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Class Actions

Class Actions Against Higher Education for Tuition Refunds Trending After Classes go Virtual

In an effort to balance safety with education amidst the ongoing COVID-19 pandemic, many colleges and universities have transitioned from in-person classes to online formats.  With many states experiencing increasing numbers of coronavirus infections, institutions will very likely continue teaching students online for the foreseeable future. 

Over the past several months, however, plaintiff lawyers have filed class action lawsuits because of schools’ decisions to teach classes online, rather than in-person.  Many of these lawsuits allege that online classes are simply worth less money than in-person classes.  Indeed, one lawsuit notes that a college charges online students less than students taking classes on campus.  Nevertheless, these lawsuits fault higher education institutions for failing to refund any of their students’ tuition.  While it remains to be seen whether plaintiff lawyers can succeed on their claims, colleges and universities can expect lawyers to continue filing lawsuits. 

Many of these lawsuits against higher education institutions assert claims for breach of contract.  A claim for breach of contract requires evidence of a contract, a breach of that contract and resulting damages.  Many institutions have sought dismissal of breach of contract actions on the grounds that the college has not breached any specific contract by moving in-person classes to virtual formats. This argument may have merit.  Indeed, in other situations, courts have dismissed breach of contract claims against universities where students failed to specify the particular rule or procedure that the universities allegedly violated.  Thus, even if a student alleges that they were deprived of the full value of their tuition, the institution may nevertheless be able to prevail in a breach of contract action.

Some lawsuits also allege claims for unjust enrichment.  An unjust enrichment claim requires a plaintiff to prove that the plaintiff conferred a benefit on the defendant, the defendant had knowledge of the benefit, and the defendant accepted and retained the benefit in such a manner that is unjust.  Unjust enrichment claims are equitable claims that are often used when plaintiffs cannot rely upon a formal contract.  While these claims are attractive to lawyers representing students, colleges will assert that they did not breach any contractual provision by moving in-person classes to online formats.

Additionally, higher education institutions will likely argue that they have not been “enriched” by moving in-person classes to online formats.  Like many other sectors, higher education institutions are struggling financially because of the pandemic.  And simply because a school moves classes to online formats does not necessarily reduce the school’s expenses in a material way. Indeed, schools must still pay overhead – teacher salaries, utilities, etc. – whether or not students are taught on campus or online.  And although students will likely contend that their online classes are less effective than in-person classes, colleges and universities will almost surely oppose that argument and courts often give deference to the academic decisions of higher education institutions.

These COVID-19-related lawsuits are being filed as class actions because of the lucrative nature of such lawsuits and the potential for millions of dollars in fees to the plaintiffs’ attorneys. But, plaintiffs, in addition to proving the merits of their claims, will have to prove that their actions should be certified.  Colleges and universities defending against these actions will have the opportunity to argue that the named plaintiff’s claim is not typical of the other student-class members and that individual issues predominate, warranting a defeat of class certification. For example, whether or not online instruction is less valuable than in-person instruction will depend on the individual student and that student’s major and course selection.  Likewise, the absence of services to a particular student, and whether that student incurred a harm as a result of the unavailability of these services, will depend on the individual student.  A student who never used the gym, for example, will have a more difficult time demonstrating harm from a campus closure than a student athlete.  Further, choice of law issues, such as which law applies to each claim, may create manageability problems for multi-state class actions.  Finally, for those jurisdictions that still require proof of ascertainability, plaintiffs will have to demonstrate that they will be able to identify and ascertain their class members based on how the class is defined.

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