If it’s “Fifty Shades,” there’s gotta be a lawsuit

The other evening I was talking with my cousin, Thomas Spear, about books and publishing books and lawsuits. (We were at Moscow57, eating chopped liver [me] and a mushroom ragu with dilled rice [Thomas], and listening to a first performance of a new musical based on an extraordinary biography, both called “The Black Russian.”)

The conversation did not flow precisely like that: Thomas has written a novel which is going out to publishers. I have written an extensive proposal for The Tao of Suing–for which Sidebar has been an experimental forum–and thanks to my literary agent, Victoria Skurnick, my proposal is out paying polite visits to editors.

So that was the books and publishing part of the conversation. And after a brief segue I don’t recall, Thomas said, “It seems like everybody in this country sues.”

True, a huge number of people do sue. And when someone sues, it necessarily means that somebody else is sued.

While Thomas and I went on to discuss how lawsuits can change or make law, what we’ve all noticed is: when somebody makes a heap of money, it seems to be a red flag waved in the face of the plaintiff bull.

So we come to today’s Publisher’s Marketplace news about the massively successful “Fifty Shades of Grey,” and a lawsuit tangential to the series:

 Writers Coffee Shop Owner Ordered To Set Aside $10M in Escrow In Fifty Shades Lawsuit

Two months after a Texas state court jury ruled that Jennifer Lynn Pedroza, former chief marketing officer of Australian publisher The Writers Coffee Shop, is entitled to a share of the proceeds from EL James’ FIFTY SHADES trilogy, state district judge Susan McCoy, ordered the defendant, TWCS founder Amanda Hayward, to deposit a minimum of $10 million into an escrow account until a final accounting determines how much Pedroza is actually owed.

According to the Star-Telegram, a hearing last week “divulged that the e-publishing business that Hayward, Pedroza and two other women formed, which originally released what would become an international blockbuster, made up to $40 million” and that Pedroza was entitled to 25 percent of those proceeds. (One of those other two women, Christina Beebe, reached a confidential settlement agreement with Hayward in December.) Pedroza’s lawyer Michael Farris told the paper he was still in the process of setting up the mechanism by which Pedroza would be paid. The escrow account would start with a royalty check from Random House to TWCS, expected to be for about $1 million.

“We were pleased with the judge’s ruling. We think it is keeping with the facts at the trial and the laws in Texas that allows for these kind of remedies.” Hayward’s lawyer Robert W. Kantner declined to comment, saying he wouldn’t “litigate this in the press,” but in court he expressed concern about the proposed amount since Hayward “has used the royalties to pay bills to run her company” and indicated that as much as 50 percent of the money was used to pay taxes in the US and Australia. “I don’t know if there is $10 million left to be identified,” Kantner said. Farris countered that Hayward lived in a house worth $4.8 million and owned other properties. “Our concern is that we have no way to follow the money once it gets to Australia without going to Australia and following legal steps down there,” said Farris.

Judge McCoy also expressed “some concern about her ability to encumber property and cash in Australia” but still went ahead and made the ruling about the escrow account.


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