Appeals Court Undoes $47 Million Music Piracy Award Against ISP

UMG Recordings, Warner Bros. Records, Sony Music, and more than a dozen other music publishers saw their $47 million copyright infringement award against internet service provider Grande Communications Networks LLC nixed by the Fifth Circuit Wednesday.

The jury’s verdict finding Grande liable for contributing to users’ piracy of more than 1,400 songs was rightly confirmed by the Texas district court, but it erred in finding each of the songs was eligible for a separate award of statutory damages, the US Court of Appeals for the Fifth Circuit said in its opinion. The appeals court sent the case back to the US District Court for the Western District of Texas for a new trial on damages.

Evidence at trial “demonstrated that Grande had a simple measure available to it to prevent further damages to copyrighted works (i.e., terminating repeat infringing subscribers), but that Grande never took it,” according to the opinion.

However, “nothing in the statute permits Plaintiffs to recover damages for each individual song,” even if it was exploited individually, Judge Stephen A. Higginson wrote for the three-judge panel. The labels, he said, are on the hook for statutory damages for each album, rather than each song that was infringed.

Higginson acknowledged that other circuits have taken both approaches, awarding damages for individual songs and albums.

In February, the US Court of Appeals for the Fourth Circuit similarly affirmed ISP Cox Communications Inc.'s liabilty for repeated music piracy by users whose service it hadn’t terminated, while vacating a damages award and remanding the case to the district court. Cox in August asked the US Supreme Court to review the liability portion of that ruling, arguing it “threatens mass evictions from the internet.”

Judges Patrick E. Higginbotham and Judge Carl E. Stewart joined the decision.

Armstrong Teasdeale LLP and Cokinos Young PC represent Grande. Jenner & Block LLP, Scott, Douglass & McConnico LLP, and Stein Mitchell Beato & Missner LLP represent the music labels.

The case is UMG Recordings v. Grande Comm., 5th Cir., No. 23-50162, 10/9/24.