09-06-2004, 12:06 PM
Publish, I have a questions for you.
Correct me if I am wrong but if they sue me, they will have to come here. If I sue them, I will have to go there. (I want home field advantage)
Hopefully, some of these agencies can take care of everything without any legal action.
I do seriously appreciate your advice and suggestions. I made a copy of your post. I know nothing about the publishing business or legal matters.
09-06-2004, 06:37 PM
Re: PA Royalties
OK, one of the PA authors I know has a seriously short royalty check. She said she was told by "other authors" that it can take up to a year for PA to get paid, but once they get paid she'll get her royalties. I told her that is a farce and have her permission to mention her thoughts here. She would like confirmation either way regarding this "one year" garbage. Anyone care to take a swat at this latest bit of false info to hit PA authors?
09-06-2004, 06:50 PM
Re: PA Royalties
<one of the PA authors I know has a seriously short royalty check. She said she was told by "other authors" that it can take up to a year for PA to get paid, but once they get paid she'll get her royalties. I told her that is a farce and have her permission to mention her thoughts here. She would like confirmation either way regarding this "one year" garbage.>
That is indeed a farce. PA gets its money up front, before a book is printed and shipped. That's why they hate the idea of selling to bookstores. Even if they did sell to a bookstore, 90 days is the longest it would take to get paid. Moreover, a legitimate publisher should have enough cash on hand to pay an author royalties even if they're having trouble collecting from a deadbeat bookstore. 'Nuff said.
09-06-2004, 07:01 PM
<Correct me if I am wrong but if they sue me, they will have to come here. If I sue them, I will have to go there. (I want home field advantage)>
Just a thought here, and I haven't checked into it to see whether it would apply to this situation -- the attorney I work for filed suit against an auto maker for product liability resulting in bodily injury. Rather than file suit on the company's home turf, we filed in federal court in our own city.
09-06-2004, 08:35 PM
Publishorperish, the Maryland Attorney General has already stated that Maryland considers authors to be companies, so it's basically business vs. business. Unfortunately, this puts the authors at a further disadvantage because it treats them as companies the moment they sign the contract.
As Sher2 has stated, it appears that this may have to be handled in federal court.
The reason that bookstores pay up to 90 days after is largely because of returns. However, as has been pointed out, PA doesn't have a returns policy, so their funds shouldn't be held up after a purchase unless the bookstore is following the same procedure for them as other publishers. If so, that is one of the few times they're treated the same and they deserve it. However, that doesn't help the writers who worked so hard to make sales.
09-06-2004, 08:58 PM
Bring it on, PA!
Mr. Meiners, Molly is ready for her closeup now! :thumbs
True Blue Forever
Read the first chapter at www.authorsden.com/joycelscarbrough1
See the hunk at www.southernbelleauthor.c...rsonalpage
Read my interview at www.yabookscentral.com/cf...view_id=44
09-06-2004, 09:24 PM
>>Publishorperish, the Maryland Attorney General has already stated that Maryland considers authors to be companies, so it's basically business vs. business.<<
To my knowledge, just one person has said this. IMO, here is one of the reasons there's so much trouble getting the Attorney General's office to pay attention to authors' complaints about PA--not because the above statement represents the AG's overall position on the matter, but because there appears to be so much confusion in the AG's office about what/where complaints have been filed.
Ann and I have spoken to several people in the AG's office, and none of them said anything about authors being businesses (which on its face is absurd--I think the person who said this simply had no notion what she was talking about). Instead, we've been told the following:
- (Two years ago) There are 8 complaints, but since no money changed hands upfront, there's really nothing the AG's office can do
- (A year ago) There's only 1 complaint, and that's not enough for the AG to take an interest.
- (A couple of weeks ago) There are 10 complaints, and if 20-30 more are received in a short period of time, the AG might take notice and start an investigation.
So who's on first? Apparently no one knows, and a different answer is given depending on who you call. Part of the problem, I think, is that when complaints trickle in slowly over a long period of time, the people receiving them may start a new file for each one, or forget they already have a file for some of them, or route them someplace different every time. Or the complaints go to different adjunct offices, rather than to the main office. So the complaints get scattered around, rather than piling up in a single file that might motivate someone to pay attention.
What can be done? In my opinion, the last piece of advice Ann and I received is the best. A sizeable number of complaints received at the AG's main office in Baltimore within a couple of months will not only attract attention, but make it less likely the complaints will be misplaced or scattered. This is what motivated the NY State AG's office to investigate Edit Ink and the Woodside Literary Agency.
About royalty statements: complaints about royalty discrepancies is nothing new. I've been receiving them almost from PA's start. However, while I'm certainly not saying that PA is free of problems in this area, I think it's as likely that many of the complaints we're seeing now result from authors' unrealistic expectations as from any malfeasance on PA's part.
09-06-2004, 10:41 PM
Okay, whether or not you will have to go Maryland for the trial does not depend on who brings suit, but where you bring suit and whether if would be fair under the Constitution to make either of you stand trial there. For example, if they brought suit in state court in Maryland, unless you have contacts (ie. um land, a house, a business, etc), or are in Maryland for some reason when they serve you with process, etc, it is likely that you can have the case dismissed for lack of jurisdiction. Of course, you can bring suit in you state and you have a better chance of withstanding any attack that PA would make on jurisdiction, because, well, PA (I would assume) has minimum contacts with your state (ie. solicits customers there, maintains a website where people in your state can purchase books, etc). Federal jurisdiction, of course, is a little trickier. If you get a good lawyer, it is unlikely that you'll have to trek down to Maryland for a trial.
Caveat: I'm not a lawyer. I'm just a law student. I'm just trying to help you understand what your'e up against a little more and explain why a case against PA may be difficult. Take my advice with a grain of salt.
09-06-2004, 10:52 PM
writers as merchants
If they consider the writers as solo proprietors (ie. businesses), then I really think that the case for anyone trying to sue PA would be extremely difficult. This is rough, but I think the best course of action is for the writers to breach their contract and see if PA sues them. I doubt they will. If they do, the writer would have a number of defenses. The law encourages efficient breach
vstrauss - I think you're right about the royalty stuff. I don't understand why they would get royalties if they bought their own books. Wouldn't that mean that they are essentially paying themselves royalties??
09-06-2004, 11:00 PM
"Mr. Meiners, I think Molly is ready for her close up now."
Joyce, I think the writer in that one is the one who ended up face down in the pool. Oh well, 1963 was a good year. Think I'll go live there for a little while.
09-06-2004, 11:05 PM
hope you're feeling better - know that all our thoughts and prayers are with you in hoping that you recover from all that ails ya and keep on writing!!!!
09-06-2004, 11:08 PM
Re: writers as merchants
Publishorperish, I've had the same feeling as you and Victoria about those royalties on discount purchases. To me, it's just a gimmick to encourage the authors to use that discount. Basically, it's just a case of PA understating what could have been the true discount that could have been offered in order to make it appear even more enticing.
Amazingly, what no one has pointed out yet is that by receiving part of that discount as a royalty, it becomes taxable to the author. As a slightly larger pure discount, it would be a true savings to the author. In other words, PA is sticking it to their authors, again.
09-06-2004, 11:14 PM
few things about this
A products liability suit necessarily be quite different than a suit for breach of contract, etc. This is especially true in this case, because there are no large sums of money involved. In order to file in a Federal Court you have the amount of money involved has to be over 75,000. Secondly, the type of cases a federal court may hear are extremely limited (they are limited by the constitution). Usually, Federal courts may hear such cases as diversity cases (where both parties hail from different states), cases where the cause of action arises under federal law or the constitution, etc . Thirdly, even if you have a choice of whether to bring suit in State or Federal court, the lawyer is going to also consider other factors, such as whether the jury might be sympathetic to these types of claims, whether the judge is sympathetic, how crowded the docket is, etc.
09-06-2004, 11:19 PM
re: writers as merchants
Mr. K, that is exactly what makes PA such a sleazy corporation. They seem to be be just treading legal water. They know that that they have a lot of people who aren't rich and who aren't publishing savvy under their heel and they keep crushing them little by little.
The tax thing is interesting. I didn't know that. I'm wondering if someone can request PA's financials (ie. tax forms) under the Freedom of Information Act.
09-06-2004, 11:29 PM
Re: re: writers as merchants
To my knowledge, FoIA applies to the government, not to businesses. In many instances you'd need a subpoena and that would require a darn good reason.
Yes, royalties are income, so those are taxable. Discounts aren't income, so those are not taxable.
09-06-2004, 11:36 PM
I was hoping
That tax filings were in the public domain ..lol ..guess not...
09-07-2004, 01:37 AM
Whoa!!! Nothing in the PA contract that royalties
There has been something that has bothered me about PublishAmerica saying they have to be paid before they owe royalties. Keep in mind I am not an accountant but I do have a Master's in Business Administration.
Paragraph 12 of my PublishAmerica contract
"The Publisher agrees to render and forward to the Author, in the months of February and August next succeeding the date of publication of said literary work, and thereafter semi-annual statements of account for so long as copies of the work subject to royalty are sold. With respect to copies sold, the statement shall indicate the price of each copy sold. The statement shall indicate both the total royalties payable to the Author on sales during the accounting period and the breakdown indicating the royalties attributable to specific kinds of sales. Author, may upon giving sufficent notice of no less than seven days, examine Publisher's records and accounts to the extent that such records and accounts are relevant to the publication of said literary work, which shall be done at Author's expense."
A sale is considered made when it is reflected in the accounting statements of the company. A sale is not contingent upon being paid.
PublishAmerica owes the author royalties as each sale is made. It accrues, which means the total builds up as an accounts payable to the author, and then is paid out twice a year.
There is NOTHING in the contract that says the royalties are not owed until PublishAmerica is paid. That's crucial. It doesn't matter that PA says that royalties aren't owed until the books are paid for. The contract says the the royalties are owed when the books are sold and the author will be paid every six months.
Here's what happens on a transaction basis.
Bookstore A orders 10 books written by Author B at $10.00 each on July 1 and Bookstore A says they will pay in 90 days.
PA has LS print books and ships.
PA goes to its accounting department and tells them to increase the sales account by $100 (10 x $10).
PA also tells accounting to increase the accounts receivable for Bookstore A by $100. (Accounts receivable just means that PA is now owed $100 by Bookstore A. All the other bookstores, Ingram's, and other customers have their own accounts receivable as well).
PA tells accounting to increase the 'royalties owed account' for Dee Power by $8. At that moment PA owes Dee Power $8 but the contract says they don't have to pay it until the month following the end of the royalty statement date, July 31. Now there are some other accounting entries that need to be done as well, such as accounts payable for LS for printing the books but they're not relevant to this discussion.
If Bookstore A orders the books on July 1 (or the 15th or even the 30th) and PA reflects that order on its income statement and balance sheet through accounting entries and I'm reasonably sure they do because that's standard accounting practice, then PA owes the author royalties for that royalty statement. It is irelevant whether PublishAmerica was paid for the books or not.
You can't have two sets of books, one where the sale is reflected and then another set that shows the royalties only due to the author when PA is paid by the bookstore. Take it to an extreme example. Major independent bookstore orders 1000 PA books. Sells all 1000. Doesn't pay PA for the books. Bookstore goes out of business. PA still owes the authors the royalties.
If PublishAmerica does not pay Author B the $8 at the time of the royalty statement PA is in breach of their contract. Period. End of story.
The ONLY way PA would not be in breach of contract would be if they conduct business on a cash basis and no one does that anymore except very small companies and individuals. When filing with the IRS a business has to tell the IRS that they are filing on a cash basis. You can't do both and you can't keep one set of books on a cash basis for one purpose and then double entry accounting basis for reporting purposes.
And for those authors wondering about whether they're being paid the correct royalties, authors have the right to examine the books of PA. " Author, may upon giving sufficent notice of no less than seven days, examine Publisher's records and accounts to the extent that such records and accounts are relevant to the publication of said literary work, which shall be done at Author's expense." The author, or representative of the author can examine such records and accounts relevant to publication of said literary work. It would be easy to tell if there are any owed royalties. And LS would have to cooperate under the "accounts are relevant to the publication" phrase. The author's representative (in this case probably a Certified Public Accountant) sends a letter to the accounting firm of LS requesting documentation of how many copies of the title LS printed. The accounting firm of LS replies with the number after examining the records of LS. Author representative compares the two figures.
If a group of authors wanted to get together and hire a CPA to verify their royalties, it would not be a hugely expensive matter.
09-07-2004, 02:08 AM
FM ST. George, thank you for the prayers and kind thoughts etc..
I enjoy and appreciate all the e mails. (I told a few this story already)
My husband and another guy helped me into rehab. I refused the wheelchair. It wasn't far to walk.
I went through my exercises on all the machines with flying colors. Then came the treadmill. I couldn't do it. I jerked the leads from my chest and walked out.
I went to the lounge where patients wait ......I sat alone for a few mnutes and was slightly crying.....not in pain, just frustration.
A young, beautiful nurse came to me. She told me she understood how I was feeling. I didn't want to be rude but I told her to leave me alone, and she couldn't possibly understand what I was feeling.
She stood and jerked off her wig. She was completely bald and yelled at me. "I'm 29 years old and have less than 6 months to live. You think I don't understand?"
I told her how sorry I was and asked if there were anything I could do for her. She said..."YES, GET BACK IN THERE AND GET BACK ON THAT TREADMILL."
Joyce, as always, is there to help me when I need help in the writing department. One eye is still closed. (Mine not hers)
I am walking more. My hearing has been restored to 85%. My "spells" are drastically reduced. (That's inner ear problems associated with the stroke.)
I went to my reg Wed night poker game last week. I'd be in the casinos this week end, if not for the storms.
I feel like I have a double whammy when I have to explain the failure of my book, the wheelchair and dark glasses all at the same time, but whenever the going gets rough, I think of that nurse and keep on truckin.
Keep the prayers coming. I'm on my way back.
09-07-2004, 02:09 AM
Re: Whoa!!! Nothing in the PA contract that royalties
Dee is absolutely correct. It's as I stated in another posting, though I don't recall which board at the moment. PA must pay the royalties at the appropriate royalty period regardless of their cash flow because that's what the contract stipulates. There are only a very few instances where that would not happen, one of those being bankruptcy where secured creditors would be first in line for any monies that PA still holds. However, that's not the case here, so PA has to pay.
09-07-2004, 02:14 AM
<I went to my reg Wed night poker game last week. I'd be in the casinos this week end, if not for the storms.
I feel like I have a double whammy when I have to explain the failure of my book, the wheelchair and dark glasses all at the same time, but whenever the going gets rough, I think of that nurse and keep on truckin.>
Yours is an indomitable spirit, Molly, and I have no doubt that you'll keep on truckin'. Good for you! And good luck at the casinos after the storms. Ain't no double whammy gonna keep you down.
09-07-2004, 02:49 AM
Dee, hiring a CPA is a wonderful idea. I know my royalties and number of books reported sold is wrong but I am especially interested in knowing how many were printed after my termination date.
Count me in.
09-07-2004, 03:04 AM
Molly, that was a damn powerful story. If you know who that nurse is, I'd like to send her some flowers. She's my kinda people... I adore people who can keep encouraging others even when their own spirits are down. E-mail me if you know how I can reach her.
09-07-2004, 03:57 AM
<I am especially interested in knowing how many were printed after my termination date.>
Molly, I don't know how accurate this is or whether it helps you, but bookfinder.com shows 4 new and 6 used copies of your book available. Interestingly, 4 of the 6 "used" copies are advertised as "new, never read" and are selling from $19.75 to $19.90.
09-07-2004, 04:44 AM
Re: Whoa!!! Nothing in the PA contract that royalties
>>A sale is considered made when it is reflected in the accounting statements of the company. A sale is not contingent upon being paid.<<
It depends on what accounting method is used. If PA is on a cash basis, then sales would be counted when payment was received, not when the sale was made. Not all businesses account on an accrual basis.
09-07-2004, 06:12 AM
Somebody explain this:
I have in my hand a cancelled check dated April 2003 for payment for my book ordered off the net.
My girlfriend has a charge on her credit card dated in March 2003 for my book.
When she ordered, Amazon advertised "ONLY ONE LEFT. MORE ON THE WAY" She bought the last one.
The next day Amazon said "THREE IN STOCK"
Now wouldn't that mean that not only the one she ordered was sold but Amazon had to order more ........that was in March of 2003
That's just a sample. We have lots more. I didn't get a check at all.