Tag: publisher

First, let me apologize for the long stretch between blog posts. Life happens. 🙁 Second, let me apologize for the pun in the post title: this isn’t a joke to Ms. Clark, and I don’t mean to diminish the importance of the matter. I have a condition.

UPDATE! Plaintiffs filed additional documents on 1/3/22. See this update post: Clark v. Grishman/RedRock Update 1/4/22

So.

Once again, fair Romancelandia is beset by the tides of war. Legal war, anyway. Prolific Romance author Marci Clark, whose most common pen name appears to be Marci Bolden, is suing her publisher, and her agent… who also appears to be her publisher. At least, he allegedly has a stake in/is an agent or employee of the publisher, Pink Sand Press, LLC, which has published most if not all of Ms. Bolden’s books to date.

If you’d like to see the case materials for yourself, you can either look on PACER for the case docket (Case 4:21-cv-00392-JEG-HCA, MARCI CLARK, Plaintiff, vs. DAVID GRISHMAN, REDROCK LITERARY, INC. and PINK SAND PRESS, LLC, Defendants) or click on the links below for the initial documents:

Clark v. Grishman et al (Complaint)

Clark v. Grishman et al Exhibit 1 (Literary Agent Agreement)

Clark v. Grishman et al Exhibit 2 (Publishing Agreement)

First, let us have a clear understanding: I am an attorney, but I do not represent any of the parties in this matter, and I have no interest in or association with any of them or any stake in the outcome. I write on this matter using only publicly available facts and my own original commentary for the purpose of education and outreach. If any alleged fact upon which my comments are based turns out to be untrue, then my commentary should be considered withdrawn or amended accordingly. Any allegation or statement of alleged fact in this post is just that: an allegation, not a representation that any given fact is true or not true.

That said, let’s dig in.

The Complaint is only eight pages long, so I’ll just go through it like Mike Dunford would, only far less rigorously. 🙂 It begins with the caption, which tells us that Ms. Clark is suing David Grishman (her literary agent,) RedRock Literary, Inc. which is presumably the corporate entity he literary-agents through, and Pink Sand Press LLC, her publisher. I’m going to call RedRock Literary “RRL” and Pink Sand Press “PSP” in this post.

Tangent The First: Agents Are Not Lawyers

That’s it. That’s the tangent.

I guess I should expand, though.

Now, some agents may also be lawyers, but if they are, you must retain them as your attorney, or they may not be providing legal services, only literary agent services. Lawyers have legally imposed fiduciary duties. They can be sued for malpractice. And, most importantly, lawyers have law licenses. Do a lot of canny old agents know more about publishing agreements than your average lawyer? Probably. But this is a Hell of a way to find out. Get a lawyer. If your agent tells you you don’t need a lawyer, get a lawyer anyway, and then get a new agent.

ANYway. On to the Complaint.

Now you remember up in the caption we saw that the defendants were David Grishman, RedRock Literary Inc, and Pink Sand Press, LLC?

Yeah, well, about that…

It turns out that neither of those corporate entities exists. RedRock Literary Inc. was converted to RedRock Literary LLC on December 7, 2018. (This date will be important later.) And Pink Sand Press, LLC, was dissolved by order of the Massachusetts Secretary of State on June 30, 2021. This usually happens because the entity didn’t file its annual report on time. (Since PSP has no filings with the MA SoS after its organization, I’m going to guess that’s why, but that’s just a guess.)

So what does this mean?

Well, mistaking RRL Inc. for RRL LLC is probably harmless error, and while I’m not a litigator, I’d expect that the court would grant leave to amend the Complaint to correct the defendant’s identification. The same parties appear to own and control RRL Inc. as owned and controlled RRL LLC, and RRL LLC would be the successor in interest to RRL Inc. anyway, probably. No big, really, although as a wise attorney taught me many years ago, the first thing you do when you get involved with a corporate entity is you check their standing with their home jurisdiction. This is a good example of why you do that.

But as far as PSP… well, this gets complicated. I don’t know what MA corporation law has to say on the subject, but in general, if an LLC is dissolved and can’t be timely reinstated, its rights and obligations devolve onto the Members. There’s no way to know how many Members PSP had, but it only lists two responsible parties, Mr. Grishman and Mr. George Tobia. Mr. Tobia appears to be a partner with Burns Levinson, a very large law firm, in their IP division. (See: https://www.burnslev.com/professionals/george-n-tobia) I’m guessing he helped PSP with their corporate formation and perhaps drafted some of their agreements. (We’ll get to those.) So I doubt Mr. Tobia is a member. Whoever the members of PSP are, they likely have received both the rights and the obligations of PSP if it is dissolved and can’t be reinstated.

This means that whoever the Members are, they may be liable for damages under this suit, as well as possibly having the rights to Ms. Clark’s works if the contract holds up. Frankly, this could go several different ways and I’m not a MA lawyer. So all I can do is speculate as above. As far as amending the Complaint to fix this, there is no fixing this. The entity does not exist. It can’t be sued. Plaintiff could (and should) ask the court for leave to amend to add the Members, either as known or as John/Jane Does to be identified through discovery, I would assume. But we’ll just have to put a pin in that.

Okay. Several hundred words later and we’re ready to start reading the actual Complaint. (Law: It’s Not Like Television.) I’ll break it up into sections, using the paragraph numbering in the Complaint itself.

Paragraphs 1-4: These just identify the parties. Ms. Clark is identified as Plaintiff, which means she doesn’t have a holding entity for her copyrights. This is probably a good idea for some professional writers, but that is beyond the scope of this post. In any event, she doesn’t have one. So she is identified as the sole plaintiff. The defendants are as listed as well, which means that the only one that actually exists is Mr. Grishman. For the rest of this post, though, I’m going to act like we’ve fixed that and RRL LLC and either the reinstated PSP or its Members as successors in interest are also proper defendants. So much for Paragraphs 1-4.

Paragraphs 5-7: Jurisdiction and venue are the subject here. First, the claim is that this is a proper Federal court case because the parties reside in different states and the amount in controversy is over $75,000 which means that “diversity jurisdiction” applies. That means that a Federal court is being asked to hear a case between citizens of different states because their home state courts might be biased or there might be questions of choice of laws that are more suited for a Federal court to resolve.

PROBLEM THE FIRST: Both the Literary Agency agreement (hereafter the “RRL Agreement”) and the Publishing Agreement (hereafter the “PSP Agreement”) have clauses that stipulate that Massachusetts law applies, and the RRL Agreement says that all claims must be adjudicated in Massachusetts. (The PSP Agreement is silent as to venue, which is weird.) So, assuming we fix the whole RRL Inc. doesn’t actually exist thing, RRL can just move to have the case removed to a Massachusetts court. Would they be successful? No idea. But it’s a real problem for Plaintiff, and their lawyer has addressed it by… pretending that it doesn’t exist. Which to be fair is what you usually do – let the defendant raise it, if they want to, and then respond appropriately. But still. Potential issue. Moving on.

The Complaint asserts personal jurisdiction over the defendants by saying they have “conducted business” in Iowa. I have no idea how much business the defendants have conducted in Iowa. If this was all done with emails and phone calls, this could be pretty tricky to establish. And again, this gets complicated fast. Suffice to say that the defendants may not only claim that they have a venue and jurisdiction clause to rely on, but even if they didn’t they have insufficient “nexus” (level of presence and activity) to give an Iowa court jurisdiction over them, and once more, the remedy is to bring the suit in Massachusetts, where they live and do business. That could also go a lot of different ways but is a potential issue for the plaintiff.

Likewise, the Complaint alleges that enough stuff related to the case took place in Iowa that an Iowa court is a proper place to hear the case. Again, no idea if that’s true or not. It’s entirely plausible, since that’s where the plaintiff lives and, presumably, does business. This is a related but different question – the previous paragraph was about jurisdiction over the defendants, and this is about jurisdiction over the case. But you get the idea. And if not, feel free to ask in the comments. 🙂

Paragraphs 8-28: These are the “recitation of facts,” which you see in almost all complaints. They set forth the general allegations that give rise to the underlying prayer for relief. In other words, Judge, first I’ll tell you what happened, and once I finish telling you what happened, I’ll tell you what I want and why what happened means I should get it.

The plaintiff alleges that she is a successful author, and that Grishman is a literary agent. It would be interesting to see PSP try to dispute that Ms. Clark is a successful author, as this is the sole content of the “Authors” and “News” sections of their website:

She further alleges that Grishman owns RRL and does his agent-ing through it. She then alleges that PSP is a publisher and literary promoter. Again assuming we fix the ghost entity issues, this is all noncontroversial. Then she alleges that Grishman is an operations manager with PSP. I guess he could try to argue with that but:

So yeah.

Plaintiff goes on to claim that she entered into an agreement with RRL/Grishman in December 2018 for him to rep her. Now, the Complaint only says “December 2018.” BUT WAIT. According to the RRL Agreement, the actual date was December 2, 2018. Remember that date I said would come up later? Later has arrived. It was five days after this that RRL Inc. became RRL LLC. This is extremely unusual. Why would RRL Inc./Grishman hold out an agreement to Clark and then, five days later, change their corporate form? You don’t do that on a whim. The charitable explanation is that they forgot to fix their representation agreement. The uncharitable explanation is… well, it looks fishy, leave it at that. Yet another weirdness, in any event. ASIDE FROM ALL THAT, this should also be uncontroversial, as the agreement is attached and is clearly dated accordingly.

About a month and a half later, Clark signed the PSP Agreement, which was executed by someone who appears to have been named “Steve Grishman.” (This will be important in a minute.) The Complaint then alleges that the PSP Agreement gave PSP a ten-year exclusive in Clark’s books, and required PSP to file copyright registration applications for them. This appears to be supported by the PSP Agreement.

Next, it alleges that no such registration applications have been filed. (Note: the PSP Agreement refers to “copyright applications.” Technically, this is incorrect: you don’t have to apply for copyrights, only for registrations. You would think that Mr. Tobia, an IP partner at Burns Levinson, would know this, but in any event it’s is not a big deal.) I have no idea if this is true but presumably Plaintiff’s attorney checked and if they didn’t, Defendants can just provide the receipts for the registration applications and refute the allegations.

Now we start to get into the seedier allegations.

Allegedly, Grishman represented to Clark that PSP was a startup owned by him and someone named Matthew Bernard. But, allegedly, PSP was really owned by Steven Grishman, Grishman’s father and presumably, the “Steve Grishman” who signed the PSP Agreement. (Toldja.) The Complaint never mentions Bernard again, so make of that what you will.

Next, it is alleged that Grishman (presmably through RRL) was to get 15% of Clark’s advance. This is likewise supported by the RRL Agreement and sustained by the PSP Agreeement.

Tangent the Second: Agents Are Terrible Lawyers

Speaking of the PSP Agreement, I am not going to do a breakdown of it in this post, but HOLY JIMINY CRICKET IS IT BAD. Any lawyer who told their client to sign that agreement should not only be sued for malpractice, they should be sanctioned by the disciplinary agency and, in my humble opinion, horsewhipped in the public square. It’s godawful. And yet, her agent cheerfully advised her to sign it. Now, part of that may be that he was double-dipping anyway so he really didn’t care that she was getting screwed. But I have seen publishing agreements that were just as bad agreed to by allegedly responsible and experienced agents, so, like I said, get a lawyer. A word to the wise suffices.

ANYWAY. Back to the Complaint.

Now we get into some allegations that one of Clark’s books required substantial unanticipated edits, which delayed its release. PSP then informed Clark that it was buying out the remaining two books in the series and having it completed by a ghostwriter, and she couldn’t stop them because the PSP Agreement allowed for this. The Complaint says that the PSP Agreement actually doesn’t allow for this: in other words, that this was what we in the law biz call a “material misrepresentation” and normal people call a “lie.” Upon brief review of the PSP Agreement, I sure can’t find anything in there about buying out series or ghostwriting, so unless the Defendants can come up with something here, I think that one goes to Plaintiff.

Next, the Complaint alleges (supported by the Exhibits) that there was an amendment to allow for copyediting signed later by the parties, but that PSP performed developmental editing in breach of its rights under the PSP Agreement and the amendment.

Due to these edits, the book fell further behind, and a new arrangement was allegedly made on May 10, 2021 to deliver a manuscript on September 24, 2021. Then in August of 2021, Grishman informed Clark that she was late in submitting the manuscript – which is odd, because it should have been PSP, not Grishman, who gave her notice of such a breach of her obligations. OH, RIGHT. Grishman works for PSP, so it’s actually in his interests for her to be in breach if what he/PSP wants is to secure the rights to Clark’s works. So yeah, there’s that.

On September 15, 2021 – at which time, allegedly, the manuscript wasn’t even yet due – PSP notified Clark that she was in default (which is logically impossible) and that her royalties would be held pending agreement on ending negotiations (What negotiations?) and termination of the PSP Agreement. Upon brief review, even if she were in breach, the withholding of royalties already accrued, on works unrelated to the manuscript in question, is not supported by the PSP Agreement nor should it be. I guess they could claim that they were entitled to recover advances under Paragraph 16 of the PSP Agreement, but they can’t do that unless and until the PSP Agreement is actually in the process of termination or uncured material breach.

Finally, Clark alleges that she has withheld the final manuscript because PSP is in breach of the PSP Agreement. Which, if PSP told her it was not going to pay her royalties timely, it inarguably was. At that time, her withholding the manuscript might also have been a breach – maybe, maybe not, it depends – but as Courtney Milan points out, it was still a smart move because if the other side breaches first, you do not look like the unreasonable one trying to preserve leverage if you can remedy the issue at any time. Which she could: if they had paid her and otherwise cured their own breaches, she could have handed over the manuscript.

Paragraphs 29-36: Count I, for Breach of Contract against PSP assuming it even exists or hopefully its Members if it doesn’t, is pretty straightforward. Paragraph 29 recites by incorporation the previous allegations of fact (as one always does in a complaint of this type.) Clark then alleges that she is in compliance with her contractual obligations, in that she delivered compliant manuscripts in a timely fashion. Conversely, PSP allegedly breached its obligations by not accepting the manuscripts and by not paying royalties timely. These breaches are alleged to have been in bad faith, and allegedly have caused and will cause Clark damages. Therefore, she asks for damages (“prays for relief”) as follows:

1. She wants PSP to have to stop publishing all of her works – in other words, she wants all of her copyright licenses granted to PSP to be terminated, although she doesn’t put it that way.
2. She wants PSP to certify to the Court that they have stopped publishing her works.
3. She wants unspecified profits, damages, costs, and attorney’s fees. This would be determined through the discovery process at a later date: she does not speculate as to how much it will be other than that it will be more than $75,000 (remember, she represented that in the diversity jurisdiction certification.)
4. She wants “other and further relief as the Court deems equitable and just,” which means, “whatever else I can come up with after discovery.”

This seems like a reasonable prayer for relief given the totality of the circumstances, is all I’ll say about what she’s actually asked for. Now, on to Count II.

Paragraphs 37-48: Count II, for Breach of Fiduciary Duty against Grishman and RRL. Again, we recite by incorporation the facts from above. Then we get into the meat of the matter: RRL, through and by Grishman, promised to be Clark’s literary agent, and therefore a fiduciary duty was created between them wherein Grishman and RRL had an obligation to faithfully represent Clark and act in her best interests in negotiating with publishers and otherwise exploiting Clark’s works. By not:

1. Telling Clark about Grishman’s direct ties to PSP (i.e. he was employed by it;) or
2. Telling Clark about Grishman’s indirect ties to PSP (i.e. his father owned it)

Grishman and RRL are alleged to have breached this fiduciary duty. It is futher alleged that this breach is the result of malice and fraud. After that Clark again prays for relief, this time against Grishman and RRL, as follows:

1. She wants money damages that will “fully compensate” her, which again are not further specified;
2. She wants the RRL Agreement nullified;
3. She wants unspecified punitive damages, doubtless related to the allegation that this was a malicious and fraudulent act;
4. She wants interest on her damages (not sure why she didn’t ask for this in Count I;) and,
5. She wants “other and further relief as the Court deems equitable and just,” which still means, “whatever else I can come up with after discovery.”

Paragraphs 49-54: Count III, for Fraudulent Concealment against Grishman and RRL. Repeat factual allegations, you know the drill. Then we get into Fraudulent Concealment which is… exactly what it says on the tin. (Note: Fraudulent Concealment, as alleged in this Complaint, is also sometimes referred to as/has a related type of tort called Fraudulent Misrepresentation. I am not licensed to practice law in Iowa or Massachusetts, so I defer to the presumably experienced litigator who drafted this complaint as to how it should be identified in this case.)

Specifically, Grishman and RRL made some representations of fact to Clark but failed to disclose other material information regarding the negotiation of the PSP Agreement, and they did it knowing that:

1. The undisclosed information was material;
2. Plaintiff didn’t know the undisclosed material information;
3. Plaintiff would only rely on the facts she did know about, and would likely act differently than she would have had she known the undisclosed material information;
4. That it would benefit them, and detriment the Plaintiff, if she acted in reliance on the facts she had absent the undisclosed material information.

Since that’s allegedly exactly what happened, Plaintiff suffered damages because of this fraudulent concealment of material facts and now, say it with me, prays for relief as follows:

1. She wants money damages that will “fully compensate” her, which yet again are not further specified;
2. She wants the RRL Agreement nullified;
3. She wants unspecified punitive damages, although she did not alleged that the fraudulent concealment was a malicious act – “fraud” is right there in the name so presumably that’s enough;
4. She wants interest on her damages; and,
5. She wants “other and further relief as the Court deems equitable and just,” which still means, “whatever else I can come up with after discovery.”

After that she just demands a jury trial and… fin. Rather brief for a Federal Complaint, but hey, this is a straightforward case. Allegedly.

Regarding the combined prayers for relief in Counts II and III, once more, I’ll just say that they’re not outrageous considering the facts as alleged. Of course there are at least three sides to every story (our side, their side, and the truth) and all we have seen is Ms. Clark’s side. So at this point our ability to evaluate the matter is somewhat limited.

But these allegations, if they are even close to the truth, are pretty damning. The PSP Agreement is horrible. Grishman had a gigantic conflict of interest when he induced Clark to sign it, which he didn’t disclose. He outright lied to her about who actually owned PSP. PSP’s actions regarding the submission of the manuscript and the withholding of royalties seem to be utterly without contractual support. It is, as the saying goes, a fine kettle of fish indeed.

As far as whether Clark can get her rights back/get out of the PSP and RRL Agreements? Maybe. It’s a big mess and the termination provisions of the agreements are likewise horrible. But here are some potential snags:

1. The RRL Agreement provides for binding arbitration. There is no indication that arbitration has been sought or entered into. However, given that the Plaintiff is alleging fiduciary misconduct which existed when the RRL Agreement was executed, she has at least an arguable case that the whole thing should just be tossed. If she can’t get it tossed, she may have to go to arbitration, and even if she wins, she may or may not get the RRL Agreement severed from the books Grishman/RRL has already repped. (See Paragraph 13 of the RRL Agreement.)
2. The PSP Agreement has some extensive termination requirements and procedures I’m not going to get into. But if they aren’t satisfied and the PSP Agreement isn’t just tossed due to the alleged fraud, she may still be stuck with them for the remainder of the ten-year term for the books they’ve already published at the very least. It depends.

The whole thing, honestly, is an utter quagmire and a sad example of what happens when you negotiate extensive contracts without legal representation. Again, I feel very bad for Ms. Clark, who, if the facts are as alleged, was outright cheated by someone she thought she could trust. But only time will tell.

Thank you very much for reading: please feel free to comment or ask questions below!

-Marc