In a case which seemed buried in the annals of history, a federal appeals court has set aside a settlement between freelance writers and a group of publishers, including the New York Times, (NYSE: NYT) Thomson, (NYSE: TOC) Factiva and others, involving rights and royalties over work posted online or in databases. The $18 million settlement, that was agreed to in 2005 after years of negotiations, was over claims by freelance writers that their contracts did not allow for publication of their work in electronic databases.

Today, the United States Court of Appeals for the Second Circuit said by 2-1 majority that the Manhattan district court lacked the power to approve the settlement. The pertinent technical statement: “The precise issue on appeal is whether the District Court had jurisdiction to certify a class consisting of claims arising from the infringement of unregistered copyrights and to approve a settlement with respect to those claims. We hold that it did not. We therefore vacate its order and judgment and remand the case for proceedings consistent with this opinion.”

The full ruling and the dissent is in the PDF of the ruling, below (RSS readers will have to click through):