Texas woman tricked out of 'Fifty Shades' royalties : court ruling

Reuters News
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Posted: Feb 20, 2015 6:32 PM

By Marice Richter

DALLAS (Reuters) - A Fort Worth jury has decided that a Texas woman was defrauded out of royalty rights to the tantalizing best-selling novel "Fifty Shades of Grey" and stands to earn a large award, her lawyer said on Friday.

Court papers showed that Jennifer Lynn Pedroza of Arlington was victorious in her lawsuit against former business partner Amanda Hayward of Australia, who the jury determined cut Pedroza out of rights to the lucrative book deal.

Pedroza was part of The Writers Coffee Shop, a small independent publisher of ebooks, that originally published the “Fifty Shades” trilogy in 2011 as an e-book and print-on-demand book.

The right to the books written by British author E.L. James were sold to Random House and the deal led to the sale of more than 100 million copies worldwide. A blockbuster film based on the first book, "Fifty Shades of Grey," earned $81.7 million during its Valentine’s Day opening weekend in the United States and Canada.

"For us, this is a very good verdict," Pedroza's attorney, Mike Farris of Dallas, said on Friday.

Attorneys for Hayward did not respond to a request for comment.

No award amount was given by the jury. Pedroza was seeking an amount over $1 million, according to court papers.

Pedroza filed suit in Tarrant County in May, claiming Hayward tricked her into signing an agreement that cut her out of a fair share of the royalties to the trilogy of books.

"Hayward signed a contract on behalf of the Coffee Shop with Random House for the rights to the 'Fifty Shades' trilogy in exchange for millions in advances and future royalties but, because of her chicanery, all payments flowed to her and not the partnership," according to the suit.

After a nine-day trial, the jury determined that Pedroza was one of the four original owners of The Writers Coffee Shop and that Hayward fraudulently restructured the partnership under the guise of tax reasons to mask her intention to keep payments from the sale to Random House for herself.

Lawyers for Hayward have contended they did nothing wrong.

Random House is owned by German media group Bertelsmann and British publisher Pearson Plc.

(Editing by Jon Herskovitz)