Don't Worry Your Pretty Little Heads, Version 2.0

So what’s this “supplemental notice” all about?

“Shortly after the Court granted preliminary approval,” the plaintiff associations’ lawyers told Judge Daniels, “Plaintiffs learned for the first time that while the parties were still engaged in mediated settlement negotiations, one or more of the Database Defendants sublicensed to two new databases, Amazon.com and Highbeam Research.”

Mediator Kenneth Feinberg was summoned. The defendants “flatly refused” to improve the settlement fund. But they did agree to move from Category B to Category A all Subject Works whose copyrights were registered before the infringements by Amazon and HighBeam began, regardless of whether they were registered by the previous, and equally incoherent, settlement deadline of December 31, 2002.

This tweak is, in the first place, disingenuous. It is, in the second place, unclear. Who holds the information on whether particular infringements are C’s or B’s or new-and-improved A’s? Why, of course, the all-seeing, all-knowing claims administrator, reputed to be a distant cousin of Carnac the Magnificent.

And what about the possibility that authors of the junior Category C articles -- comprising over 90 percent, almost certainly well over 90 percent, of all the Subject Works -- will find that their claims have been reduced, perhaps even to zero, because the senior Category A and Category B already wiped out this puny $10-to-$18-million settlement fund? That possibility, which the settlement lawyers insist is remote (though without any independent supporting documentation), just got less remote.

Here’s part of what objectors’ attorney Chalmers argued to the court:

This amendment is largely a stratagem to correct or address objections made by these objectors. It is based on an almost farcical foundation. Plaintiffs discovered that some database defendants were still infringing, in particular by licensing their databases which are full of infringed, freelancer, works. This is hardly news. Class member Muchnick informed this Court about the Highbeam infringement, as well as others which are not addressed in this amendment. The database defendants have been systematically continuing with infringement throughout the pendency of this case. The proposed settlement certainly gave them the right to continue such infringement, including sub-licensing. There is absolutely no reason why they would not have continued with business as usual, which is to make money by the use of
their databases, including the infringed works.

Plaintiffs report they sought additional compensation from these, unnamed, database defendants and were rebuffed. Small wonder! They have no leverage. They have presented no threat of litigation to the defendants. Over four years they have done nothing but negotiate. What could plaintiffs. counsel threaten: We.’ll finally start litigating this case and continue with it for the two or more years it will take to get it ready for trial. Defendants, knowing that plaintiffs have let them continue infringing throughout this action, would be well-prepared to call that bluff.

Chalmers said the amendment is a ruse to delay final approval of the settlement, preposterously, until after the claim deadline of September 30. This might allow the plaintiffs to assert that Category C claims were not prejudiced. But that’s circular nonsense. The C’s were never properly represented in the first place, and their $5-to-$60 claim awards give them little incentive to register claims.

Woody Allen used to have a joke about the meals at the old Catskills resorts where he did stand-up: “The food was terrible. And the portions, so small!”

We’ll provide a rundown review of all the basic problems with UnSettlement 2.0 in future posts. Class members who would like to join our objections can contact me at info@muchnick.net.