Bernstein v. Cengage Learning, Inc.

Background

The plaintiffs sought preliminary approval of a settlement with Cengage Learning, Inc. under Federal Rule of Civil Procedure 23(e), which governs settlements in class actions. The application was uncontested by Cengage. The order states that the settlement agreement included releases of specified claims, but it does not describe the settlement amount or the underlying claims in detail.

Preliminary Approval and Proposed Class

The court found that it would likely be able to approve the settlement under Rule 23(e)(2). It therefore preliminarily approved the settlement, including its releases, as fair, reasonable, and adequate based on the factors identified in the rule and in the cited precedent. The approval remained subject to class members’ opportunity to challenge the agreement and to a later hearing on final approval.

The proposed Settlement Class consists of authors of royalty-bearing works who entered into a publishing agreement with Cengage or one of its predecessors and whose works either were sold as part of a MindTap product with a Digital Royalty Allocation other than 100% or were available on Cengage Unlimited. The definition includes heirs and assigns and excludes Cengage and specified related persons, the court and specified court personnel and family members, people who opt out, and people who previously settled and released the claims at issue.

The court found that the class would likely satisfy the requirements for certification for purposes of judgment on the settlement proposal under Rule 23(b)(3). Specifically, it found that the class was sufficiently numerous, the plaintiffs’ claims presented common issues and were typical of the class, the plaintiffs and proposed class counsel would fairly and adequately represent the class, common issues predominated over individual issues, and class treatment was superior to other methods of resolving the case.

Appointments and Case Administration

The court appointed Susman Godfrey L.L.P. as counsel for the Settlement Class and appointed Rust Consulting, Inc. as the settlement administrator. The named plaintiffs—Douglas Bernstein, Edward Roy, Louis Penner, Ross Parke as personal representative of the estate of Alison Clarke-Stewart, Elaine Ingulli, and Terry Halbert—were appointed representatives for settlement purposes.

The court continued the stay of all proceedings, except proceedings needed to implement the settlement or comply with the agreement. Cengage was ordered to provide a class list within 14 days of the order. Rust was directed to mail the short-form notice within 14 days after receiving the final list, post the long-form notice on the lawsuit website, transmit the short-form notice through PR Newswire, and maintain an automated toll-free information line.

Exclusion, Objections, and Final Hearing

Class members may request exclusion by written notice postmarked no later than 30 days after the Notice Date. Class members may object by filing and serving a written objection no later than 30 calendar days after the Notice Date. The order states that class members who do not timely request exclusion will be bound by proceedings, orders, and judgments in the action, and that class members who do not timely object will waive their objections and may not be heard or appeal approval of the settlement.

The court scheduled a Final Fairness Hearing for February 26, 2025, at 3:00 p.m. Eastern Time by telephone. The hearing is to address final approval of the settlement, certification of the Settlement Class for purposes of judgment, entry of a final judgment, approval of the allocation plan, and the requested attorneys’ fees, expense reimbursements, and service awards. The order also established deadlines for notice, the fee request, opt-outs and objections, the final approval motion, and reply briefs.

Effect of the Order

The order states that neither the order nor the settlement may be used as an admission or evidence that Cengage was liable or that the plaintiffs’ claims lacked merit. If the settlement is not approved, does not become effective, is not consummated, is declared void, or has no effective date, the parties are to return to their status as of September 13, 2024, subject to the terms stated in the order. The court’s action was preliminary and did not finally approve the settlement or finally certify the class. Judge Andrew L. Carter, Jr. signed the order on November 25, 2024.