Bernstein v. Cengage Learning, Inc.

Background

The plaintiffs—Douglas Bernstein, Elaine Ingulli, Terry Halbert, Edward Roy, Louis Penner, and Ross Parke as personal representative of the estate of Alison Clarke-Stewart—brought the action on behalf of themselves and others similarly situated against Cengage Learning, Inc. The parties entered into a class-action settlement. The court had preliminarily approved the settlement and authorized notice to potential settlement-class members.

The approved short-form notice was mailed to settlement-class members, the long-form notice was posted on a dedicated website, and the short-form notice was also distributed through a nationwide press release. The court found that the notice complied with Federal Rule of Civil Procedure 23 and due process and was the best notice practicable under the circumstances. The court also found that the required notice under the Class Action Fairness Act had been provided to the United States Attorney General and state attorneys general. No settlement-class member filed a timely objection, and Cengage did not oppose the application for final approval.

Settlement Class

For purposes of entering judgment on the settlement under Rule 23(b)(3), the court certified a settlement class consisting of authors of royalty-bearing works who entered into publishing agreements with Cengage or one of its predecessors and whose works either were sold as components of a MindTap product with a Digital Royalty Allocation other than 100% or were available on Cengage Unlimited. The class includes qualifying authors’ heirs and assignees of their contractual rights.

The order excludes authors who previously released claims against Cengage, Diane L. France because she timely and validly requested exclusion, Cengage and specified related persons, and the court-related persons and entities identified in the order.

Court’s Analysis and Ruling

The court found that the settlement resulted from an extensive factual investigation and arm’s-length negotiations conducted in good faith with the assistance of a mediator and experienced class-action counsel. Applying the factors in Rule 23(e)(2) and the factors identified in City of Detroit v. Grinnell Corp., the court considered the complexity, expense, and likely duration of continued litigation, the class’s reaction, and the result achieved. The court concluded that the settlement terms were fair, reasonable, and adequate and fully and finally approved the settlement.

The court also approved the previously approved distribution plan as fair, reasonable, and adequate and directed its consummation under the settlement’s terms. Cengage must fund the settlement account as required by the settlement agreement. The order states that the settlement and related acts or documents are not admissions of wrongdoing. The court retained continuing and exclusive jurisdiction over settlement administration, enforcement, and certain future reimbursement applications. Finally, the parties were ordered to submit a proposed final judgment consistent with the settlement and the order within seven days.