- Time for another Borders bankruptcy update. Now things that actually matter to authors are starting to get filed...
First up, Borders management has filed a motion (Doc. 457) to continue to pay high salaries and bonuses to "key employees." Although this is routine in bankruptcy — under the rationale that it will actually cost more to the bankruptcy estate, and make a confirmable reorganization plan less likely, to bring in outsiders and bring them up to date on the details of the debtor company — it shouldn't be... and it especially shouldn't be routine when it is clear that managerial deficiencies of many of these individuals contributed to the need for bankruptcy filings in the first place. Further, it seems rather ironic, in this particular instance, to implicitly claim that people unfamiliar with Borders can't help it emerge from bankruptcy given (a) the high degree of turnover in the past three years and (b) that that turnover almost uniformly brought outsiders unfamiliar with book retailing in. Nonetheless, I expect that this plan is going to be approved, after some posturing and gnashing of teeth; as these things go, it's not particularly outrageous. (Whether this provision of the Bankruptcy Code should even be available to retailers is a policy question for another time.)
Second, Borders has now proposed specific deadlines for filing of proofs of claims (Doc. 475). Although this is not certain to be approved next Thursday (07 April), it is highly likely. Presuming such approval, proofs of claim (PDF) would be due on 01 June 2011 for nongovernmental entities and 15 August 2011 for governmental entities, using a slightly-customized proof of claim form. Now, one caution: This is not the procedure for authors, but for direct creditors like publishers. (If you're an author who self-published, put on your publisher hat — no, not the propeller beanie, the Homburg.) Publishers — particularly small publishers — who do not file by the date actually approved by the court will lose their claims. Fortunately, the form is pretty simple to fill out, and does not require a lawyer, a formal appearance, or any fee. That's not to say that some publishers won't screw it up; [name of midmajor publisher withheld to protect the guilty] screwed up and didn't file a complete proof of claim in [relatively recent distributor bankruptcy proceeding], resulting in a five-figure loss to the publisher.
- I'm also going to make a prediction about the Google Book Search settlement negotiations — a prediction that will be as difficult as shooting fish in a barrel.
No matter the other details, the structure of the settlement will shift a significant portion — and perhaps all — of the administrative burden from the infringer (Google) to the copyright holder(s) (authors and, in a few instances, publishers).
This is the broader version of Judge Chin's "opt-in/opt-out" concern. It is also consistent with the nonstatutory, but usually determinative, fifth fair-use factor: Administrative convenience. Unfortunately, the egregiously defective Authors Guild complaint in this matter gives this argument much more practical weight than it deserves. Were we not contrained by the inept and unclear statements of infringement theories in that complaint, we'd be on much stronger (or at least clearer) ground in rejecting Google's implicit claim that the administrative burden of policing copyrights must, as a matter of law and of policy, fall upon the copyright holders. Nonetheless, as Judge Chin points out, the proposed settlement goes so far beyond the complaint that those broader considerations are going to have a significant — and perhaps dominant — role in fashioning a remedy in this matter... whether by settlement or by the court.
Let this be a lesson to you, young lawyers: The quality of writing in your complaints makes a difference. Remember, too, that quality of writing is more than just the number of typographical errors one avoids through anal-retentive proofreading skills; the quality of thought and analysis before putting fingers to keyboard matters even more. It's rather ironic, and telling, that Judge Chin did not refer to the considerably better (if not what I would have preferred) complaint filed by the publishers; if he had done so, and used that as the foundation for this matter, and (more importantly) the parties had agreed to do so, both the settlement and Judge Chin's opinion would have looked quite different.
- RIP Diana Wynne Jones. Joanne Rowling's success simply would not have been possible without Diana Wynne Jones's works (nor Jane Yolen's, but that's for another time indeed).
- The 1709 Blog offers an intriguing look at personal jurisdiction in copyright-infringement matters, discussing an opinion last week from the New York Court of Appeals (the highest court in that state... where its lowest general-jurisdiction court is called "Supreme"). The real problem with this opinion is that it is a "certified question" only, and answers only part of the question that the Second Circuit (which asked for guidance on New York state law) should have asked.
As a quick review of civil procedure, a US court may only assert personal jurisdiction over a defendant who (a) can be found in that jurisdiction, or (b) has committed acts bringing it properly within that jurisdiction. In this instance, a company incorporated in Arizona and based in Oregon scanned a New York-based-publisher's book and put it on the 'net. Does that act bring it within the reach of New York courts? The New York Court of Appeals said "yes, because our long-arm statute allows reaching out to a wrongdoer who commits acts that cause injury in New York." There are two problems with this reasoning, though. First, it analogizes copyright actions to torts... and they are not: The tort theory of copyright assumes that copyright is a natural right, a view rejected two hundred years ago in favor of a statutory right/property theory. This matters because the considerations of what is "fair" regarding a property right are close to, but different from, those for a tort. Second, the Second Circuit's very certification of this question puts the cart before the horse... because copyright is an exclusively federal matter, the state's own personal jurisdiction law should be considered at most "advice." Then, too, the Second Circuit is not bound by the New York Court of Appeals' answer; it could find that in these circumstances hauling the Arizona/Oregon company into court in New York would "exceed traditional notions of fair play and substantial justice," International Shoe Co. v. Washington, 326 U.S. 310, 316, 31519 (1945); but compare Keeton v. Hustler, 465 U.S. 770 (1984) (finding jurisdiction for libel, a tortious act, based on minimal distribution in New Hampshire) with Burnham v. Superior Court, 495 U.S. 604 (1990) (finding jurisdiction in a contested divorce by "tagging" the defendant with service when he arrived to pick up the children for visitation).
In short, this one isn't over. The Second Circuit was probably hoping that the New York Court of Appeals would find that this matter exceeds the long-arm jurisdiction offered in New York state law to New York state courts, which would make rejecting jurisdiction much easier. Instead, though, it must go through the entire International Shoe/Shaffer/Keeton analysis — which is not easy, and is much more fact-bound than most first-year civil procedure texts make apparent.
28 March 2011
Spring Break Ist Entsprungen
at 11:41 [UTC8]
Now that Spring Break is over, perhaps I can get back to some work. After I get over the germs brought home from school by the younger remora and so generously shared, that is...