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Multi-Million Dollar Class Action Lawsuit Filed Against Penguin, Author Solutions
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  • May 2, 2013
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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 royaltiesfailed to send authors accurate sales statementsintroduced numerous and egregious errors into the books produced by ASIsold 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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