On October 7, 2025, the First Department issued a decision in Fine Creative Media, Inc. v. Barnes & Noble, Inc., 2025 NY Slip Op. 05458, holding that there is no joint venture absent an agreement to share profits and losses, explaining:
Supreme Court properly dismissed the cause of action for breach of fiduciary duty, as that cause of action was based on a joint venture theory and plaintiff did not sufficiently plead that there was a joint venture between the parties. The parties entered into a specialized supply contract under which plaintiff produced books of classic titles that were in the public domain, as well as ancillary material for those books, such as introductions and forewords. However, the parties’ arrangement did not create an agreement to share profits or losses — an element essential for the finding of a joint venture — but rather, simply created a commercial contract for the supply of goods. Thus, the parties’ contract constituted an arm’s-length business arrangement, which does not impose any fiduciary duty. Moreover, because the cause of action for an accounting turned on the cause of action for breach of fiduciary duty, Supreme Court correctly dismissed the cause of action for an accounting.
Plaintiff argues that it need not allege an agreement to share losses because the record establishes that there was no reasonable expectation of losses to the parties. Rather, plaintiff asserts that its only risk was its overhead in producing books under the agreement and that defendant’s only risk was the price it paid for those books. Thus, plaintiff concludes, the only risk of loss was to third parties. We reject this argument, as there is an expectation of risk where a venture is engaged in selling into a highly competitive or volatile market, such as the classic book market presented here. Moreover, under the agreement, not only did defendant take a risk of losses, but it took all of the risk without the possibility of sharing losses: defendant advanced millions of dollars in startup costs to plaintiff, which was to be paid through royalties on the sales of the books, regardless of how many books were sold. In addition, the agreement provided that defendant, a purchaser under contract for specialized goods, was not entitled to return or charge back any unsold books.
(Internal citations omitted).