BILL ANALYSIS Ó
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Loni Hancock, Chair A
2013-2014 Regular Session B
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AB 2122 (Bocanegra) 2
As Introduced February 20, 2014
Hearing date: June 17, 2014
Penal Code
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PIRACY OF SOUND RECORDINGS AND AUDIOVISUAL WORKS
HISTORY
Source: Recording Industry Association of America
Prior Legislation: SB 1479 (Pavley) - Ch. 302, Stats. 2012
AB 2750 (Krekorian) - Ch. 468, Stats. 2008
AB 64 (Cohn) - Ch. 9, Stats. 2006
SB 1506 (Murray) - Ch. 617, Stats. 2004
Support: Motion Picture Association of America; California
Police Chiefs Association; Los Angeles Area Chamber of
Commerce
Opposition:None known
Assembly Floor Vote: Ayes 75 - Noes 0
KEY ISSUE
SHOULD THE ALTERNATE FELONY-MISDEMEANOR OF PIRACY INVOLVING AT LEAST
100 ARTICLES OF SPECIFIED AUDIO OR AUDIOVISUAL RECORDINGS APPLY IN
CASES WHERE THE DEFENDANT'S CONDUCT INVOLVED THE "COMMERCIAL
EQUIVALENT" OF THE THRESHOLD OF 100 ARTICLES?
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PURPOSE
The purpose of this bill is to provide that the "true name and
address" audio recording and audiovisual works piracy alternate
felony-misdemeanor shall apply where the defendant's conduct
involved the "commercial equivalent" of at least 100 articles of
sound recordings or audiovisual recordings.
Existing law provides that a person is guilty of a crime when he
or she, for financial gain or commercial advantage, knowingly
attempts to sell, rent or manufacture, or possess for those
purposes, an illicit audio recording or audiovisual work. The
essence of this crime is that the defendant failed to disclose
the true name and address of the manufacturer and the name of
the artist:
§ A violation involving at least 100 copies of
an audio recording or an audiovisual work is an
alternate felony-misdemeanor, punishable by a
misdemeanor term of up to one year in the county
jail, or a sentenced felony jail term<1> or 2,
3, or 5 years, or a fine of up to $500,000, or
both.
§ A first violation involving less than 100
copies is a misdemeanor, punishable by up to one
year in county jail, or a fine not exceeding
$50,000, or both.
§ A subsequent violation involving less than
100 copies is an alternate felony-misdemeanor,
punishable by up to one year in county jail, or
by a felony jail term sentence of 16 months, 2
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<1> A felony jail sentence - as opposed to jail incarceration as
a condition of probation - is imposed pursuant to Penal Code
Section 1170, subdivision (h) - enacted as part of Criminal
Justice Realignment.
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years, or 3 years in state prison, or a fine not
exceeding $200,000, or both. (Pen Code § 653w.)
Existing law defines a "recording" as any tangible medium upon
which information or sounds are recorded or otherwise stored,
including, but not limited to, a phonograph record, disc, tape,
audio cassette, wire, film, memory card, flash drive, hard
drive, data storage device, or other medium on which information
or sounds are recorded or stored, but does not include sounds
accompanying a motion picture or other audiovisual work. (Pen.
Code § 653w, subd. (a)(2).)
Existing law defines "audiovisual works" as the physical
embodiment of works that consist of related images that are
intrinsically intended to be shown using machines or devices,
such as projectors, viewers, or electronic equipment, together
with accompanying sounds, if any, regardless of the nature of
the material objects, such as films, tapes, discs, memory cards,
flash drives, data storage devices, or other devices, on which
the works are embodied. (Pen. Code
§ 653w, subd. (a)(3).)
Existing law requires the court to order a person who has been
convicted of a violation of the sound recording or audiovisual
works true name and address law to make restitution to an owner
or lawful producer, or trade association acting on behalf of the
owner or lawful producer, of a phonograph record, disc, wire,
tape, film, or other device or article from which sounds or
visual images are derived that suffered economic loss resulting
from the violation. (Pen. Code § 1202.4, subd. (r)(1).)
This bill provides that in a case involving a person's failure
to disclose the true name and address of the manufacturer and
performer of a sound recording or audiovisual work, the
determination of whether the matter involves at least 100
articles of a sound recording or audiovisual work shall apply to
the "commercial equivalent" of such articles as defined in
existing law.
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RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION
For the last several years, severe overcrowding in California's
prisons has been the focus of evolving and expensive litigation
relating to conditions of confinement. On May 23, 2011, the
United States Supreme Court ordered California to reduce its
prison population to 137.5 percent of design capacity within two
years from the date of its ruling, subject to the right of the
state to seek modifications in appropriate circumstances.
Beginning in early 2007, Senate leadership initiated a policy to
hold legislative proposals which could further aggravate the
prison overcrowding crisis through new or expanded felony
prosecutions. Under the resulting policy, known as "ROCA"
(which stands for "Receivership/ Overcrowding Crisis
Aggravation"), the Committee held measures that created a new
felony, expanded the scope or penalty of an existing felony, or
otherwise increased the application of a felony in a manner
which could exacerbate the prison overcrowding crisis. Under
these principles, ROCA was applied as a content-neutral,
provisional measure necessary to ensure that the Legislature did
not erode progress towards reducing prison overcrowding by
passing legislation, which would increase the prison population.
In January of 2013, just over a year after the enactment of the
historic Public Safety Realignment Act of 2011, the State of
California filed court documents seeking to vacate or modify the
federal court order requiring the state to reduce its prison
population to 137.5 percent of design capacity. The State
submitted that the, ". . . population in the State's 33 prisons
has been reduced by over 24,000 inmates since October 2011 when
public safety realignment went into effect, by more than 36,000
inmates compared to the 2008 population . . . , and by nearly
42,000 inmates since 2006 . . . ." Plaintiffs opposed the
state's motion, arguing that, "California prisons, which
currently average 150% of capacity, and reach as high as 185% of
capacity at one prison, continue to deliver health care that is
constitutionally deficient." In an order dated January 29,
2013, the federal court granted the state a six-month extension
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to achieve the 137.5 % inmate population cap by December 31,
2013.
The Three-Judge Court then ordered, on April 11, 2013, the state
of California to "immediately take all steps necessary to comply
with this Court's . . . Order . . . requiring defendants to
reduce overall prison population to 137.5% design capacity by
December 31, 2013." On September 16, 2013, the State asked the
Court to extend that deadline to December 31, 2016. In
response, the
Court extended the deadline first to January 27, 2014, and then
February 24, 2014, and ordered the parties to enter into a
meet-and-confer process to "explore how defendants can comply
with this Court's June 20, 2013, Order, including means and
dates by which such compliance can be expedited or accomplished
and how this Court can ensure a durable solution to the prison
crowding problem."
The parties were not able to reach an agreement during the
meet-and-confer process. As a result, the Court ordered
briefing on the State's requested extension and, on February 10,
2014, issued an order extending the deadline to reduce the
in-state adult institution population to 137.5% design capacity
to February 28, 2016. The order requires the state to meet the
following interim and final population reduction benchmarks:
143% of design bed capacity by June 30, 2014;
141.5% of design bed capacity by February 28, 2015; and,
137.5% of design bed capacity by February 28, 2016.
If a benchmark is missed the Compliance Officer (a position
created by the February 10, 2016 order) can order the release of
inmates to bring the State into compliance with that benchmark.
In a status report to the Court dated May 15, 2014, the state
reported that as of May 14, 2014, 116,428 inmates were housed in
the State's 34 adult institutions, which amounts to 140.8% of
design bed capacity, and 8,650 inmates were housed in
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out-of-state facilities.
The ongoing prison overcrowding litigation indicates that prison
capacity and related issues concerning conditions of confinement
remain unresolved. While real gains in reducing the prison
population have been made, even greater reductions may be
required to meet the orders of the federal court. Therefore,
the Committee's consideration of ROCA bills -bills that may
impact the prison population - will be informed by the following
questions:
Whether a measure erodes realignment and impacts the
prison population;
Whether a measure addresses a crime which is directly
dangerous to the physical safety of others for which there
is no other reasonably appropriate sanction;
Whether a bill corrects a constitutional infirmity or
legislative drafting error;
Whether a measure proposes penalties which are
proportionate, and cannot be achieved through any other
reasonably appropriate remedy; and,
Whether a bill addresses a major area of public safety
or criminal activity for which there is no other
reasonable, appropriate remedy.
COMMENTS
1. Need for this Bill
According to the author:
AB 2122 continues the message that media piracy is a
serious crime that deprives businesses and artists of
their earned profits, thereby resulting in lost jobs
and tax revenue in California.
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The State Legislature has already recognized, through
the passage of previous anti-piracy measures, the
destructive effect of piracy on California businesses
and the value of maintaining the competitiveness and
profitability of the California recording industry.
However, problems continue to arise as the practices
of media "pirates" continue to evolve with the
development of new technology. Therefore, it is
necessary for the State to update its anti-piracy laws
to reflect the increasing sophistication of this
underground criminal market.
Many pirates now use digital tools with vast storage
capacity, such as memory sticks and computer hard
drives, to create fraudulent music or other
audiovisual products that can contain hundreds to
thousands of unauthorized recordings. Some are loaded
with movies or music at the point-of-sale and sold for
next to nothing. The unauthorized sales of these
items displace legitimate sales, thereby hurting the
businesses of legal media distributors, retailers,
record labels, artists and writers.
Though California has a statute designed to protect
the entertainment industry and the general public
against the crime of media piracy, it needs to be
clarified to recognize the illicit sale of a single
digital storage device that, while only one item, may
contain the "commercial equivalent" of multiple
musical recordings or movies.
This measure will strengthen protections for
businesses against media piracy by clarifying that the
sale of digital storage devices containing the
commercial equivalent of 100 or more records or movies
constitutes a felony violation under state law, thus
aligning the criminal penalties with the true degree
of harm caused by the sales of these pirated goods in
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California.
2. Copyright Law - Federal Preemption, but State Law can Protect
Copyright Interests if the Law also Concerns a Legitimate
State Interest
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Federal law preempts state law in the area of copyright. (17
U.S.C. § 301, subd. (a).) Federal law, however, does not annul
or limit any state law with respect to "activities violating
legal or equitable rights that are not equivalent to any of the
exclusive rights within the general scope of copyright"
specified in federal statute. (14 U.S.C. § 301, subd. (b)(3);
see also Oddo v. Ries (9th Cir. 1984) 742 F.2d 630, 635 -
finding that there is no preemption if the state law is
"predicated upon an act incorporating elements beyond mere
reproduction or the like".) Generally, state laws relating to
copyright that fall into this category, including in California,
are called "true name and address" laws and are intended to
protect consumers and prohibit specified forms of unfair
competition. Penal Code section 653w is a form of true name and
address law.
In Anderson v. Nidorf (9th Cir. 1994) 26 F.3d 100, the U.S.
Court of Appeals for the Ninth Circuit upheld the
constitutionality of California's true name and address law. In
that case, Cletus Anderson was convicted under Penal Code
section 653w for failing to disclose the origin of a sound
recording. Anderson appealed the conviction, arguing, in part,
that section 653w was preempted by federal copyright law because
it was intended to protect the rights of copyright owners
through the prevention or punishment of pirating. The court, in
rejecting Anderson's assertion, explained that the California
law, in protecting interests beyond and apart from federal
copyright law, was not preempted:
[As the district court pointed out,] "[Anderson's]
argument ignores the other purpose? Section 653w was
designed to serve: 'assisting consumers in this state
by mandating that manufacturers market products for
which consumers can go back to the source if there are
any problems or complaints.' Preemption would
frustrate the State's objective of consumer protection
through disclosure." [] Federal copyright laws do
not . . . protect consumers. They are designed to
protect the property rights of copyright owners.
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?Because § 653w does not prohibit the reproduction of
copyrighted works, but rather prohibits selling
recordings without disclosing the manufacturer and
author of the recording (regardless of its copyright
status), the federal copyright laws do not preempt the
state statute. (Id. at p. 102 - internal citations
omitted, bold type added.)
The decision in Anderson did not consider whether the California
true name and address statute would be preempted by federal law
if the sole intent of the law were to prevent piracy. However,
such an argument can be made from the decision in Anderson,
which focused on the consumer protection aspect of the
California law.
Penal Code section 653w very broadly describes the devices and
media that can be used in a violation of that statute. The
section refers to "any tangible medium" upon which audio works
are stored or recorded and states that the statute applies to
audiovisual works without regard to the nature of the medium or
device on which the works are embodied. Existing law punishes a
person who knowingly advertises, sells or resells, manufactures,
etcetera, a recording or audiovisual work for private financial
gain and fails to disclose the origin of the recording or
audiovisual work. If the offense involves at least 100 articles
of audio recordings or audiovisual works, the violation is an
alternate misdemeanor/felony:
This bill seeks to expand the alternate
misdemeanor-felony violation of section 653w to include
"the commercial equivalent" of at least 100 articles of
audio recordings or audiovisual works. As stated by
the author in the background material, the aim of this
bill is to clarify existing law "to recognize the
illicit sale of single digital storage devices that,
while only one item, may contain the 'commercial
equivalent' of multiple musical recordings or movies."
It could be argued that large-capacity storage devices,
such as memory sticks and hard drives, would be used to
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commit substantial violations of federal copyright law,
rather than to deprive the consumer of the ability to
seek replacement or reimbursement for a defective
product. In other words, it would appear harder to
argue that such large capacity devices would be used in
the legal sale of music or movies to unsuspecting
individual consumers.
3. Practical Considerations as to the Application of the Term
"Commercial Equivalent" of Recordings, as Defined in Existing
Law
SB 830 (Wright), Chapter 480, Statutes of 2010, amended the
meaning of "recording" in section 653w to include memory cards,
flash drives, hard drives, or data storage devices in the list
of tangible medium upon which information or sounds are recorded
or otherwise stored. The same mediums are included with respect
to capturing audiovisual works. As stated by Senator Wright, SB
830 was intended to plug a loophole in the law and keep state
law in pace with the latest downloading technologies. SB 830
and this bill appear to have very similar, if not the same,
effect. Consequently, this Committee may wish to explore what
practical difference this bill will make to existing law in
light of SB 830.
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