MattBrady
10-28-2005, 10:50 AM
<img src="http://www.newsarama.com/Marvel/f_MarvelLogob.jpg" width="104" height="40" align="right">And – three and a half years later, it ends.
Next week, retailers who filed claims in the class action lawsuit brought by Brian Hibbs of Comix Experience in San Francisco will see credits from Marvel on their Diamond invoices. The credit are, as regular Newsarama readers know, the result of the lawsuit (which Hibbs’ class won) which sought damages from Marvel due to the publisher’s then refusal to accept returns on books that either shipped late, or with contents that were not solicited properly – conditions which were in Marvel’s Terms of Sale.
There was relatively little fighting over the case, and in the end, Marvel agreed to settle, with retailers receiving credits for books that met the above criteria in a specified time period (Hibbs, on behalf of the retailers claimed that late or mis-solicited books were, in many cases, un-salable, or not able to be sold for cover price, reducing the retailer’s revenue).
<b>Newsarama</b>: First off Brian, the conclusion to all of this is just days away...how long has this been in coming for you?
<b>Brian Hibbs</b>: May of ’02, back when the first <i>Spider-Man</i> film came out, so yeah, it’s been a while.
<b>NRAMA</b>: Prior to that, when did you first get the inkling that you were going to do something legally about this?
<b>BH</b>: It was around Christmas of ’01 that I started realizing there was a problem – it was a slow burn with a number of small titles before then, but then the then-flagships of <b>New X-Men</b> and <b>Amazing Spider-Man</b> started shipping way off schedule, or with different creative teams and content then as solicited.
In late winter and spring of ’02 I spoke with scores of retailers, including some of the largest, about what we could do about it, and if anyone was seeing any relief, or what the story was. And universally, no one had gotten any satisfaction.
In March or April of ’02 I started using the internet to research class action suits, and what the options were. I approached several San Francisco firms, but the contract gave jurisdiction in New York, so I needed a New York firm.
I searched class action sites, lawyers.com, etc. etc., until I had a list of nearly 100 firms that might operate in that sphere of influence. Sent a letter out to each of them explaining the situation, the breach of contact and so on, and maybe a dozen got back to me. From those I emailed or called each until I found Nancy Ledy-Gurren, who really seemed interested in the case, and willing to go to bat for it.
<b>NRAMA</b>: And there was no money up front?
<b>BH</b>: Right - they were interested in taking the case on contingency, where they only got paid if we triumphed, which is what made it possible. There’s no way a single owner-operated store could ever hope to afford the costs of doing this on their own.
<b>NRAMA</b>: Back then, did you have much support from other retailers? After all, you took the lead in this, and were about the only retailer ever closely associated with it in the public eye...
<b>BH</b>: Yeah, well, that was a legal strategy. I never grasped it myself, as there were at least two score other retailers who were ready and willing to sign their name to the case, but there was some reason or another that I never really understood that it was better to go with a single lead plaintiff with others to be named later as needed.
But, yes, plenty of my brethren had my back, as it were. And I love each and every one of them for it.
Here’s the thing though: barring any “Whoa, the system really <i>is</i> f___ed up!”, I knew this was a slam dunk. I’m not a lawyer, but the Terms of Sale really could not have been any clearer: in black and white it said that if a book was more than 30 days late, or had a different creative team or content, it would be made returnable. No prevarication, no weasel words, just bluntly as that.
As it should be, mind you!
So it was just a matter of finding the right person to go after the case at that point.
<b>NRAMA</b>: That said, this was still a long, complicated, and probably anxious at times experience. Were there any points where you just wanted to say "screw it, screw Marvel, screw comics, I'm going home", or did this become something of a self-sustaining cause?
<b>BH</b>: No, not at all. I wasn’t out anything of pocket, though it became quite the time sink! But, I knew that it had to be seen through because the principle of it was absolutely 100% right. You have to do the right thing by others, you know. What the heck is the point of life otherwise?
<b>NRAMA</b>: From this side of things, there seemed to be very little fight put up by Marvel on this...was that the case from your side? From the outside it seemed like a simple progression - the suit was filed, there was some sabre rattling, then mediation, and then...settlement (with all of it's respective screwups)…
<b>BH</b>: Heh. Well, OK, but in the end, what fight really could be put up?
Y’know, the sad thing is we really tried to solve this peaceably before any lawyers were involved – via Diamond, via Marvel’s retailer liaisons, even in an email to Jemas, and the attitude I felt I got back was “yeah, whatever, what are you going to do about it?”
The legal system is a little screwy at times, but this seemed the perfect and precise example of Class Action law: individually, losses weren’t worth pursuing, $50 here, $500 there, $2000 over there… just talking to a lawyer is going to eat all of that up before you set foot in a courtroom. But, by attacking it as a class it really adds up to something.
I do tend to think that the “saber rattling” was pretty much formalities sake. I kinda doubt Legal even had an inkling that Diamond, and the reps, and the Publisher had been contacted in the first place – one hand seldom knows what the other is doing in the corporate world. Once a suit is filed <i>of course</i> they’re going to “defend it vigorously” even if they don’t know the details in play. That’s how it works.
<b>NRAMA</b>: Did you ever have any contact with Marvel directly about the suit?
<b>BH</b>: I was flown out to New York for a deposition from Marvel, and I was really surprised how little the legal firm representing Marvel knew at all about the Direct Market. I mean, why should I be, really, they almost never deal with us, but the questions I was asked at the deposition were often comedy gold.
In fact, in my original settlement offer, I asked for $100,000 for the Comic Book Legal Defense Fund, and I believe they spent more time grilling me on the CBLDF was than on any other topic. I got the impression they thought this was some sort of shady post-Spider-Man movie shakedown rather than a legitimate concern based upon contracts and shipping dates and cycle sheet data showing how sales dropped with late/wrong shipping.
<b>NRAMA</b>: So - the settlement - did you ever get a handle on just how much Marvel will be paying out, in terms of credits to retailers, either in total, or average per store?
<b>BH</b>: I never got any kind of exact breakdown, just being told in “round numbers”, as it were.
“$1.5 million” I was told, to about “5000” accounts worldwide. That comes out to $300 each as an “average”, but that’s probably a pretty pointless number.
You know, this settlement affected nearly everyone who bought from Diamond – Canada, Europe, Asia -- I was told there was an account in the Sultancy of Brunei that got credits!
Only the UK (England, Ireland, Scotland) got nothing, because they buy from Diamond UK, and not the US version of the company. Their Terms of Sale were totally different than ours, unfortunately. Frankly, I think it would have been a good gesture to have taken care of those stores as well, but there wasn’t anything I could do about it.
My understanding was that the average store that had been in business during the whole class period would be receiving the equivalent of a free week to two weeks of Marvel comics. Which is really significant to the “mom & pop” scale of most retailers.
<b>NRAMA</b>: Personally, how much credit are you receiving, and what retailer value does that represent?
<b>BH</b>: I don’t remember the exact amount (they told us over a year ago, and the invoicing with the credit posts Sunday!), but it is in the $1500 range. That’s, what, 8 months of phone bills?
<b>NRAMA</b>: How much did the attorneys get?
<b>BH</b>: $375,000 which was in addition to the credits, not drawn from the credits being paid to retailers.
<b>NRAMA</b>: And how is the credit being applied again? Retailers will just see it on their invoices, that is, if next week's comics cost $800, and the retailer is getting a credit of $200, they only owe $600?
<b>BH</b>: That’s how it is supposed to work, yes. We’ll see what the actual result is when the invoicing actually hits (Friday for the East Coast, Sunday for the West), but I don’t have any reason to believe that Diamond would mismanage this. They’re generally very good about dotting i’s and crossing t’s.
<b>NRAMA</b>: And for retailers who have since gone out of business? How will they get their credits covered?
<b>BH</b>: They’re meant to get a voucher for any amount owed - though, presumably, many went out of business owing money, so this just becomes a matter of writing debt off someone’s books, which is freely tradable to any existing Marvel account.
Newsrama’s readers can be really helpful here – if you know someone who used to own a Direct Market store between ’98 and ’02, make sure that they know about the settlement, and that they’ve gotten their vouchers. If they don’t have anywhere to redeem them, they can contact me at brian@comixexperience.com and I’ll try my level best to hook them up with another retailer willing to pay 100% of the face value of the voucher.
There’s really no reason that our fallen comrades shouldn’t get their due.
<b>NRAMA</b>: Mission accepted. End of the day - aside form the credit, what has this accomplished? Do retailers now have a better relationship with Marvel?
<b>BH</b>: Well, yes, thought I can’t necessarily say that it was the suit, itself, that got us there. I think that a lot of credit has to be given to Dan Buckley, Marvel’s current Publisher, and who strikes me as a direct, honest and forthright man; and to David Gabriel, who I think has been the first person in Marvel marketing to visibly Give a ____ about the Direct Market in a really long time.
I really value David, and his direct contact and strong initiatives for retailers.
I’m not sure that the greater Marvel, that is anyone outside of Publishing, has the slightest ____ing idea of what a Direct Market is, and why it might be a really good idea to make sure that your idea incubator is as healthy as it possibly can be. You’d think that a million and half dollar smack (plus legal fees… theirs and ours!) might get their attention, but Marvel still seems sadly on a course where topping last quarter’s returns are granted more importance that creating a better world a year or 5 or 10 from now. Again, that’s probably not the people within Publishing, people like Dan or David, or Joe Q, and everyone that works below and around them, but rather the bean-counters.
And that’s the fairly insane part of this to me – if Marvel had just made the books returnable at the first requests, they’d have been out a few thousand dollars, tops. But by being oh so very penny wise, they ended up extremely pound foolish.
That’s corporate America for you, I guess.
I do think it is probably safe to say the Marvel’s FOC system – where we can adjust orders up or down three weeks before a book ships – is a direct, if unintended, result of the case. That has, on the balance, been a real boon to retailers. There are certainly specific things that should be codified about the new system (there should still be a time frame in which a mandatory resolicitation should occur, and there are circumstances, such as shipping material too close together, or where content has changed that should result in a global return), but I have faith that, in time, these discrepancies will be addressed.
It will be interesting to see how DC writes their Terms of Sale when they go to FOC in ’06, and the pressure that exerts on Marvel to “fix” their contract. This will almost certainly trigger a change in Diamond’s basic TOS as well because their discount plateaus were largely tied to DCs volume.
Hopefully reasonable people will see the opportunity this presents to adjust economic policies to more properly serve the Direct Market retailer, and to both strengthen us, as well as providing real incentives for new entrepreneurs to enter the marketplace.
I do think I’ve inadvertently knocked over a chain of dominoes, and hopefully they’ll fall into the right pattern! In a lot of ways, everything is on the table in the next round of events – how we adjust pricing to deal with effectively weekly orders and the growing shift to backlist is going to determine the Direct Market’s long-term economic future.
<b>NRAMA</b>: Finally, how do you feel the suit affected the retailer community, or did it? Was there any empowerment going around, in that as a community, you did this together, or was it just another cost of business?
<b>BH</b>: Well, I’ve been told I don’t have to buy any alcohol at an industry event in the next year, does that count?
Seriously, I think it did empower us to a certain degree – certainly, I think that the case was one of many catalysts leading to the formation of ComicsPRO (http://www.comicspro.org), the Direct Market retailer trade organization. Hopefully, we’ll be able to help retailers navigate the big changes coming through the next years. Encourage your local retailer to take some of their settlement money and join – we can do much more together than we ever could separately.
My other hope is that this sends a message to other publishers and their own policies to late and mis-solicited books. It clearly isn’t acceptable, and it has a direct impact on a retailer’s cash flow and bottom line. No one wanted to take legal action, but the fact that we did should show you that this is a serious situation for us, yes?
The more retailers we have that can come together because of the dominoes tumbling along, the better.
Next week, retailers who filed claims in the class action lawsuit brought by Brian Hibbs of Comix Experience in San Francisco will see credits from Marvel on their Diamond invoices. The credit are, as regular Newsarama readers know, the result of the lawsuit (which Hibbs’ class won) which sought damages from Marvel due to the publisher’s then refusal to accept returns on books that either shipped late, or with contents that were not solicited properly – conditions which were in Marvel’s Terms of Sale.
There was relatively little fighting over the case, and in the end, Marvel agreed to settle, with retailers receiving credits for books that met the above criteria in a specified time period (Hibbs, on behalf of the retailers claimed that late or mis-solicited books were, in many cases, un-salable, or not able to be sold for cover price, reducing the retailer’s revenue).
<b>Newsarama</b>: First off Brian, the conclusion to all of this is just days away...how long has this been in coming for you?
<b>Brian Hibbs</b>: May of ’02, back when the first <i>Spider-Man</i> film came out, so yeah, it’s been a while.
<b>NRAMA</b>: Prior to that, when did you first get the inkling that you were going to do something legally about this?
<b>BH</b>: It was around Christmas of ’01 that I started realizing there was a problem – it was a slow burn with a number of small titles before then, but then the then-flagships of <b>New X-Men</b> and <b>Amazing Spider-Man</b> started shipping way off schedule, or with different creative teams and content then as solicited.
In late winter and spring of ’02 I spoke with scores of retailers, including some of the largest, about what we could do about it, and if anyone was seeing any relief, or what the story was. And universally, no one had gotten any satisfaction.
In March or April of ’02 I started using the internet to research class action suits, and what the options were. I approached several San Francisco firms, but the contract gave jurisdiction in New York, so I needed a New York firm.
I searched class action sites, lawyers.com, etc. etc., until I had a list of nearly 100 firms that might operate in that sphere of influence. Sent a letter out to each of them explaining the situation, the breach of contact and so on, and maybe a dozen got back to me. From those I emailed or called each until I found Nancy Ledy-Gurren, who really seemed interested in the case, and willing to go to bat for it.
<b>NRAMA</b>: And there was no money up front?
<b>BH</b>: Right - they were interested in taking the case on contingency, where they only got paid if we triumphed, which is what made it possible. There’s no way a single owner-operated store could ever hope to afford the costs of doing this on their own.
<b>NRAMA</b>: Back then, did you have much support from other retailers? After all, you took the lead in this, and were about the only retailer ever closely associated with it in the public eye...
<b>BH</b>: Yeah, well, that was a legal strategy. I never grasped it myself, as there were at least two score other retailers who were ready and willing to sign their name to the case, but there was some reason or another that I never really understood that it was better to go with a single lead plaintiff with others to be named later as needed.
But, yes, plenty of my brethren had my back, as it were. And I love each and every one of them for it.
Here’s the thing though: barring any “Whoa, the system really <i>is</i> f___ed up!”, I knew this was a slam dunk. I’m not a lawyer, but the Terms of Sale really could not have been any clearer: in black and white it said that if a book was more than 30 days late, or had a different creative team or content, it would be made returnable. No prevarication, no weasel words, just bluntly as that.
As it should be, mind you!
So it was just a matter of finding the right person to go after the case at that point.
<b>NRAMA</b>: That said, this was still a long, complicated, and probably anxious at times experience. Were there any points where you just wanted to say "screw it, screw Marvel, screw comics, I'm going home", or did this become something of a self-sustaining cause?
<b>BH</b>: No, not at all. I wasn’t out anything of pocket, though it became quite the time sink! But, I knew that it had to be seen through because the principle of it was absolutely 100% right. You have to do the right thing by others, you know. What the heck is the point of life otherwise?
<b>NRAMA</b>: From this side of things, there seemed to be very little fight put up by Marvel on this...was that the case from your side? From the outside it seemed like a simple progression - the suit was filed, there was some sabre rattling, then mediation, and then...settlement (with all of it's respective screwups)…
<b>BH</b>: Heh. Well, OK, but in the end, what fight really could be put up?
Y’know, the sad thing is we really tried to solve this peaceably before any lawyers were involved – via Diamond, via Marvel’s retailer liaisons, even in an email to Jemas, and the attitude I felt I got back was “yeah, whatever, what are you going to do about it?”
The legal system is a little screwy at times, but this seemed the perfect and precise example of Class Action law: individually, losses weren’t worth pursuing, $50 here, $500 there, $2000 over there… just talking to a lawyer is going to eat all of that up before you set foot in a courtroom. But, by attacking it as a class it really adds up to something.
I do tend to think that the “saber rattling” was pretty much formalities sake. I kinda doubt Legal even had an inkling that Diamond, and the reps, and the Publisher had been contacted in the first place – one hand seldom knows what the other is doing in the corporate world. Once a suit is filed <i>of course</i> they’re going to “defend it vigorously” even if they don’t know the details in play. That’s how it works.
<b>NRAMA</b>: Did you ever have any contact with Marvel directly about the suit?
<b>BH</b>: I was flown out to New York for a deposition from Marvel, and I was really surprised how little the legal firm representing Marvel knew at all about the Direct Market. I mean, why should I be, really, they almost never deal with us, but the questions I was asked at the deposition were often comedy gold.
In fact, in my original settlement offer, I asked for $100,000 for the Comic Book Legal Defense Fund, and I believe they spent more time grilling me on the CBLDF was than on any other topic. I got the impression they thought this was some sort of shady post-Spider-Man movie shakedown rather than a legitimate concern based upon contracts and shipping dates and cycle sheet data showing how sales dropped with late/wrong shipping.
<b>NRAMA</b>: So - the settlement - did you ever get a handle on just how much Marvel will be paying out, in terms of credits to retailers, either in total, or average per store?
<b>BH</b>: I never got any kind of exact breakdown, just being told in “round numbers”, as it were.
“$1.5 million” I was told, to about “5000” accounts worldwide. That comes out to $300 each as an “average”, but that’s probably a pretty pointless number.
You know, this settlement affected nearly everyone who bought from Diamond – Canada, Europe, Asia -- I was told there was an account in the Sultancy of Brunei that got credits!
Only the UK (England, Ireland, Scotland) got nothing, because they buy from Diamond UK, and not the US version of the company. Their Terms of Sale were totally different than ours, unfortunately. Frankly, I think it would have been a good gesture to have taken care of those stores as well, but there wasn’t anything I could do about it.
My understanding was that the average store that had been in business during the whole class period would be receiving the equivalent of a free week to two weeks of Marvel comics. Which is really significant to the “mom & pop” scale of most retailers.
<b>NRAMA</b>: Personally, how much credit are you receiving, and what retailer value does that represent?
<b>BH</b>: I don’t remember the exact amount (they told us over a year ago, and the invoicing with the credit posts Sunday!), but it is in the $1500 range. That’s, what, 8 months of phone bills?
<b>NRAMA</b>: How much did the attorneys get?
<b>BH</b>: $375,000 which was in addition to the credits, not drawn from the credits being paid to retailers.
<b>NRAMA</b>: And how is the credit being applied again? Retailers will just see it on their invoices, that is, if next week's comics cost $800, and the retailer is getting a credit of $200, they only owe $600?
<b>BH</b>: That’s how it is supposed to work, yes. We’ll see what the actual result is when the invoicing actually hits (Friday for the East Coast, Sunday for the West), but I don’t have any reason to believe that Diamond would mismanage this. They’re generally very good about dotting i’s and crossing t’s.
<b>NRAMA</b>: And for retailers who have since gone out of business? How will they get their credits covered?
<b>BH</b>: They’re meant to get a voucher for any amount owed - though, presumably, many went out of business owing money, so this just becomes a matter of writing debt off someone’s books, which is freely tradable to any existing Marvel account.
Newsrama’s readers can be really helpful here – if you know someone who used to own a Direct Market store between ’98 and ’02, make sure that they know about the settlement, and that they’ve gotten their vouchers. If they don’t have anywhere to redeem them, they can contact me at brian@comixexperience.com and I’ll try my level best to hook them up with another retailer willing to pay 100% of the face value of the voucher.
There’s really no reason that our fallen comrades shouldn’t get their due.
<b>NRAMA</b>: Mission accepted. End of the day - aside form the credit, what has this accomplished? Do retailers now have a better relationship with Marvel?
<b>BH</b>: Well, yes, thought I can’t necessarily say that it was the suit, itself, that got us there. I think that a lot of credit has to be given to Dan Buckley, Marvel’s current Publisher, and who strikes me as a direct, honest and forthright man; and to David Gabriel, who I think has been the first person in Marvel marketing to visibly Give a ____ about the Direct Market in a really long time.
I really value David, and his direct contact and strong initiatives for retailers.
I’m not sure that the greater Marvel, that is anyone outside of Publishing, has the slightest ____ing idea of what a Direct Market is, and why it might be a really good idea to make sure that your idea incubator is as healthy as it possibly can be. You’d think that a million and half dollar smack (plus legal fees… theirs and ours!) might get their attention, but Marvel still seems sadly on a course where topping last quarter’s returns are granted more importance that creating a better world a year or 5 or 10 from now. Again, that’s probably not the people within Publishing, people like Dan or David, or Joe Q, and everyone that works below and around them, but rather the bean-counters.
And that’s the fairly insane part of this to me – if Marvel had just made the books returnable at the first requests, they’d have been out a few thousand dollars, tops. But by being oh so very penny wise, they ended up extremely pound foolish.
That’s corporate America for you, I guess.
I do think it is probably safe to say the Marvel’s FOC system – where we can adjust orders up or down three weeks before a book ships – is a direct, if unintended, result of the case. That has, on the balance, been a real boon to retailers. There are certainly specific things that should be codified about the new system (there should still be a time frame in which a mandatory resolicitation should occur, and there are circumstances, such as shipping material too close together, or where content has changed that should result in a global return), but I have faith that, in time, these discrepancies will be addressed.
It will be interesting to see how DC writes their Terms of Sale when they go to FOC in ’06, and the pressure that exerts on Marvel to “fix” their contract. This will almost certainly trigger a change in Diamond’s basic TOS as well because their discount plateaus were largely tied to DCs volume.
Hopefully reasonable people will see the opportunity this presents to adjust economic policies to more properly serve the Direct Market retailer, and to both strengthen us, as well as providing real incentives for new entrepreneurs to enter the marketplace.
I do think I’ve inadvertently knocked over a chain of dominoes, and hopefully they’ll fall into the right pattern! In a lot of ways, everything is on the table in the next round of events – how we adjust pricing to deal with effectively weekly orders and the growing shift to backlist is going to determine the Direct Market’s long-term economic future.
<b>NRAMA</b>: Finally, how do you feel the suit affected the retailer community, or did it? Was there any empowerment going around, in that as a community, you did this together, or was it just another cost of business?
<b>BH</b>: Well, I’ve been told I don’t have to buy any alcohol at an industry event in the next year, does that count?
Seriously, I think it did empower us to a certain degree – certainly, I think that the case was one of many catalysts leading to the formation of ComicsPRO (http://www.comicspro.org), the Direct Market retailer trade organization. Hopefully, we’ll be able to help retailers navigate the big changes coming through the next years. Encourage your local retailer to take some of their settlement money and join – we can do much more together than we ever could separately.
My other hope is that this sends a message to other publishers and their own policies to late and mis-solicited books. It clearly isn’t acceptable, and it has a direct impact on a retailer’s cash flow and bottom line. No one wanted to take legal action, but the fact that we did should show you that this is a serious situation for us, yes?
The more retailers we have that can come together because of the dominoes tumbling along, the better.