Court Should Reject Labels' Bid for More Recovery After $47M Award: Grande

The court should reject Universal Music Group’s and other record labels' request for an additional $13 million recovery, said Grande Communications Networks in an opposition motion (docket 1:17-cv-00365) filed Wednesday in U.S. District Court for Western Texas in Austin. The plaintiff music labels filed notice Monday of a conditional cross-appeal at the 5th U.S. Circuit Appeals Court of the final judgment entered Jan. 30 in their favor by U.S. District Judge David Ezra.

Grande was responding to UMG’s request for an additional $5.2 million in attorneys’ fees, $7.3 million in prejudgment interest and about $200,000 in expert costs in a copyright infringement case for which it was awarded a “windfall $46.8 million” in statutory damages. There was evidence at trial that plaintiffs' actual damages were “far less” than the $47 million statutory damages awarded, it said.

Plaintiffs have already obtained a recovery that “far exceeds any reasonable estimation of actual harm they suffered,” said Grande. Since UMG didn’t attempt to prove the amount of loss, “there is no rationale supporting an additional monetary award.” UMG repeatedly refused to attempt to quantify harm it suffered from the copyright infringement at issue in the case, Grande said.

UMG didn’t offer any evidence of the value of its 1,400 copyrighted songs, such as revenue figures from digital or physical sales, statistics about the volume or frequency with which the songs were sold or streamed and “no evidence from which anyone could gauge the relative worth of certain works as compared to others,” the motion said. “As far as the trial record is concerned, there is no evidence that any of these individual songs have any economic value,” it said.

The existing evidence shows any lost revenue is a “small fraction of the jury’s award,” Grande said. It noted UMG’s damages expert, William Lehr, didn't offer an opinion about lost profits or revenue “or about the value of their works.” He instead focused on Grande’s alleged “economic incentives” to permit copyright infringement on its network, “without regard to the specific works or acts of infringement at issue,” said the motion.

In Lehr’s opinion, incentives ranged $50 million-$80 million, which he determined was the “lifetime value” of an individual Grande subscriber at $2,500-$3,800, including revenue the internet service provider would receive from internet, television and phone service. He multiplied the lifetime value by the number of Grande subscribers, over 20,000, accused of copyright infringement more than twice since 2013. The number also included notices sent by companies and rightsholders other than copyright enforcement company Rightscorp, along with notices about music, movies, TV shows, pornography and video games “not at issue" in the case, the motion said.

Lehr’s number was based on over 20,000 Grande subscribers he claimed Grande should have terminated for copyright infringement, but another expert indicated Rightscorp accused only 5,000 users of infringing works during the damages period, the motion said. The number of Grande users from whom Rightscorp claimed to have been able to download a file was about 500, it said. And lost revenue from a shared song over the internet would be “far less than Dr. Lehr’s ‘lifetime subscriber value,' considering that Plaintiffs’ entire catalogs were available to stream for $10 month,” the motion said.

The court should also deny plaintiffs’ request for over $7.3 million in prejudgment interest because prejudgment interest shouldn't be available on an award solely comprising statutory damages, said the motion, citing Texas court precedent. Statutory damages aren't compensatory and may be awarded in the absence of actual harm, the motion said. The reasoning for allowing prejudgment interest -- to compensate for the lost opportunity to use the money reflected in a compensatory award -- “does not apply,” it said.

The court should deny plaintiffs’ request for over $5 million in attorneys’ fees, said Grande, saying the $50 million in statutory damages “greatly exceeds any actual damages Plaintiffs may have suffered and is more than sufficient to achieve any necessary deterrent effect.” The court should order the parties to bear their own fees, it said.