Wednesday, September 9, 2009
The New York Times has an article on the large numbers of objections filed in the Google book settlement as the date of the fairness hearing looms. The article is at this link: 11th Hour Filings Oppose Google's Book Settlement (September 8, 2009). For the uninitiated reader, a class action cannot be settled as a class without judicial approval. The fairness hearing is mandated by the class action rule and requires the judge to evaluate the fairness of the settlement. The standard for approval of a class action settlement is different in different circuits.
Jay Tidmarsh of Notre Dame is quoted in the article saying: “The number and quality of opposition filings is very unusual, the court is going to have to look at the public interest in the settlement.” Andrew Gavil of Howard University is also quoted.
This is a big settlement concerning something that a lot of very articulate people care about (and with respect to which there is a lot of money to be made) and so we are getting a very robust, serious public discussion through the settlement process. That is rarely the case, but perhaps Judge Chin can show us how a public dialogue can be incorporated into the fairness hearing process to make it more, well, fair.
Unfairness is more likely to show up, and not be addressed, in settlements that fewer people care about, where there is insufficient opposition for a truly adversarial proceeding where all sides are represented. That said, either the settlement is approved or it is not. The judge cannot rewrite its terms. So we shall see if Judge Chin gives counsel some clues as to what type of settlement he will approve if not this one.
I wrote about this topic some time ago in an Article entitled Fundamental Principles for Class Action Governance that I think is still relevant today (I've only recently posted the piece on SSRN). For an excellent treatment of the issue of fairness hearings, you might be interested in William Rubenstein, The Fairness Hearing: Adversarial and Regulatory Approaches, 53 UCLA L. Rev. (2006) (available on SSRN).