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Proving Substantial Truth

October 27, 2014 by deirdre 11 Comments

elloras-cave-blog-header
Substantial truth can be tricksy. Here’s a DMLP post with a few examples.
Two of those examples where the statements were ruled substantially true:

A statement that a boxer tested positive for cocaine, when actually he had tested positive for marijuana. See Cobb v. Time Inc. 24 Media L. Rep. 585 (M.D. Tenn 1995).
A statement that a man was charged with sexual assault, when actually he had only been arrested but not arraigned. See Rouch v. Enquirer & News of Battle Creek, 440 Mich. 238 (1992).

Look, I haven’t read up on the case law, but the above two examples should demonstrate that “substantial truth” isn’t cut and dried.

Hypothetically Speaking

Let’s say the claim in question is about “a set of authors” and whether or not they’ve been paid in a timely manner. Let’s say there are more than 500 authors, each of which has one or more books.
Now, the person believing they’ve all been paid may in fact only have been double-checking the highest earners.
However, let’s say the claims are true for three authors:
a = {Fred, George, Mark}
That still means one needs to sift through an unknown large portion of the data set before one determines that it’s true for “a set” of them.

And Now an Intermission

I’m done with the above hypothetical.
I have no personal information about the actual facts of the Ellora’s Cave case. However, I’d like to look at some back-of-the-envelope calculations.

How Big Is the EC Data Set?

Let’s go with the following assumptions:

  1. 934 authors (last I counted). Let’s round down to 900.
  2. Amazon gives me 6,767 items when I search for “Ellora’s Cave.” Let’s assume 4,500. Ergo, an author has an average of 5 titles, including paperback editions.
  3. Each book sells, per month, in an average of 5 stores from: EC’s own site, ARe, Kindle, Nook, Kobo, Google, iBooks, foreign markets for same, and any paperback vendors.
  4. Need to look back to when the accounting system changed last year, so 10 months of data at present.
  5. Each line item has seven pieces of data per month per author (per Cat Grant’s statements). The 7 pieces of data are: ISBN, title, format, store, amount received per unit, qty sold, total received (calculated, so not actually a separate piece of data), royalty %, royalty paid (also calculated).

So for each month:
4500 books x 5 stores books sold in that month x 7 other pieces of data = 157,000 pieces of data (or 174 per author). Per. Month.
Times ten months, so 1.57 million.
Consider the legal and accounting billing that would be involved in re-verifying and distilling 1.57 million pieces of data.

Another Aspect of Substantial Truth

In a case where “a set of authors” may not have received timely payments, royalty payments received by the publisher not corresponding with line items paid to authors could potentially also be a source of substantial truth.
Therefore, one would also need to audit amounts received from, say, Amazon, and amounts paid out in royalty checks that month, and determine that the amounts were equal. (Especially when others have said they’ve seen no Amazon drops during the same period for similar non-EC books.)
There are also around 9,000 checks to sort out.

  • When were they written?
  • When were they mailed?
  • When were they cashed?
  • When did they clear the bank?
  • Are any missing? Either not paid or not cashed?
  • If they’re missing, were they actually cut?

In theory, all that information is already entered and double-checked and could be provided to the defense at a moment’s notice.

The Question that Started This Post

@deirdresm Law Q: Are EC actions only relevant to the case up until the time it was filed? Recent payment timing immaterial? #notchilled

— Susan Garbanzo (@Soenda) October 27, 2014


It’s a good question. It doesn’t change the absolute truth of what was said on the day it was said, no.
But if events post-filing help show substantial truth, then probably they’re relevant.

@Soenda I haven't read the case law; I can only guess. My guess: similar actions after filing help substantive truth claim. #notchilled

— Deirdre Saoirse Moen (@deirdresm) October 27, 2014

My Intuition

This case, if it gets all the way to a jury trial, will be far, far more expensive to litigate than other people have expected because the potentially triable matters of fact involve large data sets.
It’s my understanding that the burden of proof is on the plaintiff to show substantive falsity. Meaning: Ellora’s Cave and the mysteriously joined Jasmine Jade Enterprises need to demonstrate that.
Can they sample the data?
I don’t see how they can prove that “a set of authors” is defamatory without the full data being examined. “A set of authors” doesn’t need to be a large set.
My intuition, given the lagging of checks mailed weeks after the check date, all the reports of no answer for months when authors asked about royalty checks, is that that aspect of the DA post, at least, was substantively true.
Consider, for example, how small the two examples at the top are in terms of data. A single arrest. A single drug test, and possibly one or more followups. But not 1.57 million of them.
Completely different animal, litigation-wise.

Filed Under: Business of Writing, Ellora's Cave, Publishing Tagged With: ecda, ellora's cave, legal, publishing

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Comments

  1. Mzcue says

    October 27, 2014 at 7:18 pm

    Still wondering if JB/EC isn’t playing for time with no intention of seeing the suit to its conclusion. Time for what? The imagination can dream up all kinds of possibilities.
    I hope it all comes out in the wash, if only to satisfy the requirement of our protagonists’ HEA ending.

    Reply
    • Deirdre says

      October 27, 2014 at 7:47 pm

      I don’t know.
      Let me put it this way: I can’t believe EC/JJ knew, with enough certainty, from a fresh audit by a CPA after DA’s article, that Jane’s statements weren’t substantially true.
      If I ran a business that got a post like that and I believed that it was false, I’d hire a CPA before I hired a lawyer. Because having that fresh audit? That would allow for one hell of a mic drop in the initial filings.
      If I’d already had a CPA audit, I’d ask for a different CPA to run another one.
      Why? Because I’d want to make absolutely sure that I had all my ducks in a row before embarking on something that would be more expensive and time-consuming against someone who may be the wrong party.

      Reply
      • azteclady says

        October 29, 2014 at 5:20 pm

        I think that positively knowing where you stand would allow you (the publisher) to address the issues raised in the post without the drama of a lawsuit.
        Much more efficient, let alone cheaper, to contact the blogger directly and say, Hey, I want to refute what you say here, are you willing to provide the platform?

        Reply
        • Deirdre says

          November 3, 2014 at 1:47 pm

          I’ve wondered why they didn’t do that, too. Or some other, similar source.

          Reply
          • azteclady says

            November 4, 2014 at 8:41 am

            Doing something like that would have dramatically increased EC’s customers AND authors goodwill.
            Doubling down when people have questions is never a, lets say, reasonable idea.

          • Deirdre says

            November 4, 2014 at 9:11 am

            Doubling down always looks like an attempt to pretend that things are going well. Especially after massive layoffs have happened recently.

  2. jes b says

    October 27, 2014 at 8:27 pm

    I’m just astounded by the lack of information that authors receive about their own royalties. My husband is a member of IATSE. Residuals are often a part the jobs he does. Even though all residuals go straight to the pension and insurance trust fund of IATSE, he receives a full accounting of this money. He knows which production and production company has paid, when they paid, how much they paid and how IATSE disbursed the funds between insurance and pension. I’m just picturing EC walking up to authors with a fistful of sweaty dollar bills saying, look, here’s some moneez. It just seems so damn sketchy.

    Reply
    • Deirdre says

      October 27, 2014 at 8:53 pm

      Well, it’s definitely not that bad.
      Have you looked at the royalty statements Cat Grant shows copies of?
      One of the things is that authors mostly write books alone. So they’re not charged by publishers (not reputable ones, anyway) for cover art, editing, or other things like promotion. So it’s not quite the same as a whole production. Either that or you can look at each individual book is a production.
      In that sense, you can see from Cat’s May statement that EC received monies due her from: All Romance Ebooks, Amazon US, Amazon UK, Barnes & Noble, and Kobo. So, while the date EC received the payment isn’t shown, it’s stated to be in the month that’s the subject of the royalty statement, and is broken down into how much is for EC and how much is Cat’s.
      I get more data from my own royalty statement, but that’s partly because it hasn’t yet earned out the advance paid (it’s an anthology, and those only very rarely earn out). The total advance is listed, but was split between all the authors and the editor.
      It’s all very meticulously detailed, a two-page PDF for a single book, for which they sold a whole 4 copies during the first six months of this year.

      Reply
      • jes b says

        October 27, 2014 at 10:02 pm

        Oh yeah, it’s not as bad as I understood it to be.

        Reply
        • Deirdre says

          October 27, 2014 at 10:04 pm

          Thank goodness for small favors? 🙂

          Reply

Trackbacks

  1. Ellora’s Cave: Tenses and Figures says:
    November 12, 2014 at 10:11 am

    […] my Proving Substantial Truth post, I’d talked about the size of the data set in proving that “a set of” is […]

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