Opposition Brief — Westbound Records Records, Inc. v. Justin Combs Publishing (No. 07-1438)

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Q FILED

No. 07-1438 JUL 8 - 2008

OFFICE OF THE CLERK

In The SUPREME COURT, U.S.

Supreme Court of the Gnited States

WESTBOUND RECORDS, INC.,

Petitioner,

JUSTIN COMBS PUBLISHING, et al.,

Respondents.

On Petition for Writ of Certiorari to the United

States Court of Appeals for the Sixth Circuit

BRIEF IN OPPOSITION

JONATHAN D. Davis Timoruy L. WARNOCK

JONATHAN D. Davis, P.C. Counsel of Record

99 Park AVENUE, SuITE 1600 AmyJ. EVERHART

New York, NY 10016-1503 Ritey Warnock & Jacornson, PLC

(212) 687-5464 1906 West END AVENUE

NASHVILLE, TENNESSEE 37203

(615) 320-3700

Attorneys for Respondents.

Janice Combs Publishing, Inc.

d/b/a Justin Combs Publishing,

Bad Boy Entertainment, Inc.,

d/b/a Bad Bey Records, Bad

Boy Records LLC and UMG

Recordings, Inc., and its division

July 8, 2008 Universal Records

Becker Gallagher - Cincinnati, OH - Washington, D.C. - 800.890.5001

II.

QUESTIONS PRESENTED

Whether a presumption of validity for punitive-

damages awards within a single-digit ratio of

compensatory awards, with exceptions only if the

verdict is based on passion and prejudice or no

malice is found, is inappropriate because such

presumption fails to consider the guideposts

established by this Court in BMW of North

America, Inc. v. Gove, 517 U.S. 559 (1996), such as

the level of reprehensibility, the size of the

compensatory-damages award and whether the

compensatory-damages award includes a punitive

component.

Whether Petitioner failed to show a conflict among

appellate courts’ application of the Gore guideposts.

IiIl.Whether the Sixth Circuit correctly applied each

Gore guidepost in reversing the District Court’s

award of punitive damages and remanding for a

remittitur of the punitive-damages award to a

punitive/compensatory ratio of 1:1 or 2:1.

IV.Whether the Sixth Circuit correctly applied a de

novo standard of review in considering the Gore

guideposts, assuming the jury accepted Petitioner’s

factual view of the case and applying the

guideposts to such evidence.

. Whether repeated conduct for purposes of applying

the “reprehensibility” guidepost is limited to

conduct against third parties, because, as this

Court held in Philip Morris USA v. Williams, 549

U.S. 346 (2007), such conduct also may pose a

substantial risk to the general public.

RULE 29.6 STATEMENT

Respondent Bad Boy Entertainment, Inc. has no

parent company, and there are no publicly held

‘companies that own any sick of Bad _ Boy

Entertainment, Inc.

Respondent Bad Boy Records LLC has no parent

company, and there are no publicly held companies

that own any stock of Bad Boy Records LLC.

Respondent Janice Combs Publishing, Inc. d/b/a

Justin Combs Publishing has no parent company, and

there are no publicly held companies that own any

stock of Janice Combs Publishing, Inc. d/b/a Justin

Combs Publishing.

UMG Recordings, Inc. is a wholly owned subsidiary

of Vivendi Universal, a publicly traded company.

TABLE OF CONTENTS

QUESTIONS PRESENTED

RULE 29.6 STATEMENT

TABLE OF CONTENTS

TABLE OF AUTHORITIES

STATEMENT OF THE CASE

I. The Underlying Allegations

A. “Ready to Die” Is Produced and Released.

B. Bridgeport and Westbound Demand 25% of

“Ready to Die.”

>. Defendants Re-Release Ready to Die While

Engaged with Bridgeport and Westbound in

Settlement Discussions. ................

II. Procedural Background

A. Proceedings in the District Court

B. The Sixth Circuit Opinion

REASONS FOR DENYING THE WRIT

I. Westbound’s Proposed Bright-Line Test Fails to

Consider Important [ndicia of Constitutionality

Established by This Court.

. Westbound Has Manufactured an Appellate-

Court Split That Does Not Exist

. This Court Has Suggested That a 1:1 Ratio

Is Appropriate in Cases, Like This Case,

Where the Level of Reprehensibility Is Low

and Compensatory Damages Are High. .. 18

. Westbound’s Proposal Ignores Important

Indicia of Unconstitutionality. .......... 24

Il. The Sixth Circuit Correctly Applied a De Novo

Standard of Review. ...............020 00: 27

III.This Case Is Not the Appropriate Vehicle to

CUMMMO TOCELIOG LAW. 2. eee cece canes . 30

A. Reprehensibility

B. Disparity between Compensatory and

ge er re 38

C. Comparable Civil Penalties. ............ 34

CONCLUSION

TABLE OF AUTHORITIES

CASES

BMW of North America, Inc. v. Gore,

517 U.S. 559 (1996)

Clark v. Chrysler Corp.,

436 F.3d 594 (6th Cir. 2006)

Collins Entertainment Corp. v. Coats & Coats

Renial Amusement,

584 S.E.2d 120 (S.C. Ct. App. 2003) ........ 17

Conseco v. Finance Servicing Corp.,

381 F.3d 811 (8th Cir. 2004)

Cooper industries, Inc. v. Leatherman Tool Group,

532 U.S. 424 (2001) 27, 28, 29

Diesel Machinery, Inc. v. B.R. Lee Industries, Inc.,

418 F.3d 820 (8th Cir. 2005)

Eden Electrical, Ltd. v. Amana Co.,

370 F.3d 824 (8th Cir. 2004)

Exxon Shipping Co. v. Baker,

2008 U.S. Lexis 5263 (2008)

Hamil Am., Inc. v. GFT,

193 F.3d 92 (2d Cir. 1999)

Harris v. Archer,

134 S.W.3d 411 (Tex. Ct. App. 2004)

Vill

Marie Deonier & Assoc. v. Paul Revere Life Ins. Co.,

101 P.3d 742 (Mont. 2004)

Ornelas v. United States,

517 U.S. 690 (1996)

Pacific Mutual Life Ins. Co. v. Haslip,

499 U.S. 1 (1991)

Philip Morris USA v. Williams,

549 U.S. 346 (2007)

Planned Parenthood v. American Coalition of Life

Activists,

422 F.3d 949 (9th Cir. 2005)

Rhone-Poulenc Agro, S.A. v. DeKalb Genetics Corp.,

345 F.3d 1366 (Fed. Cir. 2003)

Solem v. Helm,

463 U.S. 277 (1983)

State Farm Mutual Automobile Ins. Co. v.

Campbell,

ee Ri PD ok bck ce ees see's ee passim

Tony Gullo Motors I, L.P. v. Chapa,

212 S.W.3d 299 (Tex. 2006) ...

Trinity Evangelical Lutheran Church v. Tower Ins.

Co..,

661 N.W.2d 789 (Wis. 2003)

TXO Production Corp. v. Alliance Resources Corp.,

509 U.S. 4438 (1993) 23

Vill

Union Pacific Railroad Co. v. Barber,

149 8.W.3d 325 (Ark. 2004)

Zhang v. American Gen. Seafoods, Inc.,

339 F.3d 1020 (9th Cir. 2003)

STATUTES

17 U.S.C. § 101, et seq.

17 U.S.C. § 301(c)

17 U.S.C. § 504(c)(2)

OTHER

H.R. Rep. No. 94-1476, at 161 (1976), reprinted in

17 U.S.C.A. 504 at 146 (West 1996)

STATEMENT OF THE CASE

This case is not the appropriate vehicle to revisit

punitive-damages jurisprudence. No circuit split

exists. Instead, Petitioner, Westbound Records, Inc.

(“Westbound”), is simply dissatisfied with the Sixth

Circuit’s decision reducing its unconstitutionally

excessive punitive-damages award and seeks this

Court’s review of the Sixth Circuit’s fact-specific

decision.

Congress has determined that the maximum

statutory damages for willful copyright infringement

are $150,000. Yet, because of a narrow exception

allowing punitive damages for common-law copyright

infringement of sound recordings created before 1972,

the jury awarded Westbound punitive damages of $3.5

million for a single infringed work.

The Sixth Circuit, after careful consideration of this

Court’s guideposts for review of punitive-damages

awards set forth in BMW of North America, Inc. v.

Gore, 517 U.S. 559 (1996), found the award

unconstitutionally excessive and remanded to the

District Court for a remittitur of the punitive-damages

award to a more appropriate ratio of punitive to

compensatory damages of 1:1 or 2:1.

The Sixth Circuit concluded that, at best, only a

portion of one of the three Gore guideposts weighed in

favor of a punitive-damages award in this case: a

showing, albeit not strong, of willful copyright

infringement. The Sixth Circuit determined that the

remaining guideposts including those factors this

Court emphasized in reversing a punitive-damages

award in State Farm Mutual Automobile Ins. Co. v.

Campbell, 538 U.S. 408 (2003) — demonstrated that a

$3.5 million punitive-damages award in this copyright

infringement case was unconstitutionally excessive:

1. The compensatory-damages award is

substantial and already includes a punitive

component in allowing for the recovery of lost

profits, which constitutes the majority of the

award;

The harm inflicted was economic and not

physical;

No evidence exists that Westbound is a

financially vulnerable victim; and

4. No evidence of repeated misconduct exists.

Rarely citing to — and greatly exaggerating — the

record, Westbound now complains that a recovery of

punitive damages to compensatory damages in the

range of 1:1 or 2:1, although more than twice the

amount Congress has determined appropriate to

punish willful copyright infringement, is insufficient.

Westbound urges the Court to establish a presumption

of validity for punitive-damages awards within a

single-digit ratio of compensatory awards, with

exceptions only if the verdict is based on passion and

prejudice or where no malice is found.

Westbound has manufactured a split among

appellate courts in how they apply the Gore

guideposts, and, in particular, the second guidepost

calling for consideration of the punitive-to-

compensatory ratio. In one camp, according to

Westbound, courts “apparently” presume the validity

of single-digit-ratio awards; in the other, courts

reverse single-digit-ratio awards based on de novo

review.

These cases did not apply the Gore guideposts

differently. In each case, the court did not simply

consider the punitive-compensatory ratio, but

examined all three Gore guideposts in the context of

the case-specific facts. The trend of the cases comports

with this Court’s suggestion in Exxon Shipping Co. v.

Baker, 2008 U.S. Lexis 5263, **74-80 (2008), and

Campbell that punitive-damages awards should be —

and typically are — at the lower end of the single-digit

spectrum when the level of reprehensibility is low or

the other guideposts weigh against the plaintiff.

Likewise, here the Sixth Circuit did not “get bogged

down” in examining the punitive-to-compensatory

ratio, as Westbound contends, but, instead, thoroughly

examined each guidepost in reaching its conclusion

that the ratio was too high and reduced it to the range

endorsed by this Court.

Indeed, a presumption of validity of a single-digit

ratio has never even been considered by this Court,

and for good reason. As this Court has noted in its

most recent opinions on punitive damages, high single-

digit-ratio awards represent the upper limit of

constitutional propriety only in the most exceptional

cases; a 1:1 ratio is more appropriate 1n cases where,

as here, the case for punitive damages ts not strong.

See Baker, 2008 U.S. Lexis 5263, **7 4-80; Campbell,

938 U.S. at 425

The Sixth Circuit relied on precisely such

considerations in determining that a 2:1 or 1:1 ratio is

more appropriate here than the 9.5:1 ratio the jury

awarded. Thus, this case, where Westbound has

already been compensated with a substantial sum that

includes a punitive component, demonstrates precisely

why Westbound’s “presumption of validity” proposal

would not appropriately guard against punitive-

damages awards that violate due _ process.

Westbound’s proposal fails to consider not only the

facts of each individual case but also many of the

indicia identified in Gore and Campbell that an award

is unconstitutionally excessive.

Westbound also erroneously suggests that the Sixth

Circuit applied a de novo standard of review to factual

findings of the jury when such review should have

been for clear error. The Sixth Circuit assumed the

jury accepted Westbound’s factual view of the case and

applied the guideposts to such evidence.

Finally, Westbound suggests the appellate courts

are split on whether repeated conduct for purposes of

applying the “reprehensibility” guidepost includes

conduct against the plaintiff or is limited to conduct

against third parties. This Court clarified in Philip

Morris USA v. Williams, 549 U.S. 346 (2007), that

harm to others is the test because such conduct also

may pose a substantial risk to the general public. In

any event, Westbound has failed to provide any

evidence of repeated misconduct against nonparties or

itself, alleging only a single act of infringement.

This case was properly decided under the

established precedent of this Court. Therefore,

Westbound’s Petition should be denied.

I. The Underlying Allegations

A. “Ready to Die” Is Produced and Released.’

Bridgeport Music, Inc. (“Bridgeport”) owns the

musical composition “Singing in the Morning,” and its

sister company Westbound owns the 1972 sound

recording embodying that musical composition

recorded by the Ohio Players. (R. 424, Trial Transcript

Volume (“Tr.”) [X, 1580, 1586.)

In 1994, Defendant Bad Boy Entertainment, Inc.,

as ajoint-venturer with non-party Arista Records, Inc.,

released the album Ready to Die, recorded by the late

rap artist Christopher Wallace, professionally known

as “Notorious B.I.G.” (R. 419, Tr. VII, 1037, 1166,

1169.) The album includes the sound recording “Ready

to Die.” (R. 370, Tr. Ex. 77.)

The recording “Ready to Die” was produced by non-

party Osten Harvey, Jr.,? who admitted at his

' Defendants reject, in large part, Westbound’s recitation of the

facts, which includes few, if any, citations to the record and

generally repeats many of the inflammatory, exaggerated and

unsupported allegations Westbound made at trial. To the extent

relevant to the arguments herein, Defendants explain the basis

for their disagreement within the text of their argument.

* Defendants filed a Third-Party Complaint against Harvey, but

it was dismissed without prejudice for lack of personal!

deposition that he included a sample of a small portion

of the sound recording “Singing in the Morning” in

“Ready to Die.” He said he chose the work because it

sounded like another sample he had originally used in

“Ready to Die,” which he could not license. (R. 378, Tr.

II, 281; R. 399, Videe Depo. of Osten Harvey Jr., pp.

18-20, 126-32.)

Defendants had no role in or knowledge of the

placement or selection of this sample and did not have

any control over Harvey’s actions. (R. 419, Tr. VII,

1037-40, 1058-60, 1133, 1170, 1177; R. 370, 7/19/94

Wallace Correspondence, Tr. Ex. 507; R. 378, Tr. II,

281; R. 399, Video Depo. of Osten Harvey Jr., pp. 126-

32.) Indeed, Defendants UMG Recordings, Inc. and

Bad Boy Records LLC had no involvement with the

Ready to Die album until more than a decade later. (R.

419, Tr. VII, 1206, 1210-15, 1228, 1271.)

Bad Boy Entertainment, Inc. and its principal,

Sean Combs, who was the named “executive producer”

of the album Ready to Die but who had no role in the

actual production of the song, are well known for

sampling lawfully other artists’ music in creating their

own music. (R. 419, Tr. VII, 1043, 1050-53, 1175-77.)

For years, Combs has requested and received licenses

to use hundreds of samples and is careful to do so

because of his sampling reputation. (R. 419, Tr. VII,

1043; see also id. at 1050-53.) The album Ready to Die

includes numerous authorized and credited samples.

jurisdiction. (K. 44, Amended Third Party Complaint; R. 77,

Amended Report and Recommendation; R. 104, Order.)

(R. 370, Tr. Exs. 557-558 (album liner notes); see also

R. 419, Tr. VII, 1060-61.)

B. Bridgeport and Westbound Demand 25% of

“Ready to Die.”

In 1998, Bridgeport and Westbound sent letters —

never addressed properly to reach Defendants —

demanding 25% ownership of the copyright in “Ready

to Die” in exchange for use of the “Singing in the

Morning” sample. Bridgeport and Westbound never

requested that Defendants cease exploiting the Ready

to Die album, only that they agree to a fee for the

continued use of the sample. (R. 370, Tr. Exs. 19A,

20B; R. 419, Tr. VII, 1046-47.) Defendants never

received such a letter directly and continued to exploit

the work. (R. 419, Tr. VII, 1045-46, 1176-77.)

C. Defendants Re-Release Ready to Die While

Engaged with Bridgeport and Westbound

in Settlement Discussions.

While Defendants were not allowed to introduce the

evidence during the trial’s liability phase, in an offer of

proof, Defendants demonstrated that the parties had

engaged in continuous settlement discussions during

the pendency of the action, Defendants making

numerous settlement offers. (R. 420, Tr. VIII-A, 1369.)

During these settlement discussions, in 2004, Bad

Boy Records released re-mastered versions of Ready to

Die through a distribution agreement with UMG

Recordings, Inc. Neither Bridgeport nor Westbound

ever sought to enjoin this re-release during the

pendency of the trial, instead simply relying on their

request for a permanent injunction to be decided at the

trial.

In 2005, after the UMG agreement terminated, Bad

Boy Records entered into a joint venture with Warner

Music Group, creating the entity Bad Boy Records

LLC, which continued to distribute the re-mastered

Ready to Die albums. (R. 419, Tr. VII, 1206, 1210-15.)

If. Procedural Background

A. Proceedings in the District Court

Bridgeport and Westbound filed a Complaint in the

United States District Court for the Middle District of

Tennessee on February 25, 2005,° alleging copyright

infringement under the Copyright Act, 17 U.S.C. § 101,

et seq. (R. 1, Complaint.)

The Complaint was later amended to plead on

behalf of Westbound, in the alternative, common-law

laws of Tennessee, unfair competition,

misappropriation and conversion. (R. 30, Third

Amended Complaint.)

On February 15, 2006, the District Court dismissed

Westbound’s claims for federal copyright infringement,

violation of Tennessee’s record-piracy laws and

3 Certain of the claims in this lawsuit are consolidated from a

lawsuit filed May 4, 2001. (R. 40, Stipulation and Agreed Order.)

conversion.’ (R. 169, Report and Recommendation; R.

199, Order.)

This case was tried to a jury. (R. 377-79, 414-15,

418-20, 424, 477, Tr. I-[X.) In their opening statement

and case-in-chief, Plaintiffs attempted to prove

entitlement to punitive damages by arguing that

Defendants maliciously ignored the litigation and

Plaintiffs’ settlement efforts, forcing Plaintiffs to trial.

(R. 377, Tr. I, 31, 51, 53, 59, 60, 89.)

During Defendants’ case-in-chief, however, over

Defendants’ objections (R. 419, Tr. VII, 1022-23; R.

420, Tr. VIII-A, 1295-97), the District Court, sua

sponte, bifurcated the trial and precluded Defendants

from countering Plaintiffs’ argument and evidence

introduced during the liability phase that Defendants

made numerous attempts to settle with Plaintiffs. (R.

419, Tr. VII, 1175.)

On March 20, 2006, the jury found Defendants

liable on all counts and awarded compensatory

damages in the amount of $733,878 for each Plaintiff

(R. 366, 367, Jury Verdicts), the precise amount

Plaintiffs had requested.

The jury also found that Defendants’ infringement

was “willful” and, thus, Bridgeport was entitled to the

* Westbound’s sole interest here is ownership of the sound

recording “Singing in the Morning.” The District Court found that

the sound recording was fixed in a tangible medium before

February 15, 1972, and, therefore, is not entitled to federal

maximum enhanced statutory damages under federal

damages. (R. 366, Jury Verdict.)

The jury also found that Westbound was entitled to

punitive damages. (/d.) The punitive-damages phase

was then tried to the jury. (R. 424, Tr. IX, 1630-83.)

The jury awarded punitive damages of $1,500,000

against Bad Boy Entertainment, Inc., $1,000,000

against Bad Boy Records LLC and $1,000,000 against

UMG Recordings, Inc. (R. 368, Jury Verdict on

Punitive Damages.)

Defendants moved for a mistrial or modification of

the verdict. (R. 426-27, Motion and Memo for Mistrial

or Modification of Verdict; supplemented at R. 439,

Supplemental Memo in Support of Motion for Mistrial

or Modification of Verdict.) The District Court denied

Defendants’ motion except to reduce Plaintiffs’

compensatory damages by 50% each, because

Bridgeport possesses an interest only in the musical

composition and Westbound possesses an interest only

in the sound recording.’ (R. 461, Order.)

On September 21, 2006, the District Court entered

judgment on the jury verdict and awarded damages as

follows:

° Thus, Westbound'’s contention that the Court reduced the award

“due solely to the presence of another plaintiff in the action”

(Petition at 2) is inaccurate

Bridgeport:

| Statutory damages $150,000.00 |

Westbound:

Compensatory damages $366,939.00

Prejudgment simple $276,763.93

interest from May 4, 1998,

to present at 9% per

annum

Punitive damages against $1,500,000.00

Bad Boy Entertainment,

Inc.

Punitive damages against $1,000,000.00

Bad Boy Records LLC

Punitive damages against $1,000,000.00

UMG Recordings, Inc.

TOTAL | $4,143,702.93

(R. 465, Order.)

Defendants appealed the District Court’s decision

to the United States Court of Appeals for the Sixth

Circuit. (R. 467, Notice of Appeal.) Among the issues

appealed was whether the jury’s $3.5 million punitive-

damages award was unconstitutionally excessive.

B. The Sixth Circuit Opinion

On October 17, 2007, the Sixth Circuit affirmed in

part and reversed in part the District Court’s decision.

Significant to Westbound’s Petition, the District Court

reversed the District Court’s punitive-damages award

of $3.5 million. The Sixth Circuit held that the

punitive-damages award violates due process when

measured against Defendants’ conduct, the harm that

Plaintiffs suffered and the comparable enhanced

statutory damages that federal law permits. (Petition,

Apx. 26a-35a.)

The Sixth Circuit conducted a de novo review of the

punitive-damages award and concluded that the award

was excessive in light of this Court’s three guideposts

under Campbell, 538 U.S. at 418, and Gore, 517 U.S.

at 575: 1) the reprehensibility of Defendants’ conduct,

2) the disparity between Westbound’s harm and the

punitive award, and 3) a comparison of the award and

civil penalties in comparable cases. (Petition, Apx.

26a.)

The Sixth Circuit found that Defendants’ conduct

did not warrant the $3.5 million punitive-damages

award. The court found present only one of the four

reprehensibility factors: that the harm was the result

of intentional malice or deceit. The court also found

that, although the showing was not strong, the

evidence that Defendants ignored pre-litigation letters

and re-released the album knowing it contained an

unauthorized sample supported the jury’s finding that

Defendants acted willfully and that their conduct was

“somewhat reprehensible.” (Petition, Apx. 26a-27a.)

The Sixth Circuit found that none of the other

reprehensibility factors were present: First, the harm

was purely economic and did not threaten the health

or safety of others; second, Westbound is not a

financially vulnerable victim but instead a company

“that has proven its ability to protect its rights”; and

third, no evidence was admitted or presented that

Defendants’ infringement was one of a repeated

number of actions. (Petition, Apx. 28a-29a.)

Because only one of the reprehensibility factors was

present, the Sixth Circuit concluded, based on a

comparison to civil awards in comparable cases, that

a ratio in the range of 1:1 to 2:1 is all that due process

allows in this case. (Petition, Apx. 30a-3la.) In so

concluding, the court determined that the’ raiuio of

punitive damages to compensatory damages the jury

awarded — 9.5:1 — was large, that the compensatory

award — $366,939 — was substantial, and that the

compensatory award included a punitive element by

allowing recovery for lost profits. (Petition, Apx. 32a-

34a.)

Finally, the court relied on the fact that the

maximum damages available for willful copyright

infringement under the Copyright Act is $150,000, four

times the maximum amount recoverable under the Act

if the infringement is not willful. The court observed

that Defendants’ conduct, although willful, was not

highly reprehensible and that, because the size of the

allowable ratio fluctuates with the amount of the

compensatory-damages award, a smaller ratio was

appropriate here due to the large compensatory-

damages award. (Petition, Apx. 34a-35a.)

The Sixth Circuit held that a ratio of 1:1 or 2:1 is

all that due process can tolerate in this case and

remanded to the District Court for remittitur of the

punitive-damages verdict or a new trial on such

damages. (Petition, Apx. 35a.)

On February 19, 2008, the Sixth Circuit denied

Westbound’s petition for rehearing en banc. 2008 U.S.

App. LEXIS 3778 (6" Cir. Feb. 19, 2008).

REASONS FOR DENYING THE WRIT

Westbound’s Proposed Bright-Line Test Fails

to Consider Important Indicia of

Constitutionality Established by This Court.

Westbound seeks this Court’s review to resolve a

split that Westbound alleges exists among appellate

courts in applying the Gore guideposts: those courts

that presume the validity of single-digit-ratio punitive-

damages awards — a presumption Westbound urges

the Court to adopt here —and those courts that review

each award de novo even if it falls within the single-

digit ratio.

Westbound has manufactured a court split. In each

case cited by Westbound, regardless of whether the

court has reversed the punitive-damages award or left

it intact, the court has applied the three Gore

guideposts in the context of the facts of each case. In

cases where the level of reprehensibility is high, the

courts typically affirm larger punitive-damages

awards. In cases where the level of reprehensibility is

low or compensatory damages are already substantial

or include a punitive element, courts typically reverse

or modify such awards. The trend of these cases

comports with this Court’s decisions in similar cases

where the Gore guideposts do not strongly support a

punitive-damages award

Further, Westbound’s proposed presumption to

treat all single-digit-ratio punitive-damages awards

the same ignores this Court’s precedent, just

reaffirmed in Baker, that awards in the low-single-

digit range, specifically 1:1, are more appropriate

punishment of conduct with a low level of

reprehensibility.

Westbound’s proposal ignores not only the level of

reprehensibility but also a number of other important

factors this Court has instructed courts to consider in

determining whether such awards are

unconstitutional, such as 1) whether’ the

compensatory-damages award itself contains a

punitive component; 2) whether the compensatory

damages are substantial and 3) whether the harm

inflicted was physical as opposed to economic.”

A. Westbound Has Manufactured an

Appellate-Court Split That Does Not Exist.

Courts have not ignored the “gross excessiveness”

standard in favor of “strict excessiveness,” as

Westbound alleges. Instead, courts, like the Sixth

Circuit here, determine, by applying the Gore

guideposts, whether a particular award is

unconstitutional. The appropriate measure of

° Westbound further argues that the jury based its punitive-

damages award on Defendants’ disregard of Westbound’s right to

deny the use of the sample, but Westbound made no such

argument in support of its punitive-damages request at trial and

cites to nothing in the record to support the argument here

constitutionality is determined in reference to the Gore

guideposts.

Westbound argues there is a “split in circuits” in

how courts have applied the Gore guideposts and that

some courts, including the Sixth Circuit in this case,

have become “bogged down in determining...whether

a single-digit ratio of punitive to compensatory

damages should be substituted for a marginally lower

single-digit ratio.” (Petition at 24.) Westbound

suggests that two camps have developed: 1) those

courts that “have aggressively reduced single-digit

punitive award ratios to a marginally smaller single-

digit ratio”; and 2) those courts that “have appeared to

treat single-digit ratios as presumptively valid.”

(Petition at 22-23.)

Westbound recites merely the outcomes of each

case and not the facts that militated the result. A

review of each case shows that no circuit split exists.

In each case Westbound cites, as in this case, the

court applied all three of the Gore guideposts to the

particular facts of the case, determining whether the

ratio of punitive to compensatory damages was too

high only as part of the overall analysis. Not

surprisingly, given that reprehensibility is the most

important indicia of the three guideposts, Gore, 517

U.S. at 575, where courts affirmed a higher punitive-

to-compensatory ratio, the courts found extreme

misconduct or a strong showing of reprehensibility.’

" See, e.g., Zhang v. American Gen. Seafoods, Jnc., 339 F.3d 1020,

1043-44 (9” Cir. 2003) (affirming award where the harm was

On the other hand, where reprehensibility was not

strong and the other factors did not support the

imposition of punitive damages, a higher ratio was

reversed.®

intentional race discrimination); Planned Parenthood v. American

Coalition of Life Activists, 422 F.3d 949, 958, 963 (9"" Cir. 2005)

(affirming award where defendant’s conduct was intended to

intimidate by causing fear of murder or serious bodily injury and

was thus “particularly reprehensible”); Rhone-Poulenc Agro, S.A.

v. DeKalb Genetics Corp., 345 F.3d 1366, 1372 (Fed. Cir. 2003)

(award of just over 3 to 1 warranted given egregious nature of

defendant’s fraudulent conduct); Trinity Evangelical Lutheran

Church v. Tower Ins. Co., 661 N.W.2d 789, 801-02 (Wis. 2003)

(affirming award where defendant's conduct was “grievous” and

repeated against third parties); Marie Deonier & Assoc. v. Paul

Revere Life Ins. Co., 101 P.3d 742, 753 (Mont. 2004) (affirming

award given “the heightened duty intrinsic and elemental to a

fiduciary relationship” where insurance company was indifferent

to a high probability of pecuniary loss to its agents); Union Pacific

Railroad Co. v. Barber, 149 S.W.3d 325, 346-48 (Ark. 2004)

(defendant intentionally put the traveling public in harm's way,

causing death of one victim and severe injury to another); Collins

Entertainment Corp. v. Coats & Coats Rental Amusement, 584

S.E.2d 120, 128 (S.C. Ct. App. 2003) (“degree of reprehensibility

was...significant”).

* See, e.g., Clark v. Chrysler Corp., 436 F.3d 594, 605-06 (6" Cir

2006) (reducing ratio where only one of five factors weighed in

favor of reprehensibility); Eden Electrical, Ltd. v. Amana Co., 370

F.3d 824, 829 (8 Cir. 2004) (affirming reduction of award where

the case involved economic rather than physical harm and the

fraud involved only a single incident and a single victim); Conseco

v. Finance Servicing Corp., 381 F.3d 811, 825 (8 Cir. 2004)

(reducing punitive award where compensatory award was

substantial); Harris v. Archer, 134 S.W.3d 411, 438-39 (Tex. Ct

App. 2004) (only one of five reprehensibility factors met;

The varying results of these cases were supported

by an analysis of the unique facts of each case and do

not create a split on the application of the law.

Instead, the results of these cases comport with this

Court’s holdings in Baker and Campbell applying

lower ratios to cases in which the blameworthiness is

relatively low.

B. This Court Has Suggested That a 1:1 Ratio

Is Appropriate in Cases, Like This Case,

Where the Level of Reprehensibility Is

Low and Compensatory Damages Are

High.

Westbound urges the Court to establish a bright-

line test that would impose a presumption of validity

on each punitive-damages award within a single-digit-

ratio unless the award was the result of passion or

prejudice or no malice is found. Because the ratio here

pushes the outer limits of singie-digit ratios — 9.5:1

—Westbound urges a presumption of validity for all

defendant’s isolated incident causing only economic harm not

“particularly egregious”); Tony Gullo Motors I, L.P. v. Chapa, 212

S.W.3d 299, 308-09 (Tex. 2006) (award reduced where damages for

mental anguish of three times economic damages included a

punitive element and only one of five reprehensibility factors met).

In Diesel Machinery, Inc. v. B.R. Lee Industries, Inc., 418 F.3d

820, 837-40 (8 Cir. 2005), which Westbound cites as an example

of a court getting “bogged down’ in the ratios, the court actually

affirmed a remitted award where the conduct was intentional

and repeated and comparable civil penalties were substantial.

The plaintiff did not challenge the remittitur, so the Eighth

Circuit did not address the district court’s reduction of the award,

much less “get bogged down” in the ratios in doing so

single-digit-ratio awards. Westbound’s basis for

choosing the two exceptions it did and omitting other

Gore guideposts is equally obvious because the Sixth

Circuit found in favor of Westbound on these factors.

The Sixth Circuit concluded that other factors, such

as the level of reprehensibility, the size of the

compensatory-damages award and the fact that it

includes a punitive element, and a comparison to

Congress’s statutory damages for copyright

infringement, precluded affirmance of Westbound’s

award of punitive damages.

Such indicia of unconstitutionality cannot be

ignored. Indeed, treating all single-digit-ratio awards

the same fails to consider the important principle that

“some wrongs are more blameworthy than others.” See

Gore, 517 U.S. at 576. Given the lack of guidance and

the danger of vague jury instructions, the Court

established the three Gore guideposts for courts to

consider in reviewing punitive-damages awards. Id. at

575.

The Due Process Clause of the Fourteenth

Amendment prohibits the imposition of grossly

excessive or arbitrary punishments on a tortfeasor.

Campbell, 538 U.S. at 416; Gore, 517 U.S. at 562.

“This constitutional concern...arises out of the basic

unfairness of depriving citizens of life, liberty, or

property, through the application, not of law and legal

processes, but of arbitrary coercion.” Gore, 517 U.S. at

587 (Breyer, J., concurring). “The reason is that

‘elementary notions of fairness enshrined in our

constitutional jurisprudence dictate that a person

receive fair notice not only of the conduct that will

subject him to punishment, but also of the severity of

the penalty that a State may impose.” Campbell, 538

U.S. at 416 (citing Gore, 517 U.S. at 574). Indeed, “[t]o

the extent an award is grossly excessive, it furthers no

legitimate purpose and constitutes an arbitrary

deprivation of property.” /d.

The Court has not gone so far as to impose strict

numerical guidelines on courts reviewing punitive-

damages awards. Until the Baker decision was

entered on June 25, 2008, this Court has “consistently

rejected the notion that the constitutional line is

marked by a simple mathematical formula....”

It is appropriate, therefore, to reiterate our

rejection of a categorical approach. Once again,

we return to what we said...in Haslip: “We

need not, and indeed we cannot, draw a

mathematical bright line between’ the

constitutionally acceptable and_ the

constitutionally unacceptable that would fit

every case. We can say, however, that [a]

general concer([n] of reasonableness ...properly

enterjs| into the constitutional calculus.”

Id. at 582 (internal citations omitted).

To the extent a numerical benchmark is

appropriate, this Court’s recent decision in Baker and

its previous decision in Campbell suggest that, in cases

like this case, where the level of reprehensibility is low

or the case for punitive damages is relatively weak, a

ratio of no more than 1:1 1s appropriate.

In Baker, a maritime case, the Court reversed a

$2.5 billion punitive-damages award against Exxon

Shipping Co. for its role in the catastrophic Alaskan oil

spill of 1989. The Court held that a punitive-to-

compensatory ratio of 1:1 is more appropriate given

that Exxon’s conduct has no earmarks of exceptional

blameworthiness. 2008 U.S. LEXIS 5263, at **74-80.

“Under the umbrellas of punishment and its aim of

deterrence, degrees of relative blameworthiness are

apparent.” In addition, other factors, regardless of

culpability, may warrant heavier or lighter punitive-

damages awards. Id. at **39-42.

The median ratio of punitive to compensatory

awards has remained less than 1:1 in the broad

spectrum of cases. “The figures thus show an overall

restraint and suggest that in many instances a high

ratio of punitive to compensatory damages is

substantially greater than necessary to punish or

deter.” Id. at **46-47. Noting, however, that the real

problem is the stark unpredictability of punitive

awards, td. at **50-51, the Court endorsed a quantified

approach to reviewing such awards:

There is better evidence of an accepted limit of

reasonable civil penalty...in several studies

mentioned before, showing the median ratio of

punitive to compensatory verdicts, reflecting

what juries and judges have _ considered

reasonable across many hundreds of punitive

awards....We think it is fair to assume that the

greater share of the verdicts studied in these

comprehensive collections reflect reasonable

judgments about the economic penalties

appropriate in their particular cases.

These studies cover cases of the most as well as

the least blameworthy conduct triggering

punitive liability, from malice and avarice,

down to recklessness, and even gross negligence

in some jurisdictions. The data put the median

ratio for the entire gamut of circumstances at

less than 1:1,...meaning that the compensatory

award exceeds the punitive award in most

cases. In a well-functioning system, we would

expect that awards at the median or lower

would roughly express jurors’ sense of

reasonable penalties in cases with no earmarks

of exceptional blameworthiness within the

punishable spectrum...On these assumptions, a

median ratio of punitive to compensatory

damages of about 0.65:1 probably marks the

line near which cases like this one largely

should be grouped.

Id. at **74-80. The Court thus heid that a 1:1 ratio

was a fair upper limit in such maritime cases. Id. at

*80.

The Baker decision was rendered noi in the context

of whether the punitive-damages award violated the

Due Process Clause but, instead, under the Court’s

function in reviewing such awards under federal

maritime common law. Id. at **33-34, 55.

Nevertheless, the Court’s decision to limit punitive

damages to a 1:1 ratio because the level of

reprehensibility was low and because the median

punitive-damages awards in all cases, not only

maritime cases, is less than a 1:1 ratio, is equally

applicable here.

Baker is rot the first decision in which the Court

has indicated that a 1:1 ratio is appropriate in cases

where the justification for punitive damages is not

strong. The Court did so in Campbell:

[B}ecause there are no rigid benchmarks that a

punitive damages award may not surpass,

ratios greater than those we have previously

upheld may comport with due process where ‘a

particularly egregious act has resulted in only a

smal! amount of economic damages.’...The

converse is also true, however. When

cempensatory damages are substantial,

then a lesser ratio, perheps only equal to

compensatory damages, can reach the

outermost limit of the due _ process

guarantee. The precise award in any case, of

course, must be based upon the facts and

circumstances of the defendant’s conduct and

the harm to the plaintiff.

538 U.S. at 426 (emphasis supplied).

Thus, Westbound’s proposal to treat all single-digit-

ratio awards the same is not supported by this Court’s

precedent. Indeed, treating all single-digit-ratio

awards the same has never been suggested by this

Court.

Westbound states that its proposed presumption

was suggested by the plurality opinion in TXO

Production Corp. v. Alliance Resources Corp., 509 U.S.

443, 457 (1993), and by Justice Breyer’s concurrence in

Gore, 517 U.S. at 586-87. While those opinions

endorsed establishing a presumption of validity of

punitive-damages awards in prescribed instances, they

never discussed establishing a presumption for all

awards within a single-digit ratio. Gore, 517 U.S. at

586 (Breyer, J., concurring) (“Members of this Court

have generally thought...that if ‘fair procedures were

followed, a judgment that is a product of that process

is entitled to a strong presumption of validity.”)

(quoting T-XO Production Corp., 509 U.S. at 457). Any

question that all single-digit-ratio awards should not

be treated alike should be put to rest by this Court’s

decisions in Campbell and now Baker.

Westbound’s proposal fails to consider the location

of misconduct on the spectrum of blameworthiness, as

well as other factors that may indicate a violation of

due process, and is thus fatally flawed.

C. Westbound’s Proposal Ignores Important

Indicia of Unconstitutionality.

Westbound’s emphasis on guarding against

“outliers” and punitive damages that have “run wild”

is too simplistic. While the purpose for review of

punitive-damages swards is to prevent “outlier”

awards, the test is whether an award does not comport

with due process. The Gore guideposts are designed to

assist courts in determining whether due process has

been violated. If it has, then such damages, as here,

“run wild.”

Westbound’s proposed presumption addresses only

two of the numerous indicia of unconstitutionality this

Court has articulated: 1) that such an award may be

the result of passion and prejudice; and 2) that such an

award may be imposed in cases where there is no

malice. Westbound’s proposal fails to consider other

established indicators of gross excessiveness, such as

the level of reprehensibility, the size of the

compensatory-damages award, whether such award

already contains a punitive component, comparable

civil remedies, and whether the harm inflicted is the

type of conduct warranting punitive damages.

The Court in Gore did not create the three

guideposts in a vacuum. These factors have been

applied in numerous cases assessing the

constitutionality of damages and are rooted firmly in

precedent:

The guidepost measuring reprehensibility of the

offense is based on the fundamental principles that

“some wrongs are more blameworthy than others” and

that “the punishment should fit the crime.” Gore, 517

U.S. at 575-76 & n.24 (and cases cited therein). “The

principle that punishment should fit the crime ‘is

deeply rooted and frequently .epeated in common-law

jurisprudence.” /d. at n.24 (quoting Solem v. Helm,

463 U.S. 277, 284 (1523)).

Likewise, the second guidepost, “(t]he principle that

exemplary damages must bear a_ reasonable

relationship to compensatory damages|,] has a long

pedigree.” Gore, 517 U.S. at 580 & n.32 (and cases

cited therein).

Finally, as to the third guidepost, Justice O’Connor

recognized before Gore that a reviewing court engaged

in determining whether an award of punitive damages

is excessive should “accord ‘substantial deference’ to

legislative judgments concerning appropriate sanctions

for the conduct at issue.” Gore, 517 U.S. at 583

(quoting Browning-Ferris Industries of Vt., Inc. v.

Kelco Disposal, Inc., 492 U.S. 257, 301 (1989)

(O’Connor, J., concurring in part and dissenting in

part)).

This Court in Pacific Mutual Life Ins. Co. v. Haslip,

499 U.S. 1 (1991), approved a state-court review

procedure similar to the Gore test, which “ensures that

punitive damages awards are not grossly out of

proportion to the severity of the offense and have some

understandable relationship to compensatory

damages,” suggesting, however, that state schemes

that would only set aside or modify awards that were

“manifestly and grossly excessive” or “evince[] passion,

bias and prejudice on the part of the jury so as to shock

the conscience,” would not pass muster. Jd. at 21-22.

Westbound advocates for precisely the extreme test

rejected by this Court, stating:

De novo review allows an appellate court to

review a district court’s determination anew,

but it does not. permit an appellate court to

serve as a junior varsity jury — unless that

jury’s verdict is “run wild” and is so

excessive as to strongly suggest bias,

passion, or prejudice.

(Petition at 34) (emphasis supplied). Like the rejected

review procedures in Haslip, Westhbound’s proposal

fails to consider other indicia of unconstitutional

excess and thus should not be considered.

II. The Sixth Circuit Correctly Applied a De Novo

Standard of Review.

Westbound argues that the Sixth Circuit erred by

reviewing, de novo, whether the jury’s findings

supported the Gore guideposts, and, particularly, the

reprehensibility factors. Westbound states that the

Sixth Circuit should have reviewed such findings for

clear error. Westbound then attempts to paint this

issue as a broad concern afflicting appellate courts

generally and warranting clarification by this Court,

but Westbound cites no cases in support of this

proposition.

As a threshold matter, the jury in the instant case

did not make specific findings of the reprehensibility

factors. The Gore guideposts were developed for

purposes of application by courts in reviewing jury

punitive-damages verdicts. Gore, 517 U.S. at 574-75;

Campbell, 538 U.S. at 418. The jury made only one

finding as to punitive damages: that punitive damages

of $3.5 million should be awarded against Defendants.

The Sixth Circuit properly followed the holding of

this Court in Cooper Industries, Inc. v. Leatherman

Tool Group, 532 U.S. 424, 436 (2001), and applied a de

novo standard of review to the question of whether

punitive damages were unconstitutionally excessive.

The Sixth Circuit analyzed each Gore guidepost

assuming Westbound’s — not Defendants’ — version

of the facts.

This Court in Cooper Industries, Inc. held that, “in

passing on district courts’ determinations of the

constitutionality of punitive damages awards,” the

reviewing court must apply a de novo standard of

review. Id. at 436. The reason, the Court explained,

is that punitive damages are not, like compensatory

damages, intended to address the concrete loss the

plaintiff has suffered by reason of the defendant’s

wrongful conduct, but, instead, operate as private fines

intended to punish the defendant and to deter future

wrongdoing. Id. at 432. Thus, “[a} jury’s assessment

of the extent of a plaintiffs injury is essentially a

factual determination, whereas its imposition of

punitive damages is an expression of its moral

condemnation.” Id.

Further, the precise meaning of such concepts as

gross excessiveness cannot be articulated with

precision and are “fluid concepts that take their

substantive content from the particular contexts in

which the standards are being assessed.” /d. (quoting

Ornelas v. United States, 517 U.S. 690, 697 (1996)). In

addition, the general criteria set forth in Gore will

acquire more meaningful content through case-by-case

application at the appellate level. Jd. “[Dle novo

review tends to ‘unify precedent’ and ‘stabilize the

law.” Id. (quoting Ornelas, 517 U.S. at 697-98):

Requiring the application of law, rather than a

decisionmaker’s caprice, does more than simply

provide citizens notice of what actions may

subject them to punishment; it also helps to

assure the uniform treatment of similarly

situated persons that is the essence of law itself.

Ornelas, 517 U.S. at 587.

Only the factual findings made in conducting the

excessiveness inquiry must be accepted unless clearly

erroneous. Cooper Industries, Inc., 532 U.S. at 435.

“Unlike the measure of actual damages suffered, which

presents a question of historical or predicative fact, the

level of punitive damages is not really a ‘fact’ ‘tried’ by

the jury.” Id. at 437 (citations omitted). Thus, the

reviewing court’s consideration of each of the Gore

guideposts must be made on a de novo basis.” Id. at

440.

The Sixth Circuit considered whether Defendants

acted with intentional malice or deceit. based on

Westbound’s view of the facts: that Defendants

ignored pre-litigation letters and re-released the album

knowing it contained an unauthorized sample. The

Sixth Circuit, assuming this evidence to be accurate,

determined that such conduct was “somewhat

reprehensible.” Likewise, the Sixth Circuit did not

“second guess” the jury on the issues of financial

vulnerability and repeated conduct, as Westbound

contends, but instead considered Westbound’s

arguments in the context of Westbound’s version of the

* The Court noted that differences in the institutional competence

of trial judges and appellate judges are consistent with its

conclusion, as, only with respect to the first Gore guidepost,

reprehensibility, do district courts have a “somewhat superior

vantage” over appellate courts, “and even then the advantage

exists primarily with respect to issues turning on witness

credibility and demeanor.” ‘The Court added that trial and

appellate courts seem equally capable of analyzing the second

factor — the ratio — and that appellate courts seem more suited

to the third guidepost — comparable civil penalties — which calls

for a broad legal comparison. Id

facts, finding Westbound’s evidence insufficient to

make its case.

Ill. This Case Is Not the Appropriate Vehicle

to Change Settled Law.

This case is not the appropriate vehicle for this

Court to revisit appellate review of punitive-damages

awards. Here, the punitive-damages award was

grossly excessive under the circumstances, and the

Sixth Circuit’s determination that a 2:1 or 1:1 ratio is

more appropriate comports with this Court’s decisions

in Gore, Campbell and Baker.

Applying the appropriate standard of review, the

Sixth Circuit correctly applied the Gore factors.

A. Reprehensibility.

This Court set forth the standard for

reprehensibility in Campbell:

Reprehensibility is determined based on

consideration of whether the harm caused was

physical as opposed to economic; the tortious

conduct evinced an indifference to or a reckless

disregard of the health or safety of others; the

target of the conduct had _ financial

vulnerability; the conduct involved repeated

actions or was an isolated incident; and the

harm was the result of intentional malice,

trickery, or deceit, or mere accident.

538 U.S. at 419. “The weighing of only one of these

factors in favor of plaintiff may not be sufficient, and

the absence of any factor weighing in favor of plaintiff

‘renders any award suspect.” Jd.

The Sixth Circuit found present only one of the four

reprehensibility factors — that the harm was the

result of intentional malice or deceit — and the court

determined that even the showing of that factor was

not strong. The court did not make new findings of

fact, as Westbound alleges, but instead assumed the

jury believed Westbound’s version of the facts. The

court concluded that, based on this evidence

Defendants’ conduct was “somewhat reprehensible.”

(Petition, Apx. 26a-27a.)

The Sixth Circuit also correctly found that the

other reprehensibility factors were not present.

Westbound does not contest that the harm in this case

was purely economic and did not threaten the health

or safety of others. (Petition, Apx. 28a.)

The court determined that Westbound is not a

financially vulnerable victim but rather a company

“that has proven its ability to protect its rights.”

Again, the court considered Westbound’s asserted

factual evidence: 1) that it is a small company that

depends almost entirely on income from sampling, 2)

that Defendants used Westbound’s sample instead of

a sample of Jimi Hendrix’s “Power of Love,” for which

Defendants could not get clearance, and 3) that

Defendants have “financial clout” and “strength in the

music industry worldwide.” The court rejected not the

facts themselves but Westbound’s argument that they

support a finding that Westbound is a financially

vulnerable victim. (Petition, Apx. 28a) (citing Clark v

Chrysler Corp., 436 F.3d 594, 604 (6 Cir. 2006)).

As to the fourth reprehensibility factor, the Sixth

Circuit found no evidence that Defendants’

infringement was one of a repeated number of actions.

Again, the Sixth Circuit did not disregard any factual

findings of the jury in reaching this conclusion;

instead, the court found a lack of evidence supporting

Westbound’s argument that Defendants’ conduct was

repeated.

The court assumed Westbound’s factual evidence to

be true but determined it was not sufficient to

establish infringements by Defendants against various

different parties rather than within the single

transaction with Westbound.

Westbound never alleged more than one act of

infringement. Indeed, its sister company, Bridgeport,

on the same set of facts, sought and recovered

$150,000, the maximum amount of statutory damages

for a single act of infringement: the taking of the

sample without a license.

Punitive damages are designed to punisn

actionable conduct. If Westbound believed Defendants’

conduct during the litigation was actionable,

Westbound had a separate vehicle to pursue such

remedies.” (Petition, Apx. 29a.)

'’ Westbound further argues that a split among the appellate

courts exists in applying the “repeated conduct” prong of the

reprehensibility guidepost. This Court, however, made clear in

Williams, 549 U.S. 346; 127S. Ct. at 1065, that harm to others is

the appropriate test: “Evidence of actual harm to nonparties can

help to show that the conduct that harmed the plaintiff also posed

a substantial risk of harm to the general public, and so was

B. Disparity between Compensatory and

Punitive Damages.

The Sixth Circuit followed this Court’s precedent in

considering the punitive-to-compensatory ratio here.

The Sixth Circuit determined that the

compensatory-damages award — $366,939 — is large

and supports a ratio of oniy 1:1 or 2:1... The Sixth

Circuit also emphasized that the compensatory-

damages award included a punitive element, as

Westbound was awarded both actual damages and

Defendants’ profits.” (Petition, Apx. 32a-34a.)

The Sixth Circuit’s decision, again, comports with

this Court’s decision in Campbell, where the Court

observed that a 1:1 ratio is appropriate when

compensatory damages are high and reversed a

punitive-damages award where the compensatory

”

particularly reprehensible.... Westbound failed to provide

evidence that Defendants repeated the actionable conduct here:

" The Sixth Circuit appropriately compared this case to other

cases in which the harm was more egregious but the ratio was

smaller. (See Petition, Apx. 32a-33a.)

'’ The purpose of allowing copyright plaintif%s to recover the

defendants’ profits is to prevent the infringer from unfairly

benefitting from a wrongful act. (Petition, Apx. 33a) (citing Hamil

Am., Inc. v. GFI, 193 F.3d 92, 103 (2d Cir. 1999) (quoting H.R.

Rep. No. 94-1476, at 161 (1976), reprinted in 17 U.S.C.A. 504 at

146 (West 1996))

damages were not only high but included a punitive

component. 538 U.S. at 426.”

Moreover, as the Sixth Circuit observed, when

Westbound’s actual damages, which do not include its

lost profits, are compared to punitive damages, “the

ratio of the punitive damages award and the non.

punitive element of the compensatory damages award

is very high.”

C. Comparable Civil Penalties.

Westbound does not address the third guidepost:

comparable civil remedies for the tortious conduct at

issue. This Court has observed that “a reviewing court

engaged in determining whether an award of punitive

damages is excessive should ‘accord substantial

deference to legislative judgments concerning

appropriate sarctions for the conduct at issue.” Gore,

517 U.S. at 583 (quoting Browning-Ferris Industries of

Vt., Inc., 492 U.S. at 301 (O’Connor, J., concurring in

part and dissenting in part)).

Indeed, the third guidepost is. particularly

significant here, as the Sixth Circuit recognized,

because Congress has set the maximum amount of

statutory damages allowable for willful copyright

'S The Sixth Circuit rejected Westbound’s argument that the ratio

should be measured based on the entire amount of cormnpensatory

damages awarded to both Plaintiffs — $366,939 x 2, plus interest

of $276,763.93. (Petition, Apx. 33a-34a.)

'* Westbound'’s lost licensing fees were $43,478 without interest

and $51,946 with interest, equaling a ratio of just over 100:1

infringement at $150,000. 17 U.S.C. § 504(c)(2).

Given Defendants’ conduct was not highly

reprehensible in this case and compensatory damages

are substantial, the Sixth Circuit’s maximum ratio of

2:1 or 1:1 here is appropriate.

CONCLUSION

This case presents nothing more than a garden-

variety claim of willful copyright infringement,

entitling Westbound to seek punitive damages only

because ou: a statutory exception for pre-1972 sound

recordings.” The Sixth Circmt has not outright

rejected punitive damages here bui has limited the

award to a ratio of 1:1 or 2:1. The range of punitive

damages allowed by the Sixth Circuit in this case far

exceeds the Congressional limits for the punishment of

infringing conduct and comports with the precedent of

this Court.

For the foregoing reasons, the Petition for Writ of

Certiorari should be denied.

'? See 17 U.S.C. § 301(c). This exception will be eliminated on

February 15, 2067, when the preemptive provisions of the

Respectfully submitted,

Timothy L. Warnock

Counsel of Record

Amy J. Everhart

Riley Warnock & Jacobson, PLC

1906 West End Avenue

Nashville, Tennessee 37202

(615) 320-3700

Jonathan D. Davis

Jonatnan D. Davis, P.C.

99 Park Avenue, Suite 1600

New York, NY 10016-1503

(212) 687-5464

Attorneys for Respondents,

Janice Combs Publishing, Inc. d/b/a

Justin Combs Publishing, Bad Boy

Entertainment, Inc., d/b/a Bad Boy

Records, Bad Boy Records LLC and

UMG Recordings, Inc., and _ its

division Universal Records

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.