Tuesday, December 09, 2008

Answer Man

With the settlement effectively dead, do you have any sympathy for any of the players on the other side?

Yes.

I sympathize with any of the plaintiffs' lawyers who might have intended to do the right thing in this case, as well as profit, but who found themselves overwhelmed by the legal firepower of the defendants. (If the shoe fits, wear it.)

I sympathize with the named plaintiffs who got manipulated by the lawyers into approving this mother of all sellouts. That sympathy is limited in light of analysis indicating that these inadequate class representatives stood to collect an obscenely disproportionate share of the puny $11-plus-million in claims payouts ($18 million less legal fees and notice/administration costs).

The same holds for the insiders and friends of the named plaintiffs and the associational plaintiff writers' organizations who might have "gamed the system" on the settlement's arbitrary and unexplained registration deadlines.

As for holders of unregistered, or "C," claims, no one in that category was getting rich. The argument that, for some, checks were a bridge for unpaid bills or career displacement has human and anecdotal weight. On the other side of the scale, the settlement would have permanently maimed the ability of independent creators and the public to realize some of the important benefits of new communications technology.

Even without the objections, those filing claims in large volumes never should have been counting their money, anyway, before the settlement administrator finished nitpicking them.

Finally, there's the settlement's devious "C reduction," which a close study suggests may already have wiped out a large chunk, or all, of the unregistered claims -- though no one is saying.

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Do you presume to dictate exactly how a writers' royalty system would work?


No.

I only know two things for sure. One is that Section 201(c) of the Copyright Act of 1976 devised a "doctrine of divisibility" for secondary rights to copyrighted works, for the express purpose of tweaking the balance of power between publishers and freelancers. The second thing I know is that the Supreme Court, in 2001 and by a 7-2 vote, confirmed that this section of the law and this principle applied, with bells, to the reuse on electronic databases of newspaper and magazine works, and suggested a royalty system as the solution.

Publishers simply ignored the law of the land before Tasini v. Times, and even more arrogantly continued to ignore the law of the land after Tasini v. Times. They sought to solve their prospective problem with naked market power, by shoving new all-rights contract language down the throats of contributors. On past infringements, they played the plaintiffs of this case better than Isaac Stern bowed a fiddle. Thus emerged the "license by default," which thumbed its nose at the High Court and turned on its head a decade-plus of hard work in this matter.

The structure of any royalty system must be the product of negotiations. And for sure, the ultimate format would not be identical to the music industry's ASCAP, since musical works have a different intrinsic value, as well as, in most cases, greater value over time than freelance newspaper and magazine content. Saying these things, however, is not the same thing as saying a royalty system is impossible. Even if large numbers of royalty payouts, for low-end works or for unidentified rightsholders, went into a general pot, that is much better than rewarding publishers until the end of time for stealing. (Such a general fund could be used to help organize creators or educate them on the business aspects of their work, or it could subsidize access for the underside of our "two-tiered information society.")

These are just examples, not prescriptions. What a reconstituted freelance settlement needs is more creativity, and less naysaying and Ludditism.

3 Comments:

Anonymous Moxie said...

Irv, you started your "Answer Man" post with:
"With the settlement effectively dead ..."

I don't know why you keep saying this. If this were true, no one would have bothered taking this to the Supremes (and all three sides weighed in on the cert petition).
If there wasn't any interest at the Court, this wouldn't have even reached the conference stage; cert would have been already denied.

Yes, if the Court ultimately denies cert & sends this back to the District Court, the settlement will be dead because the defendants won't likely want to settle with just the few A's & B's.

But that is the only scenario that would kill it. Here are others that would keep it alive:

1. The court VACATES the Appeals Court action, denies Cert on the Objectors' additional question and AFFIRMS the District Court's approval of the settlement. This would restore the settlement (though we don't know how much money is left) & would effectively prevent any more appeals by the Objectors and/or other members of the class (since the Supreme Court had already ruled on the validity of the settlement).

2. The Supreme Court VACATES the Appeals Court's ruling on standing and sends the case back to the Appeals Court to rule on the Objectors' question. In this situation, the settlement reverts to "alive" status (though with much potential delay & erosion of settlement money) until the Appeals Court rules.

2. And of course the Supreme Court could grant Cert on all questions (thus keeping the settlement alive)& hash this all out themselves, probably in late spring.

6:05 AM  
Blogger Irv Muchnick said...

"Moxie" is certainly correct in noting that, under scenario 1 in his comment, not only would the settlement be alive and kicking, but the objections would be dead. Whether the Supreme Court, after all these conferences, will give the settlement parties such a summary triple play is highly questionable -- but it could, indeed, happen.

The larger point is that I have been calling the settlement "effectively" dead for a long time. (See the four-part series on this blog beginning 1/21/08.) It is death by a thousand cuts, legal and practical, but mostly it is death by its own fundamental inadequacy for the class, plus its inability to give the defendants "complete peace." I don't think even a game-set-match ruling in the settlement parties' favor by the Supreme Court would change that.

Irv

6:27 AM  
Anonymous Anonymous said...

I'm not sure that the settlement money is being eroded. While this legal battle is ongoing and costly, I believe that the attorneys agreed to a flat fee of $4 Million to see the case through to completion. I don't think additional legal activity is taking money away from the class members, but I could be wrong. And yes, Moxie, you are correct that this is far from dead. There is still the option of further action in the unlikely event that the class unwinds. Too many of us who have registered their works (like ME!) have too much at stake. The Highbeam infringement was very significant for me and I will fight for restitution.

2:58 PM  

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