Penguin & Author Solutions Want Class Action Lawsuit Dismissed

Penguin & Author Solutions Want Class Action Lawsuit Dismissed

By Anne Bucher

Penguin and its self-publishing subsidiary Author Solutions filed a motion to dismiss a class action lawsuit that alleges the companies engaged in fraudulent business practices.

The class action lawsuit was filed in April by three clients of Author Solutions. They are seeking $5 million in damages. The plaintiffs allege that Author Solutions represents itself as a publisher, attracting authors with its claims of “greater speed, higher royalties, and more control for its authors.”

According to the class action lawsuit, the company uses “aggressive marketing practices that lure authors into purchasing expensive Publishing Packages and other Services.” Plaintiffs allege that these claims misrepresent the manner in which the companies work. They also claim that Author Solutions fails to pay authors the royalties that they earn.

In their class action lawsuit, the plaintiffs allege that Author Solutions profits from fraudulent business practices, including delaying publication of manuscripts, publishing manuscripts with errors and selling services that do not live up to the company’s promises. They claim that “Author Solutions fails to take diligent care of its authors’ works, making numerous and egregious publisher errors – errors made by the publisher, not the author.” Author Solutions makes money from these mistakes by charging a fee of several hundred dollars to correct them, even though the company promises to correct publisher errors for free.

The plaintiffs also allege that the Author Solutions deceives authors by promising that the authors will receive 20 percent in royalties off the cover price of the book. Authors who purchase Publishing Packages via telephone often do not realize this is not the case. In reality, authors’ royalties are calculated by what Author Solutions actually earns after distributors take a cut.

The plaintiffs in the class action lawsuit allege that Author Solutions fails to pay them according to the terms of their contract. They also claim that they have no way to calculate whether they are being paid correctly. In some cases, they are told that there was a glitch in the system. In other cases, they demand that authors provide proof of the sales in order to fix the problem. Even when an author has a book listed as a best seller on Amazon.com, Author Solutions representatives have insisted that the book had no sales.

Attorneys for the defendants seek to sever Penguin from the class action lawsuit because “no specific misconduct” by the company has been alleged. They allege that the case came about because typographical errors and formatting issues led to delays in the publishing process.  Penguin’s attorneys note that there may have been some errors associated with the royalty payments, but these claims should be handled on an individual basis. Penguin alleges that these issues are contract issues that are based on supposed underpayments, errors or delays. For this reason, the potential class action lawsuit should be dismissed.

The class action lawsuit was filed in the U.S. District Court for the Southern District of New York and will be heard by Judge Denise Cote.

The Penguin Author Solutions Class Action Lawsuit case is Kelvin James, et al. v. Penguin Group (USA) Inc., et al., Case No. 13-cv-02801, New York Southern District Court.

Plaintiffs in the class action lawsuit are represented by Oren Giskan and O. Iliana Konidaris of Giskan, Solotaroff, Anderson & Stewart LLP.

Updated July 1st, 2013

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