Thanks for the thanks for the thanks.

Random House is an interesting case. The DoJ (Department of Justice) action really presented evidence for collusion. Since Random House didn’t join the Agency Model for almost a year, it’s unlikely that they colluded with the other Agency Model publishers…they won’t have been at those meetings that were documented.

While the settlement included suspending the Agency Model, it’s not specifically the Agency Model that’s the problem.

It’s possible that Random House continues the Agency Model…but lowers the price, to compete with the non-Agency prices for the other publishers.

It’s all a bit too soon to tell, though…

I’m wondering what will become of Random House. They weren’t part of the agency model when the suits were filed, but they eventually did join in, and it looks as if they’re continuing to price their books on the highest side of the Kindle price list. The Kindle Daily promoted a gluten free cookbook in it’s download today. When I checked it out, I discovered the Kindle edition was priced at $15.99, only 99 cents lower than the price of the hard cover. The publisher was Random House. Needless to say, I passed on the opportunity to purchase.

Since they were not part of the original suits, will they be the rogue company still sticking with the agency model, or will they be required to comply with the final results? Are they waiting to see what happens to the ones who didn’t settle? Will their authors be the biggest losers because Kindle users aren’t willing to pay such high prices? Time will tell.

In 1986, the California Supreme Court endorsed cy-près mechanisms in class action settlements, and other American courts followed.[2] Cy-près mechanisms allow money to be used to promote the interests of class members, rather than reverting to a defendant, which could be seen as a windfall to a defendant charged with breaking the law. Judge Richard Posner has argued that the term is a misnomer in the class action context, because cy-près awards serve a punitive effect.[2] Some commentators have criticized the use of cy-près settlements; the American Law Institute’s Draft of the Principles of the Law of Aggregate Litigation proposes limiting cy-près to “circumstances in which direct distribution to individual class members is not economically feasible, or where funds remain after class members are given a full opportunity to make a claim.”

However, Google also found me this one, at http://www.google.com/url?q=http://newsandinsight.thomsonreuters.com/Legal/News/2011/09_-_September/5th_Circ__says_class_action_money_must_go_to_class,_not_charity/&sa=U&ei=Pa9YUJH2HJCyigLgnIHIDg&ved=0CBYQFjAB&sig2=Dqd4cvYGzSJkivHUF0mELA&usg=AFQjCNGrSNwXl3tRLe9sI9ATJp03Ns55mA

5th Circ. says class action money must go to class, not charity
9/27/2011

The legal doctrine of cy pres-from a French phrase meaning “as close as possible”-certainly has the best of intentions. Cy pres holds that when it’s not possible or not feasible to distribute funds to beneficiaries (of, for instance, a trust or inheritance), the court should do the next best thing and give the money away in a manner that’s in line with the donor’s wishes. In practice, as Georgetown law school professor Brian Wolfman explained in an appellate brief challenging a cy pres award, cy pres awards have become a controversial device in big-money class actions. When class members don’t step up to claim their share of settlements (sometimes because their share is so small or otherwise intangible that they don’t consider it worth the trouble), judges donate the unclaimed money to a charity of their choice.

“These cases have raised suspicion when the entity awarded is a favorite of counsel or the court,” Wolfman’s brief said. “But even the most innocent-seeming choices are contributing to the emergence of a ‘cy pres industry’ in which charities lobby for awards from settlements with no regard for the purposes of the class action or potential benefits to class members.”

For all the grumbling they’ve generated from class action reformists, cy pres awards are rarely challenged-mostly because there’s no one to challenge them.
[Continues]

The class action suits are yet another legal action about the Agency Model.

I also had a visceral reaction to the Agency Model. It wasn’t about prices going up…$12.99 for a newly released book didn’t seem high to me. It was about three things, really:

1. The lack of competitive pricing by retailers (as a former retailer, that really galled me)

2. The way it was directed at Amazon, really…an entity that was getting people back into reading by taking a loss on some popular books. I saw Amazon as an innovative company bringing an important technological change into the mainstream that would make the world’s great literature free to many people who couldn’t get it otherwise, and create a new distribution model that let people earn a living writing who otherwise would have had virtually no chance. Yes, Amazon was doing it for its own gain, eventually, but it was having a positive societal impact

3. It felt masterminded by Apple, which had made it clear that books and reading weren’t important, and selling hardware was the main goal

I still think a possibility is that publishers will make e-books available for loan based on needs testing. They may need to look at their public image strongly, and that would be a way to do it. In the scenario I’ve suggested for permanent copyright

http://ilmk.wordpress.com/2010/08/09/should-copyright-be-permanent/

Fair Use for educational purposes would be greatly broadened.

Tax incentives could be used to encourage publishers to support public library, but that’s a tough sell right now. Publishers have, in the past, donated literally tons of books…but not having unsold returns for e-books changes that dynamic.

I hated the Agency Model and went out of my way not to support it, and didn’t read books that I wanted to on my Kindle.

Personally, I would like to see them compelled to improve their deals with public libraries.