James Frey and Random House Settle Fraud Lawsuit

Posted on September 7, 2006

The New York Times reports that Random House and James Frey have reached an agreement in connection with the lawsuit over A Million Little Pieces, Frey's so-called memoir that turned out to be mostly fiction.

Readers in several states, including New York, California and Illinois, filed lawsuits saying that Mr. Frey and the publisher had defrauded them by selling the book as a memoir rather than as a work of fiction. In June the cases were consolidated to the United States District Court for the Southern District of New York. Under the terms of the agreement, which has been accepted by 10 of the 12 plaintiffs who are part of the consolidated case, both Mr. Frey and Random House will pay out no more than a total of $2.35 million, which includes the cost of refunding customers, lawyers' fees for both sides and a yet-to-be-specified donation to charity.
To claim a refund, readers who bought a copy of the book on or before Jan. 26 must submit proof of purchase. This will not be limited to a dated receipt however: hardcover buyers, who are entitled to a $23.95 refund, must submit page 163 (chosen at random, according to the source familiar with the negotiations); paperback buyers (entitled to $14.95) must send in the front cover of the book; those who bought the audio book ($34.95) will have to send in a piece of the packaging, and those who bought the e-book, at $9.95 apiece, must send in some proof of purchase.
People making a claim will also have to submit a sworn statement that they would not have bought the book if they knew that certain facts had been embroidered or changed.
Mr. Frey declined to comment. But his lawyer, Derek Meyer, said, "We worked with Random House on whether to resolve these lawsuits and the desire to move on became a powerful incentive to resolve what are otherwise very weak cases."

This has to be some kind of legal first: before the Frey case, we had never heard of a lawsuit where readers sued the publisher because an author fibbed in his memoir. The bottom line is this: Frey went on national television and lied right to Oprah's face about turning his life around after hitting rock bottom. His tory moved people and gave them hope -- and it all turned out to be a big fraud. Random House was absolutely correct in witholding Frey's Oprah-related royalties until after the lawsuit was settled.