Thursday, August 20, 2009

Major Objection to Google Book Search Settlement Is Filed

Andrew Albanese -- Publishers Weekly, 8/19/2009

The Google Book Search settlement has its first heavyweight objection, as author and attorney Scott Gant this morning filed with the court a hard-hitting 50-page objection that claims the sweeping deal is an illegal expansion of class-action law. In a copy of the brief shared with PW, Gant, a Harvard-educated lawyer with more than a decade of class-action litigation experience, and the author of We're All Journalists Now: The Transformation of the Press and Reshaping of the Law in The Internet Age (Free Press), argues that the settlement is a “predominantly commercial transaction,” that “cannot be imposed through the Federal Rule of Civil Procedure 23,” the order that authorizes class action.

Among his arguments, Gant asserts that the settlement:
Fails to satisfy notice requirements imposed by Rule 23 and the Fifth Amendment’s Due Process Clause
Fails to provide putative class members with adequate compensation
Fails to satisfy the typicality and adequacy requirements of Rule 23
Would vest Google with significant market power which it could not acquire without the settlement.
Raises serious antitrust issues that must be considered as part of this Court’s review of the Proposed Settlement.

Gant’s most damaging argument, however, may be that the settlement fails to safeguard the due process rights of absent class members as required by law—a potentially fatal blow to the settlement, because if upheld by the court, it would remove a critical foundation of the deal, under which Google would essentially obtain a license to works without the specific consent of the copyright holder.“A central feature of the Proposed Settlement’s commercial arrangement is the sweeping transfer of intellectual property rights from class members to Google and its partners,” Gant argues. “The use of Rule 23 to transfer class members’ intellectual property rights to Google and its partners is improper, and would violate the Rules Enabling Act’s express mandate that the Rules of procedure shall not abridge, enlarge or modify any substantive right.” Only federal copyright statutes, Gant writes, can “establish the contours of each class member’s substantive rights as they relate to their creative works protected by federal law.” Thus, he concludes, the use of class action to transfer “substantive rights of class members, created by Congress is impermissible and should be rejected."

Gant argues that the court lacks jurisdiction to approve a settlement that does not address past behavior so much as future behaviors. “Because the commercial arrangement does not relate to or resolve claims for damages, the only conceivable basis for the Court to exercise jurisdiction in a manner that would encompass approval of the commercial component of the Proposed Settlement would be to view the commercial arrangement as a form of injunctive relief,” he argues. “But the notion that the commercial component of the Proposed Settlement is a form of injunctive relief could not withstand scrutiny.”In the brief, Gant also outlines a host of unusual aspects in the class action procedure to date, beginning with Judge Sprizzo’s November 14, 2008, preliminary approval of the agreement, which was “entered without any contested briefing and without a hearing.”

Gant notes the work that preceded the settlement “describes review of millions of pages of documents produced by the parties,” but “makes no mention of any depositions or work by experts.” Indeed, Gant notes that attorneys claimed approximately $140,000 in expenses as of the date of the Settlement Agreement, “a tiny amount for a complex case or a large class action, further suggesting no significant discovery or expert work occurred.”The most serious aspect of Gant's challenge could be that he is objecting not in his role as as a well-practiced class action attorney with a prominent firm, Boies, Schiller & Flexner, but as a class member.
Gant told PW he plans to attend the October 7 hearing—as a class member.

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