Big honking EC update, part 2 of ??? #notchilled

Disclosure: I make this post on behalf of myself and definitely not anyone else, etc. etc. and so forth.

Apology: I thought that somehow spacing this stuff out would be a good idea that would let me catch up eventually, but things are happening fast and furious right now, and so if I don’t actually time to catch up for the next few nights, I’m just going to fall further behind. I am behind on LOTS of things, not just this. Eek.

Brief overview:

Much stuff has ensued since this litigation began lo these many months ago, but right now, here are the issues pending in this case:

Ellora’s Cave sued Dear Author, claiming that a blog post was defamatory. Dear Author counterclaimed for abuse of process. Author Ann Jacobs proposed to intervene as a permissive counterclaimant.

A. The claim by EC against DA alleging defamation.
D. The claim by DA against EC alleging abuse of process.
E. The motion by Ann Jacobs (hereafter AJ) proposing to intervene as a permissive counterclaimant in the litigation.
F. A requested clarification with the court regarding the length of the discovery period.

I am going to try and knock off as much as I can here, issue by issue, until I am caught up or this lawsuit is decided, whichever comes first. So let’s start with…

E. New happenings on AJ’s motion to intervene.

To remind you where we are with this: AJ moved to intervene as a permissive counterclaimant, stating that EC breached their contract with her and that they consequently owe her A Lot of Money, and also, she wants her rights back, thank you Bob.

I have covered the initial motion and EC’s response. Since yours truly last posted, Dear Author has posted a brief in support of the motion to intervene, and AJ has posted a reply to EC’s response.

Since these are both responsive briefs to Ellora’s Cave’s response, I want to briefly remind you of what Ellora’s Cave said:

  • There isn’t enough commonality of law and fact
  • This motion is not timely
  • The EC contract is subject to an arbitration clause and so should not be litigated in court

I provide this for context in terms of the responsive briefs, and I’ll talk about what each of the briefs say on this point one by one.

Common Issues of Law and Fact

Ann Jacobs, by contrast, explains that the central question in her case is, “Did you pay the authors their damned money?” which is, unsurprisingly, the same question in the DA v. EC case. Honestly, on this one, I don’t think EC has a leg to stand on. OF COURSE there is a common question of law and fact here.

(Incidentally, there is this interesting procedural footnote, which I toss out as a “huh, okay.”

Screen Shot 2015-09-15 at 6.07.12 PMEeenteresting. Particularly eeenteresting in light of the filings in issue F today, but I’ll get to those when I get to them, which might even be today! Who knows! Pigs have flown before! Just put that under your hat for now.)

Randazza and Nye (Jacobs’ lawyer) both do a pretty clear job of beating this horse. It’s okay, guys; I’m pretty sure it’s dead already.

There is one point made in Nye’s brief that I want to give a little more space to:

There is also potentially significant economy for the court system not only in avoiding two trials over the same issues, but in potentially avoiding two types of collateral litigation. First, if the cases are tried separately and Ellora’s Cave prevails in the first action to be tried (whichever case that may be), then Ellora’s Cave will all but certainly attempt to give its favorable judgment preclusive effect in the second case to be tried, thus throwing the remaining parties into a quagmire of claim preclusion or issue preclusion litigation that would be avoided if the cases were tried together.

Let me explain what this means, because “preclusion” is a legal term of art. “Preclusion” means that an issue has already been tried (or should have been tried) by the court, and it is not going to be retried. So, for instance, if person A sues person B for slander, and person B prevails, person A cannot then sue person B for slander for those same words. That’s what is called “claim preclusion”: you already made that same damn claim, you don’t get to make it again.

As a general rule, claim preclusion only applies to the original parties to the lawsuit, or those very closely related. Ann Jacobs is not closely related to either Jane or Dear Author, and so I’m a little foggy as to how claim preclusion would apply here.

“Issue preclusion” can be a little more tricky. An example of a place where issue preclusion can be huge is in bankruptcy court. If the bankruptcy trustee hears from (it thinks) all the creditors and divvies up the assets  and then you step forward and say, “Wait, what about me, you never heard from me!” the answer is, sorry bucko, you had your chance, you didn’t step forward, you’re DONE. That issue has already been settled, and the fact that you didn’t say anything is irrelevant.

Issue preclusion, however, in non-bankruptcy contexts (there’s a huge statutory framework underlying bankruptcy) is more generous. If person A sues their bank saying that they mishandle transactions, and person B (unrelated to person A) sues their bank saying that they mishandle transactions, it’s perfectly possible that person A could win and person B could lose, even if they present identical factual situations, and that the result in case 1 would not have an impact on case 2.

I seriously doubt that either case would actually have a preclusive impact on the other.

So here’s how I translate what Nye is saying: “This issue may be bogus, but EC will absolutely try to use it either way, and create more vexatious motion practice, so let’s try and combine the two cases for efficiency’s sake, and by ‘efficiency,’ I mean ‘avoiding stupid motions that waste money.'”

While I empathize with that, I am not sure the court will accept the argument that we should lump all the EC cases together and stick the court with them forever and ever just because EC might file stupid motions.


AJ raises several points on timeliness.

First, discovery is not yet finished. (More about this later).

Second, some of the conduct raised in the counterclaim had not occurred until fairly recently (e.g. one month ago), and so AJ was not dilatory in filing this motion.


Finally, as to the arbitration clause, AJ says this:

The fact that there is an arbitration clause in the publishing agreements does not weigh against allowing intervention, because the scope of arbitration is quite limited. The publishing agreement in Exhibit 1 to the intervening counterclaim . . . provides generally for arbitration, and then states, “Notwithstanding the foregoing, the parties shall have the right to conduct discovery and the right to seek injunctive relief in any court in the State of Ohio.”

And that, folks, is why the counterclaim is structured as it is: seeking injunctive relief and a declaratory judgment first. I note that claim 3 of the counterclaim is a pure claim for money damages and breach of contract, which would fall under the (very) limited scope of the arbitration clause, and Nye kind of doesn’t really say anything about that.

My takeaway? I still think it’s likely the court will bounce this, but again, I don’t know for sure. And if the court does bounce it, I suspect we’ll see it get refiled in some form, and we’ll be able to have our popcorn and eat it, too.

I’m going to try and publish another post covering both the motion for summary judgment on the counterclaim and the discovery issues, hopefully soon, hopefully tonight, because there’s some interesting stuff that just got filed in that today. But for now, I need to walk the dog and have dinner.

One thought on “Big honking EC update, part 2 of ??? #notchilled

Comments are closed.