Harlequin prevails in class-action suit brought by authors

[Doug Pardee]

The US Federal District Court for the Southern District of New York has dismissed a class-action lawsuit brought by three authors over e-book royalties for books published between 1990 and 2004.

The authors said that their contracts called for getting 50% of the publisher's net receipts on e-books. Harlequin had a Swiss tax-shelter subsidiary — originally Harlequin BV, now Harlequin SA — be the publisher of record, and arranged for the Swiss subsidiary to receive only 6-8% of the cover/list price for e-books. The authors contended that Harlequin, rather than its Swiss subsidiary, should be considered to be the publisher for their e-books, and that therefore the 50% of net should be based on Harlequin's net — estimated to be more like 50% of cover/list price — not the Swiss subsidiary's 6-8%.

From what I can tell, the dismissal of the case was basically based on, "Harlequin lived up to their contracts."