Important Developments in Nationwide COVID-19 Tuition Refund Class Actions
Highlights
- Four years after the start of the COVID-19 pandemic, tuition refund class actions against universities have not slowed down.
- Courts are divided on the type of language needed to plausibly allege a promise of in-person instruction that is sufficient to survive a motion to dismiss.
- The California Court of Appeals reaffirms the specific promise standard necessary to survive a summary judgment motion.
Four years after the start of the COVID-19 pandemic, tuition refund class actions against universities have not slowed down. This Holland & Knight alert considers two recent court cases that will impact litigation strategy going forward.
Uncertainty in the Level of Specificity Required to Survive a Motion to Dismiss
A threshold issue in tuition refund class actions is whether a complaint identifies sufficiently definite statements or actions by the college or university from which students could reasonably infer a binding promise of exclusively in-person instruction. Addressing that question, many courts to date have held that general marketing statements about campus culture and administrative information about class locations are not enough to plausibly plead a specific promise of in-person instruction.
The decision in Rynasko v. New York University, 63 F. 4th 186 (2d Cir. 2023) has called this analysis into question by holding that marketing and informational statements can be sufficient to plausibly plead a "generalized obligation" to provide in-person instruction. Although the U.S. Court of Appeals for the Second Circuit acknowledged long-standing New York law that only "specific promises set forth in a school's bulletins, circulars and handbooks, which are material to the student's relationship with the school" are contractually binding – a standard mirrored in many other states as well – Rynasko represents a departure from precedent in New York and from the majority of cases analyzing the "specific promise" standard at the pleadings phase. The ruling focuses even more scrutiny on the summary judgment phase of these cases and whether student-plaintiffs can support their pleadings with substantial evidence of the specific promises alleged.
California Court of Appeals Reaffirms Specific Promise Standard
Addressing this question on the appeal of a summary judgment decision, the California Court of Appeals recently reaffirmed the specific promise standard under California law, holding that evidence of statements in the university's publications about the on-campus experience, classroom locations and students' subjective expectations were insufficient to create a contractually binding, specific promise of in-person instruction. The case is in Berlanga v. University of San Francisco, -- Cal. Rptr. 3d --, 2024 WL 853813 (Cal. Ct. App. Feb. 29, 2024).
The Berlanga court's analysis highlights two key issues:
- What is the scope of the promise that student-plaintiffs must establish?
- What specificity is required in that promise to survive a summary judgment motion?
On the first, the Berlanga court confirmed that student-plaintiffs must establish that the university promised to provide exclusively in-person instruction and services including during a pandemic. In other words, a "generalized obligation" to provide on-campus services is not the same as a specific promise to provide on-campus services at all times and under all circumstances. The former does not restrict the discretion of colleges and universities to convert to remote instruction or make other changes in response to exceptional circumstances and is not likely to survive summary judgment following Berlanga.
On the second, Berlanga rejected the student-plaintiffs' argument that the court should abandon the specific promise standard in favor of an amorphous "totality of the circumstances" standard and confirmed that generalized statements about the campus location in San Francisco, student life and methods of teaching were insufficient to create contractually binding, specific promises of exclusively in-person instruction.
The Current Wave of New COVID-19 Tuition Refund Cases
Beginning in late spring 2020, colleges and universities across the country were targeted by class action lawyers representing students who were seeking tuition and fee refunds on the theory that they were promised exclusively in-person instruction, which was not delivered during the second half of the spring 2020 semester and in some semesters thereafter as a result of COVID-19 and related government shutdown orders.
The first cases initially targeted large public universities and private colleges. Four year later, however, there is a new surge of cases being filed against smaller liberal arts institutions, with a focus on schools in states such as Pennsylvania, where contract statutes of limitations are expiring.
On the Horizon
As earlier filed COVID-19 tuition refund cases approach summary judgment, trial and appeal, courts across the nation are likely to be faced with additional challenges to the specific promise standard, which is grounded in First Amendment principles of academic freedom. Whether courts uphold the specific promise standard under the particular law of the forum state may have far-reaching consequences on the ability of colleges and universities to respond to emergent circumstances. The ongoing uncertainty in this area warrants careful review of enrollment materials sent to students and published on websites, especially financial responsibility agreements.
For more information about emerging trends in COVID-19 tuition refund cases and responding to these actions, please contact the authors.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.