Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Keiler v. Harlequin Enters., Ltd.

United States Court of Appeals, Second Circuit

May 1, 2014

BARBARA KEILER, MONA GAY THOMAS, AND LINDA BARRETT, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, Plaintiffs-Appellants,
v.
HARLEQUIN ENTERPRISES LIMITED, HARLEQUIN BOOKS S.A., HARLEQUIN ENTERPRISES B.V., Defendants-Appellees. [1]

Argued November 21, 2013.

Appeal from the United States District Court for the Southern District of New York. No. 12-cv-5558 -- Harold Baer, Jr., Judge.

DAVID B. WOLF (Michael J. Boni & John E. Sindoni, Boni & Zack LLC, Bala Cynwyd, PA, on the brief), David Wolf Law PLLC, New York, NY, for Plaintiffs-Appellants.

DANIEL J. LEFFELL (Jay Cohen, on the brief), Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, NY, for Defendants-Appellees.

JOHN R. TANDLER (F. BRITTIN CLAYTON III, on the brief), Ryley Carlock & Apple white, Denver, CO, for Amici Curiae, Romance Writers of America and The Authors Guild, supporting Plaintiffs-Appellants.

Before: KEARSE, JACOBS, AND PARKER, Circuit Judges.

OPINION

Page 65

Barrington D. Parker, Circuit Judge:

Plaintiffs-Appellants Barbara Keiler, Mona Gay Thomas, and Linda Barrett are authors of romance novels who bring putative class action claims against publishing house Defendants-Appellees Harlequin Enterprises Limited (" Harlequin Enterprises" ) and its subsidiaries Harlequin Enterprises

Page 66

B.V. (" HEBV" ) and Harlequin Books S.A. (" HBSA," and together with HEBV, " Harlequin Switzerland" ). Plaintiffs contend that the Harlequin entities breached agreements with them and other authors (the " Publishing Agreements" ) by paying them artificially low royalties on the sales of digitized versions of their books.

The United States District Court for the Southern District of New York (Baer, J.) concluded that plaintiffs' allegations failed to state claims and dismissed the amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). See Keiler v. Harlequin Enters. Ltd., No. 12-5558, 2013 WL 1324093 (S.D.N.Y. Apr. 2, 2013). For the reasons set forth below, we hold that plaintiffs' claims based on agency, assignment, and alter ego theories cannot serve to modify the terms of the Publishing Agreements and were properly dismissed. We also conclude that the amended complaint set forth sufficient facts to plead a breach of the Publishing Agreements on the theory that defendants calculated their e-book royalties based on an unreasonable license fee. Accordingly, we affirm the judgment in part, reverse it in part, and remand for further proceedings consistent with this Opinion.

I. BACKGROUND

This case arises in the context of a meteoric rise in e-book sales over the last several years.[2] Defendant Harlequin Enterprises is the world's largest publisher of romance novels. Prior to 1983, Harlequin Enterprises directly contracted with authors for the publication of their works under the Harlequin (and related) imprints using a standard agreement which Harlequin Enterprises signed as the " Publisher." (Am. Compl. ¶ 34).

Beginning in 1983, Harlequin Enterprises changed this arrangement, ostensibly " for tax and related purposes." ( Id. ¶ 31). It registered a subsidiary HEBV, a Dutch company, in Fribourg, Switzerland. Thereafter, Harlequin Enterprises required authors to enter into publishing agreements substantially similar to its previous agreements, but with HEBV signing the agreements as the " Publisher" and with Harlequin Enterprises included in the agreements' definition of a " related licensee." ( See id. ¶ 35). Notwithstanding this change, Harlequin Enterprises continued to draft, negotiate, and administer the publishing agreements, as well as to edit, publish, and promote the authors' novels. ( See id. ¶ ¶ 3, 40, 41). HEBV, however, sent out royalty statements and payments to the authors. ( See id. ¶ ¶ 41, 42). Harlequin Enterprises advised authors that the purpose of the change was to " rationalize business procedures." ( Id. ¶ 35).

In 1994, Harlequin Enterprises registered HBSA, a Swiss company, as the successor of HEBV, again " for tax and related purposes." ( See Am. Compl. ¶ 31). Thereafter, HBSA signed the agreements as the " Publisher" and Harlequin Enterprises continued to be defined in the Publishing Agreements as a " related licensee." Harlequin Enterprises continued to publish, and promote the authors' novels while HBSA sent out royalty statements and payments. ( Id.ΒΆ 36). Harlequin Enterprises advised authors that the change to having ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.