Metropolitan News-Enterprise


Wednesday, October 13, 2010


Page 3


Appeals Court Throws Out Restitution Award Against Music Pirates


By STEVEN M. ELLIS, Staff Writer


The Fourth District Court of Appeal yesterday threw out an order requiring two convicted music pirates to pay restitution to the Recording Industry Association of America.

Div. Two reversed a restitution award of more than $14,600 against two men who sold counterfeit compact discs, holding that the association representing music industry members was not a direct victim suffering an economic loss.

Rejecting a trial court’s conclusion that the RIAA could “stand in the shoes” of its members, Justice Betty Ann Richli wrote that the group showed neither that it was the object of the crimes, nor that it lost profits or suffered other losses as a result of them.

San Bernardino Superior Court Judge Jon D. Ferguson had ordered Micah Akeem Kelly and Robert Trongale to pay restitution to the RIAA after Kelly pled nolo contendere to violating California’s criminal antipiracy statute and Trongale pled guilty to counterfeit of a registered mark.

The pair worked at a barber shop where Trongale admitted storing 1,927 counterfeited discs, and they were charged after Kelly, as a favor to Trongale, sold five counterfeit discs for $20 to an undercover police officer in March 2006. Kelly later admitted having sold 11 discs.

A jury initially convicted Kelly, but the Court of Appeal reversed for instructional error. Meanwhile, Ferguson ordered Trongale to pay $2,213 in restitution in 2007, but increased the amount to $14,606.66 in 2009 and applied it jointly and severally against both men after Kelly entered his no-contest plea.

The judge did so at the request of the RIAA, which identified its primary function as the investigation of “the illegal production and distribution of sound recordings,” and calculated a wholesale value of $7.58 for each of the discs found in the barber shop. Ferguson based his ruling on an opinion by this district’s Court of Appeal in People v. Ortiz (1997) 53 Cal.App.4th 791, upholding an order requiring a defendant convicted of possessing approximately 53,000 counterfeit cassette tapes for sale to pay investigatory costs and $2,000 for estimated economic loss to ALARM, a nonprofit trade association representing Latin American music labels.

Justice Earl Johnson Jr., who has since retired from the bench, wrote in Ortiz that ALARM was a direct victim because it stood in the shoes of its individual members.

But Kelly and Trongale argued on appeal that Ferguson abused his discretion, and Richli agreed, noting that cases from New York, Florida and Washington have decided that the RIAA is not a victim under similar circumstances. She also wrote that “other California cases concerning the ‘direct victim’ issue may be considered analogously to conclude that Ortiz was wrongly decided.”

Richli explained:

“The record does not show who are the members of RIAA, what music labels or recording artists were the subject of the counterfeit compact discs…or whether there is any correlation between RIAA’s members and the affected artists or labels. There is no evidence that RIAA receives an assignment of rights from its members. Nor is it established that RIAA represents victims who are foreign citizens, like in Ortiz, for whom seeking restitution would prove impracticable or impossible.

“Even if RIAA’s members were identified and correlated with the counterfeited products, RIAA’s investigator testified that RIAA does not seek restitution for the direct benefit of its members. Instead, RIAA uses any recovery of restitution to offset the costs of its piracy investigations.

“Under these circumstances, the trial court erred by relying on the Ortiz court for the proposition that RIAA can ‘stand in the shoes’ of its members, who are not indentified or known, and may obtain restitution when the specific damage to the anonymous members has not been established.”

Richli also concluded that legislation, effective last year, that allows a recording industry trade association to recover restitution on behalf of the “owner or producer” of a pirated disc, cannot apply in the case. Assuming that the law can be applied to past crimes, she said, it cannot be used in this case because there was no identfication of the owners or producers of the discs in the trial court and thus no way of determining whether the RIAA was acting on their behalf.

Justices Art W. McKinster and Jeffrey King joined Richli in her opinion.

The case is People v. Kelly, E048797.


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