Thomas Nelson Faces $15M in Fraud, Breach of Contract Lawsuit

Thomas Nelson, a part of HarperCollins Christian Publishing (HCCP), faces more than $15 million in damages owed to a printing company after a jury in the U.S. District Court for the Middle District of Tennessee found it liable for breach of contract and fraud.

EPAC Technologies, Inc., which also provides book manufacturing, fulfillment, and distribution services, filed a class action lawsuit against Thomas Nelson in early 2012. It sought damages for millions spent on upgrades and expansions as a result of its contract with the Christian publisher, which at the time the contract began was owned by the private equity firm Kohlberg & Company before it was sold to HarperCollins. EPAC alleges that Thomas Nelson failed to provide the agreed-upon order requisites before seeking new pricing from another vendor and terminating EPAC’s five-year contract without proper cause, according to court documents.

At trial, according to EPAC, it showed that HarperCollins’ claims of defects and late deliveries were fabrications designed to give the publisher an excuse to terminate the contract. Thomas Nelson was not able to show that any orders were late, that even a single book was returned, not a single credit was requested or issued, and not a single customer complained about the quality of book produced by EPAC, and EPAC showed that HarperCollins wanted to terminate the contract after it improperly disclosed EPAC’s business information to a competitor.

On January 18, a jury awarded EPAC $3 million in breach of contract damages, $60,000 in fraudulent concealment damages, and $12 million in punitive damages.

A spokesperson for Thomas Nelson said that the publisher disagrees with the verdict and is in the process of challenging it in court. “Thomas Nelson believes that the so-called fraud claim (not disclosing to EPAC that it was also negotiating with a competitor) is wholly without merit, legally or factually, and that it acted properly in 2011 when it terminated the printing contract that EPAC admitted it could not fulfill," the spokesperson said.