I am informed that at the fairness hearing yesterday, Judge Naomi Reice Buchwald approved the settlement, but did not make a ruling as to attorney's fees. At this point, no documents resulting from the hearing have been posted on PACER.

The EFF responded to Sony's response to their claim for almost $2M in fees. It looks like the claws are coming out in that fight and I plan to get all of the documents online soon.

The appeal will also be getting off to a good start this week, with the deadline for the appellant's brief set for Thursday, May 25. At that time, we'll have a good idea of what issues will be dealt with in that appeal. I do not anticipate that the appeal will impact the settlement.

For those of you who have not yet done so, it is important that you make a claim before the end of the year.

These documents were filed earlier this month, but due to exams and other personal issues, I’ve not had an opportunity to post them. They provide, however, the other view of the EFF’s fee request which is discussed below.

Defendant Sony BMG Music Entertainment’s Memorandum in Opposition to the "EFF Group's" Motion for the Award of Attorneys’ Fees (PDF)

Declaration of Jeffrey S. Jacobson, Esq., in Opposition to the "EFF Group's" Motion for the Award of Attorneys’ Fees (PDF)

The fairness hearing will occur tomorrow, May 22, 2006 at 9:15 am at the Daniel Patrick Moynihan United States Courthouse for the Southern District of New York at 500 Pearl Street, Room 2270, New York, NY. I will not be able to attend, but expect to post the documents that result from the hearing as soon as they are made available.

I anticipate that the settlement will be approved as proposed, and that there will be significant discussion of the amount and allocation of fees. This case provides a good example as to why fees should be disclosed to class members in advance, even if the parties claim that the amount of fees will not impact the compensation to class members. The attorneys involved certainly deserve to get paid, but consumers should have gotten more out of this deal as well.

Yesterday, 996 pages were filed in response to Judge Naomi Reice Buchwald's April 6 deadline to file papers in support of the application for final settlement from her Hearing order of January 6. I downloaded them all; PACER is now $70 richer. A number of the documents, due to the way PACER works, were divided into multiple, smaller, documents. To make browsing easier, I have consolidated those types of documents into single documents whenever possible. The largest file is around 3.5 MB. Feel free to link to the documents. If you wish to copy and host them elsewhere, please credit SonySuit.com.

I'm in the process of updating the docket on the Michaelson page with the actual docket text and links to each document. Look for that to be done tonight. First, I wanted to get the most important documents online. Of note are three motions.

The first is the Plaintiffs Motion for Final Approval of Class Action Settlement. In addition to the motion itself, there is a Memorandum in Support of the Motion and the affidavits of Mark Russinovich, Kimberly K. Ness, Dora Rivas, and a joint affidavit of Class Counsel Daniel C. Girard and Scott A. Kamber. Declarations supporting the motion were filed by Plaintiffs James Michaelson, Ori Edelstein, and Alexander Guevara.

The second is the Motion for Attorney Fees, Reimbursement of Expenses, and Incentive Awards to Named Plaintiffs. This application for fees by the Class Counsel is capped at $2,300,000.00 in legal fees and $75,000.00 in expenses. Additionally, under the terms of the settlement, each of the named Plaintiffs will receive, in addition to the other provisions of the settlement, a $1000 cash incentive payment to encourage them to agree to the settlement.

Also filed with the second motion was a Memorandum in Support of the Motion and the declarations of Peter Safirstein, Ira M. Press, Oren Giskan, Cornelius P. Dukelow, Barry M. Altman, Dennis A. Burke, Tracy D. Rezvani, Peter Michael D. Halbelish, Alan Himmelfarb, Michael L. Kelly, Robert I. Lax, Douglas A. Linde, Daniel Lynch, Paul R. Huff, William A. Baird, Ethan Preston, Stephen Raff, Brian J. Robbins, Philip A. Tortoreti, Robert I. Harwood, Jennifer Sarnelli, and Joseph E. Levi, which contain information about their billing and work performed during the settlement.

The third set of documents is the Motion for an Award of Attorneys' Fees and Reimbursement of Expenses from the other set of Plaintiffs. This set of fees is in addition to that of the Class Counsel, noted above and includes the attorneys for the EFF. These attorneys request fees in the amount of $1,846,480.16 and expenses in the amount of $90,148.66. I anticipate that the Class Counsel and Sony BMG will oppose this application for fees and expenses.

The third motion is supported by a Memorandum in Support of the Motion and the affidavits of Reed R. Kathrein, Steven M. Bellovin, Larry Ponemon, Aram Sinnreich, Lawrence E. Feldman, and Stan Mallison. Declarations supporting the motion were filed by Ira P. Rothken, Esq., Robert S. Green, Cindy A. Cohn, Diana Schneider, and a Joint Declaration of Counsel (Cindy A. Cohn, Jeffrey D. Friedman, and Rovert S. Green).

While I have not finished reviewing all of the documents, I was particularly impressed with the "inside look" that the Affidavit of Reed R. Kathrein gives to the settlement process. It's quite lengthy (288 pages) and includes many emails that have been sent throughout the settlement.

These applications total $4,311,628.82 in fees and expenses. I was not able to find any indication of the number of claimants thus far, so it is impossible for me to guess at the total cost of this settlement to Sony BMG. Mr. Sinnreich, in an analysis performed for the EFF, attempts to form a reasonable estimate of the cost of various settlement provisions. It is of note that Dr. Larry Ponemon, in his affidavit for the EFF, notes that there are 1,440,000 computers infected with XCP or MediaMax. Divided equally, these fees represent $2.99 to the attorneys for each infection. Dr. Ponemon estimates the total cost to consumers of the infection to be between $10,530,000.00 (using minimum wage) and $32,760,000.00 (Average U.S. Wage).

I did find that two letters of complaint have been sent to Class Counsel complaining that the settlement is inadequate. If you want to share your views and opinions with the Court, or would like to attend the May 22 Fairness Hearing, please read my recent post for simple forms, details, and instructions.

Note: This post is an updated version of an older post. The outdated infomation is displayed in strikethrough text.

A fairness hearing in the Sony BMG Settlement will be held on May 22, 2006 at 9:15 am at the Daniel Patrick Moynihan United States Courthouse for the Southern District of New York at 500 Pearl Street, Room 2270, New York, NY. During this hearing, the proposed settlement will be evaluated by the Court and objections to the settlement can be heard by class members who have not opted out of the class. It does not matter if you have accepted the settlement benefits, as long as you have not opted out (as of today, I am not aware of anyone being allowed to opt out). You must, however, have purchased, received, came into possession of, or otherwise have used a Sony BMG XCP or MediaMax infected CD.

If you are able to attend the hearing, I encourage you to do so. Pursuant to the Hearing Order of January 6, you must file a notice with the Court Clerk before May 1, 2006 that indicates your intent to appear, and serve copies of the notice along with any documents you intend to use during your statement to the Court upon the attorneys involved in the case. For more information about this process, see Section 15 (Page 7-8) of the Hearing Order of January 6. I have created a sample form that you can use in order to notify the Court Clerk and the attorneys. Simply download the template in your desired format [doc | wpd | rtf | txt] and fill it in with your information. The instructions are on the first page.

If you have nt done so already, read the settlement agreement and the Hearing Order of January 6 carefully. I encourage you to focus your arguments around the terms of the settlement agreement and the Hearing Order. If there are other related issues you wish to discuss, please do so, but it is important that you express your opinion on the settlement agreement itself.

It appears that Sony BMG is going to oppose my attempt to speak at the hearing. Because of this, I encourage anyone who wishes to have their voice heard but who is not certain that they will be able to attend the fairness hearing, to use this modified notice [doc | rtf | txt]. It requires that you notarize Exhibit "A", the Affidavit, and asks that th Court accept it as your testimony in the event that you do not, or are not able to, appear. You can attach copies of your CDs, receipts, emails, and any other information that supports your affidavit. You will have to mail the origional to the Court, and copies to the attorneys.

I understand, however, that many class members simply can't make it to New York. I plan to attend, and also plan to speak to the Court about the merits of the settlement. While I will not be there to represent anyone other than myself, I would like to be able to use the opinions of others to support and strengthen my argument.

To that end, I have prepared a template affidavit that you can use to explain your experience with Sony BMG, XCP, and MediaMax. Simply download the template in your desired format [doc | wpd | rtf | txt] and fill it in with your information. You can attach copies of your CDs, receipts, emails, and any other information that supports your affidavit. An example of a completed affidavit is available in PDF format.

Once your affidavit is assembled, you MUST sign it in front of a notary. There are many public notaries in your area; they can often be found at banks, law offices, and even most "pack and mail" type centers. There is typically a small fee of a few dollars for this service. Take the complete affidavit, along with any attachments, and your identification when going to the notary.

After the affidavit is completed, signed, and notarized, mail the original to me (along with all of the attachments) by first class mail. My mailing address is:

Mark Lyon
123A Highway 80 East, #238
Clinton, Mississippi 39056


Please mail your affidavit on or before Thursday, April 20, 2006 so that I will have time to assemble all of the affidavits and file them by May 1. I will be responsible for the costs of copying and mailing a copy to each of the attorneys, and to the Court Clerk. I will submit every signed, notarized affidavit I receive, regardless of your position as to the fairness of the settlement.

Your notice must be recieved by the Court before May 1, 2006. Make certain to mail it in time.

I feel that it is important for your voice to be heard. Please encourage all class members to get involved. The more information that the Court has before it, the better the end result of the class action will be.

A notice of appeal to the US Court of Appeals has been filed by a nonparty, Frederick D. Cooke, Jr. While the appeal has not yet been filed, it will appeal the hearing order entered on January 6, 2006. The hearing order contained an injunction that prevents anyone who has not opted out of the class action (which you cannot do as of this posting... I've tried) from "filing, commencing, prosecuting, maintaining, or intervening in (as members of a class action or otherwise), any claim, lawsuit, arbitration, administrative, regulatory or other proceeding arising out of [Sony BMG's XCP and MediaMax]".

Until the appeal is filed we won't know exactly what Mr. Cooke is complaining about, but I can speculate that he wants to move forward with his own suit against Sony BMG, and the Class Action Injunction is being used to delay his lawsuit.

The problem with this injunction is that it prevents those who don't want to be part of the class action from seeking relief the only way that they can — through a lawsuit. The class action settlement isn't a terrible deal for most people. There are a number of people, however, who aren't going to be adequately compensated for their damages if they are forced to accept the class action incentives as their only compensation. With the injunction in place, it is impossible for one of these people to have their problem resolved in a reasonable time frame.

There are those who probably don't think that forcing those with otherwise valid claims against Sony BMG to wait until the class action is completely settled, or at least made final, before pursuing their own action. You must remember, however, that the people who want to bring these claims must do a lot to prove their damage. They need to maintain their computer in the state it was when it was infected in order to preserve it for evidence and examination. That means they'll need to spend money to get a replacement computer, or at least a new hard drive, in order to continue to have a machine. They also have the statute of limitations running against them, and will forever lose their ability to file their claim if the Southern District of New York forces them to wait too long.

The injunction benefits Sony BMG quite a bit. The longer they make plaintiffs wait, the fewer will be willing to pursue their individual actions. Hopefully the appeal will prevent future class actions from doing similar things.

The website is not yet up, but I wanted to provide this information as soon as it was available. Following is the notice form provided in the Consent Motion To Modify The Settlement Agreement And Notice Forms. Anyone impacted by either XCP or MediaMax should read the more detailed Notice of Proposed Class Action Settlement, Motion for Attorney's Fees, and Settlement Fairness Hearing.

If You Bought, Received or Used a SONY BMG Music Entertainment CD Containing Either XCP or MediaMax Content Protection Software, Your Rights May Be Affected By a Class Action Settlement, And You Should Download Updates For That Software.

What is this about?

A settlement has been proposed in a lawsuit brought against SONY BMG Music Entertainment, Inc., SunnCom International Inc., and First 4 Internet, Ltd. ("Defendants"). The lawsuit, In re SONY BMG CD Technologies Litigation, Case No. 1:05-cv-09575-NRB, is pending in the United States District Court for the Southern District of New York and relates to XCP and MediaMax content protection software installed on certain SONY BMG music CDs. The settlement resolves claims that the Defendants manufactured and sold CDs containing XCP and MediaMax software without adequately disclosing the limitations the software imposes on the use of the CDs and the security vulnerabilities it creates. The Defendants have denied that they did anything wrong.

Who Is Included, And What Does The Settlement Provide?

The settlement provides relief for persons who bought, received or used SONY BMG CDs with either XCP or MediaMax software. Under the settlement, any person in possession of an XCP CD can exchange it for a replacement CD, an MP3 download of the same album, and either (a) cash payment of $7.50 and one (1) free album download from a list of 200 albums, or (b) three (3) free album downloads from that list. Purchasers of CDs containing MediaMax 5.0 software will receive a free MP3 download of the same album and one (1) additional free album download. Purchasers of CDs containing MediaMax 3.0 software will receive a free MP3 download of the same album.

The settlement also requires the Defendants to stop manufacturing SONY BMG CDs with XCP or MediaMax 3.0 and 5.0 software and, until 2008: (1) make available updates to fix all known security vulnerabilities caused by XCP and MediaMax software; (2) provide software programs to uninstall XCP and MediaMax software safely; (3) fix any future security vulnerabilities discovered in MediaMax and any other content protection software placed on SONY BMG CDs; (4) provide independent verification that personal information about users of SONY BMG CDs has not and will not be collected through XCP or MediaMax; (5) waive certain provisions of the end user license agreements for XCP and MediaMax software; and (6) ensure that any other content protection software will be clearly disclosed, independently tested and readily uninstalled.

At 9:15 a.m. on May 22, 2006, the Court will hold a hearing at the United States District Court, Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, Courtroom 21A, New York, New York 10007-1312, to decide whether to approve the settlement and the class attorneys' fees and costs.

How Do I Participate In The Settlement?

If you bought or received a SONY BMG Music CD containing XCP or MediaMax software and want to receive the relief you may be eligible for under the settlement, you must submit an online claim form at www.sonybmgcdtechsettlement.com, or mail a claim form to:

SONY BMG CD Technologies Settlement
P.O. Box 1804, Faribault, MN 55021-1804

All claim forms must be submitted by December 31, 2006.

What Are My Other Options? If you bought, received or used a SONY BMG Music CD containing XCP or MediaMax software, and you do not want to be legally bound by the settlement or receive a replacement CD, cash, free downloads or other relief, you must exclude yourself by May 1, 2006. If you do not exclude yourself, certain of your claims against the Defendants that were or could have been asserted in the lawsuit will be released, meaning you may not be able to sue the Defendants for those claims.

To view the detailed legal Notice of Proposed Class Action Settlement, Motion for Attorneys' Fees and Settlement Fairness Hearing and to download the software updates, visit www.sonybmgcdtechsettlement.com. You may obtain further information by contacting the claims administrator at the address above or by calling toll free 1-800-242-7610.

Additional documents are now available for the XCP and MediaMax Sony BMG Settlement. I suggest that you read the Hearing Order entered on January 6, 2006 by District Judge Naomi Reice Buchwald certifying the class and setting guidelines for what will happen next, including opting out, commenting, or attending the fairness hearings.

The fairness hearing will be held May 22, 2006 at 9:15 am at the Daniel Patrick Moynihan United States Courthouse for the Southern District of New York at 500 Pearl Street, Room 2270, New York, NY.

Sony BMG is required to start notifying those affected by XCP and MediaMax by sending emails, posting a notice on their website, displaying a banner when the CD is used, and publishing ads in major newspapers and magazines.

Claims MUST BE submitted by December 31, 2006. If you want to be excluded from the settlement, you MUST FILE before May 1, 2006. If you do not exclude yourself, you can attend the fairness hearing, at your own expense, and be heard by yourself or through your attorney. Forms will be available on this website soon.

Those of you considering filing your own action, should carefully review the injunction in paragraph 24. Any members of the class are enjoined from filing any proceeding against Sony BMG, and from soliciting to form a different class.

In the wake of the Sony BMG settlement, I am making some modifications to this website to simplify and outline the information offered here. This post, therefore, will replace my other, previous posts. If you would like to read them, they are available in the archive. As always, information about each of the major class actions is available from the links to the right. You can also view the Michaelson page for actual information about the settlement.

As of this post, there is one class action in the United States, created by consolidating the at least twenty-one class action lawsuits that were filed across the United States into one giant class action that covers anyone in the US who purchased, received, came into possession of, or used one or more XCP or MediaMax CD. Not impacted by the settlement are the two class actions just now shaping up in Canada, a lawsuit by the Texas Attorney General, other legal action in Italy, and possible litigation by the Florida and New York Attorneys General.

As part of the settlement, Sony BMG will exchange your XCP-infected CD [Full List of XCP CDs] for one that does not have XCP. There is an exchange program already in progress at this website, and you may also be able to return your CD to the store where you purchased it. Before you mail or otherwise return your CD, make a copy of your receipt, and of the CD and its case, so that you can prove you had an XCP CD if you need to do so in the future. If you don't return your CD to Sony BMG directly, be sure to get proof that you have returned your CD, most likely in the form of a receipt from the retailer indicating the return.

To encourage you to return your CD, Sony BMG is required to offer you a choice of two incentive packages, as follows:

Package 1: Sony BMG will make a one time payment by check or debit card to you in the amount of seven dollars and fifty cents ($7.50), and you get a promotional code that allows you a free download of one entire CD from a selection of about 175 Sony BMG titles [Full List].
Package 2: Instead of getting a cash payment, you get three promotional codes, each allowing you a free download of one entire CD from a selection of about 175 Sony BMG titles, for three complete CD downloads [Full List].

Sony has to offer the download from at least three different websites, including iTunes. To claim your choice of the incentive packages, you will have to return your CD directly to Sony BMG or prove that it was returned to a retailer after November 14, 2005, run the Sony BMG XCP Update or the Sony BMG Uninstaller (see below), and complete an online or hard copy claim form. The claim forms will be available once the settlement is approved.

As part of the settlement, Sony BMG will offer to anyone who purchased one or more MediaMax-infected CDs [Full List of MediaMax CDs] an opportunity to download a non-DRM MP3 version of the CDs they purchased and a promotional code that allows you a free download of one entire CD from a selection of about 175 Sony BMG titles [Full List]. MediaMax CD's do not qualify for check or debit card payment, or for the three download option. MediaMax CD's will not have to be returned. The MediaMax claims process will be very similar to the XCP claims process.

It is not known at this time if Sony BMG downloads using the promotional code will include DRM, but if music is downloaded from iTunes, it likely will, since other iTunes downloads have Apple's DRM. It is hopeful that Sony BMG will have at least one of the three services offer completely unprotected, high bitrate, MP3 (or even better — lossless FLAC) downloads.

Sony BMG is required to offer a downloadable update that uncloaks XCP from the operating system, and one that removes XCP completely. Once you've removed XCP, it is very important that you do not re-infect your computer by attempting to re-use the disk in your computer. Sony BMG is also required to offer an update and an uninstaller for MediaMax.

IT IS VITALLY IMPORTANT THAT YOU REMOVE XCP FROM YOR COMPUTER AND THAT YOU RETURN THE CDs FOR A REPLACEMENT. Keeping the software on your computer without an update or a removal can expose you to some very serious security risks. Keeping the CD around could mean that someone you or else could infect another computer later.

Additionally, if you used the earlier web-based XCP uninstaller from Sony BMG, you should have received instructions on how to disable the vulnerable ActiveX control. If you did not receive those instructions, or have not yet done so, follow these instructions to remove it, as it causes even greater security flaws than XCP.

A trustworthy source has assured me that the updates and uninstallers linked above have been evaluated by some of the top security researchers in the field and have been certified to actually do what they claim to do, and that they don't pose a security threat. If you are uncomfortable with downloading additional software from Sony BMG, I have also been informed that Microsoft has made an update available that will remove the XCP infection. It is available by running "Windows Update" or by downloading Microsoft's removal tool.

If you do not have such software on your computer now, you should download an anti-virus and an anti-spyware program onto your computer and make sure they find no other infections or viruses.

Not everyone who was infected by XCP or MediaMax had such an easy time. I, for instance, found that my laptop crashes often since my use of an XCP CD.

Sony BMG, as part of the settlement, has released their customers from many of the worst provisions of their EULAs, including the New-York forum provision, and the limitations on liability. This means that individuals can bring a lawsuit, on their own behalf, against Sony BMG for damages they have received over and above those damages that the class action settlement was designed to cover. These include hardware damage to your machine, and other damage you received as a consequence of XCP or MediaMax.

Therefore, if your specific claim wasn't taken care of by the class action settlement, you can still sue in court. The links to the right provide information about small claims court in your state, where you can usually represent yourself in a claim against Sony. If you claim exceeds the amounts offered in your small claims court, or if you have legal questions, you should consult a licensed attorney in your area. An attorney will be able to properly evaluate your case and inform you of all of your options.