Settlement agreements rarely get the amount of scrutiny as the proposed agreement in the Google Books controversy, and now the Register of Copyrights, Marybeth Peters, has testified to Congress about the settlement.
While there are parts of the settlement that meet Ms. Peters approval (“some of the settlement terms have merit and should be encouraged under separate circumstances” such as the potential for the registry to “offer the copyright community, the technology sector and the public a framework for licensing works in digital form and collecting micro-payments in an efficient and cost-effective manner”), by and large her remarks were critical, noting that “none” of the potential positive “possibilities should require Google to have immediate, unfettered, and risk-free access to the copyrighted works of other people. They are not a reason to throw out fundamental copyright principles; they are a pretext to do so.”
So, if the head of the Copyright Office has thrown her opinion into the mix (it’s unclear whether the Office will be filing a brief with District Judge Chin) what does that mean for the approval of the settlement? And might the settlement actually be one of the rare moments when a non-litigated case creates precedent?
To get there, we need to look at the Federal Rules of Civil Procedure 23(e), which states that “[t]he claims, issues, or defenses of a certified class may be settled, voluntarily dismissed, or compromised only with the court’s approval.” There are five procedures that apply to a proposed settlement, the most relevant for these purposes being the second: “If the proposal would bind class members, the court may approve it only after a hearing and on finding that it is fair, reasonable, and adequate.” Furthermore, generally, the District Court is not allowed to simply say “I approve of the settlement” or “I disapprove of the settlement”; it “must ‘undertake an analysis of the facts and the law relevant to the proposed compromise’ and ‘support [its] conclusions by memorandum opinion or otherwise in the record.’ … ‘A mere boiler-plate approval phrased in appropriate language but unsupported by evaluation of the facts or analysis of the law will not suffice.'” United States v. Alabama, 271 Fed. Appx. 896, 901-02 (11th Cir. 2008) (internal citations omitted).
The standard on appeal for class settlements is whether the District Court abused its discretion in making its decision. See id. at 902. Thus, if District Judge Chin ultimately rejects the settlement, an appeal could be heard arguing that he abused his discretion in doing so. And if that happens, then it is possible that the concern I touched on the other day won’t necessarily come to pass (i.e., that settling the case will prevent an understanding of how copyright law is developing in the courts.)
Only time will tell what will happen, and all I know is that this settlement proposal is one of the more interesting legal developments I’ve seen in a while.
