GBS: Scott Gant’s Attack on the Class

Scott Gant is an author, a partner at Boies, Schiller, and a self-appointed crusader against the settlement. This Wednesday, he filed a 47-page objection to the settlement. It is the most comprehensive and aggressive attack on the settlement to date; the issues it raises are the most fundamental that anyone has brought up in a submission to the court. His view is that the settlement—or at least the Revenue Models portions of it—is fundamentally unsalvageable.

Gant starts by framing the settlement as “fundamentally a commercial transaction” (5). Compare the framing in our amicus brief, where we call the settlement’s approach “prototypically legislative.” We both agree that the settlement’s complexity takes it out of the realm of ordinary class actions. But he focuses on the commerical rights involved, whereas we focus on the public interests. This is a classic duck-bunny problem; both perspectives are valid. Indeed, if you don’t recognize both components, not only will you miss important dangers of the settlement, but you’ll also miss the reasoning for it in the first place.

Notice Trouble

Others have called attention to notice problems, most notably the literary estates represented by Andrew DeVore. Gant, however, uses them to go for the jugular.

He starts from a familiar slogan in class action law, “Individual notice must be sent to all class members whose names and addresses may be ascertained through reasonable effort,” quoting from the famous Eisen case. Eisen involved a class action over stock-trading commissions; the six-million-member class contained about two million members whose names and addresses could be extracted from the defendants’ teletype records. The Supreme Court rejected the plaintiff’s attempt to avoid sending them individual notices, even though he made a convincing argument that it would be so prohibitvely expensive as to end the lawsuit. The notice rules have something of a fiat justitia ruat caelum flavor about them.

Gant himself never received individual notice, and to all accounts, neither have many other authors. He points out that the Copyright Office has records of copyright registrations, and thus “all of the authors of the works at issue in this case are known or knowable.” (16) Actually, this isn’t quite true; foreign works need not be registered to be in the settlement. Gant’s point, however, stands, because it still applies to the subclass of United States works, which are registered.

In a bit of extremely clever jiu-jitsu, Gant also quotes the studies that Google and the Authors Guild pointed to to argue that there are relatively few orphan works. If it’s possible to find authors with a moderate search in the orphan context, he asks, how can the parties justify not having found authors in the class notice context? He does a similar trick with the claims made about how effective the Registry will be in tracking down rightsholders.

I think this is a powerful argument, but it doesn’t strike me as conclusive. The unexamined term in Gant’s brief is what level of effort is “reasonable.” Note that in Eisen, it was only the two million class members whose teletype records were right at hand who mattered, and that all that was at issue was whether to send an envelope to the last-known address. Gant wants to hold the parties to the higher burdens of tracking down all authors, to carrying out searches that involve more individualized investigation, and to ensuring that the letters actually reach everyone.

My guess is that the notice program was designed to comply with Eisen’s specific requirements. Gant starts off by speculating that “hundreds of thousands, if not millions” (15) of authors didn’t receive notices. By the end of the section, this speculation has become a dead certainty: only a “small fraction of the millions of class members were directly contacted through individual notice.” (22) While the individual mailings weren’t great, I know of enough authors who received them that I doubt things are so unambguously inadequate as Gant claims.

That said, however, this is an area in which even if Gant loses on a bright-line rule, he can fall back to the underlying standard of fairness. He raises arguments about the complexity and size of the settlement and its massive implications for class members. Arguments of this sort should be familiar from our amicus brief. Gant uses them to call for a searching inquiry into the quality of notice. Thus, he turns to the Summary Notice mailed out to authors.

Gant quotes its opening paragraph, correctly noting that it doesn’t say anything abut future claims, only past actions. Thus, he argues that authors whose books have not yet been canned will stop reading right there. His claim that the Summary Notice is misleading depends on this argument, because the very next paragraph opens by saying that the settlement, if approved “will authorize Google to scan in-copyright books.” (emphasis added). I think he’s right that the Summary Notice is unclear and doesn’t make it obvious that the settlement deals with future book sales, but I’ve never in my life met a class-action notice that was clear. The courts have set that bar unfortunately low.

You Call This Fair?

Gant’s strongest arguments, I think, concern his attack on the settlement’s economic terms, though he opens on a weak note. He contrasts the $60 cash payments with jaw-dropping $750 to $150,000 range of copyright statutory damages. Had the case gone to trial, though, the plaintiffs wouldn’t have gotten even $750 a work. They’d have gotten nothing. Google’s scans were fair use for the indexing purposes for which they were used, and $60 a work is a fair and reasonable compromise of that long-shot lawsuit.

He’s on firmer ground raising difficult questions about the Registry. He raises the quite realistic possibility that the Registry will not be economically viable—in which case, participants in the settlement will receive nothing from the forward-looking revenue models. Moreover, he asks what the Registry’s overhead will be and how authors can trust that they will actually see most of their 63%. At the very least, the parties ought to be required to give a clearer accounting of why they expect the Registry’s operating expenses to be acceptably small.

His complaints about the Author-Publisher Procedures are also likely to resonate with many class members. The settlement doesn’t so much look to ascertain who owns the appropriate electronic rights as it does allocate them by fiat. This is, in essence, a side deal between authors and publishers, one that replaces the messy diversity of contacts with a few standardized ones. I like that; it cleans up an anticommons and makes it easier for books to reach paying publics. But I can also understand why some authors don’t like it, particularly those who gave more thought to negotiating electronic rights. I would love to see a detailed walk through the Author-Publisher Procedures that tries to find the worst-case and average-case scenarios for both sides.

Gant’s analysis of the role of the Authors Guild is very sharp and is the most original part of the brief. He observes that while the Authors Guild is named as an “Associational Plaintiff,” the motion for approval of the settlement does not “appear to advance the Authors Guild as a class representative” (35). The authors’ memorandum supporting the settlement focuses on the five individually named authors as “adequate representatives.” This fact is striking, because the Authors Guild has always been the public face of the lawsuit, and it played a central role in the negotiations. This gives Grant a good rhetorical basis for asking what role the Guild—as opposed to the five individual plaintiffs—played in negotiating the settlement. It also lets him raise some more familiar questions about how representative the Authors Guild is of authors in general and how good a deal it struck on their behalf.

Gant also emphasizes the increase in the class from the initial lawsuit—which defined the class in terms of the contents of the University of Michigan’s library—to the settlement—which defined the class in terms of all books. This expansion is one of the reasons some authors, particularly international ones, have been freaked out by the settlement. They had no particular reason to expect they’d be implicated by the settlement until they realized that the settlement class was so much bigger. People don’t like surprises.

I’d also point out that the switch moved the class from being enumerable to being open-ended. You could, in theory, write out the complete University of Michigan catalog, produce a list of authors and publishers, and try to track them all down. But when your class consists of all copyright holders of all books, there’s no way to create such a list, because there is no authoritative master list of books.

Within this immense class, Gant thinks that the Authors Guild and its pets don’t make for appropriate representatives. In our amicus brief, we point to the line between orphan and non-orphan works and suggest separate representation for the orphans. Gant adds another line of division: that between works scanned as of the opt-out date and those not yet scanned. The settlement does take account of the division—only the former are eligible for the $60 cash payments—but Gant argues that they have a conflict of interest, as the former would want to push for the pot of statutory damages at the end of the litigation rainbow. Thus, he seeks not two subclasses, but four, making up the full two-by-two matrix.

I continue to see the orphan works issue as fundamental, for all sorts of public-interest reasons. I’m less convinced by the alleged split between those whose works have been scanned and those who haven’t. Given the weakness of the copyright argument in the scanning itself, the same reasons that make $60 fair also make combined representation reasonable.

Who Can Be Against Trust?

The antitrust portions of Gant’s argument, although excellently written, largely rehearse arguments familiar from elsewhere. (Indeed, Gant attaches a number of the antitrust papers mentioned in this space as exhibits to his filing.) He contributes to the conversation by dropping a footnote suggesting that the right term of art in antitrust law for the Registry may be “joint venture.” He also picks up on Randy Picker’s “no-Noerr” argument with an analysis of the text of the settlement’s Bar Order’s antitrust implications.

Proving Too Much?

Gant makes a few arguments that strike me as implausible. He claims, for example, the settlement is impermissible because it would “transfer class’ members intellectual property rights to Google and its partners.” (10) This, he claims, would “alter the substantive rights of class members,” but the Federal Rules of Civil Procedure (including class actions) are not to “abridge, enlarge, or modify any substantive right.” (10)

This is wrong in two ways. First, it misuses copyright law’s idioms. Copyright distinguishes non-exclusive “licenses” from exclusive “transfers.” The settlement is quite explicit that it gives Google only a license, not any copyright ownership rights. Gant has things exactly backwards when he says that the settlement is a “transfer” of copyrights to Google, “in effect a license permitting specific uses of copyrighted works.” (4). (I and others have worried that the settlement is effectively exclusive, but that’s only the case for orphan works, and it takes more work to reach that conclusion. The switcheroo has the effect of making the settlement sound more dire for copyright owners’ rights than it is.

More seriously, Gant’s argument, if accepted, would strike down the Federal Rules themselves. Of course lawsuits affect substantive rights; that’s what lawsuits are for. Of course settlements affect substantive rights; otherwise, they’d be useless. Of course the Federal Rules provide a framework for lawsuits and settlements; that’s their job. The Rules aren’t supposed to affect substantive rights except by providing the procedural framework to adjudicate them. And that’s exactly what this lawsuit does.

Similarly, Gant overreaches when he argues that the court lacks jurisdiction to approve the settlement. He claims that the main elements of the settlement involve the compromise of “potential future claims” and therefore can’t be justified either as damages or injunctive relief. Thus, he concludes, the settlement violates the case or controversy requirement of Article III.

I looked into this idea when working on our amicus brief and rejected it. Google announced specific plans to scan every book it could. The act of scanning is a prima facie violation of the copyright of each class member (though it’s likely not ultimately an infringement). That’s sufficient to create a live case or controversy between Google and each class member — the test being whether the class member would face a concrete enough threat of scanning to be able to sue Google for declaratory or injunctive relief to stop it. (The only exception I could see would be for class members whose books are obscure enough — not in any partner libraries, perhaps — that the scanning wasn’t imminent.) Once in court, though, parties can voluntarily enter whatever settlement they want. Patent cases, for example, regularly end with the purchase by the defendant of a forward-looking license, which of course would release future claims of infringement. There cannot be a categorical jurisdictional bar on releasing claims for future conduct, as Gant’s argument would imply.

Indeed, try to imagine settling this very case in a way that didn’t involve releasing at least some future claims. Google has scanned copies of books on its servers. Every time it backs up those servers, it makes fresh copies of the books (in a complex database, to be sure, but everything is there). Those copies are prima facie infringements of the reproduction right. Google can’t implement useful search without making at least some copies on an ongoing basis. Any release that let Google run Book Search at all would need to waive some future claims. Gant’s line in the sand against future-claim compromises is untenable.

This is not to say that releasing claims for future infringements would not be problematic on other grounds. Because releasing future claims can leave class members worse off than when they started the lawsuit, any settlement that deals with future conduct requires especially close scrutiny. Here’s what we currently say in the amicus brief:

Second, the Proposed Settlement waives future claims by members of the Settlement Class. “The settlement of future claims has been viewed as an area where there is a need for increased judicial scrutiny … .” WRIGHT, MILLER, AND KANE, FEDERAL PRACTICE AND PROCEDURE § 1797.3. As the Supreme Court stated when rejecting certification of a class of plaintiffs exposed to asbestos, “Many persons in the exposure-only category [i.e. those with future claims] … may not even know of their exposure, or realize the extent of the harm they may incur. Even if they fully appreciate the significance of class notice, those without current afflictions may not have the information or foresight needed to decide, intelligently, whether to stay in or opt out.” Amchem Products, Inc. v. Windsor, 521 U.S. 591, 628 (1997). Here, members of the subclass of orphan work book copyright owners are, by their very nature as orphan work owners, unable to “decide, intelligently, whether to stay in or opt out.” Indeed, the orphan work book copyright owners are even less able to recognize and defend their interests than the future claimants in Amchem. The Proposed Settlement does not merely compromise future claims for past conduct, as in Amchem. Instead, it would release Google from liability for its future conduct: scanning books it has not yet scanned, and selling copies it has not yet sold. It is thus particularly inappropriate for this Court to waive the future claims of the members of the orphan work book copyright owner subclass without a searching examination to ensure that their rights are adequately protected.

There is a genuine concern here, but note the difference. The court should be concerne with the practical effects on the interests of class members, a fact-intensive and nuanced inquiry. It does not need to worry about the categorical jurisdictional bar that Gant advances.

A Few More Fine Points

A few other scattered details I found interesting:

  • Gant’s sleuthing confirmed that the case was never heavily litigated. The $140,000 in expenses incurred by the authors’ attorneys are, according to Gant, “a tiny amount for a complex case or a large class action — further suggesting no significant discovery or expert work occurred.” (3) He also found some gems in Google’s 10-Q filing, which splits the settlement’s $125 million into a $95.1 million “settlement portion” and a $25.9 million “commercial portion.” (8)

  • In footnote 25 on page 13, Gant expresses a takings argument not unlike the one in the conclusion of my Unprecedented Precedent.

  • Gant and lead author counsel Michael Boni are not good buddies. In footnote 27, Gant describes a telephone call he placed to Boni three weeks ago; Boni promised to call back, but never did. In footnote 85 (the final text of the brief), Gant takes his revenge, arguing that even if the settlement is approved, the $30 million set aside for the plaintiffs’ legal fees is excessive and should be reduced.


This is a very good brief. It is the best-written and sharpest filing I have seen in the case. Only the proposed settlement itself tops it in imagination. That said, are places where it goes wrong. I think, for example, that Gant shot himself in the foot by joining other, more persuasive arguments, to his unpersuasive treatment of the Rules Enabling Act. But even filtering out those concerns, this is still a smart and searching attack on some fundamental aspects of the settlement. How fundamental? Let me quote from the second-last footnote:

I take no position at this time about specific provisions of an alternative agreement which I might support. The issue before the Court is whether or not to approve this particular agreement. It is not the responsibility of the Court, or objectors, to rewrite the agreement.

In this, he’s actually allied with Google and the plaintiffs. In the past, they’ve responded to calls for modification of the settlement by insisting that this is an up-or-down call for the judge to make. Gant continues:

However, the Court might instruct the settling parties to decouple the two components of the Proposed Settlement — the resolution of claims for past infringement, and the commercial transaction involving the transfer of rights from copyright owners to Google and others. If the settling parties believe the terms of the commercial component of the Proposed Settlement are attractive, they are free to implement them outside the context of a Rule 23 proceeding, and invite copyright owners to participate.

Let us be clear. If the settlement goes down this path, the orphan works component of it is dead. That part works only because of the class action. In an ordinary negotiation, you can build an e-book service, but you can’t bring orphan works into it. That would be a great loss—not just for readers, but for society. And that is why I continue to believe that the goal must be to salvage this settlement, to take the flaws in it that Gant and others have identified, and fix them.

“The settlement is quite explicit that it gives Google only a license, not any copyright ownership rights.”

Well, you may be correct about that: but traditionally licences are granted by the persons who have the authority to do so: in publishing, the owners, or sometimes the licensees, of the copyright. I do not believe that either the Authors Guild, nor yet the court, have the right to grant a licence for copyrights owned by me. If they do that, they are taking away my legal right to negotiate for myself in my own interests.

“This is, in essence, a side deal between authors and publishers, one that replaces the messy diversity of cont[r]acts with a few standardized ones. I like that; it cleans up an anticommons and makes it easier for books to reach paying publics.”

Ah, the so-called ‘Tragedy of the Anticommons’. I don’t believe that that really applies to most book rights.

Books have been reaching paying publics fine under the existing system. And authors, in general, get paid enough to incentivize them: which is important. Would you like fanfic to replace novels and Wikipedia articles to replace trade non-fiction? This is a serious possibility.

“I would love to see a detailed walk through the Author-Publisher Procedures that tries to find the worst-case and average-case scenarios for both sides.”

I can’t speak for print publishers, but I think that both the average and worst case for authors are fairly clear:

The average case is that the publisher gets a share of the revenue, even though the author is entitled (under prior contracts and law) to 100% of the e-rights.

The worst case is that the author opt in to the settlement, but the author is determined not to be a “Rightsholder” for purposes of the settlement (because of capture of the Registry by publishers, resulting in a burden or standards of proof or default assumptions or procedures that favor publishers, or simply because the rights are divided, conditioned, or otherwise not “exclusive”). The print publisher then authorizes Google to “use” the book (the author can’t veto this if they aren’t deemed a “Rightsholder”), and then uses the existence of the Google Books “edition” to trigger whatever provisions of the pre-exisitng contract are conditioned on the book being “in print”. This likely means that the print publisher doesn’t have to revert any rights to the author, and the author may be blocked from authorizing their own e-edition, for which they would get 100% of the revenue and could control in other ways (e.g. use to draw readers to the author’s own Web site, generating further ad revenue for the author and building brand equity for the author rather than the print publisher). As lifetime e-rights to an author’s personal “backlist” more and more come to exceed the value of the short-term burst of income from typically short-lived print editions, this could deprive authors of most of their income potential, and keep print publishers in control of writer-reader relations — with no up-fornt cost to print publishers as they would have with actually keeping the book “in print” in hardcopy, or even having to pay to scan it themselves or prepare a Kindle-formatted file.

An excellent article, but I disagree with you on two points in particular.

1. A full-text database can’t be fair use because it isn’t a use in the legal sense. Uses have to be transformative (i.e. reviews, commentary, criticism, analysis, parody etc.), meaning that the user has to engage the original in some sort of creative labor. Google is not doing that. It is doing nothing but mechanically scanning, OCRing and displaying books. What they’ve done could have just as easily been accomplished by sending a burglar to the author’s home—or in this case a university library.

You can test how transformative their work is by asking if there’s any difference in what they’re doing from book to book that makes each unique. There isn’t. Someone who published bootleg copies of Harry Potter merely adding “I like this book” as ‘commentary’ to the title page, would be engaging in far more fair use than Google.

This distinction matters immensely. That’s why I won without going to trial when the Tolkien estate disputed my Lord of the Rings chronology in Seattle federal court. Keep in mind what I was doing. To create a complete chronology, I not only ‘took’ the heart of the book (one test of infringement), I took every major event in the tale and on slow days many minor events. That’s a lot. But because I transformed it, testing whether the complex chronology of a book almost completely lacking in chronological clues in the body of the text. That’s certainly why they bailed out during arguments for summary judgement and probably why the judge dismissed their lawsuit “with prejudice.” My hundreds of hours of labor to critically evaluate Tolkien’s chronological skills made what I did legal. Google has taken far more, the entire text rather than just bullet lists of events, and it has made no legally defensible use of what it has taken.

Full-text databases with parts available for display are better thought of as being a derivative much like movie rights. Like a movie, parts are extracted from the whole and used for commercial purposes. And this is a case where the commercial aspects of copyright law matter immensely. Google is depriving authors of any income they might derive from offering a searchable text or any publicity value from maintaining a web site with that sort of search engine. Google is taking without doing to a far greater extent than any bootlegged movie. Google’s full-text databases don’t have a legal leg to stand on. They are infringement, pure and simple, although we need a court to make that claim definitive.

2. The second concerns your emphasis on Google being granted non-exclusive use of an author’s writings. The fact that Google can display major (or in some cases all) of an author’s work doesn’t preclude him from selling it elsewhere in print or as an ebook. But you are forgetting something.

That argument might have some validity if Google were charging $100 per page view. But since Google is giving away what it displays, Google’s non-exclusive use starts to look more like a grant of ‘exclusive unless you also give copies away for free’ license. No author can compete with free.

For an analogy, imagine a dry region where water can be transformed into money by watering crops. Imagine further than one farmer, by her own labors, owns all the water in a particular lake she has created. Call her Ann Author. Assume further that Ann isn’t greedy. She’s willing to sell water to her neighbors at a reasonable cost that gives her a return for her considerable labors. That’s what Author’s typically do.

Assume that by some legal trickery, her neighbor, Getty Google, comes up with a legal scheme involving a few of her neighbors and which he calls a settlement. It lets him pump water out of that lake (say 20% of it) anytime he wants. Further assume that he has some equally clever scheme that lets him benefit from distributing the water without actually selling it (Google’s ads) to her neighbors. Maybe he is a politician and will get votes for free water.

Now we need to examine what Getty is doing. He hasn’t taken away Ann’s literal right to sell water from her lake. The water’s still there and her pumps and pipelines still work. But by giving her water away for free, he’s effectively destroyed her ability to sell her water. That’s what Google’s non-exclusive right does. Any author they exploit and any publisher whose book they display, has to compete with free. Note the dynamics. Google can give away the contents for free because it has done nothing the create that content. The creators of that content, authors and no publishers, can’t afford to do that.

That, in a nutshell, is why any author with a trace of self-esteem finds what Google is doing so outrageous. Like Ann, he wants to set the conditions under which the fruit of his labor is used. He thinks his labor has value and resents seeing someone else getting rich by giving his labor away for free.

—Michael W. Perry, one of the seven authors whose appeal to the court got the settlement delayed by four months.


I agree that your Lord of the Rings chronology was a fair use; it involved significant creativity on your part that reworked the original into something new. But that’s not the only model of fair use. Straight mechanical copying can also be fair. Take the Sony case, in which the Supreme Court held that home taping of over-the-air TV programs on a VCR for later viewing was a fair use. The courts have said, in in similar cases involving web search engines, that creating the database to make the originals searchable can be a fair use.

As for exclusive versus non-exclusive, that distinction is sharp and clear in the law. Your point is that a non-exclusive license and an exclusive license can have extremely similar economic effects. Thus, with Google, the non-exclusive uses it makes can have the effect of destroying the value of the nominally “exclusive” rights still held by the author. That gives you and your colleagues your argument that the settlement should be rejected because it’s unfair to authors. You’re arguing based on the substance; he’s arguing based on the form — and my view is just that he gets the forms wrong.

‘The settlement doesn’t so much look to ascertain who owns the appropriate electronic rights as it does allocate them by fiat.’

It is grimly amusing to see Google’s lawyers using an argument much like this criticism levelled against the book settlement agreement, that in the case of very many works the electronic rights are not, and never have been, owned by the publishers, to defend itself in the case that is now being heard in France:

“What Google is doing is absolutely legal,” Alexandra Neri, a lawyer for Google, told the court. “To assert counterfeiting, you have to show you hold the rights. We don’t deny that Editions du Seuil holds the rights to distribution on paper. But they have never shown that they hold the right to electronic copies.”

However, if Google’s lawyer is being correctly reported, she is apparently guilty of a non sequitur: it remains to be seen whether Editions du Seuil can show that they hold the electronic rights to the disputed books, but if it turns out they do not, it still doesn’t mean that what Google is doing is legal: whoever those rights belong to, it is safe to assume that it isn’t Google.

I have a very simple solution to fix the Settlement Agreement. In fact, I see it as the ONLY way to fix the Settlement Agreement. It is so obvious, I suppose the parties can’t see the forest for the trees. I’ve seen this solution since I became aware of this Settlement. Of course, it would cost a whole lot more than $125 Million dollars, and it won’t benefit Google, or Boni & Zack, or the Authors’ Guild and their dreams of being flush with Google cash and running the Artists’ Registry — BUT — it is the only way to satisfy the DOJ, the Objectors, the Opt Outs and the Judge. Can anyone guess what it is? And, mind you, for simplicity, try to keep your answer to 50 words or less.

Okay, I re-read my comment and actually, my SA Solution will benefit Google, just not in the way they had originally hoped for. And while we are trying to get into Google’s head here — did you ever stop to think that Google never really thought this outrageous SA would fly anyway, but it was a good entry point for their plans of World Domination (I mean, this lawsuit has to settle somehow, right)? Cue Dr. Evil… I think Google is ready to pay big time to advance their cause, and like any lawsuit, they are playing their poker hands with as much skill as they can muster.

Let me just reiterate here that you can write about this mess ‘til the cows come home (yep, I got more folksy metaphors than you probably care to stomach), but it is really very, VERY simple.