Authors Guild, Inc. v. Google Inc.
721 F.3d 132
2d Cir.
2013
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Docket

The AUTHORS GUILD, INC., Associational Plaintiff, Betty Miles, Joseph Goulden, and Jim Bouton, individually and on behalf of all others similarly situated, Plaintiffs-Appellees, v. GOOGLE INC., Defendant-Appellant.

Docket No. 12-3200-cv.

United States Court of Appeals, Second Circuit.

July 1, 2013.

Argued on: May 8, 2013.

Goffer‘s corrosive influence on the integrity of the financial markets and on the expectation of trust and confidence between attorney and client required a significant punishment. We do not find that his below-Guidelines sentence of 120 months’ imprisonment was unreasonable or disproportionate to the severity of his crimes.

2. Drimal‘s Sentence Was Substantively Reasonable

Drimal contends that his sentence of 66 months’ imprisonment was substantively unreasonable in light of his community service and his commitment to his family. Drimal faced a maximum of 20 years’ imprisonment on five counts of securities fraud. His offense level of 25 and Criminal History Category of I led to a Guidelines range of 57 to 71 months’ imprisonment. The Probation Office recommended a 57-month sentence.

Drimal, who traded more heavily based on insider information than any other defendant in the conspiracy, asserts that his community service and commitment to his family should mitigate his wrongdoing. The district court took note of his positive activities in sentencing Drimal. The district court also noted that Drimal, who “earned” approximately $11,497,888 from trading on insider information, did not have the same compelling social disadvantages that frequently lead to and help explain criminal behavior.15

In light of the magnitude of his insider trading, which had major deleterious effects on the market, Drimal was no small-time criminal. The district court noted Drimal‘s lack of respect for the law and his deliberate decision, weighing the risks, that insider trading “was a game worth playing.” Sentencing Tr. 48. The district court‘s assertion that insider trading requires high sentences to alter that calculus is a Congressionally-approved example of giving meaning to the 18 U.S.C. § 3553(a) factors. The district court‘s well-reasoned sentencing took account of the totality of circumstances, including Drimal‘s motivations, his positive role in his family and the community, his knowledge that what he was doing was wrong, and the severity of his crimes. We affirm.

Conclusion

For the foregoing reasons, the judgments of conviction and the sentencing orders of the district court are AFFIRMED. Defendants’ additional arguments are addressed in the corresponding summary order. See .

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.1 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 .

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.” (alteration in original).2 The District Court granted plaintiffs’ motion to certify the proposed class of authors pursuant to Federal Rule of Civil Procedure 23. Id. at 395.

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,3 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).

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, see Fed.R.Civ.P. 23(a)(2), (3), (b)(3). See, e.g., (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]“); (“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 (“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)); (“[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. (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.

Notes

1
Plaintiffs sought injunctive and declaratory relief as well as statutory damages. See .
2
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.” (internal citations omitted).
3
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.” (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.
15
Contrary to Drimal‘s assertions on appeal, the district court did not reveal a vendetta against the rich when it noted that Drimal did not have compelling reasons to warp the financial markets. Instead, Judge Sullivan recognized the same moral principles that make Jean Valjean more sympathetic than Gordon Gekko.
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