'A Tree Falls in the Media Forest'

This is republished from the March 12 edition of Beyond Chron, the San Francisco online alternative daily newspaper. The link to the original is http://www.beyondchron.org/articles/Freelance_Writers_Class_Action_Settlement_A_Tree_Falls_in_the_Media_Forest_4285.html.

Freelance Writers’ Class Action Settlement: A Tree Falls in the Media Forest

by Irvin Muchnick, 2007-03-12

Last Wednesday, at the Ceremonial Courtroom of the Second Circuit Court of Appeals in Lower Manhattan, the latest chapter played out in one of those important stories, involving the economic interests of major media companies, that you never seem to read or hear about.

This was the oral argument hearing in an appeal by a group of freelance writers, led by myself. We’re objecting to the approval two years ago, in U.S. District Court in New York, of a massively comprehensive settlement of a set of class action cases. The consolidated case bundled claims that just about every newspaper and magazine publisher in the land, along with their electronic database company partners and licensees, had been blatantly and systematically infringing freelancers’ copyrighted works for, oh, the last 20 years or so.

For their trouble, the writers were to receive, after the subtraction of attorneys’ fees and claims administration costs, a grand total of less than $12 million, divvied up in a multi-tiered claim structure with awards as low as $5. In return, class members would grant rights in perpetuity to the defendant publisher-infringers to reuse not only those articles with directly settled claims, but also the works of the tens or hundreds of thousands of other writers around the world who either didn’t get wind of the settlement or didn’t bother to study the settlement’s dense legalese and to complete its burdensome claims paperwork.

In short, it’s an unprecedented sellout both of independent creators and of the public – one enabled, no less, by the brain surgeons at the Authors Guild, the American Society of Journalists and Authors, and the National Writers Union (where I served as assistant director from 1994 to 1997), the so-called “associational plaintiffs.”

If the Second Circuit, in the coming months; rules favorably on our appeal – throwing out the settlement or sending it back to the district court – I don’t advise straining your eyes in search of in-depth coverage in The New York Times.

The fundamental issue of the case is the repackaging of old journalism in new products: LexisNexis, Dialog, searchable website archives, FindArticles, HighBeam, and others. Appropriating the mantle of public librarians, the for-profit enterprises that built these products say that they are merely facilitating access to information in the brave new digital world. They add that they were shocked, shocked, when their actions were held to be illegal in a 2001 Supreme Court decision, Tasini v. Times. By a 7-to-2 majority (including both Antonin Scalia and Ruth Bader Ginsburg), the court held that the remarketing of individual articles was nothing like, say, microfilm preservation of entire back issues of newspapers and magazines, and that the Copyright Act of 1976 could in no way, shape, or form be construed to the contrary.

Half accurately, publishers also say that this problem is prospectively moot because, in the interim, their lawyers drafted new contract language, which has been shoved down the throats of almost all freelancers, trumping the defaults of copyright law that entitle authors to a fair share of the future secondary-rights revenues derived from the exploitation of their works.

These are scoundrels’ arguments and you shouldn’t buy them for a second. (While you’re at it, be sure to reserve a special suite in purgatory for Ken Burns, the foundation-pandering middlebrow PBS documentary maker who took the side of corporate publishers on the essential question of whether new technology should be used simply to consolidate their power and profits, or to intelligently redistribute them. Throw in some more reservations for literary luminaries like E.L. Doctorow; either clueless or corrupt, Doctorow lent his imprimatur to the authors’ organizations as a “named plaintiff,” and refused to do the right thing even after being handed chapter-and-verse evidence of how those groups were manipulated by their lawyers into throwing away their members’ leverage and accepting an atrocious deal.)

As anyone who has read my article “Crass Action: Confessions of an Internet Avenger” (http://crassaction.muchnick.net) or my ongoing blog “Freelance Rights” (http://freelancerights.blogspot.com) knows, I don’t regard as easy the technical questions of how best to open up newspaper and magazine archives to the masses via the marvelous new tools of the Internet. But I do know one thing: the parties ultimately on the side of consumers and citizens – the ones fighting against price-gouging, the exacerbation of a two-tiered information society, and the doctoring of history – aren’t the guys at Reed Elsevier, owner of LexisNexis. That company’s outside counsel is playing point for the defense group as it tries to prop up this shaky edifice of a settlement, and developments during our objections and appeal demonstrate that they’re not above airbrushing the very record of this case in their efforts to pull a fast one on the courts and the public.

In any event – and for the benefit of those of you who are wondering if I’m averse to compromise – a ready technical solution exists in the form of a reasonable mechanism to collect and disperse royalties to creators. They’ve been doing precisely that in the music industry for decades, since shortly after the advent of recording equipment, via ASCAP. Noting the commissar-like overkill of today’s ASCAP regime, the lack of marketplace power and cultural capital of freelance journalists in comparison with hit music composers, and the priority of maxing out on the democratizing potential of the cyberspace revolution, I believe the writers’ version of ASCAP should be kinder, gentler, and more flexible.

But trust me, the multinational media corporations that are just now learning how to flex their muscle on the web ain’t interested in kinder and gentler. They’re interested in all the traffic will bear. Otherwise they’d be putting resources into good-faith negotiated solutions instead of into creating ever-more-audacious new infringing facts on the ground, even as they devise ways to run out the clock on their slam-dunk liabilities. An honest back-of-the-envelope calculation of damages runs into the hundreds of millions, if not billions, of dollars.

The appellants’ attorney, Charles Chalmers, operates alone out of a tiny office in West Marin. For executing a brilliant legal assault on this and other outrages of the class-action system – and because no good deed goes unpunished – Chalmers has been vilified as a “professional objector.” In fact, he’s an ex-corporate law firm practitioner who has dedicated the last years of his career to correcting what no objective observer could deny has become a serious warp in American litigation. Chalmers’ business model is as straight-shooting as it is unsentimental: If he improves a settlement, he applies to the court for his fees (often jousting in the process with the original plaintiffs’ counsel who have overbilled for shoddy work); if he loses, he loses.

Even as I type, I can hear the bleats of protest from the self-styled good guys ricocheting through the ether. Bleat away. These are people who don’t understand; who think it’s better to be a professional doormat than a beneficial objector.

Irvin Muchnick’s new book, “Wrestling Babylon: Piledriving Tales of Drugs, Sex, Death, and Scandal” (ECW Press), is having a launch event at Berkeley’s Black Oak Books on March 27, with special guest Josh Kornbluth, the monologuist and KQED-TV talk show host. For more information, see http://wrestlingbabylon.com.

Co-Objector Judith Trotsky's Report on the Second Circuit's March 7 Hearing

by Judith Trotsky

(May be reproduced only with permission from, and attribution to, the author.)


The March 7 oral argument on the appeal by the objectors of the district court's approval of the class action copyight settlement began with a sound of distant thunder in the Court.

At the outset, Judge John M. Walker declared that he and Judge Ralph Winter -- who participated in the Hearing at an offsite location -- were themselves members of Class C: both had written numerous articles now appearing in databases: none of these were registered with the U.S. Copyright office. Since they would waive any payment, should they recuse themselves? Though Walker indicated the Court would have to research the question, some minutes later publishers' attorney Charles Sims counseled the Judge that there "was no need. If you have not already filed a claim, that train has passed."

(Authors who have not filed will not be paid; and, under the Settlement Agreement, their work now can be licensed non-exclusively forever, with no payment, in any database.)

Though lengthy written briefs already had been submitted by both sides, time-limited oral arguments were heard on just a few points with, as is procedure, the jurists acting as interlocutors.

- Jurisdiction: if authors who have not registered their work have no standing to file copyright lawsuits in federal court, would a federal court have jurisdiction over an appeal of a settlement offered to those authors, as well as to those who have registered?

Perhaps. The lawsuit was not over copyright but over payment, commented one jurist. As a result, "all class members have standing" in Federal Court. Later in the proceedings, Judge Chester Straub raised the question again, though no final determination was made.

- The conflict of interest between "A" and "B" class members, those who had registered timely -- or late -- and the "C" class, whose authors had never registered any of their work at all.

Objectors' attorney Charles Chalmers was the first to speak, and it was he who brought the Court's attention to the conflict of interest between authors who had "A" and "B" registrations, and those in the "C" class . Was there adequate representation of the latter if the same attorneys were negotiating for all?

Chalmers illustrated the financial effects by citing substantial differences in the manner in which compensation was calculated. Depending on the publication date, C-class members would receive a declining, fluctuating percentage of their original writing fees. However, members of the B class would receive a flat percentage; and, for both A and B material, payments were very much larger than that made to Class C.

That argument prompted a question -- and an observation -- from Judge Walker: since this was the case, should C category Plaintiffs have had separate counsel? B and A gains were so much greater they "outweighed C's, so that therefore they were compromised."

- Chalmers also contested the settlement requirement that those objecting to it must appear in person in Court during the approval hearings. Since the Settlement Agreement includes freelancers whose work has been printed worldwide in 26,000 publications, should this requirement to appear in person be applied "to people from India, Russia, China" as well?

Those who opposed the appeal were represented by Michael Boni (for the plaintiffs) and Charles Sims (for the defendants). Boni, one of the attorneys who negotiated the sgreement for writers, explained that the settlement -- which took three years to hammer out -- was "fair" to all writers. Emphatically, he insisted that, in spite of repeated exhortations to do so, most would not register their works.

Further, the disparity between the payments to "A" and "B" class members also was equitable, "because the requirement to prove damages (for the latter class) was difficult." A still-larger decrease, the payment per unregistered article, also included additional subtractions for longer postings, "since older works are less valuable and are not accessed as much."

Nonetheless, Boni argued, in spite of the payment differences, there was no conflict of interest, or "battle," between "A" and "C" class authors. One judge disagreed, noting forcefully that the battle would have been between the lawyers if writers of unregistered works -- in the "C" class -- were represented by counsel of their own.

The question of "C" class representation came up again when publisher attorney Sims rose to speak

Sims first assured the judges that the feared "C reduction" clause would not kick in: Claims Administrators had now supplied information that there would be enough money in the settlement to pay "C" claims too.

Sims also argued that separate representation of C claimants was unnecessary: lawyers who represented writers in first two classes also adequately represented the third. Their clients would not have a conflict against their own interests, since most claimants had both registered and unregistered material.

"Where is the record that says that?" asked the judge. Though Boni and Sims insisted there was one, no citation was supplied in Court.

In his rebuttal, Chalmers contested the assertion that most writers had both registered and unregistered material, noting that the plaintiffs themselves had supplied declarations from class members who had no "A" and "B" registrations.

Further, Chalmers reminded the court that, throughout the case, both the publishers and the writers' organizations repeatedly stated that a vast majority of class members never registered any of their work; and, in fact, those assertions had been made again that day.

The hearing concluded, the judges announced they would render a decision at a future, though unspecified, date.

--##--

Bios of the Judges at the March 7 Hearing

The Second Circuit Court of Appeals has impaneled the following three of its judges to consider our appeal of the approval of the freelance writers' class action copyright infringement settlement. Oral argument is next Wednesday, March 7, in New York.

The experts with whom I've consulted agree that we have drawn a distinguished -- one might even say blue-ribbon -- panel.

***

RALPH K. WINTER

He was appointed United States Circuit Judge for the Second Circuit on December 10, 1981 and entered on duty January 5, 1982. He received a B.A. degree from Yale College in 1957 and an LL.B. degree from Yale Law School in 1960. He served as a law clerk to Judge Caleb M. Wright, Chief Judge, U.S. District Court, Delaware, 1960-61, and to Judge Thurgood Marshall, U.S. Court of Appeals, Second Circuit, 1961-62.

Judge Winter was a full-time member of the Yale Law School Faculty from 1962 until entering judicial service. At the time of his appointment, he was the William K. Townsend Professor of Law. He was also a Consultant to the Subcommittee of Separation of Powers, Committee on the Judiciary, U.S. Senate from 1968 to 1972, a Senior Fellow, The Brookings Institute, Washington, D.C. from 1968 to 1970, a John Simon Guggenheim Fellow from 1971 to 1972 and an Adjutant Scholar, American Enterprise Institute from 1972 to 1981.

He served from 1987 to 1992 as a member of the Judicial Conference Advisory Committee on Civil Rules. He served as Chair of the Judicial Conference Advisory Committee on the Rules of Evidence from 1992 to 1996. From July 1, 1997 to September 30, 2000, Judge Winter served as Chief Judge of the U.S. Court of Appeals for the Second Circuit. In April 1998, he was appointed to the Executive Committee of the U.S. Judicial Conference. From October 1999 to September 2000, he served as Chair of the Executive Committee. On October 1, 2000, he took Senior Judge status.

Judge Winter has received the Connecticut Law Review Award, Honorary Doctors of Law from Brooklyn Law School and New York Law School, the Federal Bar Council's Learned Hand Award for Excellence in Federal Jurisprudence, and the Yale Law School's Association's Award of Merit.

***

JOHN M. WALKER, JR.

At the time of his appointment to the Court in 1989, he was a United States District Judge in the Southern District of New York.

Judge Walker received his B.A. degree from Yale University in 1962, and his J.D. degree from the University of Michigan Law School in 1966.

Judge Walker served in the U.S. Marine Corps Reserves from 1963 until 1967. From 1966 until 1968, he was State Counsel to the Republic of Botswana under the aegis of an Africa-Asia Public Service Fellowship. Judge Walker was a private law practitioner in New York from 1969 to 1970. From 1970 to 1975 he served as an Assistant United States Attorney in the Criminal Division, Southern District of New York. In 1975 he returned to private law practice with the New York firm of Carter, Ledyard & Milburn, where he was initially an associate and later a partner. In 1981 Judge Walker became Assistant Secretary of the Treasury, responsible for policy in law enforcement, regulatory, and trade matters, and with oversight of the Customs Service, Secret Service, Federal Law Enforcement Training Center, Bureau of Alcohol, Tobacco and Firearms, and the Office of Foreign Assets Control. Judge Walker remained in this position until 1985, when he became a United States District Judge for the Southern District of New York.

Judge Walker has served as Special Counsel to the U.S. Administrative Conference (1987-1992), president of the Federal Judges' Association (1993-1995), and member of the Budget Committee of the Judicial Conference of the United States (1991-1999). He has been a Visiting Lecturer at Yale Law School since 2000; an Adjunct Professor at NYU Law School since 1996, and Director and on the faculty of NYU Law School's Institute of Judicial Administration and Appellate Judges Seminar since 1992. Judge Walker has also been a Director of the U.S. Association of Constitutional Law since 1997. Judge Walker is married with a daughter and three stepsons.

***

CHESTER J. STRAUB

At the time of his appointment in 1998, he was a partner in the New York law firm of Willkie Farr & Gallagher.

Judge Straub received his B.A. degree from St. Peter’s College in 1958, and his LL.B. degree from the University of Virginia Law School in 1961.

Judge Straub served as a First Lieutenant in U.S. Army Intelligence and Security from 1961 to 1963. In 1963, he began the private practice of law with Willkie Farr & Gallagher, where he became a partner in 1971, and where he remained until his appointment as a Judge of the U.S. Court of Appeals for the Second Circuit in 1998. Judge Straub’s private practice was concentrated in litigation, regulatory agencies and governmental affairs. During this period he also served as a New York State Assemblyman from 1967 until 1972 and as a New York State Senator from 1973 until 1975. He also served as a mediator/neutral evaluator in the District Courts for the Southern and Eastern Districts of New York, and as a special master for the New York State Supreme Court in the 1st Judicial Department.

Judge Straub was Chair of Gov. Mario Cuomo’s New York Statewide Judicial Screening Committee from 1988 until 1994 and of the First Department Screening Committee from 1983 until 1994. He was a member of Senator Daniel Patrick Moynihan’s Judicial Selection Committee from 1976 until 1998.

Judge Straub serves as a member of the Lenox Hill Hospital Board of Trustees, the Cardinal’s Committee of the Laity for Catholic Charities of New York, and the Kosciusko Foundation.

Judge Straub is a native of Brooklyn.

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