BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1241|
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THIRD READING
Bill No: AB 1241
Author: Calderon (D)
Amended: 3/26/15 in Assembly
Vote: 21
SENATE PUBLIC SAFETY COMMITTEE: 7-0, 6/21/16
AYES: Hancock, Anderson, Glazer, Leno, Liu, Monning, Stone
ASSEMBLY FLOOR: 78-0, 5/4/15 (Consent) - See last page for
vote
SUBJECT: Crimes: audiovisual work: recording
SOURCE: Recording Industry Association of America
DIGEST: This bill requires a sentencing court to impose a
mandatory minimum fine of at least $1,000 for a second or
subsequent conviction of audio or video piracy.
ANALYSIS:
Existing law:
1)Provides that a person is guilty of the failure to disclose
the origin of a recording or audiovisual work (piracy) if, for
commercial advantage or private financial gain, he or she
knowingly advertises or offers for sale or resale, or sells or
resells, or causes the rental, sale or resale, or rents, or
manufactures, or possesses for these purposes, any recording
or audiovisual work, the outside cover, box, jacket, or label
of which does not clearly and conspicuously disclose the
actual true name and address of the manufacturer thereof and
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the name of the actual author, artist, performer, producer,
programmer, or group thereon. (Pen. Code, § 653w, subd.
(a)(1).)
2)Provides that if the offense involves at least 100 articles of
audio recordings or audiovisual works, or the commercial
equivalent thereof, then the punishment is imprisonment in a
county jail not to exceed one year, by imprisonment pursuant
to criminal justice realignment for two, three, or five years,
by a fine not to exceed $500,000, or by both that fine and
imprisonment. (Pen. Code § 653w, subd. (b)(1).)
3)Punishes any other first-time violation of the crime by
imprisonment in a county jail not to exceed one year, by a
fine of not more than $50,000, or by both that fine and
imprisonment. (Pen. Code § 653w, subd. (b)(2).)
4)Punishes a second or subsequent conviction by imprisonment in
a county jail not to exceed one year, or by imprisonment
pursuant to criminal justice realignment, by a fine not more
than $200,000, or by both that fine and imprisonment. (Pen.
Code § 653w, subd. (b)(3).)
5)Defines "recording" as any "tangible medium upon which
information or sounds are recorded or otherwise stored,
including, but not limited to, any 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 otherwise stored, but
does not include sounds accompanying a motion picture or other
audiovisual work." (Pen. Code § 653w, subd. (a)(2).)
6)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).)
7)Requires, in addition to any other penalty or fine, the court
to order a person who has been convicted of a music or video
piracy to make restitution to an owner or lawful producer, or
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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).)
8)Requires the restitution order be based on the aggregate
wholesale value of lawfully manufactured and authorized
devices or articles, and to also include reasonable costs
incurred as a result of the investigation undertaken by the
owner, lawful producer, or trade association acting on behalf
of the owner. (Pen. Code § 1202.4, subd. (r)(1).
This bill imposes a mandatory minimum fine of not less than
$1,000 for a second or subsequent conviction for the crime of
music or video piracy, as prosecuted under the California law
that requires a person to disclose the true name and address of
the manufacturer of a musical or audio work.
Background:
According to the author:
Crimes related to piracy are often viewed as
victimless. As such, they are often treated lightly
by the courts. While there are opportunities for the
courts to establish fines, there is no mandatory fine
in cases involving piracy of copyright, intellectual
property, despite the unquestioned impact upon the
entertainment and other industries affected by these
illegitimate activities. AB 1241 would create a
minimum fine of $1,000 on a second offense.
In audio and audio-visual piracy, restitution is defined to
include the value of unsold items seized from the defendant. As
the items did not actually replace a legitimate sale, the value
of these items is not truly restitution for a loss. (People v.
Garcia (2011) 194 Cal.App.4th 612, 614-622.) The restitution is
essentially a fine paid to the victim in an amount measured by
the value of the illegitimate sales the defendant would have
made if he or she had actually sold the items. This form of
restitution is a penalty based the defendant's criminal intent,
not actual losses suffered by the victim and appears to be
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similar to punitive damages ordered in a civil suit.
This bill requires payment of a traditional fine. A criminal
fine is paid to the government, not the victim. Criminal fines
are generally imposed based on the culpability of the defendant.
The fact that a defendant would have made additional illicit
sales had he or she not been caught is such a consideration. A
fine can also reflect the harm the defendant's conduct more
generally caused society.
Federal law preempts state law in the area of copyright. State
laws related to copyright interests are generally called "true
name and address" laws, which 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 United
States 9th Circuit Court of Appeals upheld the California true
name and address law. The defendant's claim that the true name
and address law (Pen, Code § 653w) is preempted by federal
copyright has been rejected by the 9th Circuit. A state law can
protect copyright interests if the law has other purposes that
are legitimate subjects of state law.
The "underground economy" refers to those individuals and
businesses that deal in cash and/or use other schemes to conceal
their activities, identities, and true tax liabilities from
government licensing, regulatory, and taxing agencies. The
activities that occur in the underground economy include the
sale or transfer of illegal goods, such as pirated music or
movies, counterfeit pharmaceutical drugs and numerous other
products. The Board of Equalization estimates that the State of
California losses about $8.5 billion dollars annually in tax
revenue due to the underground economy. This revenue is needed
to fund critical programs such as education, public safety,
infrastructure and social services.
Setting the penalty for a crime is an inherently legislative
function. The Legislature does have the power to require a
minimum fine or other specific sentence. (Keeler v. Superior
Court (1970) 2 Cal.3d 619, 631.) Sentencing, however, is solely
a judicial power. (People v. Tenorio (1970) 3 Cal.3d 89, 90-93;
People v. Superior Court (Fellman) (1976) 59 Cal.App.3d 270,
275.) California law effectively directs judges to impose an
individualized sentence that fits the crime and the defendant's
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background, attitude, and record. (Cal. Rules of Court, rules
4.401-4.425.) This bill limits judicial discretion and requires
a minimum fine of $1,000 to be imposed in each case in which a
defendant has already suffered a prior conviction for piracy,
regardless of the facts. A sentencing court also has the
authority and discretion to impose a much higher fine than the
minimum required under this bill. The maximum fine under
existing law is $200,000 - approximately $800,000 with penalty
assesssments. There is no evidence that this amount is not
already being imposed in these types of cases.
Penalty assessments and fees must be assessed on the base fine
for a crime.
Assuming a defendant was fined $1,000 as the fine for a criminal
offense, a host of penalty assessments would actually require
the defendant to pay a fine of over $4,000. The fine does not
include victim restitution, a mandatory restitution fine, and
other fines and fees.
Current law under Penal Code section 1203.1d prioritizes the
order in which delinquent court-ordered debt received is to be
satisfied. The priorities are 1) victim restitution, 2) state
surcharge, 3) restitution fines, penalty assessments, and other
fines, with payments made on a proportional basis to the total
amount levied for all of these items, and 4) state/county/city
reimbursements, and special revenue items.
The fine at issue in this bill has a fairly low priority in the
collection order, falling in the third category. Given that
victim restitution in these types of cases is to be on the
aggregate wholesale value of lawfully manufactured and
authorized devices or articles, and to also include reasonable
costs incurred as a result of the investigation undertaken by
the owner, lawful producer, or trade association acting on
behalf of the owner (Pen. Code, § 1202.4, subd. (r)(1)), it
could very well be the case that this fine is unlikely to be
collected, especially if the defendant is ordered to pay special
restitution based on the value of unsold pirated works.
A recent San Francisco Daily Journal article noted, "California
courts and counties collect nearly $2 billion in fines and fees
every year. Nevertheless, the state still has a more than $10.2
billion balance of uncollected debt from prior years, according
to the most recent date from 2012." (See Jones & Sugarman,
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State Judges Bemoan Fee Collection Process, San Francisco Daily
Journal, (January 5, 2015).) "The annual growth in delinquent
debt partly reflects a supply of money that doesn't exist to be
collected." (Ibid.) In the same article, the Presiding Judge
of San Bernardino County was quoted as saying "the whole concept
is getting blood out of a turnip." (Ibid.)
FISCAL EFFECT: Appropriation: No Fiscal Com.:
NoLocal: No
SUPPORT: (Verified6/23/16)
Recording Industry Association of America (source)
OPPOSITION: (Verified6/23/16)
None received
ASSEMBLY FLOOR: 78-0, 5/4/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Chang, Chau,
Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd,
Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,
Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Campos, Dahle
Prepared by:Jerome McGuire / PUB. S. /
6/24/16 14:33:37
**** END ****
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