Friday, September 28, 2012

Class Action Lawsuit Against PublishAmerica Dismissed

Posted by Victoria Strauss for 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.
Responses and counter-responses ensued. A hearing was held in August with arguments by counsel. On September 4, PA's motion to dismiss was granted by Judge Marvin J. Garbis--without prejudice, with the plaintiffs given the option of filing an amended complaint by the end of the month.

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.
For long-time watchers of the PA saga, the "it's not a consumer matter, but a business matter" response may seem familiar. It's the reason cited by the Maryland Attorney General's Office for not taking action on authors' complaints (of which, we've been told by various sources, the AG's office has received a goodly number). For the Maryland AG, it's straightforward: the author-PA relationship isn't between a consumer and a business (the area the AG handles) but between a business and a business.

That's not Judge Garbis's position, however. The problem, in his opinion, is that the original complaint simply doesn't provide enough facts to determine whether it's a consumer matter or not.
For present purposes, it suffices to state that the Maryland Consumer Protection Act, Md. Code Ann., Com. Law § 13-101 et seq. (“MCPA”) provides relief with regard to deceptive trade practices relating to consumer goods and service....

The MCPA defines the term “consumer” to include “an actual or prospective purchaser . . . or recipient of . . . consumer services.” Id. § 13-101(c)(1). The term “consumer services” is defined as “services which are primarily for personal, household, family, or agricultural purposes.” Id. § 13-101(d). The Complaint does not clearly, if at all, enable the Court to determine the particular factual allegations upon which Plaintiffs base the contention that the claims in Count Two would be covered by the MCPA. Indeed, Plaintiffs do not specify which of the alleged deceptive trade practices are the subjects of the MCPA claims....

Each Plaintiff simply alleges his/her name, place of residence and that he/she contracted with PA to publish a book. Plaintiffs do not allege facts relating to their pertinent background and cannot – on the face of the pleading – be assumed to be seeking publication “primarily for personal,” as distinct from commercial, purposes.

Moreover, a particular good or service cannot be said, in the absence of a particular context, to be a consumer good or service. For example, a can of beans bought for home consumption would be a consumer good. However, the same can of beans bought by the owner of a restaurant for sale to customers may not be. Similarly, a house cleaning service for a resident homeowner would be a consumer service but the same service for the landlord owner of a rented house may not be.

Also, PA contends that at least some of the alleged “consumer services” are services that cannot plausibly be considered primarily for personal purposes, e.g., services relating to the sales, rather than literary aspects, of a book. The Court is not now addressing the question of whether any such services necessarily are non-consumer services. However, in an Amended Complaint, Plaintiffs should allege facts sufficient to present a plausible claim that the services in issue are consumer services.

In sum, Count Two must be redrafted to clearly and unambiguously indicate the factual allegations on which Plaintiffs contend they have made a plausible claim for
treatment of themselves as consumers and treatment of the services at issue as consumer services.
Judge Garbis, in other words, isn't confirming PA's argument that the author-PA relationship is not a consumer matter--rather, he's saying that the plaintiffs haven't sufficiently demonstrated that it is. He makes a similar determination with regard to the plaintiffs' claim of unjust enrichment, breach of contract, and fraud.

Though PA will likely dispute this, the dismissal doesn't vindicate their business practices or endorse their counter-claims. Rather, it leaves the door open for the plaintiffs to return with stronger arguments to bolster their case. Obviously I can't reach into the minds of the lawyers to see why they decided not to do so. But I have to be honest--it seems shoddy to me. If they felt they had sufficient grounds to base the original complaint on the MCPA, and to make claims of fraud, why would they not re-file? (Or, perhaps, more adequately state their argument in the first place?) It makes the lawsuit seem like some sort of blue-sky effort, launched without adequate commitment and folding at the first roadblock.

At any rate, I think this illustrates yet again the extremely ambiguous position a writer occupies vis-a-vis a vanity publisher, whether or not the vanity publisher actively misrepresents itself. In every meaningful way, vanity publishing is analogous (to use Judge Garvis's example) to the can of beans bought for home consumptio. But because it masquerades as "real" publishing--in part by adopting a few of real publishing's components, such as offering the book for sale--this is very hard to demonstrate.

23 comments:

Jan said...

I'm very sad to hear of the dismissal. In the past week, I managed to talk one very young writer out of choosing PA as her "publisher" but how many wandered in and threw away a book during the same time?

PT Dilloway, Superhero Author said...

How sad. Maybe some other law firm will actually do a real job on this case and get authors the justice they deserve.

Jody Rein said...

Thanks, Victoria,for a clear and thorough assessment of this sad event. It's part of a larger and equally disturbing issue,isn't it? With recent Supreme Court rulings making it harder than ever for any class action suits to prevail? http://www.nytimes.com/2012/05/06/your-money/class-actions-face-hurdle-in-2011-supreme-court-ruling.html

Christine Tripp said...

>For example, a can of beans bought for home consumption would be a consumer good. However, the same can of beans bought by the owner of a restaurant for sale to customers may not be.<

But... if that can of beans was rotten, both parties would be within their rights to get a refund and if denied, would be awarded that refund in court!!!

I know the whole business/consumer argument has gotten PA out of hot water continuously and it did so again. Perhaps the law firm is not going to go further because the writers have decided to not spend any more money on it.
Really sad.

Will Lutwick said...

As usual, the legal system can't see the forest for the trees.

Will Lutwick
Author of Dodging Machetes

Anonymous said...

PA authors are vanity people who don't want to spend the time and money to woo an agent or a commercial publisher, or whose books are not commercial to begin with. They are too cheap to pay an agent or editor for their counsel, so duh, you get what you pay for. I have no sympathy for the likes of them or of the likes of Writer Beware whining all the time. Go get your own commercial sales, you cheapskates, you get what you pay for!!! And since pa doesn't charge to publish, just after, that's just too darn bad, o well.

Anonymous said...

Disappointing, but not surprising. If you need the courts for justice, you are probably playing a losing hand. Being in the right doesn't count for much.

Anon 3:04 - True enough for the first half of the comment, but practically wishing misfortune and suffering upon people that have made ill-advised decisions - I choose not to live that way. Also, PA is a sleazy outfit that deliberately takes advantage of people. Sadly, people like this rarely get what they deserve, and I do choose to wish all manner of misfortune and suffering upon them.

Victoria Strauss said...

I'm guessing that Anon 3:04 isn't an actual commenter, but one of Writer Beware's semi-regular trolls, trying to stir things up. Don't feed the troll.

Bibliopirate said...

It's hard for starting authors, and sadly the best rule of thumb might just be "Avoid publishers who charge you."

gracebrannigan said...

In reading the Judge's decision, he is leaving it open for further argument and it seems to me, he has fairly worked within the confines of the law to let them come back, as stated, and readdress the issue in a new and stronger way. I prepare court transcripts and see this type of thing a lot, and yes it is disappointing that it won't be taken further. However, lawyers do cost money, going to court time and again costs money and someone has to come up with that money. Authors facing further legal expenses can find it very difficult to continue. To me, what would be helpful would be more authors who have an interest to then join such a lawsuit to help defray the attorney fees to present that stronger argument or someone with deeper pockets than the individual authors. Having said that, I've been involved in some form of writing/publishing for myself for many years. Education is always key. Blogs like Writer Beware is key. Many, many years ago I got sucked into the Press-tige/Ivery scam and I know myself how easy it is to think something can be a great opportunity. So thanks to Writer Beware and other such places who continually educate and make the public aware of various schemes and not so good businesses/practices going on in the epub and otherwise writing world. :)

Anonymous said...

"PA authors are vanity people who don't want to spend the time and money to woo an agent or a commercial publisher... They are too cheap to pay an agent or editor for their counsel, so duh, you get what you pay for..."
It’s not a matter of being cheap, at least not for me and most likely not for others either, it’s about being broke and desperate. I’m happy if you have an extra $1,500.00+ to get a book published, but like so many others right now, I’m drowning in debt. If I had $1,500.00, I’d be buying shoes, because I haven’t in over two years and my feet are nearly on the floor. Or getting dental work done because a tooth ache is no fun, or glasses because I can barely see and I don’t have medical insurance. I never signed with PA, but you still pissed me off.

EkkoJohnny said...

@ annoymus

Wow, how extremely arrogant of you to assume you know each new writer. While they (new writers) may be guilty of not researching or doing their homework, or not knowing enough about the business to make a wise decision, calling them cheap is pretty lame.

In addition, badmouthing Writers Beware is not allowed. Why, may I ask, is someone as superior as you following the great source of information? You wouldn't happen to WORK for PA, would you?



Anonymous said...

I am a PA Author ..unfortunately and i got a letter from the CEO gloating how David killed goliath again. I wondered..isn't PA Goliath and we the authors Davids. Anyway, he said it was never PA's fault but us and the books we write. EHHH. MY book was published with so many mistakes that a so called editor was supposed to clear out and little did i know that the Editors at PA are none other that the Windows Spell checker. So even if i have a good story written, who will want to read it if there was no proper editing. And PA does not want to edit when i complained. They even lie about their contract clause that if i don't sell anything, i can go free. They actually bought 2copies of my book to prove that it was selling.

Victoria Strauss said...

Anonymous--could you forward that letter to me? beware [at] sfwa.org. Thanks so much.

Anonymous said...

I'm not as sympathetic of these PA authors as most, I guess. It doesn't take much Googling to get a good idea of what the company is all about. And signing contracts you don't understand isn't a good idea, either. Not sure why people do that. Well, actually I am sure why they do it, but no sense pointing out the obvious here.

As for $1,500 to publish: you can publish an ebook darn near free. Many successful authors started that way:

Amanda Hocking
E.L. James
Colleen Hoover
RL Mathewson
John Locke

Yes, these are rare exceptions in a sea of countless books, but so are best-selling traditionally-published authors.

Tammy Jackson said...

I am a previous PA Author. I signed with PA in 2009 because I was new to the writing and publishing world. I was flattered and honored that a "traditional" publisher, the first one that I submitted to, would accept my manuscript. When I got my proof copy of the book, which was the finished product, I was so happy and proud of myself, I cried.

Then, I read it and saw all of the many mistakes in my book. I was so embarrassed. Still, I spent a great deal of money trying to sell my book at the rate $34. 95 that PA set for my book. I spent way more money in promotion than I received in sales.

It did not take long to realize that PA was NOT a "traditional" publishing house. I was extremely disappointed. I have since gotten the rights back to my book because it had no sales for a year.

Now, I am considered a published author, but am so embarrassed when I have to admit that my previous publisher was PA.

It isn't people who are looking for simple and easy way to publish their books that sign with PA. It is usually people who have no knowledge of the publishing industry or how it works. They are green and therefore, easily dooped. Unfortunately, it doesn't take them long after signing to realize that PAs best customers are the authors themselves.

I get to tell the world I am a published author, which I am proud of because I know my book is good. I know because all who have read it told me so and cannot wait for my next one to be finished. However, I am embarrassed to admit who published it. I will be submitting it or self-publishing it again, this time, it will be letter perfect and with a reputable publisher.

So, for those who think that those authors who sign with PA get what they deserve, no one deserves the deception and treatment they get through PA just because they are green.

Anonymous said...

I'd like to compliment you for doing a fantastic job in keeping PA Authors abreast of the suit. I had doubts about you at first; but, seeing how you followed this story through up to dismissal, you have garnered my utmost respect. I have used Publish America after getting a book professionally edited by Bill Greenleaf in New Mexico. So, once you tire of the rejection slips, some people go with PA for hope, pipe dreams, with the idea of using them simply as a free printing press. They take that final draft, upload it to Amazon. com as a Kindle book, and sit back and reap the returns. Thanks.

Rae Sunshine Lee said...

Made the PA mistake with my first book. Have since gone on to write 3 more for www.wordclay.com, then am selling them on amazon. With wordclay all I had to do was pay 99. for the SKU number.

Anonymous said...

Well golly gee whillickers. What have we here?
It smells like the same old team spirit without the proper ammo to silence the Cobainian rage.
Writers should beware of 'Writers Beware'. This, after a decade of watching, is where writers and their dreams come to die by way of bad advice. This motherly advice is actually a way for the super elite 'established' authors to close the door behind them. They can't enjoy the coveted title of "published author" if it isn't an exclusive term to drop at a party for the smug and fake.
And speaking of fake, I'm not dead. I just dropped out of he soap opera that continues right here with the same old tired recipes for failure AND GOT A FREAKIN' LIFE!!! Nobody can name this resource for their success.
It's simple, DO YOU WANT IT?
Get it on freakin' paper! Put it on film! Bang on doors and never go away until you get exactly what you want!
Sometimes that means distancing yourself along the way from what gets you there. -Very much like what you see on this site. I did with PA and it was a cow worth milking. Then I got out with no strings. Anyone can.
My child speaks highly of author Dad and the only thing that this site serves is food for the negative. If someone doesn't like me, there are sites like this so they can shout "the Emperor has no clothes!" from the highest tower to dead air. My book was in print, I got it in the stores, I got it in the libraries, I was sponsored by Pepsi and Budweiser for book signings, I got to travel around signing books, and everyone was talking crap about me. "The only thing worse than being talked about is not being talked about." But I did it while it was still fun. Sites like this only make it harder for authors and publishers to use each other in a mutually beneficial manner.
THAT'S THE NAME OF THE GAME, FOLKS!!!And for a while the sharper authors got to take the ride with me.
Jeeze, there's gotta be enough words strung together on these sites for a few dozen novels. But this is as creative as you get. -Talking smack about PA and others who give people everything they deserve but the pipe dream. The PA lawsuit was idiotic and all that came out of it was a few tears from people who were otherwise living their dream. -Nice job. You crushed some happy faces into the dirt. Why don't you go pop some balloons at a carnival and tell the kids all the clowns just want to eat them.
Don't worry. I'm not back. I was just playing with some new tech crap and got curious. What I do now is only fuel for the moot and hopelessly negative, so screw 'em. (Heh-heh)
-H.B. (Freakin') Marcus

Anonymous said...

As an outsider, it seems to me that dealing with a vanity press is like snake-handling. If you aren't VERY good, and VERY careful, you will get snake-bit.

IF (and I emphasize IF) Mr Marcus made a go of it, good for him! He was one of the (vanishingly few) lucky ones who do.

author gene said...

OOOPS! There's no fool like an old fool. Crap! Where are the good news stories? I had published my book and had done a few readings and signings; then my publisher went under. I was left without a publisher. You guessed it. Publish America had a deal for me. While my book was being republished by PA, I was invited to a signing at Orlando this weekend; for a price. In the end I paid a premium for five books that I will have to sell in Orlando (Only 2 mail days left for my books to arrive.)I should have googled...I should have googled....I can only hope they have changed and are there to help me...naieve or what. Given family history, I will not likely be around in 7 to 10 years to re-market my book. By the way, my book sold for approximately 16.00 by the old publisher. PA has it listed for 29.95. I have nothing to offer...just venting.
Gene

Anonymous said...

To Anonymous and anyone else thinking PA authors deserve what they get:

I spent five long years sending thousands and thousands of pages of my book to several publishers. They were not at all interested in my book stating no one was interested in "pirates, fairies, vampires, etc." at the time (this is just before Disney's pirates, Twilight, Harry Potter, etc. came out). After spending hundreds on sending my manuscript to the publishers and agents, I finally found PA and sent my book to them (I was sending my work to anyone at the time). At the time, PA was new, had no bad reviews, and was very helpful and active in their work. I had no idea, and shame on you for saying authors deserve what they get! Remember, everyone's situation is different and it is wrong of you to make a generalization on the situation.

steinrader said...

When I contacted PA now America Star to ask for the rights of my book back I encountered a very arrogant, rude person on the other end. I had already received right revision on a previous book as I knew long ago PA was not what I thought just had too many other life events to care. So this "person" didn't like it when I sent links to the reviews of their company and continued to demand an apology like a 15 year old. I continued to bait the person to basically gain documentation that they are refusing to return the rights to our other novel which has long ago met the 7 year contract. So now I will pursue this legally as I want the rights back, there has been no sales and it is an ego on the other side that sounds like a crazy person. I hope to market our books to a real organization. I am much more saavy on the process now then I ever was before. Beware.