When Jammie Thomas was found guilty of infringing the copyrights of 24 songs during a trial in Minnesota last year, a jury fined her $222,000 in statutory damages. Given that the record labels arguably lost about 70¢ per song from her (the amount paid by digital download stores like iTunes), this means that Thomas' fine was 13,214 times the actual loss. So when Ray Beckerman of Recording Industry vs. The People recently unearthed a case from last year in which Universal complained about having to pay a mere 10 times the actual damages in a court case of its own, critics smelled the salty tang of hypocrisy.

The case in question involves now-deceased rapper The Notorious B.I.G., whose album Ready to Die incorporated an unlicensed sample of "Singing in the Morning" from the Ohio Players after a Hendrix sample was denied clearance. The sample made its way onto the final album and even onto reissued albums. Bridgeport Music and Westbound Records, which control the rights to the song, sued. A district court ruled in their favor; Bridgeport took the $150,000 maximum in statutory damages, while Westbound sought compensatory and punitive damages. Westbound scored big, earning $366,939 from the jury along with punitive damages of a whopping $3.5 million.



Clear those samples!

In appealing the ruling, Universal argued that the punitive damages award was "grossly excessive and should be vacated or at least reduced." The reason? It's excessive. The brief quotes a Supreme Court ruling that said, "In practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process." Universal pointed out that the award in question was "approximately 10 to 1, far above the line of unconstitutional impropriety."

They convinced the Sixth Circuit Court of Appeals with the claim. The judges on the appeals court found (PDF) that "the jury's $3.5 million punitive damage award was unconstitutionally excessive."

The Universal case isn't quite the same as the Jammie Thomas case, since Thomas was hit with statutory damages and neither actual nor punitive damages were at issue (the RIAA simply says it can't possibly calculate actual damages and doesn't try to do so). But there's an overlap in principle, since in P2P lawsuits the goal seems to be "sending a message" to file-swappers. That's fine, of course, but are the damages in these cases "unconstitutionally excessive"?

Thomas raised that issue herself. The RIAA argued that Thomas should pay up, in part because the award was actually far lower than it could have been (at $150,000 per infringement, Thomas could have owed substantially more). "Where, as here, the amount awarded by the jury was less than 10 percent of what the jury could have awarded," wrote the RIAA at the time, "there is no basis for a remittur or a new trial."

The US government, which felt the need to weigh in, agreed. The Department of Justice concluded that "the damages awarded under the Copyright Act's statutory damages provision did not violate the Due Process Clause; they were not 'so severe and oppressive as to be wholly disproportioned to the offense or obviously unreasonable.'"

Fortunately, statutory damages are discretionary, but they're already so high in these sorts of cases that any attempt to raise them (as Congress considered doing in the PRO-IP Act) is bound to be seen as "gluttonous." When RIAA members like Universal object (and win) cases on the grounds that they shouldn't have to pay a penalty 10 times higher than actual damages, surely noncommercial file-swappers, operating from homes, coffee shops, and dorm rooms, shouldn't be hit with these massive fines, either, when Universal's on the other side of the courtroom. Let the penalty be commensurate with the infringement.