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RIAA’s Bullying Tactics and the Constitution

Looks like the RIAA has run into another possible stumbling block in discouraging online swapping of copyrighted songs. Now the courts are going to look at the excessive loss claims by the RIAA in its lawsuits against online music traders.

With that in mind, it wasn’t that surprising earlier this year to see one defendant in an RIAA suit question the constitutionality of the $750 number that was trotted out in her case. At the time, we stated that the reasoning used to back this up seemed much weaker than the reasoning in the law review article, but as lawyer Ray Beckerman (who is involved in the case) explained, the filing was limited in length and only needed to serve a specific purpose. It also looks like they were later able to submit either the law review article we mentioned, or other supporting documents. No matter what happened, the judge has now ruled that it is a perfectly legitimate question, and will be included as part of the case. The judge tossed out all of the RIAA’s objections, noting that the defendant actually backed up their claim with case law and law review articles. The RIAA, on the other hand, could offer no similar case law to explain why the constitutionality of the fines couldn’t be questioned. Of course, who knows how the case will turn out, but should the RIAA lose, it would be pretty damaging for them. They use the threat of the $750/song (or higher) fines as a way to bully people into just settling, rather than fighting — even if they know they’re innocent.

The law review article mentioned above can be found here. The article makes an interesting point. Suppose you download one copyrighted song that imposes a loss on the copyright holder of $1. Now, according the RIAA, they would hit you with $750, and of that $1 is to cover the loss and the remaining $749 is the punishment. A punishment in this case is not unreasonable as it can dissuade the person from downloading in the future and causing additional damage and also deter others. Now suppose you have downloaded 4,000 songs. Now you’d be paying $4,000 in damages and just under $3 million for punishment. Seems a tad excessive.

This raises another issue, what to do with the punitive damages awarded in a court case. It has always seemed to me that awarding the punitive damages to anyone runs the risk of creating perverse incentives. If it is given to the plaintiff then it creates an incentive on the part of individuals to sue in order to try and win big. If the government/courts keep it then it creates an incentive to bring more lawsuits which could be costly as it makes doing business more costly. Now, if the money is collected than burned, that would remove the incentive problem…of course, burning millions of dollars every year probably wouldn’t sit well with too many people.

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About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research.

Comments

  1. Ars Technica p2pnet.net The Inquirer reddit.com Digital Music Weblog Beta News TorrentFreak AbsolutePunk Tech Report Digital Music News Insider Blogs “Excess Copyright” by Howard Knopf afterdawn.com Outside the Beltway p2pnet (article on Howard Knopf discussion) All Headline News Shoutwire Elephants or Donkeys TuneLab Music antiMUSIC digg Boycott-RIAA.com Digital Media Thoughts TechBlog Other languages: The Inquirer (German language edition)

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  2. Anderson says:

    My pet idea is to replace punitive damages w/ the plaintiff’s attorney fees. The real incentive for seeking punitives 3/4 of the time is to cover your cost for seeking relief in the first place. Getting back “n” dollars for the expense of “5n” in fees is not real inviting.

    Fees at least have some grounding in reality — courts usually don’t rubberstamp whatever the attorneys claim — and thus avoid the randomness of punitives.

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  3. Steve Verdon says:

    Anderson,

    That isn’t a bad idea at all, provided there is judicial review of the costs (as you indicate). I vaguely remember this during the Dover trial, so yeah…that might even be a better way.

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  4. joel says:

    Down with the riaa. I am so tired of people and kids being bullyed to pay up these fines…..The riaa should get together with companyes to charge a monthly fee of 30.00 or so to allow people to download. until then people need to fight back and stop being bullyed. This is american and if people think back in history
    “BOSTON TEA PARTY”
    Can somebody please tell me why the riaa has to sue people spending all this money instead of working with companys to pay. They could not stop the vcr, dvd recorders and dvr boxes so
    what gives with p2p. The courts in nyc and supr will rule that 750 is too much and this case is whats going to breake the riaa tactics….

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  5. I am willing to sacrifice for my country, forgo my right to civil suit claims of punitive damages, serve on any civil juries in which punitive damages are at issue and in return receive all the punitive damages. I will have no influence to encourage or decide any cases so will thus be uncorrupted by the punitive damages. I could not increase them if I tried. I even will agree to not contribute to any politician or political group so I don’t have indirect influence.

    Under my plan, I suspect that the issue of punitive damages will resolve itself. Only when there is a real need for punitive damages will a plaintiff likely request them.

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