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Multi-Million Dollar Class Action Lawsuit Filed Against Penguin, Author Solutions

May 1st, 2013 by · 9 Comments · lawsuit

penguin author solutions Three self-published authors filed a class action lawsuit last week against Penguin’s vanity press subsidiary, Author Solutions.¬† I have not yet seen the filing myself, but I’m told that the 3 authors claim that Penguin/ASI “cheats writers of royalties and charges them to correct typos in manuscripts that the company itself inserted”.

The authors live in Calif. and New York, and they are represented by New York law firm Giskan, Solotaroff, Anderson, & Stewart. This is the firm that 2 months was looking for authors who had had negative encounters with Author Solutions.

The authors are asking for $5 million in punitive damages for breach of contract, unjust enrichment, various violations of the California Business and Professional Code, and violation of New York General Business Law. The list of complaints is comes as no surprise. The authors say that 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

Here’s more from the complaint:

“Author Solutions’ revenues are estimated at $100 million per year,” the complaint states. “Of the $100 million Author Solutions earns as revenue, approximately one third of that amount, or millions annually, comes from book sales. The rest of its revenue is derived from the services it offers, such as editorial services, formatting and design services, production services, and marketing services (‘services’).”

“Despite its impressive profits from book sales, Author Solutions fails at the most basic task of a publisher: paying its authors their earned royalties and providing its authors with accurate sales statements.”

“Author Solutions also fails to take diligent care of its authors’ works, making numerous and egregious publisher errors – errors made by the publisher, not the author. These errors include errors on book covers, in addition to various typographical and formatting errors. In fact, Author Solutions profits from its own mistakes. Aggressive sales techniques ensure that these errors are corrected only for a fee of several hundred dollars. Even though, as a matter of policy, Author Solutions promises to correct publisher errors for free, it rarely does.”

“Most of Author Solutions’ earnings are derived from its publishing and marketing services. These services, which can cost authors tens of thousands of dollars, likewise fail to deliver what they promise: more book sales and more opportunities for authors.”

“Therefore, even while Defendant Author Solutions prominently markets itself on its website as ‘[t]he leading indie publishing company in the world,’ authors often discover, once it is too late, that Author Solutions it is not an ‘indie publisher’ at all. It is a printing service that fails to maintain even the most rudimentary standards of book publishing, profiting not for its authors but from them.”

Author Solutions has a bad reputation that goes back for years, so this lawsuit was inevitable. In fact, the only part that puzzles me is that it didn’t happen sooner. Penguin has deep pockets, so I would have expected to see a lawsuit 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 existing poor 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), and Harlequin (DellArte Press).

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9 Comments so far ↓

  • Peter Winkler

    Wow, those must be some clever lawyers, because you can’t get punitive damages for breach of contract. Punitive damages can only be awarded in tort cases. Breaching a contract is not tortious behavior.

  • fjtorres

    I can see Author Solutions’ defense on the accounting charges: “Our accounting practices are exactly the same as every other big publisher out there.”
    ;)

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  • Jodi Foster

    Hello,

    My name is Jodi Foster. I am one of the three plaintiffs in the class action lawsuit against Author Solutions. Please feel free to contact me or my lawyers.

    http://www.gslawny.com/
    http://jodifoster.net/

    • Peggy Poston

      Jodi,
      I would be more than happy to join in on the class action lawsuit or testify for
      you. Despite these idiot comments by others that there shouldn’t be punitive
      damages, there should because it is deliberate and criminal what xlibris and author
      solutions has done. I thought about looking for an atty myself. Please feel free to have
      your attorneys contact me. I put so much into my book and xlibris claims that I only
      sold 2 copies after a million emails went out, does that make sense? I can tell by those
      selling my books on Amazon.com that I am not being properly credited. I also tried
      to talk to the heads at xlibris and they would not accomodate me. I can tell by how they
      treat me on the phone, they are crooks. When one asked what the problem was, I told her
      that it sounded as though they were having a pot party. Does this sound like a company
      that has any professionalism? They told me everything was included in the package, but
      yet they charge all the time for anything they do. They also breach and lie about what was
      in the contract. I hope they are beaten into the ground! I even got a shot in on them in my
      book, The Good Bad & Ugly, Social Security Disability but don’t buy it, it will just make them more money!

    • sean ross

      I wrote the book Life In A georgia Town and paid authorhouse to publish it. now they want more for publicity to sell the book, and they want $4500 for them to do a movie script promo since they think it can be a movie

  • Dion E Cheese

    Hello Jodi,
    My name is Dion Cheese and I am currently going through what I believe are fraudulent practices with Xlibris, the subpar editing practices and so forth. I toldtthem not to release my book in its terrible state and yet they did so anyway without my approval or knowledge…. Please inbox me on Facebook under Dion Cheeze. I will be more than obliged to help out in any way possible. I have sent my contact information to the link you provided and have left a voice mail for you as well. I would like to join in on your suit.
    Thank you so much,
    Dion Cheese

  • CC

    Nice how Xlibris, Author Solutions staff members always post rubbish on any article about how they are being sued. You’re scam artists and thieves who prey on the elderly, the disabled and naive and nothing more.

  • john b

    HI..Jody foster. .yes there Crooks..they got me to..there aare folks that work for Authorhouse& IUNIVERSE THAT cant even Spell..its Hilarious. …( Fraud ) without a shawdow of a Doubt..—-cheaters..and beaters ..its embarrassing. .!!…Ive sign up already. .after I saw they have a live person monitor. Go on your royalty page when you go on..and change your Royalty Statement. .putting in a fraudulent word document. .robbing us authors out of 10′s of thousands of dollars. .thats how Authorhouse. .makes there 38million a year in royalties. .authors get 5million if there lucky..Authorhouse shaves off the top before authors see it…thats why when you ask them to see alll Royalties statements from just the Retailers and not there royalty statements they wont show it to you even after asking for it with the attorney generals..Because they know they re dealing in deceptive practices and fraud..plus money laundering taking more then there fair share ripping us authors off ..so if they had nothing to hide ..Authorhouse would’ve shown all Retailers receipts through the atg office..and not Reply the word no..to the atg office…this should have been a Red flag. .to the Indiana state attorney generals office. ..!!!.

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