There is a current wave of class action lawsuits against institutions of higher education. Over 150 class action suits have been filed. Students are seeking reimbursement of their tuition, room and board, and fees predominately asserting breach of contract, unjust enrichment, and conversion claims based on higher education institutions transitioning from in-person courses to online or remote-learning models and suspending on-campus service including student housing.
On January 8, 2021, the U.S. District Court for the District of Maryland dismissed one such case, rejecting a student’s four count complaint alleging breach of contract and unconstitutional taking in violation of the U.S. and Maryland Constitutions. “Student “B” v. Howard County Community College, Civil Action No. SAG-20-1820. “Student B” enrolled in a state community college prior to the pandemic, opting to take classes in-person rather than via the online learning option. The student claimed that the college breached its contract to provide in-person learning when it closed its campus and converted its curriculum to online learning in March 2020 in the wake of the COVID-19 pandemic. Damages were sought for a refund of tuition and fees and for the seven days of cancelled classes, as well as equitable relief. The student also sought class certification.
First, the Court rejected the student’s breach of contract claims. Howard County Community College is a government entity and as a result, enjoys sovereign immunity. Sovereign immunity refers to the fact that the government cannot be sued without its consent. The student did not demonstrate one of the necessary requisites—an enforceable written contract, to waive the sovereign immunity that Howard is entitled to. The student did not know whether a written contract existed but believed that he could locate one in the discovery phase of trial. The Court found that the student’s breach of contract claims amounted to “mere speculation that a written contract to provide in-person classes was created and breached.” As a result, the student’s contract claims were dismissed by the Court.
Second, the Court rejected the student’s unconstitutional takings claims. Again, the student was unable to demonstrate a requisite needed to bring such a claim—a valid property interest. The student attempted to argue that he was to receive an on-campus experience in exchange for tuition and fees and the College did not provide for that, thus resulting in an unlawful taking of the student’s property. The Court rejected this argument because it stated that the Takings Clause was not meant to protect property owners in their voluntary dealings with the government and a person does not retain a property interest in the money paid to another in exchange for goods or services. In other words, the student did not have a valid property interest that could have been unlawfully taken by the government because the student voluntarily paid tuition and fees to be able to register for classes. As a result, the student’s takings claims were also dismissed. Since the student did not state any valid claims, the entire case was ultimately dismissed.
Legal precedent or guidance involving a pandemic’s impact on an institution’s obligation to provide in-person learning or services when it would be unsafe and/or against government mandates is scarce. However, the current cases serve as guidance in terms of defenses and strategies institutions have used against these student claims. In response to these suits, institutions have either moved to dismiss or argued against the class certification. Defense strategies include typical contract defenses such as the impossibility or frustration of purpose defense, force majeure clauses, that refund policies or arbitration clauses apply, and/or sovereign immunity.
Determining whether these defenses are viable requires a fact-specific inquiry as courts in various jurisdictions have come to different conclusions regarding their application. However, most of these cases have at least survived an institution’s motion to dismiss. As a result, it is vital to review all policies and public-facing documents because language within may well be considered contractual terms between the institution and its students in a lawsuit.
While there is a current wave of lawsuits regarding institutions moving to online learning, there will also likely be another round of COVID-19 lawsuits on the horizon for those institutions that have returned to in-person learning or on-campus housing. So, in addition to reviewing current policies and procedures, institutions should consider having an agreement with students that outlines COVID-19 risks that may be present while on campus.