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Sixth Circuit Orders Remittitur of Punitive Damage Award in Bridgeport Music v. Justin Combs Case
Bridgeport Music, Inc., et al. v. Justin Combs Publishing, et al.
No. 06-6294, 2007 WL 3010525, Court of Appeals for the Sixth Circuit, 10/17/2007
Companies Mentioned: Bad Boy Entertainment, Inc. d.b.a. Bad Boy Records, Bad Boy Records LLC, Janice Combs Publishing, Inc. d.b.a. Justin Combs Publishing, UMG Recordings, Inc., Westbound Records, Inc.
Holding
In this appeal, the U.S. Court of Appeals for the Sixth Circuit ordered a remittitur of the award of punitive damages granted in favor of plaintiff copyright owners. In this infringement case filed against defendant music publishers for releasing an unlicensed sample of a copyrighted song, the Sixth Circuit held that the jury award of punitive damages in the amount of $3.5 million was unconstitutionally excessive and violated due process. In arriving at this conclusion, the court explained that such award should rightly be reduced, in the light of the Supreme Court’s three “guideposts” for evaluating the constitutionality of a punitive damages award, i.e., the reprehensibility of defendants' conduct, the disparity between plaintiffs' harm and the award, and a comparison of the award and civil penalties in comparable cases. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 418, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003).
Detailed Summary
Plaintiffs Bridgeport Music, Inc. and Westbound Records, Inc. are copyright owners of the Ohio Players’ Song “Singing in the Morning.” Defendant music publishers released the Notorious B .I.G. album Ready to Die, the title song of which contained an unlicensed sample of “Singing in the Morning.”
After plaintiffs brought suit against defendants for copyright infringement, a jury issued a verdict in favor of plaintiffs, awarding compensatory and punitive damages. Bridgeport elected statutory damages under the federal Copyright Act, 17 U.S.C. Section 101 et seq., and received the maximum award of $150,000. Westbound received its one-half share of compensatory damages, $366,939, and punitive damages in the amount of $3.5 million. In this appeal, defendants raised a number of issues, the most important of which was the excessiveness of the award of $3.5 million for punitive damages.
In resolving this issue in favor of defendants, the Sixth Circuit used as basis of its remittitur order the Supreme Court’s three “guideposts” for evaluating the constitutionality of a punitive damages award—the reprehensibility of defendants’ conduct, the disparity between plaintiffs’ harm and the award, and a comparison of the award and civil penalties in comparable cases. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 418, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003); BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 575, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996).
In finding that defendants’ conduct was not as reprehensible as to justify an award of $3.5 million, the court gave three reasons for such conclusion. First, the harm in this case (copyright infringement) was purely economic and did not threaten the health or safety of others. Second, Westbound was not a financially vulnerable victim. Third, the court found no evidence that defendants’ infringement was one of a repeated number of actions. “‘The repeated conduct factor ‘‘requires[s] that the similar reprehensible conduct be committed against various different parties rather than repeated reprehensible acts within the single transaction with the plaintiff’.” Chicago Title Ins. Corp. v. Magnuson, 487 F.3d 985, 1000 (6th Cir.2007) (quoting Bach v. First Union Nat’l Bank, 149 F. App.’s 354, 356 (6th Cir.2005). In this case where only one of the reprehensibility factors was found to be present, a ratio in the range of 1:1 to 2:1 was all that due process would allow. Clark v. Chrysler Corp., 436 F.3d 594, 604 (6th Cir.2006).
On the element of the disparity between compensatory and punitive damages, the court wrote that such disparity supported the conclusion that the punitive damages award was unconstitutional for three reasons also. First, the ratio of the overall damages award to the punitive damages award—approximately 9 .5:1 ($3.5 million / $366,939) – was large. State Farm, 538 U.S. at 425. Second, court also found the compensatory damage award to be “very large.” The Supreme Court has made clear that “[w]hen compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee.” State Farm, 538 U.S. at 425. Third, citing the same case of State Farm, 538 U.S. at 426, the court held that compensatory damages award in this case already included a punitive element. The “actual” harm that Westbound suffered was reflected in the amount of licensing fees that Westbound lost because of the infringement. Accordingly, the court declared, the ratio of the punitive damages award and the non-punitive element of the compensatory damages award was very high.
Regarding the element of the amount of statutory damages, the court cited the Copyright Act that provides that a plaintiff may elect statutory damages in lieu of actual damages and profits, and may ordinarily receive no more than $30,000 in statutory damages. 17 U.S.C. § 504(c)(1). Applying this rule in this case, the court reiterated its point that defendants’ conduct, although willful, was not highly reprehensible. Further, the size of the allowable ratio fluctuated with the size of the compensatory damages award, and thus the 4:1 ratio in the Act would suggest that a smaller ratio for a larger damages award was appropriate.
On the basis of this reasoning, the court ordered a remand to the district court for a remittitur of the punitive damages verdict.
View a PDF of the judicial opinion.Copyright Law Commentary
Read the related Copyright Law commentary: Bridgeport v. Combs: Putting Limits on Punitive Damage Awards in Copyright Action, by Kendall T. Jones, Esq.
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