The agreement had been a way for publishers and writers to deal with lingering issues about work that predated a 2001 U.S. Supreme Court decision. (That decision effectively acknowledged that digital reproduction of articles on website and in electronic databases violated copyright and required publishers to henceforth seek explicit permission from writers to use the articles.)

The [class action] suit named major publishers and archive services, including the Thomson Corporation, The New York Times Company, Dow Jones & Company, the LexisNexis unit of the Reed Elsevier Group and the Tribune Company.

After years of negotiation, the companies and the writers reached a settlement in March, 2005, which the judge approved. It provided for mostly modest payments to freelancers, and capped the publishers’ payout at $18 million.

Rather than forcing writers to sue individually concerning articles published before 2001, Federal District Court Judge George B. Daniels had allowed the class-action suit by writers and their organizations. It was the settlement of that class-action suit which the federal appeals court has now thrown out.

In a 2-to-1 decision, an appellate panel ruled that the courts had no jurisdiction over the copyright dispute and that a lower court erred in accepting the writers’ lawsuit and approving the settlement.

People on both sides of the dispute said it was unclear what would happen next -- whether the decision would be appealed, a new suit filed, or a new agreement negotiated.

“The decision is an outrage, and I hope it’s appeal-able to the Supreme Court,” said Gerard Colby, president of the National Writers Union, and a plaintiff.