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Louisiana State University Files Suit Against Elsevier; Elsevier Has Not Accepted Service

On February 27, 2017, Louisiana State University (LSU) filed a lawsuit against international science publisher Elsevier after the publisher breached its contract and refused to allow LSU’s veterinarian school faculty and students to access Elsevier content licensed by LSU’s Libraries. ARL’s press release is available here.

Background

LSU currently holds a license with Elsevier to cover its entire Baton Rouge campus. LSU’s veterinary school, which is located on main campus of LSU in Baton Rouge, Louisiana, previously held its own license with Elsevier. Upon the expiration of the veterinary school’s license with Elsevier, the veterinary school users continued resources licensed by LSU Libraries. The LSU Libraries’ license (attached as an exhibit to the end of the complaint) unequivocally covers its entire Baton Rouge campus, including the veterinary school.

Despite the fact that LSU Libraries license covers IP ranges specifically covering the veterinary school, Elsevier blocked access to users at the veterinary school. Upon discovery, LSU contacted Elsevier on October 11, 2016 to request reactivation of the IP ranges for the veterinary school. Elsevier unblocked those IP addresses, but then in January again blocked access for users at the veterinary school. Elsevier refused to respond to LSU’s written requests to reactivate these IP addresses.

Additionally, when LSU Libraries made a request to license 19 additional veterinary titles from Elsevier, the publisher initially responded that it would cost an additional $35,000 to add these titles. LSU Libraries accepted this price and requested an invoice only to then find Elsevier refusing to sell these titles to them.

Although LSU requested Elsevier to restore access to the veterinary school, Elsevier failed to respond until nearly six weeks later and only after LSU filed a lawsuit for breach of contract. Ultimately, Elsevier has refused to restore access for those in the veterinary school. Additionally, Elsevier has not accepted service of the lawsuit, which was filed in the Nineteenth Judicial District Court, Parish of East Baton Rouge, Louisiana, and for which service of process was attempted at Elsevier’s New York headquarters. As a result, LSU is now attempting to effect service of process at Elsevier’s headquarters in Amsterdam through the Hague Service Convention.

On April 22, 2017 Elsevier proposed that LSU “add a minimum of $170,000 of additional 2017 subscriptions to their existing contract” and “increase the price of Freedom Collection by $30,000 for the 2017 subscription period.” This amount represents an incredible increase in cost to LSU, and would not even cover the full 2017 calendar year.

Here’s my breakdown and analysis of what’s happened so far.

Elsevier’s Actions Prevent LSU from Exercising Sound Financial Stewardship of Scarce Public Resources

In essence, in an effort to exercise sound financial stewardship of public resources, LSU has been punished through Elsevier’s refusal to honor its contract. Elsevier’s actions in this case, from its blocking the IP ranges for the veterinary school to its failure to accept service at its New York office of the lawsuit to its outrageous demands that LSU Libraries pay an additional $200,000, demonstrate the publisher’s bad faith.

As a result of this dispute, Elsevier apparently wants LSU to add $170,000 of journals that the university does not need or want, a complete waste of scarce state dollars. Elsevier is holding hostage access to the veterinary school community in an effort to extort more money from a state institution. Keep in mind that LSU is already paying $1.5 million (and rising) to Elsevier.

All LSU is trying to do in the present case is ensure that it is not unnecessarily duplicating subscriptions for its campus and using state resources in a responsible manner. It is disappointing that Elsevier would respond to its own breach of contract by demanding more money from a public institution.

As summarized in LSU’s complaint:

Elsevier is well aware that LSU, like other universities, is heavily reliant upon the various types of research and educational content for which Elsevier enjoys monopolistic market powers and Elsevier is unfairly abusing its leverage to coerce LSU into paying additional and unnecessary subscription fees for research and educational content that LSU has already contracted for.

Elsevier Refuses to Honor The Plain Language of Its Existing Contract with LSU

The most obvious harm in the case comes from Elsevier’s refusal to honor its contract with LSU by blocking access to the veterinary school. Although the faculty, staff and students of the veterinary school had previously been able to access content licensed by LSU Libraries and such access was expressly covered under the IP ranges contracted for, Elsevier has denied access to these users.

Once again, Elsevier is using its monopoly power—LSU can only get the titles owned by Elsevier from Elsevier itself—to try to extract more money out of LSU. Elsevier is hoping that by refusing to honor its contract, it will be able to pressure LSU to renegotiate its current contract and pay even more money—more than the $1.5 million dollars the university pays each year to the publisher.

Elsevier Reneges on Its Contract with LSU for Additional Titles

While the major portion of the complaint involves Elsevier’s blocking of the IP ranges for the veterinary school and thus breaching its existing contract with LSU, the publisher also refused to honor the negotiations with respect to nineteen additional titles. When LSU inquired about these additional titles, Elsevier provided a quote. LSU confirmed acceptance of these terms and requested an invoice. Elsevier then replied “Thank you for these new title additions.” However, Elsevier subsequently refused to honor this agreement.

Every first-year law student takes contract law and the very first lesson is that an offer plus acceptance of that offer (plus consideration, such as money, to differentiate it from a gift) results in a valid contract. Here, Elsevier made an offer to add the requested titles in exchange for payment by LSU of $35,000. LSU expressly accepted. Elsevier even acknowledged receipt of acceptance. However, like its current contract with LSU, Elsevier has breached its own contract by now reneging and refusing to invoice the institution and provide the promised content.

Offer + acceptance (and consideration) = valid contract. Except, apparently, when you’re Elsevier. 

Elsevier’s Fails to Accept Service of the Lawsuit

Perhaps the craziest part of the entire story—though there are many deeply troubling actions by Elsevier—is the fact that Elsevier has not accepted service of the lawsuit. More than two months after the lawsuit was filed (during which time, LSU and its faculty, staff and students continue to be harmed by Elsevier’s refusal to honor its contract), Elsevier appears to be playing games with this public university. While it would be understandable for Elsevier to try to aggressively defend itself against the claims (even in a case where the facts clearly favor LSU), here Elsevier is essentially pretending that the lawsuit doesn’t even exist. This is not a standard delay tactic in litigation.

Elsevier does substantial business in the United States. The publisher charges millions of dollars each year to hundreds of universities and institutions in the United States. It has fourteen corporate headquarters and branch offices located in the United States. It is a member of the Association of American Publishers. According to OpenSecrets, last year Elsevier (under RELX) spent $1.72 million dollars lobbying in the United States (and lest you think RELX’s lobbying dollars are going to be substantially different from Elsevier, the 2014 filings show that while the company was still going by the name Reed Elsevier it paid $1.6 million dollars to its lobbyists). It has lobbied substantially on issues related to copyright and against open access. The publisher’s global litigation counsel was a witness in the House of Representatives Judiciary Committee copyright review hearing on Section 512. Elsevier has taken advantage of its rights to sue as a plaintiff in United States courts on multiple occasions in cases involving everything from breach of contract to copyright infringement to exemptions from sunshine laws. Clearly, Elsevier enjoys the benefits of its business in the United States and invests substantial resources into shaping the laws in this country.

While Elsevier enjoys all the advantages of doing business in the United States when it benefits the corporation, it conveniently decides that it’s a Dutch company when it is being sued. That LSU is being forced to chase Elsevier down in Amsterdam through the Hague Service Convention is an incredible outcome of the dispute.

Concluding Thoughts

Elsevier’s actions in the present case, including its refusal to acknowledge or respond to LSU’s requests for the publisher to abide by the terms of its own contract until after a lawsuit was filed, demonstrate its corporate culture. LSU’s complaint perfectly sums up Elsevier’s abuse of its monopoly power:

Elsevier’s total disregard for LSU’s serious concerns and amicable efforts to resolve this dispute reflects the monopolistic market power and arrogance that comes with Elsevier’s posturing as a “world-leading provider of information solutions that enhance the performance of science, health and technology professionals.”

Through its continuing breach of its contractual obligations to LSU under the Agreement, Elsevier has caused, and continues to cause, irreparable injury and significant damages to LSU and has significantly damaged, impaired and restrained the university’s ability to conduct research and educate its students, thereby improperly restricting and interfering with LSU’s primary purpose and constitutional mandate under the Louisiana Constitution.

In a time where states are facing enormous budget deficits public universities must ensure financial responsibility of scarce public resources. LSU is attempting to exercise sound judgment and stewardship of limited resources, but its only reward has been Elsevier blocking access to faculty, researchers and students at the university.