Instead of attacking the mountain of work I should be doing (including my own legal pleadings), I read the claim and counterclaim again.
The only exposure I see for LSI is if they accepted return of books that were physically printed by PA and they then charged PA for the wholesale price and handling during the return process.
If I were LSI, the questions would be:
1. The contract went into effect before you started plugged in your own printer,
2. Therefore, how in the flying flip is LSI supposed to tell the difference between the flurry of returns they were getting that they printed and the few that PA printed. Did the PA printed ones have magic fairy dust on them that caused them to glow?
3. Did PA inform LSI that they were also doing in-house printing and that each shipment of returns had to be checked for in-house printed books? Did PA mark in-house books in any way (other than shoddy quality) to differentiate them from LSI editions?
4. What other publishers do this in-house printing? Is this a case of first impression for LSI?
I see LSI as only culpable for grinding a few (dozen? hundred?) in-house books and charging PA for them. An honest mistake, but still a mistake.
If PA did not attempt to mitigate their own damages by at least informing LSI that this could happen, then LSI's exposure should be limited to its own errors. However, since those errors have been pulped, there needs to be a reasonable settlement and solution.
Depending on the wholesale price that PA was 'paid' by LSI, plus $2.00 per copy, how many books could we realistically be talking about?
Let's say between 2007 (when PA started printing) and 2009 when this situation blew up, it was 1000 books. That is, 1000 PA printed books were returned and LSI mistakenly pulped and charged PA for them.
1. $3.00 print charge per book
2. $2.00 shipping charge per book
3. $5.00 wholesale charge per book (I'm guessing - no clue)
That comes to $10.00 per copy or about $10000 that LSI could realistically have over-charged PA. Okay, they screwed up . . . it happens . . . especially if PA didn't inform them of the parallel printing operation.
Now, how much does PA owe LSI????? That number is being kept under wraps for the moment, the counterclaim is mum as to the amount.
Now, PA wants about $850,000. Yeah right. That number is pure 'shock and awe' hoping that LSI will cower and offer some settlement offer. That is similar to what we've seen PA do before when trying to strong arm complainers into silence.
When I sued my opponent for ZERO dollars in 2006 (I just wanted them to leave us alone), they counter-sued us for about $2.5 million, again, hoping to huff and puff and blow our house down. It didn't work - it rarely does against a sophisticated litigant and LSI is certainly a sophisticated litigant . . .
LSI did make some errors in that it apparently charged PA for the clean and properly printed bound copies that it produced and shipped to PA after it had pulped the PA-printed books mixed in with other returns.
However, as for printing new copies for the 'YES-deliver' option, I do not see any liability for LSI. That was a business decision. It was apparently cheaper and more efficient to pulp the returns en masse after check-in (I assume scanning the barcode) and push 'print' than it was to sort and re-pack them (especially if PA returned books were mixed in with returns from other publishers).
LSI promised to deliver books, not necessarily the original books, and they did. Where is the fraud?
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olishes up crystal ball::
I foresee a 12(b)(6) motion from LSI to dismiss all the fraud claims for failure to state a claim for which relief can be granted.
Not all will be dismissed, there is one legit contract question, that of the fate of the PA printed books that were returned.
Therefore, I foresee a summary judgment motion by LSI on any remaining questions.
I do not see a trial. I guaran-freaking-tee that PA owes LSI more than LSI owes PA.
I do not see an award of legal fees. Contract cases rarely win fees.
These motions could give the PA-watchers of the world some interesting info on what PA's through-put really is, so it should be fun.
PA will continue to milk the situation and not pay its writers for as long as possible. They must really be in a cash-flow bind.
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uts cover back on crystal ball::
Be interesting to see if any of my psychic predictions come true.