'License By Default' Will Doom the UnSettlement
Probably the number one reason is what we've dubbed the License by Default -- a provision giving the defendants the right to use, and allow others to use, the copyrights of all works covered by the settlement. Roughly, this consists of all freelance articles and content in hundreds, if not thousands, of newspapers, magazines, and journals from around 1980 to 1995 (along with some after that).
How did such a ludicrous and extreme provision come to pass? The purpose of class actions is to pursue claims held in common by members of the class. Under stringent conditions a class representative (named plaintiff) can indeed pursue and settle, and release, the common claims, with class members allowed to opt out if they don’t like the compensation. But class actions most assuredly do not exist for the purpose of giving away the rights or property of class members. The Second Circuit, our appellate court here, has previously stated: “The most fundamental principles underlying class actions limit the powers of the representative parties to the claims they possess in common with other members of the class."
The parties admitted that they had few current addresses for the freelancers of the 1980s and early 1990s. Some publishers had a hard time identifying which articles were freelance and which were staff. Thousands of freelancers will never have received the notice of this settlement. Copyrights last for about 100 years. Some of those freelancers have passed on, and the copyrights are now held by heirs or estates. Some are in hospitals or retirement homes. Some are probably the kind of people, like many of us, who see a class action notice in the mail and toss it, uninterested in processing pages of fine print just to turn a few bucks. Some may have read the notice and not realized the meaning of this provision – we complained that it was obscure at best.
Just imagine if you had to take the time to study carefully each class action notice because buried in it might be a provision saying that some items of your property will be turned over to a defendant. Maybe if you don’t opt out you pay the defendant $10 a year for ten years. Maybe the defendant utility gets the right to string power lines over your house. Do you want class actions to be able to do that to you?
What gave the parties here the nerve to present a settlement with a feature so patently improper?
Well, judges are busy and don’t spend much time reviewing settlements. This issue is legal and most objectors are not going to have the ability to spot it, or argue it.
But why did the Authors Guild, the American Society of Journalists and Authors, and the National Writers Union sign off on the License by Default? That's the question their members will have to ask.
Perhaps the organizations will respond that this was the only way to get compensation from the defendants. Such an explanation, however, won't cover the associational plaintiffs with honor: "In order to get compensation for some, we tried to give away the rights of all."
When you understand that a small group of named plaintiffs stand to walk away with nearly $2 million, and that group is influential in the organizations, you might be getting closer to the true explanation.
When you understand that all the organizations offer their memberships the potential for contacts with, or introductions to, the publishers who benefit from this settlement, you might be getting even warmer.
The legislative history multiplies this outrage. What led to the 2001 Supreme Court Tasini decision, and victory for freelancers, was a deliberate decision by Congress in the Copyright Act of 1976 to shift power from publishers of collective works like newspapers and magazines to freelancers. It wasn’t an accident.
Yet in the settlement we're challenging, the writers' organizations just rolled over and tried to turn that power right back to the publishers. But they won't succeed.