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Class Action Lawsuit Against PublishAmerica Dismissed

30 September 2012

From Writer Beware:

On June 11 of this year, a class action lawsuit was filed against PublishAmerica by a Baltimore, MD law firm, in association with high-profile litigators Hagens Berman Sobol Shapiro.

Among other things, the complaint alleged that PA makes money off its authors while billing itself as a traditional publisher, requires authors to pay for “usual and customary marketing that any reputable publisher would do as a matter of course,” offers “services that are not reasonably designed to promote book sales,” and “duped” the three plaintiffs in the lawsuit with, among other things, “bogus services” and books “riddled with errors.” The complaint sought “a declarative judgment that defendant’s publishing contracts violate the Maryland Consumer Protection Act,” including the MCPA’s prohibition against deceptive trade practices.

. . . .

PA, not surprisingly, filed a motion to dismiss for “failure to state a claim,” arguing that the author-PA relationship is not protected under the MCPA:

The Court should dismiss the claims brought by Plaintiffs under the Maryland Consumer Protection Act (“CPA”) because Plaintiffs are not consumers; they have entered into a commercial enterprise with PA pursuant to which they split the proceeds from sales of their literary work made by PA. This profit sharing relationship is not a relationship that is protected by the (“CPA”). Plaintiffs’ declaratory judgment count should also be dismissed since the underlying CPA claim is defective.

The Motion to Dismiss was granted by the trial court.

. . . .

This past Wednesday, however, PA authors who’d sought to join the suit received a letter from Hagens Berman indicating that they did not intend to re-file.

In speaking and e-mailing with many of you what you wanted was out of your contract. That is also what we had hoped for when we filed this class action. We thought we had a good shot at this when we filed our first complaint. We claimed that Publish America’s representations about itself as a traditional publisher misled authors and led them to give away the publication rights to their books and that this violated the Maryland Consumer Protection Act. But the court concluded that the statute has a narrower scope and that the complaints we asserted against Publish America are not really consumer complaints, but more like business complaints.

Link to the rest at Writer Beware and thanks to Jeanne for the tip.

It’s pretty embarrassing for class action counsel to get bounced out of court so quickly. Passive Guy would love to know why they took the risk of suing under a consumer protection statute instead of plain old fraud. He speculates class action status and punitive damages were easier to generate under the consumer protection law.

Legal Stuff

5 Comments to “Class Action Lawsuit Against PublishAmerica Dismissed”

  1. “He speculates class action status and punitive damages were easier to generate under the consumer protection law.”

    P.G.

    To help my understanding of your speculation….

    You speculate that the lawyers hit up the class action, because if it succeeded, there was a greater chance of getting some money?

    As they have failed, does that mean they get nothing for their work up to now, or have the original complainants underwritten the fees?

    Or is that one of them, “individual to the specific case,” questions?

    Either way, I’m a bit surprised, because this outfit are well established at this type of effort.

    brendan

    • Brendan – Because individual damages under consumer protection laws may not be large enough to justify the expense of litigation for a single consumer, courts are generally amenable to class action suits because that’s the only way consumers are likely to be compensated for the wrongs done to them.

      Additionally, because of the possibility of small actual damages under some consumer protection laws might not deter violation of the law in some cases, the law might provide for a set amount of punitive damages the judge could award (e.g. $10,000 per instance of wrongdoing over and above actual damages) or the judge might be granted general powers to award punitive damages in an amount deemed appropriate given the behavior of defendants.

      At this point, there is a 99.9999% probability that attorneys for the authors named as plaintiffs in the suit will be getting nothing for their efforts because they took up the matter for the named plaintiffs (and the rest of the class) on a contingency fee basis.

      This is all general speculation on my part because I haven’t read the complaint or the Maryland law in question.

  2. OMG! That is so funny that this has happened…I wrote a book that was published by them a couple of years ago. I have been desperately trying to get out of this crooked contract ever since. I know that my book is best-seller worthy had Publish America been more “professional” they released my book flooded
    with grammatical errors and flawed writing. When I emailed them about correcting the errors they REFUSED so now I am deprived of the joy of writing my first novel and am a little discouraged because it will not get the recognition that it needs until my contract with them is up! Its very frustrating and very heartbreaking to be a first-time author and you can’t direct people to purchase your novel because you are embarrassed. I really hope another law suit is filed (one that I can join)so that hopefully I can give my book the same attention that a REAL reputable company and publishers would. Thank you for posting this article!

  3. This is sad. It sounds like the lawyers weren’t really in this – a quick hit, and then out. What a shame.

    I hope this doesn’t discourage the authors from trying to find another set of lawyers, some who might believe more in the cause.

  4. This just underscores a point PG has made before–you can’t count on consumer protections when you sign with a publisher.

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