Anthropic Judge Blasts $1.5 Billion AI Copyright Settlement (2)

The federal judge overseeing Anthropic PBC’s proposed $1.5 billion copyright settlement is concerned class lawyers are striking a deal behind the scenes that will be forced “down the throat of authors.”

Judge William Alsup at the hearing said the motion to approve the deal was denied without prejudice, but in a minute order after the hearing said approval is postponed pending submission of further clarifying information.

During the first hearing since the deal was announced on Sept. 5, Alsup said he felt “misled” and needs to see more information about the claim process for class members. “I have an uneasy feeling about hangers on with all this money on the table,” he said.

The agreement is “nowhere close to complete,” said Alsup of the US District Court for the Northern District of California.

Authors’ counsel, Justin Nelson of Susman Godfrey LLP, assured Alsup that the attorneys “care deeply that every single proper claim gets compensation.”

In an order docketed the evening before the hearing, Alsup said he was “disappointed” that the parties left “important questions” for the future, including a list of works covered by the deal and the processes for notifying potential class members. Those “critical choices” will need to be made before preliminary approval can be granted, he said.

His criticism forces attorneys to recalibrate a proposed settlement touted as among the largest copyright deals in US history and a template for similar AI copyright litigation.

Maria A. Pallante, president and CEO of the Association of American Publishers, said in a statement that the court “demonstrated a lack of understanding of how the publishing industry works.” The court “seems to be envisioning a claims process that would be unworkable, and sees a world with collateral litigation between authors and publishers for years to come,” she added.

The deal would resolve authors’ class action over the AI company’s downloading of millions of pirated books, one of the first settlements of a copyright dispute against AI leaders including OpenAI Inc., Meta Platforms Inc., and Midjourney Inc. Attorneys say the proposed $3,000-per-book settlement establishes a potential benchmark for the tech giants to resolve similar claims.

Alsup said class members “get the shaft” in many class actions once the monetary relief is established and attorneys stop caring. He told the parties that “very good notice” must be given to class members to ensure they have the opportunity to opt in or out, and protect Anthropic from potential claimants coming out of the woodwork later.

“When they pay that kind of money, they’re going to get the relief in the form of a clean bill of health going forward,” he said, and Anthropic cannot be at risk of being sued by somebody else on the very same thing.

Nelson said he expects a high claim rate, noting the high-profile nature of the dispute.

Alsup admonished class counsel for enlisting an “army” of attorneys to work on the settlement disbursement, including some from the Authors Guild and Association of American Publishers. “Add-on” attorneys won’t be paid from the settlement funds and attorneys fees will be based on how much is paid to class members, he said.

Nelson explained that the groups were brought to collaborate over complex ownership questions, including when certain books with multiple authors and publishers as claimants.

Alsup instructed the parties to design a claim form that requires anyone with copyright ownership to opt-in to the settlement. If one owner opts out, the work won’t be covered by the settlement. A form should be submitted for each claim, he said, and if there’s a dispute over ownership the parties should go to state court.

Alsup gave the parties a Sept. 15 deadline to submit a final list of works, which currently stands around 465,000.

Anthropic is represented by Cooley LLP, Arnold & Porter Kaye Scholer LLP, Latham & Watkins LLP, Lex Lumina LLP, and Morrison & Foerster LLP. Lieff Cabraser Heimann & Bernstein LLP, Cowan Debaets Abrahams & Sheppard LLP, Edelson PC, and Oppenheim + Zebrak LLP also represent the authors.

The case is Bartz v. Anthropic PBC, N.D. Cal., 24-cv-5417, hearing held 9/8/25.