Authors Guild, Inc. v. Google Inc.

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Docket Number

Docket No. 12–3200–cv.

Attorney(S)

Seth P. Waxman (Louis R. Cohen, Randolph D. Moss, Daniel P. Kearney, Jr., Ari Holtzblatt, on the brief) Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, for Appellant Google Inc. Daralyn J. Durie, Joseph C. Gratz, Durie Tangri LLP, San Francisco, CA, for Appellant Google Inc.

Judges

Pierre Nelson Leval
Jose Alberto Cabranes
Barrington Daniels Parker

Acts

Copyrights — Subject Matter And Scope Of Copyright — Limitations On Exclusive Rights: Fair Use

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Smart Summary

Factual and Procedural Background

In 2005, The Authors Guild, an association of authors, along with several individual authors, initiated a lawsuit against Google Inc., alleging copyright infringement. The claim centered on Google's Library Project, which scanned and indexed over 20 million books and made available public “snippets” of these books via its Google Books search tool. Plaintiffs sought injunctive and declaratory relief as well as statutory damages. After discovery and settlement discussions, the parties proposed an amended class settlement agreement (ASA), which the District Court, presided over by Judge Chin, declined to approve in 2011. Subsequently, plaintiffs moved to certify a class defined as all U.S. persons holding copyright interests in books scanned by Google, excluding Google personnel and certain government and court employees. The District Court granted class certification pursuant to Federal Rule of Civil Procedure 23. Google opposed this certification and appealed the District Court’s decision.

Legal Issues Presented

Whether the District Court properly certified the proposed class under Federal Rule of Civil Procedure 23.
Whether Google's anticipated fair use defense affects the appropriateness of class certification.
Whether the plaintiffs adequately represent the interests of the class, considering that many class members may benefit from Google's Library Project and oppose the lawsuit.

Arguments of the Parties

Appellant Google Inc.'s Arguments

Google asserted a fair use defense, arguing that its use of the copyrighted works falls within the judicially recognized fair use doctrine, potentially mooting the litigation.
Google contended that the plaintiffs do not fairly and adequately represent the class interests under Rule 23(a)(4), because a significant portion of class members benefit from the Library Project and oppose the lawsuit.

Appellees The Authors Guild and Individual Authors' Arguments

The opinion does not contain a detailed account of the appellees' specific legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Authors Guild v. Google, Inc., 770 F.Supp.2d 666 (S.D.N.Y. 2011)	Denial of approval of amended proposed class settlement agreement.	Referenced as part of the procedural history regarding settlement discussions and denial of ASA approval.
Authors Guild v. Google, Inc., 282 F.R.D. 384 (S.D.N.Y. 2012)	Class certification under Federal Rule of Civil Procedure 23.	Used to describe the class definition and the District Court’s grant of class certification.
On Davis v. The Gap, Inc., 246 F.3d 152 (2d Cir. 2001)	Explanation of the fair use doctrine and statutory factors under 17 U.S.C. § 107.	Provided background on fair use as a judicial doctrine relevant to Google's defense.
FPX, LLC v. Google, Inc., 276 F.R.D. 543 (E.D. Tex. 2011)	Consideration of affirmative defenses affecting class certification.	Supported the proposition that fact-specific affirmative defenses like fair use may preclude class certification.
Vulcan Golf, LLC v. Google Inc., 254 F.R.D. 521 (N.D. Ill. 2008)	Impact of affirmative defenses on predominance requirement under Rule 23(b)(3).	Used to illustrate that affirmative defenses requiring individual determination affect class certification.
Coopers & Lybrand v. Livesay, 437 U.S. 463 (1978)	Interrelation of merits and class certification issues.	Quoted to emphasize that evaluation of class certification often involves merits-related inquiries.
Castano v. Am. Tobacco Co., 84 F.3d 734 (5th Cir. 1996)	Necessity of understanding claims, defenses, and law for class certification.	Supported the requirement that courts understand substantive law and defenses before certifying a class.
Wal–Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011)	Limits on class certification when defendant’s statutory defenses require individual litigation.	Cited to confirm that defendants must be allowed to litigate statutory defenses individually, affecting class certification.

Court's Reasoning and Analysis

The court recognized that Google’s asserted fair use defense is a significant affirmative defense that could potentially moot or substantially alter the litigation's trajectory. Because fair use requires fact-specific inquiries, its resolution is critical to assessing class certification prerequisites such as commonality, typicality, and predominance under Federal Rule of Civil Procedure 23. The court noted established precedents emphasizing that class certification decisions must incorporate an understanding of substantive claims and defenses, including affirmative defenses that may require individualized consideration. The court acknowledged Google's argument that plaintiffs might not adequately represent the class due to internal conflicts among class members but refrained from definitively deciding this issue. Instead, the court concluded that postponing class certification until the fair use defense is resolved would promote judicial economy and fairness to all parties. Consequently, the court vacated the District Court’s class certification order and remanded for further proceedings focused initially on the fair use defense.

Holding and Implications

The court VACATED the District Court’s June 11, 2012 order certifying the plaintiffs’ proposed class and REMANDED the case for further consideration of the fair use defense before reconsideration of class certification. The remand allows the District Court to address the fair use issues without prejudice to any renewed motion for class certification following that determination. The court emphasized that this approach serves judicial economy and does not prejudice either party. No new precedent was established; rather, the decision directly affects the procedural posture of this litigation by requiring resolution of the fair use defense prior to class certification.

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The AUTHORS GUILD, INC., Associational Plaintiff, Betty Miles, Joseph Goulden, and Jim Bouton, indi v. dually and on behalf of all others similarly situated, Plaintiffs–Appellees,

PER CURIAM:

Seth P. Waxman (Louis R. Cohen, Randolph D. Moss, Daniel P. Kearney, Jr., Ari Holtzblatt, on the brief) Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, for Appellant Google Inc. Daralyn J. Durie, Joseph C. Gratz, Durie Tangri LLP, San Francisco, CA, for Appellant Google Inc.
Robert J. Larocca, Kohn, Swift & Graf, P.C., Philadelphia, PA, for Appellees The Authors Guild Inc., et al.
Michael J. Boni, Joshua D. Snyder, John E. Sindoni, Boni & Zack LLC, Bala Cynwyd, PA, for Appellees The Authors Guild Inc., et al.
Sanford P. Dumain, Milberg LLP, New York, NY, for Appellees The Authors Guild Inc., et al.
Before: LEVAL, CABRANES, and B.D. PARKER, Circuit Judges.

PER CURIAM:

Plaintiff-appellee The Authors Guild, an association of authors, as well as several individual authors (jointly, “plaintiffs”), began this suit in 2005, alleging that defendant-appellant Google Inc. (“Google”) committed copyright infringement through the Library Project of its “Google Books” search tool by scanning and indexing more than 20 million books and making available for public display “snippets” of most books upon a user's search. Following a course of discovery and settlement discussions, the parties moved for final approval of an amended proposed class settlement agreement (“ASA”) before the District Court. In a thorough opinion, Judge Chin refused to approve the ASA on March 22, 2011. See Authors Guild v. Google, Inc., 770 F.Supp.2d 666, 686 (S.D.N.Y.2011).

Plaintiffs sought injunctive and declaratory relief as well as statutory damages. See Authors Guild v. Google, Inc., 282 F.R.D. 384, 387 (S.D.N.Y.2012).

Following the District Court's denial of the motion to approve the ASA, plaintiffs moved to certify a proposed class of “[a]ll 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, who are either (a) natural persons who are authors of such Books or (b) natural persons, family trusts or sole proprietorships who are heirs, successors in interest or assigns of such authors.” Authors Guild v. Google, Inc., 282 F.R.D. 384, 393 (S.D.N.Y.2012) (alteration in original). The District Court granted plaintiffs' motion to certify the proposed class of authors pursuant to Federal Rule of Civil Procedure 23. Id. at 395.

The motion for class certification also specified that a “book” was defined as each “full-length book published in the United States in the English language and registered with the United States Copyright Office within three months after its first publication. Google's directors, officers, and employees [were] excluded from the class, as well as United States Government and Court personnel.” Author's Guild, 282 F.R.D. at 393 n. 7 (internal citations omitted).

Google opposed the motion for class certification before the District Court and now appeals the District Court's grant of class certification to us. Google argues, inter alia, that it intends to assert a “fair use” defense, which might moot the litigation. Google also claims that plaintiffs are unable to “fairly and adequately protect the interests of the class,” Fed.R.Civ.P. 23(a)(4), because many members of the class, perhaps even a majority, benefit from the Library Project and oppose plaintiffs' efforts. See Appellant's Br. 25 (arguing that class certification has “potentially tied many [authors] in the class to a suit that is contrary to their interests”); see also Joint App'x 244 (summarizing the findings of a controverted survey of authors).

As we have explained, “[f]air use is a judicially created doctrine dating back nearly to the birth of copyright in the eighteenth century, but first explicitly recognized in statute in the Copyright Act of 1976.” On Davis v. The Gap, Inc., 246 F.3d 152, 173 (2d Cir.2001) (internal citations omitted). Under that statute, to determine whether the use of a work is a fair use, courts consider four factors, including:
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

17 U.S.C. § 107
.

Putting aside the merits of Google's claim that plaintiffs are not representative of the certified class—an argument which, in our view, may carry some force—we believe that the resolution of Google's fair use defense in the first instance will necessarily inform and perhaps moot our analysis of many class certification issues, including those regarding the commonality of plaintiffs' injuries, the typicality of their claims, and the predominance of common questions of law or fact, seeFed.R.Civ.P. 23(a)(2), (3), (b)(3). See, e.g., FPX, LLC v. Google, Inc., 276 F.R.D. 543, 551 (E.D.Tex.2011) (denying plaintiffs' request for class certification “because of the fact-specific inquiries the court would have to evaluate to address [defendants'] affirmative defenses [including fair use of trademarks]”); Vulcan Golf, LLC v. Google Inc., 254 F.R.D. 521, 531 (N.D.Ill.2008) (“The existence of affirmative defenses [such as fair use of trademarks] which require individual resolution can be considered as part of the court's analysis to determine whether individual issues predominate under Rule 23(b)(3).”); see also Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 n. 12, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978) (“Evaluation of many of the questions entering into determination of class action questions is intimately involved with the merits of the claims. The typicality of the representative's claims or defenses ... and the presence of common questions of law or fact are obvious examples.” (quotation marks omitted)); Castano v. Am. Tobacco Co., 84 F.3d 734, 744 (5th Cir.1996) (“[A] court must understand the claims, defenses, relevant facts, and applicable substantive law in order to make a meaningful determination of the certification issues.”); cf. Wal–Mart Stores, Inc. v. Dukes, ––– U.S. ––––, 131 S.Ct. 2541, 2561, 180 L.Ed.2d 374 (2011) (holding that “a class cannot be certified on the premise that [a defendant] will not be entitled to litigate its statutory defenses to individual claims”). Moreover, we are persuaded that holding the issue of class certification in abeyance until Google's fair use defense has been resolved will not prejudice the interests of either party during the projected proceedings before the District Court following remand. Accordingly, we vacate the District Court's order of June 11, 2012 certifying plaintiffs' proposed class, and we remand the cause to the District Court, for consideration of the fair use issues.

CONCLUSION

For the reasons stated above, we VACATE the June 11, 2012 order of the District Court certifying plaintiffs' proposed class and

REMAND

the cause to the District Court for consideration of the fair use issues, without prejudice to any renewal of the motion for class certification before the District Court following its decision on the fair use defense. In the interest of judicial economy, any further appeal from the decisions of the District Court shall be assigned to this panel.

The mandate shall issue forthwith.
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