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