Taylors sues B&N and 17 publishers while African-American booksellers take on Borders and B&N
Independent booksellers continue to use litigation in a bid to overcome what they contend are illegal deals made between bookstore chains and publishers. In late 1998, two separate parties filed lawsuits against Barnes &Noble and the Borders Group, and against some of the country's largest publishers.
In a suit similar to the one filed by Wallace Kuralt, owner of the Intimate Bookshop (News, Aug. 10, 1998), Taylors Ltd. filed separate lawsuits against B&N and 17 different publishers in the U.S. Bankruptcy Court for the Northern District of Texas, charging them with antitrust violations.
The suit, which was filed November 25, 1998, is actually an amended complaint, after Judge Steven Felsenthal of the bankruptcy court denied attempts by B&N and the publishers to have the original lawsuit dismissed. The judge, did, however, ask that Taylors' lawyer, Paul Genender, make some modifications in the complaint.
The revised lawsuit contends that Taylors is "no longer in business because of the illegal, deceptive and anticompetitive actions of national book publishers as well as Barnes &Noble." Taylors, founded in 1969, filed for bankruptcy in February 1996.
The complaint alleges that B&N conspired with publishers to obtain lower prices that allowed B&N to monopolize the Dallas/Fort Worth retail market. According to the complaint, the publishers and B&N defrauded Taylors through illegal pricing schemes that included such things as unfair pricing allowances and providing B&N with preferential credit and return terms. Taylors is seeking $11 million in damages, plus treble damages, punitive damages and attorneys' fees.
B&N said it intends to vigorously defend itself against the suit.
In a second action, six African-American owned bookstores filed suit in the Northern District of California against B&N and Borders, charging the companies with violations of the Robinson-Patman Act. The stores involved in the action are Marcus Books, Native Son, Pyramid Books, Positive Vibes, Arkar's Books &Things and Tut-Ra-Ma. Charles Bonner, who is representing the booksellers, told PW other store owners may join the suit.
According to the complaint, much of the growth and profitability of B&N and Borders has been due to special pricing terms the two chains have solicited from publishers that are unavailable to independent bookstores. While the suit names most of the major publishers as giving special deals to B&N and Borders, it also notes that "mid-size and smaller publishers are particularly susceptible to c rcive tactics used by the chains to obtain secret, preferential and unlawful terms."
The suit further contends that while a number of major publishers signed consent decrees agreeing not to offer special terms, the preferential terms continue. The suit cites the agreement Penguin reached with the ABA after the ABA charged the publisher with violating the decree as evidence of continuing price discrimination. The Penguin litigation "has revealed some of the secret deals defendants receive from publishers," the suit charges, and adds that "these preferential considerations from Penguin are only illustrative and not exclusive."
In addition to seeking an unspecified amount of damages, the plaintiffs are asking for the court to permanently enjoin B&N and Borders from unlawful practices.
Borders said it will vigorously defend itself against the suit.