Friday, July 23, 2010

The Wonders of Law

I am assisting my attorney on this matter.  The things that I learn along the way make me wonder how smart the RightHaven attorneys are.  They have filed all these 79 suits so far demanding $75,000 each--and there's a reason for this. 

The section of U.S. law that regulates civil suits in federal court between citizens of different states (28 USC 1332) requires that the "amount in controversy" must be at least $75,000.  In short, claim $75,000 at least, or the federal courts aren't interested in hearing a dispute between citizens of different states.  However, 28 USC 1332(b) provides that if the final judgment is less than $75,000, the district court "may deny costs to the plaintiff, and, in addition, may impose costs on the plaintiff." 

In the suit against Dave Burnett and myself, there's only one claim for copyright infringement involving a registered copyrighted news story, and therefore only one that allows them request a fixed penalty (the statutory civil penalty), instead of the actual losses the Review-Journal suffered, and the actual profits we made.  The range of allowed civil penalties is $750 to $30,000 per infringement (and that is a substitute for the actual damages, which are trivial for all of these stories).  Unless RightHaven is going to demonstrate that actual damages from the other supposed six violations with no statutory penalty available add up to $45,000, they aren't going to make the $75,000 amount in controversy--not even close.   (There is a $150,000 civil penalty available, but that requires intentional, knowing copyright violation, as evidenced by hiding your name on domain registration.)

I was a little unclear whether what is called Federal Question Jurisdiction takes precedence over Diversity Jurisdiction's "amount in controversy" question.  Federal district courts can hear cases involving violations of federal law, and 28 USC 1332(b) does say that "when express provision therefor is otherwise made in a statute of the United States" the amount in controversy does not apply.  So does this mean that copyright law violates do not require the $75,000 minimum?  This discussion at and would seem to indicate that the amount in controversy minimum applies to copyright violations as well--hence the request from professional photographers for Congress to create small claims copyright court.  They can't go to federal court to pursue copyright infringements for unregistered copyrights, because the damages are usually hundreds or thousands of dollars at most--and even registered copyrights would require at least three separate infringements to get up to the $75,000 amount in controversy level.

The more I try to understand this, the more anarchy, and returning to a state of nature, sounds good.

1 comment:

  1. The "amount in controversy" requirement does not apply to claims based on Federal law, such as copyright claims.

    The two links suggest a general concern with the "costs" of litigating in federal court, which is a legitimate concern, but that's not the same as the amount-in-controversy requirement.

    Here is a Federal Court in North Carolina addressing this issue in 2006:

    "Defendant also asserts that the court lacks subject matter jurisdiction because the amount in controversy could not reach $75,000. Since this is an action for copyright infringement, however, the jurisdiction of this court is not dependent upon the requisite $75,000 amount in controversy applicable to diversity jurisdiction. Although Plaintiff asserts jurisdiction is based upon both federal question and diversity of citizenship, the fact that federal question jurisdiction is present obviates the need for the court to address whether there is more than $75,000 in damages."

    Innovative Multimedia Solutions v. Sulit 2006 WL 1367381 (W.D.N.C. 2006.