APPEAL from the Superior Court of San Bernardino County. Jon D. Ferguson, Judge. Reversed. (Super. Ct. No. FVA026530).
The opinion of the court was delivered by: Richli J.
CERTIFIED FOR PUBLICATION
Can the Recording Industry Association of America (RIAA), a trade association whose members are part of the music industry, obtain restitution for piracy from criminal defendants? We hold that RIAA was not a direct victim of defendants' crimes and reverse the restitution orders made by the trial court. In doing so, we distinguish People v. Ortiz (1997) 53 Cal.App.4th 791, 795-797 and consider the effect of an amended statute, section 1202.4, subdivision (r), effective January 1, 2009.
Defendant Micah Akeem Kelly (Kelly) pleaded nolo contendere and defendant Robert Trongale (Trongale)*fn2 pleaded guilty to criminal offenses for involving counterfeit compact discs. (§§ 350, subd. (a)(2), 653w, subd. (a).) As part of defendants' sentences, the court ordered them to pay $14,606.66 in restitution to RIAA. Defendants urge us to find the lower court abused its discretion by ordering restitution because RIAA was not a direct victim suffering an economic loss.
The appeals are authorized under section 1237, subdivisions (a) and (b), and California Rules of Court, rule 8.304(b)(4)(8).
II. FACTUAL AND PROCEDURAL BACKGROUND
The underlying facts are recited in an earlier opinion of this court. Kelly worked in a barber shop with Trongale. Trongale admitted storing 1,927 counterfeit compact discs at the barber shop. In March 2006 as a favor to Trongale, Kelly sold five counterfeit compact discs for $20 to an undercover police officer, posing as a customer. Kelly admitted having sold a total of 11 compact discs. (People v. Kelly (Mar. 24, 2008, E043200) [nonpub. opn.].)
In earlier proceedings, a jury convicted Kelly of one count of violating section 653w, subdivision (a), California's criminal antipiracy statute. This court reversed the judgment for instructional error. (People v. Kelly, supra, E043200.)
Meanwhile, Trongale pleaded guilty in March 2007 to one count of violating section 350, subdivision (a)(2), counterfeit of a registered mark. As part of his sentence, in April 2007, he was ordered to pay $2,213 in victim restitution to RIAA, the amount originally requested by RIAA.
After the reversal of Kelly's conviction, in January 2009, he entered a plea of nolo contendere to violating section 653w, subdivision (a), and was sentenced to a two-year term, which had already been served.
At Kelly's restitution hearing June 2009, the RIAA submitted a letter seeking restitution. The RIAA identified itself as a nonprofit trade association that represents the United States recording industry. RIAA's primary function "is to investigate the illegal production and distribution of sound recordings,... When restitution is ordered, the RIAA receives the payments on behalf of its members pursuant to their authorization." The RIAA calculated a wholesale value of $7.58 for each of the 1,927 compact discs found in the barber shop. Based on RIAA's letter, the court ordered Kelly to pay a restitution fine of $14,606.66 to RIAA.*fn3
In September 2009, the court then modified Trongale's restitution order to provide that he and Kelly, jointly and severally, be ordered to pay the ...