Capitol Records, Inc. v. Thomas–Rasset

692 F.3d 899

104 U.S.P.Q.2d 1063

CAPITOL RECORDS, INC.; Sony BMG Music Entertainment; Arista Records LLC; Interscope Records; Warner Bros. Records Inc.; UMG Recordings, Inc., Plaintiffs–Appellants,

v.Jammie THOMAS–RASSET, Defendant–Appellee,United States of America, Intervenor below-Appellee.

Motion Picture Association of America, Incorporated, Amicus on Behalf of Appellant,

Electronic Frontier Foundation; Internet Archive; American Library Association; Association of Research Libraries; Association of College and Research Libraries; Public Knowledge, Amici on Behalf of Appellee.

Capitol Records, Inc.; Sony BMG Music Entertainment; Arista Records LLC; Interscope Records; Warner Bros. Records Inc.; UMG Recordings, Inc., Plaintiffs–Appellees,

v.Jammie Thomas–Rasset, Defendant–Appellant,United States of America, Intervenor below-Appellee.

Motion Picture Association of America, Incorporated, Amicus on Behalf of Appellee,

American Library Association; Association of Research Libraries; Association of College and Research Libraries; Public Knowledge; Electronic Frontier Foundation; Internet Archive, Amici on Behalf of Appellant.

Nos. 11–2820, 11–2858.

United States Court of Appeals, Eighth Circuit.

Submitted: June 12, 2012.

Filed: Sept. 11, 2012.

Paul D. Clement, argued, Washington, DC, Matthew J. Oppenheim, Potomac, MD, Erin Murphy, Washington, DC, Timothy M. Reynolds, Eve G. Burton, Denver, CO, Jennifer L. Pariser, Washington, DC, on the brief, for appellants.

Kiwi Alejandro Danao–Camara, argued, Michael Lee Wilson, on the brief, Houston, TX, for appellee Thomas–Rasset.

Jeffrey A. Clair, argued, USDOJ, Civil Division, Washington, DC, for United States of America.

Robert Alan Garrett, Lisa S. Blatt, R. Reeves Anderson, Washington, DC, on the amicus brief filed by The Motion Picture Association of America Inc., in support of appellant.

Sherwin Siy, Washington, DC, on the amicus brief of Public Knowledge in support of appellee.

Jonathan Band, Washington, DC, on the amicus brief in support of appellee filed by American Library Association, Association of Research Libraries and Association of College and Research Libraries.

Corynne McSherry, San Francisco, CA, Michael Barclay, Menlo Park, CA, on the amicus brief filed by Frontier Foundation and Internet Archive in support of appellee.

Before MURPHY, MELLOY, and COLLOTON, Circuit Judges.

COLLOTON, Circuit Judge.

This appeal arises from a dispute between several recording companies and Jammie Thomas–Rasset. There is a complicated procedural history involving three jury trials, but for purposes of appeal, it is undisputed that Thomas–Rasset willfully infringed copyrights of twenty-four sound recordings by engaging in file-sharing on the Internet. After a first jury found Thomas–Rasset liable and awarded damages of $222,000, the district court granted a new trial on the ground that the jury instructions incorrectly provided that the Copyright Act forbids making sound recordings available for distribution on a peer-to-peer network, regardless of whether there is proof of “actual distribution.” A second jury found Thomas–Rasset liable for willful copyright infringement under a different instruction, and awarded statutory damages of $1,920,000. The district court remitted the award to $54,000, and the companies opted for a new trial on damages. A third jury awarded statutory damages of $1,500,000, but the district court ultimately ruled that the maximum amount permitted by the Due Process Clause of the Fifth Amendment was $54,000 and reduced the verdict accordingly. The court also enjoined Thomas–Rasset from taking certain actions with respect to copyrighted recordings owned by the recording companies.

The companies appeal two aspects of the remedy ordered by the district court. They object to the district court's ruling on damages, and they seek an award of $222,000, which was the amount awarded by the jury in the first trial. They also seek a broader injunction that bars Thomas–Rasset from making any of their sound recordings available to the public. For tactical reasons, the companies do not seek reinstatement of the third jury's award of $1,500,000. They urge instead that this court should reverse the district court's order granting a new trial, rule that the Copyright Act does protect a right to “making available” sound recordings, reinstate the first jury's award of $222,000, and direct entry of a broader injunction. In a cross-appeal, Thomas–Rasset argues that any award of statutory damages is unconstitutional, and urges us to vacate the award of damages altogether.

For reasons set forth below, we conclude that the recording companies are entitled to the remedies they seek: damages of $222,000 and a broadened injunction that forbids Thomas–Rasset to make available sound recordings for distribution. But because the verdicts returned by the second and third juries are sufficient to justify these remedies, it is unnecessary for this court to consider the merits of the district court's order granting a new trial after the first verdict. Important though the “making available” legal issue may be to the recording companies, they are not entitled to an opinion on an issue of law that is unnecessary for the remedies sought or to a freestanding decision on whether Thomas–Rasset violated the law by making recordings available.

I.

Capitol Records, Inc., Sony BMG Music Entertainment, Arista Records LLC, Interscope Records, Warner Bros. Records, and UMG Recordings, Inc., are recording companies that own the copyrights to large catalogs of music recordings. In 2005, they undertook to investigate suspected infringement of these copyrights. MediaSentry, an online investigative firm hired by the recording companies, discovered that an individual with the username “tereastarr” was participating in unauthorized file sharing on the peer-to-peer network KaZaA.

During the relevant time period, 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. A share folder is a location on the user's computer in which the user places files—such as audio or video recordings—that she wants to make available for other users to download. KaZaA allowed its users to access other users' share folders, view the files in the folder, and download copies of files from the folder.

MediaSentry accessed tereastarr's share folder. The investigative firm determined that the user had downloaded copyrighted songs and was making those songs available for download by other KaZaA users. MediaSentry took screen shots of tereastarr's share folder, which included over 1,700 music files, and downloaded samples of the files. But MediaSentry was unable to collect direct evidence that other users had downloaded the files from tereastarr. MediaSentry then used KaZaA to send two instant messages to tereastarr, notifying the user of potential copyright infringement. Tereastarr did not respond to the messages. MediaSentry also determined tereastarr's IP address, and traced the address to an Internet service account in Duluth, Minnesota, provided by Charter Communications. MediaSentry compiled this data in a report that it prepared for the recording companies.

Using the information provided by MediaSentry, the recording companies, through the Recording Industry Association of America (RIAA), issued a subpoena to Charter Communications requesting the name of the person associated with tereastarr's IP address. Charter informed the RIAA that the IP address belonged to Jammie Thomas–Rasset. The RIAA then sent a letter to Thomas–Rasset informing her that she had been identified as engaging in unauthorized trading of music and inviting her to contact them to discuss the situation and settle the matter. Thomas–Rasset contacted the RIAA as directed in the letter and engaged in settlement conversations with the organization. The parties were unable to resolve the matter.

In 2006, the recording companies sued Thomas–Rasset, seeking statutory damages and injunctive relief for willful copyright infringement under the Copyright Act, 17 U.S.C. § 101 et seq. They alleged that Thomas–Rasset violated their exclusive right to reproduction and distribution under 17 U.S.C. § 106 by impermissibly downloading, distributing, and making available for distribution twenty-four copyrighted sound recordings.

A jury trial was held in October 2007. At trial, Thomas–Rasset conceded that “tereastarr” is a username that she uses regularly for Internet and computer accounts. She admitted familiarity with and interest in some of the artists of works found in the tereastarr KaZaA account. She also acknowledged that she wrote a case study during college on the legality of Napster—another peer-to-peer file sharing program—and knew that Napster was shut down because it was illegal. Nonetheless, Thomas–Rasset testified that she had never heard of KaZaA before this case, did not have KaZaA on her computer, and did not use KaZaA to download files. The jury also heard evidence from a forensic investigator that Thomas–Rasset 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.

At the close of evidence, the district court instructed the jury that one who reproduces or distributes a copyrighted work without license infringes the copyright. The court's instructions defined “reproduction” to include “[t]he act of downloading copyrighted sound recordings on a peer-to-peer network.” The court also instructed that the act of “making copyrighted sound recordings available for electronic distribution on a peer-to-peer network, without license from the copyright owners, violates the copyright owners' exclusive right of distribution, regardless of whether actual distribution has been shown.” The jury found Thomas–Rasset liable...