Keiler, et al. v. Harlequin Enterprises LTD et al. , No. 13-1753 (2d Cir. 2014)Annotate this Case
Plaintiffs, authors of romance novels, filed a putative class action against Harlequin Enterprises and its subsidiaries contending that the Harlequin entities breached agreements with them and others by paying them artificially low royalties on the sale of digitized versions of their books. The district court dismissed under Ruled 12(b)(6). Based on the court's review of the Publishing Agreements, the court concluded that plaintiffs' first through third claims were not viable because the Publishing Agreements unambiguously provided that Harlequin subsidiaries HEBV or HBSA was the "Publisher" and Harlequin Enterprises was a "Related Licensee" for purposes of computing royalty payments. The court held that the fourth claim alleged sufficient facts to plead a breach of the Publishing Agreements on the theory that defendants calculated their e-book royalties based on an unreasonable license fee. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings.