In its response to a class action lawsuit filed against them in May by David Knox and Caroline Schacht, Cengage denies that its business model “tramples on” or is in any way inconsistent with its authors’ rights and said it believes that the new Cengage Unlimited model will “increase sales and revenues (and, accordingly, royalties to authors).”

Cengage authors Knox and Schacht filed their class action lawsuit in the U.S. District Court for the Southern District of New York on May 14 against Cengage claiming the company’s emphasis on digital distribution, including its new Cengage Unlimited model and expanded digital courseware offerings, have violated their publishing agreements. The suit also claims that the company is refusing to provide information that would allow them to audit their royalty payments.

In the response, filed July 27, Cengage said that Knox and Schacht did not have an audit clause in their contracts and admit denying the authors’ request for an audit.

Juli Saitz, senior managing director of Ankura Consulting, said that based on her understanding of the Cengage Unlimited royalty calculation, she was struck by Cengage’s statement that authors will see increased royalties: “This is not how I see things playing out for individual authors, but I hope that I’m wrong.”

David Slarskey, the authors’ attorney, said: “We are looking forward to the next phase of litigation, in which we will be pursuing certification from the court to proceed on a class-wide basis. There are many authors similarly impacted by Cengage’s practices–the launch of Cengage Unlimited, the misallocation of value on courseware to reduce royalties, and the denial of information necessary to determine the validity of royalty reporting.”

Read Cengage’s Full Answer to the Complaint with Exhibit

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