Well if you ask me personally, it should be "James's" and anyone who disagrees fails English class in school. Of course, I don't make the rules; in fact no one person does and that's the problem here. I doubt there is a big enough number of people who care to customise such a fine detail, so for your product I would just use the rules obeyed in the original text. Or if you don't want to customise on a per-text basis, the rule used by the majority of texts. Or just the easier one, since it's technically correct.