Source: http://bogusbarrister.blogspot.com/2012/08/publish-america-class-action-suit.html
Timestamp: 2017-06-28 22:33:26
Document Index: 279624247

Matched Legal Cases: ['§ 13', '§ 5', '§ 45', '§ 45', '§ 13', '§ 13', '§ 13', '§ 13', '§ 1382', '§ 57', '§ 2201']

The Bogus Barrister: Publish America class action suit
Publish America class action suit
The Publish America class-action lawsuit. Plaintiffs response to PA's motion to dismiss. ISSUES PRESENTED AND SUMMARY OF PLAINTFFS' RESPONSESPlaintiffs are inexperienced authors duped by defendant Publish America's bait-andswitchscam that purports to offer traditional, royalty-paying book-publishing services butinstead — after authors assign their publishing rights to defendant — requires them to purchasepublishing services. Plaintiffs assert claims for declaratory relief, unjust enrichment andviolation of Maryland's Consumer Protection Act, which defendant now seeks to dismiss.Defendant's motion to dismiss presents five principal questions:1) Do inexperienced authors have standing as consumers to sue theirpublisher under the Maryland Consumer Protection Act (MCPA) even ifthey theoretically could earn royalties on their book sales?The Maryland Legislature directs the Court to consider Federal Trade Commission (FTC)decisions. The FTC uniformly treats fraudulent get-rich-quick and home-business schemes asconsumer fraud, and courts in other jurisdictions have reached similar conclusions underconsumer-fraud laws that have standing requirements similar to Maryland's. The Courttherefore should find that plaintiffs are consumers for the purposes of the MCPA. See infra at11-16.2) Did Publish America mislead and injure plaintiffs?Publish America represents itself to plaintiffs as a "traditional publisher" that markets itsbooks and pays royalties to its authors, rather than a "vanity" or "publish-on-demand" publisherthat charges authors for services and book copies. Relying on these misrepresentations, plaintiffsgranted Publish America publishing rights to their manuscripts for at least seven years. But onlythen did plaintiffs learn that Publish America required them to pay for editing, marketing andother "traditional publisher" services, that Publish America marketed plaintiffs' books primarilyto plaintiffs and their family and friends, and that Publish America required plaintiffs to payCase 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 8 of 40- 2 -010313-11 542909 V1hundreds of dollars to regain publishing rights to their manuscripts. Publish America alsomisrepresented the quality and nature of the marketing and other services for which it requiredpayment from plaintiffs. See infra at 16-24.3) Should the Court strike as "scandalous" allegations in the class-actioncomplaint regarding third parties' experiences with Publish America thatmirror plaintiffs' own experiences?For the purposes of a motion to strike, the word "scandalous" refers to "any allegationthat unnecessarily reflects on the moral character of an individual …." A court should not strikeallegations that are relevant to the action. Publish America seeks to strike from plaintiffs' classactioncomplaint allegations showing that its misconduct is widespread and recurring with otherauthors that, like plaintiffs, granted exclusive publishing rights to Publish America. Theallegations also do not disparage any individual associated with defendant and largely reproducecommentary that is easily available on the internet from major publications like the WashingtonPost and the LA Times. The complaint properly contains these allegations. See infra at 24-27.4) Should the Court dismiss plaintiffs' declaratory-judgment claim simplybecause it addresses the same core issue as their MCPA damages claim?Recognizing the potential procedural advantages of a declaratory action, the FederalDeclaratory Judgment Act and Rule 57 of the Federal Rules of Civil Procedure both provide thatplaintiffs may pursue a declaration of their rights along with other, overlapping remedies. TheCourt therefore should not dismiss plaintiffs' declaratory-judgment claim. See infra at 27-30.5) When plaintiffs have alleged fraud in forming and maintaining theircontract, should this Court dismiss their claims for unjust enrichment?Even when a contract exists, Maryland allows parties to assert unjust-enrichment claimsif they properly pled fraud in forming or maintaining the contract. Regardless of plaintiffs'standing under the MCPA, plaintiffs have alleged facts sufficient to support fraud in formingCase 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 9 of 40- 3 -010313-11 542909 V1their contract with Publish America. The Court therefore should allow plaintiffs to pursue theirunjust-enrichment claim for lost publication rights and lost payments made to defendant underthe contract. See infra at 30-32.II. STATEMENT OF FACTSPlaintiffs are inexperienced authors who are suing their publisher, Publish America, onbehalf of themselves and a class of similarly situated authors. ¶ 1.1 They seek a declaratoryjudgment that Publish America misrepresents the nature of its publishing businesses and promotesfraudulent services in violation of the Maryland Consumer Protection Act, restoration oftheir publishing rights, return of all fees for services paid to defendant, and punitive damages.¶¶ 1, 112-29.A. Defendant Portrays Itself as a Traditional Publisher That Makes its Money SellingBooks, But It Preys on its Own Authors with Hidden Fees and FraudulentPromotions.Defendant Publish America LLLP is a book publisher that portrays itself as "a traditional,royalty paying publisher," but unlike traditional publishers, which profit from the sale of books,defendant profits from its own clients, i.e., the authors who submit works for publication bydefendant. Defendant lures these authors in by promising to publish their book at no cost, and itmakes false and misleading representations that it will promote their books and support theauthors' efforts to sell their own books. ¶ 2. Once the authors sign the contract and grantdefendant exclusive rights to their books for seven to ten years, Publish America does nothingconstructive to promote their books but instead offers various promotion packages on a fee-forservicebasis, e.g., sending the book to a book fair, sending it to the National Library of Scotlandfor inclusion in their collection, sending it to best-selling author J.K. Rowling for review, and the1 "¶ __" refers to paragraphs of the Class Action Complaint, Dkt. No. 1, unless otherwisenoted.Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 10 of 40- 4 -010313-11 542909 V1like. These services, which are either misrepresented or never carried out, are not reasonablydesigned to promote class members' books. Defendant provides poor or non-existent editingservices and it routinely overprices the books it publishes. This is no accident. Publish Americacharges a substantial fee to correct errors in published manuscripts or lower the price of itsclients' books to a competitive rate. ¶¶ 5, 88. Each of the plaintiffs has had a similar experiencewith defendant.B. Plaintiff Darla Yoos Relied on Publish America Because it was a Local Companyand Described Itself as a Traditional Publisher, but Her Trust was Misplaced.Darla Yoos signed up with defendant this year to publish her first book. She chosePublish America because she wanted a local publisher and defendant purported to be a traditionalpublisher. She expected Publish America to get her book into the bookstores, or at a minimumimprove the chances that a bookstore would stock it. She purchased many costly services fromdefendant to promote the book, including:Breaking News Publicity Package $399, with tax and shipping$427.93;My Own Literary Agent $99, with tax and shipping $109.93;Kindle, Nook, Google publication $149, with tax and shipping$162.93.1500 Bookstores Promotion $149, with tax and shipping $164.93;All Conventions Promotion $149, with tax and shipping $164.93;Hollywood Resources Promotion $69, with tax and shipping$80.13;Author Efficiency Package $59, with tax and shipping $67.53;Screenplay Promotion $89, with tax and shipping $99.33;Softcover Option $79, with tax and shipping $88.73; andBig Cities Promotion $29, with tax and shipping $35.73. [¶ 77.]Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 11 of 40- 5 -010313-11 542909 V1Plaintiff objected to shipping-and-handling service charges, since these services did not involveany shipping. Defendant did not respond to her objections, so she paid the fees to obtain theservices. Id.Ms. Yoos realized too late she had been conned. It seemed odd to her that defendantasked her to write her own synopsis for the back cover. The fact that defendant charged for somany services also seemed inappropriate, but she was unfamiliar with the publishing world.¶ 79.Most aggravating was the pitiful press release she purchased for $400 as part ofdefendant's "Breaking News Publicity Package." It took almost a month to arrive, and it wasalmost verbatim what she had written for the back cover of her book. Id. The rest of the releasewas a plug for defendant's services, not for her book. She also had to instruct Publish Americawhere to send the release and she is reasonably certain that it was not sent to all of thenewspapers on her list. Her local newspaper, which takes a special interest in works by localauthors, would have contacted her if they had received the release.The only other sign of the "Breaking News Publicity Package" was a single, genericemail on March 8. Ms. Yoos contacted the point of contact for the package by the only meansavailable (email) and received no responses. From her "literary agent," she received only asingle email on March 7, purportedly showing that her book was being presented to a publisherin Athens, Greece, which did not seem reasonably likely to promote her book. She was providedno contact number and received no other responses from her purported literary agent.She received a single generic response on March 19 from the Hollywood ResourcesPromotion and one from the Screenplay Promotion on March 21. Otherwise, she received noupdates or status confirmations from any other promotions. Id.Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 12 of 40- 6 -010313-11 542909 V1By late March, Ms. Yoos also realized that defendant had overpriced her book at $24.95,which was too high to compete with other books by first-time or little-known authors. Defendantinformed her that it would charge her $399 to lower her book price to $10.95, and that it wouldcharge her twice to cover both the printed and ebook editions. Ms. Yoos objected to the charge.She also disputed whether the promotions she purchased had been performed and asked to bereleased from her contract so that she could pursue a genuine traditional publisher. ¶ 80.Defendant chastised her:No, what you say is false. All services that you paid for haveeither been performed, or are being performed. You will not begiven any refund, at all. Please do not ask us again. [¶ 81.]Finding that her relationship with Publish America was more harmful than good, Ms. Yoos askedto be released from her contract. Even though she had already paid $1500 to defendant, PublishAmerica demanded further payment — with "shipping and handling," a total of $320.93 torelease from her contract. ¶¶ 82-85. Ms. Yoos seeks repayment of all sums she paid defendantbecause defendant misrepresented itself and the services it provides. ¶ 86.C. Edwin McCall Believed That Publish America Valued His Manuscript, But He SoonLearned That Was a Pretext to Extort Money From Him.Plaintiff Edwin McCall was initially thrilled when Publish America agreed to publish hisshort-story collection. He believed defendant was a traditional publisher and that it wascompetent, trustworthy, and would do its part to promote his book. ¶ 87. Defendant representedthat it would perform all the essentials: publishing, promoting, and marketing. His onlyresponsibility was to email family and friends about how to order his book, and he did so. ¶ 89.But his excitement was short-lived. Mr. McCall first learned about defendant's hiddenfees after he signed the contract, when defendant sent him the proofs of his book. Defendantinstructed him to make sure that there were no errors and to return the corrections as soon asCase 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 13 of 40- 7 -010313-11 542909 V1possible. He found multiple errors on 40 pages, and submitted them to defendant. PublishAmerica refused to correct the errors unless he paid a considerable fee:If you insist on us making these changes anyway, we must chargeyou $99 for rescheduling text department assignments. For thatfee we will be able to make up to 5 pages of changes. You havesubmitted more than 5 pages. Please let us know if you wish tohave all of the pages considered, so we can let you know the cost.Please let us know how you would like us to proceed. If you optfor having the change implemented, we will call you for yourcredit card information. [¶ 88.]Naturally, Mr. McCall objected. He had pointed out these errors before defendant published thebook. When defendant sent the proofs, he expected it to make the necessary changes so theycould publish a finished product. When defendant refused, Mr. McCall was forced to publish hiswork with errors on over 40 pages. ¶ 87.Mr. McCall had trusted that Publish America was a traditional publisher with an interestin selling his books. Instead, he soon found that defendant continuously solicited him withpromotional offers that involved buying his own books. ¶ 91. Again Mr. McCall objected. Hetold defendant he was displeased with all of the solicitations for services because PublishAmerica had represented itself as a traditional publisher and had led him to believe that theservices were included and that it paid its authors, not the other way around. ¶ 90. He had alsobeen told that he would have his own personal representative to answer any questions he mighthave, which never happened. Nor did he receive any direct answers from defendant'srepresentative. For example, when he pointed out that defendant had listed his book in thewrong category at its online bookstore, defendant never bothered to respond. ¶ 90.Despite his best efforts, he could not market the book with so many errors. ¶¶ 90, 94.Mr. McCall is deeply disappointed with the whole experience. He seeks the return of hispublication rights. ¶ 95.Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 14 of 40- 8 -010313-11 542909 V1D. Plaintiff Kerri Levine Believed in Publish America Because It Appeared to Be aTraditional Publisher That Valued its Authors, But She Also Was Mistaken.Kerri Levine owns a small business with her husband in St. Louis, Missouri. In 2003 shepublished her first book with a self-publisher called AuthorHouse. While AuthorHouse didexactly what it said it would for exactly the price quoted, Ms. Levine wanted a differentapproach for her second book. What struck her the most about Publish America was that itseemed to be a small business, which she appreciated, and it seemed genuinely interested indeveloping a partnership with the authors, working together for a common goal. At defendant'swebsite she found nothing but glowing accounts about defendant from other authors. ¶ 96.She was thrilled – initially – when Publish America accepted her manuscript in April2010. Her expectations were simple. It struck her that Publish America was taking a huge riskwith her work because the subject matter — atheism — is a controversial subject. Because shepaid no money up front, she expected that she would have to do a lot of work herself to get theword out and arrange book signings and other types of events. But she was perfectly happy to dothe hard work to promote her book and build a mutually beneficial relationship. See id.But the charges rolled in. At first, when she learned there would be charges to correcttypographical errors, for example, she accepted it. She agreed to purchase four books to getsome of the errors corrected. She rationalized it because defendant had not charged her any costsup front. As time went on, it became harder to justify why defendant sent her up to fifteen offersa day on her business computer's e-mail with various promotional offers. But she did accept twoother offers in 2010. To lower the price of her book, which was overpriced at $24.99, she agreedto buy five books to lower the price to $7.99. She also bought six books so that her book wouldbe promoted at the book fair in Germany. Id.Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 15 of 40- 9 -010313-11 542909 V1Her internet service was interrupted for a period of time, during which she did not trackthe progress of her book. Then in January 2012, Ms. Levine learned from friends, who tried toorder her book that the price was still listed at $24.99. She immediately wrote to defendant todemand that it correct the price, as promised. Defendant ignored her request and insteadsuggested she pay another fee to "convert" her softcover book to a hardback. ¶ 98. When shepersisted, defendant blocked her emails.Soon after that she learned on the internet that her experience was not unusual and therewere many unhappy Publish America authors. She asked defendant to release her from hercontract and to provide proof that her book was featured at the book fair in Germany or that thepublication errors in her book were corrected. Defendant responded with the subject line "KerriLevine: nonsense email ignored / cannot backup her own words," and claimed that the posts onthe internet about Publish America are "all lies and half-lies." Id. Defendant referred her to itswebsite with 100% positive testimonials: "Over 4,000 now, unsolicited. That, of course, is thereal story." Id. Defendant reports that she has sold just three books and refuses to release herfrom her contract.E. Plaintiffs' Experiences Are Typical: Many Other Publish America Authors ReportSimilar Experiences.The truth about Publish America's disreputable service is emerging, having been featuredrecently in several publications including the Washington Post, the LA Times, and PublishersWeekly. ¶¶ 23, 26, 29-30, 47, 56-57. One industry reviewer recently described Publish Americaas "at best, a company with a ridiculously inflated view of what they can do for the manythousands of authors who publish with them every year, and at worst, PublishAmericaprosecute[s] a deliberately skewed and misleading model of 'traditional publishing.'" ¶ 35. Thereviewer concludes that Publish America is not a traditional publisher even if it does not chargeCase 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 16 of 40- 10 -010313-11 542909 V1its authors an upfront fee, rather this is a deception "fueled by the ignorance and naivety ofauthors combined with the greed and ignorance of a publisher." Id. At the same time, defendantis also not a vanity press or author-solutions service because it lacks transparency and is "noteven equipped with the paid-services better author solutions services offer, like a competitivelypriced book; a prescribed and effective template of marketing aid for an author; a properlydeveloped network of both physical and online distribution and availability; a contract based onnon-exclusive terms; a strategy that has properly considered the advent of e-books; and mostimportantly of all, a reputation that is remotely salvageable in the book publishing and retailindustries." ¶ 46. "Plainly and simply; PublishAmerica [is] just a bad publisher." ¶ 35. Ratherthan correcting its practices, Publish America continues to lure unsuspecting first-time authorsby the thousands. Id.III. ARGUMENTA Rule 12(b)(6) motion to dismiss tests the legal sufficiency of the complaint, not themerits.2 Rule 12(b)(6) sets a "low bar of stating a claim for relief."3 When a court rules on a12(b)(6) motion to dismiss, all well-pleaded allegations are accepted as true, and all reasonableinferences are drawn in favor of the plaintiff.4 A plaintiff must allege "only enough facts tostate a claim to relief that is plausible on its face."5 When the allegations in a complaint do not"raise a claim of entitlement to relief," the court will dismiss the complaint.62 Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008).3 Cleveland Constr., Inc. v. Fireman's Fund Ins. Co., 2009 U.S. Dist. LEXIS 104982,at *5 (W.D.N.C. Nov. 5, 2009).4 Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999).5 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).6 Id. at 558, 570.Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 17 of 40- 11 -010313-11 542909 V1A. Publish America's Deception Violated the Maryland Consumer Protection ActBecause It Provides its Publishing Services to Consumers and Plaintiffs areConsumers Who Were Deceived by Publish America.Publish America seeks to deny plaintiffs protection under the MCPA, asserting thatplaintiffs cannot plead a cause of action because they are parties to a commercial contract to sellbooks to the public. Publish America relies on Morris v. Osmose Wood Preserving,7 whichrejected claims by consumers against the defendant plywood manufacturer because themanufacturer did not produce the plywood for consumption by consumers and the falsestatements were directed to the home builders, not the consumers. Defendant relies on Morrisfor the proposition that its duties under the MCPA are limited to its interactions with bookpurchasers, not its authors. But unlike the plywood manufacturer, Publish America's clients arenot businesses; they are ordinary consumers. Plaintiffs allege that Publish America's business isattracting inexperienced writers, like plaintiffs, and selling them bogus promotional services orinducing them to buy their own books. For purposes of a motion to dismiss, Plaintiffs havealleged sufficient facts to bring their claims within the MCPA.1. Publish America mischaracterizes the allegations of the complaint:plaintiffs' relationship with defendant is not a commercial venture exemptunder the MCPA.Plaintiffs are individual consumers who contracted with Publish America to publish theirmanuscripts. ¶¶ 8-10, 104. They are not commercial booksellers or even professional writers.¶¶ 77, 87, 91. Publish America directs its website and advertising to consumers interested inbeing published, not to consumers interested in purchasing books. ¶¶ 40, 53. Publish America isnot selective about whom it publishes; it accepts virtually any manuscript. ¶ 22. Indeed, a7 Morris v. Osmose Wood Preserving, 667 A.2d 624, 635-36 (1995).Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 18 of 40- 12 -010313-11 542909 V1"bestseller" at Publish America is a book that sells a couple hundred copies.8 It has no viablepromotion and distribution scheme. ¶ 46. It is the authors themselves and their family andfriends who purchase the vast majority of Publish America books sold. ¶¶ 25, 30, 38, 90.2. It is no defense that plaintiffs theoretically stood to profit from the publishingrelationship.The MCPA must "be construed and applied liberally to promote its purpose" and courtsare instructed to look to the Federal Trade Commission and the federal courts' interpretations of"unfair or deceptive trade practices," under the Federal Trade Commission Act (FTCA) forguidance.9 Like the MCPA, the FTCA regulates practices that may cause consumers injury.10Plaintiffs are unaware of any federal court decision interpreting the FTCA – defendant certainlycites none – that would support Publish America's contention that an author is not entitled toprotection against the deceptive practices of a company offering to provide publishing servicesmerely because the author may obtain royalties from the book's publication. In fact, courtsaddressing similar facts under similar laws specifically reject defendant's arguments. TheSeventh Circuit noted in Morrison v. YTB Int'l, Inc.,11 that "[m]any decisions hold thatpurchasers of home-business packages are 'consumers' for the purpose of the Federal TradeCommission Act."8 See Susan Pagani, Paperback Writer, San Antonio Current (June 24, 2004),http://www2.sacurrent.com/columns/story.asp?id=58606 (cited in Complaint).9 MD. CODE ANN COM. LAW § 13-105. Section 13-105 references § 5(a)(1) of the FTCA,which prohibits "unfair or deceptive acts or practices in or affecting commerce." 15 U.S.C.§ 45(a)(1).10 The FTCA's scope is limited to an "act or practice that causes or is likely to causesubstantial injury to consumers which is not reasonably avoidable by consumers themselves andnot outweighed by countervailing benefits to consumers or to competition." 15 U.S.C. § 45(n).11 Morrison v. YTB Int'l, Inc., 649 F.3d 533, 538-39 (7th Cir. 2011) (collecting cases andrejecting defendants' argument that, for the purposes of the Illinois Consumer Protection Act,plaintiffs were not consumers because they "sought financial gain" under defendants' pyramidscheme).Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 19 of 40- 13 -010313-11 542909 V1For example, in FTC v. Febre,12 the Seventh Circuit affirmed an order grantingpermanent injunctive relief under the FTCA against a corporation "engaged in deceptivebusiness practices by advertising, promoting, offering for sale, selling, or inducing consumers toparticipate in work-at-home opportunities in which consumers would use the Ace programs toearn money." In doing so, the Febre court held that purchasers and participants in work-at-homebusiness opportunities were "consumers" for FTCA purposes, acknowledging that the FTCA'svery purpose was "to protect consumers from economic injuries."13 Similarly, in FTC v.Freecom Communications, Inc.,14 the Tenth Circuit held that the FTC presented evidence thatdefendants had violated the FTCA by promoting business opportunities to consumers usingatypical, false, and/or inapplicable success stories and testimonials to reflect the ordinaryexperiences of satisfied consumers and providing fraudulent income projections to consumers invarious infomercials, print ads, and seminars.15Many district courts have enjoined businesses and individuals who likewise haveengaged in fraud in the sale or promotion of at-home business opportunities. For example, thecourts in FTC v. Financial Resource Unlimited, Inc.16 and FTC v. Cruz,17 issued injunctionsagainst defendants under the FTCA to bar them from selling "work-at-home" business12 FTC v. Febre, 128 F.3d 530, 532 (7th Cir. 1997).13 Id. at 536.14 FTC v. Freecom Comm'ns, Inc., 401 F.3d 1192, 1197 (10th Cir. 2005).15 The FTC sued several corporations and individual defendants, and settled with all but onedefendant, who prevailed at trial and was awarded attorneys' fees. On appeal the FTCchallenged the award of attorneys' fees and prevailed. The appeals court specifically found thatthe FTC had evidence that defendants violated the Federal Trade Commission Act by makingmaterial misrepresentations likely to deceive ordinary consumers. Id. at 1204.16 FTC v. Financial Resource Unlimited, Inc., 2006 U.S. Dist. LEXIS 27630, at *5, *10(N.D. Ill. Apr. 25, 2006).17 FTC v. Cruz, 2010 U.S. Dist. LEXIS 4568, at *4 (D.P.R. Jan. 19, 2010).Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 20 of 40- 14 -010313-11 542909 V1opportunities to consumer purchasers, which they promoted falsely. Similarly, in FTC v.Medical Billers Network, Inc.,18 the court held that a permanent injunction under FTCA waswarranted against defendant who "made misrepresentations to consumers for years" with respectto sales of "work-at-home medical billing opportunities." In FTC v. Medicor, LLC,19 the courtenjoined defendants from selling an electronic-claims-processing package to customers whowished to work from home part- or full-time by submitting medical bills from doctors to benefitsprograms because they falsely represented consumers' potential income consumers and workopportunities, and the company's refund policy. Finally, in FTC v. Para-Link Int'l, 20 the courtenjoined defendants who lured potential purchasers into buying a work-at-home kit withdeceptive promises that defendants would train purchasers to become a paralegal and receivecase referrals from the defendants.Federal appellate courts interpreting states' consumer-protection laws also conclude thata consumer does not lose protection by entering into a service contract for purposes of financialgain. Plaintiffs in Morrison v. YTB Int'l, Inc.,21 alleged that defendants engaged in a pyramidscheme that targeted consumers interested in working part-time or full-time in the travelindustry. Like Maryland, Illinois limits its consumer-protection law to consumer transactions.2218 FTC v. Medical Billers Network, Inc., 543 F. Supp. 2d 283, 323 (S.D.N.Y. 2008).19 FTC v. Medicor, LLC, 217 F. Supp. 2d 1048, 1050-51 (C.D. Cal. 2002).20 FTC v. Para-Link Int'l, 2001 U.S. Dist. LEXIS 17372, at *5-6, *19-20 (M.D. Fla. Feb. 28,2001).21 Morrison, 649 F.3d at 538-39. See also Morrison v. YTB Int'l, Inc., 641 F. Supp. 2d 768,773 (S.D. Ill. 2009), vacated, 649 F.3d 533 (7th Cir. 2011).22 815 ILCS 505/1(e) ("[t]he term 'consumer' means any person who purchases or contractsfor the purchase of merchandise not for resale in the ordinary course of his trade or business butfor his use or that of a member of his household"); Durst v. Ill. Farmers Ins. Co., 2006 U.S. Dist.LEXIS 2870 (N.D. Ill. Jan. 12, 2006) ("[a] plaintiff in a [Illinois Consumer] Fraud Act suit mustalso be a consumer, as defined under the statute").Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 21 of 40- 15 -010313-11 542909 V1Relying in part on FTC home-business-scam cases, the Seventh Circuit rejected defendants'argument that because individual plaintiffs "sought financial gain" from their relationship withdefendant, they were businesses who lacked standing to bring a claim under the IllinoisConsumer Fraud Act.23So too in Rice v. Snarlin, Inc.,24 where, much like Publish America's scam, the defendantcompany offered advertising contracts to young models, falsely claiming that it would publishtheir names, addresses, and phone numbers in a model directory that would be sent to 500companies. The court ruled that the plaintiff mother, on behalf of her minor daughter, stated acause of action under the Illinois Consumer Fraud Statute for deception and that she fit withinthe definition of a "consumer."25In Hofstetter v. Fletcher,26 the Sixth Circuit rejected a similar argument under the OhioConsumer Sales Practices Act, which, like Maryland's act, applies only to transactions that areprimarily for personal, family or household use. Defendants argued that their activities, whichincluded encouraging creating and operating a home-based business, did not fall within thedefinition of a "consumer transaction" because such activities did not involve the sale of goodsor services "'to an individual for purposes that are primarily personal, family, or household.'"27The court disagreed, finding "defendants' tax planning program was directed at reducing the23 Morrison, 649 F.3d at 539. The court also noted that the Illinois Consumer Fraud Actexpressly bans pyramid schemes. Id. at 538.24 Rice v. Snarlin, Inc., 266 N.E.2d 183 (Ill. App. Ct. 1970).25 Id. at 187.26 Hofstetter v. Fletcher, 905 F.2d 897, 905 (6th Cir. 1988) (quoting OHIO REV. CODE ANN.1345.01(A) (1987) (defining "consumer transaction" to mean a sale or other transfer involving agood or service to "an individual for purposes that are primarily personal, family, or household,or solicitation to supply any of these things").27 Id. at 906.Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 22 of 40- 16 -010313-11 542909 V1plaintiff's personal-income-tax liability. The creation and operation of a home-based businesswas merely incidental to the overall goal of eliminating [plaintiff's] personal tax liability."28Like these defendants, Publish America directed its deceptive conduct at individualsseeking personal fulfillment, not businesses. Plaintiffs' economic incentive — the outsidepossibility of significant royalty payments from the sales of their books — is merely incidental tothe goal of seeing their works in print and available to friends, family and other readers.In reply, Publish America may assert Holland v. Psychological Assessment Resources,29to argue that an author may never be a consumer for the purposes of the MCPA. But the Hollandcourt never reached that question because the plaintiff in that case chose not to pursue the claim.Even assuming the Holland plaintiff would been barred, the case is distinguishable because hehad published a "groundbreaking" work that had been "used by over twenty million people andtranslated into twenty-five languages,"30 whereas here, plaintiffs and members of the proposedclass have published works that were purchased primarily by themselves, their family andfriends. ¶¶ 25, 30, 38, 90. These allegations support a MCPA consumer-deception claim.B. Publish America Misled and Injured Plaintiffs.To prevail on a MCPA claim, a private plaintiff must prove that defendant engaged in anunfair and deceptive practice expressly prohibited by the CPA and that he or she sustained aninjury as a result.31 For the purposes of a consumer-deception claim, "the meaning of anystatement or representation is determined not only by what is explicitly stated, but also by what28 Id.29 Holland v. Psychological Assessment Resources, 482 F. Supp. 2d 667, 682 (D. Md. 2007).30 Id. at 668-69.31 Citaramanis v. Hallowell, 613 A.2d 964, 967 (Md. 1992).Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 23 of 40- 17 -010313-11 542909 V1is reasonably implied."32 Defendant seeks to dismiss the MCPA claims based on amisconception of plaintiffs' claim and an unreasonably narrow construction of its contractprovisions and the statements on its current website. Publish American's argument also failsbecause it applies the wrong standard to consumer deception and because it fails to construe allreasonable inferences in plaintiffs' favor.331. Publish America deceived plaintiffs and the Class in forming their contractsby claiming to be a traditional publisher that would publish them for free.Plaintiffs claim that Publish America fraudulently induced them and members of theproposed class to enter into a publishing contract with Publish America through misleadingrepresentations on its website and other promotional materials. These materials falsely claim orconvey the false impression that the company will engage in reasonable marketing efforts andprovide reasonable support to its authors in their efforts to promote their works. Plaintiffs alsoclaim that Publish American misled them and class members because its website, promotionalmaterials and contract did not disclose to its authors that it would only promote their works on afee-for-service basis. ¶¶ 3, 8-11, 21, 41, 117, 119. This is not mere "puffery" - Publish Americamisrepresents specific services it would provide plaintiffs and the scores of individualsreferenced in their complaint.34 Publish America also deceives consumers by stripping allnegative reviews from its website and disparaging its critics. ¶ 34. For the purposes of a motion32 Golt v. Phillips, 517 A.2d 328, 332 (Md. 1986).33 Cf., Hartford Accident & Indem. Co. v. Scarlett Harbor Assocs., 674 A.2d 106, 118 (Md.Ct. Spec. App. 1996) ("The Council alleged that the Purchase Agreements falsely stated that theCondominium would conform to plans and specifications. We cannot say, as a matter ofundisputed, material fact, that the alleged misrepresentation does not have the capacity tomislead consumers.").34 Cf., McGraw v. Loyola Ford, Inc., 723 A.2d 502, 512 (Md. Ct. Spec. App. 1999) (findingno deception because customers could not reasonably have relied on such vague and customarysales talk as "the most outstanding value").Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 24 of 40- 18 -010313-11 542909 V1dismiss, plaintiffs have satisfactorily alleged a "representation of any kind which has thecapacity, tendency, or effect of deceiving or misleading consumers[.]"352. Defendant has failed to show that plaintiffs' claims of deception areimplausible.At this stage, plaintiffs need only allege facts that plausibly support their claim. The webpages central to their claim do not render plaintiffs' claims implausible. Rather, they help todemonstrate defendant's deception, i.e., by the false or misleading statements that PublishAmerica does not want to take the authors' money,36 that its contract does not charge publishingfees,37 that it is in no way a vanity press or subsidy publishing[] and has nothing in common withthem,"38 that the defendant "knows the venues of how to inform the rest of the world," and thatonce the author has completed his or her work, Publish America will "take it from there."39Publish America's statement that it offers "special post-publication promotion opportunities at afee" is also confusing and deceptive because it does not plainly state it provides no marketing atall unless paid to do so. Defendant also represents that "[e]lectronic publishing rights are part ofevery book's publishing rights" and that "Publish America has converted thousands of e-booksfor Amazon's Kindle, Barnes and Noble's Nook and Google's e-book store," but it does notacknowledge that this is a free service available through these booksellers, but Publish Americacharges its authors for it.4035 MD. CODE ANN., COM. LAW § 13-301 (2012).36 Def.'s Ex. B.37 Def.'s Ex. A (twice), Ex. B (twice).38 Def.'s Ex. B.39 Def.'s Ex. C.40 Def.'s Ex. B.Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 25 of 40- 19 -010313-11 542909 V1a. Mr. McCall makes a plausible claim he was deceived by defendant'srepresentations and reasonably expected defendant to correct theerrors he discovered in his manuscript before it was published.Plaintiff McCall believed Publish America's representation that it was a traditionalpublisher, that it was interested in selling his book and that it would do its part to promote it.¶¶ 87, 91. He was misled in this belief because defendant published his manuscript with scoresof errors on over 40 pages, ¶ 88, and defendant failed to support his marketing efforts, especiallyby refusing to correct the errors, ¶¶ 88-89, 91-93.Defendant appears to argue that Mr. McCall should have realized from his contract thatPublish America was free to publish his work without proofing it. Defendant is wrong and itsreliance on Call Carl, Inc. v. BP Oil Corp.41 is misplaced. That court held that plaintiffs couldnot avoid the parol-evidence rule merely by claiming that defendants fraudulently induced themto sign the contract.42 Call Carl's reasoning does not apply here because the contract does notrefute Mr. McCall's expectations under the contract, expectations that Publish America itselfcreated and encouraged by misrepresenting itself as a traditional publisher that did not charge itsauthors except for extraordinary services and by deleting negative comments from its website, sothat Mr. McCall (and others like him) was not warned of the possibility that Publish Americawould publish an author's manuscript knowing that it contained multiple errors.Paragraph 8 of the contract merely states that the "Author agrees to provide PublishAmerica a final version of the manuscript and that once it is in final form, no changes are to bemade except to correct Publish America's errors."43 But this statement cannot be considered inisolation. First, Publish America represented itself as a reputable publisher — not a mere41 Call Carl, Inc. v. BP Oil Corp., 554 F.2d 623 (4th Cir. 1977).42 Id. at 630-31.43 Compl., Ex. C, ¶ 8.Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 26 of 40- 20 -010313-11 542909 V1photocopy shop. Mr. McCall relied on this representation and reasonably expected defendant toshare his desire to sell his book and to intend to publish his work reasonably free of errors — incontrast to a photocopy or printing shop that raises no expectations of a shared interest in thefinal product's content quality. The contract does not contradict these representations.Second, this is not a case where an author discovered errors after publication and the costof withdrawing the books from the market would be cost-prohibitive. Defendant's books do noteven exist until defendant processes an order from a bookseller. Further, Mr. McCall discoveredthe errors before the book went "into print" — whatever that actually means for a print-ondemandbook — when defendant sent him the proofs to review. It is entirely reasonable for Mr.McCall (and others like him) to expect defendant to make the corrections for free, or at a veryminimum allow Mr. McCall himself to correct his manuscript and resubmit it for publicationwithout charge. Plaintiffs are entitled to that reasonable inference on this motion.Defendant's reliance on the contract's marketing provision fares no better. The contractprovides that all marketing decisions are left to Publish America's discretion.44 This, too, is misleading.A consumer could reasonably assume that objective factors, like a product's marketability,would determine how much marketing Publish America would do. The contract did notnotify Mr. McCall that Publish America would exercise its "discretion" under the contract only ifhe paid more money. These allegations are sufficient at the pleading stage.b. It is plausible that Ms. Yoos and Ms. Levine were deceived bydefendant's claim to be a traditional publisher but still pay for its"special" marketing services.Plaintiffs Yoos and Levine, like thousands of other aspiring authors who signed up withPublish America, were deceived because they relied on its representation that it was a traditional44 Id., Exs. A, B, and C, ¶ 8.Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 27 of 40- 21 -010313-11 542909 V1publisher, when in fact the publishing relationship turned out to be a pretext to sell promotionalservices. ¶¶ 7, 77, 96. Publish America asserts Ms. Yoos and Ms. Levine could not both bedeceived by its misrepresentations in forming the contract, which granted defendant exclusivepublishing rights to their books for at least seven years, and still have paid for its "special"marketing services.45 But this is a trial argument — defendant fails to demonstrate it is implausiblefor plaintiffs to sign with defendant based on defendant's representations, and then end uppaying hidden fees when Publish America essentially held their books hostage. Defendantowned the books' publication rights and it appeared their books would never be marketed unlessthey paid the fees. Only by defendant's perverse logic could such extorted payments be deemeda "waiver."For example, persuaded by Publish America's representations, Ms. Yoos assigned it thepublishing rights to her book. With exclusive publishing rights on her book locked up, PublishAmerica pitched marketing "services" to her, which she purchased. And with none of its ownresources invested in her book, Publish America also priced the book at $24.95, too high tocompete with other books by first-time or unknown authors. When Ms. Yoos asked defendant todrop the price to make it more competitive, it told her she would have to pay $399 to lower theprice for printed editions and another $399 for the ebook edition. ¶¶ 77-80. Fed up, she askedPublish America to release publishing rights to her book back to her — for which defendantcharged her another $320.93. ¶¶ 81-85. Ms. Yoos did not know when she signed her contractassigning publishing rights to Publish America that it intentionally overpriced its books so thatauthors like her would later have to pay it to lower the book price. Neither did Ms. Yoos knowbeforehand that she would have to incur so many hidden costs that she would spend another45 Def.'s Br. at 13-14.Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 28 of 40- 22 -010313-11 542909 V1$320.93 for release from her contract. Her payment of these fees for purported marketing andother services, while Publish America possessed exclusive publishing rights to her book, do notshow it is more plausible she accepted the fees were proper and thus "waived her objection" tothem rather than that she paid only under duress. These allegations are sufficient to withstand amotion to dismiss.46Publish America's authorities do not demonstrate it is implausible for plaintiffs to havepaid fees that were unexpected when they first granted defendant exclusive publishing rights totheir books. Lloyd v. GMC, merely holds that plaintiffs must prove reliance,47 which plaintiffsdo not dispute. Plaintiffs plead reliance: they selected defendant because it purported to be atraditional publisher; they assigned exclusive publishing rights to defendant for seven years orlonger; they paid for the services because they had little choice and they thought PublishAmerica was helping them market the books. Defendant's only other authority, ProgressiveCasualty Ins. Co. v. Ehrhardt,48 recites an insurance-law principle that an insurance companymay waive its contractual rights (to reinstate coverage) if it acts inconsistently (by acceptingpremium). Plaintiffs are unaware of any authority that would imply waiver as a matter of law toconsumers under the facts of this case.3. These deceptions injured plaintiffs because plaintiffs granted exclusivepublishing rights to Publish America.Had they not been deceived, plaintiffs and class members could have explored better,alternative options to bring a finished book of good quality to the reading public. For example, if46 Plaintiff Levine's circumstances are similar. ¶¶ 96-102. Plaintiffs respond separately thatPublish America deceived them by misrepresenting the marketing and other services they couldpurchase. See infra at 24-24.47 Lloyd v. GMC, 916 A.2d 257, 277 (Md. 2007).48 Progressive Cas. Ins. Co. v. Ehrhardt, 518 A.2d 151, 157 (Md. Ct. Spec. App. 1986).Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 29 of 40- 23 -010313-11 542909 V1their work was accepted and they were willing to pay a substantial fee, plaintiffs could have gonewith a reputable, established self-publisher, like Vantage, that provides expert editing services(both style and form) and high-quality promotion for a fee. ¶ 17. Less selective and cheaperself-publishers also exist with varying options to market the finished product. Id. BecausePublish America portrays itself as a traditional publisher deceived plaintiffs, they lost this opportunity,thereby saddling them with a flawed and/or overpriced product. ¶¶ 2-3, 7, 24. Their onlyremedy is to pay Publish America a steep price to correct the flaws (typographical only) or dropthe price. Publish America charges hundreds of dollars for these services. It offered, forexample, to correct just five of the 40 pages of errors in Mr. McCall's book for $99. ¶ 88.Plaintiffs also have printed their works at a local printer or book binder at little cost andwithout losing control over the marketing of their book. Writers can also post and sell their workas an electronic book (e.g. Kindle) on Amazon or at Barnes and Nobel for free. ¶ 52. PublishAmerica eliminates this option for authors when they sign the contract; they must pay defendanta substantial fee — up to a couple hundred dollars for the privilege of taking part in this service,which is free to others. Id. These allegations satisfy the MCPA's injury requirement.49Plaintiffs McCall and Levine also seek the return of their publication rights.50 Defendantclaims that a reversion of rights is rescission, which is not allowed under the MCPA. Butdefendant misreads its cases. In Golt v. Phillips,51 the court held that plaintiff was entitled tocompensatory damages consisting of restitution of the rent that he paid for three months for anuninhabitable apartment and consequential damages, such as the cost of moving from the49 MD. CODE ANN., COM. LAW § 13-408 (2012).50 Plaintiff Yoos paid Publish America to return her rights; she seeks to recover that paymentand all other payments she made for Publish America's fraudulent services. See supra at 6.51 Golt v. Phillips, 517 A.2d 328, 333 (Md. 1986).Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 30 of 40- 24 -010313-11 542909 V1premises and the additional cost of substitute housing for the remainder of the term of the leasehe had entered with Phillips Brothers. Golt makes clear, however, that compensation is notlimited to refunding the payment to defendant, but may also include other losses caused by thefraud, which in this case includes reverting publication rights to their rightful owners.524. After they had assigned publication rights to their books to Publish America,plaintiffs were injured further because they paid Publish America forservices that it did not provide or falsely portrayed.Plaintiffs also allege that Publish America sent them many false or misleading offers.False claims include its offer to promote its authors' books at the Edinburgh book festival (for afee), when it was never signed up as a participant, or when it claimed to present its authors'books to J.K. Rowling (for a fee), when it made no such arrangements with Ms. Rowling, whopublicly disavowed any connection with Publish America. Misleading claims include all offersto promote its authors at any book fair, trade fair or in dealings with movie studios and the like,because it lacks the reputation, skills and connections to provide effective marketing services.¶¶ 56-71, 117-18, 120. These claims satisfy the requirement of alleging a "representation of anykind which has the capacity, tendency, or effect of deceiving or misleading consumers[.]"53Plaintiff Yoos spent around $1500 and Plaintiff Levine also spent hundreds of dollars forunfulfilled or worthless services. ¶¶ 77, 96. These allegations satisfy the injury requirement.54C. The Court Should Deny Publish America's Motion to Strike Because PublishAmerica Cannot Demonstrate Harm From the Articles and Blogs Cited in the52 Id. at 334. Defendant's other citations stand for the uncontroversial assertions that theMCPA requires injury and reliance. Luskin's, Inc. v. Consumer Prot. Div., 726 A.2d 702, 713(Md. 1999) (noting that a material misrepresentation involves information that is important to aconsumer's choice of services or products); McGraw v. Loyola Ford, Inc., 723 A.2d 502, 512(Md. Ct. Spec. App. 1999) (misrepresentation must be the cause of any injury or loss).53 MD. CODE ANN., COM. LAW § 13-301 (2012).54MD. CODE ANN., COM. LAW § 13-408 (2012).Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 31 of 40- 25 -010313-11 542909 V1Complaint, When the Allegations Are Relevant to the Claims Asserted and AreNeither Repulsive Nor Beneath the Court's Dignity.Publish America moves to strike "disparaging statements about PA that were made bythird parties" and class allegations. These statements by various authors and industry spokespeopleare taken from articles and blog posts that describe Publish America's deceptivepractices. The motion should be denied.The Court may strike from any pleading "redundant, immaterial, impertinent or scandallousmatter."55 Striking a portion of a pleading is a drastic and generally disfavored remedy.56None of Publish America's authorities justify striking the allegations in question. Mike'sTrain House, Inc. v. Broadway Ltd. Imps., LLC,57 Schultz v. Braga,58 and Xerox Corp. v.ImaTek, Inc.,59 did not strike allegations because they were scandalous. The allegations werestricken instead because they were inadequately pled60 or irrelevant.61For the purposes of a motion to strike, the word "scandalous" refers to "any allegationthat unnecessarily reflects on the moral character of an individual or states anything in repulsivelanguage that detracts from the dignity of the court."62 "It is not enough that the matter offendsthe sensibilities of the objecting party if the challenged allegations describe acts or events that55 Fed. R. Civ. P. 12(f).56 Waste Mgmt. Holdings v. Gilmore, 252 F.3d 316, 347 (4th Cir. 2001).57 Mike's Train House, Inc. v. Broadway Ltd. Imps., LLC, 2011 U.S. Dist. LEXIS 62054 (D.Md. June 10, 2011).58 Schultz v. Braga, 290 F. Supp. 2d 637 (D. Md. 2003), aff'd, 455 F.3d 470 (4th Cir. 2006).59 Xerox Corp. v. ImaTek, Inc., 220 F.R.D. 244, 245 (D. Md. 2004).60 Mike's Train House, Inc., 2011 U.S. Dist. LEXIS 62054, at *10-11; Schultz, 290 F. Supp.2d at 655.61 Xerox Corp., 220 F.R.D. at 245.62 Pigford v. Veneman, 215 F.R.D. 2, 4 (D.D.C. 2003) (emphasis added).Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 32 of 40- 26 -010313-11 542909 V1are relevant to the action."63 Motions to strike are not typically granted absent a showing ofsignificant prejudice.64 Any doubt as to striking of matter in pleading should be resolved infavor of the pleading.65As an example of scandalous allegations, the court in Pigford v. Veneman struckunfounded and irrelevant statements directed at opposing counsel. 66 As another example, Morsev. Weingarten67 struck references to a party's criminal conviction and his income level, whichhad no bearing on the case and served no purpose except to inflame the reader. None of theelements of a scandalous allegation are present here. Publish America does not claim that itscounsel or any of its principals have been personally disparaged or that the Complaint frames theallegations at issue in repulsive language that detracts from the Court's dignity. And while itdisputes the allegations themselves, i.e., its deceptive practices, it does not dispute the evidentiarybasis for these allegations, i.e., the multiple articles and blogs describing these practices.Publish America also fails to identify how it is prejudiced, and it is hard to see how itwould be — interested readers can easily find the articles and blogs quoted and summarized inthe complaint, e.g., LA Times, Washington Post, and Frederick News-Post articles are found onthe internet and in libraries across the country. Publish America also acknowledges that theseallegations describe authors' experiences with defendant. See Def.'s Br. at 16.63 Gitto v. Worcester Telegram & Gazette Corp., 2005 U.S. Dist. LEXIS 7918, at *29 n.9(D. Mass. May 2, 2005) (quoting 5C WRIGHT &MILLER, FEDERAL PRACTICE AND PROCEDURE3D. § 1382 (2004)).64 McKinney v. Bayer Corp., 2010 U.S. Dist. LEXIS 69247 (N.D. Ohio July 12, 2010).65 Lacey v. Braxton, 2011 U.S. Dist. LEXIS 84313, at *18-19 (W.D. Va. Aug. 1, 2011).66 Pigford, 215 F.R.D. at 4.67 Morse v. Weingarten, 777 F. Supp. 312, 319 (S.D.N.Y. 1991).Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 33 of 40- 27 -010313-11 542909 V1Defendant's remaining objections are also easily resolved. It complains that some of thearticles were written before plaintiffs' claims arose. But allegations of past and recurringconduct are relevant to establish Publish America's intent to deceive.68 The experiences of theauthors described in the articles and blogs about Publish America are strikingly similar to theplaintiffs' experiences, which thus are clearly relevant to establish class allegations. ¶ 106.Defendant also seeks to strike class allegations and narrow them to the precise conductdirected at the named plaintiffs. But the scope of the proposed class and the adequacy of thenamed plaintiffs to represent the class are questions "better left for the class certificationstage."69 Defendant's attempt to refute the allegations by referring to statements on its website ismisplaced. Allegations in a complaint cannot be stricken simply because a defendant challengestheir factual basis.70D. Plaintiffs May Pursue a Declaration of Their Rights Along with Other, OverlappingRemedies.Publish America asks the Court to dismiss plaintiffs' declaratory judgment claim on thesame grounds that it moved to dismiss the MCPA claim.71 Because plaintiffs have establishedthat they are consumers for the purpose of the MCPA and have adequately pled the elements of aMCPA claim, the request should be rejected. See supra at 11-24.68 See SEC v. Treadway, 2011 U.S. Dist. LEXIS 73950, at *6-9 (S.D.N.Y. June 29, 2011);Tierco Md., Inc. v. Williams, 849 A.2d 504 (Md. 2004) (punitive damages based on deceitrequire proof that the defendant knew that its representations were false).69 Lantz v. Am. Honda Motor Co., 2008 U.S. Dist. LEXIS 3556, at *10 (N.D. Ill. Jan. 17,2008).70 Colodny v. Iverson, Yoakum, Papiano & Hatch, 838 F. Supp. 572, 575 (M.D. Fla. 1993).71 Def.'s Br. at 16-18.Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 34 of 40- 28 -010313-11 542909 V1Defendant next argues that the Court should strike the claim because plaintiffs do notseek to clarify whether their conduct is legal. But declaratory judgments serve many purposes.72Other purposes relevant to this lawsuit are the "judicial efficiency by avoiding multipleproceedings" and the "alternative to injunctive relief with a lesser showing than is required toobtain an injunction."73 The Declaratory Judgment Act does not impose a higher threshold forjusticiability than the basic Article III requirement that federal courts shall only decide cases orcontroversies: (i) an injury in fact; (ii) a causal connection between the injury and the conductcomplained of; and (iii) the likelihood that a favorable decision will redress the injury.74Defendant does not dispute justiciability.Defendant's other arguments fare no better. Publish America asks the Court to dismissthe claim because it asks the Court to resolve the same issues identified in their MCPA damagesclaims.75 Defendant's argument is rebutted by the very text of the Federal Declaratory JudgmentAct, which provides: "upon filing of appropriate pleading, [federal courts ] may declare therights and other legal relations of any interested party seeking such declaration, whether or notfurther relief is or could be sought." 76 Likewise, Rule 57 of the Federal Rules of CivilProcedure, which governs declaratory actions, provides: "The existence of another adequate72 12-57 MOORE'S FEDERAL PRACTICE – CIVIL § 57.04.73 Id.74 MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 138 (2007).75 Def.'s Br. at 19.76 28 U.S.C. § 2201 (emphasis added).Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 35 of 40- 29 -010313-11 542909 V1remedy does not preclude a declaratory judgment that is otherwise appropriate."77 PublishAmerica's authority does not suggest otherwise.The decision in Gallant v. Deutsche Bank National Trust Co.78 turned not on theavailability of other claims — indeed the court found that she had no cognizable claims againstthe bank — but rather on redressability. Since the house had already been foreclosed, the courtdismissed the declaratory judgment claim seeking to declare the sale void.79 Tapia v. UnitedStates Bank, N.A.,80 involved the same circumstances and the court also dismissed the declaratory-judgment claim because the house had already been foreclosed and a declaration invaliddatingthe foreclosure would not have helped plaintiff, who had no legal standing to recoveragainst the bank for the foreclosure. The court in Hipage Co. v. Access2Go, Inc.,81 dismissedplaintiff's action to declare its rights under a contract when he had already been sued in anotherforum for breach of contract. In such cases, while the court technically could have heard thecase, plaintiff was plainly forum shopping and allowing the claim to go forward could have ledto inconsistent results. In Johnson v. D&D Home Loans Corp.,82 defendants did not dispute theavailability of declaratory relief as a possible remedy but objected to the stand-alone declaratoryjudgmentclaim when plaintiffs had already requested declaratory relief in several of its otherclaims and the court granted the request. And defendant miscites Eaton Vance Mgmt. v.77 Fed. R. Civ. P. 57 (emphasis added). See also Advisory Committee Note to 1937Adoption to Fed. R. Civ. P. 57 (the fact that another remedy would be equally effective affordsno ground for declining declaratory relief).78 Gallant v. Deutsche Bank Nat'l Trust Co., 766 F. Supp. 2d 714 (W.D. Va. 2011).79 Id. at 719.80 Tapia v. United States Bank, N.A., 718 F. Supp. 2d 689, 695 (E.D. Va. 2010).81 Hipage Co. v. Access2Go, Inc., 589 F. Supp. 2d 602, 606, 616 (E.D. Va. 2008).82 Johnson v. D&D Home Loans Corp., 2007 U.S. Dist. LEXIS 90140, at *11 (E.D. Va. Dec.6, 2007), aff'd, 559 F.3d 238 (4th Cir. 2009).Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 36 of 40- 30 -010313-11 542909 V1ForstmannLeff Assocs., LLC,83 which does not contain the quotation defendant ascribes to it(Def.'s Br. at 19). Nor does it support defendant's argument. The court found the plaintiff, whowas not a party to the contract, had no standing to seek a declaration of contractual rights.84Finally, Publish America is incorrect that the class-action procedure foreclosesdeclaratory judgment. This is specifically contemplated by Rule 23(b)(2) of the Federal Rules ofProcedure, which addresses class actions that primarily seek injunctive or declaratory relief. Ifplaintiffs proceed under that section, the notice requirements are relaxed and plaintiffs do notneed to meet Rule 23(b)(3)'s predominance requirements. Regardless, Publish America'spredominance challenge is premature, when there has been no discovery and there is no pendingclass-certification motion.85 Plaintiffs will not indulge defendant with a response to its senselessprojections of plaintiffs' alleged motives and litigation strategy.E. Plaintiffs Have Properly Pled Their Unjust-Enrichment Claim Because They AllegeFraud in the Formation and Maintenance of Their Contract.The parties agree that the elements of an unjust-enrichment claim are (i) a benefitconferred upon the defendant by the plaintiff; (ii) defendant's knowledge of the benefitconferred; and (iii) circumstances that make it inequitable for the defendant to retain the83 Eaton Vance Mgmt. v. ForstmannLeff Assocs., LLC, 2006 U.S. Dist. LEXIS 55741, at *18-19 (S.D.N.Y. Aug. 11, 2006).84 Id., 2006 U.S. Dist. LEXIS 55741, at *18-19.85 See, e.g., Landsman & Funk PC v. Skinder-Strauss Assocs., 640 F.3d 72, 93 (3d Cir. 2011)(holding that a district court's ruling on class certification on a motion to dismiss was premature,noting that, "[p]articularly when a court considers predominance, it might have to venture intothe territory of the claim's merits and evaluate the nature of the evidence. In most cases, somelevel of discovery is essential to such an evaluation"), vacated, en banc review granted, 650 F.3d311 (3d Cir. 2011), order granting en banc reargument vacated, 2012 U.S. App. LEXIS 11946(3d Cir. Apr. 17, 2012).Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 37 of 40- 31 -010313-11 542909 V1benefit.86 Plaintiffs allege that Publish America obtained exclusive publishing rights to theirworks and fees for bogus services, and that it has acknowledged receipt of both. ¶¶ 126-27.Because Publish America represented itself as a traditional publisher and then failed to provideeven the minimum services of a traditional publisher, allowing it to retain the publication rightsto plaintiffs' works for seven years or more would be inequitable. For the same reason, it isinequitable for defendant to retain payment for services related to producing and promoting ofplaintiffs' books. It is also inequitable for defendant to retain payment for services that itmisrepresented or failed to carry out. ¶ 129.While it is generally true that a person making a claim based upon an express contractmay not also rely on the doctrine of unjust enrichment,87 a party may proceed on a theory ofunjust enrichment where, as here, there is evidence of fraud or bad faith in forming the contractthat would otherwise govern or if rescission is otherwise warranted.88 Plaintiffs allege just suchfraud or bad faith. See, e.g., ¶¶ 117-19, 24-25. Publish America's reliance on FLF, Inc. v. WorldPublications89 is therefore misplaced. There, the plaintiff claimed that defendant (which hadacquired plaintiff's assets) was unjustly enriched because it failed to make severance paymentsto plaintiff's employees. The court dismissed the claim because the contract under which thedefendant acquired the plaintiff's assets specifically provided that the defendant would not be86 Hill v. Cross Country Settlements, LLC, 936 A.2d 343, 351 (Md. 2007); Def.'s Br. at 21-22.87 Elderkin v. Carroll, 941 A.2d 1127, 1129 (Md. 2008).88 Kwang Dong Pharm. Co. v. Myun Ki Han, 205 F. Supp. 2d 489, 497 (D. Md. 2002);County Comm'rs of Caroline Cnty. v. J. Roland Dashiell & Sons, Inc., 747 A.2d 600, 609 (Md.2000).89 FLF, Inc. v. World Publications, 999 F. Supp. 640 (D. Md. 1998).Case 1:12-cv-01696-MJG Document 12 Filed 08/06/12 Page 38 of 40- 32 -010313-11 542909 V1liable for such payments and there were no allegations of fraud or bad faith in the formation ofthe contract that would warrant rescission of that agreement.90By contrast, plaintiffs claim they were defrauded in forming the contract and ask theCourt to void it and Publish America's publishing rights to their manuscripts. ¶¶ 87, 91, 117-20,128-29, Prayer for Relief ¶ C. These allegations state a cause of action for unjust enrichmentand, if proved, would provide the basis for repaying all the fees Publish America obtained fromPlaintiffs Yoos and Levine for the bogus services it charged to them under the publishingagreement. Plaintiffs also have a claim for punitive damages based on their unjust-enrichmentclaim.91IV. CONCLUSIONPlaintiffs ask the Court to find that plaintiffs have standing as consumers and they haveadequately pled all of their claims. Should the Court find any of the pleadings deficient,plaintiffs ask leave to amend. Plaintiffs also ask the Court to deny defendant's motion to strikeclass allegations and third-party accounts of defendant's misconduct. These are supportedallegations, material to the claims alleged, not scandalous in nature or likely to harm defendantunfairly with their inclusion. Posted by