⚖ Oral Arguments, with Context

The Second Circuit considers who must pay Scholastic's remaining legal bills and settlement costs from a lawsuit brought by Vanderbilt University. Vanderbilt had licensed educational software to Scholastic in exchange for royalties. It later sued over allegedly unpaid royalties and use of its trademarks, and the parties settled. Scholastic's primary insurer paid part of the costs until its policy limit was exhausted. Scholastic then sought the balance from St. Paul, its excess insurer—an additional layer of coverage above the primary policy. The district court ordered St. Paul to cover the outstanding defense and settlement costs. St. Paul will argue that the royalty dispute was a failure to pay a contractual debt, not a loss caused by professional services. Scholastic will argue that the dispute concerned its development and use of educational products, which the policy covers.

Scholastic Inc. v. St. Paul Fire and Marine Insurance Company (No. 25-2505) — U.S. Court of Appeals for the Second Circuit, argued October 29, 2026.