Chodos v. West Publishing Co.
292 F.3d 992 (2002)
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Rule of Law:
Under a standard author agreement allowing a publisher to reject a manuscript if it is 'unacceptable in form and content,' the publisher's discretion is limited to the literary or scholarly quality of the work and does not permit rejection of a high-quality manuscript for purely commercial or marketing reasons.
Facts:
- In July 1995, attorney Rafael Chodos entered into a standard Author Agreement with Bancroft-Whitney Publishing Company to write a treatise on the law of fiduciary duty.
- The agreement stipulated that Chodos would receive no advance payment, but a 15% share of the gross revenues from the book's sales.
- From 1995 to 1998, Chodos dedicated approximately 3600 hours to writing the treatise, significantly limiting his law practice.
- In mid-1996, West Publishing Group acquired Bancroft-Whitney.
- Chodos submitted the final, 1247-page manuscript in February 1998 after extensive work and consultation with Bancroft (and later West) editors.
- West editors continued working with Chodos, and in December 1998, assured him publication would occur in the first quarter of 1999.
- In February 1999, West informed Chodos it would not publish the book, citing concerns about its 'market potential' and fit within their 'current product mix.'
- West admitted that the manuscript was of 'high quality' and that the decision not to publish was based on commercial factors, not any literary shortcomings.
Procedural Posture:
- Chodos filed an action against West for breach of contract in Los Angeles Superior Court, a state trial court.
- West removed the case to the U.S. District Court (a federal trial court) on the basis of diversity jurisdiction.
- The district court denied Chodos's initial motion for summary judgment.
- Chodos amended his complaint to drop the breach of contract claim and seek restitution on a quantum meruit basis.
- At the conclusion of discovery, West moved for summary judgment.
- The district court granted summary judgment in favor of West.
- Chodos, as appellant, appealed the grant of summary judgment to the U.S. Court of Appeals for the Ninth Circuit, with West as the appellee.
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Issue:
Does a publisher, under a standard author agreement allowing rejection of a manuscript deemed 'unacceptable in form and content,' have the discretion to reject a high-quality manuscript solely for commercial reasons unrelated to its literary merit?
Opinions:
Majority - Reinhardt, Circuit Judge
No, a publisher does not have the discretion to reject a high-quality manuscript for purely commercial reasons under a contract that limits rejection to dissatisfaction with the work's 'form and content.' The contract language limits the publisher's discretion to reasons related to the manuscript's quality or literary merit. The court reasoned that the term 'form and content' refers to the intrinsic qualities of the work, such as its writing, research, and organization. This interpretation is reinforced by the contract's 'cure' provision, which gives the author an opportunity to remedy deficiencies. An author can cure a poorly written chapter but cannot 'cure' a publisher's change in marketing strategy or a downturn in the market. Because West admitted Chodos's manuscript was of high quality and rejected it solely for commercial reasons, West breached the agreement as a matter of law. Chodos may seek recovery in quantum meruit because his potential compensation—a percentage of future, speculative sales—was not a 'liquidated debt.'
Analysis:
This decision significantly curtails a publisher's discretion under standard author agreements, providing greater protection to authors. It establishes that a general 'satisfaction' clause related to 'form and content' cannot be used as an escape hatch for purely commercial reasons if the author has delivered a manuscript of the expected quality. The ruling shifts some of the commercial risk of publishing from the author back to the publisher, who is better positioned to assess it before entering into the contract. This precedent will likely influence how publishing contracts are interpreted and may lead to more explicit language regarding commercial viability if publishers wish to retain that discretion.
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