Monday, July 31, 2006

UnSettlement Gallery of Heroes Contact Info

LAWYERS

They told the Court of Appeals that the value of "prima facie valid claims" was $10.76 million, so the $11.8 million cap for the C Reduction wouldn't kick in. Indeed, the very idea that it ever could have was always "absurd."

But, oops, then they admitted that the $10.76 million was off because a lot of potential Category A and B claims (registered copyrights) got initially counted as Category C's (unregistereds). They're trying to file "corrected" briefs, which would delete the wrong information without releasing the right information, and would simply ignore the arguments they've been making for a year on the basis of the former.

A.J. De Bartolomeo (ajd@girardgibbs.com)
Michael J. Boni (mboni@kohnswift.com)
Gary Fergus (gfergus@ferguslegal.com)
Diane S. Rice (drice@hosielaw.com)
Spencer Hosie (shosie@hosielaw.com)

*****

"ASSOCIATIONAL" PLAINTIFFS

These aren't writers, but three organizations of authors. with a combined membership of a few thousand (including crossovers) that appointed themselves to negotiate a settlement on behalf of every writer everywhere. And they negotiated badly, "winning" for all of us a grand total of $18 million before attorneys' fees, an unconscionable "License by Default," and the C Reduction. They're not even doing right by their own members, a super-majority of whose claims are in the C Category; at ASJA and NWU especially, the percentage likely hovers somewhere between 98.99 and 99.99%.

Oh yeah, and they're self-promoting hucksters, too. They said the 99% were lucky to be getting even crumbs, when the record shows that the defendants would never have settled unless the unregistereds (and their hideously broad release of future claims) were folded into the agreement. But the orgs did say that everyone eligible would at least get something: what they had the nerve to label "found money."

Now the associations are obliged to give the international community of freelancers an explanation of what's happening with the settlement fund. Write to these people and demand that they discharge their fiduciary duty.

Authors Guild
[Paul Aiken, executive director], staff@authorsguild.org

American Society of Journalists and Authors
fax the staff at 212.937.2315
Jack El-Hai, current president (El-Haijack@el-hai.com)
Jim Morrison, former president and chief hypemeister (jimmor@aol.com)

National Writers Union
fax the staff at 212.254.0673
Gerard Colby, president (gcolby@nwu.org)
See http://nwu.org/nwu/index.php?cmd=showPage&page_id=1.4.3 for email addresses of other national officers

*****

NAMED PLAINTIFFS

They should be representing the class and demanding that the lawyers publish the truth, including the best current claims value information. We "absent class members" (don't you love that term?) have to pressure the named plaintiffs to do so, because they have no economic incentive to give a damn about the C Reduction -- they already stand to collect in the neighborhood of $1.6 million from their A's and B's. They won't get a dime shaved from their awards if theirs and others' A's and B's take the settlement fund all the way up to its $11.8 million claims cap, while the rest of us are left holding a bag of (mostly hot) air.

Michael Castleman
E.L. Doctorow
Tom Dunkel
(the late) Andrea Dworkin
Jay Feldman
James Gleick
Ronald Hayman
Robert Lacey
Ruth Laney
Paula McDonald
P/K Associates, Inc.
Letty Cottin Pogrebin
Gerald Posner
Miriam Raftery
Ronald M. Schwartz
Mary Sherman
Donald Spoto
Robert E. Treuhaft and Jessica L. Treuhaft (Mitford) Trust.
Constance Romilly, Trustee
Robert Vaughan
Robley Wilson
Marie Winn

*****

11 INCREDIBLE SHRINKING CATEGORY C CLAIMANT DECLARANTS

These are freelancers who were recruited to write declarations in support of the settlement last year. All cited large sums of money they expected to receive for C claim awards. Were they told that there's a good chance there won't wind up being any C claim awards?

One of the ISCCCD's, Martha Russis of Glenview, Illinois, said she also had registered claims -- more than 600 of them -- and expected to get a grand, a very grand, total of $110,000. She probably stands to get almost all of that even in the event of a C Reduction. Maybe that's why, uniquely among the ISCCCD's, she not only supported the settlement but noted that she was "disgusted and aggravated" by your humble blogger/objector. And you, Martha my dear, have the breath of Paul McCartney's old pet dog.

If the ISCCCD's didn't commit perjury, there's not a whole lot else to say about them. They're under no fiduciary obligation to the class, but if they have any interest in actually collecting the revenue that they told the court they were expecting in sworn statements, they would be well advised to contact A.J. De Bartolomeo, Esq., at Girard Gibbs & De Bartolomeo (see above), and if ole A.J. is nice enough to get back to them with anything approximating an honest answer, kind of clue in the rest of us.

Heidi Siegmund Cuda
Hilary de Vries
Pamela Ferris-Olson
Hugh Hart
Bart Mills
Nancy Mills
Martha Russis
Richard Scherr
Jeff Seidel
Gary Taylor
Susan Wallace

LexisNexis and Thomson Gale -- At Your (Private) Service

Reed Elsevier and the Thomson Corp. -- two cornerstone defendants in the UnSettlement -- "pointed to digital initiatives" as factors in their growth, Publishers Weekly reported. (PW, of course, is itself owned by Reed Elsevier.)

In the first half of 2006, total revenue at Reed rose 8%, and operating profit surged 16%, to $632 million. The numbers were similar at Thomson: six-month revenue growth of 7%, operating profit increase of 16%, to $447 million.

Et Tu, Brett?

Another old friend of mine is Brett Harvey, who is retiring as executive director of the American Society of Journalists and Authors. She worked for the Graphic Artists Guild and was on the National Executive Board of the National Writers Union when I was on the NWU staff.

In her declaration to the court last year in support of settlement approval, Brett said her ASJA responsibilities include "the dissemination of information about the class action lawsuit to writers -- both within the ASJA and outside the ASJA."

OK, Brett, don't criticize the settlement -- you can't do that -- but please commence disseminating.

What's the story behind your side's abrupt shift from "the C Reduction will never happen" to "the C Reduction could happen"? How many registered works were improperly counted as C's in the "prima face valid claims" value of $10.76 million, which itself is barely a million dollars under the $11.8 million cap that would trigger the C Reduction? How about asking some questions on behalf of the class "both within and outside ASJA" and doing some "dissemination of information"?

Plea to 'My' Named Plaintiffs: Demand an Explanation from Your Lawyers

This post is addressed directly to three of my writer friends -- Gerald Posner, Michael Castleman, and Jay Feldman -- whom I recruited six years ago to become named plaintiffs in a copyright class action against Gale Group, a huge, shameless, multinational, serial infringer of freelancers' works.

This also is addressed to Karen Leonard, who helps run the literary affairs of a fourth friend, the late Jessica Mitford, and to the Mitford heirs. "Decca" Mitford, one of the grand ladies of letters and of hellraising, was a member of the advisory board of the National Writers Union when I was the NWU's assistant director. She not only lent her name to the cause; she showed up at events and graciously mingled and shared her wisdom with less-accomplished colleagues.

When Spencer Hosie and Gary Fergus assigned me in 2000 to help put together a slate of class representatives for what became the first of the class actions later consolidated into the settlement I am now opposing, I immediately thought of Decca, who had died four years earlier. I contacted her widower, retired civil rights and labor lawyer Bob Treuhaft, about documented knockoffs of Decca's last major book, The American Way of Birth, and he instantly grasped what I was talking about and signed on. (Mr. Treuhaft himself died the next year.)

As everyone knows, the consolidated class action settlement was approved last year in federal district court, and I objected. While I was launching the objection project, I explained what had gone wrong to my friends Posner, Castleman, and Feldman, and to the Mitford estate, and urged them to join us. Each declined.

I understand that one factor playing into their refusal to reverse course may be that Paragraph 9 of the settlement agreement bars the named plaintiffs from "actions intended to ... undermine" it. Similarly, the associational plaintiffs -- the Authors Guild, the American Society of Journalists and Authors, and the NWU -- must "support and publicly profess their support" of the settlement.

Part of my job now, as one of the ten objectors who stand an excellent chance of prevailing in our appeal of the settlement approval, is simply to shed the light of day on what your lawyers, your organizations, and -- by named association -- you have wrought. The district court judge, George Daniels, did not take a hard enough look at the evidence of the blatant inadequacy and unfairness of the settlement, and at the collusive process of the defense group and the authors' groups that negotiated it. However, I am confident that the Second Circuit Court of Appeals panel will.

But there's another factor that has nothing to do with winning and losing. It has to do, instead, with a devastating new piece of that evidence and what that means, at its core, about why Decca Mitford, Gerald Posner, Michael Castleman, and Jay Feldman involved themselves in the National Writers Union in the first place. You joined the NWU, and this case, to band together with fellow writers and create a healthier publishing environment for all of us. Your objective was not to partner with the very publishing entities that treat the work of independent creators as if it were the publishers' private property.

OK, so the settlement happened. You can't publicly "undermine" it even though you might privately acknowledge at this point that it stinks.

I therefore am not asking you to undermine. I'm asking you to explain. As class representatives, you have a duty to communicate how the C Reduction came to be and where we stand with its fast-approaching probability. (The scandal over the manipulation of claims data by the settlement lawyers has been discussed at length on this blog. Read all about it. Soon our side will be filing a new motion or motions on the lawyers' ham-handed attempts to "correct" their earlier-submitted briefs and airbrush the record.)

Explain. Or at least demand that your lawyers explain. Their explanation to date is not credible.

The trigger for the C Reduction is $11.8 million in total claims value. For the entire history of the objections, in the district and appellate courts, your lawyers were saying that there was "no realistic chance" that the C Reduction could happen; that such speculation was "inconceivable," "absurd."

Yet their own current "prima facie valid claims" number is $10.76 million, not that much under $11.8 million, and they've admitted that this number is misleadingly low because of all the "undocumented" registered-copyright claims that got provisionally valued as C's.

How do you square "absurd" with this development?

Come on, Gerald, Michael, Jay, and the Mitford heirs. None of us like to own up to it after the wool has been pulled over our eyes. But there's something larger at stake here than your vanity. A little something like the worst sellout ever of authors' rights. Please do what you can before it's too late.

Saturday, July 29, 2006

Choose ‘No. 1 Outrage of the UnSettlement,’ Win Fabulous Prizes!

Freelance Rights Blog LLP now invites readers to vote on the worst outrage of the UnSettlement. Email your ballot to info@muchnick.net. The results will be forwarded to the associational plaintiffs, the named plaintiffs, and their lawyers.

As an added incentive, those of you who vote for the winning outrage will receive a free .pdf file of the License by Default language from the settlement agreement. Runners-up will receive cash payments equal to the amount of Category C claim awards if A and B claims exceed $11.8 million.

Employees of Freelance Rights Blog LLP and their families are not eligible.

Because there are so many outrages to choose from, our crack staff has gotten you started with a chronological rundown of a few of our own favorites.

MAY 2005

  • The writers’ organizations set up an interactive Q & A page to address class members’ concerns. It goes kerplooey within weeks.

JUNE 2005

  • ASJA is revealed to have a deal with defendant LexisNexis for a special rate for its members.

JULY 2005

  • “UnSettlement 2.0” amendment grandfathers in two new infringers, Amazon and HighBeam -- for no additional money in the settlement fund. Plaintiffs’ counsel blow the deadline they’d given the court for submission of the amended settlement agreement.

AUGUST 2005

  • NWU posts garbled message, riddled with errors, from current and former presidents. The message is soon withdrawn.
  • Plaintiffs’ lawyer Gary “Enron” Fergus lies to the court about the posting of supplemental notice on the writers’ organizations’ websites.
  • Unannounced, the Authors Guild’s general counsel, Kay Murray, quits for a job with the defense group’s Tribune Company.

SEPTEMBER 2005

  • In final approval papers filed without any time for a thorough review, lawyers say there were zero complaints about the settlement by anyone other than those few represented by a “professional objector.” Their claims analysis stops at 2002, omitting subsequent infringements and interest.
  • A named plaintiff lies in a pathetic declaration that earns her the perennial sobriquet Paula “Pinocchio” McDonald.
  • As the approval hearing and claims deadline approach, the Authors Guild conducts members-only training on how to file claims, and admits that books as well as articles are vulnerable. For the first time one of the associational plaintiffs, ASJA, acknowledges the existence of the License by Default and, in its own members-only forum and in collusion with class counsel, dispenses secret advice on how to get around it.
  • Named plaintiff Tom Dunkel complains about the criticism on this blog. “I’m aware” of the settlement’s unspecified shortcomings, he whines, but “for reasons I’ll not go into here, I’d prefer to see the agreement approved.”

JUNE 2006

  • Many claimants receive defect notices for registered claims, despite public assurances by ASJA that accompanying documentation was not necessary. The claims administrator later reverses itself.
  • The settlement parties’ appellate briefs file illegal outside-the-record information about claims in an attempt to discredit the objectors’ arguments about the danger of the C Reduction. An investigation by the objectors reveals that this information is false and misleading.

JULY 2006

  • The settlement lawyers, arguing that the mistakes in their briefs were trivial and blaming them on the claims administrator, seek to file “corrected” briefs.
  • Another objectors’ investigation sheds light on the Mystery of the 11 Incredible Shrinking Category C Claimant Declarants, who last year signed statements supporting the settlement, apparently without even having been informed that the vast bulk of their claims, represented as totaling hundreds of thousands of dollars, may be worthless.

Friday, July 28, 2006

Jim Morrison, The $18 Million* Man (* With An Asterisk)

In her comment in the previous post, Judith Trotsky hits the nail on the head. Go back and read it. You can put it into your own paraphrase. Here's mine:

We were never informed by the writers' organizations that it was the defendants who insisted on including the unregistereds into the settlement. That was the only way to achieve "complete peace," in the words of defendants' co-counsel Charles Sims.

The people running the show on behalf of class members with Category A and Category B claims have painted a false picture for the super-majority of class members with Category C claims. The unregistereds aren't "lucky to be getting anything"; on the contrary, they're the key to the deal. Now, with the looming threat of the C Reduction, and thanks to some undetermined admixture of corruption and bungling, the C's may be getting exactly ... nothing.

Lots of readers of this blog ask me why I'm so hard on the writers' organizations that negotiated the UnSettlement. After all, they're nice people and they did the best they could, etc., etc., etc.

The main answer to that question is that at some point, after a giant redwood tree has been whittled down to a toothpick, life demands elemental accountability.

Take Jim Morrison, former president of the American Society of Journalists and Authors. After the settlement was announced last year, an article in the ASJA magazine by Morrison's successor hailed him as "the $18 Million Man." The story was that Morrison, armed with indispensable inside data made possible by ASJA's thousand-strong army of freelancers, had fought the big, bad publishing industry and, if not brought it to its knees, at least won restitution for victims of infringements of works whose copyrights had been registered, and had even adroitly arranged "found money" for others.

How many ways can we asterisk this papier-mache Robin Hood? Let us count them. It's like following the leaderboard of the Tour de France, a day after the victory lap on the Champs d'Ellyses but before the drug tests.

Here's what we find in this particular urine sample:

* $18 million is really $11.8 million for writers after attorneys' fees and the costs of mediation, class notice, and claims administration. Less than twelve million bucks for decades of infringement of tens upon tens of thousands of freelancers, by every major database operator, in cahoots with every major newspaper and magazine in the land! All without executing a single litigation tactic after filing the original complaint and finding that the defendants were too arrogant even to dignify it with a formal response to the court.

* Ready for your next slice of baloney? That $11.8 million includes (for those who choose to accept the claim awards in their full paltry-ness) a license in perpetuity to the very entities that have been so insouciantly ripping us off, as well as to every other company to which they might choose to turn around and license our work. If you don't want to grant the future license, you get 65 cents on the dollar. And if you didn't hear about the settlement, or didn't know better, or weren't interested in collecting your claim award because you didn't think the small amount of revenue was worth the trouble, there's a stealth "License by Default" granting permission to the infringers to continue exploiting your work forever anyway, in any form, without any further compensation.

* Now for the unkindest cut: the scandal of the C Reduction, which the settlement lawyers were recently cornered by the objectors into admitting is possible. More than possible, we think; probable. But don't worry, it's not such a big deal -- only about 99.9% of the infringements in this case, by both sides' accounts, are of unregistered, or Category C, works. The writers who would get shut out are the writers who made the comprehensive settlement possible. The only people who would get anything would be the registereds, who used the unregistereds in a class action rather than going out and hiring their own lawyers and fighting their own real cases.

So, sorry to be so harsh. Really, truly.

We just want to know what ASJA, the Authors Guild, and the National Writers Union plan to do about all this. Did the lawyers dupe them into this atrocity? If so, tell the Court of Appeals and unwind this sucker. The heat you're feeling from Freelance Rights Blog LLP is nothing like the shameful legacy you're on the cusp of finalizing.

In upcoming posts, we'll once again publish all the contact info for the "associational plaintiffs." In the meantime, for those of you who can't wait to ask "What gives?" of the $18 Million Man himself, you can email him at jimmor@aol.com.

'Boni Doesn't Address the Assurances Given to Writers'

Co-objector Judith Trotsky, commenting on lawyer Michael Boni's letter to the Court of Appeals admitting the live threat of a C Reduction, says:

Boni doesn't address the question of the assurances given to writers -- from the very beginning -- that C claimants will "get something" -- which was, so we were told, the reason ASJA et al. agreed to the settlement as "the best we could do."

To my recollection we were never informed that it was the defendants who insisted on including the unregistered. In any case, we have now gone from "getting something" to "we don't know." Hardly inspires confidence by representees in their representatives.

Lawyer Boni to Court: 'We Have Insufficient Data to Determine Whether the Cap Will Be Reached'

As reported here, the UnSettlement lawyers have admitted that they filed misleading briefs with the Second Circuit Court of Appeals, and are seeking to "correct" them. Specifically, the $10.76 million figure cited as the total of "prima facie valid claims" was low because this initial run-through counted as low-paying C claims a whole bunch of claims that will be shown to be A's and B's. If the claims number tops $11.8 million, the dreaded C Reduction is triggered.

One of the things we'd like to know now is whether the U.S. District Court of Judge George Daniels was similarly misled before he approved the settlement last year.

We also would like to know if the 11 writers who filed declarations in support of approval of the settlement were fully apprised at the time of the C Reduction possibility. If not, they were induced to submit sworn statements under false pretenses. These people have collective claims on the order of a quarter of a million dollars riding on whether there's a C Reduction. One of the declarants, Bart Mills, has asked lawyer A.J. De Bartolomeo to answer these very questions. As of the posting of this item, to the best of my knowledge, De Bartolomeo had not responded.

In the meantime I thought I'd share with blog readers the document by which the lawyers informed the Court of Appeals of the error of their ways. Michael J. Boni's July 7 letter (http://muchnick.net/BoniToCourt.pdf) raises obfuscation to an art form. He blames the whole thing on the claims administrator, which was only doing precisely what the settlement agreement's claims administration memorandum instructed it to do.

Buried in his dense text is another disturbing implication, which we'll explore in greater depth down the road. It is this: The named plaintiffs in this case -- from literary icon E.L. Doctorow all the way down to Paula "Pinocchio" McDonald -- stand to swallow up a grossly disproportionate share of the $11.8 million available for claims. Just how disproportionate that amount is, too, has surely been understated in early estimates, because many of their A and B claims, like everyone else's, went into the initial tally as C's.

Here are the email addresses of the architects of this crumbling edifice:

A.J. De Bartolomeo
(ajd@girardgibbs.com)

Michael J. Boni
(mboni@kohnswift.com)

Gary Fergus
(gfergus@ferguslegal.com)

Diane S. Rice
(drice@hosielaw.com)

Spencer Hosie
(shosie@hosielaw.com)

Thursday, July 27, 2006

Lawyer De Bartolomeo Hasn't Answered Her Declarant's Questions

Before posting the information about the 11 writers who were recruited last year to file declarations in support of the settlement, I made a good-faith effort to reach all of them. I wanted them to know that this was a very serious business. Above all, in their own interests, I wanted them to know -- and I wondered if they already had been told -- that the various anticipated claim awards cited in their declarations, all in the tens of thousands of dollars, could very well turn to dust with the C Reduction. (Any of you who are new to this story can catch up on the blog.)

One of these "Incredible Shrinking Category C Claimant Declarants," Pamela Ferris-Olson, responded with nonsense squared, followed by defensive silence.

Another, Bart Mills (whose wife, Nancy Mills, also was a declarant), was more forthcoming. "In the spirit of honest inquiry," as he put it, he forwarded the pertinent questions about the grave possibility of the C Reduction early this week to A.J. De Bartolomeo of the San Francisco class-action factory Girard Gibbs & De Bartolomeo LLP, co-lead counsel for the plaintiffs and the person to whose declaration in support of the brief for approval of the settlement the 11 writers' own declarations were appended.

Yesterday a Girard Gibbs paralegal emailed back to Bart Mills and asked for his phone number so De Bartolomeo could call him.

De Bartolomeo did not call Bart yesterday.

De Bartolomeo did not call him today.

Will she call him Friday? And if she does, will she tell him the truth?

Martha Russis: A Clarification

On further review, I think one of the statements in my previous post about Martha Russis is mistaken. I'll go ahead and revise the post, but I'm also putting up this separate item for those of you who might have read our promotional email burst, or the original blog.

This clarification is also an opportunity to restate a point we've made in several contexts: In every key area of the UnSettlement, the information to resolve threshold ambiguities is the exclusive property of the settlement parties -- or, in this case, the defendants who have been doing all the infringing for decades, and even as we speak continue unabated with their infringement.

OK, let's try to explain.

Russis' copyright registrations were filed in 1998-99. That means that infringements of those 600+ works are at least Category B's. Some, perhaps many or all, are converted to Category A's by virtue of the settlement amendment incorporating Amazon and HighBeam.

However, it was not correct for me to state that these are "pure A's," because I don't know. The settlement parties appear to have codified what I think is a perverse "first infringement theory" of the defendants. That means -- again, I think -- that the key to whether something is a Category A or a Category B is when works were infringed for the first time.

Example: I wrote an article for The Washington Monthly in 1988 that was infringed, most likely, from day one. I complained and it was removed by Information Access Company (now Thomson Gale) from some but not all infringing products. I registered the copyright in 1999. I then found what I thought were "new" infringements. But the defendants might say that Thomson Gale had "already" infringed it the first time, so its new appearance on even a Thomson Gale-licensed product to another company is old news.

Or some such b.s. Suffice to say that Martha Russis, with her hundreds of 1998-99 registrations, was in a much stronger position than the average class member, which makes her declaration's hostility toward the objectors all the more bewildering. Or, as the case may be, all the more predictable.

More On Martha Russis

As blog readers who have reviewed all the declarations know (see yesterday’s post with the complete list of links to the 11 documents), Martha Russis’ was unique, for two related reasons:

1. Her estimate of anticipated claims awards, $110,000, was by far the highest.

2. Unlike the others, she had a mix of registered and unregistered articles. A search of the Copyright Office’s online database confirms that Russis registered hundreds of works in 1999, supplementing about a dozen others registered in 1998.

That would mean that Russis has claims for copyrights registered before the filing of the three class actions in 2000, which were later consolidated into this settlement. These are not B claims (registrations between the filing of the suits and the settlement’s arbitrary cutoff date of December 31, 2002). They are not even B claims that were converted to A’s by the equally mysterious last-minute settlement amendment of the summer of 2005, which grandfathered in two new infringers, Amazon and HighBeam. They are “pure” A claims. I'm not licensed to give legal advice, but I think she could have done far better for herself by opting out of the class and pursuing on her own a slam-dunk case of willful infringement of tons of registered works.

[UPDATE: My flat statement that all of her infringed works are "pure A's" is not correct. See the next post for a clarification.]

Therefore, Russis is anomalous for this group, which I’ve dubbed the Incredible Shrinking C Claimant Declarants. She’s much more like the named plaintiffs, who have a preponderance of A, or A and B, claims. She is unrepresentative of the class, which overwhelmingly consists of C’s; or at best she’s a kind of crossover class member with a foot in each camp.

What’s abundantly clear, however, is that even without the looming Damoclean sword of the C Reduction, which would render her declaration (and the others’) totally ridiculous, Martha Russis has not undermined the arguments of the objectors. She has reinforced them. The current state of the evidence shows that Russis would want the settlement to be approved so she could collect her A and B awards, which without a doubt comprise the lion’s share (almost certainly all but $10,000 or so) of her anticipated $110,000 windfall.

Finally -- and this is addressed directly to Martha Russis -- I am sorry to hear about your mother’s health issues. But that is not a good enough reason to screw the class. The law says that you, and the lawyers who recruited you to write this declaration, have to do better than that. You can't argue that your comparatively trivial inconvenience outweighs shutting out the 99-plus-percent of the class with no compensation and, to boot, with an overbroad release that forecloses everyone else's options to pursue future claims.

Does anyone out there know how to find this lady and get her side of the story?

Wednesday, July 26, 2006

Dear Martha Russis of the Incredible Shrinking Category C Claimant Declarants

Folks, I’ve just posted all 11 declarations filed last September by writers who supported the settlement and cited the thousands of dollars they each expected to receive upon approval. Their expectations have been, shall we say, called into question by mounting indications that the puny settlement fund might be overloaded with claims and that a provision by which deduction or elimination of C claims, for unregistered-copyrighted articles, will be triggered.

Of the 11 declarations, none has stronger language than that of Martha Russis of Glenview, Illinois. (Again, read it for yourself at http://muchnick.net/MarthaRussis.pdf.) In part, perhaps, this is because her anticipated windfall includes not only C claims, but also A and B (registered) claims, for a total of $110,000. Not a bad day’s -- or decade’s -- work for a freelance writer. Whatever the incentive, economic or otherwise, Russis was “disgusted and aggravated by this objector to the settlement.”

En garde, Martha!

***************

IN THE COURT OF PUBLIC OPINION

DECLARATION OF IRVIN MUCHNICK IN OPPOSITION TO FINAL SETTLEMENT APPROVAL

I, Irvin Muchnick, declare as follows:

1. I am a freelance writer and class member in In re Literary Works In Electronic Databases Copyright Litigation, MDL 1379. I submit this declaration in opposition to Plaintiffs’ motion for final approval of the proposed class action settlement in this lawsuit. I have personal knowledge of the facts herein and, if called on to do so, could and would testify competently thereto.

2. I have been selling publication rights to my literary works as a freelance author since 1972.

3. I have been waiting a long time for a settlement in this case since I became an activist for the issue of writers’ rights in new technologies in 1994. I organized the National Writers Union’s Operation Magazine Index campaign. That campaign produced massive evidence of willful and systematic infringement, none of which is acknowledged in the record by the plaintiffs’ lawyers in this case; in fact, co-lead counsel A.J. De Bartolomeo swore under oath to the court that there is “no” such evidence. From 1994 to 1997 I was assistant director of the National Writers Union and founding administrator of its agency, Publication Rights Clearinghouse. From 1997 to 2000 I was a consultant for Robins, Kaplan, Miller & Ciresi, which extracted a $7.25 million settlement for writers from a tiny fax-delivery service called UnCover. That was believed to be the first such use of the class-action vehicle in the history of American jurisprudence. From 2000 to 2001 I was a consultant for Hosie Frost Large & McArthur, which launched the first of the class actions later consolidated into this settlement. Hosie Frost and its co-counsel, the now-defunct Brobeck, Phleger & Harrison, subsequently brought in the National Writers Union as an “associational plaintiff.”

4. In my memoir “Crass Action: Confessions of an Internet Avenger” (viewable at http://crassaction.muchnick.net), I disclose the consulting fees I received during this three-and-a-half year period -- $50 an hour from Robins, Kaplan and $75 an hour from Hosie Frost -- and estimate that they “equaled the cost of a couple of paralegals standing around staring at boxes of documents.”

5. After my contract with Robins expired, the UnCover settlement team did a lousy job with class notice. I personally stepped in, without compensation, and contacted more than a dozen writers whose claims were missed by a technical glitch in the claims database, and when half or more them responded, I helped them submit and receive $30,000 claims. Still later, long after the case was closed, and with the help of San Francisco attorney Roy Gordet and Oakland’s First Amendment Project, I litigated to unseal records about the shoddy performance of the settlement team and the $500,000 in fees for claims administration collected by the now-disgraced Arthur Andersen accounting firm. For details, see my piece “Arthur Andersen and Me” at http://muchnick.net/ARTHURANDERSEN.html.

6. See also my declarations in the record of this case at http://muchnick.net/Declaration.pdf and http://muchnick.net/Muchnick.pdf.

7. I am the father of two sons and two daughters with child-rearing costs. The main benefit to me of an improved settlement in this case is that my dear wife of 20 years might stop reminding me of what a worthless piece of garbage I am.

8. The proposed settlement is unfair, inadequate, unreasonable, and a disgrace. If it goes through in its present form, the named plaintiffs, the “associational plaintiff” writers’ organizations, and the declarants in support of the settlement -- all of whose best defense is naivete -- will live in infamy. The plaintiffs’ lawyers, I suspect, won’t lose too much sleep.

I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct. Executed July 26, 2006, at Berkeley, California.

Irvin Muchnick

Complete And Unexpurgated: Declarations of the 11 Incredible Shrinking Category C Claimant Declarants

In response to popular demand, here are the declarations of the 11 writers who, at the behest of counsel for the plaintiffs, filed statements in September 2005 supporting the UnSettlement and telling their own stories. We'll comment further later.


Heidi Siegmund Cuda of Los Angeles (estimated more than 900 C claims, $22,000)
http://muchnick.net/HeidiSiegmundCuda.pdf

Hilary de Vries of Los Angeles (estimated 399 C claims, $18,500)
http://muchnick.net/HilaryDeVries.pdf

Pamela Ferris-Olson of Centerville, Ohio (estimated 1,548 C claims, $9,962.50)
http://muchnick.net/PamelaFerrisOlson.pdf

Hugh Hart of Van Nuys, California (estimated 1,100 C claims, $10,000)
http://muchnick.net/HughHart.pdf

Bart Mills of Manhattan Beach, California (estimated 3,000 C claims, $20,000)
http://muchnick.net/BartMills.pdf

Nancy Mills of Manhattan Beach, California (estimated 2,500 C claims, $15,000)
http://muchnick.net/NancyMills.pdf

Martha Russis of Glenview, Illinois (estimated 600 C claims; also 650 registered works in the A and B categories; total estimated claim $110,000)
http://muchnick.net/MarthaRussis.pdf

Richard Scherr of Owings Mills, Maryland (estimated 2,204 C claims, $15,000)
http://muchnick.net/RichardScherr.pdf

Jeff Seidel of Baltimore (estimated 3,300 C claims, $21,000)
http://muchnick.net/JeffSeidel.pdf

Gary Taylor of Houston (estimated 1,200 C claims, $13,000)
http://muchnick.net/GaryTaylor.pdf

Susan Wallace of Liverpool, England (estimated 200 C claims, no dollar figure given)
http://muchnick.net/SusanWallace.pdf

Tuesday, July 25, 2006

From Cavity-Filling to Root Canal: Defense Group Prepares to Challenge Claims

Several weeks ago, as we were exposing the scandal of the low-balled $10.76 million number presented in the settlement parties' appellate briefs as the sum of "prima facie valid claims," LexisNexis lawyer Charles Sims made a point that is worth reflecting on.

The claims administration process, Sims told objectors' attorney Charles Chalmers, "is not nearly sufficiently advanced to draw any reliable conclusions whatever about whether, as you put it, 'the C Reduction has in fact been triggered,' or even whether that 'is likely.' Claims have not even been passed to the defendants and publishers for review, and we are some months from that happening, since the work required by the Claims Administration Memorandum is very far from completion."

This is technically -- and frighteningly -- true.

Let's say that the current claims pool winds up totaling $15 million. (That is a wildly random number, for illustration purposes only.) Let's say that when the claims administrator is finished bumping back up to A and B status all the registered claims that were erroneously accounted for as C's, and correcting other mistakes, claims are not $1-plus million under, but $3-plus million over, the $11.8 million cap that would trigger the C Reduction. What's next?

What's next, under the Claims Administration Memorandum, is that the Defense Group (database companies and first-print publishers) gets to take a hack at challenging claims. And who will be advocating for the claimants whose potential settlement awards are being attacked? Why, the plaintiffs' lawyers, of course.

If those lawyers do their job with appropriate care and aggressiveness, then the disputed claims will be upheld and the settlement fund will be busted.

If those lawyers ease up, in order to rescue their discredited argument that the possibility of a C Reduction was "absurd," then they will not have discharged their fiduciary duty to the class.

The finest legal minds tell me that this is what is known as a conflict of interest. It is one more reason why the C subclass needed its own representation in this case. The lawyers, the writers' organizations, and the named plaintiffs never had an economic incentive to watch the backs of the C's. On the contrary, they were motivated to screw the C's. Which they did.

Do the Math: 400 writers x 20 'A' claims each = $12 M

A blog reader points out a much more elegant (if that's the word) way to visualize how not just the C subclass, but even many A's and B's, could left out in the cold by the UnSettlement:

If just 400 writers have 20 registered (Category A) claims each, they will swallow $12 million. Remember, the settlement fund claims cap is $11.8 million.

These are back-of-the-envelope numbers, of course. A class member gets $1,500 for each of the first 15 subject works for any given publisher, $1,200 for each of the next 15, and $750 thereafter.

But they make the point. Does anyone out there, lawyer or lay person, really think $11.8 million ($18 million less attorneys' fees and other costs) comes anywhere close to covering the decades-long willful infringement in this case that enabled the launch of the multibillion-dollar global electronic article database industry?

Is the Settlement Fund Already Busted?

We're in the middle of investigating the scenario of 11 writers who last year were recruited to submit declarations to the court in support of the settlement. All stated that they expected to receive this or that many thousands of dollars in C claims (non-registered). All may wind up getting zilch because, under the settlement, C claims are the first in line to get zapped if the settlement fund turns out to be too small to support the volume of claims that were filed.

We have presented this information to the 11 writers. If they weren't made fully aware of the implications of what they were signing, they should feel misused. If they were misused, and actually stand to gain little or nothing from the settlement, then we hope they will be motivated to do the right thing now: demand that the lawyers who drafted their declarations tell the truth to the class. What are the claim numbers? They should be published, not dribbled out at the convenience of a self-serving few who are slated to take their millions of dollars in fees off the top of the settlement fund, regardless of how others are impacted.

We know that the C Reduction is a real, live concern. We know this for several reasons.


The UnSettlement lawyers rescinded blue-sky statements about them in their briefs to the Court of Appeals.

Last year, in response to our objections to the district court, their line was that the C Reducton would never happen. In the recent appellate briefs they said there were "prima facie valid claims" totaling $10.76 million, or $1 million-plus below the $11.8 million number that would trigger the C Reduction. Now they've admitted that number is off by some unspecified amount.

It's hard to overstate the importance of this development. Lawyers arguing before appellate courts just aren't in the habit of adding information from outside the district court record (which is against the appellate rules in the first place) and building an entire argument around that info, then turning around and saying, "Oops." You can smell the stench all the way from Denmark.


The claim procedures give the lawyers complete control over the reporting of "interim" and "final" claims data.

Under the procedures of a claims administration memorandum appended to the settlement agreement, the claims administrator was told to flag as defective all claims submitted for A and B works (registered copyrights) that didn't include supporting documentation ... and temporarily count them as C claims.

And in the confusion of instructions to class members (many of whom submitted registration numbers only, not documentation, because that's what one of the associational plaintiff organizations publicly told them to do), many claims that will wind up counting as A's and B's did indeed get bumped down to C's in the initial -- or "prima facie valid claims" -- count. We know that the $10.76 million number is low; we just don't know how low, and the parties closely holding the information that would provide the answer aren't saying.


Even without all this mumbo-jumbo, we suspect that the settlement fund was under great strain to support claim payouts to the C subclass.

The evidence is anecdotal but compelling:

* From the get-go, a few named plaintiffs crowed about their windfalls. (See James Gleick quoted in the April 4, 2005, issue of The New York Observer.)

* An analysis of the copyright registrations of named plaintiffs, and others whom we know filed claims, indicates high levels of the senior, and much higher-paying, A and B claims, which would wipe out the C's. (Of particular interest are the named plaintiffs Mary Sherman and Paula McDonald, whom I've cheekily pegged the "Category B Goldust Twins.")

* Last year, and at the last minute, the parties amended the settlement agreement to grandfather in Amazon and HighBeam, two recently arisen infringing brands that use material supplied by the defendant database companies and their licensor newspapers and magazines. Under the amendment, many B claims have been elevated to A claims. Again, we don't know just how many because the lawyers are treating the claims data like their own private toolbox.

* We're getting credible reports that "omnibus" registrations of groups of articles were miscounted by the claims administrator. Some of the more prolific freelancers use a special form to register an entire year's output in one registration. In at least some cases, these omnibus registrations, covering 10 or 20 or 100 or more works, have been provisionally and mistakenly tabulated as only one claim.

Get the picture?

Sunday, July 23, 2006

Where Did the Lawyers Dig Her Up?

A blog reader below makes what I think are sensible observations about my exchange with Pamela Ferris-Olson (see previous post, http://freelancerights.blogspot.com/2006/07/mystery-of-incredible-shrinking.html). The speculation of "some hidden subtext here" is wonderfully dry understatement. I have a feeling that the Mystery of the 11 Incredible Shrinking Category C Declarants will not be going away soon.

The vast majority of freelancers covered by this agreement -- and its "affirmative" requirement for deleting material from databases -- are not members of the three writer orgs; and thus had no protection from the defendant claims because there was no one providing them with information. Thus, the "informed consent" necessary to conclude writers approved the settlement is false.

It appears to me this woman is either completely naive, or there is some hidden subtext here. My take on this is that the lawyers dug her up, called her up, and simply told her "It's this or nothing. So suppose we do the work for you, send you the letter and you sign it"?

In other words, she might have been completely unaware of alternatives, of the truth, that there was anyone fighting for her, etc. And the lawyers never told her about the opposition. So now, having made the decision and discovered she'd been misled, she doesn't want to admit it. (She gets regular work from a newspaper. So perhaps that also factors into it
.)

Friday, July 21, 2006

Mystery of the Incredible Shrinking Category C Claimant Declarant

A mystifying exchange with Pamela Ferris-Olson, a writer in Centerville, Ohio, has even the most seasoned Kremlinologists here shaking our heads.

Ferris-Olson freelances, principally for the Dayton Daily News. Last September she was one of 11 absent class members (that is, non-named plaintiffs) who filed almost identical declarations with the district court in support of the plaintiffs’ lawyers’ brief arguing for approval of the class-action copyright settlement. They all said, basically, the settlement is fair and reasonable, yadda yadda yadda, and here’s my personal stake in it.

Like the other 10, Ferris-Olson said she had a large number of claims in the “C” category (unregistered copyrights) and estimated her claim award under the proposed settlement. Ferris-Olson noted a total of 1,548 eligible works with expected compensation of $9,962.50.

In an email to Ferris-Olson, I pointed out that lawyers for both sides of the settlement were admitting that the settlement agreement’s “C Reduction” is in danger of kicking in.

Previously those same lawyers had mocked the objectors’ argument over the possibility of a C Reduction. This is a provision whereby, if claims exceed $11.8 million, payments for unregistered works would get reduced -- if necessary, reduced all the way to zero -- before the far less numerous and far higher-paying registered categories, A and B, get touched.

For a solid year the UnSettlement-meisters said, nah, there was no way the C Reduction would ever be triggered. The very idea was “absurd.”

Now they’ve changed their tune. As we speak, they’re trying to “correct” their briefs to the Second Circuit Court of Appeals.

All of which raises an obvious question for the 11 declarants of September 2005, who told the district court all about their anticipated windfalls for C claims. These amounts ranged from Ferris-Olson’s $9,962.50 to $22,000. (One of the 11 had registered claims in addition to unregistered ones, and projected a grand total of $110,000.)

My email to Ferris-Olson said: “I would like your reactions to this development. I think your concern should match that of the objectors, for two reasons. First, the claim award numbers cited above for each of you are clearly in jeopardy. Second, the information that formed the basis for your sworn statements to the court in September 2005 have [sic] been shown to be erroneous. Again, compare the previous assertions by the lawyers with the current data. Do you feel misused?”

In response, Pamela Ferris-Olson cranked and harumphed. She also railed against the excessive power of the bosses in the publisher-author relationship. Over the last dozen years I've learned that the latter is a ritual trope of tough-guy writers’ rights talk by people who don’t do anything about it.

Ferris-Olson did not, however, answer the question.

“I have always been unsure as to whether I’d ever receive compensation,” she said.

I told Ferris-Olson that I was dumbfounded by her answer. “Did you ask if you would receive the $9,962.50 cited as the estimate of your total claims (or any substantial fraction thereof) in the declaration drafted for you, and were you told, ‘Oh maybe, maybe not; who knows?’, and did you then decide to sign it anyway? Do you now intend to get further information from the lawyers on whether you are actually in line to receive this money, or whether the claims data show that the C Reduction will reduce or eliminate altogether your estimated claim award?”

Ferris-Olson: “I think the lawyers were open. They explained that if the settlement was finalized that the money would be paid out in the way you have outlined. They also explained that there might be delays which is what has happened. My lack of optimism comes from experience with past class actions. I’ve been a member of a ‘class’ dealing with everything from phone providers to clothing companies. I would be notified that I was a member and my participation netted literally a dollar or two or some trivial item such as a cookbook. The remainder of my low expectations come from the treatment freelancers receive from newspapers including pay. This made me particularly reluctant to fill out the detailed claim. It took a great deal of time and I expected I’d probably receive no compensation.”

Muchnick: “Delays caused by the grinding wheels of the court system are one thing; an active anticipation that the numbers would not play out pretty much as you outlined in your declaration is quite another. Please clarify. To paraphrase, the lawyers said in their court papers that the possibility of a C Reduction was a wild theoretical fantasy of the objectors. Now they are admitting otherwise. Did the C Reduction, and what that might mean for your claims and for the accuracy of the statements in your declaration, arise in the discussion and preparation of your declaration? That's my first question. My second question is: Given your lack of optimism that anything very useful would come out of the settlement, why did you give it your imprimatur by filing a declaration with the court in support of it?”

Ferris-Olson: “I hoped that I might receive something out of the settlement. If I had been totally pessimistic about the outcome I would not have invested multiple hours filling out the paperwork documenting my claim. I have never met any of the lawyers, other members of the class, or you. I am unaware of your agendas. I can still hope that someday I will see some form of compensation for the time I invested in submitting my claim. And, as long as I am making wishes, I’d like to get assurances that I would be paid a guaranteed standard for my work including compensation for the use of my creative property.”

Muchnick: “In your declaration to the court, you stated in conclusion (paragraph 5): ‘I believe the proposed settlement is fair, adequate and reasonable for me as a class member, and support final approval of the settlement and plan of allocation so that I can receive my share of the Settlement proceeds as approved by the District Court.’ Do you hold to the belief that the settlement is fair, adequate and reasonable, now that it is possible (according to the lawyers for whom you submitted this declaration) or quite likely (according to my own analysis of the sketchy claims data that those lawyers are closely holding) that your share of the settlement proceeds will be less than $9,962.50 -- maybe even zero? Finally, I understand that you’ve never met the lawyers in person. But you must have been contacted by somebody on the plaintiffs’ team to supply this declaration -- perhaps a representative of one of the associational plaintiff organizations, or a staff assistant at one of the lawyers’ law firms. Please enlighten me on how the contact came about. Or are you telling me that you simply stepped forward of your own volition, volunteered to write a supporting declaration for a settlement that you ‘hoped’ would turn out a particular way, and drafted and filed it all by yourself? You can draw whatever conclusions you want about the agendas of various players -- mine is transparent, published publicly at my blog.”

Ferris-Olson: “I am not interested in continuing this conversation …”

If form holds, Ms. Ferris-Olson now will proceed to get angry at your humble blogger for having chosen to share this information with the freelancers around the world who stand to be affected by her declaration -- a key piece of the public record whose very premise has been shown to be false, whether innocently or otherwise.

So be it. Like named plaintiffs Tom “I’m Mad As Hell And I’m Not Going to Take it Any More” Dunkel (http://freelancerights.blogspot.com/2005/09/tom-dunkel-is-mad-as-hell-and-hes-not.html) and Paula “Pinocchio” McDonald (http://freelancerights.blogspot.com/2005/09/paula-pinocchio-mcdonald.html), Ferris-Olson would better serve herself and the class by taking a hard look at the lawyers who concocted this farce, and at the writers’ organizations that rolled over for it.

Wednesday, July 12, 2006

Reviewing This Major Development

In response to the many inquiries we've received, let's review the implications of the new blockbuster development in the UnSettlement: the parties' acknowledgment that they filed misleading information with the Second Circuit Court of Appeals.

We'll have a pop quiz tomorrow. It's really not that complicated.



We objected to the settlement on -- among other grounds -- the structure that forced only the C's, or holders of copyrights that were not registered with the Copyright Office, to bear the entire risk of having claims reduced in the event the settlement fund became overloaded with claims. The trigger for the "C Reduction" (which even allows for the scenario that C claim awards get reduced all the way to zero) is $11.8 million in total claims. (The remainder of the $18 million settlement fund goes to lawyers and to the costs of mediation, notice, and claims administration.)

The other side said, effectively, "Don't worry. The C Reduction will never, ever happen."

In our appeal brief we reiterated our argument. In their opposition brief to the Second Circuit they said, most dramatically, "It would be absurd to reverse class certification on this ground, since the claim period expired last September and the submitted claims as reported by the claims administrator make plain that there will be no C reduction whatever, even if every claim asserted were valid." At various other points in their briefs the settlement parties called our point about the possibility of the C Reduction's kicking in "exceedingly remote," "inconceivable," and something which "as a factual matter" has "no chance" and "[n]o basis in reality."

To prove this, they then -- in violation of the Federal Rules of Appellate Procedure, which generally prohibit the introduction of new information from outside the lower court record -- told the Second Circuit that the claim administrator had reported to them "prima facie valid claims" totaling $10.76 million, more than $1 million below the C Reduction trigger.

The question then became, How were "prima facie valid claims" defined? It was clear from the claim administration memorandum (an exhibit to the settlement agreement) that the claim administrator, in this initial calculation, was supposed to reject A and B claims that were not accompanied by documentation of copyright registration, and to preliminarily count all such deficient claims as C's or unregistereds. This procedure was confirmed by the mailing that went out to so many of us, dinging us for failure to enclose documentation and telling us that, absent a cure of this defect by a new due date, the claims would be considered C's.

As you know, the lawyers then reversed themselves and did a new mailing saying, OK, so you don't need the actual documents, after all, just valid copyright registration numbers, and sorry for the inconvenience.

But they'd already given the court that figure of $10.76 million. As claimants proceed to provide the registration numbers and/or the documents requested, many, many, many claims -- we don't yet know how many -- that were busted down to low-paying C's will be elevated again to higher-paying B's or A's. So calling attention to the C Reduction was not a crazy, outlandish, wildly theoretical and academic speculation. Indeed, when all the precincts are counted it almost surely will be a living, breathing reality!

Lawyers for both the plaintiffs and the defendants ducked objectors' attorney Charles Chalmers' questions about this for more than a week. Then they admitted that the $10.76 million number was a mistake and, tacitly, admitted that it seriously misled the Court of Appeals. (We're currently investigating whether parallel misleading information was given to Judge Daniels of the district court as part of the basis for his approval of the settlement, but we don't have any conclusions on that yet.) The parties filed "corrected" briefs, a step so extraordinary that many experienced court observers are saying they'd never before seen such a thing, especially from law firms as highly regarded as the defendants'.

We're investigating the possibility of asking for sanctions against the other side. We're also looking into how to get the screwy process that led to the formulation of the $10.76 million number into the record for consideration of our appeal by the three-judge Second Circuit panel.

That's basically the story, except for one more crucial angle, which exposes why the named plaintiffs and their lawyers have a conflict of interest and why C claimants (by all accounts, more than 99 percent of the class) should have their own representation.

As noted, the $10.76 million figure will rise. We don't know by how much -- let's hypothetically say to $15 million. The next step will be a review of the claims by the Defense Group (the database companies and publishers). Under the procedures spelled out in the claim administration memorandum, they have a right to challenge claims.

In turn, the lawyers for the plaintiffs have a fiduciary duty to advocate for members of the class whose claims are challenged. That sets up an obvious conflict. If they aggressively support the C's whose claims are challenged, then they risk seeing the claim pool stay above the $11.8 million C Reduction trigger. The lawyers, and the named plaintiffs and the associational plaintiff writers' organizations, have staked their credibility on the argument that the C Reduction is an absurdity that could never, ever happen.

Which is why we reiterate our call for freelancers across the globe to contact the Authors Guild, the American Society of Journalists and Authors, and the National Writers Union, and demand that they be held accountable for this atrocity of a settlement.

Tuesday, July 11, 2006

'I Envision the Possibility of a Motion for Sanctions'

Here is the text of objectors attorney's Charles Chalmers' letter today to Charles S. Sims, co-lead counsel for the defendants, and Michael J. Boni, co-lead counsel for the plaintiffs.

Dear Counsel:

I would like to have a clear description of how the presentation of the erroneous information about claims value occurred. Your statements are cryptic. I am requesting a detailed explanation. The following questions indicate the types of information I would like to have.

1. What is the explanation from the Administrator for its failure to provide the calculation that you explicitly requested?

2. Have you received the reports called for by the claims memorandum?

3. Assuming that you have, it seems the number presented in the last report, covering all filed claims, would be very similar to the one you reported believing that it was a different calculation. Didn't anyone notice the similarity, and if not, why not?

4. Why didn't you tell me about the problem when I first raised the question, instead of waiting more than a week and providing it only when I threatened a motion.

I would also like to have a similar clear, detailed explanation about how the claims figures you each (Sims and De Bartolomeo declarations) presented about interim claims were developed. Chuck Sims' letter to me begs the question by referring to the Administrator. Mr. Boni has not provided me any answer. Again, these questions indicate the type of information I would like to know.

1. Were you receiving the Memorandum reports at that time, and were they being prepared as specified in the Memo?

2. Did you ask the Administrator for a different report, similar to what you describe for use in your appeal briefs?

I request that you obtain, if you have not already, the report from the Administrator that you thought you had for the appeal briefs, and provide it to me.

I am investigating the possibility of motions to the Court of Appeals regarding these matters. My analysis is not complete, but I envision the possibility of a motion to make your descriptions of what has occurred part of the record on appeal, and a motion for sanctions. I believe that the information I am requesting, or your refusal to provide it, will be relevant to such motions.

Sincerely,
Charles D. Chalmers

Monday, July 10, 2006

This Is What Happens When You Blog from the Front Seat of a Used Minivan

Several alert recipients of the email burst that was sent out a couple of hours ago helpfully point out that the cut-and-paste job there was incomplete. The blog item itself, and the link thereto, were fine, but the text stripped into my email included only LexisNexis lawyer Charles Sims' letter to the court of last Thursday. It cut off objectors attorney Charles Chalmers' letter of today.

To avoid making the same mistake twice, may I advise you just to go right to this blog link:

"UnSettlement Parties File 'Corrected' Briefs; Appellants Object to Irregularities"
http://freelancerights.blogspot.com/2006/07/unsettlement-parties-file-corrected.html

This is what happens when you blog from the front seat of an old Toyota Sienna, on the parking lot outside the Contra Costa College swimming complex, while your toddler is crawling all over you and your ten-year-old daughter is about to emerge from one of her final practices before this weekend's Junior Olympics meet in San Jose. (Her starts were much improved today, thank you very much.)

To quote the UnSettlement lawyers -- who made the comparatively trivial mistake of illegally filing outside-the-record information with the appellate court, and then said the information was wrong -- I "apologize for the inconvenience."

UnSettlement Parties File 'Corrected' Briefs; Appellants Object to Irregularities

Last Thursday the plaintiffs and the defendants filed "corrected" briefs with the Second Circuit Court of Appeals. The text of the cover letter to the court, from Proskauer Rose's Charles Sims, lawyer for defendant LexisNexis, is below. So is today's letter from objectors' attorney Charles Chalmers.

The problem here has been well developed in previous posts on this blog. The settlement parties will try to sell this as a little clerical error. Don't buy it for a second. Some experienced court observers have told me they have never seen a comparable misstatement of crucial information in a case at this level. Let's see what happens next.

+++++++++++++++

July 6, 2006

[Charles S. Sims to Roseann B. MacKechnie, Clerk, United States Court of Appeals for the Second Circuit]

Dear Ms. McKechnie:

Enclosed in advance of the due date, please find the original and ten copies of a corrected brief for defendants-appellees ("defendants") in this matter. Defendants previously filed their brief ahead of time on May 25, 2006.

Six sentences (and parts of four other sentences) in defendants' previously submitted brief were based on information we and plaintiffs' counsel believed to be reliable at the time. The information was post-judgment information provided by the official class action Claims Administrator, and the brief expressly identified it as such. We considered it appropriate to use the information in our briefs because we believed it would be useful to the Court in evaluating certain arguments of appellants. However, we have recently ascertained that we can no longer consider the post-judgment information reliable, and we therefore file this corrected brief.

The sentences and phrases struck from the previously-submitted brief have been discussed with counsel for the appellant, Charles Chalmers (as well as counsel for the plaintiffs-appellees). We believe that we have eliminated from the brief all post-judgment information about filed claims, as well as any assertions or arguments based on such information. [citations enumerated in a footnote]

We apologize for any inconvenience, and regret having to submit this superseding brief.

Very truly yours,
Charles S. Sims

cc: Charles Chalmers, Counsel for Appellants
Counsel for Plaintiffs-Appellees
Counsel for Defendants-Appellees

***************

July 10, 2006

[Chalmers to MacKechnie]

Dear Ms. McKechnie:

Appellants object to the filing of "Corrected Brief for Plaintiffs/Appellees" and the "Corrected Brief for Defendants/Appellees" without an authorizing order from the Court. There is no explicit provision in the Federal Rules of Appellate Procedure, or the Second Circuit Local Rules, for such a procedure. These briefs purport to replace, or "supercede," briefs filed seven weeks earlier, and to which Appellants have already filed a Reply Brief.

These are not simple corrections. They are significant revisions. The filing also presents a serious question. Are Appellants expected to now file a new Reply, responding to these revised briefs of the Appellees?

The circumstances leading to this situation are not fully explained by the letters to you. I have discussed changes to their briefs with appellees' counsel, but only in the context of a stipulation. Further, the changes do not arise from a self-initiated decision of the appellees, but from appellants bringing to light serious mistatements of fact in the Appellees' briefs.

Sincerely,
Charles D. Chalmers

cc: Julius Crockwell, by fax
All other counsel, by email

Thursday, July 06, 2006

Oh Say Can You 'C' the Problem: UnSettlement Lawyers in Scramble Mode

Over Fourth of July weekend, the class-action copyright settlement crossed what any reasonable observer would agree was the line between marginally flawed and untenable.

This process is illuminated by the texts of correspondence between Charles Chalmers, attorney for the objectors (who have appealed to the Second Circuit Court of Appeals), and the lawyers for the settlement parties. (For those of you who want to view the actual exchanges, including attachments, we will put up a link later today.
)

In subsequent posts, we'll interpret the legalese here. The implications are devastating for the settlement parties. They have admitted that they filed misleading information in their appellate briefs. And the misleading information is not trivial. In representations to the court, an as-yet-unknown quantity of claims was counted as low-payout Category C claims when they almost certainly will come out in the wash as higher-payout Categories A and B claims.

As a result, the $10.76 million figure that was supposed to comprise "prima facie valid claims" is a grave mistake. In fact, the total of claims will almost surely exceed $11.8 million, triggering what the parties had vowed would never happen: reduction -- possibly reduction to zero -- of all C claim awards. C's are 99-plus percent of the infringements in this case.

We also suggest you review our previous post, "Words of Wisdom from Jim 'Found Money' Morrison," http://freelancerights.blogspot.com/2006/07/words-of-wisdom-from-jim-found-money.html.

On to the correspondence:

++++++++++

June 20, 2006

Charles D. Chalmers [counsel for the objectors] to Charles S. Sims [counsel for defendant LexisNexis], Michael J. Boni [co-lead counsel for plaintiffs], and Gary S. Fergus [co-lead counsel for plaintiffs]

Dear Counsel:

Some of my clients (at least 5) have received letters from the Claims Administrator stating that their claim(s) are defective in some respect. They are given approximately 30 days to provide a correction. Please advise at the earliest possible time whether the claims of class members who have been sent, or will be sent, these notices are included in the term "prima facie valid claims" as used in the plaintiffs' brief. This request is urgent. If you can not respond immediately please reply today to indicate when your answer can be expected.

Sincerely,
Charles D. Chalmers

cc: All other counsel of record, by email

***************

June 20, 2006

Chalmers to Sims, Boni, and Fergus

Dear Counsel:

Following up on my letter of earlier today, I notice that a description of the eligibility for the A Category stated in a letter from the Claims Administrator is incorrect, and would tend to understate, possibly quite significantly, the value of A claims. (copy attached) Please advise with the same degree of urgency as to whether this is the definition that has been used by the Claims Administrator in the calculation of claims value stated in one or both of your briefs.

Sincerely,
Charles D. Chalmers

cc: All other counsel of record, by email

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June 21, 2006

Boni to Chalmers

Charles:

As to your two letters of yesterday, Mr. Sims is out of the country until next week, and we will respond when he returns.

Michael J. Boni

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June 21, 2006

Chalmers to Boni

Michael:

Your response does not seem appropriate or sufficient under the circumstances. I can not believe that Mr. Sims is the sole repository of the information that I requested. Surely others in his firm, or counsel for other defendants, or counsel for plaintiffs, either possess this information or can obtain it from the Claims Administrator.

I am currently considering, and beginning the preparation of, a motion to strike portions of the parties' briefs. See, Pereira v. Felzenberg (In re Felzenberg), 2000 U.S. App. LEXIS 34103, 1-3 (2d Cir. 2000). Before making the motion I will propose a stipulation for your very brief consideration. The portions of the briefs that I will seek to have stricken, if I decide to file the motion, are the statements that I am a "professional objector" and your references to information outside the record. You have asked to have the oral argument as soon as possible, a position which we support, so I believe this motion should be filed at the earliest possible opportunity.

Charles D. Chalmers

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June 21, 2006

Chalmers to Sims, Boni, and Fergus

Dear Counsel:

I request that you stipulate to strike the portions of the plaintiffs' and defendants' briefs that refer to me as a professional objector, and those portions of the briefs which state any information not in the record about the filed claims, or make any assertions or arguments based on such information. While the final decision has not been made, if you do not agree, or respond, it is likely that we will file a motion to strike.

Sincerely,
Charles D. Chalmers

cc: All other counsel of record, by email

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June 28, 2006

Sims to Chalmers

Dear Charles:

On behalf of the defendants, I am responding to your emails of June 20 (two) and June 21.

First, with respect to your comment that the Claims Administrator's letter reflects an inaccurate statement of the criteria for category A claim eligibility, we agree, but have been advised by the Claims Administrator that the error was textual only, and did not result in any deficiency letters being sent. No otherwise valid Category A claims have been rejected or diminished by reason of a registration on or after January 1, 2003.

Second, on reflection, we are agreeable to eliminating portions of the briefs which state information not in the record about the filed claims or make arguments and assertions based on such information. Attached please find the three affected pages, showing on pages 16, 21, and 25 (in brackets) the portions we've identified as based on information not in the record about the filed claims. We will shortly submit a new set of briefs, with those few sentences eliminated. We intended to identify all the passages fitting that category; if there are others you believe we've missed, please advise.

Very truly yours,
Charles S. Sims

cc: Michael Boni, Esq.

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June 28, 2006

Boni to Chalmers

Charles:

Plaintiffs-appellees join defendants-appellees' letter response to you earlier today, and we intend to take the same course of action as defendants-appellees.

Sincerely,
Michael J. Boni

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June 29, 2006

Chalmers to Sims, Boni, and Fergus

Dear Counsel:

I will pursue the stipulation next week. Below I note additional parts of the Defendants' brief that need to be stricken, and the places where plaintiffs need to propose their strikes. In the mean time, please respond to my letter of June 20th. As I read the settlement administration memorandum, the Administrator's initial review of the claims counted claims for registered works submitted without documentation as C claims. If that methodology resulted in the figures that you stated we have a problem beyond simply striking improper material from a brief.

If the figures that you disclosed are based on the memorandum, it is likely that the C Reduction has in fact been triggered. I know of numerous registration documentation notices that will result in proof of registration. I believe that you have an obligation to present correct information to the class and the Court to avoid a miscarriage of justice in a case where the Court has a particular duty, as do class counsel, to protect the class.

Defendants
The two lines (beginning with "Second" at the bottom of page 21; in ftnt 4, the "we are advised ..." phrase; Ftnt 5, the "all of which ..." phrase.

Plaintiffs
Page 13, and ftnt 7; ftnt 12; ftnt 15.

Sincerely,
Charles D. Chalmers

cc: All other counsel of record, by email

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June 30, 2006

Sims to Chalmers

Dear Charles:

With respect to your identification of additional phrases in the defendants' brief based on post-record information, we agree (with the immaterial exception that in the paragraph commencing at the bottom of page 21, we will retain the phrase "Second, at the threshold" and then eliminate through the word "because").

The balance of your letter addresses a query that concerns "plaintiffs' brief" and is therefore addressed to plaintiffs, not defendants. However, it is worth pointing out that the claims administration process is not nearly sufficiently advanced to draw any reliable conclusions whatever about whether, as you put it, "the C Reduction has in fact been triggered," or even whether that "is likely." Claims have not even been passed to the defendants and publishers for review, and we are some months from that happening, since the work required by the Claims Administration Memorandum is very far from completion.

Very truly yours,
Charles S. Sims

cc: Michael Boni, Esq.

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June 30, 2006

Chalmers to Sims, Boni, and Fergus

Dear Counsel:

I have Chuck Sims' letter of this morning. While the number itself is not in Defendants' brief, the following statement implies it: "It would be absurd to reverse class certification on this ground, since the claim period expired last September and the submitted claims as reported by the claims administrator make plain that there will be no C reduction whatever, even if every claim asserted were valid."

Although the question is not directly answered, I take Chuck Sims' statement, in the context of no direct answer to the question, as an admission that the value in the Plaintiffs' brief counted the registered claims that did not include documentation as C claims. That makes the various statements in the briefs of far greater concern than just presenting information that is outside the record. I will endeavor to avoid the possibility that any judge or law clerk assumes that a stipulation is simply based on your acknowledgement that citing information outside the record is not appropriate. I want them to know that the number is, or may be, wrong and that the real information carries the possibility that the C Reduction will be triggered.

I must have the truth immediately. I hope to receive from you both a clear explanation of the true facts today. I will not further delay any action that appears appropriate under the circumstances.

Sincerely,
Charles D. Chalmers

cc: All other counsel of record, by email

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June 30, 2006

Boni to Chalmers

Dear Charles:

Prior to the filing of plaintiffs-appellees' brief, the parties asked the claims administrator to calculate the aggregate potential value of the claims, i.e., before those claims are sent to the defense group for its scrutiny under the Claims Administration Memorandum. Contrary to our clear instructions, the claims administrator provided us with a value that excluded claims that were the subject of a deficiency or ineligibility letter. That included reducing to Category C Subject Works that were claimed as registered works but lacked documentation and/or a registration number. We learned of this only after the June 16, 2006 deficiency letters went out. (A subsequent letter has since gone out that clarifies the claimants' registration documentation obligations. See www.copyrightclassaction.com.)

When we learned what the claims administrator had done, we decided we would have to strike those portions of our brief that reflected the inaccurate data, and that is what we intend to do. Contrary to the suggestion in your June 29 letter, we would never consider withholding correct information, and have every intention of informing the Court of the reasons for our filing a modified brief.

At this point, we have insufficient data to conclude that the $18 million cap will be reached, and will not know this until after the claims have been examined by the defense group. It may well be that the prima facie claims with the deficiencies put back in will raise the number over $18 million, and even if that is the case, the number may yet go down after the defense group examines the claims. It goes without saying that whatever information we have that pertains to the issues before the Court, we will provide the Court with such information.

Sincerely,
Michael J. Boni

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June 30, 2006

Chalmers to Boni and Sims

Dear Michael and Chuck:

I will reflect on this. I am puzzled by your description of asking the claims administration for a certain calculation. If I correctly read the claims administration memorandum that calculation is exactly what the administrator is supposed to provide you, and has been providing you, without being asked.

I request that you, with the greatest urgency, advise me of exactly how, and when, you intend to advise the court as you describe. I do not, however, commit to waiting for your proposal, or your action.

I personally believe, as argued in our briefing, that you have misled the district court, and by extension the Court of Appeals, with respect to the scientific/medical issue and the C Reduction. In that context, you can imagine how skeptical, and concerned, I and my clients are by this development.

While I am sure to develop my thinking on this further, I have to initially note the following problem. You and your clients (your named clients) have staked your credibility in this matter on the C Reduction not occurring. Plaintiffs' counsel is supposed to advocate for claimants whose claims are challenged. There is a conflict. Moreover, a certain part, of potential great importance, of this claims process is obscured to the class, knownj only to the counsel for the parties, the defendants and publishers and the claims administrator. Under the circumstances, this is not acceptable.

Charles D. Chalmers

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July 4, 2006

Chalmers to Sims and Boni

Dear Counsel:

Do Ms. De Bartolomeo's and Chuck Sims' statements below about interim claims data contain the same flaw as the statements about final claims in your briefs? They refer to reports from the Administrator. (A 1482, paragraph 40; A 1571, paragraph 11.) The reports the Administrator was required to provide weekly would not reflect "registered" value for registered works if the proof of registration was not submitted. (A 384-385) If the statements (and related arguments in briefs (A 1450; A 1553) are thus misleading, what do you propose to do about that?

Is it true that some organizations, such as ASJA, or their representatives, such as Jim Morrison, encouraged class members not to submit documentation? Is that the reason you have reversed the request to class members to provide proof of registration? How many (measured in claims, not claimants) requests to provide proof of registration were sent out by the Administrator?

To correct the Defendants' brief would also require elimination of the "B." heading on page 24, and the first sentence of that section.

Sincerely,
Charles D. Chalmers

cc: All other counsel of record, by email

Tuesday, July 04, 2006

Words of Wisdom from Jim 'Found Money' Morrison

"Even for those of you, like me, who did not register stories in the early years, the settlement represents found money." -- Jim Morrison, The ASJA Monthly, May 2005

The lawyers now acknowledge that their representation to the appellate court of $10.76 million in "prima facie valid claims" was way off -- and in the process tacitly acknowledge that they've misled the district and appellate courts, as well as all of us.

The reason is that
the UnSettlement has a provision to trigger reductions of C Category claims -- those of subject works whose copyrights were not registered -- if total claims exceed $11.8 million. (The $18 million settlement fund has $6.2 million taken off the top for attorneys' fees and various administrative costs.) The A and B Categories (registered works) would remain untouched while C's get reduced, if necessary to zero.

In calculating "prima facie valid claims," the lawyers counted all the claims without registration documents as C's rather than A's or B's. Now they're saying never mind, in almost all cases you don't need registration documents, you just need to list valid registration numbers on the claim form. So many/most/almost all of the claims dinged for this defect will become A or B claims, and the $10.76 million figure will rise significantly.

Therefore, Jim Morrison's crowing of a year ago has been exposed as crow that must be swallowed whole, without condiments. The UnSettlement may very well be worthless to unregistereds.

Sunday, July 02, 2006

'This Case Is Not Even a Joke. It's a Fake Settlement'

From a blog reader:

This case has veered into the truly surreal.

My situation may be a little unusual, since I was employed by one of the defendants as an editor at the time of the infringement. After I left this defendant's employ, I consulted a copyright attorney.

I couldn't afford the 30-40K necessary to pursue my own claim, so I had the attorney write a letter to the employer-defendant. Their general counsel wrote back to say there was already a settlement underway.

So I made my C-Class claims by the deadline.

Now, I'm really struggling to get this straight. In a world where the FBI arrests movie-tapers for copyright infringement, my "recovery" from this alleged settlement may be nothing at all.

This case is not even a joke. It's a fake settlement from a fake legal system.