“Powerball-size” attorney payouts
Lawyers accused of rushing historic settlement to seize $320 million in fees.
After several authors and class members raised objections to Anthropic’s $1.5 billion settlement over its widespread book piracy to train AI, a federal judge has delayed final approvals of the settlement.
On Thursday, US District Judge Araceli Martinez-Olguin declined to rubber-stamp what’s regarded as the largest copyright settlement in US history. Instead, she wanted to better understand why some class members were objecting and opting out of the settlement. So, she asked authors to address key concerns of objectors, who argued that lawyers’ compensation was way too high and payments to class members were a “pittance.”
Ars reviewed several objections to the settlement, as well as letters from objectors who claimed that the authors’ legal team was trying to unfairly shut them out from voicing concerns.
Calling out lawyers for requesting more than $320 million in legal fees when each author only expects a $3,000 payout, some objectors asked the court to delay approving the settlement until a more reasonable plaintiff compensation plan is constructed.
“Every dollar that Counsel takes from the Settlement fund is one that is not given to those actually harmed,” wrote Pierce Story, an objector and author of two works covered by the settlement.
To support his arguments against the eye-popping lawyer fees, Story estimated that the large payout could break down to lawyers receiving between roughly $10,000–$12,000 per hour, which he said included a generous estimate of hours for any future work. That’s excessive, Story suggested, citing a T-Mobile case where the 8th Circuit court observed that “no reasonable class member would willingly pay” a much lower requested fee award between $7,000–$9,500.
Story accused lawyers of breaking a promise to tie their compensation to member payouts. And he’s further frustrated that the compensation they’re seeking is tied to the full settlement fund, when many authors entitled to compensation have yet to register and “are unlikely to be compensated.”
An attorney for authors confirmed on Thursday that “authors and other copyright holders filed claims covering over 92% of the more than 480,000 works included in the settlement.” But objectors maintain that lawyers’ pay should reflect the total number of claimants, not the total amount in the settlement fund.
By urging the court to make “reasonable and fair adjustments” to lower attorney fees, Story is hoping to increase compensation to authors. Offering an example, he noted that “a still-generous Counsel payout of $70 million would yield a nearly 25 percent increase in individual Plaintiff awards, while Counsel would still receive the equivalent of their current top rates” for hours worked.
To Story, it also seemed like the attorneys could’ve gotten more compensation for authors, but instead of pursuing “creative options,” they “settled far too quickly to maximize” their own compensation.
“Were the attorneys as skilled, gritty, and brilliant as they profess, and were the Settlement the ‘home run’ Counsel claims it to be, Plaintiffs would receive more than this pittance,” Story said.
Ruben Lee, another class member objecting, agreed: “I believe the amount offered is paltry, and does not in any way reflect the full value of the unauthorized use of my work.”
Objectors may not win every fight, but they have seemingly persuaded the court to at least entertain their strongly worded pleas, including warnings that the settlement may not survive an appeal if the terms aren’t re-examined. Notably, their objections came shortly before a group of 25 class members opting out of the settlement filed a new lawsuit, showing that Anthropic is not done fighting these claims.
“For the Court to agree that counsel’s request of nearly a third of a billion dollars, while individual plaintiffs settle for a pittance of available compensation and no protections against future abuse is an aberration of civil justice and a slap in the face to all those who labored to publish their works,” Story said. “Such a decision would also further the too-often-observed stereotype that … class-action Plaintiffs are merely tools used to obtain Powerball-size payouts to attorneys.”
Judge William Alsup, who initially approved the settlement but has since retired, also questioned whether the lawyers’ fees were too high. Worried that the settlement was being “shoved down the throat of authors,” he recommended an independent investigation to ensure no improper attorneys’ fees would be granted, but according to Lea Bishop, a non-class member objector and professor of copyright law, the recommendation “was not squarely disclosed to incoming Judge Martinez-Olguin” in a status report submitted by authors’ lawyers. Additionally, class members weren’t notified of the investigation.
Authors must respond to objections raised by May 21, when Anthropic will also have to file a brief explaining “why late opt outs should not be honored,” the judge ordered.
Attempts to shut out some objectors
Objectors also feel strongly that the settlement should not be approved unless Anthropic agrees to restrict future uses of pirated works.
James R. Sills, who has two works included in the settlement, insisted that due to ambiguity over how each individual work was acquired, Anthropic must agree to destroy all copies of works, both digital and physical, before the settlement can proceed.
“Currently, Anthropic will not delete any scanned physical copies of works/books,” Sills wrote. “So, they currently can use these works. The key problem: I don’t know how Anthropic acquired/pirated my two works. No authors will know how their works were taken by Anthropic. So, no authors will know if their works will be destroyed or not. Therefore, all forms of all of the works must be destroyed and not utilized by Anthropic.”
For some objectors, the process of submitting concerns was apparently a challenge. Ruben noted that he “tried to file this objection via the Court’s ECF and PACER systems, but have found it impossible to do so.”
The authors’ legal team has attempted to exclude some objections from the record, according to letters submitted urging the court to recognize that they met the deadline to submit their filings.
In one letter, an author with one work included in the settlement, Robert C. Jacobson, told the judge that counsel had characterized his objection as improperly filed despite the court acknowledging “a delay in docketing certain objections received earlier this year.”
Like Sills, Johnson raised complaints about “the absence of any prospective relief or framework addressing ongoing commercial use of models trained on the class works,” as well as “the lack of transparency regarding how class members’ specific works were processed and used.”
Another class member, Victoria Pinder, complained that counsel tried to mark her objections as “invalid” by incorrectly claiming her objection “was not sent to the court.”
Pinder pointed out how messy communication between some class members and their lawyers has gotten. She noted that the lawyers had docketed her claims previously before attempting to claim they’d never been submitted.
“There is no basis to single Ms. Pinder out,” her submission said.
To Pinder, it seems like attorneys are taking little care when hearing concerns from class members. In her letter, she requested the court to correct a misspelling of her name in counsel’s filing attempting to invalidate her objection. It seems that the lawyers mashed together the two female objectors’ names, referring to her as “Lea Victoria Pinder” and referring to Bishop as “Lea Victoria Bishop.”
Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.
