Hear It Now -- Audio of the March 7 Argument at the Second Circuit
The appellants (objectors) were represented by Charles Chalmers. The appellees were represented by Charles Sims (defendants) and Michael Boni (plaintiffs). I should note that subsequent to this hearing, Boni -- head of a team that the objectors believe have inadequately represented the class -- announced his departure from the firm of Kohn, Swift & Graf.
To hear the hearing, you must download nine sequential files:
If you have the proper "codec" installed, you can open these files in QuickTime or Windows Media Player. However, we recommend that you listen to them in a special audio program called The Record Player, which can be downloaded for free at http://www.ftrgold.com. Not only is the sound quality better, but more importantly The Record Player has a digital clock corresponding to the real time on March 7, and this will help you follow the highlights explained below.
Our judges were Ralph K. Winter, John M. Walker Jr., and Chester J. Straub (presiding). As noted earlier on our blog, all are very experienced and accomplished. Winter was one of the judges on the appellate panel that reversed the original district court ruling in favor of the publishers in Tasini v. New York Times. In addition, the leading U.S. Supreme Court case on adequacy of representation and the need for subclasses, is a case called AmChem. In Amchem the Supreme Court relied upon a Second Circuit opinion in In re JOINT EASTERN & SOUTHERN DIST. ASBESTOS LITIG. Judge Winter was one of the judges rendering that opinion. (He participated in our hearing by phone, and never asked a question.)
Judge Straub's questions were mostly confined to the question of jurisdiction. (The objectors, the defendants, and the plaintiffs all agree that the federal courts do have jurisdiction over this settlement.)
There was no discussion of many of our arguments in brief, the most significant of which is what we call the "License by Default." Anyone expecting high drama from this audio needs to know that things rarely work that way; the oral argument focuses on what the three-judge panel chooses to focus on, and not necessarily because they think other points covered in the brief were unimportant or even settled.From our standpoint, the most impressive takeaway from the hearing is that Judge Walker clearly knows -- and even states -- some of our best arguments with respect to the C's. At one point he challenged Boni on this.
Here are some highlights:
Judge Walker asks Chalmers if there should have been a subclass for C's. Walker mentions the objectors' three main points here: (1) The C reduction shows they were not properly represented; (2) Their compensation formula, compared to B's, was not fair; and (3) The named plaintiffs could not adequately represent the C's, even though they had some unregistered works, because the amount they stood to gain, do in fact gain under the settlement, for the A's and B's is so much greater than anything they lose by treating C's badly.
Boni states that all authors have registered and unregistered works. He’s making an argument that the settlement treats “works” rather than authors because all authors have both registered and unregistered.
Judge Walker asks, since C's can register their works at any time and sue for infringement, why should they be compensated differently than B's. (This is another of our arguments on the fairness to C's.) Boni goes into a long justification.
Boni says that in designing the compensation there were no battles among A's and B's and C's – it was done by representatives trying to serve the interests of all parties. He wraps up by directing a remark to Judge Walker that there was no need for subclasses. Judge Walker asks: Wouldn’t there have been a battle if C's had their own attorneys? Boni then repeats the argument that the unregistered authors were not a separate group – all authors held both registered and unregistered. Judge Walker asks where in the record there is evidence of that. Boni describes how complaints show the class representatives had both registered and unregistered works.
Sims, in addressing the C Reduction, says they have updated information. He doesn’t say what that information is. Judge Walker indicates they may be interested and if they are they will contact the parties. (To date there has been no contact.)
Chalmers comes up for rebuttal. He notes that Boni said all class members had registered and unregistered works. Chalmers says this is an untrue statement. He notes that Judge Walker asked for evidence in the record and Boni said it was there. Chalmers says the record shows just the opposite. He cites the court to a series of declaration by class members that were put in the record by the plaintiffs and say that at least half of them had only C works. [Later review of the record showed that 10 out of 11 had only C works -- which is what the court will find when it looks.] Chalmers then cites a statement by plaintiffs that “most class members never registered anything.” Judge Walker asks Chalmers to repeat that cite. Then Chalmers cites for the court a statement by defendants that “the vast majority of freelance authors never registered their works at all.”