Thursday, August 03, 2006

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:/,, and It shortly will be viewable in a single file, at

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


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

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]


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