Last week, former Breitbart editor Milo Yiannopolous filed a $10 million lawsuit against Simon & Schuster accusing the publisher of “wrongfully, and in bad faith,” terminating its contract with him to publish his book Dangerous. What are the actual claims in the suit? And can Yiannopoulos prevail? Below is a quick primer on the litigation.
The Legal Claims
In comments to Publishers Weekly and other media outlets, Yiannopoulous has made the suit sound like a free speech or a defamation case, alleging “reputational” damage and an intent to silence conservative voices. But the suit filed in New York State Supreme Court lists just two narrow claims: breach of contract, and breach of “the covenant of good faith and fair dealing.”
Lawyers tell PW that the first claim, breach of contract, faces an obvious hurdle: a legally terminated contract cannot be breached, and S&S will point out that it terminated the contract after deeming Milo’s manuscript unacceptable. Milo was allowed to keep the $80,000 paid on signing of his $255,000 advance. And S&S reverted all rights in the work to Milo, who self-published the book on July 4.
The key question of the suit, however, which also lies at the heart of the second claim—the breach of good faith—is whether S&S legally terminated the contract?
Milo’s attorneys say no. They contend that the contract allowed S&S to terminate the deal only if Milo delivered a manuscript that was not “editorially” acceptable, or if S&S lawyers deemed the work to be libelous, obscene, or in breach of another party's rights. And they claim the evidence will show that S&S was satisfied with the editorial progress of the book—right up until Milo’s controversial comments on pedophilia got him disinvited from CPAC and ousted from Breitbart News. At that point, the suit claims, S&S abruptly and without warning terminated the contract using the “obviously false pretext” that the manuscript was unacceptable.
“The complaint is very well done, and sets up a factual dispute over the reason the deal was canceled,” says Christopher Sagers, professor of law at Cleveland State University. And that dispute, he says, could at the very least keep the suit from being immediately dismissed.
“Milo has a plausible bad faith termination argument,” adds veteran publishing lawyer Lloyd Jassin, “if it can be shown that termination had nothing to do with the manuscript S&S thought they were buying, but something to do with Milo’s admitted ‘bad choice of words’ and the collateral damage it caused S&S.”
In legal parlance, “good faith” essentially means that each party promises to act honestly in discharging their obligations. Certainly, the timing of S&S's cancellation raises questions about why S&S walked away from Milo. Still, proving that S&S acted in bad faith in declaring the manuscript unacceptable will be a high bar to clear.
That's because the contract broadly states that S&S is “not be obligated to accept or publish the Work if in its sole good faith judgment the Work is not acceptable to it,” a key clause that S&S will cite in its defense, Jassin says.
“It doesn’t say 'not acceptable to it in content and form,'”Jassin explains. “Taken in isolation, that sentence gives S&S a lot of leeway because there’s no definition of satisfactory. There’s no objective standard of reasonableness. Just good faith. And like fairness, good faith is in the eye of the beholder."
While the contract does at other points tie rejection to editorial concerns, Jassin says S&S still has a wide berth. "Standing alone, there is a good argument that the content or quality of Milo’s manuscript was irrelevant. Unless you go back in time and rewrite that sentence, S&S may in good faith consider the likelihood of the book's commercial success, or object to the book’s content for promoting hatred, discrimination, or bullying."
In their filing, Milo’s attorneys make much of the fact that Ivers was actively engaged in revisions as a sign that the manuscript was acceptable, including one message cited in the filing in which Ivers praises Milo's effort as "good" and "thorough." But the contract is also clear that engaging in revisions doesn’t mean acceptance. And in the very next lines of the message, Ivers matter-of-factly notes that another draft (a third) would be necessary, potentially undercutting claims of an acceptable manuscript.
Milo's attorneys also note that the S&S team appeared to be moving full steam ahead on marketing and publicity efforts right up until termination. However, it’s not surprising that the S&S marketing and publicity departments would be working without a final manuscript: the book was being rushed out on an exceptionally aggressive schedule.
The suit also points out that S&S CEO Carolyn Reidy signed the contract and authorized the first payment of the advance, due on signing, in mid-January, 2017, some six weeks after the deal was struck and after a two-week review of Milo's first draft.
"Reidy would not have signed the Publishing Agreement," Milo's attorneys argue, "unless Simon & Schuster believed that the Manuscript was acceptable for publication."
That argument also seems unpersuasive, undercut as it is by the contract, which states that formal acceptance will be made in writing and accompanied by a second payment of $80,000—neither of which was made.
Bottom line: absent a bad faith smoking gun turning up in discovery, it will be difficult for Milo to prove that S&S wrongly deemed the manuscript unacceptable.
$10 Million Dollars
One of the more eye-opening parts of the suit is that Milo is seeking $10 million in damages. "They have to pay for silencing conservatives and libertarians," Milo said in announcing the suit last week.
That’s not what's happening. While Milo has framed his suit in the media as a free speech suit, in reality it’s a pretty run-of-the-mill contract dispute in a state court. As such, the remedies available are limited.
“My guess would be that if he can actually prove breach of contract, his damages will be limited to whatever he might have been able to earn in royalties that would exceed his royalties as a self-publisher,” Sagers says. “He says that the termination itself caused pecuniary harm to the value of his brand, but it's pretty unlikely that he could prove that such harm was due to S&S's termination of the contract, and S&S could offer substantial evidence at trial that he caused that harm himself.”
Jassin agrees that a big jury award isn’t happening. “Milo, if he were to prevail, is entitled to the benefit of his bargain,” he explains. “If there’s no firm basis for calculating future profits, courts will not award speculative damages.”
Jassin says Milo is probably looking at $175,000 if he prevails—the difference between the $80,000 he was paid on signing, and his full $255,000 advance. “$10 million isn’t commensurate with Milo’s economic loss,” Jassin says. “If, indeed, there is one.”
So why ask for $10 million? Well, you have to ask for something—may as well set your ceiling high. And $10 million sure makes for a better headline than $175,000.
S&S now has 30 days from the date they were served to reply to Milo’s lawsuit. In a statement, an S&S spokesperson last week said the publisher would vigorously defend itself. But a settlement is also possible.
That's because, as Sagers suggests, there is a decent chance Milo’s case will survive a motion to dismiss. "It seems to me that whether the termination was legal or not is a question that is open until a court answers it," he explains. And if the case does progress, you can imagine how brutal the discovery phase in the case could be for S&S—much less a trial.
After all, S&S’s decision to publish Milo was a headline-grabbing, controversial topic. Surely there were many frank conversations about Milo throughout the company at various levels over the two-plus months he was under contract. As tough a PR situation as signing Milo was for S&S, a lawsuit exposing the publisher's thinking not only on canceling Milo, but on signing him in the first place, could actually be worse. Even if the publisher has a good chance of ultimately winning, they have to be thinking about how to make this go away as quickly as possible.
On the other hand, this case seems to offer exactly the kind of publicity Milo wants and needs to sell Dangerous. S&S officials have even acknowledged as much, calling the suit “publicity-driven.” For Milo, a few more headlines and settling for an undisclosed confidential settlement that allows him to claim victory seems like a pretty ideal result.