22 March 2011

GBS: Settlement Rejected as Not Fair and Adequate

So, the wicked witch is dead: Judge Chin has rejected the Google Book Search settlement. I want to digest this before I make too many detailed pronouncements, but there's one huge "I told you so!" moment:

While the named plaintiffs and Google would argue that these authors can simply opt out, the comments underscore certain points. First, many authors of unclaimed works undoubtedly share similar concerns. Second, it is incongruous with the purpose of the copyright laws to place the onus on copyright owners to come forward to protect their rights when Google copied their works without first seeking their permission. Third, there are likely to be many authors -- including those whose works will not be scanned by Google until some years in the future -- who will simply not know to come forward.

Authors Guild v. Google, No. 05–8136 (SDNY 22 Mar 2011), Doc. 971, slip op. at 34–36 (citations and footnotes omitted). Judge Chin also spent considerably more time on the antitrust issues than the proponents of the settlement would have preferred, and noted that altering of substantive copyright rights is properly a matter for Congress, not the courts. Further, Judge Chin raised questions about the fairness and adequacy of representation — specifically, conflicts of interest — that the parties will need to address if they wish to go further, regardless of changes they make to the settlement documents themselves.

Judge Chin closes by rejecting the settlement as it stands; suggesting a mechanism to which he'd be more amenable; and setting a status hearing.

In the end, I conclude that the ASA is not fair, adequate, and reasonable. As the United States and other objectors have noted, many of the concerns raised in the objections would be ameliorated if the ASA were converted from an "opt-out" settlement to an "opt-in" settlement. I urge the parties to consider revising the ASA accordingly.

The motion for final approval of the ASA is denied, without prejudice to renewal in the event the parties negotiate a revised settlement agreement. The motion for an award of attorneys fees and costs is denied, without prejudice.

The Court will hold a status conference on April 25, 2011, at 4:30 p.m., in Courtroom 11A of the Daniel Patrick Moynihan Courthouse.

Id., slip op. at 45–46 (emphasis added; citations omitted).

More tomorrow...