When Jammie Thomas (now Thomas-Rasset) became the first alleged P2P file-swapper to take her case all the way to trial and verdict, no one suspected that she would actually have three trials and verdicts, but that's the case today, as the RIAA rejected a federal judge's decision to slash Thomas-Rasset's damage award. Instead, we're headed to a truncated third trial on the issue of damages.

The recording industry also made it clear this week that both Thomas-Rasset and Joel Tenenbaum (the second P2P defendant to go to trial and verdict) are, in its view, quite terrible people: lying, deceiving, irresponsible, and unreasonable. And the industry can't understand why they're both fighting on.

Which is, when you look into the details, a pretty good question. Thomas-Rasset was first hit with a $222,000 damage award in her first trial, which the judge later vacated when he ordered a second trial. That second trial, in mid-2009, landed Thomas-Rasset with $1.92 million in damages. The judge, calling it a "monstrous" verdict, slashed it to $54,000 on remittitur, and he gave the recording industry a few days to decide if they would accept the lower award or proceed to a third trial.

The RIAA's answer came last night - and it simply won't accept the new award. It's not due to the price; in fact, the RIAA offered Thomas-Rasset a lower settlement if she would ask the judge to vacate his remittitur order. Thomas-Rasset refused, and her lawyers tell Ars that she will continue her refusal to pay anything.

The issue is the judge's decision to cap the damage award at $2,250 per song - triple the baseline $750 in statutory damages, but far from the upper limit of $150,000 allowed under the law.

The recording industry "regretfully must decline" this lower amount because of the precedent it would set. "Plaintiffs find it impossible to accept a remittitur that could be read to set a new standard for statutory damages - essentially capping those damages at three times the minimum statutory amount of $750 (or $2,250) for any 'noncommercial individuals who illegally download and upload music.' This far-reaching determination is contrary to the law and creates a statutory scheme that Congress did not intend or enact."

Copyright claims like this must be filed in federal court, an expensive and lengthy process. "The Court’s cap would set a new ceiling such that no copyright owner could effectively enforce their rights unless they could and did sue on numerous works," says the filing. "No copyright owner would be motivated to enforce its rights where it could only sue on a handful of works because the potential recovery would be too limited."

That's probably true, though the industry has always contended that both Thomas-Rasset and Tenenbaum downloaded and shared thousands of songs; even at a cap of $2,250 apiece, this could add up to serious money. Instead, the labels sued in each case on only a handful of the songs in question.

From the industry's perspective, the judge is essentially rewriting statutory damages law in the case of P2P file-sharing, and that's something it can't accept. As for why Thomas-Rasset wants a third trial, that's less clear. The judge has ordered that the new trial be "on the issue of damages," and it will apparently be devoted only to giving a third jury another crack at plucking damage awards from the air (which, in the absence of any real testimony about damages, is clearly what has been happening). But if Thomas-Rasset won't agree to pay a single penny, what's the point?

The other question is how Judge Michael Davis will react; will he simply cap the third award at $2,250 and present the parties with the same choices once more? If so, will we keep going round and round until a jury finally comes in with something less than $2,250 per song? At some point, does this simply become an unwillingness to allow the industry a jury trial?

One thing that remains clear is the RIAA's disdain for Thomas-Rasset, which was already obvious the last time around. "Her conduct throughout this litigation has been patently unreasonable," the lawyers assert. Also, she "chose to stonewall Plaintiffs and lie to two juries." Expect those points to be hammered home in a damages trial.