Monday, June 10, 2002
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West Publishing Liable for Not Publishing Lawyer’s Treatise—Court
By KENNETH OFGANG, Staff Writer/Appellate Courts
West Publishing Company is liable for breach of its contract to publish a local attorney’s treatise on “the intriguing subject” of fiduciary duty, the Ninth U.S. Circuit Court of Appeals ruled yesterday.
Reversing a summary judgment in favor of America’s only remaining large legal publisher, the panel said West must compensate Woodland Hills sole practitioner Rafael Chodos because its decision not to publish his completed work was based on economics and not quality.
The panel, in an opinion by Judge Stephen Reinhardt, “unequivocally rejected” U.S. District Judge Audrey Collins’ ruling that West’s right to reject the final manuscript on the basis of its “form and content” allowed it to make a good-faith commercial judgment that the work should not be published.
Chodos signed a standard Author Agreement with Bancroft-Whitney Corporation in July 1995, based on a detailed proposal he had submitted to the then-San Francisco-based publisher earlier that year. He was promised 15 percent of the gross sales.
‘Market Potential’
He completed the work in 1998, two years after Bancroft-Whitney was acquired by West. But he was notified in early 1999 that the book, which the company acknowledged to be of “high quality,” was not going to be published because West now doubted its “market potential.”
The decision not to publish, according to discovery, was made by a new regional manager who had not read the book but relied on the original proposal as well as a detailed outline. After Chodos complained that his contract had been breached, West did an economic analysis that concluded the book would be unprofitable.
“Like a good lawyer,” Reinhardt explained, “Chodos responded by suing for damages, first for breach of contract, and then, after amending his complaint to drop that claim, in quantum meruit.”
The book was later published by Blackthorne Legal Press, which Chodos founded, and is advertised on its website, www.blackthornelegal.com.
Plain Meaning
The Ninth Circuit panel said West’s defense was inconsistent with the plain meaning of “form and content” and the “cure” provision of the contract.
The agreement said the company had the right to terminate if it notified the author of any deficiencies in the completed manuscript and the author failed to “cure[ ]such failure in performance” within 30 days, the company could terminate.
This clearly meant, Reinhardt reasoned, that the only deficiencies for which the agreement could be terminated were those within the control of the author.
“Chodos has no power to ‘cure’ West’s view that the marketplace for books on fiduciary duty had changed; nor could he ‘cure’ a change in West’s overall marketing strategy and product mix; nor, indeed, could he be expected to do much about a general downturn in economic conditions,” the judge wrote.
At trial, Reinhardt said, Chodos is entitled to recover the fair value of his effort to develop the work. The court was not taking any view as to how that should be calculated, the judge—who was joined in his opinion by Judge Richard C. Tallman and Senior Judge James R. Browning—cautioned.
Chodos was represented by his brother, Hillel Chodos, and nephew, Michael Chodos.
Hillel Chodos Friday said his brother spent 3,600 hours on the “extraordinary” book and should be able to recover at least $1 million at trial.
“It was exceedingly stupid of West not to publish it,” he said. “It’s a great book, and I’ve read a lot of law books in my time,” the 40-year lawyer added.
He said it was “particularly sweet to think they’re going to have to publish this opinion,” since West is the exclusive publisher of federal court opinions in the United States.
Randall Kay of San Diego’s Gray Cary Ware & Friedenrich, who argued the appeal for West, did not return a MetNews phone call.
The case is Chodos v. West Publishing Company, Inc., 00-55954.
Copyright 2002, Metropolitan News Company