The Volokh Conspiracy
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My colleague Sam Bray, who is one of the nation's leading remedies experts, and also someone whose judgment I very much trust, passes along this note highly recommending Prof. Tomas Gómez-Arostegui's "What History Teaches Us About U.S. Copyright Law and Statutory Damages":
Mark Twain said many witty things. He also didn't say many witty things that have been attributed to him, and one of the best fake Mark Twain quotes is: "It's not what you don't know that gets you into trouble, but what you know for sure that ain't so." In a short essay published in 2013, Professor Tomás Gómez-Arostegui takes aim at one of the things we knew for sure that ain't so about statutory damages in copyright law, namely that they were once intended to serve a strictly compensatory function. Professor Gómez-Arostegui's essay is brief and somewhat opaquely titled (What History Teaches Us about US Copyright Law and Statutory Damages). But it is a neglected gem, and I hope this post brings it further attention from scholars of copyright, remedies and statutory interpretation.
The Copyright Act of 1909 authorized statutory damages but said they "shall not be regarded as a penalty." To the reader now, the meaning of that clause looks plain. It means that statutory damages under the Act were not designed for punishment and deterrence, but merely for compensation. To take one example of a distinguished scholar recognizing this apparently plain meaning, Professor Shyamkrishna Balganesh referred to the clause as "seemingly endowing" statutory damages under the Act "exclusively with a compensatory dimension." The Uneasy Case Against Copyright Trolls, 86 S. Cal. L. Rev. 723, 774 (2013).
The "shall not be regarded as a penalty" clause is no longer part of the federal statutory law on copyright, having been eliminated by the Copyright Act of 1976. But it remains important. If the 1909 Act said that statutory damages for copyright were to be purely compensatory, and the 1976 Act eliminated that restriction, then maybe statutory damages for copyright can now be punitive. In addition, some might be tempted to think of a golden age: Statutory damages were compensatory in the good old days, the argument might run, and they should be so again.
All of this seems fairly straightforward, but Gómez-Arostegui convincingly shows that it should be classified as things that just ain't so. In fact, the clause speaks to an entirely different question than the one it seems to.
Gómez-Arostegui notes that "our first clue that something special was afoot" should be the word regard. As he puts it, "If Congress had wanted to instruct courts not to impose statutory damages in a punitive way, I suspect it would have said so directly. Using 'regard' to achieve that result is needlessly circuitous."
He then recovers the critical distinction that lies behind the clause. At the time, for an interpreter of a statute, there was a threshold question: is this a penal statute or a remedial statute? If the statute were penal-that is, something like "quasi-criminal"-it was to be narrowly construed, and ambiguities were resolved in favor of the defendant. If it were remedial, it was to be broadly construed. The classification of a statute as penal had further implications, among them the fact that a court of equity could not award a penalty. Congress had reason to be concerned that its copyright statute would be classed among the "penal statutes" and thus narrowly construed.
Gómez-Arostegui also offers evidence from the legislative history. He shows that the drafters and supporters of the new copyright statute were uneasy about how courts might classify the statutory-damages provision. For example, Arthur Steuart, the chairman of the ABA's copyright committee, had pointed out the danger that courts might consider the provision "penal in character, and therefore an interpretation may be applied to it which will be exceedingly strict and rigid" (quoted on p. 84).
With these premises in place, the conclusion follows easily. As Gómez-Arostegui says, "historical principles, coupled with the textual context and legislative history, make clear that Congress did not declare that there could be no punitive purpose. By prescribing that the remedy 'shall not be regarded as a penalty', Congress was simply stating that courts should not subject these awards to all the defendant-protective consequences normally associated with penal laws."
Gómez-Arostegui's essay is only thirteen pages, and the core of the argument is shorter still. Once stated, it may look obvious. But before Gómez-Arostegui's essay, it was not. It is a testament to his curiosity and diligence that the penal/remedial distinction has been recovered and can now be used to understand statutory damages under the 1909 Act.
The obvious implications lie in copyright and in remedies. Perhaps statutory damages should serve only a compensatory purpose. But the 1909 offers no direct support for that proposition. Nor can the 1976 Act, which excised the "shall not be regarded as a penalty" language, be easily taken as congressional support for imposing statutory damages for punitive purposes. (What members of Congress thought they were doing when they excised the language from the 1909 Act is another question, also interesting. Yet another interesting question is whether any weaker implications about the substance of the 1909 Act can be drawn from Congress's attempt to control its interpretation.)
Other implications about statutory interpretation more generally. These are not explored in the essay, but they may be some of the most far-reaching. The "shall not be regarded as a penalty" clause becomes a parade example of why scholars need to know the contemporaneous legal-intellectual milieu to read statutory terms. Legal scholars are of course aware that to be good readers of a legal text, we need to read it in its legal context. But that point is usually expressed in terms of relatively specific and discrete categories, such as "terms of art" and "background presumptions."
Gómez-Arostegui's essay is a reminder of how our appreciation for legal-intellectual context should not be reduced down to those categories. To be sure, penalty was a term of art. And there was a background presumption about how ambiguities should be resolved under a penal statute. But what drives Gómez-Arostegui's account is not so much the meaning of the term penalty, or any specific background presumption, but rather a larger view of statute-making and statute-interpreting that was encoded in the statute. Recovering that kind of regime of legal thought is crucial to understanding many legal texts; it cannot be reduced to sleuthing for terms of art and background presumptions.
Finally, the larger view of statute-making and statute-interpreting is itself is of interest. The old canon that "remedial statutes are broadly construed" seems like pre-Realist nonsense to many scholars. (It has been called "dice-loading" and "artificial" by Justice Scalia, "arbitrary" by Judge Posner, and "useless" by Professor Sunstein.)
But the canon about remedial statutes is more intelligible when put alongside the canon of interpretation that "penal statutes are narrowly construed." They are a pair of interpretive canons, not dueling Llewellyn-style, but working in tandem. Together they divide up all of the statutes into two kinds, instructing the interpreter about how to resolve ambiguities in each kind of statute. In this pair of canons, there may be an implicit concession of human frailty. The idea is that we can never really interpret a statute straight up, with no thumbs on the scales. If so, the beginning of wisdom would be to sort out what kind of statute is being interpreted, and where the thumb needs to be.