Don't Forget the Latest Deadline: August 31

Many class members, including myself and other objectors, last month received notices identifying alleged defects in our claims submissions. Many of these alleged defects had to do with a failure to provide documentation of copyright registrations -- something that the associational plaintiff organizations had assured all of us was unnecessary. Acknowledging the confusion, the claims administrator later set a new deadline of August 31 to cure all defects, and backed off on requiring registration documentation (in most cases, submission of a verifiable registration certificate number, which can be found at the Copyright Office website, is sufficient).

Those of you following the scandalously misleading information that the UnSettlement parties have been presenting to the courts (the district court last year, and the Second Circuit Court of Appeals this year) have a sense of how this little administrative sideshow was playing out -- until objectors' attorney Charles Chalmers exposed the shenanigans of the lawyers on the other side.

Meanwhile, though, in order to maintain your claims eligibility, it's important for everyone to complete and return your amended claims information. Remember, your package must be postmarked by August 31.

'Merits' Panel to Hear Motion to Strike 'Corrected' Briefs -- Victory for Objectors

The Second Circuit Court of Appeals has issued the following order on the objectors' motion to strike the briefs filed by the settlement parties in an attempt to "correct" their previous submissions, which included and made arguments on the basis of misleading information about the value of claims.

The Court said: "It is hereby ordered that the motion is referred to the merits panel / presiding judge."

In other words, the same judge, or three-judge panel, who will be considering our appeal of the approval of the settlement will be hearing our motion to strike. The consensus of legal experts is that this is a clear procedural victory for the objectors.

NWU Members to Leadership: Fire 'Our' Lawyers

Some National Writers Union members are asking the NWU leadership to fire their lawyers for misconduct, and support the objectors' appeal and oppose the settlement. This has become an issue in the current NWU elections.

We earlier noted language in the settlement agreement binding the associational plaintiffs (Authors Guild and American Society of Journalists and Authors, as well as NWU) to support of the settlement. But at least at the NWU, people are talking openly, if still internally, about what than really means in the context of the parties' misleading filings about the supposed practical impossibility of the C Reduction (now acknowledged by the parties to be a possibility, and asserted by us objectors to be a high probability).

(For background, see the recent information on this blog. For deeper background on dissatisfaction with class counsel, see Edward Hasbrouck's September 2005 blog post, http://hasbrouck.org/blog/archives/000812.html#more, which we referred to at the time here, "EDWARD HASBROUCK: LIES FROM 'MY' LAWYERS," http://freelancerights.blogspot.com/2005/09/edward-hasbrouck-lies-from-my-lawyers.html.)

The position of these NWU members (with which I obviously sympathize) is that the associations' decisions to remain supporters of the settlement, and retain current counsel, are continuing ones that could be changed at any time. The dissidents are asking, among other things, if their organizations could be held liable for the misconduct of their counsel, especially if the orgs are aware of it and fail to take corrective action.

C Reduction Isn't the Only Reason the UnSettlement Should Go Down

Outrage builds over the lawyers' bait-and-switch on the C Reduction, and that's a good thing. To review, the 99% of the class who have unregistered claims first were told that there was no chance their claim awards could be reduced, or reduced to zero. So were the courts. Now we're being told, well, maybe there is a chance. Yeah, I'll say there's a chance. Then again, they never promised us a rose garden.

At this point I'd like to take a brief pause to point out that the C Reduction deception is not an anomaly of the UnSettlement. Indeed, the whole deal is shot through with double-talk, legal legerdemain, and power-tripping solely for the benefit of the defense group. In every area small and large, the writers' organizations, the named plaintiffs, and their mouthpieces have taken the leverage they had with the 2001 Supreme Court Tasini v. New York Times decision, and proceeded to bury themselves and all of us.

Here's one of the most important of many other examples.

The notice to the class stated that no claims were allowed for "[works in] scientific and research-oriented medical journals." Yet scientific/medical works were clearly in the class definition, which covers all English language literary works. And the settlement agreement releases all claims for works within the class definition and grants a license for the copyrights in those works.

Long after our objections were filed, the plaintiffs said they never intended to release those claims, and unilaterally qualified them: "No claims shall be released with respect to works published in scientific or research-based medical journals."

Note the unexplained shift from the language of the notice, "research-oriented," to "research-based." Is an article in a popular magazine about the search for a cure for AIDS "research-based"? And while we're at it, are they talking about scientific journals or research-based medical journals -- or scientific medical journals or research-based medical journals?

It appears that the trick here is to exploit the old fault line between freelancers who make a living from their writing, and those who draw salaries from the academy and are motivated mostly to publish so as not to perish. There is no such explicit distinction in copyright law, and the slope is a slippery one. If the defense group intends to lock up the entire corpus of writings over the last generation in technical and scientific fields, then we're talking about a major piece of the history of our civilization.

But go ahead, plaintiffs, just give it all away and hope no one notices before you collect your obscene shares of a paltry settlement pot and your lawyers pocket their fees.

DECLARATION OF CHARLES D. CHALMERS

The objectors' motion to strike the settlement parties' "corrected" briefs is viewable at http:/muchnick.net/StrikePart1.pdf, http://muchnick.net/StrikePart2.pdf, and http://muchnick.net/StrikeMisc.pdf. It shortly will be viewable in a single file, at http://muchnick.net/MotionToStrike.pdf.

Below is the ninth and last in a series of excerpts from that document. (The exhibits to the Chalmers declaration are not posted here but can be seen in the facsimile version.)



1. I am counsel for the appellants.

2. In from October 2005 to March 2006 I engaged in extensive communications with Michael Boni, representing all plaintiffs, and Charles Sims, representing all defendants, regarding the content of the Appendix. They never said anything to me about presenting post-judgment information about class member claims to the Court.

3. Attached as Exhibit A are the portions of the Combined Reply of Appellants which are meaningless when read against the corrected briefs of the Appellees.

4. Attached as Exhibit B, which is sequentially paged for reference in the Memorandum, are true copies of correspondence (letters and emails) with counsel for appellees, and a letter from counsel for plaintiffs-appellees to the Clerk of the Court.

5. After I wrote to the Clerk urging that appellees' corrected brief not be filed, I was called by Julius Crockwell, the deputy clerk responsible for this case, and told his supervisor had decided to file the briefs and that my remedy was to file a motion to strike. He said the reason was the Clerk's office did not think it should be responsible for determining what is a true "correction."

6. Before I learned that the factual statements in the appellees' briefs were wrong I proposed a stipulation to strike them. That is shown in Exhibit B, p. ... I was concerned that the Court would actually think the issues were moot, even though I thought, and appellants argued in the Reply, that the figure demonstrated the error of the parties' "certainty" that the C Reduction would not occur. But I dropped the proposal after I learned that the factual statements were an understatement of the filed claims, and the value of the claims by the named plaintiffs. This information is very important to the appellants' position.

VIII. THE APPELLEES' ACTIONS AND EXPLANATIONS ARE QUESTIONABLE: 'Why Do They Refuse to Candidly Describe What Has Actually Happened?'

The objectors' motion to strike the settlement parties' "corrected" briefs is viewable at http:/muchnick.net/StrikePart1.pdf, http://muchnick.net/StrikePart2.pdf, and http://muchnick.net/StrikeMisc.pdf. It shortly will be viewable in a single file, at http://muchnick.net/MotionToStrike.pdf.

Below is the eighth in a series of excerpts from that document.



VIII. APPELLEES' ACTIONS AND EXPLANATIONS ARE QUESTIONABLE

Counsel for all parties went through the process of determining the record for a Joint Appendix in March 2006. (Declaration, Para. 2.) By that time the appellees' counsel had the last of the "initial claim award reports" required by the Memorandum which would state the final value of the claims except for defective but curable claims. They never mentioned supplementing the record. (Id.)

Appellees' counsel are experienced. They know that inserting outside-of-the-record facts in their briefs is improper, and sure to provoke close examination. Would they not have taken steps to insure the accuracy of the information? They knew that the proper procedure was to ask appellants for a stipulation.

The error allegedly made by the Administrator was plainly in front of them before they used the information. The mistake they say the Administrator made produced a report exactly like the one called for in the Memorandum, which they had received weekly throughout the claims period. The faulty $10.76 million figure had to be virtually the same figure they had received in the last weekly report after the close of the claims period. Is it believable that they did not observe this, thereby being alerted to the "mistake" of the Administrator.

Appellees did not reveal the error until challenged. Appellants' counsel asked if the figures were wrong on June 20th. (Declaration, Exhibit B, p. B 1.) He did not receive an answer until June 30th. (Declaration, Exhibit B, p. B 9-10.) The reason given for the delay was that counsel for the defendants was out of town. (Declaration, Exhibit B, p. B 2.) To get that answer he had to write:

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.

(Declaration, Exhibit B, p. B 8.) Prior to that, on June 28th, the plaintiffs and defendants tried to agree on the idea of a stipulation to strike the new facts without explaining whether they were right or wrong. (Declaration, Exhibit B, p. B 4-5.) Appellants' counsel responded to that:

[P]lease respond to my first 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.

(Declaration, Exhibit B, p. B 6.) Still it was two more days, and only after the threat quoted above, that appellees disclosed that the information was wrong.

The parties deny that appellants played any role in discovery of the error of the facts in their briefs. (Declaration, Exhibit B, p. B 17.) Yet, when appellants' counsel raised the question, counsel for plaintiffs-appellees said he could not answer because counsel for defendants-appellees was out of town. (Declaration, Exhibit B, p. B 2.) Ten days later, it is the same counsel for plaintiffs-appellees who provided the explanation. (Declaration, Exhibit B, p. B 9-10.)

This history is disquieting. Appellants asked for an explanation of these events. They posed several questions, including:

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?

(Declaration, Exhibit B, p. B 15-16.) The appellees refuse to answer or provide any information which would explain the events, saying it was an effort at "discovery." (Declaration, Exhibit B, p. B 17.)

The events arouse suspicion, and the matter is too important to ignore. The appellees say that appellants' counsel had nothing to do with their discovery that the information was wrong. That means they knew it was wrong before his letter of June 20th. Why did they delay disclosing it until June 30th? Why do they refuse to candidly describe what has actually happened? In light of the seriousness of what has transpired, and the circumstantial evidence that raises questions about appellees' actions and intentions, requiring a more detailed explanation is appropriate.


[Next blog excerpt: CHARLES D. CHALMERS DECLARATION]

VII. THE CORRECTED BRIEFS SHOULD BE STRICKEN

The objectors' motion to strike the settlement parties' "corrected" briefs is viewable at http:/muchnick.net/StrikePart1.pdf, http://muchnick.net/StrikePart2.pdf, and http://muchnick.net/StrikeMisc.pdf. It shortly will be viewable in a single file, at http://muchnick.net/MotionToStrike.pdf.

Below is the seventh in a series of excerpts from that document.



VII. THE CORRECTED BRIEFS SHOULD BE STRICKEN

The "corrected" briefs should be stricken. Should the Court permit the corrected briefs, appellants should be given leave to file a revised Reply.

Appellants believe that the proper procedure is to strike the corrected briefs, and allow appellees' explanations of the reasons the information is wrong to be part of the record. This is appropriate for these reasons:

1. These are highly relevant factual admissions. There is no prejudice to the appellees to have their original briefs stand, as they chose to make the statements. There is no prejudice to the Court, since the court is advised of how the first statements are flawed.

2. As it stands there is ambiguity about the record in this appeal. If the "corrected" briefs remain, the question is raised as to whether the statements by the appellees i their original briefs are still part of the record. Normally, if something is to be removed from the record, either in a trial court or a court of appeals, it is by a motion to strike.

3. It expedites this already substantially delayed appeal.

Appellants first thought that striking the outside-of-the-record facts was the appropriate step, and proposed a stipulation to do that. (Declaration, Para. 6.) This was before they were told that the facts were wrong. (Id.) The importance of the information, which confirms an even greater likelihood that the district court was misled about the possibility of the C Reduction, convinced them the information should stand in the record of this appeal. (Id.) They also believed that process would provide an opportunity to for a more satisfying explanation of why appellees presented outside-of-the-record information that turned out to be inaccurate.


[Next blog excerpt: THE APPELLEES' ACTIONS AND EXPLANATIONS ARE QUESTIONABLE]

VI. APPELLANTS SHOULD BE PERMITTED TO RELY ON APPELLEES' ADMISSIONS: '23 Named Plaintiffs Already Were Taking 13.5% of the Total Settlement'

The objectors' motion to strike the settlement parties' "corrected" briefs is viewable at http:/muchnick.net/StrikePart1.pdf, http://muchnick.net/StrikePart2.pdf, and http://muchnick.net/StrikeMisc.pdf. It shortly will be viewable in a single file, at http://muchnick.net/MotionToStrike.pdf.

Below is the sixth in a series of excerpts from that document.



VI. APPELLANTS SHOULD BE PERMITTED TO RELY ON APPELLEES' ADMISSIONS

The announcement that prima facie valid claims were $10.76 million, was a damning admission against the argument that plaintiffs agreed to the C Reduction because they were "certain" it would never occur. $10.76 is 91% of the $11.8 trigger for the C Reduction. Now, the admission that prima facie valid claims is some value greater than $10.76 million, possibly over $11.8 million, is an even stronger admission.

Another of appellees' outside-of-the-record factual statements is that the named plaintiffs as a group submitted 1,355 A claims, 155 B claims and 3,698 C claims. (Brief for Plaintiffs-Appellees, p. 35, ftnt 12.) This is directed to the objection that the named plaintiffs, who hold a substantial number of registered copyright claims, were unrepresentative of the 99% of the class who hold unregistered claims. Appellees argued that this claims information showed that the named plaintiffs had substantial unregistered claims and thus were sufficiently representative. In the Reply appellants showed that A claims of the named plaintiffs were worth approximately $1.6 million, while the C claims were worth about $185,000. (Combined Reply For Objectors-Appellants, p. 8-9.) They demonstrated that the named plaintiffs would suffer far more from a pro rata reduction if claims were greater than the settlement than they would from the C Reduction, even with their C claims. (Id.)

The fact that named plaintiffs had $1.6 million in registered claims is dramatic. We don't know the final number of total claims, but we do know that there were 1220 claims by September 13, 2005. (A 1541) Given the tremendous increase in value between September 13, 2005 and September 30, 2005, there must have also been a tremendous increase in the number of claims. But just using the 1220 figure, we see that 23 named plaintiffs, or 1.9% of the claims, would be taking 13.5% of the total settlement value.

The mistake disclosure shows that it is possibly far worse. This statement of the error in their "facts" is of explosive importance. The Claims Administrator reduced "to Category C Subject Works that were claimed as registered works but lacked documentation and/or a registration number." (Declaration, Exhibit B, pp. 9-10.) That means that the named plaintiffs' 3,698 C claims may really be much more valuable A or B claims. They may be entitled to much more than 13.5 percent of the settlement.

The factual disclosures by the parties support the appellants' arguments and they should be considered. It would deny the appellants' due process rights to prevent them from using these factual admissions against interest.


[Next blog excerpt: THE CORRECTED BRIEFS SHOULD BE STRICKEN]

V. THESE ARE NOT CORRECTIONS

The objectors' motion to strike the settlement parties' "corrected" briefs is viewable at http:/muchnick.net/StrikePart1.pdf, http://muchnick.net/StrikePart2.pdf, and http://muchnick.net/StrikeMisc.pdf. It shortly will be viewable in a single file, at http://muchnick.net/MotionToStrike.pdf.

Below is the fifth in a series of excerpts from that document.



V. THESE ARE NOT CORRECTIONS

This situation results from a flagrant violation of the Rules. The facts were outside the record. Fed. R. App. P. 10. Factual assertion without record references has been the basis for sanctions. Laitram Corp. v. Cambridge Wire Cloth Co., 919 F.2d 1579, 1583 (Fed. Cir. 1990)(sanctions for, inter alia, "statements of fact with no record reference; statements of fact for which there is no record; reliance on attorney argument and counsel's unsworn fact statements as 'evidence'"); see also, Ernst Haas Studio, Inc. v. Palm Press, Inc., 164 F.3d 110, 112 (2d Cir. 1999). The Rule provides for modification of the record in explicit ways, and requires all other questions regarding the content of the record to be present to the court of appeals. Fed. R. App. P. 10(e)(3).

These are revised briefs, not corrections. Appellants' Reply does not match these "corrected" briefs. Substantial parts will be meaningless when read against the "corrected" briefs. (Declaration, Para. 3, Exhibit A.) In fairness to the Court, as well as to appellants, if the new briefs by appellees stand, the appellants should file a new reply. This occasions both extra work, and delay.

Corrections are for incorrect citations to the record or legal authority* (* Plaintiffs-Appellees present a "release" argument based on a citation to Amchem Prods. Inc. v. Windsor, 521 U.S. 591 (1997). (Brief for Plaintiffs-Appellees, p. 28; Corrected Brief for Plaintiffs-Appellees, p. 28.) There is nothing in that opinion remotely like the citation, and Appellants pointed that out in their Reply. (Combined Reply For Objectors-Appellants, p. 24.) If truly interested in correcting their brief the Plaintiffs could have addressed that citation.), or the correction of a failure to observe the rules regarding required content or form. The Rules contain a strong indication that substantive corrections are not allowed without permission of the court. In the Rule dealing with the situation where briefs are filed before the appendix is prepared, the parties are allowed to submit new copies of their briefs citing to the appendix. Fed. R. App. P. 30(c)(2). The Rule states: "Except for the correction of typographical errors, no other changes may be made to the brief." Id. The Supreme Court is even more emphatic: "No other change may be made in the brief as initially served and filed, except that typographical errors may be corrected." Supreme Court Rule 26(4)(b).

It is the common practice in the courts of appeal that the filing of a corrected brief is done by order of the court. See, e.g., Cobell v. Norton, 2006 U.S. App. LEXIS 9322, *1-*2 (D.C. Cir. 2006); Tyler v. Missouri Highways and Trans. Comm., 160 Fed. Appx. 547, 2005 U.S. App. LEXIS 28553, **2 (8th Cir. 2005); Williams-Lindsey v. National Car Rental System, Inc., 2005 App. LEXIS 21697, *1 (7th Cir. 2005); Lyons v. Red Roof Inns, Inc., 130 Fed. Appx. 953, 957, 2005 U.S. Appx. 9272 (10th Cir. 2005); Ray v. Koester, 85 Fed. Appx. 983, 984, 2004 U.S. App. LEXIS 839, **2 (5th Cir. 2004); Julien v. County of Alameda, 46 Fed. Appx. 528, 529, 2002 U.S. App. LEXIS 20172, **3 (9th Cir. 2002); United States v. Arora, 43 Fed. Appx. 598, 2002 U.S. App. LEXIS 16138, **1 (4th Cir. 2002); Tan-Gatue v. Office of Pers. Mgmt., 44 Fed. Appx. 484, 2002 U.S. App. LEXIS 17918 (Fed. Cir. 2002).


[Next blog excerpt: APPELLANTS SHOULD BE PERMITTED TO RELY ON APPELLEES' ADMISSIONS]

IV. APPELLEES' FACTUAL STATEMENTS WERE WRONG: 'Value of Claims Is in Excess of $10.76 Million by Some Unknown Amount'

The objectors' motion to strike the settlement parties' "corrected" briefs is viewable at http:/muchnick.net/StrikePart1.pdf, http://muchnick.net/StrikePart2.pdf, and http://muchnick.net/StrikeMisc.pdf. It shortly will be viewable in a single file, at http://muchnick.net/MotionToStrike.pdf.

Below is the fourth in a series of excerpts from that document.



IV. APPELLEE'S FACTUAL STATEMENTS WERE WRONG

Appellants filed a Reply, addressing appellees' outside-of-the-record factual assertions. Appellants also objected, stating they would stipulate to supplementing the record with this information if it were "sufficiently complete and verified." (Combined Reply For Objectors-Appellants, p. 7.)

Thereafter appellants learned of actions by the Claims Administrator that called into question the accuracy of the claims value the parties stated in their briefs. Their counsel wrote to appellees' 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.

(Declaration, Exhibit B, p. B.1.)* (*"Declaration" herein refers to the accompanying Declaration of Charles Chalmers In Support of Motion.) Ten days later plaintiffs' counsel acknowledged that the information was wrong.

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 terms of the Claims Administration Memorandum. Contrary to our clear instructions, and unbeknownst to us, 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 valid 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.

(Declaration, Exhibit B, p. B 9-10.) (emphasis added)

This means that the value of the "prima facie valid claims" is in excess of $10.76 million by some unknown amount. The $10.76 million number was already inconsistent with the contention that the C Reduction had no chance of occurring because $10.76 is only $1 million less than the $11.8 million trigger. Coming within 91% hardly equates to "no chance" or "inconceivable." Plaintiffs' counsel captures the importance of this mistake: "It may be that the prima facie claims with the deficiencies put back in will raise the number over $18 million;..." By "over $18 million" he means in effect over the $11.8 million trigger. In other words Appellees state that the C Reduction may occur, instead of being "moot" or "absurd."

The special report plaintiffs' counsel received from the Administrator is exactly, or essentially, the "initial claim awards report" required from the Administrator, which counsel for plaintiffs and defendants received weekly until the end of the claims period. Like the "initial claim awards report" the special report understated the final value of claims.

The appellees filed "Corrected" briefs. These are the original briefs with the outside-of-the-record factual assertions, and related arguments, deleted and other changes made to adjust for the deletions. Appellants wrote to the Clerk opposing this filing but their counsel was advised by a deputy clerk that the Clerk's Office had decided to file the "corrected" briefs, and that appellants' remedy was a motion to strike.* (* The Deputy Clerk explained that the Clerk's Office did not feel that it should be responsible for determining what was, or was not, a "correction" as opposed to a revision. Declaration, Para. 5.)


[Next blog excerpt: THESE ARE NOT CORRECTIONS]

III. CLAIMS ADMINISTRATOR'S REPORTS: 'Feature in the Possibility That the Parties Have Misled the Courts'

The objectors' motion to strike the settlement parties' "corrected" briefs is viewable at http:/muchnick.net/StrikePart1.pdf, http://muchnick.net/StrikePart2.pdf, and http://muchnick.net/StrikeMisc.pdf. It shortly will be viewable in a single file, at http://muchnick.net/MotionToStrike.pdf.

Below is the third in a series of excerpts from that document.



III. THE CLAIMS ADMINISTRATOR'S REPORTS

The claims administrator is required by the settlement to provide reports to the plaintiffs and defendants about the claims. (Claims Administration Memorandum, ("Memorandum") (A383 - 387) It requires the Claims Administrator to "compute an initial per claim damage award per Subject Work." (A384, Para. 3.a.) A claim must provide documentation of copyright registration to be eligible for the A and B categories [higher value claims] in this initial computation. (Id. Para. 3.a.i. and ii.) This point is the key to a great sense of disquiet that arises when one considers the events addressed by this motion. This Administrator report presents, by definition, a lower value than "prima facie valid claims" definition. It is a lower number because the registration documentation defect is curable. The Claims Administrator was to e-mail a weekly report to the counsel for plaintiffs and defendants stating this "computation of initial claim awards." (A385, Para. 3.a.v.) For the rest of this memorandum, movants use "initial claim award reports" to refer to this Administrator's report.

The importance of the initial claim awards reports is described below, as it features significantly in the possibility that the parties have misled both this Court and the district court. The single most important aspect of the reports is that they, by definition, would understate the value of initial claims, by not counting claims for Categories A and B if the required registration documentation was not present. But this is a curable defect, so it is not a proper indication of total claims value.


[Next blog excerpt: APPELLEES' FACTUAL STATEMENTS WERE WRONG]

II. BACKGROUND: 'They Said That $10.76 Million Was as High in Value as the Claims Could Ever Be'

This is the second excerpt of the objectors' motion to the Second Circuit Court of Appeals to strike the settlement parties' "corrected" briefs. The introduction to the motion is in the previous post. A facsimile of our brief is viewable in three parts (http:/muchnick.net/StrikePart1.pdf, http://muchnick.net/StrikePart2.pdf, and http://muchnick.net/StrikeMisc.pdf) and in a few days will be viewable in a single file, http://muchnick.net/MotionToStrike.pdf.


II. BACKGROUND

This is an appeal of a class action settlement approval. A settlement provision called the "C Reduction" figures prominently. Appellants, objectors to the settlement, objected to it and argue on appeal that it is unfair and evidence of inadequate representation of the class. (Brief for Objectors-Appellants, pp. 15-16, 26-31.) Appellees (plaintiffs and defendants) defended the C Reduction below by asserting their certainty that it would never be implemented. "[T]he risk is exceedingly remote." (A490) "[N]o basis in reality." (A611) "As a factual matter there is no chance ..." (A1446) "[I]t appears inconceivable ..." (A1571)

The C Reduction reduces the compensation of one of three compensation categories, the C category, if the total value of all claims for three categories (A, B & C) exceeds the net settlement amount available for claims. That amount is the "trigger" and it is $11.8 million. The total settlement is $18 million, but $6.2 million goes to attorneys' fees, claim administration, and cost of notice to the class.

The plaintiffs and defendants filed separate briefs. Both stated the total, final value of all class member claims, assuming the claims to be valid. They said the value of all "prima facie valid claims" was $10.76 million. (Brief for Plaintiffs-Appellees, p. 13, footnote 7; Brief for Defendants-Appellees, pp. 16, 25.) The parties made strong arguments based on these new facts. Defendants argued:

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.

(Brief for Defendants-Appellees, p. 25.) Defendants confirmed that the meaning of "prima facie valid claims" is "if every claim asserted were valid" in the above quote. In other words, they asserted that $10.76 million was as high in value as the claims could ever be. Plaintiffs said these facts made the C Reduction argument moot. (Brief for Plaintiffs-Appellees, p. 37, ftnt 15.)


[Next blog excerpt: THE CLAIMS ADMINISTRATOR'S REPORTS]

I. INTRODUCTION: 'Without Action by This Court There Will Be a Miscarriage of Justice'

As noted earlier, the objectors' motion to strike the settlement parties' "corrected" briefs -- which attempt to write out of the record previously filed, devastating information about the likelihood of a C Reduction -- is viewable at http:/muchnick.net/StrikePart1.pdf, http://muchnick.net/StrikePart2.pdf, and http://muchnick.net/StrikeMisc.pdf. In a few days, when your humble blogger returns from a family vacation at Yosemite, we'll consolidate this files into a single document, viewable at http://muchnick.net/MotionToStrike.pdf.

We're now running on this blog, in serial form, the full text of our brief.



I. INTRODUCTION

Extraordinary events have occurred. Without action by this Court there will be a miscarriage of justice, so appellants frame the issues in this motion to strike the "corrected" briefs of the appellees.

Appellees' briefs, before "correction," contain statements of post-judgment, outside-of-the-record facts. The facts are the total value of class member claims against the settlement, and the number of named plaintiff claims in the different compensation categories. Appellees said these facts rendered the appeal "absurd" and moot. Then Appellants questioned the accuracy of the facts and Appellees admitted they are wrong. They then filed "corrected" briefs, excising the facts and related arguments.

The facts, and appellees' explanation for the error, are dramatic admissions that demonstrate that the parties misled, intentionally or mistakenly, the district court. These admissions should be considered on the appeal. These events raise the specter of bad faith by the appellees and they refuse to dispel this cloud on the judicial process with a candid explanation.


[Next blog excerpt: BACKGROUND]

OBJECTORS FILE MOTION TO STRIKE 'CORRECTED' BRIEFS; 'MISCARRIAGE OF JUSTICE' FEARED

CONTACT: info@muchnick.net

COURT ASKED TO STRIKE ‘CORRECTED’ BRIEFS IN AUTHORS’
COPYRIGHT SETTLEMENT APPEAL; ALTERNATIVE WOULD BE
MISCARRIAGE OF JUSTICE, WRITER-OBJECTORS SAY

NEW YORK, August 1, 2006 – Objectors to a copyright class action settlement for freelance authors today asked the Second Circuit Court of Appeals not to allow electronic database operators, newspaper and magazine publishers, 22 named plaintiffs and three writers’ organizations to file “corrected” briefs omitting information that indicates they misled the courts, as well as the class of freelancers around the world, about a key aspect of the settlement.

In a “motion to strike,” the objectors said that without appropriate action “there will be a miscarriage of justice” in consideration of their appeal of last year’s approval in district court of a settlement that would total $10 million to $18 million (including attorneys’ fees and the costs of mediation, class notice and claims administration).

Attorney Charles D. Chalmers filed the motion on behalf of Irvin Muchnick and nine other writers. The objectors’ brief and supporting documentation are viewable at http://muchnick.net/StrikePart1.pdf, http://muchnick.net/StrikePart2.pdf, and http://muchnick.net/StrikeMisc.pdf. (The papers are divided into three files due to technical scanning problems. In the near future they will be combined into a single clean file and available for download at http://muchnick.net/MotionToStrike.pdf.)

The history and ongoing news of the objections are published at Muchnick’s blog, http://freelancerights.blogspot.com.

The objectors challenge many aspects of the settlement, but the current motion focuses on an admission by the settlement parties that they were mistaken in telling the appellate court, in their original briefs, that “prima facie valid claims” in the case totaled $10.76 million. Due to a technical point of the claims administration process, which is explained in the Chalmers brief and accompanying declaration, that figure actually projects to be considerably higher and, indeed, is likely to be in excess of $11.8 million. If the total claims value does exceed $11.8 million, then a provision of the settlement will be triggered whereby the claim awards of holders of unregistered copyrights are reduced, possibly even to zero.

Both sides of the settlement have stated that unregistered copyrights constitute more than 99% of the potential claims in this case. Throughout the litigation of the objections, and in their original appellate briefs, the electronic and print publishers and the authors’ groups (the Authors Guild, the American Society of Journalists and Authors, and the National Writers Union) had repeatedly dismissed the objectors’ arguments about the possibility of such a reduction as “absurd.” Now, in the absence of the striking of “corrected” briefs, undisputed evidence to the contrary would be suppressed.

“The facts, and the opposition’s less-than-credible explanation of their error, demonstrate that the parties misled the district court, intentionally or mistakenly,” Muchnick said. “These admissions should be considered on the appeal. They raise the specter of bad faith by the appellees, who refuse to dispel this cloud on the judicial process with a candid account.”

Muchnick added: “On behalf of freelance authors everywhere – even the many who have a hard time understanding exactly what is going on – I want to thank attorney Charles Chalmers for his brilliant work. In desperate ad hominem attacks, the settlement parties have attempted to characterize Mr. Chalmers as an ethically challenged ‘professional objector’ who extorts fees. In light of their own malfeasance here, those smears are ironic. In fact, Mr. Chalmers represents a group of ‘beneficial objectors’ who are trying to undo, before it’s too late, the worst sellout in the history of writers’ rights.”

Irvin Muchnick has written hundreds of articles for many major magazines and newspapers. He also is author of the forthcoming book Wrestling Babylon: Piledriving Tales of Drugs, Sex, Death, and Scandal (ECW Press). From 1994 to 1997 Muchnick was assistant director of the National Writers Union and founding administrator of the NWU’s collective licensing agency, Publication Rights Clearinghouse. From 1997 to 2001 he was a litigation consultant and helped extract a $7.25 million settlement from the now-defunct UnCover article delivery service in Ryan v. CARL, which is believed to be the only successful use of the class-action vehicle in a copyright case on behalf of authors.

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