RETAILERS v MARVEL SETTLEMENT HELD UP IN COURT

[MattBrady]

While legal issues typically move at a glacial pace, many comic retailers as well as casual observers have noticed that the Brian Hibbs-led class action by retailers against Marvel, originally filed in 2002, has slowed to a virtual standstill.

Hibbs’ complaint, filed in early 2002 stemmed from Marvel’s alleged breach of their agreement with retailers in regards to allowing books to be returnable. While Marvel’s agreement said that books were returnable under certain circumstances (more than a set period late, a change in creative team, or a change in content), Hibbs alleged that Marvel was not allowing returns on any books under any circumstances, and as a result, retailers were stuck with books that they could not sell – either readers had lost interest in late-shipping titles, or didn’t want to purchase an issue with a different creative team than what was solicited.

The complaint was filed as a potential class action on behalf of all comics retailers who suffered alleged financial injury due to Marvel’s actions. Hibbs’ complaint was asking for $8 million in compensation and $10 million in punitive damages, and was supposed to have gone in front of a judge during the second week of April, 2003.

Hibbs’ class action suit claimed that, by virtue of Marvel’s refusal to accept returns on late books (as was written into their contract with retailers) retailers who bought Marvel books between January 1, 1998 and March 31, 2003 were due compensation for being stuck with product that they could not sell, and Marvel would not accept as returns, even though it was contractually obligated to do so.

Instead, Hibbs’ attorney and Marvel’s attorney opted for mediation in April of 2003, which resulted in a settlement, in December of 2003. The terms of the settlement allowed retailers (the class of the class action) could opt-out of the class if they chose, and would see Marvel issuing credits to retailers which would represent a percentage of the retailer’s purchase price of the books named on the list that should have been returnable. Under the terms, retailers would receive a 24% credit (24% of their purchase price) for late issues, and 17.5% for “different issues,” those with significant editorial changes or creative team changes. Marvel worked with Diamond to provide the class’ attorney with a list of the books that should have been returnable under the terms during the time period in question.

Notice was mailed to retailers in early 2004, the terms were approved by the class, and retailers received their settlement packages in August of the same year. Retailers had 45 days to respond (with Marvel reserving the right to terminate the settlement if more than 10% of the class, or retailers representing more than $250,000 in proposed credits). After the responses from the retailers came in, Marvel had 30 days to tabulate the data. As of last reportage on the matter, a hearing was scheduled for November 4th, which many assumed would allow the court to approve of the settlement, and, after an appeals period passed, retailers would see credits by the end of 2004.

No retailers have seen credits to date. We spoke with the class’ attorney Nancy Ledy-Gurren.

“We notified all the class and we got a terrific response – there were only 19 people out of more than 5,000 served, that opted out of the class action. We’d established a website had a hotline, and saw just a great response from retailers. We submitted all of our data to the Court, and the judge denied approval of the settlement, saying that he wanted the settlement to be an opt-in provision.”

In other words, in Judge Charles Ramos' view, if retailers wanted to claim credits, they needed to make notice that they were going to do so. The judge’s decision caught Ledy-Gurren – and Marvel, off guard, as previously, the judge had approved the terms of the settlement. “In short, he wants us to do it all again,” Ledy-Gurren said.

According to Ledy-Gurren, the judge articulated that he had always meant for this to be an opt-in settlement, stating that, in his view, he could not give Marvel release from the claims unless the individual class members had done something affirmative (opted in) to get the benefit that the settlement offers. The decision is the judge’s own preference, rather than a rule of law. According to Ledy-Gurren, the judge had made no mention of his preference for an opt-in stipulation when he originally reviewed the terms of the settlement and requested changes in them.

As Ledy-Gurren feels, an opt out requirement is in the best interests of the retailers, and by requiring that the entire settlement be redone, the class as a whole is bound to lose out. “I believe the benefit will be greater and distributed to more people if they don’t have to do lots of paperwork to get it,” Ledy-Gurren said. “So, by requiring you to do the paperwork if you don’t want to participate, I felt it was more beneficial to the plaintiffs. I think the proof is in the pudding – there are nearly 5,000 people who are going to get credits without having to do a lot of work. The 19 people who did file their paperwork to opt out did their homework, and submitted. They’re also free to sue Marvel if they choose to do so, which was one of the terms of a retailer opting out. Of interest though is that the amount of credits available to those people were very, very small. Of the 19 people total, it was roughly $900 - $1000 worth of total credit.

“Also, these people bought these comics with 1990-2000 dollars, and the longer the court delays it, the less valuable the credit is to the retailers, because the price of issues has gone up. A credit of $500 today doesn’t buy you what a credit of the same would have bought you five years ago.”

While it may appear that the judge’s ruling would be of direct benefit to Marvel (as fewer retailers are likely to respond if they have to file paperwork to be a part of the class from the start), Ledy-Gurren said that Marvel is as disappointed with the judge’s ruling as she is.

“Marvel spent over $100,000 affecting the notice,” Ledy-Gurren said. “Now, the retailers and Marvel are going to appeal the judge’s ruling. We’re on the same side now. Once we negotiated the settlement agreement, we were all on the same page – we had settled our dispute and it was time to make the payments. Marvel can’t make the payments and protect its legal right unless they have an approved settlement. They’ve spent the money to notify the class and have done the work, so now they’re joining us to ask what this court is doing.”

Ledy-Gurren said that she will be filing her brief with the appellate court this week, and that should put the case on the May term, which usually begins at the end of April and runs through May. “The appellate court works pretty quickly, but we have to wait. I learned a long time ago that if you’re into instant gratification, the law is not the place to be.”

If the appellate court reverses the judge’s decision, retailers may see their credits from Marvel in mid-2005, a little over three years after Hibbs filed his original complaint.

[algertman]

so MARVEL doesn't want to pay up. Wonder where I've heard that before?

[Hebime]

Originally posted by algertman
so MARVEL doesn't want to pay up. Wonder where I've heard that before?

Jesus, did you suffer head truma recently?

Or did you just not read the article?

The JUDGE is the one holding things up. The lawyer for the class and marvel are working together to get the original settlement implemented.

[fedres]

Originally posted by algertman
so MARVEL doesn't want to pay up. Wonder where I've heard that before?

Maybe in your head? Because the article above that I read stated that the judge stopped the payments, not Marvel.

[David H.]

Originally posted by algertman
so MARVEL doesn't want to pay up. Wonder where I've heard that before?

Nowhere in this article, that's for sure.

Did you actually read it?

[Augie De Blieck Jr.]

Wow, it usually takes three or four posts around here for someone to troll without reading a story. This is a new record.

He did, however, miss the mandatory "FIRST POST!" addendum.

As to the legal situation -- it is a shame. It sounds like everyone wants to finish this deal and move on with their lives, but now a judge is getting a little too detail oriented. While I understand his logic, he should have been more clear in his instructions from the very beginning.

-Augie

[Gordon McAlpin]

Originally posted by fedres
Maybe in your head? Because the article above that I read stated that the judge stopped the payments, not Marvel.

What, is it jump down the throat of an idiot day?

[algertman]

Judge was bought off

[spider985]

Originally posted by algertman
Judge was bought off

I agree with copies of Black Cat/Spider Man and the complete run of Daredevil Father.

[Huh?]

I read in Comics International that international retailers can't get in on this suit because Marvel had opted to use Diamond's terms for all sales outside the US. Does anyone know if Marvel has since changed the terms since the suit was filed for all US retailers?

*Note - this is positive for Marvel. The story seems to indicate that they are interested in taking care of this as soon as possible. Good for them.

[Brian Garside]

Originally posted by algertman
Judge was bought off

Good god man. Read the effing article!

“Marvel spent over $100,000 affecting the notice,” Ledy-Gurren said. “Now, the retailers and Marvel are going to appeal the judge’s ruling. We’re on the same side now. Once we negotiated the settlement agreement, we were all on the same page – we had settled our dispute and it was time to make the payments. Marvel can’t make the payments and protect its legal right unless they have an approved settlement. They’ve spent the money to notify the class and have done the work, so now they’re joining us to ask what this court is doing.”

NOTE; Marvel has already spent $100k on this notice.

Here's a thought; read the whole article before commenting on it. If you can't be bothered to actually read it, don't bother commenting on it.

[Cliffy]

That judge is smokin' something.

--Cliffy

[ParisCub]

Originally posted by Cliffy
That judge is smokin' something.

--Cliffy

so is Algertman LOL

More seriously, and to answer (I hope) the question about International Retailers asked higher up this page....

If I remember correctly from the time I worked in a comic book shop in France (that may have changed since then), comics ordered by an international retailer are non-returnable, except in some exacptions like if the product is damaged during packing and shipping (and in some cases, it doesn't work under those circumstances either).

Of course, Diamond now has it's own European business that takes care of distributing products in Europe, which creates a whole different set of circumstances. International retailers in Europe now use Diamond UK and I think the products are returnable up to a point. However, this has absolutely no bearing on what's happening in the USA with Marvel and/or Diamond US.

[blankpoint]

What about Canadian retailers who got fucked over? Over here, returns are even less cost-effective because of shipping costs.

[MattBrady]

Originally posted by algertman
Judge was bought off

so now, you answer criticism of your first, rather uninformed post with a claim that a felony was committed. I'm probably not even going to see anything, but care to offer proof, or at least an explanation of how you came to that conclusion, as both sides are appealing the judge's ruling?

last warning - stop the trolling, or you're gone.

MattB

[TK-421]

Originally posted by Huh?
I read in Comics International that international retailers can't get in on this suit because Marvel had opted to use Diamond's terms for all sales outside the US. Does anyone know if Marvel has since changed the terms since the suit was filed for all US retailers?

Only retailers served by Diuamond UK are excluded due to the lack of a trems of sale agreement betweek Marvel and retailers serviced by Diamond UK. Any international accounts serviced by Diamond US are still within the class.

[algertman]

ah, screw it

[metr0man]

that's interesting.

(I haven't read the article and I'm commenting on it. Yeah, that's right, What ya gonna do huh? what're ya gonna do about it!? )

[Vyper]

Originally posted by algertman
ah, screw it

Are you referring to the article or the fact that your posts regarding the criminal activities by Marvel have come under fire?

[samnoir]

Originally posted by MattBrady
so now, you answer criticism of your first, rather uninformed post with a claim that a felony was committed. I'm probably not even going to see anything, but care to offer proof, or at least an explanation of how you came to that conclusion, as both sides are appealing the judge's ruling?

last warning - stop the trolling, or you're gone.

MattB

Is that SS target avatar of algertman the Suicide Squad logo?

Amusingly appropriate if it is.

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[OM]

...If I understand this correctly, the Q is going to have to pay retailers $14.95 for each late copy of Daredevil: Father that finally sees print. No fucking wonder he won't finish the damn thing!

[Qwerty]

Originally posted by OM
...If I understand this correctly, the Q is going to have to pay retailers $14.95 for each late copy of Daredevil: Father that finally sees print. No fucking wonder he won't finish the damn thing!

All these issues only serve to underline how the current system with which comics are sold, and the interactions between comic makers, distributers, retailers and end costumers, are inane, not apt for the market, and, contrary to stimulating sale, only hampering it.

I can understand why the market had to change after the 90's bubble, but i don't see how that bandaid needs to still exist and be maintained.

Having only Diamond monopolizing the market is bad, having comics only in 'specialty' comic stores instead of everywhere is bad, and is not only bad because it hampers sales but because it labels comics as a 'nerd' product, sold by 'nerds' for 'nerds' with sometimes doubful quality, presentation and professionalism(*) from the so called 'specialised stores' that sell them, which will only result in a downward spiral of sales and the contant atrophy of the already diminishing market.

The current system only creates problems - This case is evidence of it.

*(what i mean, to be blunt, is that some stores that sell comics in the US look like nothing else than a nerdfest with horrible presentation and service within which no one with a minimum of social skills would want to be seen going in)

[Brian Hibbs]

Originally posted by Qwerty
The current system only creates problems - This case is evidence of it.

Huh?

The case is about the contract between a class of retail business and a vendor. The vendor did not perform the actions specified in the contract, and the class is asking them to live up to thier promised commitments.

What does that have to do with the Direct Market system specifically?

Seriously: huh?

-B

[beta-ray]

Originally posted by Hebime
Jesus, did you suffer head truma recently?

Hey now!... That's a sensitive topic for him...

[Qwerty]

Originally posted by Brian Hibbs
Huh?

The case is about the contract between a class of retail business and a vendor. The vendor did not perform the actions specified in the contract, and the class is asking them to live up to thier promised commitments.

What does that have to do with the Direct Market system specifically?

Seriously: huh?

-B

If Marvel weren't doing business through one monopolist distributer, or - as in this case - particular contracts with retail, this wpuldn't have happened. Marvel should be fully concentrated with comic book creation, not distribution.

There should be a healthy, competitive, independent distribution system for comics - as there is for pretty much everything else - so that Marvel or whoever wouldn't have to worry about these issues, or be faced with these problems, since, to be fully honest, Marvel already has enough problems internally to worry about with content creation, let alone it's distribution.

This bizarre situation pretty much only happens in the comic industry.