Last week TIPM highlighted the discovery that Author Solutions was indeed the company behind many of the services provided by Nook Press. We also referred to the class action complaint filed by law firm Giskan SolotaroffAnderson & Stewart (GSAS) against Author Solutions in the Southern District Court of New York. This case was filed by GSAS on behalf of three authors who used the services of Author Solutions imprints and the case concluded the process of depositions and class certification. GSAS continues to invite authors of Author Solutions to contact them in relation to the class action suit expected to progress to full litigation later this year.

As part of proceedings in February GSAS filed its depositions (sworn statements) and its request for class action certification (Memorandum of Law in Support of their Motion for Class Certification). Both filed documents provide a illuminating view into the world of Author Solutions imprints and in the coming days and weeks I want to take a closer look at these documents. Whatever the outcome of this class action law suit, I think it could eventually have major implications for all publishing service providers in the future. At the very least it is also a blueprint for authors looking to self-publish, some of the red flags to look out and the pitfalls to avoid in what can be at times be a murky publishing services industry.

I also want to stress that this case has only completed its discovery and deposition stages and the allegations made have not yet been ruled upon. Let us also not forget that Judge Denise Cote threw out all charges against co-defendant Penguin (Authors Solutions’ sister company) last year. [NOTE: Pearson is actually the parent company and owner of both Author Solutions and Penguin.]

Today we are going to look at extracts from the 30 page Memorandum of Law in Support of their Motion for Class Certification. In future articles I will be examining the more extensive 188 pages of depositions.

In the opening of the Motion for Class Certification (from this point on — The Motion), GSAS outlines the basis of its case in the INTRODUCTION; how it believes Author Solutions (AS) presents itself to prospective authors and the manner in which it operates.

Author Solutions LLC (“AS” or the “Company”) represents to authors that it is a leading “indie” self-publisher,1 suggesting that it is a small, independently run press, when this is far from the case.

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The suggestion here is that AS has adopted the ‘indie’ term to attract authors to what they might perceive as a small independent press and not the publishing services goliath it actually is.

Instead, AS operates more like a telemarketing company, not a publisher, that employs a large, commissioned sales force to sell books and services to its target audience: the Authors themselves, not the general public.

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While I don’t doubt that AS has now and previously had staff members with experience in the publishing industry, GSAS focus on those people running the business.

Its top executives have no experience in the publishing industry (Giskan Dec. Ex. 10, Weiss Dep. 11; id. Ex. 7, Ogorek Dep. 13; id. Ex. 9, Seitz Dep. 4-5),3 nor do they need it to run AS.

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AS, like all companies, have different titles for staff depending on their responsibilities and tasks. GSAS suggest that AS consultants are nothing more than ‘telemarketing’ sales persons with aggressive and targeted quotas.

AS refers to its sales force as Publishing Consultants (“PCs”), Editorial Consultants (“ECs”),4 Marketing Consultants (“MCs”), and Book Consultants (“BCs”) to give Authors the impression that the “consultant” possesses the relevant background to guide them through the publishing or book marketing process. Instead, the “consultant” is simply a sales person with an aggressive quota, typically based in the Philippines, though this is never disclosed to Authors (and the email insignias provide Indiana as the “consultant’s” address).

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Obviously, the implication here is that authors believe they are talking to professional publishing consultants based in the USA. AS’s Indiana is nothing more than a head office base, not an operational base.

And to emphasise the suggestion that AS is more a telemarketing company for author services, GSAS points to the fact that the company never analyses whether its marketing services have any positive effect on book sales.

Unlike an “indie publisher” or a traditional publisher, an Author’s retail success is largely irrelevant to AS. Authors would be shocked to learn that book sales are in fact “not one of the goals of AS’s marketing services.” (Giskan Dec. Ex. 4, Dunn Dep. 56).

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AS never analyzes whether marketing services yield increased book sales for Authors or whether Authors recoup their initial investment through sales. (Id. Ex. 5, Gregory 30(b)(6) Dep. 71-72; id. Ex. 1, Becher 30(b)(6) Dep. 53; id. Ex. 3, Bunner Dep. 30, 54; id. Ex. 7, Ogorek Dep. 43, 48, 50, 52, 127-29.) AS does not even find this data relevant, because “[t]hat’s not necessarily why [Authors] buy services.” (Id. Ex. 10, Weiss Dep. 64-65, 163-64.)

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Presumably AS believe authors just buy marketing services for fun!

And the core allegation GSAS makes about AS, based on the evidence it is going to present to the court, is the following:

The evidence common to all class members will prove that Author Solutions deceptively sold Publishing Packages and other Services by making false, untrue, or misleading statements,6 and by concealing critical information from Plaintiffs and the Class.

These deceptive practices include the following facts:

(1) AS represents to Authors on its websites and through sales calls that it is invested in the Authors’ success and that it has expertise in helping Authors accomplish their publishing goals but conceals that it has never determined or even sought to determine the effectiveness of its Services at driving book sales;

(2) AS conceals from Authors the nature of the role of the PCs, MCs, and BCs. The “consultants” are not required to have any relevant experience but are rather commissioned telemarketers with a sales quota;

(3) AS conceals its lack of affiliation with Barnes & Noble, the chief carrot AS uses in luring authors to buy expensive services required for its Recognition Programs, such as Rising Star;

(4) AS is not interested in the Authors’ finished product and rushes it to publication, or “title live,” so that AS may claim revenue, at its completion, for the publishing package;

(5) AS does not know whether Authors succeed in the retail channel and makes no effort to find out. No employees are tasked with selling books to stores and, internally, AS recognizes that it does not promote Authors’ books;

(6) The services are not reasonably designed to help Authors sell books or to accomplish their stated goal and are effectively worthless. The value of these services is best evidenced by the Editorial Services Manager of AS, Joel Pierson who published seven books with AS but did not purchase a single AS marketing service, despite his goal of retail success; and

(7) AS avoids any analysis of whether Authors recoup their initial investment because it knows that few, if any authors ever do.

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The Motion then moves on to STATEMENTS OF FACTS and how the company developed under the original ownership of Bertram Capital, prior to its purchase by Pearson/Penguin. Since 2007 AS began acquiring other self-publishing service providers at an alarming rate. We also learn why much of AS’s operation is now based in the Philippines. Kevin Weiss has since left AS a year after the company was merged into the Penguin Group.

Mr. Weiss was tasked with increasing revenue and growing the business. (Id. Ex. 10, Weiss Dep. 21.) To do so, AS began acquiring imprints. When Mr. Weiss joined in 2007, AS operated AuthorHouse, iUniverse, and another imprint. (Id. Ex. 10, Weiss Dep. 18.) AS subsequently acquired Trafford (2009) and Xlibris (2009). These four imprints are referred to as AS’s “core imprints.” When AS acquired Xlibris, a small self-publishing company with operations in Cebu, Philippines in 2009, it moved part of its operations to Cebu. (Id. Ex. 1, Weiss Dep. 27-28.) By 2012, most of the “consultants” were based in Cebu – only 79 out of 365 remained in Indiana. (Id. Ex. 13, 39-41.)

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GSAS also points out one rather unsavoury practice at AS; authors were often referred to as ‘leads’ and very much considered in this way by consultants selling services at the various AS imprints. Consultants had their targets and quotas.

By 2012, a PC’s quota was to make XXXXXXX worth of sales per month, with an average order of XXXXX, and to make XXXX calls per day with XXXXXXXXXX of call time. (Id. Ex. 13) MCs had a sales quota of XXXXX, with the average order at XXXXX, and the same amount of calls per day. Id. Finally, BCs, tasked with selling the Author’s very own book back to the Author herself, had a quota of XXXXXX, with an average sale at XXXX, and the same call metrics. (Id.) “Consultants” make XXXXXXX plus commission, and, in the Philippines, approximately per month. (Id. Ex. 3, Bunner Dep. 65-66.)

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And if you were once an AS author and your consultant told you how much they loved your book; think again:

“Consultants” are not required to have marketing or publishing experience, nor are they required to read the Author’s work. (Giskan Dec. Ex. 3, Bunner Dep. 42, 63.) For AS to maximize revenue opportunities, when an Author’s book is just published (or about to be published), the Author is assigned a “Tier 1” MC, but after a certain amount of time, or if the Author purchased a Service, she is moved to a “Tier 2” MC. (Id. Ex. 3, Bunner Dep. 57-58.) Once the title is live, the Author becomes an “active lead” for the BC. (Id. Ex. 2, Becher Dep. 152-53.) In other words, the Author is passed around and bombarded with calls from several levels of “consultants.” Authors have complained to AS about this practice. (Id. Ex. 10, Weiss Dep. 55.)

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GSAS suggested that a former AS employee perhaps summed up just what the company thought of its authors and their books:

… AS noticed that a former employee posted on a blog that “[s]alespeople brag about pushing customers to overextend themselves, promising them the world, laughing about how they’ll probably only sell a dozen copies” and that “Keith Ogorek has a shelf of the worst books in his office that he laughs about.” (Giskan Dec. Ex. 16; id. Ex. 7, Ogorek Dep. 194-95.) When asked if he had such a shelf, Ogorek did not deny it and stated only: “I have a shelf of books in my office that has all kinds of books on there.” (Id. Ex. 7, Ogorek 195-96.)10

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And AS authors still get the hard marketing service sell no matter how poor their books are:

The quality of the Author’s work is meaningless to AS. To AS, a manuscript is a sales vehicle used to push Marketing Services and book sales on the Author. Interestingly, even the most poorly written books with no marketing potential that receive scathing internal reviews14 are not spared from receiving sales calls from their “consultants” to purchase Marketing Services. (Id. Ex. 8, Pierson Dep. 33-34; id. Ex. 3, Bunner Dep. 104.)

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Authors at AS’s iUniverse imprint are kept at arm’s length from their editors despite the fact that they have paid thousands of dollars for a professional editor.

Contrary to what iUniverse claims on its website and to what Authors reasonably expect, Authors do not “[w]ork with an editorial team to make [their] book the best it can be.”15 Authors do not even know the name of their editor and cannot speak with them, and they have only one chance, per service, to improve the quality of their book. (Id. Ex. 8, Pierson Dep. 68-69.) In other words, an Author is “held hostage” in the process (Id. Ex. 11, Foster Dep. 91), because any changes an Author makes after she has submitted her work for the editing Service, and any errors that AS itself has made, become the Author’s fault. (Id. Ex. 12, Simmons Dep. 95.) Ultimately, unlike a traditional publisher, the quality of the Author’s book is irrelevant to AS, since AS’s primary source of revenue is the Authors themselves.

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AS may be back with a healthy relationship with Barnes & Noble since the deal to power Nook Press services, but that relationship wasn’t always perfect by any means.

Though AS attempted to continue the “B&N store placement promise as part of the Rising Star offering to [A]uthors,” Barnes & Noble told AS “thanks but no thanks” (id. Ex. 17) because, as AS explained to Barnes & Noble in an email, AS “has work to do” regarding the quality of its books presented to Barnes & Noble (id. Ex. 18).17 The soured relationship with Barnes & Noble did not stop AS from making the misleading claim on its website that Rising Star Books would be “presented” to Barnes & Noble. But AS did not in fact “present” Rising Star books to Barnes & Noble in any meaningful way. AS simply emailed Barnes & Noble’s small press department with book information (id. Ex. 4, Dunn Dep. 114-15), which any author could do – the process is the same, and Rising Star books are treated no differently.

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As GSAS point out, it would be reasonable to assume that AS marketing services are designed to help authors sell more of their books. Well… maybe not. In fact AS think the idea itself is unrealistic!

A reasonable person would believe that AS’s marketing services were designed to help Authors sell books. AS takes a different position in this litigation, claiming that sales are “not the goal” of their Marketing Services. When asked to provide a definition of “marketing” with respect to Author Solutions, the Global Director of Author Marketing for AS, Susan Dunn, stated: “We are trying to provide authors with the best quality services we can in their position for them to be able to market their book. I mean, it would be unrealistic for us to think that we could market our author’s books. Assisted self-publishing is marketing – assisted marketing.” (Giskan Dec. Ex. 4, Dunn Dep. 123-124.)

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I’ve argued for a long time that I don’t see a huge value in paying for an expensive service which places your book in a booth at book fairs, and in particular trade shows. Trade shows are mainly industry events, and unless you are present at the event yourself, as the author of a book, you are pretty unlikely to sell many books.

While AS tells Authors it will “showcase your book in front of thousands of attendees” at a book conference, the book is simply put on a shelf in the booth. The AS staff at the booth have never read the book. (Giskan Dec. Ex. 4, Dunn Dep. 17.) AS does not track how many event-goers stop by the booth, nor does it track sales. (Id. Ex. 4, Dunn Dep. 18; id. Ex. 7, Ogorek Dep. 48.)

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Much of the rest of The Motion deals with points of law and GSAS arguing the case to be granted a class action suit on behalf of 170,000 AS authors and GSAS also argue that the claims of their three plaintiffs (one previously dropped out of the action and was replaced by another) are ‘typical’ of the complaints other AS authors have.

The claims of the class representative must be “typical” of the claims of the class. Fed. R. Civ. P. 23(a)(3). Typicality “is satisfied when each class member’s claim arises from the same course of events, and each class member makes similar legal arguments to prove the defendant’s liability.” Marisol A. v. Giuliani, 126 F.3d 372, 376 (2d Cir. 1997) (citations omitted). “The typicality analysis focuses on whether the named plaintiff’s interests align with the interests of the rest of the class.” Vitamin C Antitrust Litig., 279 F.R.D. at 105. “The purpose of this analysis is to ensure that, by prosecuting its own case, the named plaintiff simultaneously advances the interests of the absent class members.’” Id. (citations omitted). Typicality “does not require complete symmetry between the class representative’s claims and those of the absent class members, but “[r]ather, the named plaintiff must simply raise claims that ‘arise from the same course of events’ as the class claims and make ‘similar legal arguments to prove the defendant’s liability.’” Id. (citations omitted).

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I think you will agree, the above should be something of an eye-opener for all authors who decide to contract the services of any company, regardless of whether it is an AS imprint or not. But I also want to stress again that what you have read are documents lodged and presented to the courts. This case has yet to reach an outcome and while authors should always fully research any company before signing a contract and paying over money for services. The reality remains that there are many options for authors out there and also good reputable companies. The challenge is always finding those companies and one which also fits your needs as an author.

TIPM will soon have another article on this subject and this time we will look at the sworn depositions in this case.