Author Solutions Class Action Lawsuit: Update #2

It's been logo_authorsolutions[1]nearly a year since a group of authors filed a class-action lawsuit against Author Solutions (ASI) and its parent company, Penguin (now Random Penguin Solutions). In the past 11 months the case has been neither settled nor thrown out, but the gears of justice have been turning, albeit slowly.

The lawsuit, which was originally filed in May 2013, includes allegations of unjust enrichment, breach of contract, and violation of state statutes in California and New York. According to lawyers for the 3 authors who filed the suit, ASI had:

  • failed to pay royalties
  • failed to send authors accurate sales statements
  • introduced numerous and egregious errors into the books produced by ASI
  • sold useless and ineffective marketing and promotional services

Penguin and ASI filed a motion to dismiss in June, and in July the plaintiff's attorneys filed an Amended Complaint (PDF) which raised new allegations. Legal wrangling over the Amended complaint, as well as the second amended complaint, proceeded over the following months while discovery continued.

Earlier this month Judge Denise Cote issued a ruling that's good news for Penguin, but mostly a defeat for Author Solutions. (Writers Beware posted the full ruling here).

All claims against Penguin were dismissed.

Penguin is dismissed as a defendant in this action. The activities at issue here were undertaken by Author Solutions, a subsidiary of Penguin. Plaintiffs concede that they are not attempting to pierce the corporate veil in order to hold Penguin liable for Author Solutions’ actions. Accordingly, under basic corporate law principles, Penguin cannot be held liable for the alleged misconduct of Author Solutions.

ASI's motion to dismiss plaintiffs' unjust enrichment claims is granted in part and denied in part:

Plaintiffs allege two distinct forms of unjust enrichment by defendants. First, defendants unjustly profited by failing to pay royalties at the rate set forth in the contractual arrangement. Second, in failing to provide services that members of the class purchased without entering into a contract, defendants were unjustly enriched in the amount of the revenue received for those services.

Plaintiffs’ unjust enrichment claim as to unpaid royalties is dismissed. The royalty rate is governed by written contracts, which plaintiffs seek to enforce in their breach-of-contract claim. Accordingly, these royalties cannot be recovered under an unjust enrichment theory.

Plaintiffs’ unjust enrichment claim as to the non-contractual publishing services, however, is adequately pled. Unlike the claim regarding unpaid royalties, plaintiffs allege that there was no written contract setting forth the nature of the services for which they are seeking damages in their unjust enrichment claim.

Author Solution's motions to dismiss the claims of various state statutes were denied. The lawsuit is going to proceed to discovery, and the parties have been ordered to submit a proposed pre-trial schedule.

Author Solutions has a bad reputation that goes back for years, so this lawsuit was well-nigh inevitable. In fact, the only surprise is that the lawsuit wasn't filed almost as soon as the Penguin-ASI deal was finalized.

Penguin bought Author Solutions in July 2012 for $116 million, in spite of ASI’s infamous reputation. ASI has been operating  under a variety of logos, including AuthorHouse, iUniverse, Palibrio, Trafford, and Xlibri. ASI is also providing similar sketchy services under contract to a number of otherwise respectable companies, including Simon & Schuster (Archway), Lulu, Penguin India (Partridge), F+W Media (Writers Digest), and Harlequin (DellArte Press).

Writers Beware


About Nate Hoffelder (11471 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader: "I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

7 Comments on Author Solutions Class Action Lawsuit: Update #2

  1. The big milestone is discovery: if they get that far, there should be the usual juicy emails to bolster the plaintiffs case.

  2. Hello

    my name is Yuliya, I self-published with iUniverse in 2012 and regret it very much, I didn’t know about the class lawsuit, is it too late to join? If so, are you aware of any other class lawsuit that is forming now?
    All the complaints/observations of other authors who have commented on the internet were my unfortunate experience (unpaid royalties, forcing me into the services they never deliver), they have also sold me my own books for over 2000$ and disappeared owing my 600$ worth of books. I don’t know what to do.. they are not answering emails and calling is just useless …. they pretend they want to help and promise to call back in 10 minutes and never do … If you have experience solving these types of issues or if you know someone who have succeed – I would appreciate very much your advice..

    Thanks in advance !!
    Yuliya Bond

  3. The compaints that you have against Trafford, Xlibris i have suffer from 4-21-08 untill now 2-15-15. I got away from Xlibris in 2011, they were selling my book over seas. They never gave dime. In 2011, a friend gave me Trafford which i had TRafford to publish my books ” Trials & Triblation of Life and Inveronmental Trap. THese books are selling on the webb with out any offer of money to me. Maybe ? i have spent 2000.00 less from 08 to 2015. I hope they get thier punishment as they have punish other Al Ross

  4. To more clearly reiterate my previous statement. The complaint that was lodged against Trafford and Xilbris, I also suffered. In 2008 I was a new Authur, unknowledgeable of procedures, processing or even profits of this industry. I paid a fee to both compaines one after the other. Not knowing that they were both connected, so I went from bad to worse.
    In my previous statement on this web site, I stated a loss of $2000.00 a typo I really meant $20,000 or more and I have the verifiable proof. I hope that the parts of this class action suit that is still being tryed, I will be fairly compensated for my financial loss and also my pain and suffering.

    Please someone help me

  5. I gotta feeling , folks better not put all their confidence in these lawyers , Because at the end of the Day.. their really defending the three initial Plantiffs..Remember this Post..Folks are selfish today..

  6. I published Hades and Persephone on 2007 and as for the first year I didn’t get paid, I cancelled the agreement but the books were selling internationally in more than 60 internet sides plus over 50 agencies internationally as well without having paid for 8 years now.
    Despite my phone calls and letters during 8 years, they promise will get back to me but never respond either my phone calls, emails or letters. I don’t know what to do.

    I estimated my losses minimun over 8M on the basis 50,000 copies per month.

    Your advise highly appreciated.

  7. I am aware that the previous mentioned class action suit has been canceled, I hope that is only temporary. But I wish to log a law suit against them both seperately . I have loss $20,000 dollars or more I can not afford such a loss. I have been patient but to no avail. Please someone advise to the least expensive route. I can be reached by phone at 773 499-8113. Thank you in advance for your cooperation in this matter.

2 Trackbacks & Pingbacks

  1. Whispers And Warnings For May 27th |
  2. New Class Action Suit Filed Against Penguin Random House, Author Solutions | The Digital Reader

Leave a comment

Your email address will not be published.