Class action complaint filed against Cengage alleging unfair, deceptive royalty-reporting practices
A class action lawsuit was filed today in the United States District Court for the District of Massachusetts against Cengage, one of the leading publishers of educational textbooks, alleging that its unfair and deceptive royalty-reporting practices violate Massachusetts’ Consumer Protection Law.
The lawsuit, filed by Slarskey LLC and Casner & Edwards LLP on behalf of art history author Fred Kleiner and similarly-situated individuals, alleges that Cengage’s practices are designed to conceal that Cengage systematically underpays royalties due to authors in the range of 10-30 percent.
The complaint describes Cengage’s bi-annual royalty statements as “incomplete, confusing, and concealing from authors the information they need to reasonably determine whether their royalties have been paid based on fair and accurate calculations.”
Kleiner’s counsel David Slarskey said that in addition to deliberately confusing royalty statements, Cengage “tasks their account executives or author representatives with delaying and avoiding accountability for their royalty statements and how they’re calculating them.” This practices affects all of its authors, he said, “because the royalty statements are opaque and because they don’t really respond to questions in a way that’s designed to provide clarity.” As a result of these practices, which are designed to conceal the fact that they are “just skimming off the royalties,” said Slarskey, authors across the board are “systematically under paid their royalties.”
According to the lawsuit, Cengage’s recent introduction of Cengage Unlimited, its on-demand
electronic subscription model, and Cengage’s increased promotion of “MindTap,” its digital learning-aid platform, have exacerbated the problem, as royalty statements have become longer, more complicated, and less comprehensible.
“This lawsuit aims to hold Cengage accountable for its false, misleading, and unfairly opaque royalty statements, which are part of a broader practice designed and implemented by Cengage to dissuade its hard working authors from questioning the accuracy of their royalty statements,” said Slarskey.
Part of the relief the lawsuit is seeking, he says, will be clearer royalty statements, clearer calculations and more and better disclosure to authors about how royalties are being calculated. It is also seeking a process by which authors can not only better understand their royalty statements, but can also get information or responses to their inquiries when they have them.
Based on Cengage’s annual reported revenues, it is believed that Cengage’s practices conceal the underreporting of $12 to $18 million annually in underpaid royalties.
If you are an author who entered into a publishing agreement with Cengage, or any of its predecessor companies, and are interested in learning more about this lawsuit, please contact Richard Weingarten at email@example.com.
“A lot of authors in the past have been frustrated because they may feel like their royalty earnings aren’t large enough to warrant the attention of either an attorney or the court,” said Slarskey. “But this is a good vehicle for those authors who otherwise may have modest royalty statements and otherwise might not hire an accountant or an attorney to speak up on their behalf. We’re interested in talking to authors who don’t necessarily have very large royalty claims, but still have significant questions about how their royalties are being calculated and feel like that they don’t get good information from Cengage.”
Kleiner, author of Gardner’s Art through the Ages, is a long-time member of the Textbook & Academic Authors Association.