Legal Stuff

The Flush Pile – An Author’s Perspective

30 September 2014

From author Carolyn Jewel at Writer’s Diary:

I am an author who was with a publishing company that was heading toward bankruptcy. (Dorchester Publishing) This post is about what the experience was like for me. My situation ended up with a silver lining, but the outcome I had was never certain, just as it is not certain for any of the EC authors who are wondering if they’ll ever get paid or if they are going to lose their books.

If you have books with a publisher in the Flush Pile, here’s what’s quite likely:
1. No, you are never going to be paid money owed to you.
2. Yes, you could well lose your books. Gone.

Every publishing contract I’ve ever signed has had a bankruptcy clause. The clause means nothing. Zero. Zlich. It might as well not be there. If your publisher declares bankruptcy, your book is an asset of the company to be liquidated and turned into cash to pay to creditors. Authors are dead last on the list of creditors.

At Dorchester, authors talked amongst themselves. Advances and royalties due to authors were paid slowly. Some of use waited months for advances to be paid. More and more often, authors just weren’t paid. Foreign rights got sold and authors were never told. Those monies never appeared on royalty statements. I was surprised, for example, to find that one of my books had a Dutch translation. Toward the end, I also learned about other translations I was never told about and never paid for. One of them did not even have a signed contract despite being on sale. As royalties continued to be paid in haphazard fashion, there were consolidations and reductions in books, imprints and staff, and sales of rights to backlist titles of prominent authors to other publishers.

. . . .

Dorchester had not filed for bankruptcy, but there was wide speculation that they could not recover from their difficulties and a filing was felt by some to be inevitable. I was advised that it was possible that rights reversions made within the year prior to a bankruptcy filing could be deemed fraudulent and any reversions negated. I was horrified to learn there was case law to that effect.

Even before the non-payment issue was a severe problem, it was clear to me that at long last, there was a good reason (ie, self-publishing) for an author to vigorously pursue reversions for all books that met the criteria of the out of print clauses. I’d read all those clauses and had begun that process with all my titles well before this. And by the way, I was roundly ignored everywhere except for Harper-Collins, who noted the request and put it on their schedule for a decision 6 months later. Literally. The meeting was in 6 months. Let that sink in.

My reversions from Dorchester came through at the end of 2010. Other publishers were an even harder nut to crack. St. Martin’s Press was spectacularly uncooperative. Hachette — I don’t even have words. And I have loads of hind-sight advice about what reversion clauses should say.

. . . .

My advice is going to sound harsh. But, assume you will never be paid. The risk of waiting to see if your publisher rights their ship is the complete loss of your rights in your books. This is your career and you must not fail to take steps to protect your back list and front list.

Link to the rest at Writer’s Diary and thanks to C.R. for the tip.

Here’s a link to Carolyn Jewel’s books

Digital publisher Ellora’s Cave sues Dear Author blog for reporting on its financial troubles

30 September 2014

From Gigaom:

To those who follow the digital romance publishing world, it’s not exactly a secret that digital publisher Ellora’s Cave is struggling. But now the company is suing a leading romance blogger who wrote about the problems it was having.

Ellora’s Cave, launched in 2000, was a very early player in romance ebook sales and for a time was highly successful, selling romance and erotica titles that mainstream publishers had ignored to a passionate audience of female readers. Then things began falling apart, sales decreased and authors started going unpaid.

Dear Author, a romance blog that also covers a variety of digital publishing issues,reported thoroughly on Ellora’s Cave’s troubles earlier this month, citing tax violations by Tina Engler, the company’s founder, and reporting further on delayed or missing author payments. Dear Author also published an email that Ellora’s Cave sent to its authors in which it described a “quick, sharp decline of ebook sales via Amazon in recent months.”

. . . .

Litte, who is also a lawyer, plans to fight the lawsuit and tweeted Monday that she’s hired Marc Randazza, an attorney who specializes in the First Amendment and also played a key role in bringing down patent troll Righthaven.

Link to the rest at Gigaom

Our reply to Ellora’s Cave’s recent actions

29 September 2014

From The Book Pushers:

It’s been a crazy time these past few days. Jane from Dear Author is being sued by Ellora’s Cave.

Ellora’s Cave is suing Jane after she posted this very informative and well written post about Ellora’s Cave and their behaviour which has been reported by EC authors and past employees.

Ellora’s Cave, do you want to silence critics? Ellora’s Cave, do you want to silence your authors?

You won’t silence us.

. . . .

In one stroke, Ellora’s Cave have managed to evaporate all goodwill towards the company–what little they had considering some of the alleged behaviour they have directed and are directing towards their authors.

Some readers, bloggers and authors have decided not to review and buy any present or future books of Ellora’s Cave.

At the Bookpushers, we have made a decision not to review any titles of Ellora’s Cave. On a personal note, some of us have made the decision not to buy any present or future books of Ellora’s Cave.

Link to the rest at The Book Pushers

Could Ellora’s Cave Be More Pathetic and Pernicious?

29 September 2014

From Barry Eisler:

I was traveling . . .  so I missed the news that romance publisher Ellora’s Cave is suing Jane Litte and her blog Dear Author for “defamation.” Jane reported on EC’s apparent failure to pay EC authors royalties that were due, on authors calling for a boycott of EC-published books, and on related matters, and it seems EC responded the way powerful entities sometimes do when their abuses are exposed: they sued.

. . . .

I’ve opined many times that we’re living through a revolution in publishing, a revolution that promises more opportunities, freedom, and profits for authors, and better choice, convenience, and prices for readers. The publishing establishment is trying to impede that progress in a variety of ways: propaganda; marginalizing critics; calls for government intervention; and now, it seems, litigation designed to frighten and silence critics of entrenched interests.

. . . .

The post I wrote is about power dynamics in publishing. As I think should be reasonably clear from our discussions here (and my posts elsewhere), I don’t trust asymmetrical market power anywhere I see it, and despise its abuses no matter how or in what system it manifests itself.

. . . .

If EC doesn’t believe its suit is going to cause a massive backlash and result in new authors being afraid to sign with them, it can only be because: (i) they’re so desperate they think they have nothing to lose; (ii) they believe they have such asymmetrical market power that authors will submit new manuscripts to them no matter what; or (iii) both.

Link to the rest at Barry Eisler

Here’s a link to Barry Eisler’s books

Ellora’s Cave Sues Dear Author Book Blog for Defamation

27 September 2014

From The Digital Reader:

Here’s something crazy.

Romance publisher Ellora’s Cave has been having financial issues for the past year or so, but rather than sit down and fix them this publisher has decided that the best solution was a public and messy defamation lawsuit.

Court documents filed today in Ohio have revealed that Ellora’s Cave has filed suit against Jennifer Gerrish-Lampe, an Iowa lawyer who is better known as Jane Litte, the proprietor of one of the best romance book blogs (I did not know it was a pseudonym).

Ellora’s Cave alleges that a recent blog post on Dear Author defamed them, and in addition to suing the publisher also asks for a temporary restraining order – meaning that Dear Author might not be allowed to report that they are being sued.

. . . .

The lawsuit was only filed today, but Jane has indicated that she will fight this suit. She’s looking for a good attorney in the Akron, OH, area with experience in defamation.

. . . .

The cost of defending against a lawsuit can be onerous, leading some to give in. On the other hand, this type of lawsuit can also result in a Streisand effect, attracting even more attention to the story which Ellora’s Cave is trying to bury.

What’s more, even if this lawsuit doesn’t generate even more negative publicity for Ellora’s Cave, it will result in the public airing of all of that publisher’s dirty laundry during the discovery process. If even half of the rumors going around are true, we could well see many authors suing Ellora’s Cave for unpaid royalties.

Link to the rest at The Digital Reader

PG says truth is a defense in a defamation suit. This means that Jane gets to use the discovery phase of the litigation to force Ellora’s Cave to disclose all sorts of information, including information that shows what Jane wrote is true.

Here are some of the things that Jane has written that EC says are false:

1. That employees of EC are going unpaid.

2. That EC authors have not received their royalties.

3. That unpaid royalties, editors’ fees and artists’ fees amount to several thousand dollars.

Basically, Jane gets to find out if these and other statements about Ellora’s Cave are true or not.

As a general proposition, documents filed in litigation are public. Already, the contents of the original Dear Author post that EC found objectionable are included as an exhibit to the complaint. Everyone who reads the complaint will be able to see what Dear Author published about Ellora’s Cave.

Nate mentioned The Streisand Effect. Here’s a definition:

The Streisand effect is the phenomenon whereby an attempt to hide, remove, or censor a piece of information has the unintended consequence of publicizing the information more widely, usually facilitated by the Internet.

Here’s a copy of the Complaint:


Ellora’s Cave

16 September 2014

From author Lynne Connolly:

This is just to state my case. I’m not asking anyone to do anything or to help me, just so people are aware of where I stand in this.

As some of you know I was involved in a similar case years ago. Triskelion went bankrupt and took around 70 authors with it. Ellora’s Cave authors number in the hundreds. This is much bigger, and could potentially be nastier. If management turns the situation around, then I will be the first to applaud them, but I cannot agree with some of the methods they are employing to do that.

I joined Ellora’s Cave in 2007 and for most years since earned good money and was treated well by them. I enjoyed my time there because I was never asked to be “one of the family,” they paid on time, the cover art was lovely, and the editing was rigorous, but excellent.

This year my royalties plummeted so alarmingly that I had to make some serious decisions about working with the publisher. Also, the quality of the cover art is way down, since they fired the artistic directors earlier in the year. The prices of the books are way above the prices any of my other publishers charge.

. . . .

Now things have changed and I’ve been forced to ask for my rights back. I have 19 published books with EC. Two unpublished manuscripts are in the editing queue and have been for over twelve months. I’ve had a response on the two unpublished ones. A form response on the others.

No, I can’t have my rights back on those two. If I don’t cooperate with the editing, Ellora’s Cave will exercise its contractual right to edit and publish the books anyway. If those books do come out, I will make a statement to say I had nothing to do with the editing and the books are released without my cooperation. After that, it’s up to the reader to decide.

By “editing,” they mean “light editing.” The editors are not even allowed to alter spelling mistakes, because that would be changing the “author’s voice.” So a worse-than-spellcheck scenario.

Link to the rest at Lynne Connolly

The Curious Case of Ellora’s Cave

14 September 2014

From Dear Author:

Long before there was the Kindle, long before self publishing, long before the emergence of Fifty Shades, a digital first publisher by the name of Ellora’s Cave began to deliver sexy reads that would transform the face of romance publishing. Ellora’s Cave was established in 2000 as an outlet for Tina Engler to publish books with heavy sexy content that were romantic in nature. Because there was no “ebook” in the late 1990s, Engler would create PDFs and email them to reader who sent her money via paypal. In 2000, EC was established and soon thereafter, it would become a powerhouse selling hundreds of thousands of ebooks a year in a world where ebooks did not exist for the most part.

. . . .

As Ellora’s Cave began to flourish, arguments began to spring up about its legitimacy. There was row after online row about whether digital publishing was a legitimate career path. The Romance Writer’s of America (RWA) denounced it and refused to acknowledge digitally published authors in its Published Author Network or for its awards. In fact, it wasn’t until 2012 when a digital first book won the organization’s RITA award. (Fiona Lowe’s Boomerang Bride from Carina Press).

. . . .

As the world began to catch on to digital books and the Kindle was launched creating a second wave ebook revolution, Ellora’s Cave seemed poised to launch itself into publishing super stardom. It had thousands of backlist titles and it had launched many of the bestselling authors today–Bella Andre, Lora Leigh, Christine Warren, Beth Kery, Lauren Dane, Jaci Burton, to name a few.

Yet something strange happened. Growth stagnated. In 2010, it was revealed that EC’s revenues were $5 million but a reported $6.7 million in 2006. How on earth was a digital publisher’s income declining in the biggest boom period of digital books? (This was before self publishing took off).

Word of Ms. Engler’s increasingly erratic behavior surfaced on odd places on the internet and then came the lawsuits. In 2008, former employee Christina Brashears filed suit for unpaid monies against EC. EC countersued. Brashears, Publisher and Chief Operating Officer, left and formed Samhain. Bad blood existed which culminated with EC agreeing to a settlement of undisclosed amount. The damages were alleged to be in the high six figures to low seven figures. EC’s behavior during this lawsuit was so egregious, the judge commented on it in his ruling ordering damages to be paid to Brashears. In 2009, EC filed suit against Borders accusing them of illegal business practices. The suit went nowhere.

In the Brashears lawsuit, EC was accused of inappropriately diverting funds to Tina Engler through overpayment of rent. In 2009, the prevailing market rent for the space EC was occupying in Akron Ohio was around $40K but EC was paying Engler close to $100K per month. EC was providing loans to various officers at no interest and there was no indication those loans were ever repaid.

At the same time, court records showed repeated tax violations by Engler and Jasmine Jade Enterprises. Since 2009, Engler has had a tax lien filed against her by Ohio Department of Taxation in every year except 2010.

. . . .

Many authors and other workers associated with the production of EC books are afraid to speak out. They email me and DM me from made up accounts and beg for secrecy. They speak of a vindictive company who will be unafraid to retaliate and many of them who are owed several thousands of dollars fear that the money may never be paid to them should any outward showing of non allegiance be discovered.

But the problems within Ellora’s Cave are deep and broad and should be brought into the light of day, not only for those existing authors and creators but for future ones.

. . . .

A report from Ohio business record places Ellora’s Cave revenues at $15 million last year. So why is it that tax liens go unpaid as well as the salaries or royalties of creative individuals? It is unknown but it sounds like the money is being mismanaged at best and improperly diverted at worst.

What’s the result? Many people believe that EC will close its doors before the summer is over but at least by the end of the year. If it enters bankruptcy, author’s intellectual property rights are part of the estate and can be sold off to the highest bidder.  It could wind down and revert the rights back but it’s doubtful that will happen.

Link to the rest at Dear Author and thanks to India for the tip.

Amazon Loves Government

9 September 2014

From The Wall Street Journal:

The cold war between Amazon and publisher Hachette is said to pit readers against authors, or consumers against one corporate hegemon or another—though the fight is unfair. Hachette is a unit of the French conglomerate Lagardère  SCA with $7.2 billion in annual revenue. Its adversaries are both the $74.5 billion Amazonand the $3.65 trillion U.S. government, and the story of how the online retailer brought on this strategic political partner deserves more scrutiny.

. . . .

The current dispute is best seen as a new iteration of the same fraught business negotiations in late 2009 and early 2010 that led Justice to sue the six major publishers and Apple for antitrust violations. Then as now, the book people believed that Amazon was devaluing their products by setting retail prices too low and endangering the industry’s long-term survival.

. . . .

The publishers wanted to regain some nominal management of their own retail prices. So prior to the iPad and the creation of the tablet market, Apple proposed a switch to an “agency model” for e-books. The book producers could choose among pricing tiers in its digital bookstore, and Apple would take a fixed royalty of 30% on each sale.

Amazon could have continued with its wholesale model—but the publishers were protesting the company’s tactics by withholding popular hardback or e-book titles for several months. Thus for the first time Amazon had in Apple an e-book competitor with a potentially superior selection of books.

. . . .

So in February 2010 Amazon posed as the victim, and associate general counsel David Zapolsky submitted a confidential white paper to the Federal Trade Commission and Justice’s antitrust division on “the collective nature of the publishers’ action to take control of digital book pricing.”

DoJ then picked up Amazon’s legal argument and used it to sue Apple.

. . . .

[I]n Judge Cote’s July 2013 antitrust finding against Apple, she held that Amazon’s very dominance explained the alleged collusion. “The Publisher Defendants did not believe, however, that any one of them acting along could convince Amazon to change its pricing policy. They also feared that if they did not act as a group, Amazon would use its ever-growing power in the book distribution business to retaliate against them.”

By then the publishers had settled, without admitting wrongdoing, under threat of financial ruin. That 2013 consent decree preserved agency agreements but included a de facto prohibition on price floors for two years, allowing Amazon’s discounting practices to go on. The only reason Hachette is fighting now is that it is the first to be released from the settlement’s staggered terms. Next up is Harper Collins, which like this newspaper is a part of News Corp.

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

Passive Guy suspects the hand of News Corp in this editorial. As he has said before, the Apple/Price-fix Six collusion was a classic example of behavior prohibited under the antitrust laws.

Price-fixing is a violation of the antitrust law whether it’s directed at the corner bookstore or at Amazon.

The Heir’s Not Apparent

7 September 2014

From The New York Times:

The story of the street photographer Vivian Maier has always been tangled — she worked much of her life as a nanny, keeping her artistic life a secret, and only after she died in 2009, at the age of 83, nearly penniless and with no family, were her pictures declared to be among the most remarkable of the 20th century. Now a court case in Chicago seeking to name a previously unknown heir is threatening to tie her legacy in knots and could prevent her work from being seen again for years.

The case was filed in June by a former commercial photographer and lawyer, David C. Deal, who said he became fascinated with Maier’s life in law school and took it upon himself to try to track down an heir. He did so, he said, because he was upset that prints of her work — from more than 100,000 negatives found in a storage locker at an auction, containing images now possibly worth millions of dollars — were being sold by people who came to own the negatives but had no family connection to Maier, who spent most of her childhood in France and worked in Chicago, where she died.

. . . .

Chief among the owners of Maier’s work is John Maloof, a former real estate agent in Chicago who bought tens of thousands of the negatives for less than $400 in 2007 and has spent years tending and promoting her work through commercial galleries, museum exhibitions, books and a recent documentary,“Finding Vivian Maier,” that he helped direct. Mr. Maloof hired genealogists to find heirs to Maier in France and eventually paid an undisclosed amount for the rights to her work to a man named Sylvain Jaussaud, whom experts identified as her closest relative, a first cousin once removed.

But Mr. Deal hired his own genealogists and last year traveled to Gap, an alpine town in southeastern France, home of Francis Baille, a retired civil servant whom he believes to be another first cousin once removed.

Mr. Baille, who had no idea he was related to Maier, agreed with Mr. Deal to seek to be recognized as her heir under American law. Reached on Friday by phone in France, Mr. Baille said, “For now, I just do not want to talk about this.” But his French lawyer, Denis Compigne, said: “It’s an extraordinary situation. You can imagine what it’s like to get a telephone call about someone who died that he never knew, with this precious legacy. He is very, very surprised.”

The legal case to determine whether Mr. Baille is Maier’s closest relative has now set in motion a process that Chicago officials say could take years and could result in Maier’s works’ being pulled from gallery inventories and museum shows until a determination is made.

. . . .

The Stephen Bulger Gallery, in Toronto, which lists dozens of Maier prints on its website, received a letter on Aug. 19 from a Chicago law firm, Marshall, Gerstein & Borun, representing the estate, asking it to preserve all documents related to her work and its sale.

“We are investigating the potential misuse and infringement of copyrighted works whose rights are held by the estate,” the letter said, adding that the firm anticipated “filing litigation against the responsible parties upon completion of our investigation.” An exhibition of her work is on view at the Toronto gallery.

. . . .

Under federal copyright law, owning a photograph’s negative or a print is distinct from owning the copyright itself. The copyright owner controls whether images can be reproduced and sold.

Mr. Maloof said that he had been working for more than a year to register copyright to the images on the negatives he owns, based on his agreement with the man he believes to be Maier’s rightful heir, but that the copyright applications were still pending. (In his own research, he said, he too found the name of Mr. Baille, but he came to believe, based on the advice of his genealogists and lawyers, that Mr. Jaussaud was legally the closest heir.)

“I’ve been obsessed since the beginning with trying to find out who Vivian Maier was and whether she had heirs,” Mr. Maloof said. “I was always trying to do what was as legally and ethically aboveboard as possible.”

Link to the rest at The New York Times

PG says this story is another reminder that all creative artists, including authors, need to properly plan for what happens to their work after they die.

In the US, the people who can help are called estate planning attorneys. (PG is not one of those)

Standing Against Plagiarism – Part 2

2 September 2014

PG previously had a post about author Rachel Nunes and her claims that another author had plagiarized one of her books.

Rachel has now filed suit against the alleged plagiarist. A copy of her complaint follows:


Nunes (Text)

Thanks to Marc for the tip.

Here’s a link to Rachel Nunes’ books

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