Dragonlance Dragonlance's Margaret Weis & Tracy Hickman Are Suing WotC for Breach of Contract

For fans of the Dragonlance D&D setting, there's some mixed news which has just hit a court in Washington State: it seems that there's a new Dragonlance trilogy of books which was (until recently) being written; but we may never see them. On 16th October 2020, a lawsuit was filed in the US District Court by Dragonlance authors Weis and Hickman asserting an unlawful breach of contract by WotC regarding the licensing of a new series of Dragonlance novels. Indeed, it appears that the first of three novels, Dragons of Deceit, has already been written, as has Book 2, Dragons of Fate.

DocumentCloud

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The Lawsuit
From the documents it appears that in March 2019 a new Dragonlance trilogy was licensed by WotC; Weis and Hickman wrote a book called Dragons of Deceit, and the draft of a second called Dragons of Fate, and then WotC terminated the contract in August 2020.

The suit asserts that the termination was unlawful, and "violated multiple aspects of the License Agreement". It goes on to assert that the reasons for the termination were due to WotC being "embroiled in a series of embarrassing public disputes whereby its non-Dragonlance publications were excoriated for racism and sexism. Moreover, the company itself was vilified by well-publicized allegations of misogyny and racist hiring and employment practices by and with respect to artists and employees unrelated to Dragonlance."

NATURE OF THE ACTION

1. Margaret Weis (“Weis”) and Tracy Hickman (“Hickman”) (collectively with Margaret Weis, LLC, “Plaintiff-Creators”) are among the most widely-read and successful living authors and world-creators in the fantasy fiction arena. Over thirty-five years ago, Plaintiff- Creators conceived of and created the Dragonlance universe—a campaign setting for the “Dungeons & Dragons” roleplaying game, the rights to which are owned by Defendant. (In Dungeons & Dragons, gamers assume roles within a storyline and embark on a series of adventures—a “campaign”—in the context of a particular campaign setting.)

2. Plaintiff-Creators’ conception and development of the Dragonlance universe has given rise to, among other things, gaming modules, video games, merchandise, comic books, films, and a series of books set in the Dungeons & Dragons fantasy world. While other authors have been invited to participate in creating over 190 separate fictional works within the Dragonlance universe, often with Plaintiff-Creators as editors, Weis’s and Hickman’s own works remain by far the most familiar and salable. Their work has inspired generations of gamers, readers and enthusiasts, beginning in 1984 when they published their groundbreaking novel Dragons of Autumn Twilight, which launched the Dragonlance Chronicles trilogy. Their books have sold more than thirty million copies, and their Dragonlance World of Krynn is arguably the most successful and popular world in shared fiction, rivaled in the fantasy realm only by the renowned works created by J.R.R. Tolkien (which do not involve a shared fictional world). Within the Dragonlance universe, Plaintiff-Creators have authored or edited 31 separate books, short story anthologies, game materials, and art and reference books in a related series of works all dedicated to furthering the Dungeons & Dragons/Dragonlance brand.

3. In or around 2017, Plaintiff-Creators learned that Defendant was receptive to licensing its properties with established authors to revitalize the Dungeons & Dragons brand. After a ten-year hiatus, Plaintiff-Creators approached Defendant and began negotiating for a license to author a new Dragonlance trilogy. Plaintiff-Creators viewed the new trilogy as the capstone to their life’s work and as an offering to their multitude of fans who had clamored for a continuation of the series. Given that the Dragonlance series intellectual property is owned by Defendant, there could be no publication without a license. In March, 2019, the negotiations between the parties hereto culminated in new written licensing agreement whereby Weis and Hickman were to personally author and publish a new Dragonlance trilogy in conjunction with Penguin Random House, a highly prestigious book publisher (the “License Agreement”).

4. By the time the License Agreement was signed, Defendant had a full overview of the story and story arc, with considerable detail, of the planned trilogy. Defendant knew exactly the nature of the work it was going to receive and had pre-approved Penguin Random House as the publisher. Indeed, Defendant was at all times aware of the contract between Penguin Random House and Plaintiff-Creators (the “Publishing Agreement”) and its terms. In fact, the License Agreement expressly refers to the Publishing Agreement.

5. By June 2019, Defendant received and approved a full outline of the first contracted book in the trilogy (“Book 1”) and by November 2019 the publisher accepted a manuscript for Book 1. Plaintiff-Creators in turn sent the Book 1 manuscript to Defendant, who approved it in January 2020. In the meantime, Defendant was already approving foreign translation rights and encouraging Plaintiff-Creators to work on the subsequent novels.

6. During the development and writing process, Plaintiff-Creators met all contractual milestones and received all requisite approvals from Defendant. Defendant at all times knew that Hickman and Weis had devoted their full attention and time commitment to completing Book 1 and the trilogy as a whole in conformity with their contractual obligations. During the writing process, Defendant proposed certain changes in keeping with the modern-day zeitgeist of a more inclusive and diverse story-world. At each step, Plaintiff-Creators timely accommodated such requests, and all others, within the framework of their novels. This collaborative process tracks with Section 2(a)(iii) of the License Agreement, which requires Defendant to approve Plaintiff- Creators’ drafts or, alternatively, provide written direction as to the changes that will result in Defendant’s approval of a draft.

7. On or about August 13, 2020, Defendant participated in a telephone conference with Plaintiff-Creators’ agents, which was attended by Defendant’s highest-level executives and attorneys as well as PRH executives and counsel. At that meeting, Defendant declared that it would not approve any further Drafts of Book 1 or any subsequent works in the trilogy, effectively repudiating and terminating the License Agreement. No reason was provided for the termination. (In any event, no material breaches or defaults were indicated or existed upon which to predicate a termination.) The termination was wholly arbitrary and without contractual basis. The termination was unlawful and in violation of multiple aspects of the License Agreement (arguably almost every part of it, in fact). The termination also had the knowing and premeditated effect of precluding publication and destroying the value of Plaintiff-Creators’ work—not to mention their publishing deal with Penguin Random House.

8. Defendant’s acts and failures to act breached the License Agreement and were made in stunning and brazen bad faith. Defendant acted with full knowledge that its unilateral decision would not only interfere with, but also would lay waste to, the years of work that Plaintiff-Creators had, to that point, put into the project. Given that the obligation to obtain a publisher was part and parcel of the License Agreement, Defendant was fully cognizant that its backdoor termination of the License Agreement would nullify the millions of dollars in remuneration to which Plaintiff-Creators were entitled from their publishing contract.

9. As Plaintiff-Creators subsequently learned, Defendant’s arbitrary decision to terminate the License Agreement—and thereby the book publishing contract—was based on events that had nothing to do with either the Work or Plaintiff-Creators. In fact, at nearly the exact point in time of the termination, Defendant was embroiled in a series of embarrassing public disputes whereby its non-Dragonlance publications were excoriated for racism and sexism. Moreover, the company itself was vilified by well-publicized allegations of misogyny and racist hiring and employment practices by and with respect to artists and employees unrelated to Dragonlance. Plaintiff-Creators are informed and believe, and based thereon allege, that a decision was made jointly by Defendant and its parent company, Hasbro, Inc., to deflect any possible criticism or further public outcry regarding Defendant’s other properties by effectively killing the Dragonlance deal with Plaintiff-Creators. The upshot of that was to inflict knowing, malicious and oppressive harm to Plaintiff-Creators and to interfere with their third- party contractual obligations, all to Plaintiff-Creator’s severe detriment and distress.

Delving into the attached document, all seemed to be going to plan until June 2020, at which the team overseeing the novels was replaced by WotC. The document cites public controversies involving one of the new team, issues with Magic: The Gathering, Orion Black's public complaints about the company's hiring practices, and more. Eventually, in August 2020, the suit alleges that during a telephone call, WotC terminated the agreement with the statement "We are not moving toward breach, but we will not approve any further drafts.”

Ending the Agreement
The suit notes that "None of the termination provisions were triggered, nor was there a claim of material breach much less written notice thereof, nor was a 30-day cure period initiated." The situation appears to be that while the agreement could not in itself be unilaterally 'terminated' in this way, WotC was able to simply not approve any further drafts (including the existing draft). The text of that allegation reads:

Not only was Defendant’s statement that “we will not approve any future drafts” a clumsy effort to circumvent the termination provisions (because, of course, there was no ground for termination), it undermined the fundamental structure of the contractual relationship whereby the Defendant-Licensor would provide Plaintiff-Creators the opportunity and roadmap to “fix”/rewrite/cure any valid concerns related to the protection of the Dungeons & Dragons brand with respect to approvals. In any event, Defendant had already approved the essential storylines, plots, characters, creatures, and lore for the new Dragonlance trilogy when it approved Plaintiff-Creators’ previous drafts and story arc, which were complete unto themselves, were delivered prior to execution of the License Agreement, and are acknowledged in the text of the License Agreement. In other words, Defendant’s breach had nothing to do with Plaintiff-Creators’ work; it was driven by Defendant’s response to its own, unrelated corporate public relations problems—possibly encouraged or enacted by its corporate parent, Hasbro, Inc.

Basically, while the contract itself could not be terminated, refusing to approve work amounts to an 'effective' termination. Weis and Hickman note that the license itself does not allow for arbitrary termination. The following section of the document is relevant:

Nothing in the above provision allows Defendant to terminate the License Agreement based on Defendant’s failure to provide approval. To the contrary, should Defendant find any aspect of the Draft to be unacceptable, Defendant has an affirmative duty under contract to provide “reasonable detail” of any changes Plaintiff-Creators must make, which changes will result in Defendant’s approval of the manuscript. Accordingly, for Defendant to make the blanket statement that it will never approve any Drafts going forward is, by itself, a breach of the license agreement.

So, the agreement apparently requires WotC to allow W&H to fix any approval-based concerns. Notwithstanding that WotC might be unsatisfied with W&H's previous rewrites, the decision in advance to simply not approve drafts without giving them this chance to rewrite appears to be the crux of the issue, and this is what the writers are alleging is the breach of contract.

Weis & Hickman are demanding a jury trial and are suing for breach of contract, damages, and a court order to require WotC to fulfill its end of the agreement. They cite years of work, and millions of dollars.

Licensing Agreements

Defendant acted with full knowledge that its unilateral decision would not only interfere with, but also would lay waste to, the years of work that Plaintiff-Creators had, to that point, put into the project. Given that the obligation to obtain a publisher was part and parcel of the License Agreement, Defendant was fully cognizant that its backdoor termination of the License Agreement would nullify the millions of dollars in remuneration to which Plaintiff-Creators were entitled from their publishing contract.

So how does all this work? Obviously we don't have access to the original contract, so we don't know the exact terms of the licensing agreement; similarly, we are hearing one side of the story here.

The arrangement appears to have been a licensing arrangement -- that is, Weis & Hickman will have licensed the Dragonlance IP from WotC, and have arranged with Penguin Random House to publish the trilogy. It's not work-for-hire, or work commissioned by and paid for by WotC; on the contrary, in most licensing deals, the licensee pays the licensor. Indeed in this case, the document indicates that Penguin Random House paid Weis & Hickman an advance in April 2019, and W&H subsequently paid WotC (presumably a percentage of this).

Licensing agreements vary, but they often share similar features. These usually involve the licensee paying the IP owner a licensing fee or an advance on royalties at the start of the license, and sometimes annually or at certain milestones. Thereafter, the licensee also often pays the IP holder royalties on the actual book profits. We don't know the exact details of this licensing agreement, but it seems to share some of those features.

On March 29, 2019, Plaintiff-Creators and PRH entered into the Publishing Agreement. PRH remitted the signing payment due under the Publishing Agreement to Plaintiff- Creators in April 2019. Per the terms of the License Agreement, Plaintiff-Creators in turn remitted a portion of the signing payment to Defendant—an amount Defendant continues to retain despite having effectively terminated the License Agreement.

Tortious Interference

On information and belief, Defendant also engaged in back-channel activities to disrupt the Publishing Agreement by convincing PRH that Defendant would prevent Plaintiff- Creators from performing under the Publishing Agreement

There's another wrinkle, a little later. The document says that a second payment was due on November 2019 -- similarly it would be paid to W&H by Penguin Random House, who would then pay WotC. It appears that PRH did not make that second payment to W&H. W&H later say they discovered that WotC was talking directly to Penguin Random House about editorial topics, which is what the term 'tortious interference with contract' is referring to.

By June 2019, Defendant/Hasbro expressly approved a detailed outline of Book 1. In November 2019, PRH indicated that the complete manuscript of Book 1 was accepted and it would push through the second payment due on the Publishing Agreement. At that time, Plaintiff-Creators submitted the complete manuscript of Book 1 to Defendant/Hasbro who expressly approved the Book 1 manuscript in January 2020. Inexplicably, and despite Plaintiff- Creators’ repeated request, PRH never actually delivered the second payment due on approval of the Book 1 manuscript.

What Happened?
Throughout the process, WotC asked for 'sensitivity rewrites'. These appear to include four points, including the use of a love potion, and other "concerns of sexism, inclusivity and potential negative connotations of certain character names." W&H content that they provided the requested rewrites.

One section which might provide some insight into the process is this:

During the writing process, Defendant proposed certain changes in keeping with the modern-day zeitgeist of a more inclusive and diverse story-world. At each step, Plaintiff-Creators timely accommodated such requests, and all others, within the framework of their novels.

It's hard to interpret that without the context of the full conversations that took place, but it sounds like WotC, in response to the previously-mentioned publicity storm it has been enduring regarding inclusivity, wanted to ensure that this new trilogy of books would not exacerbate the problems. We know they asked for some rewrites, and W&H say they complied, but the phrase "within the framework of their novels" sounds like a conditional description. It could be that WotC was not satisfied with the rewrites, and that W&H were either unable or unwilling to alter the story or other details to the extent that they were asked to. There's a lot to unpack in that little "within the framework of their novels" phrase, and we can only speculate.

It sounds like this then resulted in WotC essentially backing out of the whole deal by simply declaring that they would refuse to approve any further drafts, in the absence of an actual contractual clause that would accommodate this situation.

What we do know is that there are two completed drafts of new Dragonlance novels out there. Whether we'll ever get to read them is another question! Dragons of Deceit is complete, Dragons of Fate has a draft, and the third book has been outlined.

 

[LuisCarlos17f]

The kender towns are as if they were built to be labyrinths where invaders get lost.

Maybe some kenders are right, they didn't steal those things, nor even touch them, but only they appeared in their pockets by some some curse with teletransporting effects, as if the Gray Gem would them to gather or collect things. And this happen more times if they have been using magical items.

 

[Maxperson]

This is why I think the deep pockets feature works well. Instead of stealing specific items from your party, you have a bunch of random junk on you, and it’s assumed you just kind of picked it up somewhere without really thinking about it. Maybe it was from a party member or maybe it was from somewhere else; you don’t really remember because you aren’t used to thinking about possession that way. You saw it, you thought it was neat, you grabbed it. Later, you will probably put it down somewhere and forget about it.

I think the play should still be allowed to play it out as well. There are all kinds or little interesting things the DM describes that I might want my Kender(like I'd ever play one) to grab.

 

[AdmundfortGeographer]

The Minoi gnomes of Taladas and Merak Kender also of Taladas gave interesting takes that I like more.
I’d like to see some attempts a doing Tasha’s 5e takes on tinker gnomes, kender, and gully dwarves that gets at their essences. Maybe it has to be done in combination of new cultural backgrounds available to them.

 

[billd91]

This is why I think the deep pockets feature works well. Instead of stealing specific items from your party, you have a bunch of random junk on you, and it’s assumed you just kind of picked it up somewhere without really thinking about it. Maybe it was from a party member or maybe it was from somewhere else; you don’t really remember because you aren’t used to thinking about possession that way. You saw it, you thought it was neat, you grabbed it. Later, you will probably put it down somewhere and forget about it.

There's a halfling-oriented feat along those lines in Pathfinder.v1 that I always enjoyed - and it's pretty clearly inspired by kender. It's called Well Prepared. I rarely have a halfling adventurer without it because it's so much fun.

 

[UngainlyTitan]

Re: theft

My understanding is that in at least some states in the US, merely taking a thing without asking the right person can amount to theft, even if there was no intention to permanently deprive and no dishonesty of any kind. Which as you point out, is most certainly not the case in English law. So that would actually be a distinction. Despite being common-law, the US actually differs on several points from the UK/Australia/Canada (another one is the "duty to retreat", which you can probably find entire articles discussing the difference between UK/Oz/Can and the US - and it's a difference that emerged quite a long time back in the history of jurisprudence).

Re: this case, I am very skeptical that Hickman and Weis have much of a chance.

To me, it looks like they're hoping to convict WotC in the court of public opinion, as being censorious and over-modern, and hoping they can get an out-of-court settlement and/or the novels published out of it.

They don't present a particularly compelling argument. Unless the contract was hugely favourable to them, which seems unlikely from WotC, I am skeptical that WotC had no right to cancel it. And their whole wild and some what fevered theorizing that they got "cancelled" because WotC was taking what was actually a pretty mild degree of somewhat ineffectual criticism doesn't seem very likely to be based in fact, and seems to tie in more to the fact that they'd been asked to change problematic elements before being cancelled than anything solid (especially given they did make the changes.

If WotC don't settle, then at best I guess, in discovery, they go through WotC's documents, and hopefully for them dig out some sort of smoking gun email that says "We've got to cancel these Boomers because their un-PC novels might attract criticism! To hell with the contract!!!". Which, y'know, I'm very much doubting anyone at WotC actually wrote. That's more a "startup" level of documenting your own incompetence. Even if such an email did exist, it would probably just lead to WotC settling with some sort of heavily-NDA'd deal (which could also happen if they just bargained Hickman/Weis down enough that settling was cheaper than trying the case, so even if there is an NDA'd settlement, we'll have no idea what happened).

Re: Kender and property, I think Hickman & Weis were trying to draw on popular-in-the-1970s anthropological notions that a lot of nomadic or tribal cultures didn't have a notion of personal property in the way most of the world does. Trouble is, the pop-culture understanding of this stuff was pretty facile and silly (you see this continuing on into the 1990s with a couple of White Wolf WoD books). The actual scholarship tended to boil down to "in a lot of tribal or nomadic cultures, if you're not using something, like you're genuinely done with it, anyone can take it" in a "common sense" way - for example, if you just put your down and quiver down and go have a nap, you're not "done with it". But if you leave it in your hut, and then ride off into the distance saying "I'm not coming back you jerks!" to the rest of the tribe, it's absolutely up for grabs, even if under civilized laws it would still be yours (and your hut is up for grabs too, note), and even if you come back the next week having ceased sulking. Which is a lot less exciting and wacky than a lot of the pop-culture takes.

On this case, I disagree with your take. Weis and Hickman's case, as I understand it that WoTC breached their licence agreement by interfering in the relationships between Wei and Hickman and their publisher and acted in bad faith by refusing to specify what changes would make the books publishable and refusing to revoke the licence. On the face of it I think Weis and Hickman have a case. The legal analysis video I referenced up thread agrees on this. That is not to say that WoTC does not have good counter arguments.

On the kender issue. I think that this may not be, initially about racism. A love potion is mentioned as part of the initial source of the edit requests.

My own wild speculation: I think that initially W&H had a plot element involving a love potion and were asked for a rewrite and while that was going down WoTC got in hot water over racism and gender issues and this attracted Hasbro attention. Some one high up the food chain decided not to go ahead with any Dragonlance related product and the editorial team was changed to do a hatchet job and kill the novels but not revoke the licence because that would cost money. Legal intimidation was tried and W&H decided to sue. I suspect WoTC will settle but the books will not be published.

 

[Remathilis]

I think the play should still be allowed to play it out as well. There are all kinds or little interesting things the DM describes that I might want my Kender(like I'd ever play one) to grab.

From the various locations they travel through? Sure. From a PCs backpack? No.

 

[Mercurius]

I like the books. I also recognize where they fail.

Where they fail? Fail to do what? Represent your values?

I have no resonance with Mormorism, but I don't have a problem with a Mormon author infusing their work with their ideology. We shouldn't expect people who don't share our values to write for our values.

And of course the obvious point: do we ask for books written in the mid-80s to reflect 2020 values? And if so, which 2020 values? As I said upthread, humans are not monolithic in their ideology.

 

[FrozenNorth]

As an aside, would you say US law is more remote and UK/Oz/Can law forms a more similar group of legal traditions or would you say they are each equally similar and diverging on different topics?

The highest court in the land in Canada was the UK Privy Council until 1947, and I suspect that the AU situation was similar, so the common law of UK/CA/AU is likely more similar than the US, which diverged 150 years earlier.

 

[Charlaquin]

I think the play should still be allowed to play it out as well. There are all kinds or little interesting things the DM describes that I might want my Kender(like I'd ever play one) to grab.

Agreed! I would never say a player can’t choose to take a specific thing that catches their fancy. The deep pockets feature is just a nice way to represent the tendency without having to rely exclusively on taking specific objects.

 

[MGibster]

They don't present a particularly compelling argument. Unless the contract was hugely favourable to them, which seems unlikely from WotC, I am skeptical that WotC had no right to cancel it.

You are right to be skeptical about any claims that WotC is not permitted to cancel the contract. But the complaint put forth by Weis & Hickman acknowledge that WotC has the right to cancel the contract. However, the suit alleges that WotC isn't acting in good faith to uphold their side of the contract. There are provisions for cancelling the contract, and instead of using those WotC has decided they will simple not approve of any drafts Weis & Hickman which they argue amounts to cancelling the contract.