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Textbook authors hit McGraw Hill with a class action lawsuit alleging that it reduced the royalties it pays out when selling textbooks in violation of their contracts.
University professors who wrote textbooks for McGraw Hill filed the lawsuit saying that affected authors will see a drop in profits of up to 35 percent due to the breach. The issue surrounds McGraw Hill’s online platform called “Connect,” which allows consumers to purchase online textbooks.
Since the launch of Connect in 2009, McGraw Hill continued to pay authors royalties based on the total price of the textbook. Now the company has allegedly “unilaterally” decided to just pay royalties for a portion of the textbook sales price.
“This maneuver amounts to a bald attempt by McGraw Hill to pass its Connect related costs to authors, in direct contravention of its contracts, which state that McGraw Hill will publish the authors’ works ‘at its own expense,’” the class action lawsuit asserts. “This is equivalent to reducing royalties for sales of paper textbooks based on McGraw Hill’s costs of printing those books, which would violate the explicit terms of the contracts.”
The university authors add that McGraw Hill is fully aware that royalties must be paid in full for the textbook sales, based on its actions over the last decade. The deviation is a violation of “the explicit terms of the Royalty Contracts,” the complaint asserts.
However, the company begs to differ. “We believe our royalty calculations are fully consistent with the terms of our author agreements and accurately account for the relative contributions we and each of our authors have made to the components of our Connect product,” a McGraw Hill spokesperson reportedly told Law360.
This isn’t the only legal battle McGraw Hill is facing. The textbook publisher is also named in class action lawsuits accusing the company of conspiring with other book retailers to overcharge students for necessary materials. Plaintiffs in Delaware say the publishing giants have created a monopoly, fixing prices for college course materials while controlling about 90 percent of the market nationwide.
“This case challenges the Defendants’ conspiracy and their improper acquisition and use of monopoly power to irreparably harm the higher education course materials market by eliminating competition and thereby eliminating any consumer choice.” the complaint asserts.
A class action lawsuit filed by students in Canada echo the same notions. They say the global publishers are forcing students to buy new college course materials every semester, while artificially reducing the supply.
“As a result of the captive market structure and the educational publishers’ efforts to limit competition, textbook prices have skyrocketed over the past 50 years,” the class action lawsuit Canada states.
What do you think about McGraw Hill allegedly shortchanging its authors on royalties? Tell us your thoughts in the comments section below!
The plaintiffs are represented by Daniel L. Berger, Caitlin M. Moyna, Richard S. Schiffrin, and Andrew N. Dodemaide of Grant & Eisenhofer P.A.
The McGraw Hill Authors Royalties Class Action Lawsuit is Flynn et al. v McGraw Hill LLC, Case No. 1:21-cv-00614, in the U.S. District Court for the Southern District of New York.
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