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EDUCATIONAL TESTING SERVS. v. KATZMAN

January 16, 1987

EDUCATIONAL TESTING SERVICES, Plaintiff,
v.
JOHN KATZMAN and THE PRINCETON REVIEW, INC., Defendants


Maryanne Trump Barry, United States District Judge.


The opinion of the court was delivered by: BARRY

MARYANNE TRUMP BARRY, UNITED STATES DISTRICT JUDGE

 Educational Testing Services brings this action against The Princeton Review and its sole officer and shareholder, John Katzman, alleging copyright infringement and pendent state law claims. Plaintiff now moves to strike defendants' jury demand. The facts are those set out in this court's earlier opinion reported at 631 F. Supp. 550 (D.N.J. 1986). Plaintiff's motion will be denied.

 The issue presented by defendants' jury demand is more easily stated than it is resolved. Does plaintiff by seeking statutory damages under § 504 of the Copyright Act *fn1" confer upon the defendants the right to a trial by jury. *fn2" Because plaintiff's right to damages, assuming a showing of infringement, is statutory, the inquiry is two-fold. First, in creating the right to damages did Congress also intend that the issue be submitted to a jury; and second, even if Congress had no such intention does application of the seventh amendment achieve the same result.

 If possible a statute should be construed to avoid a constitutional issue. *fn3" However, because I find the words of the statute ambiguous and the legislative history inconclusive, I will reach the merits of defendants' seventh amendment argument. I note, parenthetically, that the precise issue now before me has been the subject of conflict between both courts *fn4" and commentators. *fn5"

 The Statute

 The starting point is the language of the statute. Section 504(c)(1) of the 1976 Act states in pertinent part:

 
The copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages . . . in a sum of not less than $ 250 or more than $ 10,000 as the court considers just.

 17 U.S.C. § 504(c)(1) (1982). Section 504(c)(2) further provides that if

 
the court finds . . . that the infringement was committed willfully, the court in its discretion may increase the award of statutory damages to a sum of not more than $ 50,000.

 Plaintiff contends *fn6" that the plain language of the statute shows that Congress intended these "in lieu of" or "liquidated" damages to be awarded by the judge and not a jury. In plaintiff's view, the statute's reference to "the court" can only mean the judge. Moreover, according to plaintiff, the phrases "as the court considers just" and "the court in its discretion" cannot be squared with the traditional functions of juries which cannot be said to exercise discretion, or determine what is "just," in the same way a judge does. Support for plaintiff's position is garnered from the actual damages provision *fn7" which does not refer to "the court" or "discretion" and from § 505 *fn8" which does contain those words to command a function which is clearly one for the judge.

 The simple answer to plaintiff's first argument, as defendants correctly point out, is Curtis v. Loether, 415 U.S. 189, 39 L. Ed. 2d 260, 94 S. Ct. 1005 (1974). In that case, the Supreme Court held, in construing a provision similar to the one at bar, that the term "court" did not necessarily mean only a judge but could also include the jury. 415 U.S. at 195. At least one court, the Court of Appeals for the Fourth Circuit, has adopted that definition of "court" for purposes of § 504. Gnossos Music v. Mitken Inc., 653 F.2d 117 (4th Cir. 1981); but see Glazier v. First Media Corp., 532 F. Supp. 63, 65 (D. Del. 1982).

 The addition of the word "discretion" and the phrase "as the court considers just" does not, as plaintiff asserts, alter the definition of "court." While plaintiff is correct in noting that discretion is often thought of as a term of equity, see Note, The Availability of Jury Trials in Copyright Infringement Cases: Limiting the Scope of the Seventh Amendment, 83 Mich. L. Rev. 1950, 1954 n. 32 (1985) (hereinafter Michigan Note), the dispensing of justice and the exercise of discretion is not the exclusive province of the "chancellor." To suggest, as plaintiff's argument does when taken to its logical end, that juries do not and cannot consider what is just or exercise discretion in the setting of damage awards is to divide the jury and judge into separate spheres where no such division exists. *fn9" Moreover, it may be that including the words "court" and "discretion" in the statutory damages provisions is nothing more than a subtle admonishment that, absent the relative ease in computing damages occasioned by hard facts, discretion should be exercised to avoid the twin evils of under- or over-compensation.

 On its face there is some merit to plaintiff's argument that the use of identical language in § 505, which clearly calls for the judge to consider the award of attorney's fees and costs, demonstrates congressional ...


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