GBS: Motion for Final Approval Posted

The plaintiffs’ motion for final approval of the settlement and its many supporting documents are now posted on the Public Index (scroll down to the end of the page). There’s a an awful lot of information here: hundreds of pages of legal briefing in reply to the objections, extensive reports on the notice program and opt-outs from the settlement program administrators, and much, much more.

According to pp. 37-38 of this PDF, 6800 authors and publishers have already opted out of the settlement entirely. That’s a remarkable number, especially in light of the poor notice. It’s even more remarkable in comparison to the number who made claims: 44,000 authors and publishers claimed 1.1 million works. That ratio suggests that most of the claims were bulk claims by publishers. And it means that for every six entities who made a claim, one opted out — an extraordinarily high ratio for any class action. (More numbers on the claims and opt-outs are on page 5 of this PDF, and the list of authors and publishers who opted out is on pp. 19-78 of this PDF. There’s a summary on the first page of this PDF, but the column heading are missing so it’s hard to guess what it’s supposed to mean.) More opt-out letters, particularly those mailed from overseas, will continue to arrive for weeks or months. Perhaps because of weather delays to postal deliveries in New York, some objections and opt-out letters posted by the 28 January deadline from as close as Toronto have yet to arrive at the courthouse. Most of the millions of affected writers clearly stayed away entirely, either by choice or because they never got, or didn’t understand, the notice, or thought they weren’t affected, or assumed they didn’t need to do anything.

Perhaps the most problematic of the claims in the latest filings by proponents of the settlement are those in the declaration by Paul Aiken, executive director of the Authors Guild.

Aiken’s declaration makes clear that the negotiations were based on the experience of the Authors Guild and the typical terms of its members’ contracts — which by the Authors Guild’s own membership criteria (and as was noted in the briefs by other writers’ organizations) are limited to contracts with large publishers that involve substantial advances. Those are, of course, hardly typical of the much larger numbers of authors published by more diverse small publishers, under much less standardized contracts.

Even more significantly, Aiken claims — below the bold headline, “The Critical — and Unending — Right of Nonparticipation” (p. 7), that “At any time, under the settlement, an author can choose to deny Google the right to display the work…. [W]e made sure that there would be no downside to an author to remain in the settlement… If at any time any author found any term to be disagreeable, the author could simply choose to further participate in the settlement…. An author can at any time choose not to participate in the new markets and terminate any perceived harm.”

These are the same claims Aiken made at the NWU/ASJA/SFWA information session for writers at which he, Prof. Grimmelmann, and I all spoke in New York last month, and — as Aiken himself says in his declaration — what he and the Authors Guild have told thousands of other writers.

But none of this is true. In fact, the choices Aiken describes are available neither to “any” author nor at “any” time. Most of these choices are available only to an author who is determined, under the substantive definitions and decision-making procedures of the settlement (including mandatory binding “one strike you’re out” arbitration) to be “the Rightsholder” for purposes of the settlement.

This requires that the author be found by the single arbitrator, under procedures yet to be determined and in the face of near-inevitable claims to the contrary by print publishers, to be the “exclusive” holder of the particular rights “implicated” by the uses of the work under the settlement (as among, typically, rights separated and differently allocated under at least three clauses of a typical author-publisher contract, any of which might be argued to be implicated and any of which might be argued to be non-exclusive).

As for the ability to “terminate any perceived harm”, an author determined by an arbitrator not to be “the Rightsholder” or not to be entitled to the share of revenues to which they are entitled under their current contracts cannot, in fact, take action to terminate the harm, unless they opted out of the settlement by 27 January 2010. If they didn’t opt opt, they have released their claims and given up their ability to enforce their copyright against Google, and have effectively released their claims against print publishers for copyright infringement and/or conversion of receipts owed to authors by “agreeing” by default that their only “remedy” against publishers for such actions will be through arbitration.

Authors who relied on Aiken’s claims about what “any” author could do at “any” time could be in for a rude surprise when they find that, as a result of bogus claims by print publishers and an inequitable arbitration process, authors’ own efforts to distribute their own work electronically face competition by Google and print publishers, revenue from which goes to Google and print publishers (but not to authors), authorized by the settlement, and against which authors have no legal recourse.

Aiken’s declaration is, in effect, sworn testimony as to exactly how, and to how great an extent, he and the Authors Guild have misrepresented the proposed settlement to affected writers. As such, it provides sufficient basis in itself for the court to reject the proposed settlement and the proposal for certification of the class. And since class counsel were aware of tolerated this conduct — as evidenced by their filing of Aiken’s declaration — it provides grounds to revoke their appointment as class counsel and reject their motion for an award of fees.

Some of the most interesting parts of of these filings are the details of optouts and claims and the declaration by Paul Aiken of the Authors Guild.

Is the case mentioned here any kind of useful precedent?