Co-authored by Amanda Karp
A recent decision by the United States District Court for the Southern District of New York highlights two key concepts in representative litigation: (1) associational standing to bring a representative action; and (2) the propriety of class certification when class members’ interests may be in conflict with one another.
In Authors Guild v. Google, Inc., Case Nos. 05 Civ. 8136(DC), 10 Civ. 2977(DC), 2012 WL 1951790, at *1 (S.D.N.Y. May 31, 2012), Second Circuit Judge Denny Chin, sitting by designation, ruled in plaintiffs’ favor finding both standing and class certification for thousands of authors alleging copyright infringement. Defendant Google Inc.’s (“Google”) defense is “fair-use.” In 2004, Google entered into agreements with several research libraries to digitally copy books and other writings. Google has subsequently scanned more than 12 million books and made text available for online searching. Google searchers can even view excerpts from the books. However, millions of these books were still under copyright at the time and Google did not obtain permission to scan and reproduce them. Two plaintiff groups emerged in this case. The first was the “Authors Guild Plaintiffs,” comprised of the Authors Guild Representative Plaintiffs and the Authors Guild itself. The second was the “ASMP Plaintiffs,” a group of photographers and illustrators comprised of ASMP Representative Plaintiffs and the ASMP Associational Plaintiffs. The ASMP Associational Plaintiffs seek only injunctive and declaratory relief.
First, the court discussed Google’s 12(b)(1) motion to dismiss the claims of the associational plaintiffs for lack of standing. The court relied on Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 343 (1977) and its three prong standing test for associational standing to bring a representative action. Id. at *3. The parties only disputed the third prong, which requires that neither the claim nor the relief involve the participation of individual members in the law suit. Id. Google argued that two factors in its fair-use defense, (1) the nature of the copyrighted work and (2) the effect of the use upon the potential market for or value of the copyrighted work, require individualized review. Id. at *5. Regarding factor one, Google argued that creative and non-creative works are treated differently in the fair-use analysis. Id. Regarding factor two, Google argued that the snippet display affects the market for in-print books more than it affects the market for out-of-print books. Id. While the court recognized that different classes of works may require different treatment, the court found that by creating sub-groups for the different types of works, the court could effectively assess the merits of the fair use defense without individual participation. Id.
The second part of the opinion discussed class certification. The class was defined as “all persons residing in the United States who hold a United States copyright interest in one or more Books reproduced by Google as part of its library project….”
Certification hinged on the adequacy and predominance elements of FRCP Rule 23. Id. at *9. Under the adequacy prong, Google argued that the plaintiffs’ interests were antagonistic to the interests of other class members. Id. at *10. To support their argument, Google cited a survey in which over 500 authors (58% of those surveyed) approved of Google scanning their work, and 19% actually believed they benefited financially. Id. The court found the class representatives to be adequate representatives because the claims of the class representatives did not conflict with the copyright claims of other class members or compromise the claims of any other class members. Id. That some class members did not object to the alleged violation was not a basis for finding the lead plaintiffs inadequate. Id. The court was instead concerned with whether the representatives were “interested enough to be forceful advocates” and whether a “substantial portion” of the class would agree with the representatives. Id. The court also noted that some authors who “approved” of Google’s actions may still choose to join the class. Id.
Finally, Google argued that the predominance element was not satisfied because, inter alia, copyright ownership is not subject to generalized proof. Id. at *11. Google argued that publishing contracts create varying types of ownership interests which do not all permit the author to sue for infringement. Id. The court again disagreed, noting that although individual class members will have to submit documentation proving the ability to sue, this issue does not predominate over the common issues. Id. The court noted the common issues arose “…out of Google’s uniform, widespread practice of copying entire books without permission…whether this practice constitutes copyright infringement does not depend on any individualized considerations.” Id.
To the extent that it is not reversed on appeal, the Author’s Guild decision will be an important consideration for any defendant facing a class action in which the class members’ interests are inherently in conflict. Plaintiff’s counsel are likely to rely on the court’s analysis in arguing that internal conflict within the class is only relevant to class certification if, as the Author’s Guild court concluded, the claims of the representative plaintiffs are in conflict with the claims of other class members. However, this analysis ignores the potential for the lead plaintiffs’ interests in pursing the litigation in a particular way to be at odds with the interests of other members of the class. The court’s analysis was justified by reasoning that a lack of interest among some members in pursing litigation should not be a reason for finding the representative plaintiffs inadequate. However, this analysis ignores the possibility that some class members might be better off in not pursuing copyright infringement claims against Google because of the potential positive advertising or marketing impact of Google’s library service. This distinction between claims and interests is likely to be emphasized in future cases involving conflicts within a proposed class.