18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 499 of the COVID-19 pandemic without providing tuition refunds constituted a breach of contract, or in the alternative, unjust enrichment. Defendant filed a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), which the Court denied. Plaintiff alleged that Defendant’s contract with its students required it to provide an in-person, on-campus experience during the Spring 2020 semester, and that Defendant failed to do so when it closed the campus in mid-March 2020. Defendant enrolled students for either its full-time in person educational program or a distinct, fully online program "claiming you can ‘study when and where you choose.’" Id . at *3. At the beginning of each semester, a student selected courses to take and whether to take those in the fully online program or the on-campus program. The tuition fees varied based on whether a student chose the on-campus or fully online program. Plaintiff asserted that Defendant breached its contractual obligation to provide an in-person experience by transitioning to fully remote learning, and even though Plaintiff paid full tuition and certain fees thinking he would be learning in-person, Defendant declined to refunded any payments. Id . at *11. In the alternative, Plaintiff alleged that Defendant was unjustly enriched by retaining the tuition and fee payments while it delivered a remote learning experience. Defendant argued that the breach of contract and unjust enrichment claims failed either because they were barred by a common law doctrine foreclosing judicial inquiry into allegations of "educational malpractice," or because its contract with students never included an enforceable promise to offer an in-person experience in Spring 2020. Id . at *6. The Court held that Plaintiff’s allegations were not foreclosed by the educational malpractice common law doctrine. The Court determined that the agreement between the parties was ambiguous, and when reasonable inferences were drawn in Plaintiff’s favor, there was a reasonable reading in which the school promised to provide an in-person experience when Plaintiff chose in-person classes and paid certain fees. The Court explained that Plaintiff sufficiently alleged that Defendant made an express or implied promise to conduct in-person classes and to provide an on-campus experience during the Spring 2020 semester, and a reasonable person could interpret his contract with Defendant to include a specific provision for an on-campus education. Id . at *7. The Court held that that, when the facts were construed in Plaintiff’s favor, he sufficiently advanced a plausible reading of the contract that students who paid tuition to take in-person classes and paid fees associated with campus resources would receive an on-campus education. The Court ruled that Plaintiff could have, as alleged, relied on Defendant’s materials, including statements that particular classes would be held in particular on-campus rooms, as a promise that classes generally would be held on campus. Id . at *17. Defendant argued that even if there was a promise to provide an in-person experience, a provision in the course catalog allowed it unilaterally to modify its academic programs. The Court found the language ambiguous, as it permitted changes to "course offerings,” but did not specify that it would contemplate a wholesale shift in the entire learning experience to online classes for students who paid tuition and fees with the reasonable expectation that they would learn on campus. Id . at *18. As to Plaintiff’s unjust enrichment claim, he alleged that Defendant was able to run its programs more cheaply and thus profited from retaining his full payment of tuition and fees. Id . at *21. Accordingly, the Court ruled that since claims for unjust enrichment may be pled in the alternative to a breach of contract claim, Plaintiff’s claim for unjust enrichment also survived dismissal. For these reasons, the Court denied Defendant’s motion to dismiss. Wright, et al. v. Southern New Hampshire University, 2021 U.S. Dist. LEXIS 79352 (D.N.H. April 26, 2021). Plaintiff brought a putative class action on behalf of herself and other similarly- situated students and former students of Southern New Hampshire University (“SNHU”) who paid tuition and fees for in-person educational services during SNHU’s spring 2020 semester. Plaintiff alleged that in the spring of 2020, the per-semester cost in tuition and fees for in-person educational services at SNHU (the "campus experience" option) was approximately $17,500, whereas the per-semester cost to students who elected to attend SNHU classes remotely (the "online experience" option) was $960 per course, or $4,800 for a full load of five courses. It was undisputed that, because of the global COVID-19 pandemic, Defendant canceled all of its in-person classes from March of 2020 through the end of its spring 2020 semester, without refunding or abating the tuition or fees paid by students who chose the campus experience option. Plaintiff alleged that students who contracted and paid for Defendant’s campus experience received educational services during approximately half of the spring 2020 semester that were identical to those received by students who paid lesser amounts for SNHU’s online experience. Plaintiff’s class action complaint asserted claims for breach of contract, unjust enrichment, and conversion under New Hampshire common law. The parties reached a negotiated settlement of their dispute, and Plaintiff brought a motion pursuant to Rule 23(e) for preliminary approval of the parties’ proposed class action settlement. Plaintiff sought to preliminarily certify a class for settlement purposes that consisted of all