Arlington woman wins ‘Fifty Shades of Grey’ lawsuit

Jennifer Pedroza, left, and Christa Beebe, right, of Arlington launched The Soap Barista, a handmade soap company. Pedroza won a lawsuit against a former partner in a case involving Fifty Shades of Grey.
Jennifer Pedroza, left, and Christa Beebe, right, of Arlington launched The Soap Barista, a handmade soap company. Pedroza won a lawsuit against a former partner in a case involving Fifty Shades of Grey. The Soap Barista

Color Arlington resident Jennifer Pedroza fifty shades of happy.

Pedroza, one of two Arlington women who said they are owed royalties from the blockbuster novel Fifty Shades of Grey, won her lawsuit in Tarrant County civil court this week, a victory that could pad her bank account by at least seven figures, an attorney said.

The jury deliberated for about 10 hours over three days before determining on Thursday that Pedroza was defrauded by Amanda Hayward, her Australian partner in an e-publishing business that originally released what would become a New York Times bestseller.

State District Judge Susan McCoy will determine how much Pedroza eventually gets after an accounting of the financial records connected to book sales is completed. Records on the royalties have been sealed, but earlier estimates were that her share could be $10 million to $20 million.

“It will be large numbers. It will be in the seven figures,” said Mike Farris, Pedroza’s attorney, who added that the earlier amounts were merely guesses.

The verdict is only “the first step,” but his client feels “vindicated,” he said.

Robert Kantner, an attorney representing Hayward, said his clients decided not to comment to the press and will “litigate the case in the courts.” Kantner did not respond when asked if his clients would appeal the verdict.

Pedroza sued Hayward last year, contending that she conned her out of her rightful partnership interests in advances and royalties flowing from the wildly successful book, which recently inspired a movie by the same name.

Pedroza and Hayward, who lived in Dural, a Sydney suburb, were partners in The Writer’s Coffee Shop, which started out as a blog site in 2009, along with Waxahachie resident Jennifer McGuire. Visitors to the fan-based website discussed books and wrote “fan fiction” stories.

The three women formed online friendships. McGuire did design for the blog, Pedroza uploaded contributors’ writing, and Hayward worked with the authors, court records show. Later, Christa Beebe, another Arlington resident, joined and helped with marketing and distribution.

By 2010, Pedroza and Hayward had the Coffee House operating as a publishing house that in 2011 published Fifty Shades of Grey, an erotic romance novel by E.L. James, a British author, as an e-book and print-on-demand full-length book. The company published the sequels, Fifty Shades Darker and Fifty Shades Freed, in 2011 and 2012.

The Fifty Shades of Grey trilogy became an online sensation, selling 250,000 copies through e-book and print-on-demand, with another 20,000 print copies.

Hollywood came calling as did major publishing houses.

In 2012, Random House made a deal with Hayward and James to publish the books in what was described as a “million-dollar deal.” Pedroza received a one-time payment of $100,000 after the Random House contract was signed, but she was never told of the full terms of the transaction.

By contrast, James earned $95 million in royalties between June 2012 and June 2013, the lawsuit states. Random House was not named in the lawsuit.

The lawsuit acknowledges that the two Texans — Pedroza and McGuire — and Hayward never signed a prepared partnership agreement. But in 2011, The Writer's Coffee Shop filed a partnership income tax return, naming Pedroza as a general partner, it says.

Pedroza contended in her suit that Hayward in 2012 secretly converted the Coffee Shop into a company she alone owned, TWCS Operations Pty Limited, cutting her out of the millions that the trilogy eventually would earn.

Ferris said the jury eventually determined that there was a partnership between the women and that Heywood failed to comply with her duties. The jury also found that Heyward defrauded Pedroza.

Beebe, who originally was a part of the lawsuit and was seeking $45,000 in lost wages and punitive damages, settled her claims in December in a confidential agreement, Ferris said.

Max B. Baker, 817-390-7714

Twitter: @MaxBBaker

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