In this guest post, Justin Morong, a student in the Entertainment Law and Web 2.0 course, updates the appellate review of the verdict and judgment in an infringment case against a grad student, who downloaded music and is a self-described crusader against recording companies. 

Let’s call it the case of costly principles: The U.S. First Circuit Court of Appeals, in a recent  ruling in an infringement case, upheld a hefty penalty against a digital music downloader, slapping graduate student Joel Tenenbaum with a $675,000 judgment.

In August, 2007, Sony BMG and other record labels sued in federal district court against Tenenbaum for statutory damages and injunctive relief, claiming 30 counts of unauthorized music downloads.  Tenenbaum was found liable for willful infringement to the tune of $22,500 per infringement.

U.S. Judge Nancy Gertner then reduced the judgment by 10%, calling the price tag set by the jury “unconstitutionally excessive,” such that it violated Tenenbaum’s due process rights. Plaintiffs objected to Gertner’s move, stating, “with this decision, the court has substituted its judgment for that of 10 jurors as well as Congress.”

Plaintiffs appealed.

In its decision, the appellate court said Gertner’s move thrust the case into a “thicket of Constitutional issues” and the judges  reinstated the original $650,000 judgment.  The district court had cited the “doctrine of constitutional avoidance,” which dictates that courts consider common law claims before constitutional claims.  The appellate court also ordered another district judge to rule on a more appropriate judgment figure and, if all else fails, a new trial would ordered.  Sony BMG, pleased with the reversal, said, “the court agreed with us that the finding of liability was correct and that the District Court erred in finding the verdict unconstitutional.”

This case provides one of the early appellate reviews of the music industry’s legal successes in court-related crackdowns on what they have termed illegal appropriation of their intellectual property.

Tenenbaum (shown at right with his legal team, photo from the defendant’s web site) considers himself a crusader against the record companies. He asserts they have sought to intimidate him into settling before filing their complaint.

He told  The Guardian that he received settlement notices and was told to phone a call center to arrange payment of $3,000 to make the infringement issue disappear.  Tenenbaum did not pay and soon found himself mired in a lawsuit.

His website details his battles against the record labels and frames the story as a digital David and Goliath tale.  He also makes a plea for justice.  He notes that the captain of the Exxon Valdez was fined $50,000 while George Harrison, sued for infringement, was fined $587,000.  He insists that payment of either the $675,000 or the reduced amount would be impossible and such a judgment would force him into bankruptcy.