Like millions of others, Joel Tenenbaum illegally shared music on the Internet in college. And like thousands of others, he was caught by the recording industry, which asked him to pay a few thousand dollars to settle the case. But he's one of just two individuals who have decided to fight in court rather than settle.
The result: a $675,000 judgment for sharing 30 songs. This week, the U.S. Court of Appeals for the First Circuit upheld the verdict, rejecting Tenebaum's argument that the amount was so large it violated his constitutional rights.
The courts have held that damages that are wildly disproportionate to a defendant's conduct can violate a defendant's Constitutional right to due process. But they've also set a high bar. In a 1919 case, the Supreme Court upheld $75 judgments against a railroad that had illegally overcharged two customers by 66 cents each. The high court ruled that fines set by statute become unconstitutional only when "the penalty prescribed is so severe and oppressive as to be wholly disproportioned to the offense, and obviously unreasonable."
Tenenbaum argued that a $675,000 judgment for sharing 30 songs is just such a disproportionate penalty. But the First Circuit didn't agree.
"The evidence of Tenenbaum's copyright infringement easily justifies the conclusion that his conduct was egregious," the court ruled. "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. We do not hesitate to conclude that an award of $22,500 per song, an amount representing 15% of the maximum award for willful violations...comports with due process."
The First Circuit believes that the logic the Supreme Court applied to a railroad in 1919 applies equally to a file-sharing college kid in 2013. But that doesn't make much sense. A railroad is a sophisticated and well-capitalized business venture that can be expected to understand and follow the rules. Tenenbaum was a kid in his early 20s who — even after warnings from his elders — may not have appreciated the gravity of his actions.
The railroad was ordered to pay about 100 times the harm it had caused to the plaintiffs. Even in 1919, $75 was pocket change for a railroad. In contrast, $675,000 is at least 1,000 times any reasonable estimate of the harm Tenebaum caused to the recording industry. It can be quite a crippling financial burden for an individual.
The other person to defy the recording industry hasn't fared much better. Earlier this year, the Supreme Court refused to hear an appeal by Jammie Thomas-Rasset of Minnesota. As a result, she owes $222,000 to the recording industry for sharing 24 songs online.