Court Rejects Freelancer Settlement: Still No Payment From Tasini Court Win

Jonathan Tasini was a hero to many writers when he won his battle to get additional payments from publishers like The New York Times who had included his freelance work in databases like LexisNexis. Tasini’s battle went to the Supreme Court in 2001, and created a strong legal precedent guaranteeing payment to freelancers whose work ends up being published again digitally. But the vast majority of freelancers owed money still haven’t been paid-and their battle continues to languish in court. Today, a federal appeals court threw out an attempted settlement between freelancers and publishers, saying that the biggest group of freelancers in the case hadn’t been fairly represented.

Even though Tasini won his case in 2001, the settlement he reached only applied to himself and his co-plaintiffs. A separate, class action lawsuit was litigated, to use the Tasini precedent and get payment to thousands of other writers. On the plaintiffs’ side, that lawsuit includes 21 individual writers as well as the National Writers Union, The Authors Guild, and the American Society of Journalists and Authors. The defendants include electronic database companies like Reed Elsevier (NYSE: RUK), which owns LexisNexis, and Thomas Reuters (NYSE: TRI) Corp., which owns Westlaw; as well as newspaper publishers with their own databases, such as The New York Times Co. (NYSE: NYT) and Dow Jones (NSDQ: NWS).

(Tasini, of course, recently got his name back into the headlines by suing The Huffington Post over a novel legal claim about how the company owes money to its heretofore unpaid bloggers.)

A settlement was finally negotiated, but now it’s been thrown out by a three judge panel from the U.S. Court of Appeals for the 2nd Circuit. The problem is that the settlement simply isn’t fair to the biggest group in the class action case-the 99% of writers who hadn’t registered their copyrights.

The proposed settlement had tried to divide freelance writers up into three categories. In category A were authors who had registered their work with the Copyright Office relatively quickly; Category B included authors who registered their works, but less quickly; and Category C includes all other claims.

»  Category A authors were to be paid $1,500 for each of their first 15 works; $1,200 for the second 15 works; and $875 for all work beyond that. (The damages in this category are very high because authors are entitled to “statutory damages,” which are the most punishing form of copyright damages.

»  Category B authors were to be paid $150 or 12.5% of the original sale price of their works.

»  Category C authors-the vast majority, with unregistered claims-were to be paid a mere $5 or 10% of the original price of the subject work; if the original price was $250 or more, they got an even smaller percentage. In addition, payments to Category C authors would be maxed out at $18 million, no matter what.

The court today held that the interests of these groups aren’t truly aligned. The named plaintiffs all had works in Categories A and B. Even though some of them had Category C claims as well, the court found they were essentially trying to push a raw deal onto the great majority of freelancers. As an example, a Category B article-sold for $200 and registered at the Copyright Office before 2003-would get $150 for its author. But the author of an equivalent unregistered article in Category C would collect a mere $20.

“Although the mediators safeguarded the negotiation process, and the institutional plaintiffs watched out for the interests of the class as a whole, no one advanced the strongest arguments in favor of Category C’s recovery,” wrote the judges. “The interests of Category C-only plaintiffs could be protected only by the formation of a subclass and the advocacy of independent counsel.”

Now the case will go back to the district court, which will have to reformulate the class in this case along those lines.

Overall, this case shows how class action litigation can be a highly inefficient way to handle monetary claims by large groups of people. It’s been a full decade since the Supreme Court ruled that these freelancers should be paid, and it may still be years before they’re paid. The negotiations went on from 2002 to 2005, and from 2005 to 2010 the case was mired in jurisdictional disputes. Now at the end of the whole process, a close analysis has showed that the most involved parties weren’t really looking out for the majority.

What looked like a solid and promising win for writers in 2001 may just be another indication of how copyright in the digital age is turning into an overcomplicated mess, to no one’s benefit but lawyers. It may still be years before the writers get paid.

Literary Works In Electronic Databases

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