without authorization, using various
peer-to-peer networks.1 Tenenbaum knew that his conduct was
illegal, but he pressed on, ignoring warnings from his father, his
college, and recording companies. In 2007, Sony BMG Music
Entertainment, Warner Bros. Records Inc., Arista Records LLC,
Atlantic Recording Corporation,2 and UMG Recordings, Inc.
(together, "Sony"), sued Tenenbaum under the Copyright Act, 17
U.S.C. § 101 et seq., for statutory damages and injunctive relief.
Sony pursued claims for thirty copyrighted works, although
Tenenbaum had apparently distributed far more. During discovery,
1
For more discussion of the facts of this case, see Sony BMG
Music Entertainment v. Tenenbaum (Tenenbaum II), 660 F.3d 487, 490-
96 (1st Cir. 2011).
2
Atlantic Recording Corporation was dismissed from the case
on July 20, 2009.
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Tenenbaum lied about his activities, blaming unidentified burglars
and a foster child living in his parents' home, among others. Only
at trial did Tenenbaum admit that he had distributed as many as
five thousand songs.
The district court held as a matter of law that Tenenbaum
had violated the Copyright Act, and a jury found that Tenenbaum's
violations were willful. The court instructed the jury that the
Copyright Act provides for damages between $750 and $150,000 for
each willful violation. 17 U.S.C. § 504(c). The court also gave
the jury a set of non-exhaustive factors that it might wish to
consider in issuing its award, including the nature of the
infringement; the defendant's purpose and intent; the profit that
the defendant reaped, if any, or the expense that the defendant
saved; the revenue lost by the plaintiff as a result of the
infringement; the value of the copyright; the duration of the
infringement; the defendant's continuation of infringement after
notice or knowledge of copyright claims; and the need to deter this
defendant and other potential infringers. The jury awarded Sony
$22,500 for each of Tenenbaum's thirty violations (15% of the
statutory maximum), for a total award of $675,000. Tenenbaum moved
for a reduction in the award, arguing that remittitur was
appropriate and that the award was so high that it violated his
right to due process. The court bypassed the issue of remittitur
and held that the award violated due process, reducing it to
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$67,500. Sony BMG Music Entm't v. Tenenbaum, 721 F. Supp. 2d 85
(D. Mass. 2010). In doing so, the court relied on BMW of North
America, Inc. v. Gore, 517 U.S. 559 (1996), in which the Supreme
Court held that an excessive award of punitive damages can violate
due process.
Sony appealed the reduction of the award. We vacated the
district court's judgment, holding that the principle of
constitutional avoidance required the court to address the issue of
remittitur before determining whether the award violated due
process. Sony BMG Music Entm't v. Tenenbaum (Tenenbaum II), 660
F.3d 487, 508-15 (1st Cir. 2011). We also suggested that if the
district court were to evaluate the constitutionality of the award
on remand, it should rely not on Gore, but on St. Louis, I.M. & S.
Ry. Co. v. Williams, 251 U.S. 63 (1919), in which the Supreme Court
considered the constitutionality of an award of statutory damages.
Tenenbaum II, 660 F.3d at 512-13.
On remand,3 the district court decided that remittitur
was inappropriate and that the original award of $675,000 comported
with due process, relying on Williams. Sony BMG Music Entm't v.
Tenenbaum (Tenenbaum III), No. 07-cv-11446, 2012 WL 3639053
(D. Mass. Aug. 23, 2012). Tenenbaum now appeals the decision on
3
Judge Gertner, who had presided over Tenenbaum's trial,
retired while the appeal was pending. The case was remanded to
Judge Zobel.
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the constitutionality of the damage award, but not the decision on
remittitur.
II. Analysis
This appeal presents two questions. First, what is the
correct standard for evaluating the constitutionality of an award
of statutory damages under the Copyright Act? Second, did the
award of $675,000 violate Tenenbaum's right to due process? We
review these questions of law de novo. See Cooper Indus., Inc. v.
Leatherman Tool Grp., Inc., 532 U.S. 424, 436 (2001).
A. Evaluating the Constitutionality of Statutory Damages
In Williams, the Supreme Court considered a challenge to
an Arkansas statute that subjected railroads to penalties of 50 to
300 dollars, plus costs, for each offense of charging passengers
fares that exceeded legal limits. See Williams, 251 U.S. at 64.
After the St. Louis, I.M. & S. Railroad collected from two
passengers a fare of 66 cents more than the law allowed, the
passengers brought suit pursuant to the statute. Id. Each
passenger obtained a judgment of 75 dollars plus fees--an award
within the statutory range. Id. The railroad challenged the
statutory award as unconstitutionally excessive under the Due
Process Clause. Id. The Court rejected the railroad's due process
argument, holding that a statutory damage award violates due
process only "where the penalty prescribed is so severe and
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oppressive as to be wholly disproportioned to the offense and
obviously unreasonable." Id. at 66-67.
Gore and its progeny, which Tenenbaum argues should apply
here, address the related but distinct issue of when a jury's award
of punitive damages is so excessive that it violates due process.
See Gore, 517 U.S. at 574. In Gore, the Court, animated by the
principle that due process requires that civil defendants receive
fair notice of the severity of the penalties their conduct might
subject them to, id., identified three "guideposts" for a court's
consideration of whether a punitive damage award is so excessive
that it deprives a defendant of due process: (1) the degree of
reprehensibility of the defendant's conduct, id. at 575–80, (2) the
ratio of the punitive award to the actual or potential harm
suffered by the plaintiff, id. at 580–83, and (3) the disparity
between the punitive award issued by the jury and the civil or
criminal penalties authorized in comparable cases, id. at 583–85.
Here, the district court correctly chose to apply the
Williams standard. By its own terms, Williams applies to awards of
statutory damages, which the jury awarded in this case, while Gore
applies to awards of punitive damages, which the jury did not
award. Gore did not overrule Williams, and the Supreme Court has
not suggested that the Gore guideposts should extend to
constitutional review of statutory damage awards. The concerns
regarding fair notice to the parties of the range of possible
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punitive damage awards, which underpin Gore, are simply not present
in a statutory damages case where the statute itself provides
notice of the scope of the potential award. Moreover, Gore's
second and third guideposts cannot logically apply to an award of
statutory damages under the Copyright Act. The second due process
guidepost requires a comparison between the award and the harm to
the plaintiff, but a plaintiff seeking statutory damages under the
Copyright Act need not prove actual damages. F.W. Woolworth Co. v.
Contemporary Arts, Inc., 344 U.S. 228, 233 (1952). The third
guidepost requires a comparison between the award and the
authorized civil and criminal penalties in comparable cases.
Because an award of statutory damages is by definition an
authorized civil penalty, this guidepost would require a court to
compare the award to itself, a nonsensical result. Therefore, we
conclude, as have other courts, that the standard articulated in
Williams governs the review of an award of statutory damages under
the Copyright Act. See Capitol Records, Inc. v. Thomas-Rasset, 692
F.3d 899, 907 (8th Cir. 2012); Zomba Enters., Inc. v. Panorama
Records, Inc., 491 F.3d 574, 587 (6th Cir. 2007).
B. Constitutionality of the Award Against Tenenbaum
To determine whether "the penalty prescribed [against
Tenenbaum] is so severe and oppressive as to be wholly
disproportioned to the offense and obviously unreasonable,"
Williams, 251 U.S. at 66-67, we will examine the purpose of
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statutory damages under the Copyright Act, as well as Tenenbaum's
behavior.
Statutory damages under the Copyright Act are designed
not only to provide "reparation for injury," but also "to
discourage wrongful conduct." F.W. Woolworth Co., 344 U.S. at 233.
As we explained in Tenenbaum II, in 1999 Congress increased the
minimum and maximum statutory awards under the Copyright Act
because of new technologies that would allow Internet users to
steal copyrighted works. 660 F.3d at 500. At trial, Sony
presented evidence that Tenenbaum's activities led to the same type
of harm that Congress foresaw: loss of the value of its
copyrights, reduced income and profits, and job losses. Id. at
502-03.
On appeal, Tenenbaum invites us to assume that he is "the
most heinous of noncommercial copyright infringers." We need not
go so far as to accept his offer.4 The evidence of Tenenbaum's
copyright infringement easily justifies the conclusion that his
conduct was egregious. Tenenbaum carried on his activities for
years in spite of numerous warnings, he made thousands of songs
available illegally, and he denied responsibility during discovery.
Much of this behavior was exactly what Congress was trying to deter
when it amended the Copyright Act. Therefore, we do not hesitate
4
In Tenenbaum II, we rejected Tenenbaum's argument that the
Copyright Act distinguishes between "consumer" and "non-consumer"
infringement. 660 F.3d at 498.
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to conclude that an award of $22,500 per song, an amount
representing 15% of the maximum award for willful violations and
less than the maximum award for non-willful violations, comports
with due process.
Tenenbaum argues that the award of $675,000 violates due
process because it is not tied to the actual injury that he caused,
which he estimates to be no more than $450, or the cost of 30
albums at $15 each. But this argument asks us to disregard the
deterrent effect of statutory damages, the inherent difficulty in
proving damages in a copyright suit, and Sony's evidence of the
harm that it suffered from conduct such as Tenenbaum's. More
importantly, the Supreme Court held in Williams that statutory
damages are not to be measured this way:
Nor does giving the penalty to the aggrieved
[party] require that it be confined or
proportioned to his loss or damages; for, as
it is imposed as a punishment for the
violation of a public law, the Legislature may
adjust its amount to the public wrong rather
than the private injury, just as if it were
going to the state.
251 U.S. at 66; see also Thomas-Rasset, 692 F.3d 899 at 909-10
(rejecting, in a case with similar facts, the district court's
conclusion that "statutory damages must still bear some relation to
actual damages"). For these reasons, we find Tenenbaum's arguments
unpersuasive.5
5
Tenenbaum asks us to remand the case for a new trial at
which the jury will not be told the maximum award of damages, but
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III. Conclusion
For the reasons stated above, the jury's award of
$675,000 did not violate Tenenbaum's right to due process. The
judgment of the district court is affirmed.
will be instructed that proportionate damages would be three times
the statutory minimum award. Tenenbaum II forecloses this remedy.
660 F.3d at 503-05 (citing Feltner v. Columbia Pictures Television,
Inc., 523 U.S. 340 (1998)).
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