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Class action suit against Penguin and Author Solutions

1 May 2013

From Courthouse News Service:

Penguin Group’s self-publishing branch, Author Solutions, cheats writers of royalties and charges them to correct typos in manuscripts that the company itself inserted, three unhappy authors claim in a federal class action.

. . . .

Kelvin James, Jodi Foster and Terry Hardy sued Penguin Group (USA) and Author Solutions, a Penguin company.

Author Solutions claims to have worked with 160,000 writers and created 200,000 books, according to the complaint.

. . . .

“Author Solutions’ revenues are estimated at $100 million per year,” the complaint states. “Of the $100 million Author Solutions earns as revenue, approximately one third of that amount, or millions annually, comes from book sales. The rest of its revenue is derived from the services it offers, such as editorial services, formatting and design services, production services, and marketing services (‘services’).

“Despite its impressive profits from book sales, Author Solutions fails at the most basic task of a publisher: paying its authors their earned royalties and providing its authors with accurate sales statements.

“Author Solutions also fails to take diligent care of its authors’ works, making numerous and egregious publisher errors – errors made by the publisher, not the author. These errors include errors on book covers, in addition to various typographical and formatting errors. In fact, Author Solutions profits from its own mistakes. Aggressive sales techniques ensure that these errors are corrected only for a fee of several hundred dollars. Even though, as a matter of policy, Author Solutions promises to correct publisher errors for free, it rarely does.

. . . .

“Therefore, even while Defendant Author Solutions prominently markets itself on its website as ‘[t]he leading indie publishing company in the world,’ authors often discover, once it is too late, that Author Solutions it is not an ‘indie publisher’ at all. It is a printing service that fails to maintain even the most rudimentary standards of book publishing, profiting not for its authors but from them.”

Link to the rest at Courthouse News Service and thanks to Mira for the tip.

Big Publishing, Legal Stuff

28 Comments to “Class action suit against Penguin and Author Solutions”

  1. Yay! Bully for them! I hope they have an excellent case and win. I hope this is the first of many such lawsuits.

    It’s about time for people who try to scam writers to be held accountable in the courts.

  2. “Author Solutions claims to have worked with 160,000 writers and created 200,000 books,”

    “Author Solutions’ revenues are estimated at $100 million per year,” the complaint states. “Of the $100 million Author Solutions earns as revenue, approximately one third of that amount, or millions annually, comes from book sales. The rest of its revenue is derived from the services it offers, such as editorial services, formatting and design services, production services, and marketing services (‘services’).”

    So, one third of 100 million, or $33,333,333÷200,000 books comes out to about $208 per book, per year.
    Meanwhile, the 160,000 writers they work with pay for “Services” valued at $66,666,666.
    $66,666,666÷160,000 writers = about $416.

    I see. You pay them $416 a year to earn $208 a year.
    And Amazon’s the Devil?

  3. I eagerly await Scott Turow’s rebuttal.

    • *snort* Oh, boy!

    • sobbing… You know it’s bad when you can’t tell the parody from the real thing.

    • Okay, Dan, that was pretty funny. :D

      • AG Prez here…and I’d like to thank the NYT for giving me another unfettered platform for my latest pro-establishment piece.

        But more importantly I’m here to announce that the plantiffs in the Random-Penguin class action suit are officially enemies of all important books, book culture and literature. And orphaned babies and puppies.

        Despite my position, education and experience I’ll offer no substantive argument to support this but will only appeal to your gullibility to believe my rhetoric based solely on who I am. As usual, any commentary or rebuttal to my message is strictly prohibited so keep your trite opinions to yourself.

        That is all. You may continue writing.

        All hail Big Pub.

        • Nice work, but I had to knock you down to an A- because you forgot to blame Amazon for something.

  4. Good on those who sued, I say, and doubly good to have waited until ASI was bought by a bigger company, with deeper pockets.

  5. “The writers want $5 million in punitive damages for breach of contract, unjust enrichment, California unfair competition law, and New York general business law.”

    I am lost in admiration for the plaintiff’s attorneys’ legal ingenuity. I’d like to know how they intend to get punitive damages awarded for breach of contract. Punitive damages are not recoverable for breach of contact, because breach of contract is not a tort.

    What say you, PG?

    • I haven’t read the Complaint, but, in an individual suit, fraud would certainly be one of the prominent causes of action.

      However, in a class action suit, fraud is difficult because fraud requires reliance on misrepresentations and reliance is not necessarily the same for all members of a class. Consumer fraud doesn’t help because a vanity publishing contract doesn’t fall under the ambit of consumer fraud statutes.

  6. Should be interesting to watch. May more people sue and they all win and make the BPHs think more seriously about offering/partnering/buying companies that operate like ASI

  7. I used iUniverse for my first book when I didn’t know any better. I found that they were careful to keep to what the contract specified but that ‘editorial evaluation’ skimmed the surface of a few areas and entailed advising me how it was in my interests to purchase further services. I think my final disillusionment was when they wanted to charge me $300 to fix 4 small, one word/letter typos. (these were my errors). Since I know now that it take me maybe ten minutes to do that myself, I felt offended.

  8. And in more happy news, the plaintiffs are appealing in the Harlequin class action suit as well: http://www.harlequinlawsuit.com/

    Perhaps the publishers can get a group discount on attorney’s fees? Take one another out for a pity party?

  9. They also used to be called AuthorHouse, and I “vanity” published with them in 2005.

    I’m eternally grateful for all of the hair-pulling frustrations they put me through–forcing me to “indie” publish and do much better as a result.

    • They’re still called AuthorHouse, Jason. Their thing is having an insane number of brands with which to confuse prospective suckers – I mean, clients.

      • I was blogging about them again yesterday and made a list. I *think* this is the complete list, but I might have missed one or two:

        Here’s the full list for future reference: Author House, iUniverse, XLibris, Trafford, Palibrio, Publish in the USA, Abbott Press (Writers Digest), Balboa Press (Hay House), WestBow (Thomas Nelson/Harper Collins), Partridge (Penguin India), Archway (Simon & Schuster), Inspiring Voices (Guideposts Magazine), Legacy Keepers, FuseFrame (previously Author Solutions Films), Pitchfest (Authors pay to come pitch their stories for film adaptations), Author Learning Center (Online learning tool hoping you’ll forget to cancel your credit card after the free trial ends), WordClay (Abandoned ebook imprint), BookTango (New ebook imprint), AuthorHive

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