Lawyers behind $1.5 billion Anthropic settlement slash fee bid after pushback from judge

By David Thomas

March 20 (Reuters) - Lawyers representing authors and publishers in a landmark $1.5 billion copyright settlement with artificial intelligence company Anthropic have lowered their bid for attorney fees in the case by hundreds of millions of dollars.

Law firms Susman Godfrey and Lieff Cabraser asked the federal court in San Francisco on Thursday to award them 12.5% of the settlement fund, or $187.5 million, after Anthropic and two judges overseeing the case objected that they were seeking oversized fees to split with three other law firms that were not appointed to represent the entire class.

Susman and Lieff Cabraser initially sought $300 million, with $75 million of the amount going to the three other firms – Cowan DeBaets Abrahams & Sheppard, Edelson, and Oppenheim + Zebrak.

In their new request, submitted as part of a motion seeking final approval of the settlement, Susman and Lieff Cabraser said the $187 million they are seeking is "based only on the work of class counsel." They said they are not disputing the court's opposition to awarding fees to attorneys that are not formally representing the class.

Attorneys at Susman and Lieff Cabraser did not immediately respond to requests for comment, including how the other firms would be paid.

Anthropic agreed to the settlement in August to resolve claims that it trained its AI models on hundreds of thousands of pirated books. The company also agreed to destroy pirated datasets and certify that those works were not used in its commercial AI models like Claude.

The lead attorneys have called the accord, which requires Anthropic to pay class members more than $3,000 per copyrighted work, the largest reported copyright class action settlement in history.

U.S. District Judge Araceli Martinez-Olguin in San Francisco is set to consider final approval of the settlement at an April 23 hearing.

Martinez-Olguin took over the case from U.S. District Judge William Alsup, who gave preliminary approval to the settlement before going on inactive status at the end of December. Alsup opposed Susman and Lieff's proposed fee split with the three other firms, writing in a Dec. 23 memorandum that they cannot "appoint someone else" to share responsibility for the class.

Susman and Lieff Cabraser in their filing Thursday said the Cowan, Edelson and Oppenheim firms "made significant contributions that have been of material benefit to the class." Jay Edelson, of Edelson, said in an email to Reuters he was "incredibly proud to have led the negotiations" and of the work his firm and Oppenheim + Zebrak did preparing for trial.

Cowan DeBaets appeared as one of the firms on the original lawsuit. Attorneys at that firm did not immediately respond to a request for comment.