U of O law student who masterminded copyright class action loses bid for $3.5-million fee cut
Judge awards Tanya Woods $330,000, rejecting claim for at least five per cent of the $50-million total class award
A former University of Ottawa law student who masterminded a $50-million copyright class action has lost out on her bid for a $3.5-million cut of the award.
Tanya Woods brought her plan for an “orphan works” class action against various music labels to the university’s Canadian Internet Policy and Public Interest Clinic back in 2007 after crystallizing the idea following her final-year Digital Music Law class.
But when the class action settled for close to $50 million, Woods sued her alma mater, claiming she was entitled to at least five per cent of the total class award, rather than five per cent of the court-approved class counsel fee, which came in at just over $6 million. In addition, she accused the university of negligence, misrepresentation, unjust enrichment, breach of fiduciary duty and breach of copyright, bringing her total claim for damages to $3.5 million.
However, Ontario Superior Court Justice Calum MacLeod sided with the University of Ottawa, finding the agreement Woods signed with the clinic for a guaranteed five-per-cent share of the counsel fee was binding and enforceable. As a result, he awarded her half of CIPPIC’s $660,000 cut, for a total of around $330,000.
“Accepting that the plaintiff’s marriage of the idea of the class proceeding with her knowledge of the pending list was the stroke of genius that made the litigation possible, I agree with the submissions of counsel for the university that the plaintiff is exaggerating the importance of her contribution,” Justice MacLeod wrote. “Having a brilliant concept for litigation is one thing. Carrying it into action and successfully pursuing it is quite another. The plaintiff deserves great credit for her initiative. Very few law students can say that they developed a concept for a multi-million-dollar class proceeding in law school and solved an intractable problem in the music industry. She can take pride in this. It does not follow that Ms. Woods has somehow been cheated if she receives only five percent of the counsel fee under these circumstances.”
According to the ruling, Woods decided to focus her digital music class paper on the problem of orphan works – music for which no copyright holder could be identified – and the accumulated liability for royalties owed to those authors by music publishers, which was widely known in the Canadian industry to total around $50 million by the end of 2006.
Her paper The Unlocatables: Playing Hide and Seek with Royalties in the Canadian Music Industry, described the issue and explored potential solutions, but it wasn’t until February 2007, following a placement with the Copyright Board of Canada, that Woods brought the idea for a class action to Philippa Lawson, the executive director of CIPPIC, where she had previously interned.
Woods told the court she was sparked into action when one of her professors informed her he had discussed her paper with class actions trailblazer Harvey Strosberg, which brought home the realization that someone else would run with the idea if she didn’t get something started herself.
Things moved quickly once CIPPIC became involved, and the clinic soon formed a consortium with two law firms to advance the case.
Woods conducted research and prepared a draft statement of claim, before bowing out of active involvement in June 2007 to avoid a conflict with her articling position at the Copyright Board.
“There is no doubt whatsoever that awareness of the pending list, the size of the potential liability and the possible utility of a class proceeding to unlock these funds was an idea which would not have occurred independently to any of CIPPIC or the collaborating law firms,” Justice MacLeod wrote.
The class action was eventually launched in September 2008 and settled three years later for just under $50 million, with fees to class counsel approved at $6.25 million plus taxes and disbursements. CIPPIC claimed 10 per cent of the total fees under its consortium agreement.
Woods’ case against the university focused on her separate agreement with CIPPIC, guaranteeing her a minimum of five percent of the compensation awarded to class counsel, which she argued was invalid.
But emails and written evidence clearly supported the university’s case that the contract with CIPPIC was an agreement to share a portion of counsel fees, rather than the $50 million class award, the judge found.
“Read in context, having regard to the discussions and the email exchanges, there is no doubt that the plaintiff had agreed (however reluctantly) to a guarantee of five percent of the counsel fee,” he wrote.
Justice MacLeod noted in his decision that it was “remarkable” that the clinic was able to pursue its agreements with both Woods and the consortium without any formal approvals or extensive documentation.
“With the benefit of hindsight, clear policies, crisper contractual language, written releases and independent legal advice might have avoided this dispute,” he wrote.
Still, the evidence did not persuade him that Woods’ rights were breached:
“The plaintiff has failed to prove that copyrighted material was appropriated or misused, and she cannot show that the lawyers at CIPPIC put the interests of the university before hers. Nothing in the evidence persuades me that the plaintiff was misled or induced to detrimentally surrender her rights. I do not accept the argument that there was a solicitor client relationship between CIPPIC and the plaintiff or that there was an agency relationship. I cannot conclude that the university should be liable for any damages beyond a share of the amount CIPPIC has been paid let alone damages of $3.5 million,” Justice MacLeod concluded.
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