How I sued my publisher, represented myself, and won.
Updated: Sep 18, 2018
By Debra Lynne KAtz
After 10 years of ongoing contract and payment issues, and 9 months of failed negotiations between myself and Llewellyn Worldwide, the publisher of my 3 books, my advocates at the National Writers Union agreed there was no other recourse but to proceed with arbitration.
Like many of its authors, Llewellyn was continuing to pay me only 10 percent for e books even though my contract clearly indicated that e books “licensed to third parties” shall pay 50%. Llewellyn’s owners argued that what they had with Amazon and B & N was not a license. Eventually they offered me 25 percent of my ebook sales (that's what they brought in, not list price), admitting they sometimes made this offer to their authors, but who complained. This was not good enough. I wanted my 50 percent. I knew I hadn’t agreed to less for ebooks, and wouldn’t have.
Furthermore, because of excessively late payments and lack of clear reporting for my first book, my subsequent contracts dictated that I be paid within 60 days for sub rights, but this had not been honored. As a result, I had conducted a partial audit that had gotten too expensive to continue. The company’s owners called me personally, reiterating their promises to pay on time, convincing me to allow them to publish my second and third books (my first contract had a 'first look' clause, so I had to at least give them the opportunity to make me an offer), but problems continued.
By the end of the contact negotiations mediated by the National Writers Union staff, not only had Llewellyn’s owners once again “forgotten” about their verbal promises, but now they were denying that the 60 day clauses even existed in the contracts. (even though they were right there). Meanwhile I was hearing from fans of books published in other languages, such as my Greek Books, that I didn’t even know were out there – as again, in violation of my contract, I wasn’t even being informed that these particular rights had been licensed out. Nor had I been paid for them.
Thanks to the American Arbitration Association’s fast track program, and making the decision to represent myself even though I am not an attorney (who needs law school when you’ve got a copy of "Contract Law for Dummies"?) my entire arbitration cost less than $3000, taking only 4 months to accomplish.
In all of this I was determined to not have to agree to a non disclosure agreement. I felt strongly about this because this is how publishing and entertainment companies and so many other businesses have continued to keep those they are supposed to be representing, disempowered. Silence equals stagnation, only communication equals change. I really felt like with all I was going through, it was more about making a difference for all authors much more so than getting financial compensation, although I wanted that too – after all the time I had spent away from my infant son, family, and other activities writing these books.
Meanwhile I had been seduced into the idea that this publisher, the largest metaphysical publisher out there at the time, was there to be my business partner and honor my interests. Yes, I was very naive in those days! What I would go onto learn, both from my experiences and investigations was that most publishers view an author as an adversary, on a need to know only basis. They are your best bud during the recruitment phase, but once you sign on the dotted line, now you are basically annoying, in their way, a drain on their time and resources, and even a foe. There is nothing equal in the relationship between a major publisher and an author.
Representing myself took up an enormous amount of time and preparation, but I learned so much about the law (contract and tort), publishing, and in the end sitting across from the owner of the publishing company, the head of accounting, and their 3 attorneys, it was clear my work and my plan to represent myself paid off - I knew the tiny details of my case so much better than they did. Their attorneys just seriously underestimated me - which I think was largely due to some ideas they had about authors being powerless and uneducated and easily intimidated. Basically I took my skills as a writer and demonstrated them in a way they never anticipated.
Nevertheless, the day of my hearing was one of the most stressful and unpleasant of my life. It just sucked sitting feet across from the owner and having to say derogatory things about her and her company. I demonstrated over and over again how she had either seriously forgotten what she had promised, or misrepresented the truth. It seems like a mixture of both. Being right or justified in my arguments, didn’t make me feel any better.
It took about a week to find out the case results: The arbitrator ruled that I should have been paid 50% for the e books, awarding $7,435 in restitution for these, and returned ebook rights to me. (I had asked for all of my rights back but he only agreed to give me these, which I was ok with as this meant my physical books would remain unscathed in the bookstores). For the late payments and lack of clear reporting, he awarded me $2,300 reimbursement for the audit (even though my contract said they wouldn’t have to pay for an audit if discrepancies were not found), and $25,000 in punitive damages. He also indicated I was free to discuss my case, and the outcome given I had not agreed to any non disclosure agreement.
Three weeks after the ruling, Llewellyn offered to give me the rest of my rights back even for my physical books. Their attorney said they wanted to completely “divorce me”. I can't say more about this as I did sign a non disclosure agreement for this, but trust me, there isn't much more to say...
Except that in the end I took the money awarded and bought an airplane. It's an old plane, a 1966 Cessna 176, but my husband went on to get his private pilots license and we are certainly enjoying it, having now flown it across the United States a couple times. I see it as a symbol of my freedom.
Now I sell my books primarily on Amazon and am bringing in so much more $ than I was when I was with Llewellyn (about $1000 per month). The only downside to having my rights back is I don't have the same presence in the bookstores any more. That being said, there are far fewer bookstores in existence now. Not being in physical bookstores is a bit of a hit to my ego, as it was fun to go into most any bookstore before and see at least one of my own, but it doesn't seem to be impacting sales. Another fantastic change is now I can just go into Amazon's author's page (for KDP Direct/Create Space) and see my royalties 24 hours a day. Contrast this with the bi annual statement (let me emphasize – that is twice a year only) I received from Llewellyn all those years, which were literally one page long per book, and these didn't even include my subrights/foreign sales.
In retrospect, I very much appreciate all Llewellyn did for the books starting out. I appreciate the beautiful covers they came up with; some of their staff who were supportive throughout; and that they did get my books placement in the major bookstores. They helped launch my career as an author and for that I’ll ever be appreciative. That being said, my books brought in hundreds of thousands of dollars in sales to them, nearing a million (I’ll never know the exact amount but records indicated it was close to that) so I think it was a mutually beneficial exchange, until it wasn’t anymore.
During the hearing itself, things got a little stressful. I entertained myself by coming up with titles for the article I’d write when I won. I vowed to call it, “How I Sued My Publisher and Won”.