Authors Guild v. OpenAI Inc.

Background

The opinion addresses motions filed by plaintiffs in a related California case, identified as the California Action, to intervene in four New York Actions involving copyright claims against Microsoft Corporation, OpenAI, Inc., and OpenAI-related entities. The New York Actions concern allegations that copyrighted works were used to train OpenAI’s large language models and, in some cases, that ChatGPT’s outputs infringed copyrights or violated the Digital Millennium Copyright Act.

The California Plaintiffs sought to intervene under Federal Rule of Civil Procedure 24 so they could ask the court to dismiss, stay, or transfer the New York Actions under the first-to-file rule. The Authors Guild, Jonathan Alter, and New York Times plaintiffs, along with Microsoft, opposed intervention; the plaintiffs in the Basbanes action supported it; and OpenAI took no position. The Authors Guild action had been consolidated with the other author actions for pretrial purposes, discovery had begun, and a schedule for summary-judgment briefing had been established.

Intervention as of right

Rule 24(a) permits intervention as of right when a timely applicant has a direct, substantial, and legally protectable interest related to the action; disposition may impair that interest; and existing parties do not adequately represent it. The court held that the California Plaintiffs failed to satisfy these requirements.

The California Plaintiffs argued that they had an interest in avoiding inconsistent rulings between the New York and California Actions. The court found that the cases differed in significant ways: the California Plaintiffs asserted state-law and Digital Millennium Copyright Act claims not asserted in the Author Actions, and Microsoft was not a defendant in the California Action. More importantly, no class had been certified in any of the cases. Before certification, the California Plaintiffs had a direct and legally cognizable interest only in their own case, and rulings concerning different plaintiffs in another district would not bind them.

The court also held that the California Plaintiffs had not shown that their interests would be impaired. A ruling involving the individual New York plaintiffs would not bind the California Plaintiffs or the Northern District of California. Even if a class were later certified in an Author Action that included the California Plaintiffs, the court stated that class certification would require a finding that the representative plaintiffs adequately protected the class’s interests.

Finally, the court held that the existing New York plaintiffs adequately represented the California Plaintiffs’ asserted interests. Because the parties shared an interest in holding OpenAI accountable for alleged copyright infringement, a presumption of adequate representation applied. The California Plaintiffs did not rebut that presumption with evidence of collusion, conflicting interests, failure to act, or incompetence. The court also rejected the argument that the Authors Guild’s stated interest in licensing intellectual-property rights showed inadequate representation.

Permissive intervention

Rule 24(b) allows a court, in its discretion, to permit intervention when the proposed intervenor’s claim or defense shares a common question of law or fact with the main action. The court must consider whether intervention would unduly delay or prejudice the original parties’ rights.

The court denied permissive intervention for the same reasons it denied intervention as of right: the California Plaintiffs lacked a legally cognizable interest, their interests would not be impaired, and the existing parties adequately represented them. The court further found that intervention would prejudice the original parties because the California Plaintiffs expressly sought to intervene only to move for dismissal, a stay, or transfer. Such intervention would also disrupt the expedited schedule in the Author Actions, where discovery had begun and summary-judgment briefing was scheduled.

Disposition

The court denied the California Plaintiffs’ motions to intervene in each of the New York Actions for the purpose of transferring, staying, or dismissing those actions. The opinion did not decide the underlying copyright claims or whether the New York Actions should ultimately be dismissed, stayed, or transferred.