A preliminary settlement has been reached between HarperCollins and two of its authors, Ken Englade and Patricia Simpson, who initiated a class-action lawsuit against HC charging breach of contract. The lawsuit, first filed in November 1999, alleged that HC had deprived U.S. authors of royalties by selling books to its affiliated companies at deep discounts.
Under the proposed agreement, HC will make adjustments to royalty payments. The company will recalculate royalties on sales to its foreign affiliates from November 5, 1993, through June 30, 1999, by reducing its nonreturnable discount on hardcovers and trade paperbacks from 72.5% to 65% and by reducing the discount on mass market paperbacks from 75% to 67.5%. No adjustments will be made for books sold by HC to its foreign affiliates after June 30, 1999.
Authors who have earned out their advance will receive a royalty check, while authors who have not recouped their advance will receive a credit, said Robert Lax, the attorney representing the HC authors. Authors should begin receiving settlement notices soon, allowing each author to accept the agreement or to opt out of the deal, in which case the author is free to seek his or her own remedy. Authors will be paid after the court holds a fairness hearing in February and decides to approve the proposed settlement.
Lax said the settlement, "gives real value to authors" and that he hopes the agreement will remind all publishers that authors' royalty rights will be monitored.
HC said that while it believes it would have prevailed if the case went to trial, it wanted to avoid a lengthy process so it decided to settle the matter to maintain good relations with its authors.
