19 February 2013

Road Sausages

Road sausages are sort of like road pizza, but a bit more rounded. Since I've been on the road around the area for meetings for the last couple of days, that may be all too apt.

  • A fascinating piece at Frankfurter Rundschau offers a rather different geographical perspective on the world. First, the revised projection:

    Benjamin Hennig, population-area projection, 2012, http://www.viewsoftheworld.net/

    This representation graphically demonstrates something many Americans fail to comprehend: That the population of the Indian subcontinent area is equal to, and perhaps slightly exceeds, the hordes of China still stuck in our collective unconscious since the Korean conflict... and, not coincidentally, that the population of the two Koreas greatly exceeds that of Australia and is nearly equal to that of Mexico. It places a rather interesting twist on decades-long inattention in American business and policy, doesn't it? As Lilo Berg (the article's author) notes, "In viele Rastertransformationskarten muss man sich hineindenken" (one must think one's way into [understanding] many data-transformed maps).

  • Turning to litigation land — and, explicitly, to Google Book Search land — Judge Baer has denied the HathiTrust libraries' motion for attorneys' fees, remarking:

    The Libraries and NFB make much of a few specific areas where more could have been expected of the Authors Guild (such as [17 U.S.C.] § 108, statutory standing, and the ripeness of the Orphan Works Project). But on the larger question of how copyright law (and the Americans with Disabilities Act) will account for changes in technology, the Authors Guild and the other plaintiffs acted reasonably.

    Authors['] Guild, Inc. v. HathiTrust, No. [20]11–6351 Doc. 173 (PDF) (S.D.N.Y. 15 Feb 2013) slip op. at 2. What this reflects more than anything else is that the law regarding attorneys' fees in copyright matters is less well developed in the Second Circuit than in the Ninth Circuit, thanks to the Ninth Circuit's consideration of Fogerty on remand. Cf. Ellison v. Robertson, No. [20]00–4321 Doc. 222 (C.D. Cal. 15 May 2002), slip op. at 3 ("an award of attorneys' fees to AOL would not advance the purposes of copyright law. To the contrary, it would likely have a chilling effect on copyright holders, who would be less likely to seek legal protection for their copyrights in the future, even in situations in which their infringement claims were potentially meritorious."), citing Fogerty v. Fantasy, Inc. [III], 94 F.3d 553, 557–58 (9th Cir. 1996). (Disclosure: I was lead plaintiff's counsel in Ellison... and any award of fees to defendant AOL would have been mooted by our later victory on appeal.)

    What bothers me the most about Judge Baer's decision is that he never acknowledges that the standing failures severely restricted the scope of the matter as properly before him. That's much less important given that he denied fees... but failure to even mention it leaves this opinion open to later misinterpretation and citation for inimical purposes.

  • Also implicating the Google Book Search mess, a decision out of the Third Circuit — if the Second Circuit pays attention to it, that is — essentially torpedoes any chance to settle the Google Book Search cases... on civil procedure grounds. In In re Baby Prods. Antitrust Litig., No. [20]12–1165 (PDF) (3d Cir. 19 Feb 2013), the court found that a sufficiently high proportion of a class action common settlement fund distributed not to class members, but to charities purportedly working for similar interests, renders the settlement untenable.

    Young’s overarching concern, and ours as well, is that the settlement has resulted in a troubling and, according to counsel for the parties, surprising allocation of the settlement fund. Cy pres distributions, while in our view permissible, are inferior to direct distributions to the class because they only imperfectly serve the purpose of the underlying causes of action—to compensate class members. Though the parties contemplated that excess funds would be distributed to charity after the bulk of the settlement fund was distributed to class members through an exhaustive claims process, it appears the actual allocation will be just the opposite. Defendants paid $35,500,000 into a settlement fund. About $14,000,000 will go to class counsel in attorneys’ fees and expenses. Of the remainder, it is expected that roughly $3,000,000 will be distributed to class members, while the rest—approximately $18,500,000 less administrative expenses—will be distributed to one or more cy pres recipients.

    We vacate the District Court’s approval of the settlement because the Court was apparently unaware of the amount of the fund that would be distributed to cy pres beneficiaries rather than being distributed directly to the class. On remand, the Court should consider whether this or any alternative settlement provides sufficient direct benefit to the class before giving its approval. We also vacate the attorneys’ fees award because its approval was based on the terms of a settlement that are no longer in effect and may be altered on remand. Addressing Young’s argument that attorneys’ fees should be reduced, we confirm that courts need to consider the level of direct benefit provided to the class in calculating attorneys’ fees. We leave it to the District Court’s discretion to assess what effect, if any, that consideration should have on any future fee award in this case.

    Slip op. at 9–10. Much as it pains me to agree with Ted Frank — a right-wing ideologue of breathtaking certitude — on the facts of this matter he was probably right to challenge this particular award... largely due to a mismatch between counsel for plaintiffs and the combination of the cause of action and the nature of the plaintiff class. That's the usual cause of inappropriate cy pres settlements that don't benefit the class members when it was possible to do so. (Disclosure: I've been one of several class counsel in several matters that led to cy pres settlements; the class numbered in the hundreds of thousands, but due to caps imposed by Congress on damages under the causes of action in question, each class member would have received less than $3.00.) Frank's ideological problem is that he doesn't think cy pres settlements are ever justified (and, for that matter, that class actions are ever justified, or that a corporate defendant should ever have to pay for deceptive conduct, but that's for another time).

    Although the class counsel in the Baby Products matter do not overlap with the class counsel in the Google Books matters, the potential problems still do. If a sufficiently high proportion of authors opts out of any GBS settlement — my back-of-the-envelope calculation indicates that about 15% would do it — the potential cy pres distribution based on the proposed-and-rejected settlement would turn into a disturbingly large number... unless Google and other wrongdoers were allowed to retain money that was "unclaimed." To my mind, that would be worse, although it would certainly meet Mr Frank's approval. The key point is that there is also a problem with the relationship between attorneys' fees and total settlement value that underlies the Third Circuit's skepticism, see slip op. at 23–30. I'm afraid that in that respect, the proposed GBS settlement was worse.