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.