Informally, parity-of-preclusion means that future-conduct claims may be released only when they are closely connected to something the defendant has already done. This restriction addresses many of the normative concerns with future-conduct releases identified in Part II. It does not address them completely, so there is still also a need for heightened Rule 23(e)(2) scrutiny. But it does so effectively enough that parity-of-preclusion marks a normatively attractive dividing line between potentially permissible future-conduct releases and absolutely forbidden ones. Once again, it is helpful to group the analysis by those normative concerns.
277. But see Williams v. Gen. Elec. Capital Auto Lease, Inc., 159 F.3d 266, 274 (7th Cir.
1998) (reading TBK Partners and other cases “as pertaining broadly to the law of
‘releases’ rather than narrowly to the issue of federal court jurisdiction”). Williams is discussed on other grounds and criticized herein. See infra Part V.C.
278. See RESTATEMENT (SECOND) OF JUDGMENTS § 26(1)(c) (1980).
279. Id. § 28(3) (explaining that preclusive effect depends on “differences in the quality or extensiveness of the procedures followed in the two courts or by factors relating to the allocation of jurisdiction between them”).
280. See Matsushita, 516 U.S. at 377–79, 382–83.
281. TBK Partners, Ltd. v. W. Union Corp., 675 F.2d 456, 460–61 (2d Cir. 1982).
1. High Stakes
It is almost tautological that parity of preclusion can only reduce the stakes of potential settlements. If a given claim was at risk in litigation, then the stakes are already high enough to include it. True, a complaint can be drafted broadly, but we tolerate broad complaints in litigation already
282and trust courts to ensure that class members are adequately represented to the extent of those claims.
283If the scope of settlement authority were narrower, counsel could have the incentive to litigate weak and risky claims rather than accepting a beneficial settlement. Moreover there are still limits on even a broadly drafted complaint.
284There is no way that authors and publishers could have lost the right to stop Google from selling complete copies of their books, no matter how broad their pleadings.
For one thing, since Google did not sell and was not about to sell complete books, such claims would have been categorically unripe.
285For another, the infringement case would have been so unequivocal that a court could easily conclude that there was no colorable risk of loss.
2862. Uncertainty
Grounding future-conduct releases in the defendant’s past conduct introduces specificity: we can better anticipate the future if we know that it will be like the past. This makes it easier to predict the relevant conduct and its consequences, thereby helping counsel, class members, and the court. They can look at what the defendant has already been doing to guess what it will do in the future. It is much easier to feel comfortable about a settlement allowing Google
282. See FED.R.CIV.P.18(a) (permitting a party to join in one complaint “as many claims as it has against an opposing party”).
283. See FED.R. CIV.P. 23(g) (establishing standards for the appointment of class counsel, including that counsel will “fairly and adequately represent the interests of the class”).
284. See supra Part IV.A (discussing pleading doctrines).
285. See Authors Guild, Inc. v. HathiTrust, No. 11 CV 6351(HB), 2012 WL 4808939, at
*7–8 (S.D.N.Y. Oct. 10, 2012) (holding that claims against Google’s library partners for cancelled plan to distribute complete copies of books were unripe); Authors Guild v.
Google, Inc., 770 F. Supp. 2d 666, 678 (S.D.N.Y. 2011) (“Google did not scan the books to make them available for purchase . . . .”).
286. Indeed, the Authors Guild court did just that. Authors Guild, 770 F.Supp.2d at 678 (“Google would have no colorable defense to a claim of infringement based on the unauthorized copying and selling or other exploitation of entire copyrighted books.”); see also Transcript of Fairness Hearing, supra note 87, at 150 (“THE COURT: If Google had been digitizing entire books and not just making portions available but making the entire portions available and indeed selling them, would that be something that Google would have tried to defend? MS. DURIE: Selling the work, no.”).
to create a search index than about one allowing it to sell books. The search index Google has spent the last seven years building is a very good illustration of how a search index would work, whereas basic features of the proposed bookstore and subscription service were still giant question marks as of the time the settlement was rejected. Past performance is no guarantee of future results, but it is better than past nothing.
3. Moral Hazard
It is harder to set up perverse incentives if one does not have novel conduct to work with. The question to class members is simply whether they will be able to tolerate what the defendant is already doing and, if so, at what price. The court can similarly have more confidence that the arrangement it is blessing is not unduly dangerous, if it has managed to exist already without problem.
Moreover, a defendant seeking to undertake an activity will need to be prepared to actually engage in the activity, without the cover of the settlement, and risk the consequences. This skin in the game gives the class more negotiating leverage because it leaves litigation as a credible threat.
2874. Concentrated Power
Future-conduct releases can still give a defendant concentrated power, but with parity of preclusion, that power is limited to the continuation of the power the defendant has already claimed. This pulls potential challenges forward in time: for example, antitrust suits by third parties need not wait until after the settlement. Parity also assists the defendant’s competitors, because if the defendant could have obtained the rights it seeks through litigation, anyone similarly situated could do likewise. This was one of the key defects of the Google Books settlement: it created a legal platform that was usable only by Google and not available to other book scanning institutions.
288287. Cf. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 621 (1997) (“Class counsel confined to settlement negotiations could not use the threat of litigation to press for a better offer.”). Crucially, this alternative would also produce the attorney’s fees needed to motivate class counsel to consider litigation instead of settlement.
288. See generally Grimmelmann, supra note 128 (discussing obstacles standing in the way of potential competitors looking to establish similar programs).