Publisher Threatens Writers Association With Defamation Suit After Being Kicked Out For Not Paying Royalties

from the Ellora's-Cave-re-enters-the-realm-of-speculative-financing dept

Back in 2014, erotica publisher Ellora's Cave sued the person behind the influential and respected website Dear Author for defamation in response to a post questioning the imprint's financial stability and detailing multiple authors' claims that the publisher wasn't paying out royalties in a timely manner.

Dear Author based its post on statements from Ellora's Cave writers, as well as public records, which included a handful of tax liens against EC founder Tina Engler (a.k.a. Jaid Black). The post was a balanced and sobering examination of the publisher's financial problems and included plenty of citations for every assertion it made. Rather than address the issues raised by the post, EC/Jaid Black decided to sue.

Marc Randazza stepped up to defend Dear Author and roughly a year after the lawsuit was filed, a settlement was reached. The terms were confidential, so there's no telling who "won," but information uncovered during the lawsuit suggested Dear Author's claims that Ellora's Cave was underwater had plenty of factual basis.

This case may be over, but Ellora's Cave's dire financial state persists. Authors and staff say that they're still not getting paid, which means we could soon be hearing of a new lawsuit, bankruptcy, or both.

In fact, the situation is so bad that Ellora's Cave is neglecting to pay their counsel. Or so a footnote in one of the filing suggests:

Further, Ellora’s may be planning for bankruptcy even at this time–but have refrained from doing so in the hopes that this SLAPP suit will bear fruit. In fact, Ellora’s counsel has reported to the undersigned on numerous occasions that Ellora’s has failed to pay his bills.

The Digital Reader also pointed out that Dear Author wasn't the only entity to pick up on the fact that EC's payments to its authors were either greatly delayed or completely nonexistent.

Saoirse Moen also noted that Ellora's Cave is not in good standing with the RWA [Romance Writers of America] because it wasn't paying its authors, and the tweets of numerous authors who say that they are only now getting their February 2015 royalty checks confirm the financial issues.

Past performance may not be indicative of future results and all that, but who didn't see this coming?

Author Kellie Jamieson has revealed on Facebook that Ellora's Cave is making legal threats against the RWA. On Thursday she published part of a notice which she says the RWA sent out.

RWA has repeatedly contacted management at Ellora’s Cave to demand payment to authors. RWA has also requested that the publisher revert rights if it is unable to pay authors in full. The response we received was a letter signed by Steve Mastrantonio, attorney for Ellora’s Cave, in which he states, “any premature comment by RWA that Ellora’s Cave is in breach of their agreements is reckless, false and Defamatory.” Mr. Mastrantonio asserts that Ellora’s Cave is paying authors as it should, and “any false comments by RWA to harm his clients reputation will be dealt with in a forceful manner.

In light of Ellora's Cave's lawsuit against the Dear Author book blog, that is not a legal warning so much as it is an outright threat, an attempt to silence the RWA through legal intimidation.

The RWA has basically cut Ellora's Cave off for violating its Code of Ethics -- which includes things like not paying royalties on time. It has banned EC from RWA conferences and forbidden it from using the group to recruit new writers.

The last lawsuit apparently didn't reverse EC's downward trend. Apparently, the publisher has enough money to fund litigation, even if it's still having trouble paying its authors. Nate Hoffelder of the Digital Reader has rounded up comments from EC authors indicating the publisher is anywhere from 8-11 months behind on royalty payments.

Hoffelder notes that the RWA has stood up to major publishers like Harlequin in the past so it's unlikely to be intimidated by EC's legal threats. And it now appears that Hoffelder's reporting has added him to EC's legal threat list. This Facebook post by EC founder Jaid Black was spotted by a reader of Hoffelder's site:

This guy is the blogger who reported Allison Kelly's email as factual and not at all misleading. Oh and he libelously referred to the lawsuit we filed and later settled as a SLAPP suit. Where's the judicial ruling backing up that sick assertion??? One should be able to prove what one writes about others.

Somehow, EC believes it can sue its way back to respectability. But that's incredibly difficult to do when you're better known for legal threats than timely royalty payments.


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  • icon
    Anonymous Anonymous Coward (profile), 31 May 2016 @ 2:32pm

    What a statement about any new counsel

    How desperate would a lawyer have to be to take on Ellora's Cave as a client with the above knowledge?

    Why do I have the feeling that we will find out...

    reply to this | link to this | view in chronology ]

    • icon
      JoeCool (profile), 31 May 2016 @ 3:29pm

      Re: What a statement about any new counsel

      Seeing as there are often five times as many lawyers added per year than there are jobs, I expect they'll have no problem finding lawyers desperate enough to take their case. That's 90% of the problem today - too many lawyers trying to make work where none exists. So they try all kinds of crazy nonsense in an effort to pay off their college loans.

      reply to this | link to this | view in chronology ]

      • icon
        Mason Wheeler (profile), 1 Jun 2016 @ 7:41am

        Re: Re: What a statement about any new counsel

        Because they heard there's money in it.

        This is advice I frequently end up giving people who talk about thinking of getting into computer programming: don't do it unless you actually love it. Yes, there can be good money in it, but it's also a lot of hard work and it can be really stressful at times, and you need a mind that's structured a certain way in order to be able to do anything beyond beginner-level and not be a total screwup.

        If it's something you already have a passion for, then go for it. You'll probably even make good money. But it's not worth doing otherwise.

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 1 Jun 2016 @ 7:48am

        Re: Re: What a statement about any new counsel

        "five times as many lawyers"
        "90% of the problem today"

        I assert that 123% of the time, JoeCool makes up statistics.

        reply to this | link to this | view in chronology ]

    • identicon
      azteclady, 31 May 2016 @ 8:26pm

      Re: What a statement about any new counsel

      Steve Mastrantonio is the lawyer threatening the RWA, and he's also the same lawyer who represented Ellora's Cave and company in the lawsuit against Dear Author.

      He's with a bankruptcy firm out of Ohio, for whatever that's worth.

      reply to this | link to this | view in chronology ]

  • icon
    That One Guy (profile), 31 May 2016 @ 2:34pm

    "Presenting exhibits A through Z"

    Seems to me the perfect way for them to demonstrate that the claims are false would be to present the records of their full, on-time payments to their authors. If they really have been paying their authors on time and for the proper amounts that should be trivially easy to show, so chop chop, stop wasting time and lets get the whole matter sorted out quickly so you can go back to being the awesome publisher you claim to be.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 May 2016 @ 3:21pm

    "This guy is the blogger who reported Allison Kelly's email as factual and not at all misleading. Oh and he libelously referred to the lawsuit we filed and later settled as a SLAPP suit. Where's the judicial ruling backing up that sick assertion??? [...]"

    I wonder if he has a judicial ruling backing up that the e-mail is misleading and the referral is libelous?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 May 2016 @ 5:56pm

    > Apparently, the publisher has enough money to fund litigation,

    ... or the lawyer has enough sunk cost in the company to hope the suits get him a pay day.

    reply to this | link to this | view in chronology ]

  • identicon
    Lawrence D’Oliveiro, 31 May 2016 @ 7:11pm

    Why Would Any Lawyers Stoop To Be Involved With A Client Like This?

    It must be cause there’s always a chance they can win their ca$e.

    reply to this | link to this | view in chronology ]

    • icon
      Marc John Randazza (profile), 31 May 2016 @ 7:40pm

      Re: Why Would Any Lawyers Stoop To Be Involved With A Client Like This?

      After litigating against him for more than a year, I'll say he's a class act. He may be representing a client you find objectionable, but lawyers are not their clients. He's got a job to do, and he's doing it.

      reply to this | link to this | view in chronology ]

      • identicon
        Lawrence D’Oliveiro, 31 May 2016 @ 7:51pm

        Re: He's got a job to do, and he's doing it.

        But will he get paid for it?

        reply to this | link to this | view in chronology ]

        • icon
          Tanner Andrews (profile), 23 Aug 2016 @ 5:02am

          Re: Re: He's got a job to do, and he's doing it.

          But will he get paid for it?

          Not really any of our business. That is between him and his client. He might be handling it pro bono, for instance, because he is a big believer in their type of publishing; there would probably be an assignment of fees in such a case.

          He may also be getting paid every month as he sends bills to the client. Or he could bill irregularly because he is busy with other things. All of that is between him and his client.

          With all that in mind, I do remind people that the atty should not take an interest in the litigation itself. The rules on this can get complicated, however, because of legitimate contingency fee arrangements in tort cases and unconstitutional fee restrictions in worker comp cases. And things are at least somewhat different in your state.

          reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 31 May 2016 @ 10:59pm

        Re: Re: Why Would Any Lawyers Stoop To Be Involved With A Client Like This?

        Is it a lawyers job to represent their client regardless of the merits of a case, or is it to give their client the best legal advice that they can?

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 1 Jun 2016 @ 3:46am

        Re: Re: Why Would Any Lawyers Stoop To Be Involved With A Client Like This?

        'we' have an (in)justice system which -like speech- has become oriented around one thing and one thing only (and it ain't 'justice'): do you have the money ?
        you gots to pay to play; no moolah, no justice...
        thems the facts, all the rest is bullshit...
        (gee, why can't us lowly citizens have 'self-policing' like lawyers, kops, and the banksters ? ? ? gee, i wonder why...)

        reply to this | link to this | view in chronology ]

  • identicon
    sman88, 1 Jun 2016 @ 5:29am

    Sounds like EC went to Trump University.

    reply to this | link to this | view in chronology ]


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