Wednesday, May 2, 2012

NY Federal Judge stays e-book class action case against Hachette and HarperCollins

paidContent's Jeff John Roberts reports that New York Federal Justice Denise Cote has stayed the class action suit against HarperCollins and Hachette "on the grounds that the publishers are close to a consumer restitution settlement with state governments."

The state governments' deal trumps the consumer class action, he explains.

The lead class-action lawyer, Steve Berman said, in a letter to Cote, that only part of the proceedings should be suspended because "many states might not take part in the agreement." While Berman said that the two publishers should have to share documents related to the Justice Dept's antitrust investigation, the judge's order will prevent that for now.

It turns out that Hachette and HarperCollins have "entered a memorandum of understanding with several states, and have suggested a deal with all 50 states is imminent.  The publishers would likely have to pay millions under a settlement, but it would allow them to escape the class action proceedings and avoid the risk of a jury award that could be even higher."

So it becomes clearer why they settled right away.

Simon & Schuster hasn't signed a formal memorandum from its talks with the state governments, so it didn't receive a stay.

Macmillan and Penguin are continuing to fight both the class action lawyers and the government, Penguin claiming that the class action "is invalid because users of Amazon Kindle and Barnes & Noble’s Nook agreed to settle any disputes through arbitration."

Apple denies all and has lots of money to cover what should be a long battle.

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