Alert May 05, 2020

Student Class Actions Based on U.S. College and University Campus Shutdowns

COVID-19 has presented myriad challenges for U.S. colleges and universities to navigate over the past several months. One recent development has been a growing number of lawsuits brought by students seeking a refund of tuition and other fees as a result of campus closures and the move to online learning.  

More than two dozen cases have been filed against both public and private colleges and universities across the country by students or parents who paid tuition and other fees. These lawsuits assert claims for breach of contract and unjust enrichment, and in some instances, conversion. These cases all seek a pro rata refund of tuition and fees that have been paid for the spring semester, based on allegations that online courses deprive students of the benefits of classroom learning and the campus experience, and that therefore the value of the services received by the students is less than the amount of tuition and fees paid for the spring 2020 semester. In alleging that an online education is worth less than an on-campus education, plaintiffs point to statements by the schools promoting their on-campus offerings and the value of the campus experience. Plaintiffs also allege in many cases that the value of their degrees will be impacted by this online learning experience. Many cases also include claims based on fees, both mandatory and voluntary, that were paid for benefits such as student activities that cannot be accessed remotely. In addition, several cases include claims based on housing fees, claiming that the refunds or credits that were offered were inadequate. 

Defending these cases will require colleges and universities to consider both the substantive defenses to the claims, as well as challenges to class certification. While some plaintiffs have alleged subclasses based on the types of fees that were paid, there are likely to be differences between even the members of the subclasses. For example, there are significant differences in the experiences of undergraduates and graduate students, yet none of the proposed classes or subclasses draw a distinction between these two groups. There are also likely differences between students based on the type of degree program, the types of classes in which they are enrolled, and each student’s expectation as to the type of educational experience they would be receiving. The in-person learning experience is highly individualized, varying not only by major or concentration but also by each student’s level of engagement and expectation. While differences in damages theories and recovery among proposed class members is not necessarily sufficient to defeat class certification, some of these issues could also impact a finding of liability in a manner that varies with each individual class member. For instance, damages is an element of breach of contract, and if there are potential class members who have suffered no damages at all, that may weaken the plaintiffs’ ability to demonstrate uniformity among the class. 

In addition, there are a number of substantive defenses available to these claims. As with many claims that have arisen and are likely to arise as a result of COVID-19, force majeure may be a defense to the breach of contract claims. There are also challenges to the scope of the contracts alleged by plaintiffs, as plaintiffs rely largely on marketing materials to allege that the contracted-for services include in-person learning and campus experiences, but a court may not find that the school was contractually obligated to provide all of these experiences.

Please contact Goodwin’s Higher Education Practice Chair, Yvonne Chan, or another member of the firm’s Higher Education Practice, to continue this discussion.

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