Saturday, 24 September 2005

Lies from "my" lawyers in copyright class action lawsuit

On the eve of the court hearing scheduled for this coming Tuesday to decide whether to approve a proposed settlement giving the New York Times and its co-defendant copyright infringers future rights in perpetuity to sell, license, and sublicense the electronic rights to freelance articles that they've been stealing for years, the Times this past Monday began charging new fees (a US$50 monthly subscription fee and/or a per-article fee, none of which goes to the authors) for online access to articles (including those to which the Times has never paid for, nor acquired, the electronic rights).

The Times has been gearing up for this for months. So it's odd that they launched the new subscription fee and services now, rather than waiting a week for the settlement granting them rights to be approved. But their greed is, apparently, impatient. Clearly this is their attempt to monetize, as quickly as possible and without even waiting to get the settlement approved, the value of the settlement's grant of future electronic rights to freelance work.

TimesSelect has been launched with intense promotion including an 8-page insert in Monday's print edition, and has prompted a lot of discussion in print and the blogosphere this week on the value of electronic rights to archived articles.

For example, the boldface money quote in this article is from Scott Heekin-Canedy, President & General Manager, The New York Times: "Our research very strongly supports willingness to pay far beyond what we're charging."

Editor & Publisher says:

Martin Nisenholtz, president of New York Times Digital, says the catalyst for the shift in strategy is to build a significant online revenue stream on top of advertising.... Nisenholtz is convinced that TimesSelect has a good shot at achieving that goal.... He points out that NYTimes.com has offered a number of piecemeal premium services in the past, but in aggregate they only brought in a couple million dollars a year. The ambition is to have a much larger revenue stream. He's looking for significant numbers. The goal won't be met with TimesSelect subscription numbers in the tens of thousands, Nisenholtz says; it needs to be in the hundreds of thousands in the early years, and even more over the long term.

At US$50 per month per subscriber, that adds up.

And the Times and its co-defendants in the copyright class action lawsuit are proposing a settlement that values rights in perpetuity to the freelance portion of the Times archives, and those of tens of thousands of other publishers, and the entirety of over 100,000 books included in Amazon.com's "Search Inside the Book", at US$10-18 million?

Given the value they place on electronic rights, I assume the reason the Times didn't start charging for electronic access sooner is that they didn't want to call attention -- while the settlement negotiations were going on, and while authors still had the opportunity to demand more in the settlement, or to opt out of the settlement -- to how much more valuable the rights they are getting will be to them than the amount they will pay in the settlement.

The deadline for writers to opt out of the proposed settlement was Monday, 12 September 2005. The new "TimesSelect" scheme went into effect at the start of the very next week, on Monday, 19 September 2005.

The timing... well, you can draw your own conclusions.

The settlement sucks , and the lawyers who purport to represent writers are lying to the Federal Court hearing the case, to try to justify the sell-out.

Some of those lies relate directly to my conversations with counsel for the class and for one of the organizations to which I belong, the National Writers Union. I've opted out of the class subject to the settlement in order to preserve my rights even if the settlement is approved. But I also felt obligated, once I knew that "my" lawyers were lying about me in their pleadings, to send the following e-mail message today regarding this:

From: "Edward Hasbrouck" edward@hasbrouck.org
To: mboni@kohnswift.com , ajd@girardgibbs.com , drice@hosielaw.com
Cc: Copyright Class Action counsel and parties
Date: Sat, 24 Sep 2005 18:02:02 -0800
Subject: False statements in your memo

It has come to my attention that your "Memorandum of Law in Support of Plaintiffs' Motion for Final Settlement Approval" in "In Re Literary Works In Electronic Databases Copyright Litigation", contains materially false statements of material facts, which you knew to be false when you filed that memo.

I found a copy of your memo , signed by Mr. Boni over the names of himself and co-lead class counsel and dated 19 September 2005, at:

http://www.asja.org/media/nr050329b.pdf

To my personal knowledge, on the basis of my e-mail correspondence and telephone conversation with you, you were personally aware of the falsehood of the following two claims in your memo:

(1) "None of the thousands of visitors to the Associational Plaintiffs joint website has voiced any criticism of the Settlement." (section III ( C )(2), page 22 of your memo)

(2) "Neither the author nor Chalmers claims that the book in question has ever been copied by any Defense Group member." (section III (E)(3)(a), pages 49-50 of your memo, referring to me as "the author" and to one of my books as "the book in question")

I am writing to make sure that all class counsel and other parties to the case, and of course the Court, are aware that you as class counsel have lied to the Court in your pleadings.

I don't know if this is a crime, a tort, professional malpractice, an attempt to perpetrate a fraud on the Court, misconduct as an officer of the Court, some of the above, or all of the above.

I do know that it is wrong, unethical, and offensive.

As you know, I have opted out of the settlement, as explained in my declaration filed with the Court and posted at:

http://hasbrouck.org/articles/copyrightclassaction.pdf

As you know, I was unable to use the form on the Web site for the proposed settlement to seek advice as to whether I was a member of the class eligible to submit a claim or to object to the settlement. This was because the form to submit "comments" requires as a condition of submitting a comment that the would-be commenter check a box labelled, "By checking the "I Agree" box, I hereby certify that I am a class member," which I couldn't certify because I didn't know and was trying to find out.

Being unable to obtain advice through the Web form, I sent an e- mail message on Thursday, 1 September 2005, to the address on the Contact Us page of the Web site, "CopyrightSettlement@girardgibbs.com".

Having received no response to that e-mail message, I sent a follow-up e-mail message on Wednesday, 7 September 2005 to the individual e-mail addresses given in the detailed settlement notice for each of the three co-lead class counsel. If you don't keep copies of the e-mail messages you receive from clients, it has been posted (with my permission) at:

http://freelancerights.blogspot.com/2005/09/author-edward-hasbrouck-why-im-opting.html

The three addressees of this message were three of the four names that appeared as "Co-Lead Class Counsel" on your memo of 19 September 2005.

I know from their responses that at least two of the three of your firms received that message, and thus were aware that I, as a visitor to the Associational Plaintiffs' Web site, had voiced criticisms of the proposed settlement.

(For the record, many others voiced criticisms of the proposed settlement in forums in which I participate as a freelance writer and as a member of one of the associational plaintiffs, the National Writers Union.)

I received a response by e-mail on Friday, 9 September 2005, from a paralegal at class counsel Girard Gibbs & De Bartolomeo.

I received a voicemail message later that same day, Friday, 9 September 2005, from a person who identified himself as Michael Boni , and asked me to call him back at 215-238-9570. I called that number, and my call was answered by what sounded like the same person who again identified himself as Michael Boni. Mr. Boni and I then spoke for about half an hour.

At the start of the call, Mr. Boni volunteered that he understood from reading my e-mail message that I had unable to use the Web comment form, and had not received a response to my e-mail to the address on the Web site. "I apologize for that, and that a lawyer didn't contact you sooner," he said.

Next Mr. Boni asked me what my status was with respect to the proposed settlement. I explained that my problem, with which I was seeking the assistance of class counsel as my attorneys, was that I was unable to determine whether I was a member of the class. I made clear that it was a criticism of the proposed settlement that I and others similarly situated could not determine whether or not we are members of the class eligible to participate. It was clear to me that Mr. Boni understood this to be a criticism of the proposed settlement, even though he was not persuaded that it was a justified criticism.

After receiving my e-mail, and after our conversation, how could you sign a memo stating in its description of "The Reaction of the Class to the Settlement" (section III ( C )(2), page 22), that "None of the thousands of visitors to the Associational Plaintiffs joint website has voiced any criticism of the Settlement"?

I had voiced such criticism directly to you, and you knew of my inability to use the Web comment form and the lack of response to e-mail sent to the address on the Web site.

The description of the proposed settlement in section II ( C )(1)(a) at page 6 of your brief erroneously describes the "Defense Group" as consisting only of (1) certain named database operators and (2) certain named newspaper publishers.

In fact, as I pointed out in my e-mail message, and again during our conversation, the definition of "Defense Group" in section (1)(h) of the proposed settlement also includes their "affiliates".

Similarly, the "Released Claims" as defined in section (1)(n) of the proposed settlement include claims against "all of their past, present, and future ... affiliates ... and all of their respective ... licensees".

According to the Supplemental Notice of Settlement , Amazon.com is, or purports to be (I do not concede that Amazon.com has any valid license to my work) a "licensee" of "one or more of the Database defendants". And Amazon.com says on its Web site that it has "over 1,000,000" affiliates:

http://www.amazon.com/gp/browse.html/?node=3435371

So, as I pointed out to you in my e-mail message to you and in our phone conversation, whether I or any other author whose work was infringed by Amazon.com's Search Inside The Book program is a member of the class eligible to participate in the settlement, and whether my and others' claims against Amazon.com would be released by the settlement, depends on the terms of Amazon.com's "license", and on whether Amazon.com and any member(s) of the Defense Group are among each other's million and more "affiliates".

I asked you specifically whether I was a member of the class. You said you didn't know, and you could suggest no methodology by which I could determine that.

I asked you whether my works were included in Amazon.com's "license". You said you didn't know, and you could suggest no methodology by which I could determine that.

I asked you whether Amazon.com and any member(s) of the defense group were "affiliates". You said you didn't know, and you could suggest no methodology by which I could determine that.

But in section III (E)(3)(a) at pages 49-50 of your brief, you say with respect to my book, and me as its author, "Neither the author nor Chalmers claims that the book in question has ever been copied by any Defense Group member."

You know that this statement in your brief is not true.

I had made such a claim, to you, both in my e-mail -- which you acknowledged to me that you received -- and during our phone conversation.

I claimed (and continue to claim) that Amazon.com has copied my book, and that Amazon.com is probably a Defense Group member as an affiliate and/or licensee of one or more of the Database Defendants.

Why did you lie to the Court and deny that I had made this claim to you?

Your brief continues, "the work [i.e. my book] gives rise to no claim and is subject to no release under the Settlement".

If you knew that I had no claim, why did you tell me you did not know, and had no way to determine, whether the infringement of my book by Amazon.com made me eligible to make a claim?

Why did you tell me one thing -- as your client who was seeking your advice as my legal counsel in this matter, as a member of one of the Associational Plaintiffs you represent, and a possible member of the class you claim to represent -- and tell the Court something contrary in your brief? Whose interests were you actually representing when you spoke with me? And if that's what happened to me, as someone who actually persevered until I got a response from class counsel, what does that say about the advice that other potential claimants did or didn't receive?

I believe that the most appropriate form of apology and redress would be for you to withdraw your motion for approval of the proposed settlement (including its provisions with respect to attorneys' fees) and any motions for attorneys' fees, withdraw your appearance as counsel for the National Writers Union (of which I am a member) and for the class, and release the National Writers Union and all of its present and past officers from the obligations contained in section 9, pages 24-25 of the proposed settlement agreement with respect to their support for the proposed settlement agreement and their communications with their members, other potential members of the class, and the public.

Should you decline to do the right thing, and withdraw yourselves and your motions from this case, I will have no recourse other than to ask the Court, and/or other disciplinary bodies with jurisdiction over your professional misconduct, to impose appropriate sanctions including, but not limited to, the denial of your motions for approval of the proposed settlement and award of fees. I would find it unconscionable, as I trust the Court would, to award fees to you for such misconduct.

I am copying this message to all class counsel and to all other interested counsel (as identified from those other pleadings in this case which I have seen) whose e-mail addresses are known to me.

I am also copying this to several officers of the National Writers Union, the Associational Plaintiff on whose behalf (among others) you filed your memo, and of which I am a member, so that they will be aware that knowingly false statements have been made to the court by you as NWU counsel, and that I as a member of the NWU have been misrepresented by you as NWU counsel. And for the benefit of others who might be misled by the false claims in your memo, I am posting this in my blog at:

http://hasbrouck.org/blog/archives/000812.html

I look forward to your prompt response before the hearing on your motions currently scheduled for this Tuesday in New York.

Sincerely,

Edward Hasbrouck

Link | Posted by Edward on Saturday, 24 September 2005, 14:49 ( 2:49 PM) | TrackBack (1)
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