Judge allows Anthropic author settlement to proceed after case reassignment

The $1.5 million settlement between tech giant Anthropic and a group of authors alleging it used their copyrighted works to train its AI model can proceed as scheduled despite being transferred to a new judge before final approval.

Attorneys for the plaintiffs and Anthropic met with U.S. District Judge Araceli Martinez-Olguin for the first time at a Thursday hearing in San Francisco to discuss how the landmark case should proceed in the wake of former U.S. District Judge William Alsup's retirement.

Martinez-Olguin, who was assigned the case Dec. 31, indicated the settlement could proceed without additional delays but said that a few steps need to be taken to ensure a smooth transition from Alsup to herself.

Martinez-Olguin said she hopes to appoint a special master as she gets up to speed on the 570-page docket. She said she understood an order issued by Alsup just before his retirement, requiring a declaration from both sides about where the settlement process stands, as a hint that the case would be difficult to pick up at this stage.

"I read his order as saying, 'Dear colleague who gets this case, you might need help,'" Martinez-Olguin said at the hearing. Bartz et al v. Anthropic PBC, 3:24-cv-05417 (N.D. Cal., filed Aug. 19, 2024).

Plaintiffs, represented by Justin A. Nelson of Susman Godfrey LLP, opposed the idea since they believe their declaration answered Alsup's remaining questions.

"We don't believe a special master would be appropriate," Nelson said.

Martinez-Olguin said that Alsup expressed concern about inconsistencies between the parties' responses to his preliminary approval and their previous declarations, and that a special master would help her sort through those.

The case has already had two special masters -- Harold J. McElhinny during litigation and Theodore K. Cheng during settlement proceedings. Both Nelson and Anthropic's attorney, Daralyn J. Durie of Morrison & Foerster LLP, said they'd be fine with whomever the court appoints.

The judge also said she's considering extending the deadline for class members to opt out since they weren't given sufficient notice of a recent order extending the deadline from Jan. 15 to Jan. 29.

Plaintiffs' attorneys said the 480,000-member class is "well-informed" and likely knew about the order. They said they've received several calls from class members wishing to opt out since Jan. 15, indicating that the class is aware of the change. Instead of extending the deadline again, plaintiffs' attorneys said, the court should handle opt-outs from class members confused about the initial extension on a case-by-case basis.

If Martinez-Olguin decides to extend the deadline, they said, it likely won't affect the rest of the case schedule.

A group of authors who had opted out of the settlement filed a lawsuit against the company and other tech giants in December hoping to secure more money for each copyright violation than the proposed settlement allows.

Martinez-Olguin also criticized attorneys on both sides for ignoring her order to re-notice the court about any pending motions. She said she was surprised, given the reputations of the firms on both sides.

"I'm reminding you to just read the orders," Martinez-Olguin said.

Alsup granted preliminary approval to the $1.5 billion settlement in September but expressed concerns with the deal that he said needed to be addressed before final approval. The case marked the first major settlement between an AI developer and authors whose work the company used to train its algorithm at a time when similar lawsuits have been filed across the country.

According to a case management statement, the sides have until Feb. 13 to file any additional motions and plaintiffs have until March 19 to move for final approval. A fairness hearing is tentatively scheduled for April 23. Nelson suggested the two sides could soon file a joint motion to set a date for the final approval hearing.