1 UNITED STATES COURT OF APPEALS

2 FOR THE SECOND CIRCUIT

3 ------

4 August Term, 2022

5 (Argued: May 2, 2023 Decided: November 6, 2024)

6 Docket No. 22-2650

7 _________________________________________________________

8 SEAN FLYNN, DEAN KARLAN, JONATHAN MORDUCH, DAVID 9 MYERS, and JEAN TWENGE, individually and on behalf of all others 10 similarly situated, 11 Plaintiffs-Appellants, 12 - v. - 13 MCGRAW HILL LLC and MCGRAW HILL EDUCATION, INC., 14 Defendants-Appellees.* 15 _________________________________________________________ 16 Before: KEARSE, JACOBS, and MENASHI, Circuit Judges.

* The Clerk of Court is instructed to amend the official caption to conform with the above. 1 Appeal by plaintiff authors from so much of a judgment of the United

2 States District Court for the Southern District of New York, Lorna G. Schofield, Judge,

3 as dismissed their amended consolidated putative class action complaint ("Complaint")

4 alleging that defendants breached publishing agreements by ceasing or reducing

5 royalty payments on certain revenues generated from defendants' online platform that

6 hosts and delivers plaintiffs' electronic textbooks and related course materials. The

7 district court granted defendants' motion pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss

8 the breach-of-contract causes of action for failure to state a claim, (a) ruling that the

9 contract definitions of "net receipts" unambiguously foreclosed plaintiffs' claims of right 10 to royalties on sales of any products other than their textbooks, and (b) ruling that 11 defendants' reduction of royalties on textbooks sold through the online platform did 12 not violate the contracts' requirement that the publishers distribute the textbooks at 13 their "own expense." On appeal, plaintiffs contend that the court erred in interpreting 14 the contracts' "net receipts" and "own expense" clauses, or at least erred in finding the 15 "net receipts" clauses unambiguous. We reject plaintiffs' challenge to the dismissal of 16 their claims based on alleged breach of the "net receipts" clauses; however, we find 17 merit in their challenge to the ruling that the Complaint failed to state a breach-of-

2 1 contract claim based on the "own expense" clauses. See Flynn v. McGraw Hill LLC, No.

2 21 Civ. 614, 2022 WL 103537 (S.D.N.Y. Jan. 11, 2022).

3 Vacated in part, and remanded.

4 ALEXANDER W. AIKEN, Seattle, Washington (Susman 5 Godfrey, Seattle, Washington; Daniel L. Berger, Grant & 6 Eisenhofer, New York, New York; Chanler A. Langham, 7 Susman Godfrey, Houston, Texas, on the brief), for 8 Plaintiffs-Appellants.

9 SAUL B. SHAPIRO, New York, New York (Stephanie 10 Teplin, Andrew I. Haddad, Patterson Belknap Webb & 11 Tyler, New York, New York, on the brief), for 12 Defendants-Appellees.

13 KEARSE, Circuit Judge: 14 Plaintiff textbook authors Sean Flynn, Dean Karlan, Jonathan Morduch, 15 David Myers, and Jean Twenge (collectively "Plaintiffs" or the "Authors") appeal from 16 so much of a judgment of the United States District Court for the Southern District of 17 New York, Lorna G. Schofield, Judge, as dismissed their amended consolidated putative 18 class action complaint ("Complaint") alleging that defendants McGraw Hill LLC and 19 McGraw Hill Education, Inc. (collectively "McGraw Hill"