Is the update at the claims administration
website (http://www.copyrightclassaction.
com) and telephone message (1-800-330-
0516) accurate?

Essentially yes. Claim awards will not be
disbursed during the pendency of the
appeal by attorney Charles Chalmers on
behalf of ten objectors, including myself. The
timetable for what happens next is up to the
Second Circuit, and it’s reasonable to expect
this to take a year or more to get unraveled.

Are the settlement parties’ communications
omitting anything important?

Yes, of course! What more -- or less -- could
we have expected from the folks who
brought us the License by Default; whose
damages analysis stopped in 2001 and didn’
t even calculate interest; and who inserted
an 11th hour amendment to the settlement
agreement to include, among others, and its new search-inside-the-
book feature?

What they’ve left out is that the systematic,
blatant, years-long (and in some cases
decades-long) infringement by the
defendants also continues unabated during
the appeal. That means that even the things
on which everyone agreed in this settlement
agreement won’t get executed for now.
Class members like myself, who submitted
paperwork notifying the settlement team that
they were denying future use of their works
in return for reduced claims awards, find
their articles are still getting knocked off. So
do those who had opted out of the

Why did you object and why are you

Fundamentally because the settlement is a
disgraceful sellout of freelance writers’
rights and interests and also makes bad
public policy for the flow of information in
the Internet age.

The architects of this sellout are the so-
called “associational plaintiffs”: the Authors
Guild, the American Society of Journalists
and Authors, and the National Writers Union.
In the six weeks since the judge lowered his
rubber stamp, none of these organizations
has even bothered to update its website with
news of the approval of a settlement they’d
hyped to the skies six months earlier. The
Guild has moved on to suing Google -- right
after caving in to Amazon and a cast of
thousands in this case. ASJA appears to
have published not one, but two,
subsequent editions of its house magazine
without a word about the resolution it had
promoted for In re Literary Works. And the
NWU is in deep, deep REM sleep.

The front people for these sellout
associations are the so-called “class
representatives.” They include
Doctorow (see http://freelancerights.
el-doctorow.html), Tom Dunkel (see http:
dunkel-is-mad-as-hell-and-hes-not.html), and
Paula McDonald (see http://freelancerights.

In fairness to all these hapless antagonists,
they have been largely manipulated by a
hydra-headed team of lawyers who are
desperate to collect their millions of dollars
in fees for this atrocious work, and then get
the hell out of here. These esteemed officers
of the court include
Michael J. Boni (see http:
and-his.html), Spencer Hosie (see http:
Gary Fergus (see http://freelancerights.
eyes.html), and A.J. De Bartolomeo (see http:

What are some of the specifics of this sellout
settlement that give you confidence the
appeal will succeed?

There was only one way to get a settlement
in this case. That was by including all the
unregistered works -- what are called
Category C’s.

The fact pattern of years of blatant, willful
infringement, along with the sheer volume of
C infringements, made the C’s the key. The
plaintiff organizations and the individual
named plaintiffs (all with A’s and B’s) weren’t
doing the C’s a favor by including them; they
were following the sole road map to
resolution of this dispute. (A’s held
copyrights registered within 90 days of first
publication; B’s held copyrights registered
by certain complicated and utterly arbitrary
deadlines established by the settlement.)

I’m not speculating when I say this. Check
out the following statement by the
defendants’ lead attorney, Charles S. Sims:

“From the outset of the litigation, the
Database Defendants advised the
plaintiffs … that any settlement must
… guarantee ‘complete peace’ with
respect to the Subject Works.”
Declaration,  6.)

Now, let’s break down the huge differences
in the recoveries to B’s and C’s.

C’s get no less than $5, and up to $24 for
works sold for under $250. B’s get the
greater of $150 or 12.5% of the original price.
For an article whose first publication rights
were sold for $250, a C gets $25 while a B
gets $150. For a $2,000 piece, a C gets $50, a
B gets $250. For a $5,000 story, a C gets $60,
a B gets $625.

The settlement consolidated four complaints
filed originally by different plaintiffs against
different defendants -- three in 2000, the
fourth in early 2001. Three of these alleged to
represent only freelancers who held
registered copyrights. The fourth (Laney v.
Dow Jones) alleged that it represented all
copyright owners, without reference to
registration status.

According to plaintiffs’ counsel, settlement
discussions with the defendants
commenced in September 2001, shortly after
the Supreme Court affirmed the Tasini ruling
in favor of freelancers. In late September the
plaintiffs in three of those cases filed a new,
consolidated complaint, which adopted the
Laney approach, alleging a class of all
copyright owners. This suggests that the
plaintiffs’ lawyers understood that the
unregistered copyright owners had to be
part of the deal.

They were right. An author “owns” a
copyright, whether it is registered or not.
Registration is a precondition to filing an
action. However, once you file your
registration you can file an action to recover
damages for infringement in the prior three
years. Here, since unregistered owners were
alleged to part of the class as of September
26, 2001 (and against Dow Jones going back
to 2000), the argument can be made that an
unregistered who registers is entitled to
damages reaching back to three years
before those complaints.

Registering isn’t that hard: a little paperwork
and a $30 fee. You can register a group of
works published in the same year under a
single omnibus registration.

In the only other similar class action
settlement, Ryan v. CARL, the complaint was
only for registered copyrights, but the
settlement also included unregistereds --
who proceeded to receive the same
compensation as the B’s.

What you’re saying is that the tail wagged the
dog. How did that happen?

The plaintiffs told the court they had a study
showing that only 1 in 1,000 freelancers
registered their copyrights. That means that
two groups were motivated to keep C
compensation low.

One was, obviously, the defendants. Since C’
s represented 99.9% of the freelancers with
claims, a higher individual compensation
formula would have meant a much higher
total settlement number. Besides, the lower a
class member’s compensation, the less
likely it would be that he or she would
undergo the paperwork hassle of filing a

The settlement also has a “reversion”
feature. If the filed claims, together with the
attorneys’ fees ($4.1 million) and the costs
($1 million) don’t exceed $10 million, then the
additional $8 million of the $18 million
settlement fund never has to be paid to
anyone. If they exceed the $10 million
threshold but don’t reach $18 million, then
the unused portion of the $8 million goes
back to the defendants.

As of September 12, 2005, the claims period
had been open for 102 days, and had 18
days to go. At that point, according to the
plaintiffs’ attorneys, the filed claims totaled
$3.2 million. So I’d say the defendants stand
a very good chance of getting to keep that
$8 million or a large part of it.

Does anyone else have an incentive to screw
the C’s?

Surprise, surprise -- the plaintiffs with A and
B claims also were motivated to kept the
Category C compensation low. For a couple
of reasons.

If you’re arguing about a lump sum of
money, these plaintiffs have the problem that
the C’s vastly outnumber them by a 1,000-to-
1 ratio. And if the claims, together with fees
and costs, don’t exhaust the basic $10
million, then the claimants get to share the
remainder pro rata. A’s and B’s would get
the lion’s share of any such remainder.

Is there other evidence that the named
plaintiffs were serving their own interests
and not that of the C’s?

Yes -- plenty.

If you’re an A or a B, and you know that for
every one of you there are 1,000 C’s, and
your lawyers have reached a tentative
settlement for a fixed number ($18 million
minus fees and costs), you’re going to be
concerned that C claims, even at their low
compensation numbers, together with A and
B claims, could eat up the settlement and
thus reduce everyone’s recovery. So you’d
like a provision that if total claims exceed the
eighteen mil, then the C claim awards are
reduced until the total is under $18 million --
even if the C claim awards must be reduced
all the way down to zero -- before A or B
claim awards are reduced a penny.

The settlement parties now say there was
never any chance of that happening, and
they point to the $3.2 million of claims
through September 12 to prove it. But if
there was very little chance, and they really
believed that, why did they put all the risk on
the C’s? They were already getting very low
compensation. Why not structure the
settlement so that everyone shared this
putatively tiny risk?

An independent objector, Anita
Bartholomew, did a very telling piece of
research. Using published numbers for
freelance articles covered by the lawsuit for
The Philadelphia Inquirer and The New
York Times
, and employing ASJA’s
anecdotal data on what writers had been
paid there, Anita found that claims for those
alone could equal $12 million using the C
rate of compensation. Twelve million from
two publishers -- right there roughly the
amount left over from $18 million after you
deduct fees and costs.

Anita submitted this information to the court.
Neither the plaintiffs nor the defendants

There's a term of art for this kind of thing:
collusion on its face.

What do you advise while we’re all waiting?

The objectors-appellants are urging a
campaign to get C’s to register their works
with the Copyright Office. If we succeed in
killing this settlement, there’s a chance the
defendants will say, “OK, sue us.” They
might want to fight class action certification
on various technical grounds. But what they
can’t fight is 50, 100, 250, 500, 1,000, 10,000
individual plaintiffs, all armed and registered,
suing them in different cases (or in one case
-- they eventually would be consolidated
with or without class certification). At 1,000
and growing the defendants will begin to get
an icy feeling. At 5,000 they will be begging
for negotiations.
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