Saturday, February 20, 2010
I attended three hours of the Google Book Settlement fairness hearing before Judge Denny Chin on Thursday. The event was well-attended, with two overflow rooms filled to the brim. In the courtroom I was in (the second overflow room) there were over 70 people.
28 objectors were slated to speak. I sat next to a very well dressed gentleman representing one of the objectors who had elected not to speak. And indeed, many of the objections were repetitive. But it was a great demonstration of the use of fairness hearings to open up a public dialogue.
One of the central objections to the settlement that is important from our perspective (the mass tort folks) is that the judge is overreaching in allowing this settlement to go forward. This is a separation of powers argument - Congress should legislate a massive digital library rather than allowing Google to do this through the court system. It brings up the age old question, what are the limits of adjudication? Many of the issues raised there have been addressed in the mass torts context such as
1. Is this a litigation or a type of business transaction? (see William Rubenstein, A Transactional Model of Adjudication, 89 Georgetown Law Journal 371(2001)). People opposing the settlement say that Google is using the litigation to do what is too costly to do on the ground - get permission from every rightsholder.
2. Is this class action transforming copyright law? The way that class actions have an effect on the substantive law -- increasing the cost of remedy from the perspective of the defendant, allowing persons who would not otherwise bring suit to bring it (that is, enabling litigation), allowing defendant to get global peace -- is a topic that will soon be addressed in a very different context by the Supreme Court in the Shady Grove case. Class actions do alter the substantive law by allowing cases to be collected that would otherwise proceed individually. But does this mean they are impermissible? In a recent book called Wholesale Justice, Martin Redish argues that this type of class action violates the Rules Enabling Act by altering substantive rights. On the other hand (as Redish himself recognizes), the Rules Enabling Act's requirement that procedural rules not modify any substantive rights doesn't make any sense, as all 1Ls know from learning the Erie doctrine. The question ought to be, is the way that this settlement interacts with copyright law in particular a problem? This requires an interpretation and debate about the substance of copyright law and the importance of the default that the user actively seek permission of the copyright holders to our understanding of copyright. This is something courts are well situated to do.
3. Is this class action usurping the role of the legislature? This is the same question above - shouldn't it be the legislature that enacts copyright legislation? If the legislature doesn' t want to act, its not the court's role to step in. This reminds me of the famous essays by Lon Fuller and Abe Chayes. In his essay The Forms and Limits of Adjudication, Fuller argued that some types of cases are polycnetric disputes. "By this term he meant problems in which many points of decision were interlocked, so that the correct solution of any one issue depended on the solution for all the others. Perhaps the most important example of what he had in mind was the system of wages and prices, but he suggested that even deciding who should play what position on a football team raised much the same issue. "It is not merely a matter of eleven different men being possibly affected; each shift of any one player might have a different set of repercussions on the remaining players: putting Jones in as quarterback would have one set of carryover effects, putting him in as left end, another. Here, again, we are dealing with a situation of interacting points of influence and therefore with a polycentric problem beyond the proper limits of adjudication." (see summary here). Chayes, in an article called "The Role of the Judge in Public Law Litigation" argued that judges do in fact try such disputes with multiple parties and complex issues and that this is appropriate. (see a summary here).
What the fairness hearing demonstrated to me was the extent to which, contrary to the views expressed by Fuller and Redish, courts are capable of being a place where dialogue between multiple parties takes place -- and fruitful dialogue. Furthermore, the lawsuit can spur an interaction with the legislative branch in which Congress sees that intervention is necessary.
Friday, February 19, 2010
Initially Judge Hellerstein had ordered six bellwether trials. Now apparently he is conducting 12. In the order naming the 12, I saw reference to a status conference in which the reasons for the number were apparently discussed. So I went down to 500 Pearl Street, where the Southern District of New York is located, to read the transcript of that conference. I learned some interesting things, but not why 12 instead of 6 (or 30 for that matter, which is the number of cases of the 9,000 or so in the litigation that are proceeding to trial readiness). The judge has also not yet decided whether cases will proceeding one after another or simultaneously before multiple judges, but he is against grouping cases together for trial.
The term sheet for the settlement is 70 some odd pages according to the judge. This means that the settlement discussions are quite advanced. The lead lawyers did not want to say anything about the discussions in open court. But one lawyer did complain that he wasn't involved in the discussions.
Also, although the judge was clear that this is not a class action and that he had refused to certify it has such, he is planning to hold a fairness hearing about the settlement, should one be reached. Here's what he says: "...because of the extraordinary public interest in this case and because of the limited nature of the funds that are available for settlement, that there will undoubtedly be fairness proceedings that will be part of the settlement. That means that what is fair and reasonable will have to be determined by the court, subject to the right of appeal."
Judge Hellerstein also stressed the importance of fairness to individual plaintiffs.
....my conception of fairness relates not only to the aggregate size of the settlement, but more to the individual settlements themselves. .... I regard the 9,000 cases as just those, 9,000 separate cases. Many of them are similar. Many of them can be ranked for convenience into categories, but in their fundamental aspects they have an individual plaintiff in each individual case, plus the possibility of additional family members. But they all revolve around one personal injury or one death, as they case may be.
So the fairness to individuals is an extremely important aspect of settlement. And I will be looking carefully, if and when there is a settlement at how individual members are treated.
If any readers know why 12 and not 6 (or 30) please contact me.
Monday, February 15, 2010
Professor Carrie Menkel-Meadow (Georgetown & UC Irvine) and Dean Bryant Garth (Southwestern) have posted to SSRN their essay, Process, People, Power and Policy: Empirical Studies of Civil Procedure and Courts, which is forthcoming in the forthcoming Oxford Handbook of Empirical Studies. Here's the abstract:
This review essay, by Professor Carrie Menkel-Meadow and Dean Bryant Garth, reports on the history and deployment of empirical studies of civil procedure rules, court policies, and legal developments for reforms of court procedures and practices in both the United States and England and Wales. It traces the influence of particular individuals (e.g., Charles Clark in the United States, and Harry Woolf in England) in the use of empirical studies of litigation patterns and court rules to effectuate legal reforms. The essay reviews some particularly contentious issues over time, such as whether there is/was too much or too little litigation, access to courts, discovery practices, evaluations of the effects of particular rules, such as Rule 11 verification requirements, class actions, and practices such as court use of ADR, case management, and pre-trial conferences. The authors argue that empirical research on procedures and policies in courts have mostly been conducted in service of particular reform agendas, with a few exceptions of more "pure academic" study. The essay concludes with some suggestions for research questions that explore questions of who does the research for what purposes. Do researchers use research to develop their own "human capital" or legal reform influence? How do we know what optimal rates of court usage are? Can empirical studies shed light on more normative questions about what are optimal levels of process, access to courts, and when justice is delivered in formal court institutions?
Sunday, February 14, 2010
The Wall Street Journal's Law Blog reported Friday that Judge Manuel Real told Bar/Bri antitrust litigators that they could recover around $1.26 million in costs, but not the $12 million in attorneys fees. Judge Real cited concerns about conflicts of interest and ethical concerns in forfeiting McGuireWoods LLP's fees. The full story is available here.
The Economist suggests a connection between Toyota's continuing manufacturing problems and a corporate culture that fails to raise problems because it is overly deferential. I have separately heard that Asian airplane co-pilots have had to be specifically trained to overcome their traditional cultural deference and challenge the actions of pilots, if warranted, in emergency situations. Here's an excerpt from article:
Toyota’s problems are its alone, but they highlight broader failings in Japanese corporate governance that make large companies particularly vulnerable to mishandling a crisis in this way. Such firms typically have a rigid system of seniority and hierarchy in which people are reluctant to pass bad news up the chain, thus keeping information from those who need to hear it in a misguided effort to protect them from losing face. In many firms, including Toyota, family ties make challenging the boss all but impossible. Any attempt to short-circuit the hierarchy is deemed an act of disloyalty and a violation of the traditional consensual corporate culture. Groupthink becomes entrenched because there is so little mobility between companies: hiring from outside is thought to disrupt a firm’s internal harmony, and an executive willing to move will be stained as a disloyal “job-hopper”. This further hinders firms’ ability to take bold, decisive action. The preference for harmony crowds out alternative viewpoints.