The Curious Case of Ellora’s Cave
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Long before there was the Kindle, long before self publishing, long before the emergence of Fifty Shades, a digital first publisher by the name of Ellora’s Cave began to deliver sexy reads that would transform the face of romance publishing. Ellora’s Cave was established in 2000 as an outlet for Tina Engler to publish books with heavy sexy content that were romantic in nature. Because there was no “ebook” in the late 1990s, Engler would create PDFs and email them to reader who sent her money via paypal. In 2000, EC was established and soon thereafter, it would become a powerhouse selling hundreds of thousands of ebooks a year in a world where ebooks did not exist for the most part.
Engler’s path was not dissimilar to that of JK Rowling. She went from welfare to millionaire in a short time.
Ellora’s Cave fed an unheretofore unexplored appetite of women for explicit scenes, bold women, and frank language. Prior to 2000, references to the penis would often be couched in terms such as “manroot” “stalk” and “pleasure rod”. The clitoris or vagina would be known in equally obscure terms. Now it’s not uncommon to see the use of “cock”, “cunt”, or “pussy” within many mainstream romances whether they be historical, contemporary or paranormal. Today the line between erotic romance and non erotic romance appears blurred, not just for readers but authors and publishers as well.
But in 2000, erotic romance was a new and somewhat scary thing for mainstream publishers. In fact, the recent acquisition or launch of digital publishing arms for mainstream publishers followed a similar trajectory to the old acquisition and launch of erotic romance lines. While it might seem ludicrous today, in the early to mid 2000s, agents had to identify which publishers would accept erotic romances and which would not. And it was a big deal when traditional publishers started accepting erotic romances regularly.
Erotic romance author pioneers like Susan Johnson, Robin Schone, and Bertrice Small would likely seem tame to many of today’s readers but in the mid 1990s, they were writing ground breaking books. Schone, for example, wrote the first female masturbation scene in Awaken My Love published in 1995. Erotic romances were long considered the bastard child of the genre with major mainstream NYT bestselling authors decrying their existence. (I won’t link to those posts because I’m sure we’ve all said things ten years ago we regret).
As Ellora’s Cave began to flourish, arguments began to spring up about its legitimacy. There was row after online row about whether digital publishing was a legitimate career path. The Romance Writer’s of America (RWA) denounced it and refused to acknowledge digitally published authors in its Published Author Network or for its awards. In fact, it wasn’t until 2012 when a digital first book won the organization’s RITA award. (Fiona Lowe’s Boomerang Bride from Carina Press).
The truth was, though, Ellora’s Cave was thriving in the mid 2000s and through its digital publishing portal, many women were empowered not just through the stories themselves, but through the act of making money. Some may scoff at the source of the money, but all green spends the same. There were several authors making six figures a year and there were even more making a living wage–for the first time in their lives.
As the world began to catch on to digital books and the Kindle was launched creating a second wave ebook revolution, Ellora’s Cave seemed poised to launch itself into publishing super stardom. It had thousands of backlist titles and it had launched many of the bestselling authors today–Bella Andre, Lora Leigh, Christine Warren, Beth Kery, Lauren Dane, Jaci Burton, to name a few.
Yet something strange happened. Growth stagnated. In 2010, it was revealed that EC’s revenues were $5 million but a reported $6.7 million in 2006. How on earth was a digital publisher’s income declining in the biggest boom period of digital books? (This was before self publishing took off).
Word of Ms. Engler’s increasingly erratic behavior surfaced on odd places on the internet and then came the lawsuits. In 2008, former employee Christina Brashears filed suit for unpaid monies against EC. EC countersued. Brashears, Publisher and Chief Operating Officer, left and formed Samhain. Bad blood existed which culminated with EC agreeing to a settlement of undisclosed amount. The damages were alleged to be in the high six figures to low seven figures. EC’s behavior during this lawsuit was so egregious, the judge commented on it in his ruling ordering damages to be paid to Brashears. In 2009, EC filed suit against Borders accusing them of illegal business practices. The suit went nowhere.
In the Brashears lawsuit, EC was accused of inappropriately diverting funds to Tina Engler through overpayment of rent. In 2009, the prevailing market rent for the space EC was occupying in Akron Ohio was around $40K but EC was paying Engler close to $100K per month. EC was providing loans to various officers at no interest and there was no indication those loans were ever repaid.
At the same time, court records showed repeated tax violations by Engler and Jasmine Jade Enterprises. Since 2009, Engler has had a tax lien filed against her by Ohio Department of Taxation in every year except 2010.
- Nov 2009: $26,972.74
- Dec 2009: $83,586.11
- Jan 2011: $29,271.98
- Aug 2011: $44,391.84
- Jul 2012: $62,769.64
- July 2013: $35,853.21 (currently unpaid)
- June 2014: $105,819.92 (currently unpaid)
In March of 2014, Engler was hit with another tax bill, this time from the City of Akron in the amount $29,679.52. Court documents reveal she is paying $2,473.70 per month. In the meantime, Engler boasts of her Rodeo Drive shopping trips and her new property purchase in West Hollywood on her Facebook page. She claims that she is having the head of her security detail investigate “everyone” and turn over information to “Interpol.”
What likely saved EC prior to this year was the acquisition of 75 books from author Laurann Dohner. You may not have heard of her recently, but Dohner is a huge seller for EC. She began hitting the combined lists in 2012 and continued to hit them thereafter.With her tremendous backlist and the high prices, there’s no question that Dohner was keeping EC afloat along with Lolita Lopez, Mari Carr, surprise hit Jo Wylde, and a handful of others.
In 2014, this appears to not be the case. In an email to the EC authors and confirmed by the CEO Patty Marks, the sales for EC books have plummeted.
Many authors and other workers associated with the production of EC books are afraid to speak out. They email me and DM me from made up accounts and beg for secrecy. They speak of a vindictive company who will be unafraid to retaliate and many of them who are owed several thousands of dollars fear that the money may never be paid to them should any outward showing of non allegiance be discovered.
But the problems within Ellora’s Cave are deep and broad and should be brought into the light of day, not only for those existing authors and creators but for future ones. In internal emails, the CEO admits that “the drastic drop in sales has resulted in large net short term variable production losses and slow and often negative return on investment for EC on almost every new book we publish, with the exception of a handful of the highest sellers.”
- There is a set of authors who have not received royalty payments in over six months. EC has blamed this repeatedly on a new accounting system installed in December of 2013.
- CEO Marks admits that “already submitted finished books” will be paid but that “payment may be delayed.”
- For editors, any partial work would not be paid, only finished work and that by finishing the work, they must accept the terms of the late payment.
- Partial work that is completed should be sent in to be finished by an in house editor and no partial work will be paid for.
- Failure to turn in either partial work or finished work will result in a 25% deduction of overall payment for that project.
- The author portal has been shut down where a select few authors could check their royalties.
- Authors request for return of their rights have been rejected and some are told that their books will be published with or without their approval.
- The total sum of unpaid royalties, editor fees, cover artist fees is in the several thousands, perhaps approaching six figures.
- EC has held warehouse sales advertised via online forums and through eBay.
Authors are now asking readers to not buy EC books. See Avril Ashton and Cat Grant.
Despite authors, editors, and cover artists going unpaid, Engler is in the process of launching at least one, if not three, different businesses. She has a new epublishing serial available that she is writing, she has a production company which she advertises as producing an untitled horror film and is attempting to shop a reality TV show around her publishing company and the Ellora’s Cavemen, and she has a self publishing services company called Beton Black Press.
A report from Ohio business record places Ellora’s Cave revenues at $15 million last year. So why is it that tax liens go unpaid as well as the salaries or royalties of creative individuals? It is unknown but it sounds like the money is being mismanaged at best and improperly diverted at worst.
What’s the result? Many people believe that EC will close its doors before the summer is over but at least by the end of the year. If it enters bankruptcy, author’s intellectual property rights are part of the estate and can be sold off to the highest bidder. It could wind down and revert the rights back but it’s doubtful that will happen.
For authors, a lawsuit could be brought but oftentimes those are expensive. If EC has not paid royalties, then its materially breached the contract. Problematically for authors, courts often look for the breach to be “cured” or in other words, if EC can pay the owed royalties, the contract is not voided (legal term). A claim for diversion of funds (a piercing the corporate veil argument) can usually only be brought by shareholders or directors in a company. Neither are a position that the author holds. And in every case, the author is only due her royalties. If she should sue and the author not be paid, then the contract could possibly be cancelled.
No author wants to see EC go bankrupt but they also want to be paid. As do the editors and cover artists. It rankles to see Ms. Engler post on her Facebook page of high end shopping sprees while individuals who make money for her company go without.
There’s a sad irony to the fact that a publisher that gave many women a living by writing about women exercising sexual agency now looks to be placing these women authors in a very vulnerable position, one that sets a really poor example for digital publishing in yet another new era of Romance writing.
Note: if you do plan on commenting anonymously, please use an alternate email. we use gravatars here at Dear Author which are associated with your email address.
The real issue, actually, is that someone – not you – is being sued for material damages because of what they wrote about someone else. Ratcheting up the paranoia over EC’s motives only makes it look like DA and its supporters are indeed trying to smear EC and steer people away from publishing with them. The court only cares about what was said and what basis there was for saying it. If the claim was made that Jaid Black purchased an expensive home and then an implication is made that she did so by diverting monies owed to writers to her personal accounts, that’s a potentially actionable statement.
But, no, it’s all about you and your self-righteous outrage, not the actual suit.
@AnonMK: There is no paranoia here, there’s experience.
If you truly have no idea why TE/JB statements about her lavish lifestyle matter, do a quick search and find out more about how she reacts to people questioning her.
Authors and other contractors, and staff, are being told there’s no money–see the email by EC–yet the founder claims to have money to burn. Gee, nothing smells fishy there.
But since you are interested in the defamation lawsuit: nothing Jane posted was created out of whole cloth. She quoted statements given by both TE/JB through her Facebook account, and the email the company send to the authors, editors, etc.
IANAL, TINLA, but I sincerely doubt that speculation and inference, which are basically opinion, are actionable in a defamation lawsuit. The facts Jane quoted, would likely be easy to prove–if any third party auditor ever got access to EC’s books.
Given past history, that’s not going to happen any time soon.
Finally, I agree with Lee Rowan. Are you trying to scare people into silence?
I’m not trying to scare anyone into silence. Say what you like. As will I. Ain’t free speech grand…?
@AnonMK- Ah, you put a foot in your mouth here: you said yourself that court only cares about what was said and basis of it. Jane wrote:
“In the meantime, Engler boasts of her Rodeo Drive shopping trips and her new property purchase in West Hollywood on her Facebook page. ” – Jane never said she bought the house. She wrote that she boasted about it on her FB page.
And why would Jane or anyone else care about her boasting posts- Because, people are not paid. If it’s true that she bought a house- it’s bad because she has money to spend, and they are not getting their royalties. If she is lying- then her lies are maybe signal that something is going on with EC.
@AnonMK: “It seems to me as if she does a lot of bragging, as you say, but there’s very little actual evidence that any of her claims are true, so it’s probably unwise to treat them as such, especially if one is going to use those claims to back up insinuations of impropriety.”
You’re saying her statements are untrustworthy. Is it possible to defame a person by relying on her untrue claims? Is her proof of defamation that her statements were false? If she wasn’t claiming to be living extravagantly, there likely wouldn’t be questions about her propriety. It’d just be a case of another tanking small publisher.
I accidentally stumbled across this article while looking for something to read. While I am not an author and have neither the time nor the patience to be one, I am an avid reader; at least 2 or 3 novels or novellas a week depending on my work schedule. Anywho, my favorite genre is paranormal romance and it is so difficult to find, that when I discovered Ellora’s Cave about 3 years ago, it was like uncovering a gold mine. It led to finding other ebook publishers of the same caliber. Now, I could take or leave the erotic as long as there is a good plot and some romance. When I first started reading EC books, they were great; smoothly flowing plots, no grammar or formatting issues, and they did not read like they were written by some third grader. Lately I’ve noticed the books coming out from EC have been very slack with either the editing or the writing and if this is due to whatever it is that is going on at this company, then that is a terrible shame. As a consumer, I was willing to pay those exorbitant prices on those books (prices more expensive than going to my local B&N) because the writing was good and I could find there what I couldn’t elsewhere. Not to say that the newer published books from EC are bad, because they aren’t atrocious, but they are definitely not worth the price charged and the quality has drastically decreased. I don’t notice an ebook’s publisher until the final page; but lately I’ve been finding that I enjoy Samhain books more. Just my two cents worth.
Did she boast of a property _purchase_? As far as I can tell, she said her lease was up and she was moving to a house in W.Hollywood. I’m saying that making assumptions and hinting at financial shenanigans in the middle of what was basically a take-down piece is never wise, especially as it doesn’t seem as if EC/JB was approached for comment before publication. Which is a whole ‘ other can of worms involving the difference between blogging and journalism, but that’s another topic for another day, although not unrelated to this one.
MK, you’re clearly doing your very best to derail the discussion into irrelevancies, but I doubt anyone is impressed, or fooled. Not going to respond further as I never engage in a battle of wits with … well, I’m sure you’ve heard the expression.
@AnonMK:
No. That’s not how royalties work. Royalties are paid to authors out of money that has ALREADY BEEN PAID to the publisher. So there’s never any reason not to pay authors unless the money that was theirs has been misspent elsewhere.
If EC sales are down because of what’s been said about EC online, then sure, authors will be due less royalties in the future. But that has absolutely no relevance to payment for royalties already owing. EC has received that money. If they haven’t paid it out to authors, they have no one to blame for that but themselves.
No, actually, I’m not derailing the conversation into irrelevancies. I’m focusing on the actual lawsuit and what elements of DA’s piece may indeed be an issue.
You’re the one making it all about you and the supposed suppression of your speech. Which is interesting, because all you’ve done is basically tell _me_ to shut up. But you’re not responding anymore of your own volition, so that’s a moot point now.
@Ros — that was a facetious response to a snarky reply to me. Therefore I did not bother reading whatever it is you’re going on about. I don’t care about royalites or how they work, nor are royalties and how they work pertinent to the case.
Documented evidence that royalties are being withheld, however, would be pertinent. You got that…?
@AnonMK: My response was not snarky, it was factual. The outcome of this case has nothing to do with EC’s ability to pay authors’ royalties.
@Ros: You know, if EC were waiting to win a defamation suit in order to pay past due royalties to their authors, as AnonMK suggests…well, *that* would certainly warrant a second look at their books, wouldn’t it?
@Ros
The comment wasn’t in response to anything you said.
And anyone who took that comment seriously is dumber than a sack of hammers.
“Ellora’s has received numerous contacts from Authors wishing to rescind contracts based on this Publication.”
I wonder if rescinding a contract is the new term for rights reversion.
Anonymous commenters who claim to be owed money, you realize this lawsuit is saying you are not owed money? It’s saying Jane’s report of your claims is false. So, either she lied about it or you lied about it. And now Jane needs proof that the claims are true. Don’t wait and hope for an audit of the books to vindicate you. The judge is asking for evidence now. Presenting your testimony to the judge may be your only chance to prove your claims are true.
I think “rescind contracts” means they want the entire contract voided. According to the definition here, it puts everything back at the state before the contract was signed — so that would mean the authors had their rights as though they had never contracted them to EC. What that would do in terms of the books EC already had in stock is probably something a judge would decide
This is just one of many online definitions…
http://legal-dictionary.thefreedictionary.com/Rescission+of+contract
Mary K – again, I am not one of the EC authors, but how would an author go about entering evidence? Would a deposition made and notarized, giving evidence of nonpayment, be sufficient? Would the deposition have to be made to Jane’s own attorney? (I assume the whole point of filing in Ohio is to make it difficult for anyone outside the state to get involved.) Or is it all at the “sit still and wait” stage? It seems mighty shaky for someone to claim that she is being libeled when the threats the plaintiff is making against others are right there in the documentation… and when the documentation being used as evidence of ‘libel’ mostly consists of statements that can be verified.
Most of the authors I know who have asked for rights reversion did it before the DA article appeared.
Lee Rowan, I believe in the update article where Jane asked for evidence she said that notarized affidavits would be completely fine – no deposition is necessary, just the statement from the author or whoever else did not get paid.
I just wanted to add that I know she asked for a live testimony as well – because at trial witnesses are needed, but she also did say that affidavits would be fine as well at this stage.
@Lee Rowan: Here Jane gives specifics of how to help her by giving testimony, over the phone, in person or via affidavit. I believe that for the last, all you need is a notary public and your written statement.
@Lee Rowan: “how would an author go about entering evidence?”
Contact Jane and let her know the author is willing to provide testimony or documentation. Jane’s attorney will arrange the details. Or contact Courtney Milan ( [email protected] ) who has offered to help authors who aren’t sure if they should speak up.
In Jane’s latest post, she said the judge has set another hearing where evidence will be presented. At that hearing, Jane needs to have evidence so it’s definitely not a sit and wait stage.
“the threats the plaintiff is making against others are right there in the documentation … and when the documentation being used as evidence of ‘libel’ mostly consists of statements that can be verified.”
I’m not sure what you mean by “documentation.” The fight is over Jane’s blog post and whether or not what she reported was true. The blog post itself is not documentation; it’s a report. The judge is looking for information apart from Jane’s blog post. S/he is looking for first hand testimony or written records showing that what Jane said was true.
The judge isn’t interested in “statements that can be verified.” The judge wants the statements to be verified and the proof of verification presented in court. So, if you are a person who made an anonymous statement to Jane, now she needs you to come forward and verify that you made the statement or provide your written records to show the statement is true.
Since I screwed up the link earlier, these are Jane’s exact words in the update she posted on Tuesday:
So that’s what she needs and how you do it. No rumors, no interpretations, straight from the horse’s mouth, as it where.
But if you are afraid of violating the confidentiality clause in your contract, you to Courtney Milan’s blog, at courtneymilan.com/rambligs/ and read her post–and incredibly generous offer–there.
@Noelle: Whoops, I’ve recommended your books online and now that this has come to light I feel horrible that I was inadvertently part of the problem. I’m not a writer but from a consumers standpoint I will no longer recommend nor buy books from EC in order to support the authors/editors/artists who are being treated unfairly.
I hope that you beat this lawsuit! Good luck with the fight and “never let the bastards get you down!”