On Track to Approval, Google Settlement Faces Legal Hurdles

Andrew Albanese -- Library Journal, 11/5/2008

Approval no slam dunk
Will there be many opt-outs, or objectors?
Arcane copyright law at the root of the matter

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(This originally appeared in the November 4, 2008 edition of the LJ Academic Newswire.)
With last week’s settlement, four years of wrangling between authors, publishers, and Google is ostensibly over. Now, however, the battle turns to getting the sweeping class-action settlement past the various class members, and a federal court. When it comes to copyright law, nothing is ever clear-cut, so this settlement, which holds major implications for both the past and the future of the book, may be no slam dunk.

“This is not the final word,” blogged Duke Scholarly Communications officer Kevin Smith, hinting at the winding legal road that now lies ahead for the settlement—beginning with the parties themselves. “The plaintiff classes in this class action suit are very large, so the process of notification will be complex and it is likely that class members will object and want to discuss changes in the agreement.”

Objectors
Washington-based attorney Jonathan Band, a frequent library community consultant, told the LJ Academic Newswire the size of class in this settlement—encompassing publishers and authors of millions of in-copyright books—was not unusual. “In terms of the breadth of the class, courts often recognize very large classes, and often there are only a handful of real class representatives,” he explained. “The fact that the Authors Guild (AG) represents 8000 authors suggests that this class has more real representatives than most.”

On the other hand, the Authors Guild’s stated 8000 members represent but a tiny fraction of the authors included in Google’s program. The Association of American Publishers (AAP), meanwhile, which pursued the legal action on behalf its members, represents some 260 publishers. While that includes all of the major houses, and many mid-to-smaller houses, that is but a small slice of a historically diverse book publishing universe—and notably, a number of both groups’ members opposed the suits from the start. All of which raises the $125 million question: could there be a large, yet-unformed objector class looming out there?

Perhaps, but both AAP and the AG will note that copyright owners who disagree with the settlement can simply opt out of it. Opting out would mean that a party could not claim any of the settlement’s benefits (such as their piece of the $45 million to be paid by Google to satisfy aggrieved writers). On the other hand, opting out would not bind that party to the terms of the deal—nor prevent them from suing independently in the future. To preserve one’s standing outside the settlement, however, one must opt out. Under the deal, if a party does not officially opt out they will be included in the class, and bound by the approved settlement terms. In other words, if you don’t opt out, you’re in.

May 9, 2009 has been listed as the opt-out deadline, and it will be worth watching to see how many choose to opt out, and why—and how vocal they are in their opposition. If large numbers balk, it could threaten—or, at least change—the settlement.

Some small cracks, meanwhile, have already begun to appear in the authors’ camp. In a statement, the Science Fiction and Fantasy Writers of America (SFWA) noted several potential problems with the settlement. “This settlement is not set in stone,” SFWA President Russell Davis told his constituents, urging them to review the deal carefully. “The judge…may order modifications, sometimes quite substantial, or reject it entirely. His decision to do so will depend, at least in part, on what any objectors to the settlement have to say in their formal filings.”

Going rogue
Of course, the formal filings will only be part of the story. The judge also will weigh the settlement against the law, and, as with all things copyright, that’s a wildcard. In the recent Tasini settlement proceedings (which could be docketed for Supreme Court review in the coming weeks), a federal judge quashed the proposed deal as inconsistent with the law, even though no party raised the issue the judge used to reject the settlement, and both parties to the suit, and the settlement’s objectors, disagreed in briefs with the judge’s reasoning.

There are major differences between this settlement and Tasini, not the least of which the latter had a Supreme Court verdict behind it. However, both involve an unwieldy copyright law. If there is a true nightmare scenario to be suggested for the Google settlement by Tasini, it is this: more than five years after an initial settlement was announced for Tasini, there is still no deal.

Band says he has no predictions about how the approval process will go for Google. “A court’s main objective in reviewing a class action settlement is to make sure that the settlement actually is in the interests of the class,” he noted, “and not just the lawyers representing the class.”

Legal fiction
Given the complex nature of class action suits, was there (or is there) an easier way to settle the issues in the Google case? Because of the arcane nature of copyright law—specifically, that there is no requirement that owners register their works—the answer, Band says, is most likely no.

“The underlying legal problem is that for a huge category of books in-copyright, but not commercially available, there is no efficient rights clearance mechanism. So in many cases, it is not clear who owns the rights,” he explained. There are many scenarios: an author might be dead; a publisher might be out of business; rights might have so little economic value that the owner might be completely unaware they exist. “Google has already scanned five million books in this twilight zone,” Band noted, “and reportedly plans to scan another 15 million.” This has made what Band calls “the legal fiction” of a class action settlement—a deal in which a fraction of stakeholders represent the interests of a significantly larger whole—a necessary route.

“Without the legal fiction of a class action settlement, there is no way to bring all the owners, including those who don’t know they are owners, into the tent,” he said. “The settlement is binding on the millions of members of the class, all the copyright owners, unless they explicitly opt out of the settlement. And Google doesn’t need to resolve the ownership issue for each book up front.” Instead, the registry proposed in the settlement is designed to settle ownership issues “on the back end.”

Given the vagaries of existing copyright law, and the scope of Google’s plans, a class action may be the most efficient way around this rights-clearance problem, “other than asserting fair use,” Band added, “or convincing Congress to adopt a specific exception.” That however, doesn’t it mean the class action will be, simply, efficient. The first challenge, will be getting millions of copyright owners—and a federal judge—all “in the tent.” In other words, you may not want to wait by the mailbox for your check. No one can predict, but given the size of the class, the complexity of copyright law, and the parties' expansive goals, it could be months, or years, before the settlement, itself, is settled.