Legal Stuff

Techdirt’s First Amendment Fight For Its Life

12 January 2017

From TechDirt:

As you may have heard, last week we were sued for $15 million by Shiva Ayyadurai, who claims to have invented email. We have written, at great length, about his claims and our opinion — backed up by detailed and thorough evidence — that email existed long before Ayyadurai created any software. We believe the legal claims in the lawsuit are meritless, and we intend to fight them and to win.

There is a larger point here. Defamation claims like this can force independent media companies to capitulate and shut down due to mounting legal costs. Ayyadurai’s attorney, Charles Harder, has already shown that this model can lead to exactly that result. His efforts helped put a much larger and much more well-resourced company than Techdirt completely out of business.

So, in our view, this is not a fight about who invented email. This is a fight about whether or not our legal system will silence independent publications for publishing opinions that public figures do not like.

And here’s the thing: this fight could very well be the end of Techdirt, even if we are completely on the right side of the law.

Whether or not you agree with us on our opinions about various things, I hope that you can recognize the importance of what’s at stake here. Our First Amendment is designed to enable a free and open press — a press that can investigate and dig, a press that can challenge and expose. And if prominent individuals can make use of a crippling legal process to silence that effort, or even to create chilling effects among others, we become a weaker nation and a weaker people because of it.

We are a truly small and independent media company. We do not have many resources. We intend to fight this baseless lawsuit because of the principles at stake, but we have no illusions about the costs. It will take a toll on us, even if we win. It will be a distraction, no matter what happens. It already has been — which may well have been part of Ayyadurai’s intent.

Link to the rest at TechDirt and thanks to Scott for the tip.

Case of ‘fattened’ Jorge Luis Borges story heads to court in Argentina

11 January 2017

From The Guardian:

One of the best-known stories by the Argentinian author Jorge Luis Borges takes the form of a fake literary essay about a Frenchman who rewrites a section of Don Quixote word for word and is showered with praise for his daring.

It is probably safe to say that Borges’s 79-year-old widow, María Kodama – sole heir and literary custodian of his oeuvre – takes a dimmer view of such rewrites.

The novelist and poet Pablo Katchadjian is facing trial for “intellectual property fraud” after publishing a reworking of Borges’s 1945 story The Aleph. The Fattened Aleph – originally published by a small press in 2009 – extended Borges’s work from its original 4,000 words to 9,600.

Most of the alterations consist of the addition of adjectives and descriptive passages and do not change the original plot, which revolves around a “a small iridescent sphere” in a Buenos Aires basement, through which a person can see the entirety of creation.

. . . .

After five years, a court hearing has finally been set for 14 February, and the judge in the case appears to be leaning in Kodama’s favour. “The alteration of the text of the work by Borges is evident,” Judge Guillermo Carvajal stated in his ruling for a trial.

Kodama’s lawyer Fernando Soto dismissed Katchadjian’s claims that the work was a literary experiment. “Only Katchadjian’s name appears on the cover. It doesn’t say ‘The Aleph by Borges, altered by Katchadjian’. Borges is not mentioned in the index or the copyright page either. The only place Borges appears is in a brief postscript at the end of the text,” Soto said.

. . . .

Katchadjian has rarely spoken in public about the case (and did not respond to an interview request), but he did discuss it at at an event last year at the National Library in Buenos Aires.

“The Fattened Aleph is not plagiarism because no plagiarism is open about its source,” Katchadjian said. “Neither is it a joke that went wrong, or one that went right. It is a book I wrote based on a previous text.”

. . . .

Katchadjian’s laywer, Ricardo Strafacce, said he was confident the lawsuit would not prosper. “Legal forensic experts have already established that The Fattened Aleph is a new work of art. Secondly, the court will also take into account that there was no intent by Katchadjian to deceive the reader as to Borges’s authorship of the original The Aleph, which is clearly stated in Katchadjian’s book.”

Link to the rest at The Guardian

All Romance Ebooks & Visions of The Future: Part One

1 January 2017

From Kristine Kathryn Rusch:

All Romance Ebooks and its sister website Omnilit did something incredibly awful on December 28, 2016. It sent out a handful of emails, letting writers, publishers, readers, and others know that it was shutting its doors four days later.

The letter WMG Publishing got said this,

On midnight, December 31, our sites will go dark and your content will cease to be available for sale through our platforms. This includes any content you are having us distribute to Apple.

We will be unable to remit Q4 2016 commissions in full and are proposing a settlement of 10 cents on the dollar (USD) for payments received through 27 December 2016.  We also request the following conditions:

1.     That you consider this negotiated settlement to be “paid in full.”

2.     That no further legal action be taken with regards to the above referenced commissions owed….

It is my sincere hope that we will be able to settle this account and avoid filing for bankruptcy[KKR: all bold mine]

I have no books on that site. Hadn’t for a long time. If any of my work is there, it’s there through other publishers or as part of an anthology. WMG pulled its books off All Romance Ebooks (ARe) almost a year ago, because of problems dealing with the site, the people behind the site, and just some really unsettling business practices.

How unsettling? Nothing concrete. It looked (from the outside) like their interface was breaking down. We knew of sales on our account that never were credited to our account. I believe WMG even tested the site by buying (or having someone buy) a book, and seeing if we got credited.

We didn’t. Then we tried to track down what was owed, what payments had been made, and communications issues. We had a handful of truly incompetent employees (nice people; terrible workers) in 2014, and at first, we attributed our ARe problems to them. But after some dealings, we realized that, nope, the problem wasn’t ours. It was ARe’s problem, and that was a very, very, very bad sign.

We pulled all our titles off ARe, deactivated our account, and moved on to other sites.

So when we got this ridiculous letter, we knew it would have no effect on us. But as Allyson Longueira at WMG noted, ARe (a major Apple portal) made its announcement while Apple is shut down for annual maintenance, and writers who have to switch from ARe to Apple direct can’t do so.

Not only that, authors will lose any algorithm from Apple, and probably any revenue from them.

. . . .

ARe is a distributor, mostly, and so it is dealing with its writers as suppliers and unsecured creditors. I’ve been through a bunch of distributor closings, many in the late 1990s, with paper books, and they all happen like this.

One day, everything works, and the next, the distributor is closed for good. In some ways, ARe is unusual in that it gave its suppliers and creditors four days notice. Most places just close their doors, period.

I’m not defending ARe. I’m saying they’re no different than any other company that has gone out of business like this. Traditional publishers have had to deal with this kind of crap for decades. Some comic book companies went out of business as comic book distributors collapsed over the past 25 years. Such closures have incredible (bad) ripple effects. In the past, writers have lost entire careers because of these closures, but haven’t known why, because the publishing house had to cope with the direct losses when the distributor went down.

The difference here is that ARe wasn’t dealing with a dozen other companies. It was dealing with hundreds, maybe thousands, of writers individually, as well as publishers. So, writers are seeing this distribution collapse firsthand instead of secondhand.

To further complicate matters, ARe acted as a publisher for some authors, and is offering them no compensation whatsoever, not even that horrid 10 cents on the dollar (which, I have to say, I’ll be surprised if they pay even that).

. . . .

Now, let me give you all some advice.

Lawsuits cost time as well as money. I know a whole bunch of angry writers are banding together to go to war with ARe. Which is good, on the one hand, because these kinds of things should not ever happen.

But on the other hand, it’s not good, because a whole bunch of writers are going to lose a year or more of precious and irreplaceable writing time to go after this company.

Some writers have that time; others do not.

Frankly, if the writers’ organizations put together some kind of lawsuit, sign on to that, because it will be more effective. They can afford good lawyers and they will have a huge number of writers that they represent.

I know you’re angry. I know you may have serious financial problems because of this shut-down.

You need to take a deep breath, and look at the impact ARe’s shutdown and the loss of fourth quarter earnings will have on you. Then you need to understand that any lawsuit will take a year or more (courts are slow). ARe might settle; they might not.

. . . .

Guessing now, purely guessing.

ARe had run ahead of their money since they started. They used today’s money to pay yesterday’s bills. They had no profit. So they were floating money—payments to authors, payments to creditors, payments like website and rent.

That’s why ARe’s technology grew antiquated, why they weren’t keeping up with the times, why payments in some cases were late or impossible to get. They probably got a line of credit too late or they didn’t have one or they were borrowing off credit cards.

This fall, book sales went down. I discussed some of that after the election, but I’ll be discussing it more and in a different way later in January. Like its authors, ARe was counting on a certain level of revenue. That revenue went down, starting in July (maybe sooner), and continued downward all fall.

ARe paid writers and publishers 45 days after the close of the quarter. So they had to have made the Q3 payments by early November. That probably used most of their capital. They figured the holiday season would save them, along with holiday ad buys.

I’ll wager those were below what ARe expected—significantly below. So, they tried the 2017 ad buy the week before Christmas, hoping that would save them.

Link to the rest at Kristine Kathryn Rusch on Patreon and thanks to C.G. for the tip.

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

As usual, Kris’s advice is sound. If you’re involved in the ARe matter, you’ll want to read her entire post.

In a past life, PG represented lots of people in lots of civil litigation. He spent a great deal of time in court.

In some cases, litigation is a necessary part of solving a dispute. The parties are unable to agree, so a judge or jury must decide the matter.

On the other hand, litigation takes a financial and emotional toll on the parties. In some cases, the tangible and/or intangible rewards of litigation outweigh the financial/emotional costs and in other cases they do not.

PG was once involved in finally settling a lawsuit over the validity of a will that had lasted 13 years. He’s comfortable in saying that the costs outweighed the rewards for the litigants in that case.

PG says it is almost always a bad idea to entrust your business or personal welfare to the outcome of litigation.

You can move on with your life without a lawsuit or sue and move on with your life. The moving on with your life part is always the most important.

Court Documents Regarding All Romance E-Books’ Disturbing Business Practices Surface

1 January 2017

From Blog Critics:

In a previous article about the sudden closing of All Romance E-Books, LLC and the owner’s announcement that she was not going to pay any royalties for the 4th quarter sales of books from the over 5000 publishers and authors with books on the site.

. . . .

In order to see the whole story, you need to go back to 2014 when a dramatic conflict began between Lori James and her business partner, Barbara Perfetti Ulmer. In fact, Ulmer sued James and All Romance E-Books, LLC in the Sixth Judicial Circuit Court of Pinellas County, Florida – where ARe was established as a legal business entity – on March 2, 2015. Ulmer filed a complaint alleging that James had been “denying access to contemporaneous and current financial information related to All Romance, breach of duties (fiduciary, care, and loyalty) unjust enrichment, inequitable distribution, and judicial dissolution of All Romance.”

The information regarding this lawsuit is easily found thanks to the open court records in the state of Florida, and can be viewed online here.

. . . .

Ulmer and James established All Romance E-Books, LLC together as full partners in 2006. Ulmer was the Chief Financial Officer, and as she was resident in Florida that’s where the physical address of ARe was established. (Remember the three addresses in Florida? One was in Ulmer’s town, Safety Harbor, and appears to be a post office box, which would be understandable as she was the CFO.) James was the Chief Operating Officer, and under the terms of their original operating agreement (Exhibit A) both partners owned 50% of the company and all decisions were to be made by “unanimous agreement” while all financial considerations –  both contribution and distribution – were to be equally shared.

. . . .

According to Ulmer’s complaint, in October of 2014, Dominick Addario, MD – a forensic psychiatrist affiliated with the University of California-San Diego – examined Ulmer to determine whether she was “disabled” and unable to perform her duties under the terms of their operating agreement, which stipulated that if a condition was “permanent or expected to be of an indefinite duration” and prohibited one of the partners from performing their duties, the other partner could assume full responsibility for the company, including all financial and operational decisions.

On November 26, 2014 Dr. Addario sent an email (Exhibit B) to both partners stating that: “…I recommended certain treatment and testing for her and suggest reevaluation in 3 to 6 months at which time she may once again be fit to carry out her duties…”

. . . .

When Ulmer asked to be included in meetings, James told her no and to “stop being a distraction.” When Ulmer asked to return to work, James said no. When Ulmer protested, James told her that “if she did not like what James was doing, that Perfetti(Ulmer) should go get a lawyer.”

Link to the rest at Blog Critics and thanks to A. for the tip.

PG will remind all that the contentions in a court filing are not proven facts.

A quick review of the case summary of Ulmer vs. James reveals that Ulmer’s filing was dismissed “because of lack of prosecution.” This generally means that the plaintiff didn’t do what he/she was required to do in order to move the case forward. There was never a trial or other disposition of the case on its merits.

Publisher All Romance Ebooks: Closing Hits New Low In Stealing From Authors

30 December 2016

From BlogCritics:

The ebook industry has undergone several transitions in the past few years, where authors have become increasingly victimized by e-pirates, vanity presses, and scams designed to keep writers from making money on their intellectual property. Earlier today, December 28, 2016, the industry hit a new low when longtime e-tailer All Romance E-Books (Are), LLC (with its non-romance genre partner Omni Lit) released a surprise notice to its authors and publishers. ARe’s CEO and owner, Lori James, announced that the retailer was closing its doors in three days’ time.

What makes this so terrible is not the fact that they’re closing. What makes this so terrible is how they’re doing it:

We will be unable to remit Q4 2016 commissions in full and are proposing a settlement of 10 cents on the dollar (USD) for payments received through 27 December 2016. We also request the following conditions:
1. That you consider this negotiated settlement to be “paid in full”.
2. That no further legal action be taken with regards to the above referenced commissions owed.

Wait…what?

Let’s break this down. An online retailer is closing down and cannot remit the royalties owed to authors and publishers for the entire fourth quarter of 2016. In lieu of the agreed-upon percentage of 60% of the cover price for each book sold, ARe is proposing that they pay authors TEN CENTS on the dollar of those owed royalties–for books that have already been sold and the money already collected and presumably deposited in the bank account of ARe.

. . . .

The big publishing houses will almost certainly get their money. But the small presses and self-published authors are facing a terrible decision. Do writers allow ARe to steal their royalties? Do they submit for convenience’s sake because the owners of ARe aren’t planning to pay those royalties as they are contractually and legally required to do? Or, are writers willing to stand up to this theft and pursue legal recourse, knowing full well they won’t even see that ten cents on the dollar after all is said and done?

Because let’s be for real here. It’s not like ARe’s owners aren’t paying authors because they don’t have the money for the sales. They do have it. They banked all that cash and are now trying to keep it. And by hanging the threat of filing for bankruptcy out there, the company is attempting to threaten authors into agreeing legally to let them retain that money without future legal responsibility.

And here’s the million dollar question – what did ARe and its owners actually do with all the money they collected from fourth quarter sales? They haven’t paid the authors, obviously. So where is it?

And what about the authors who prepaid for advertising in 2017? What happened to their money? Just last week, ARe sent out notices soliciting ads for 2017. As you can see from their website, advertising cost anywhere from $50 to $2000 per month.

. . . .

There is an underlying lack of legal protections for authors, their intellectual property, and their income in this country. Publishers, false agents, and retailers continue to run these long-term scams, sucking the unwary into their webs and milking them for every dime. But what makes this case stand out is the egregious bullying tone of its owner’s statement to the authors she stole from, and the utter lack of concern James and ARe display for anyone outside of their own personal interests. And sure, most of the authors whose money just vanished into the ether surrounding those multi-million dollar properties in a Big Bear Lake vacation community may be out ten bucks at most.

But that’s not the point.The point is that a retailer announced today that it was stealing the money it’s received for three months’ worth of book sales and has no intention of fulfilling its fiduciary responsibility to the authors whose intellectual property they sold. A retailer has basically committed fraud and has no evident fear of being challenged or behind held responsible legally, either on a criminal or civil level. And unfortunately, that’s probably true. They’ll get away with it, and Lori James will continue to spend part of her time at Big Bear Lake, where she will enjoy the benefits of running a company who blatantly stole from the authors whose books she sold.

Link to the rest at BlogCritics and thanks to Matthew for the tip.

PG believes this whole matter is likely to end up in bankruptcy court where they deal with this sort of situation all the time.

PG hasn’t appeared in bankruptcy court in many years and hasn’t kept up on bankruptcy law, but, generally speaking, bankruptcy judges are experienced in sorting out the kinds of problems mentioned in the OP.

Failing businesses almost always stiff or try to stiff most or all of their creditors. If the owners have diverted significant sums of money from the businesses for their personal use, bankruptcy courts can claw back money and/or assets purchased with that money for distribution to creditors.

To the best of PG’s dated bankruptcy knowledge, booksellers, distributors or publishers would not owe any special fiduciary duty to authors for royalty payments and authors would not receive priority for payments over other unsecured creditors.

The difference between secured and unsecured creditors is important in a bankruptcy. If a bankrupt entity had borrowed money to purchase real estate, the lender (a bank, for example) would have almost certainly required that the borrower grant it a security interest (mortgage) in the real estate. In a bankruptcy, with permission of the court, the bank would be entitled to foreclose on the real estate for repayment of its mortgage loan. If such a foreclosure failed to generate enough cash to pay off the loan, the bank would likely be an unsecured creditor with respect to the remaining balance of the loan, just like other unsecured creditors.

If a failing business attempts to pay one creditor or group of creditors to the detriment of others similarly situated, a bankruptcy judge can require the favored creditors to refund part or all of the money they have received. In the case of a failing publisher, if the publisher attempts to pay some authors 100% of royalties due and other authors 10% of royalties due, the authors who have received 100% can be made to repay most or all of the money they’ve received into the bankruptcy court.

In the case of ARe, if a bankruptcy proceeding is commenced, authors are unlikely to be the only unsecured creditors who are not paid. If a group of authors are paid 10% of royalties due and other unsecured creditors are paid nothing, those other unsecured creditors may ask the bankruptcy court to require the 10% authors to repay some or all of the money they’ve received. Creditor priority can raise complex issues and PG is just skimming over the top of this topic.

Usually the owners of a failing business will file a bankruptcy petition for the business. If a business is, in fact, unable to pay its creditors, the creditors may petition the bankruptcy court to place the business into bankruptcy and bring its assets under court supervision. An involuntary bankruptcy proceeding is sometimes used if creditors suspect the owners of the business have improperly siphoned money or assets out of the business.

These are general bankruptcy principles and PG is neither current on bankruptcy law or privy to any inside information regarding ARe’s collapse.

Given the way authors often support one another, PG wouldn’t be surprised if a group of authors have not already banded together to consult with competent bankruptcy counsel about ways to protect their rights and maximize their return from their books which ARe has sold or licensed. Generally speaking, unless things have changed since the last time PG walked out of bankruptcy court, counsel can often represent a group of creditors who are similarly situated in a bankruptcy proceeding.

If he has not already made himself clear, PG is not currently able to represent anyone in a bankruptcy proceeding. He likes to help mistreated authors and regrets not being able to do so in this instance.

Amazon, the Monopolist?

29 December 2016

From Pacific Standard:

In the summer of 2014, a very loud dispute emerged between Amazon, the ubiquitous online retailer, and Hachette, the publisher of books by such well-known authors as Malcolm Gladwell and Paul Ryan.

The exact details of the feud were never publicly revealed, but reports say it centered on e-book pricing. At the same time the blow-up was taking place, Amazon engaged in a variety of negotiating tactics meant to disadvantage the publishing house: eliminating next-day or two-day shipping for Hachette (Hachette books took two to five weeks to ship), declining to make Hachette books available for pre-order, and allegedly fiddling with its algorithm to make it difficult for customers to find Hachette books on an Amazon search.

Hachette’s writers were outraged. One group of authors announced plans to request an inquiry by the Department of Justice into Amazon’s business practices. Others publicly lamented Amazon’s behavior.

. . . .

Two years later, the company’s growing clout and its swelling ambition continues to provoke anxiety. In the run-up to the 2016 election, antitrust policy, particularly with respect to big tech companies, emerged as an interesting new battleground in the progressive political movement. In a now-infamous speech on antitrust policy, Elizabeth Warren focused specific attention on Amazon, saying the company “uses its position as the dominant bookseller to steer consumers to books published by Amazon to the detriment of other publishers.”

. . . .

Amazon’s increasing market power is tough to deny.

According to a new report from the Institute for Local Self-Reliance, a non-profit research shop that advocates for sustainable community development, Amazon will capture 46 percent of online retail sales in 2016, up from just 22 percent in 2011. The company’s market capitalization surpassed Walmart’sfor the first time in 2015 (Walmart’s revenues are still much higher than Amazon’s).

. . . .

“Today, half of all U.S. households are subscribed to the membership program Amazon Prime, half of all online shopping searches start directly on Amazon, and Amazon captures nearly one in every two dollars that Americans spend online,” ILSR researchers Olivia LaVecchia and Stacy Mitchell write. “Amazon sells more books, toys, and by next year, apparel and consumer electronics than any retailer online or off, and is investing heavily in its grocery business.”

. . . .

While few would disagree that Amazon’s ascendance has been bad for its competitors, it’s less clear whether the company is harming consumers. After all, it delivers excellent consumer service and has millions of satisfied customers. In fact, Amazon mostly uses its market power to demand lower prices for consumers, the opposite behavior of what one would expect from a traditional monopolist.

Still, its dominance concerns progressives.

Link to the rest at Pacific Standard and thanks to John for the tip.

PG checked on the author of the cited Amazon study, the Institute for Local Self-Reliance. It appears that major ILSR-supported initiatives include recycling, community gardens and opposition to Walmart. They are not in favor of global warming. Opposition to Amazon appears to be a recent addition to their catalog of activities.

PG didn’t see any indication that this small organization had any expertise regarding antitrust laws. He was unable to locate a list of donors.

As PG was reading the OP, a thought entered his mind.

Suppose Jeff Bezos wakes up one morning and says, “You know, those Hachette authors were right. Amazon really is a terrible company. Think of all the local bookstores Amazon has destroyed and all the worry we have caused for New York publishers.

“I need to feel good when I go to work. From this day forward, Amazon is out of the book business. Not another book leaves our warehouses. We’ll return our entire inventory to publishers so there won’t be any shortage of supply for real bookstores. Ebooks are not real books and everybody really wants printed books instead, so we’ll immediately erase all ebook files from our servers.

“When somebody searches for a book on Amazon, we’ll show them a screen that says, ‘Jeff wants a clear conscience. Go to your local bookstore to buy this book. We’re not going to put any more Moms and Pops out of business.'”

 

Feds charge porn-troll lawyers in major fraud, extortion case in Minneapolis

17 December 2016

From The Minneapolis Star-Tribune:

A Minnesota lawyer who has drawn scorn for his tactics in filing porn copyright lawsuits and disability litigation has been indicted alongside a longtime partner in a multimillion-fraud and extortion conspiracy that counted as its victims hundreds of people nationwide and the court system itself.

Authorities arrested Paul Hansmeier, 35, of Woodbury, and John L. Steele, 45, an attorney in Illinois who was a former classmate of Hansmeier’s at the University of Minnesota Law School, shortly before U.S. Attorney Andrew Luger announced charges Friday morning. Hansmeier was arrested in the Twin Cities; Steele, who has lived off and on in Florida, was arrested in Fort Lauderdale.

They were charged Wednesday in an 18-count indictment with running a multimillion-dollar extortion fraud scheme between 2011 and 2014. The charges, unsealed Friday, include conspiracy to commit mail and wire fraud, conspiracy to commit and suborn perjury and conspiracy to launder money.

“In order to carry out the scheme, the defendants used sham entities to obtain copyrights to pornographic movies — some of which they filmed themselves — and then uploaded those movies to file-sharing websites in order to lure people to download the movies,” the indictment says.

. . . .

Hansmeier and Steele collected about $6 million from legal settlements in copyright-infringement lawsuits they had filed against people who allegedly downloaded pornographic movies online — films to which the men’s companies had ostensibly purchased or filed copyrights, the indictment says.

In an order awarding attorneys’ fees, bonds and a punitive multiplier against Hansmeier and associates, U.S. District Judge Otis D. Wright in Los Angeles found that Prenda Law began its “copyright-enforcement crusade” in about 2010. It set up shell companies that bought copyrights to pornographic movies and made them available on online through file-sharing protocols like BitTorrent. Prenda Law, or a local attorney it hired, sometimes through Craigslist, would then file federal lawsuits against the “John Doe” internet addresses captured during the downloads of the films. They then sought to subpoena the internet Service Providers for the identity of the users.

They offered to “settle” the lawsuits for an average of about $4,000. Otherwise, they threatened public exposure and penalties under copyright laws of as much as $150,000.

“Think about how ingenious this scheme was,” Luger said, pointing to a copy of one letter blown up on a large poster board. “It worked to the tune of millions of dollars, person after person, victim after victim who was extorted to make this payment in order to make the entire problem go away.”

Link to the rest at Minneapolis Star-Tribune

PG hopes everyone involved spends a long time in the penitentiary.

Katina Powell’s publisher sues Louisville lawyers

28 October 2016

From the Louisville Courier-Journal:

The publisher and co-author of Katina Powell’s book, “Breaking Cardinal Rules: Basketball and the Escort Queen,” have sued two Louisville lawyers for bringing a “baseless” lawsuit on behalf of University of Louisville students who claimed the book reduced the value of their education.

The students’ suit, filed by lawyer Nader George Shunnarah and John Andrew White, was dismissed by a Jefferson Circuit Court judge who said there were no grounds for recovery and permitting it to go forward would “drastically expand the avenues of civil liability and recovery in the commonwealth of Kentucky.”

IBJ Book Publishing LLC and Dick Cady, the co-author, say they have been forced to spend at least $150,000 defending the suit, which they alleged was filed “to extort a monetary settlement and gain notoriety for their clients and themselves.”

. . . .

Hornback alleged in a suit filed in October 2015 that the book tarnished the university and reduced the value of her education. She asked that it be designated a class action so she and other students could share in the profits.

. . . .

In the book, Powell, a self-described escort, said U of L employee Andre McGee paid her $10,000 over four years to provide sex and striptease shows to players and recruits.

Link to the rest at Louisville Courier-Journal

Our journey has come to a close

17 October 2016

From Jolly Fish Press:

It is with deep sadness that we are announcing the closing of Jolly Fish Press (JFP). For nearly five years, JFP has been a beacon of inspiration to many in the publishing industry; we’ve opened up doors to authors, editors, designers, publicists, and illustrators alike, providing them with a platform on which their dreams of establishing themselves in the industry could be realized.

JFP has accomplished much. We’ve helped our authors get copies of their books into the hands of readers. We are extremely proud and grateful for the immense contributions and efforts our employees and interns have put in through these five amazing years—we could not have done it without them. The hard work and commitment of our creative and publicity teams, and the talents of our editors, interns, and designers are what allowed us to continue publishing quality and beautiful books thus far. But even with a collection of note-worthy and great books in our catalog and future lineup, we have not generated sufficient revenues to make the business viable.

After a long process of seeking investors who believe in our company and what we aim to achieve, we have, unfortunately, failed to secure the funds necessary to grow and move the company forward. While JFP has great propensity to becoming a serious competitor in the industry, the lack of financial investment prohibits us from reaching our potential. We have approached the point where we can no longer sustain our business.

JFP is ceasing business effective October 31, 2016. All rights to our titles will be reverted by October 31, 2016. Book production will stop effective immediately.

Link to the rest at Jolly Fish Press and thanks to Abel for the tip.

Amazon and EU in Settlement Talks Over E-Book Terms

5 October 2016
Comments Off on Amazon and EU in Settlement Talks Over E-Book Terms

From The Wall Street Journal:

Amazon.com Inc. and European Union antitrust authorities are engaged in initial settlement discussions to resolve the regulator’s concerns the e-commerce company abuses its market power to force illegal terms on publishers that harm purchasers of electronic books, according to a person familiar with the matter.

If both sides reach a settlement deal, the commission would then need to test out the agreement’s conditions with publishers.

. . . .

The European Commission opened an in-depth probe into Amazon’s e-books business dealings last June, citing concerns the tech company designs contracts with publishers that prevent other e-books distributors from competing on the same level.

Link to the rest at The Wall Street Journal (Link may expire)

PG says one of the Amazon contract practices being investigated is Amazon’s “most favored nation” (MFN) clause in its contracts with publishers.

Such clauses are not uncommon in US business contracts involving one or more large companies. PG has negotiated MFN provisions dozens of times.

The purpose of an MFN clause is to make certain that a purchaser of products or services gains the benefits of lower prices for those products or services if the seller is currently selling its products or services for lower prices to someone else or, more importantly, reduces its prices in the future.

Basically MFN provisions provide that, if a seller offers a better deal (lower prices, installment payments, etc., etc.) to a third party, the selling party must offer the same improved terms to the first customer under the MFN clause.

A simple example:

  1. Andrea agrees to sell Bob 10 widgets per month at a cost of $1,000 per widget. At Bob’s insistence, the sales contract includes an MFN clause.
  2. Alexandra then sells or agrees to sell Cathy 10 widgets per month at a cost of $500 per widget.
  3. Under the MFN clause, Andrea must lower her widget prices to $500 per widget for Bob.

The EU antitrust investigation is evidently focused on whether the contracts between European publishers and Amazon that include an MFN clause guaranteeing that the publishers won’t sell books for lower prices to third parties (or other ebookstores) violate EU laws or regulations.

PG says any etailer or retailer is very interested in buying goods at the best prices offered by a vendor. Retailers like Walmart or Target will routinely include MFN provisions in their purchase agreements with all significant suppliers.

If you understand how MFN works (or is supposed to work), it’s not hard to find product offerings that are likely structured to avoid triggering MFN provisions.

For example, PG’s local Costco does not sell individual boxes of Kleenex brand tissues. If you want to purchase Kleenex at Costco, you must buy a huge package of twelve boxes of Kleenex.

Costco has likely agreed that it won’t break down the big package and sell single boxes of Kleenex.

PG suspects such packaging permits Kleenex to be sold to Costco at a lower per-box price than Kleenex is sold to Walmart and other retailers without triggering MFN provisions in the Kleenex purchasing agreements with those retailers.

Kleenex is happy to sell twelve-box packages to Walmart at the same price and terms as it does to Costco, but Walmart doesn’t want to sell Kleenex that way.

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