According to US Magistrate Judge Donald Ashmanskas, the damages awarded to Ms. Andersen were primarily based on the fact that recording industry attorneys didn't even pursue evidence which clearly suggested someone else was actually responsible.
In his original decision awarding damages Judge Ashmanskas stated "both plaintiffs and defendant at some point identified a man residing in Everett, Washington, who has no connection to defendant, as a user of the screen name gotenkito@KaZaA. When contacted by plaintiffs in April 2007 (almost two years after initiating this action), this man made similar denials to those consistently made by defendant. Declaration of Amy Bauer, Ex. F to Plaintiffs' Response Brief, pp. 2-3. Inexplicably, plaintiffs credit his denials and discredit defendant's."
He goes on to say "they appeared to readily accept the denial of infringement by a third party tied to the user name at issue even though the record discloses no reason to do so, nor any reason to wait so long to contact him after plaintiffs had evidence that implicated him as the actual infringer."
In describing the case's conclusion he summed it up with a simple analogy "In poker terms, defendant didn't call; plaintiffs folded."
So how did the RIAA respond? Not surprisingly they chose to ignore the relevant case law addressing the award of lawyer fees, most notably the 1994 case in which John Fogerty was granted a similar judgement after successfully defending himself against a copyright infringement suit from his former label. Instead they argued that the judge should take a case of trademark violation into account.
In his latest ruling Judge Ashmanskas responded by saying simply "In that case, the Ninth Circuit addressed the calculation of attorney's fees under the Lanham Act, not the Copyright Act."
No doubt the RIAA will call the decision a miscarriage of justice, just as they have every other loss in this case. But in reality they're probably scared of the consequences. They have a consistent record of dropping cases when it looks like an important ruling will go against them. This time they were too late, and the defendant was too determined.