Last week, educational publisher Cengage announced that it had settled a lawsuit filed by textbook authors David Knox and Caroline Schact over a dispute alleging that Cengage’s new unlimited subscription service will dramatically reduce their textbook sales and royalties. The authors were also concerned that there was not an appropriate audit mechanism in place to understand royalty payments under the new compensation system. Knox and Schacht sought class action status for their claim, filed in the Southern District of New York in May. The settlement amount was not disclosed.

“We are very pleased to have reached an agreement with our authors David Knox and Caroline Schacht. Under the agreement, Mr. Knox and Ms. Schacht will purchase Choices in Relationships: An Introduction to Marriage and Family from Cengage. And, Cengage retains the exclusive rights to other titles authored or co-authored by these authors, including M&F and Understanding Social Problems. These works continue to be available with a Cengage Unlimited subscription,” said Cengage in a news release.

“Cengage Unlimited was created to lower students’ costs and increase access to our authors’ quality learning materials.  The subscription has been positively received by students, faculty and authors because of the value it offers: for one price, students have unlimited access to more than 20,000 eBooks, online homework access codes and study guides,” added Cengage. “We thank Mr. Knox and Ms. Schacht for their contributions to Cengage and wish them the very best in their future endeavors.”

Cengage originally announced the launch of Cengage Unlimited, its unlimited college textbook subscription service, in December of last year. The service launched in August. With the new service, college students can pay one flat price to get access to textbooks Cengage offers plus print textbook rentals for $7.99 per book. Pricing, as of today, is as follows:

• 4 months: $119.99
• 1 year: $179.99
• 2 years: $239.99

In an October 4 statement by attorney David Slarskey of Slarskey LLC, the plaintiffs’ attorney, other authors had similar concerns, which is why the plaintiffs pursued class action status.

Slarskey wrote, “Sometimes class action litigation settles quickly — before the court can consider the legal issues presented. This often happens when terms can be negotiated that are acceptable both to the individual plaintiffs, who have stepped forward and offered to represent a class, and to the defendant. That is what happened here. Today we amicably settled the lawsuit on behalf of Professors Knox and Schacht, before a single document was exchanged in discovery, and on terms that are public — except for the amount of the payment made by Cengage to the two plaintiffs. The settlement does not affect the rights of any authors other than Knox and Schacht.”

Insider Take:

According to Cengage’s promotional materials, the goal of Cengage Unlimited is to provide affordable textbooks, supplemental educational materials like study guides and digital learning platforms to college students. For students and parents paying tuition, Cengage’s slogan “learn more for less” is a welcome price break. From a subscription standpoint, however, the program must be financially sustainable for Cengage and advantageous for authors as well. Hopefully, this initial lawsuit opened Cengage’s eyes to the concerns of textbook authors to ensure equity and fair payments down the road.