Saturday, August 05, 2006

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

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


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.



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