The Settlement (in essay form)
The Lawsuit (in essay form)
So why am I so dismissive of the dissent in Muchnick IV (and yes, the comparison to a bad series of horror films is both traditional in law and intentionally ridiculous for this matter)? It's a very simple reason, but its bound up in the complex institutional dynamics of the Second Circuit and, more generally, in excessive stare decisis.
Any first-year law student would tell you that the common law is a system founded on precedent, in which senior courts bind more-junior courts with "definitive" statements of what the law is. This makes a great deal of sense when the underlying source of law is not changing rapidly; we don't really want whiplash and uncertainty. It makes particular sense (and in a way that those who've only ever experienced civil law seldom discern) when interpreting slow-changing foundational documents like constitutions.
However...
Sometimes the underlying source of law changes. Sometimes it's the sheer pace or constancy of change; sometimes, however, it is a long-ago change in fundamental concepts that is not made explicit in the source of law, so it doesn't obviously make all of the precedent established under the old sources invalid. An excellent example of this is the resistance of the Courts of Appeals to the implications of 2Live Crew for parody/satire in particular, and fair use in general... because the Courts of Appeals continue to rely upon case law based upon the judge-made equitable doctrine of fair use as it developed under the 1909 Act, not the statutory interpretation of the statutory affirmative defense of fair use found in § 107 of the 1976 Act. The Ninth Circuit's continuing reliance on Air Pirates and Krofft as accurate, current interpretations of law is just one example; the Second Circuit's reliance on its own old precedent has been even more disturbing, as in Castle Rock.
And now, after this longwinded introduction, I must point to what I perceive as two fundamental errors in Judge Straub's partial dissent. Either one of these errors would probably have caused his partial dissent; together, they appear to have proven irresistible.
The first of the two errors concerns the nature of copyright itself, as defined in the statute... however inelegantly and unclearly. Under the 1909 Act, copyright was unitary — that is, it could not be subdivided, and a party exploiting a copyright needed to actually own the whole copyright at the moment of publication. This is why so many older articles and works of short fiction that were published in magazines have copyrights credited to the publisher (e.g., "Copyright © 1942, Street & Smith Publications; copyright renewed 1970, Nightfall, Inc."). Although the text of the 1976 Act is not exceptionally clear about it, the 1976 Act fundamentally changed the presumptive author-publisher relationship from a sale to a mere license of a limited right in two ways. First, the rights for copyright were made divisible; second, the termination/revocation provisions indicate that the author of a work is to be treated as its ultimate master, even when the publisher's market power enabled it to force a sale (rather than a license) upon the author. With all due respect to Judge Straub, I think his rejection of the fundamental conflict found by the majority (slip op. at 38–44 sub nom. 3–9) is infected by a presumption that the publishers inherently had the right to do what they did with the electronic databases but for the Supreme Court's decision in Tasini. This is incorrect; Tasini is a necessary, logical consequence of both the 1976 Act and a careful consideration of the IP Clause of the Constitution.
The second dubious assumption that I see Judge Straub making is a more subtle one, because the "source of law" that changed was not a statute created by Congress, but the judge-made rules of procedure. Most of the authority cited by Judge Straub (and, for that matter, the majority, if less obviously so) supporting his analysis of adequate representation comes from a time when Rule 23 did not explicitly and separately consider the suitability of counsel. Instead, the suitability of counsel was folded into considerations of adequacy of representation under Rule 23(a)(4) — as if the named plaintiffs were more alter egos of the lawyers controlling the litigation's process than anything else. However, a few years back these considerations were explicitly separated; Rule 23(a)(4) now concerns only the adequacy of the proposed class representatives, while adequacy of counsel is considered under Rule 23(g). This is much more of a problem in a settlement class than in a fully litigated class; indeed, the increasing use of settlement classes in the 1980s and 1990s provided much of the impetus for the revision of Rule 23.
I find this latter problem particularly troubling due to the way this litigation arose... combined with the conduct of the various parties. The post-Tasini litigation for periodicals (and, too, the anti-Google Book Search litigation lurking on Judge Chin's docket) was begun by lawyers hired by a subclass of plaintiffs who did not share the personal interests of the disfavored subclasses. Bluntly, the Author's Guild does not adequately represent "authors", or even "authors of material published in commercial periodicals" — its own membership criteria make that impossible, and the particular AG members nominated as named plaintiffs are egregiously nonrepresentative. The settling parties made no effort whatsoever to ensure that the disfavored subclasses were represented at the bargaining table, either in the person of named plaintiffs or by counsel; indeed, the AG and its lawyers have been obstinately hostile to anyone else providing substantive input.
I think that the lesson we should take from this is that neither civilization nor litigation ends at the Hudson... and that stare decisis is a valid consideration only so long as the context remains comparable. IMNSHO, Judge Straub's dissent is unpersuasive when this is considered; the settlement under consideration in Muchnick IV is inappropriate and improper under the Federal Rules of Civil Procedure, not to mention under both antitrust and copyright law; and the proposed settlement in the GBS litigation is worse.