An arbitrator has ruled for Regnery Publishing in a lawsuit brought by three of its authors who charged the publisher with breach of contract, breach of good faith and breach of fiduciary duty. The three authord--Joel Mowbray, Richard Minter and Jerome Corsi--had charged that Regnery had “siphoned off” retail sales of their books by selling their books through the Conservative Book Club and Human Events magazine, which, like Regnery are owned by Eagle Publishing.
In his ruling, arbitrator Alan Baron rejected all of the authors chargers, noting that the authors “have not produced evidence that a single volume was ‘diverted’ improperly or fraudulently by Eagle Publishers or Regnery. Suspicions and speculation are no substitute for evidence.” The authors had alleged that, in order to lower royalty payments, Regnery had moved sales of their books from retail channels through the book clubs and magazine. Baron agreed with Regnery publisher Marji Ross who said sales through the club and magazine were done as a normal course of events to help promote the book, a position supported by several expert witnesses.
The authors primary evidence was that a total of 460,000 copies of their books were unaccounted for, and alleged that those books had been sold through non-retail channel with royalties unreported, but Ross said that most of those copies had been destroyed. She was backed by Regnery’s distributor at the time, NBN, whose president, Jed Lyons, noted that the 460,000 copies represented a return rate of just over 30%, typical in the book industry.
In ruling against charges of breach of fiduciary duty and fair dealing, Baron said there was no fiduciary duty between Regnery and the authors and that Regnery had acted within industry standards. He pointed to testimony from Regnery expert Cathy Hemming who said the relationship between publisher and author is “fundamentally adversarial, not fiduciary in nature.”
“We are pleased, but not at all surprised, to be completely vindicated of all charges,” said Ross about the decision. “We have always strived to have excellent relationships with our authors and to work closely with them to ensure their books’ success.” She added: “To my knowledge, this is the first time an author has ever sued Regnery,” added Ross. “And while we would have liked to resolve this amicably, without arbitration, at some point you have to stand your ground. We knew these charges were completely false and we wanted to set the record straight.”