Supreme Court’s Muchnick Ruling Keeps Dream of a Fair Royalty System Alive

by Irvin Muchnick on March 3, 2010

As the Muchnick of the Supreme Court’s freelance journalists’ class-action copyright case Reed Elsevier v. Muchnick, I believe yesterday’s ruling is a very good thing – but not for the reason that will have been promoted all over the mainstream media by the time this essay is published. The New York Times, Reuters, and other corporate publishers can be counted on to do their usual linguistic and journalistic contortions to suggest that the justices, by this ruling, approve of the settlement of the lawsuit that was reached years ago between the periodicals industry and their electronic database partners, and a group of plaintiffs stage-managed by the Authors Guild, the National Writers Union (NWU), and the American Society of Journalists and Authors (ASJA).

The reason the Court’s action is good news is that it keeps alive the dream of a reasonable royalty system for re-use of copyrighted works in new media. This, in turn, would empower independent creators – who currently lie prostrate before big publishers – and enhance the diversity and vitality of American culture.

As soon as the settlement, known by the shorthand “Freelance,” was announced in 2005, I recognized it as a miserable sellout of writers’ rights and the public interest, concocted by the legally and financially overmatched alphabet-soup authors’ organizations. One way I knew this was that, as a former NWU assistant director myself, I had helped put together the very first piece of litigation in this field, Ryan v. CARL Corp., and gotten results.

I immediately organized a slate of objectors to Freelance. After the federal district court judge in New York, George Daniels, blew us off, we appealed to the Second Circuit Court of Appeals.

Then a three-judge appellate panel there did something odd. In what is known as a sua sponte ruling, the Second Circuit threw out the settlement – but on technical grounds that would have been disastrous for the future ability of anyone to seek redress for blatant wide-scale piracy. The judges held that the federal courts had no jurisdiction to consider settlements of lawsuits involving works whose copyrights were not registered with the U.S. Copyright Office.

In Freelance, unregistereds made up an estimated 99 percent of the infringement universe. Indeed, the inclusion of unregistereds in Freelance, along with registered, was very nearly the only thing on which we objectors agreed with the settlement parties.

So the publishers and the writers’ organizations appealed to the Supreme Court. At the invitation of the justices (who showed the additional impeccable taste of renaming the case Reed Elsevier v. Muchnick), the objectors weighed in too.

What yesterday’s decision means is that we all go back to the Second Circuit to argue what the objectors have always wanted to argue: the settlement’s merits or lack thereof.

Meanwhile, the better-publicized Google Books settlement is similarly stalled at the district court level. When President Obama’s Justice Department intervened with a withering “statement of interest,” buoying that settlement’s objectors, the parties went back to the drawing board. But most of the people (including Obama Justice) who were dissatisfied with Version 1.0 say the resulting Version 2.0 has the same fundamental flaws.

In an amusing twist of bedfellows, the long list of Google Books objectors from across the globe include the Authors Guild’s two partners in Freelance. What’s more, NWU and ASJA are making some of the same arguments that the objectors in Freelance had developed earlier against all three of them!

Yet for all its problems, the Google Books deal (to which I am “opting out” rather than objecting) at least includes a future royalty system, which I personally consider the key missing ingredient in Freelance. That is why I wrote last September to Attorney General Eric Holder and made the decidedly unrigorous recommendation that his office knock some heads together and try to fuse Google Books and Freelance into a truly comprehensive negotiation of all interests: librarians and information consumers, as well as publishers and a few writers’ organizations claiming to represent everyone. My letter can be viewed at

On January 27 of this year, Pam Samuelson – the Cal legal scholar, new technology activist, and MacArthur Fellow, and one of the leading objectors to the Google Books settlement – asked Judge Denny Chin to wait for the Supreme Court’s decision in Reed Elsevier v. Muchnick before deciding Google 2.0. “If the Supreme Court rules that owners of copyrights in unregistered works are eligible to participate in copyright class action settlements, the court should direct the parties to renegotiate the agreement,” Samuelson’s brief argued.

The first part is exactly what the justices have now done. Let’s see if Judge Chin takes up Samuelson on the second part.

After yesterday’s opinion was released, Freelance objectors’ attorney Charles Chalmers and I reflected that it came almost exactly five years after I first started bugging him about getting involved on our behalf. Since then, Chalmers has put in more hundreds of hours of unpaid work, and expended more thousands of dollars out of pocket, than he probably cares to tote up. I joked to Chuck, “We live to fight another day – whether you like it or not.”

(Along with Chalmers, the objectors’ sincere thanks go to the Stanford Supreme Court Litigation Clinic, directed by Pamela Karlan and Jeffrey Fisher, for their invaluable pro bono brain power and support.)

Neither Rome nor ASCAP – the musical licensing system launched after the advent of records and radio – was built in a day. It will be the same for a fair and equitable royalty system in the digital age for unaffiliated writers, photographers, videographers, and graphic artists. Whether all of them realize it or not, they should be celebrating.

Irvin Muchnick will be in Connecticut later this month to promote his book CHRIS & NANCY: The True Story of the Benoit Murder-Suicide and Pro Wrestling’s Cocktail of Death, at Borders stores in Stamford (March 25) and Farmington (March 27). He blogs about freelancer issues at

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