So (Don't) Sue Me

In 1998, Misha Defonseca, the recently confessed author of a hoax, Misha: A Memoire of the Holocaust Years, sued her publisher for failing to make her book a hit in the U.S. Her ghostwriter sued, too, on the grounds that her name did not appear on the cover of the book. They won. It was the second largest judgment in Massachusetts history.

The court in 2001 held that my company, Mt. Ivy Press, had fraudulently asserted “it was an expert in marketing books.” For those in the industry, it may be hard to imagine that Mt. Ivy didn't live up to its own billing. The “memoire” was a bestseller in Canada, France and Italy. There were film offers from Disney and Henson, and a half-completed Oprah show in the can. The jury, however, wasn't impressed and awarded damages to the author and her ghostwriter in the amount of $11 million. The court tripled that jaw-dropping figure to $33 million for “unfair and deceptive business practices.” The trial judge's findings included this commentary: “the court finds that [the publisher's] conduct was extremely egregious.... [They] misrepresented their publishing capabilities.” Lest all those zeroes in the award mislead you, we're not talking Random House or Penguin. Mt. Ivy Press is a micro publisher with less than a dozen titles.

Admittedly, my lawsuit is atypical. Defonseca's “Mother Theresa” moral stature distorted and magnified both the issues and the results. There is, however, an underlying worrisome message here for independent publishers who today number 80,000-plus, according to “The Rest of Us,” a report produced for the Independent Book Publishers Association.

“The rest of us” are ill-equipped to avoid and withstand litigation from disgruntled authors. We don't have a staff of lawyers looking over our shoulders. And should the worst happen, the plaintiff's lawyer generally will be working on contingency, while our defense lawyer will bill $150 to $400 an hour. Plaintiff's lawyers, like the ones who pursued me, take between 25% and 40% of what they win for their clients.

No matter how cautious you are, a claim can come out of the nowhere. Changes over the past several decades in the way the legal industry is regulated have made it easier to sue. “In no other major democracy can a freebooting lawyer show up, dump a pile of papers on your front lawn, tie you up for years, inflict untold damage to your business and reputation, and then walk away with hardly any consequences if he is proven wrong,” said Walter Olson, author of The Litigation Explosion. He sees unfortunate consequences for the publishing industry. “Today there are more and different traps for people who are trying to create original works. Too much risk turns people off from doing the very things that make them creative.”

What kind of precedent is set by my case? Will disgruntled authors be more disposed to hold their publishers liable for not living up to their expectations? Will plaintiffs' lawyers be more inclined to take them on as clients? Would such claims really succeed at trial?

Who'd want to go all the way to find out? Experts estimate that 90% of the 18 million lawsuits filed annually are settled out of court. “Nobody knows the money spent on legal fees and settlements,” says Sandra Baron of the Media Law Resource Center. The late economist Walter Hoadley saw in the high cost of litigation what he said amounts to “legal blackmail” as a powerful incentive for defendants to cough up to make the problem go away.

I would have been more than happy to cough up to settle my case before trial. As it turned out, the risk I was facing was far worse than I ever imagined. Because there was a finding of fraud, I and my company were barred by law from filing bankruptcy to wipe out the judgment.

The prospect of a Disney movie and an Oprah show was like chum in the water to hungry sharks. Should independent publishers be feeling a bit uneasy in these litigious times? Not to worry, says Dan Poynter of indie press Para Publishing, “You won't have any trouble—until you make money.”