Wednesday, June 03, 2009

'Reed Elsevier v. Muchnick' Briefing Process Exposes Settlement's Sham Arguments

Now that the briefs have been filed with the Supreme Court, there is so much more that the objectors know about the shady business of the freelance settlement that we didn't know before. In the future, this blog will develop that theme.

For now, some observations on what the objections have always been, and continue to be, about. With a timeout for thanks again to Pam Karlan and the Stanford Law School Supreme Court Litigation Clinic for their superb work in support of objectors' attorney Charles Chalmers.

From day one, the objectors' fight has been largely a fight on behalf of the holders of unregistered copyrights. Everyone agrees that 99 percent of freelancers are chronic unregistereds and that 99 percent of the class works of this case are unregistereds.

Our brief shows this. We are explicitly arguing, here in the Supreme Court, that the law does allow, and should be recognized as allowing, unregistereds to be legitimately in a settlement class without the "permission" of the defendants.

(I refer here, of course, to unregistered American works, as opposed to works originating in other countries where registration isn't required. The settlement automatically stuck all non-U.S. works in Category C, and that is an outrage in itself. The many many thousands of non-U.S. works appearing in the 26,000 publications in the settlement are, legally and morally, exactly the same as the higher-paying Category B. The settlement parties never attempted to jusify Category C treatment of non-U.S. works, except to say that registration was required to sue -- which is not true for the non-U.S. works. This justification was always a sham.)

One of our core Supreme Court arguments is something known as "supplemental jurisdiction." And here's the thing: This argument apparently has been known to the named plaintiffs and their counsel from day one. I say so because it was explicitly part of their original pleading in the complaint consolidating the several class-action cases filed in the summer of 2000.

Another of our arguments is the rule that in some cases -- and we think this is one -- when there is a precondition to a lawsuit, it only has to be met by the named plaintiffs, not the class members. Perhaps the plaintiffs or their counsel knew this one, too.

But one thing is clear. Knowing the first, and maybe knowing the second (or at least being in position to find it out), they instead simply gave these arguments away. They settled with the defendants as though that leverage didn't exist. The defendants weren't giving anyone anything by including the unregistered. They wanted and needed them, for two reasons.

First, the defendants wanted to keep databases intact, or so they said (all the while surreptitiously deleting material from databases and failing to disclose this to their paying customers in a full and timely fashion).

Second, the defendants wanted and needed the unregistereds because an unregistered can always register, and the defense group's pattern of relicensing from time to time meant that an unregistered could turn out to be a Category A (highest-level claim) for some new licensee offering a new slice of the database.

All the spin to the contrary, in which the settlement partner plaintiffs shamelessly colluded, was a double-sham atop a simple sham.


Anonymous Anonymous said...

I stand to benefit substantially from the current settlement, through hundreds of "C" articles (approx. 500, as I recall). If your argument were to prevail, what do you imagine happening next? Putting aside the question of justice or fairness for a moment, what would the legal process be and when do you anticipate a revised settlement would be reached?

6:23 AM  
Blogger Irv Muchnick said...

It's awfully hard to project a timeline for final resolution of this complex case -- much less anything like an outline of final terms. We're in virgin territory here.

7:45 AM  
Anonymous Anonymous said...

But given your determination to block the existing settlement, you must have given some thought to what would ensue if you're successful.

I want the case resolved so I can get my share of the settlement. If I understand correctly, you feel that I, as a representative of the "C" class, am being cheated by the terms of the settlement. I'm pragmatic about accepting the existing terms, because I don't expect the legal system to be "just," because I'm tired of waiting, and because I anticipate that a rejection of the settlement would lead to another decade-long legal process and greater fees to the lawyers.

You disagree with me and I'm not looking to engage you on the merits of our disagreement. But my support of the settlement incorporates a sense of what could happen next if the Supreme Court upholds, and I wonder how your opposition to the settlement incorporates a view of the future you're working to achieve.

8:42 AM  
Blogger Irv Muchnick said...

First, a point of clarification: You refer to yourself as a "representative of the 'C' class." That is a term of art for a named plaintiff. If you are a named plaintiff, then you should come out from behind your veil of anonymity. I suspect, however, that you are just using the term loosely and are a mere "member" of the class, as I am.

I do not feel that you, personally, are being cheated by the settlement; I do not presume to make that call for you.

I do feel that the settlement cheats the class (and if you are indeed a purported class representative, I would add that I blame you for that).

My first goal from this piece of litigation is the old adage, "First, do no harm." This settlement, unfortunately, would do irreparable harm to writers' rights. My long-term policy goal, also voluminously recounted on this blog, is a royalty system that is fair to creators, fair to publishers, fair to consumers, and all in all in the public interest. I'm hopeful, even confident, that the resolution of this case can still advance that goal.

10:01 AM  
Anonymous Moxie said...

"My long-term policy goal, also voluminously recounted on this blog, is a royalty system that is fair to creators, fair to publishers, fair to consumers, and all in all in the public interest. I'm hopeful, even confident, that the resolution of this case can still advance that goal."

And therein lies the huge flaw in your opposition:

A royalty system cannot be used to compensate for past infringements.

8:07 PM  
Blogger Irv Muchnick said...

I didn't propose a royalty system to compensate for past infringements. I proposed using the full extent of damages for past infringements as leverage or pressure to help create a royalty system for the future.

You're going to have to do better than that, Moxie.

9:03 PM  

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