The age of digital distribution exacerbates transaction costs in two distinct ways. First, the dissemination of large quantities of works requires permissions from myriad copyright holders. Second, new technologies lower the cost of content creation, resulting in millions of individual creators, rather than a discrete set of large industry repeat players. The potential of class actions to address this rising transaction cost problem has gone largely unexplored. Instead, copyright scholars approaching the problem have advocated for either private ordering or legislative reform. But aggregate litigation fulfills a different function—something much closer to an administrative copyright—administering millions of licenses while filling in statutory gaps to address a rapidly shifting technological landscape.

In this sense, copyright class actions also differ from procedural scholars’ understanding of mass litigation as either a regulatory or joinder device to address distinct past harms. Instead, this Article offers a novel view of the class action as both an efficient transactional mechanism—a hybrid public–private licensing scheme—and as substantive legal reform, updating copyright law for new technological uses. Settlements in copyright class actions have been used as blanket licenses—for both past harms and forward-looking royalties—where individual negotiations are impossible. They have also been progenitors to landmark copyright legislation—and indeed, some settlements themselves contain quasi-legislative components that solve long-standing problems in the copyright industry. This Article argues for a vision of copyright class actions as the future and for the promise of licensing and reform by litigation in an age of mass aggregation, far-flung rights, and legislative gridlock.

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Copyright class actions are not new. 1 See infra section II.A (detailing how the first copyright class action coincided with the promulgation of Federal Rule of Civil Procedure 23 (Rule 23)). But, in comparison to other types of class actions, they are exceedingly rare. 2 See William F. Patry, Copyright Law and Practice 1141 (1994) (describing class actions in the copyright context as “rare”). The most recent edition of a well-known copyright treatise, however, describes copyright class actions as “not infrequent[],” reflecting, perhaps, the increase in popularity of the class action mechanism in the copyright context. Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 12.09[D][2] (2022). Indeed, since the advent of the modern-day class action, 3 Edward H. Cooper, Federal Class Action Reform in the United States: Past and Future and Where Next?, 69 Def. Couns. J. 432, 432–33 (2002) (describing the 1966 revision of Rule 23 as the “beginning point” of the contemporary class action mechanism). it is likely that only a few hundred copyright class actions have ever been filed—less than 0.5% of all class action cases. 4 Publicly available data from 1997 to 2004 from the U.S. Administrative Office’s Judicial Business Reports show that a total of 18,731 federal class actions were filed during that eight-year period. Of those cases, only thirty-five were federal copyright class actions (0.187%). U.S. Admin. Off. of the U.S. Courts, X-5: U.S. District Courts—Class Action Civil Cases Filed, by Jurisdiction and Nature of Suit, U.S. Courts, (last visited Aug. 16, 2022) (on file with the Columbia Law Review). While small in number, however, copyright class actions are enormous in impact: They have resulted in sweeping settlements that contained provisions not just for past harms but for ongoing royalties, shaping the future income streams for hundreds of thousands of copyright-holding class members. 5 See infra sections II.B–.D. They have been the driving impetus for landmark copyright legislation that imposed royalties on home-recording devices, 6 See Audio Home Recording Act of 1992, Pub. L. No. 102-563, §§ 1003–1007, 106 Stat. 4237, 4240–44 (codified at 17 U.S.C. §§ 1001–1010 (2018)); S. Rep. No. 102-294, at 30 (1992) (explaining that the Audio Home Recording Act provides royalties for “the various elements of the music industry”); see also infra section II.B.1. digital radio, 7 See Digital Performance Right in Sound Recordings Act of 1995, Pub. L. No. 104-39, sec. 4, § 115, 109 Stat. 336, 345–47 (codified as amended in scattered sections of 17 U.S.C.); see also infra section II.B.2. and streaming services. 8 See Orrin G. Hatch–Bob Goodlatte Music Modernization Act, Pub. L. No. 115-264, § 102(a)(1)(B), 132 Stat. 3676, 3680 (2018) (codified at 17 U.S.C. § 115(c)(1)(F)); see also infra section II.D.

Despite the import of the class action mechanism 9 The term “mechanism” is used here because “class action” in this Article refers to any suit styled as a putative class action, regardless of whether a court ultimately certifies the class. This Article shows that rightsholders have good reason to aggregate and style their claims as class claims and defendants have good reason to wish the claims disposed of on a class-wide basis. Almost all of the copyright actions filed as class actions that are examined herein have settled. This is, however, not all that unique from class actions more generally, in which settlement is almost always the norm. See Richard A. Nagareda, Administering Adequacy in Class Representation, 82 Tex. L. Rev. 287, 289 (2003) (describing class actions as characteristically producing settlement agreements). See generally Samuel Issacharoff & John Fabian Witt, The Inevitability of Aggregate Settlement: An Institutional Account of American Tort Law, 57 Vand. L. Rev. 1571 (2004) (describing the pervasive nature of aggregate settlements throughout the history of U.S. tort law). for copyright law, virtually no scholarship has been written on copyright class actions. 10 Two notable exceptions are Professor James Grimmelmann and Professor Pamela Samuelson, who have each written on one particular copyright class action: the Google Books case. See James Grimmelmann, Future Conduct and the Limits of Class-Action Settlements, 91 N.C. L. Rev. 387, 419–20, 456 (2013) [hereinafter Grimmelmann, Future Conduct] (arguing, inter alia, that the Google Books settlement was improper because it contained a release for future conduct, creating severe informational problems and giving the settling defendant concentrated market power); Pamela Samuelson, Google Book Search and the Future of Books in Cyberspace, 94 Minn. L. Rev. 1308, 1359 (2010) [hereinafter Samuelson, Google Book Search] (arguing that the proposed Google Books settlement was too expansive and, if approved, could adversely impact competition and usurp the role of Congress); Pamela Samuelson, The Google Book Settlement as Copyright Reform, 2011 Wis. L. Rev. 479, 560 [hereinafter Samuelson, Google Book Settlement] (“The [rejected Google Books settlement] is perhaps the most adventuresome class action settlement ever attempted. There are numerous respects in which the settlement, if approved, would have brought about results akin to reform of U.S. copyright laws.”). This Article does not discuss defendant class actions where individual plaintiffs sue numerous defendants. See Francis X. Shen, The Overlooked Utility of the Defendant Class Action, 88 Denv. U. L. Rev. 73, 78 (2010) (discussing an application of defendant class actions to copyright cases); see also Joshua A. Druckerman, Note, The Uncertifiable Swarm: Why Defendant Class Actions and Mass BitTorrent Copyright Litigation Don’t Mix, 58 N.Y. L. Sch. L. Rev. 931, 934 (2013) (arguing that defendant classes in these cases are not allowed under Rule 23 and are neither fair nor efficient in the context of person-to-person file sharing). Likewise, even as procedural scholars point to the general trend of class actions and aggregated settlements in the modern technological age, scant attention has been paid to how the rise in prominence of copyright class action settlements provides concrete proof of this transactional model of litigation. 11 See, e.g., Issacharoff & Witt, supra note 9, at 1571–77; Nagareda, supra note 9, at 361–62; Judith Resnik, Money Matters: Judicial Market Interventions Creating Subsidies and Awarding Fees and Costs in Individual and Aggregate Litigation, 148 U. Pa. L. Rev. 2119, 2144–59 (2000) [hereinafter Resnik, Money Matters]. This Article is the first to present an in-depth analysis of the class action mechanism in copyright cases and, in doing so, to demonstrate that copyright class actions present a little-examined solution to a problem that has vexed copyright scholars with the rise of digital creation and dissemination. As others have written about, new technologies present two unique problems for rights clearances. First, new technologies often aggregate and disseminate large quantities of copyrighted works, which itself requires obtaining rights from a large number of copyright holders. 12 See Mark A. Lemley & Philip J. Weiser, Should Property or Liability Rules Govern Information?, 85 Tex. L. Rev. 783, 792 (2007) (noting that some form of compensation, but not permitting the intellectual property owner to stop the secondary use, is appropriate “where the production of a particular type of work requires clearances of so many rights, or rights are so hard to find, that doing so would be uneconomic”); Samuelson, Google Book Search, supra note 10, at 1358–59 (describing the “‘Gordian knot of the huge’ transaction costs” associated with obtaining permissions to digitize millions of out-of-print books (quoting Letter from Mary Ellen Davis, Exec. Dir., Ass’n of Coll. & Rsch. Librs., Keith Fiels, Exec. Dir., Am. Libr. Ass’n & Charles Lowry, Exec. Dir., Ass’n of Rsch. Librs., to William F. Cavanaugh, Deputy Assistant Att’y Gen., Antitrust Div., DOJ (Dec. 15, 2009), [])). As Professors Lemley and Weiser note, the most commonly proposed solution to the compensation-without-control model is a compulsory license, a solution that has been enacted by Congress, as well as proposed by scholars. See Lemley & Weiser, supra, at 792 (citing 17 U.S.C. §§ 111, 114–115, 118–119); see also William W. Fisher III, Promises to Keep: Technology, Law, and the Future of Entertainment 199–258 (2004); Neil Weinstock Netanel, Impose a Noncommercial Use Levy to Allow Free Peer-to-Peer File Sharing, 17 Harv. J.L. & Tech. 1, 25 (2003). Second, new technologies lower the cost of content creation. 13 See Mark A. Lemley, IP in a World Without Scarcity, 90 N.Y.U. L. Rev. 460, 487–88 (2015) (noting the reduction in reproduction and distribution costs). On the one hand, this creates a democratizing effect: As Professor Madhavi Sunder put it, new technologies “empower[] democratic cultural participation . . . in which all individuals can ‘rip, mix, and burn’ culture.” 14 Madhavi Sunder, IP3, 59 Stan. L. Rev. 257, 262 (2006). Yet the now trite adage that “anyone can be a creator” in the internet age has, as Professor Molly Van Houweling has explored, a downside: Many rights are now spread out among millions of individual creators, rather than concentrated in a discreet set of large industry repeat players. 15 See Molly Shaffer Van Houweling, Author Autonomy and Atomism in Copyright Law, 96 Va. L. Rev. 549, 616 (2010). Some refer to this as the “long tail” of copyright holders. 16 See infra section III.B. In short, digital technologies exacerbate, rather than reduce, the problem of transaction costs. 17 See Matthew Sag, Copyright and Copy-Reliant Technology, 103 Nw. U. L. Rev. 1607, 1664 (2009) (“[I]ronically, while [i]nternet search engines have reduced transaction costs in relation to many copyrighted markets, they themselves are subject to increasing transaction costs by virtue of their own success.”). And these costs are only likely to increase, as the newly-enacted Copyright Alternative in Small-Claims Enforcement (CASE) Act makes it easier for individual creators to file infringement actions in a specialized copyright claims court, potentially subjecting large technology users, like Google, to thousands of claims each year from long tail copyright holders. 18 See Copyright Alternative in Small-Claims Enforcement Act of 2020, Pub. L. No. 116-260, 134 Stat. 2176 (to be codified at 17 U.S.C. §§ 1501–1511).

The use of class actions in addressing how copyright law has responded to new technological uses has gone largely unexplored, and its potential underutilized, in the intellectual property literature. Copyright scholars addressing the acute problem of transaction costs in the digital age have either advocated for a vision of private ordering via new licensing collectives or contractual arrangements, or common law and legislative interventions in the form of fair use reform, specialized rate courts, and tailored legislation. 19 See infra Part I. Missing from their analysis, however, is how aggregate litigation may fulfill a different function, something much closer to an administrative copyright: administering millions of licenses for not merely past infringement but future uses and, in the process, filling in statutory gaps to address a rapidly shifting technological landscape. 20 See infra Part II. In this sense, copyright class actions also differ from procedural scholars’ understanding of aggregate litigation as either a regulatory device for the wide-scale administration of public policy or a joinder device to ensure litigation efficiency. 21 See, e.g., David Marcus & Will Ostrander, Class Actions, Jurisdiction, and Principle in Doctrinal Design, 2019 BYU L. Rev. 1511, 1512 (describing two conceptions of the class action, one as a conflict resolution vehicle and the other as a regulatory device). A third conception of the class action as theorized by procedural scholars might be described as a combination of the prior two: a regulatory–administrative framework that sees the class action device as creating temporary agencies for the efficient processing of wrongdoing at scale. See Martha Minow, Judge for the Situation: Judge Jack Weinstein, Creator of Temporary Administrative Agencies, 97 Colum. L. Rev. 2010, 2020 (1997). Mass torts, discrimination, and consumer class actions attempt to do some form of rough justice to make class plaintiffs whole for economic or personal injuries that are defined by existing substantive law. 22 See Jack B. Weinstein, Individual Justice in Mass Tort Litigation: The Effect of Class Actions, Consolidations, and Other Multiparty Devices 148 (1995) (outlining the purpose of mass tort cases as compensation-based); David Marcus, Some Realism About Mass Torts, 75 U. Chi. L. Rev. 1949, 1950 (2008) (describing the mass torts framework as starting from a “defendant engag[ing] in allegedly injurious conduct” and “prospective claimants acquir[ing] legal rights defined by the applicable substantive law”). But this Article’s examination of copyright class actions uncovers the class mechanism doing something slightly different from merely administering compensation for defined harms: It updates and fills in gaps in the substantive law and determines exactly what constitutes a copyright injury in the first place for new technological uses such as audio recording, user-generated content, and digital streaming. 23 See infra Part II.

Thus, this Article fills the chasm between two domains that are rarely in conversation with one another and offers a novel view of the class action device as both an efficient legal coordinating mechanism—as a hybrid public–private licensing scheme—and as having a part to play in making substantive copyright law. The copyright class actions and ensuing settlements examined in this Article are notable: as court-fashioned compulsory licenses establishing forward-looking royalty payments for millions of rightsholders, as sweeping settlements containing market-based royalty rates, as catalysts for significant legislative reform, and as precisely the type of hybrid solution (of private ordering and judge-made law) to the problem of digitization and dissemination of copyrighted works that scholars have long cogitated over.

This Article proceeds as follows. Part I begins by examining the problems posed by new technologies that redistribute mass quantities of existing copyrighted works. Not only do these technologies fail to fit comfortably into the fair use paradigm, but they also present the intellectual property corollary to the holdout problems that Professors Guido Calabresi and Douglas Melamed famously identified in the real property context. 24 See Guido Calabresi & A. Douglas Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 Harv. L. Rev. 1089, 1106–07 (1972); infra section I.A. Part I also discusses solutions, and problems with those solutions, posed by scholars and implemented by courts, ranging from judicially imposed liability rules that may mimic compulsory licenses to the establishment of private collection societies that could issue voluntarily negotiated blanket licenses. Part II provides a historical overview of the development of copyright class actions, from examples of early representative suits, to increased class action suits in the 1990s as responses to new digital technologies, to two recent, and particularly advanced, settlements in class action cases, involving Google Books and Spotify. This Part pays particular attention to the nonmonetary components of any ensuing settlements, analyzing them as explicit or implicit attempts to advance legislative changes that ultimately resulted in the passage of several landmark copyright laws. By joining far-flung, disparate rightsholders as putative class members, these class action suits exposed the defendants to enormous risk while creating enormous opportunity—to craft private settlements that would first release all claims, known or unknown, past, present, and future, against the defendant in one fell swoop and serve as the blueprint for industry-wide change. Using these learnings, Part III argues that aggregate litigation, if implemented properly, can solve the problem of mass infringements, high transaction costs, unwieldy holdouts, and a long tail of small, individual rightsholders. Part IV addresses potential objections, such as concerns that reform by private settlement usurps the role of legislatures, or that any such ensuing settlements may vest monopoly power in the settling defendant. This Article concludes by looking toward the future and suggesting that the class action mechanism represents one model for what the future of copyright infringement remedies may look like in a digital age rife with increasingly fragmented rights and rightsholders.