The Obama administration is set to urge a federal appeals court to reinstate a $1.5 million music filing-sharing verdict a jury levied against a Minnesota woman for sharing two dozen songs on Kazaa.

At issue is a Minnesota federal judge's decision last year lowering the verdict to $54,000, ruling that the jury's award "for stealing 24 songs for personal use is appalling."

The case tests the constitutionality of the Copyright Act, which allows penalties of as much as $150,000 per infringement. It also asks whether federal judges have the power to reduce copyright damage awards rendered by juries.

The decision by US District Judge Michael Davis follows the third trial in the Recording Industry Association of America’s lawsuit against Jammie Thomas-Rasset, the first file sharer to take an RIAA lawsuit to a jury trial. Under the case's latest iteration, a Minnesota jury penalized her last year $62,500 for each of 24 tracks she pilfered on Kazaa.

Despite the judge's reduction, Thomas-Rasset appealed the lowered damages verdict, (.pdf) claiming the Copyright Act was unconstitutional because of its large or "excessive" awards. The RIAA, for its part, claims that judges do not have the power to alter jury awards when it comes to copyright infringement.

The Obama administration, which is intervening because the constitutionality of the Copyright Act is at issue, agreed with the RIAA and added that the act was constitutional.

"The Copyright Act's statutory damage provision is reasonably related to furthering the public interest in protecting original works of artistic, literary, and musical expression and its constitutionality must therefore be sustained under the applicable, highly deferential standards of judicial review," the government wrote (.pdf) the Missouri-based 8th U.S. Circuit Court of Appeals.

The three-judge appellate court panel will hear oral arguments in the case Tuesday.

Judge Davis has overturned the judgments of three separate juries in the Thomas-Rasset case dating to 2007.

The first trial of Thomas-Rasset, of Minnesota, ended with a $222,000 judgment, but Davis declared a mistrial, on the grounds that he'd improperly instructed the jury on a point of law. After the second trial, Davis tentatively reduced the award from $1.92 million to $54,000, and ordered a new trial on damages if the parties didn't agree to that amount or settle. That third trial ended in the $1.5 million judgement that Davis reduced again.

Judge Davis, the nation's first judge to reduce the amount of damages in a Copyright Act case, said fairness demanded his decision to reduce the latest award to $2,250 per track.

The jury’s award was "so severe and oppressive as to be wholly disproportionate to the offense and obviously unreasonable," he wrote.

The RIAA said in a legal filing with the appeals court that Judge Davis' decision "is fundamentally incompatible both with Plaintiff's constitutional right to have a jury determine what amount of statutory damages is just, and with the deference due to congressionally authorized awards."

The three Thomas-Rasset verdicts prove that federal juries are willing to slap file sharers with monster awards.

The only other file sharing case to have gone to trial resulted in a Boston jury awarding the RIAA $675,000 for 30 songs, which a judge reduced last year to $67,500. A federal appeals court reinstated the verdict, and the Supreme Court last week declined to intervene.

Most of the thousands of RIAA file sharing cases against individuals settled out of court for a few thousand dollars. The RIAA has ceased its 5-year campaign of suing individual file sharers and, with the Motion Picture Association of America, has convinced internet service providers to take punitive action against copyright scofflaws, including terminating service.

(Thanks to Ray Beckerman for pointing out next week's oral arguments.)