Legal Question in Civil Litigation in California

In all likelihood they are bluffing. Class action lawsuits involve spending a very large sum of money, the generally same behavior as to many other customers, etc. How could they get a copyright that quickly; you can contact the governmental department handling that to see if there has bee an application made. You should see whether you want to get a copyright. It would be worthwhile to see an attorney who specializes in this area to see how to protect your self in the future [written contract, etc.]

Shers is scary sometimes. He is right about the class action being a bluff, but that's about it. A class action is where a whole lot of people have the same or similar damages from one defendant, but the amout of each person's damages is too small to sue over. So one or a small group of the claimants get a firm to file a class action, which claims the small amount of damages on behalf of all the people with damages, even though they never sue themselves. The people who sue are called "representative plaintiffs." This would have no application to the situation you describe.

As for copyright, though, Mr. Shers is just wrong. A copyright comes into effect the moment a work is created. There is NO need to register or do anything else with it for there to be a copyright. Registration only puts the world on notice, so that if someone infringes and then sells or otherwise induces infringing use by innocent parties, they can't claim innocense because they are on legal notice of everything that is registered. Again, this has no bearing on your situation.

Now, getting to your real problem, it is clear that you don't really understand or cannot articulate your legal relationship with the other party. This is why you are in this trouble with them. If you created the design for them for money, you gave them at least a colorable argument that it was a work for hire and they are the copyright owner of the design. If that was not the intent or agreement, you have a problem. Unfortunately, because you don't understand the legalities of this situation, you have not described it in a way that allows any real asessment of the issues and your rights. So in the end, Mr. Shers is right: call a lawyer.