Carty v. AUTHOR SOLUTIONS, INC.
789 F. Supp. 2d 131
D.D.C.2011Background
- Carty, appearing pro se, sued Author Solutions in DC Superior Court alleging misconduct related to the sale of her book and seeking $30,000,000 in restitution.
- Carty signed an Author Services Agreement on September 28, 2006 to publish her book under the Standard Paperback Publishing option, including distribution, ISBN assignment, and sales reporting.
- The Agreement provides quarterly royalty payments and a sales report, and requires that any disputes be submitted to binding arbitration administered by the AAA.
- From 2007 to 2010, Carty received relatively small royalty checks; she alleged concealment of sales and suppression of evidence of other subsidiaries selling her book.
- Author Solutions removed the case to federal court and moved to dismiss for failure to state a claim and on the grounds of arbitration under the Agreement.
- The court granted the motion to dismiss, finding, among other things, that the complaint failed to state a claim and that arbitration was required by the Agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Carty states a claim upon which relief can be granted. | Carty contends defendant concealed sales and underpaid royalties. | Complaint lacks factual basis and fails to identify a contractual breach. | Complaint fails to state a claim; dismissal for failure to state a claim. |
| Whether the arbitration clause requires dismissal in favor of arbitration rather than court adjudication. | Claims may be arbitratable or subject to court review; she seeks relief in court. | Agreement mandates binding arbitration for any disputes. | Arbitration is required; dismissal with prejudice is appropriate due to the arbitration clause. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must include plausible claim for relief)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for Rule 12(b)(6))
- Erickson v. Pardus, 551 U.S. 89 (2007) (liberal review of pro se pleadings)
- Kowal v. MCI Commc'ns Corp., 16 F.3d 1271 (D.C. Cir. 1994) (court may not accept unsupported inferences)
- Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (strong presumption in favor of arbitration agreements)
- Firestone v. Firestone, 76 F.3d 1205 (D.C. Cir. 1996) (amendment generally futile where arbitration clause controls)
- James Madison Ltd. v. Ludwig, 82 F.3d 1085 (D.C. Cir. 1996) (amendment futile when clause forecloses claim)
- Johnson v. Dist. of Columbia, 244 F.R.D. 1 (D.D.C. 2007) (denying amendment where remedy would be futile because of arbitration requirement)
- Jung v. Ass'n of Am. Med. Colls., 184 F. App’x 9 (D.C. Cir. 2006) (affirming dismissal where claim barred and amendment would not cure)
- Phillips v. Bureau of Prisons, 591 F.2d 966 (D.C. Cir. 1979) (notice pleading standards for pro se plaintiffs)