CURRENT ACTIVITY

In re Literary Rights
(Southern District of New York;
Second Circuit Court of Appeals)

This is the settlement of a copyright class action. The defendant publishers (virtually all important newspapers and magazines) and defendant database companies (LEXIS-NEXIS, Proquest, etc.) have been infringing millions of articles for years by selling them through databases. Our clients objected to the settlement on many grounds but it was approved. This settlement has the stunning and unheard of feature of giving the defendants a license to use all those articles for the rest of the copyright, up to 100 years. Settlements are supposed to compensate class members, not give their property to defendants. This settlement also presents the situation of a tiny group of class members who will receive millions under the settlement representing the interests of a different, much larger group who will receive little or nothing.

We have appealed to the Second Circuit and it will be argued late in 2006.

Citibank (San Francisco Superior Court)

This is the settlement of invasion of privacy claims for Citibank’s selling customer information. It was settled for $5 million which, because it is so little per customer, will be given to charities. The notice to the class was to be mailed in cardholder’s monthly statements. Due to an unexplained “problem” more than one million notices were not ready and were instead mailed first class. Thus almost 10% of the settlement went to mailing those notices. This was an unnecessary waste of the class money designated for charities, and Citibank made the decision to do this on its own, consulting neither the plaintiffs’ counsel or the Court. Nonetheless, the Court approved it and we have appealed. The extra cost could have been easily avoided. This demonstrates how casually class action attorneys’ and sometimes the Court, take their responsibility to protect the class.

Flash Memory Settlement
(San Francisco Superior Court)

This is the settlement of claims of mispresentation about memory capacity against five manufacturers of flash memory, including SanDisk and Lexar. The settlement offers both refunds and discounts. While that sounds good, the settlement is really designed to result in very little, if any, real benefit to class members. The 10% discount is off the prices on defendants’ websites. Discounts much larger are routinely available from the retailers that are defendants’ real customers. If a class member actually used the discount the defendant would make more profit than its normal sales to its retailer customers, like Best Buy. Also the plaintiffs simply drop part of the class they said they represented in order to make the settlement. The class attorneys received a $2.4 million fee without regard to how many class members received anything, which is a warning sign for collusion in a settlement. We presented these objections, but the settlement was approved. We are appealing.