Note: I am not a lawyer so if you are interested I suggest reading the original documents as linked. But the gist of it seems to be that Publish America made a deal with Lightning Source that including authorising Lightning Source to accept returns for books sold wholesale via their service. The doubted the accuracy of returns and so asked for these returns to be shipped to them so they could account for returns accurately. The book received, they claim, were presented as the returns but were actually new books. LSI presented a defence and counterclaim for unpaid fees.
Publish America vs Lightning Source
"LSI was only authorised to charge PA for returns of Wholesale orders ... Nevertheless, LSI charged PA for returns of books sold by PA ... LSI breached the contract by destroy .. returns and reprinting substitute copies."