Capitol Records, Inc. v. Thomas-Rasset

692 F.3d 899 (8th Cir. 2012)

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Nature of the Case

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Facts

P undertook to investigate suspected infringement of its copyrights. P discovered that an individual with the username 'terreastarr' was participating in unauthorized file sharing on the peer-to-peer network KaZaA. KaZaA was a file-sharing computer program that allowed its users to search for and download specific files from other users. KaZaA users shared files using a share folder. KaZaA allowed its users to access other users' share folders, view the files in the folder, and download copies of files from the folder. P took screenshots of terreastarr's share folder, which included over 1,700 music files, and downloaded samples of the files. P got D's IP address and name and contacted her. The parties engaged in settlement conversations and were unable to resolve the matter. P sued D seeking statutory damages and injunctive relief for willful copyright infringement. D denied having any knowledge of KaZaA. The jury heard evidence from a forensic investigator that D removed and replaced the hard drive on her computer with a new hard drive after investigators notified her of her potential infringement. The new hard drive did not contain the files at issue. The jury found D liable for willful infringement and awarded the recording companies statutory damages of $9,250 per work, for a total of $222,000. It is undisputed that Thomas-Rasset (D) willfully infringed copyrights of twenty-four sound recordings by engaging in file-sharing on the Internet. D moved for a new trial or, in the alternative, for a remittitur, arguing that the size of the jury's statutory damages award violated her rights under the Due Process Clause. The district court sua sponte raised the issue whether it erred by instructing the jury that making sound recordings available for distribution on a peer-to-peer network violates a copyright owners' exclusive right to distribution, 'regardless of whether actual distribution has been shown.' The district court granted D's motion for a new trial holding that making a work available to the public is not 'distribution' under 17 U.S.C. § 106(3). At the second trial, D attempted to deflect responsibility by suggesting for the first time that her children and former boyfriend might have done the downloading and file-sharing attributed to the 'terreastarr' username. The court instructed the jury that 'the act of distributing copyrighted sound recordings to other users on a peer-to-peer network, without a license from the copyright owners, violates the copyright owners' exclusive distribution right.' The jury again found D liable for willful infringement, and awarded the recording companies statutory damages of $80,000 per work, for a total of $1,920,000. The court remitted damages to $2,250 per work, for a total of $54,000, on the ground that the jury's award was 'shocking.' The recording companies declined the remitted award and exercised their right to a new trial on damages. A third trial was held in November 2010. The jury awarded the recording companies statutory damages of $62,500 per work, for a total of $1,500,000. The court reduced the award to $2,250 per work, for a total of $54,000. The court ruled that this amount was the maximum award permitted by the Due Process Clause. The district court also entered a permanent injunction against D but refused to include language enjoining her from 'making available' copyrighted works for distribution to the public. P appealed seeking to reinstate the first jury award for $222,000. D cross-appealed, arguing that even an award of the minimum statutory damages authorized by the Copyright Act would be unconstitutional.