reasonable consumer wouldn’t expect advertised in-person classes in pandemic (but contract claims survive)

Ford v. Rensselaer Polytechnic Institute, No. 20-CV-470, 2020
WL 7389155 (N.D.N.Y. Dec. 16, 2020)

This is a putative class action against RPI for breach of
contract, false advertising, and related claims based on the mid-semester pandemic
shutdown of early 2020. The court dismisses false advertising and conversion
claims but declines to dismiss the contract/unjust enrichment claims at this
stage. One question of more general import: How many institutions had something
like the following:

Plaintiffs allege that they were
drawn to defendant in part because of “The Rensselaer Plan 2024” (the “Plan”),
a framework of programs, some enacted, some yet hypothetical, designed to
afford its students a unique educational experience. The language of the Plan
has a flavor of commitment, and most of its substantive clauses begin with the
phrase “we will.”  

Of particular relevance, RPI claims
in the Plan that it “will … [o]ffer a complete student experience,
highlighted by[ ] Clustered Learning, Advocacy, and Support for Students”
(“CLASS”). Defendant’s CLASS program, which it has actively incorporated into
student life, is designed to improve counseling, academic skill development,
community building, and other purported benefits that “originate within the
residential setting.” Defendant’s catalog defines the CLASS program as “built
around a time-based clustering and residential commons program.” To help facilitate
CLASS, defendant mandates that all first- and second-year students, as well as
transfer students, live on campus.  

However, after the pandemic began, RPI cancelled all
university-sponsored events, required students to move out of on-campus housing,
and moved classes online. RPI issued refunds for Spring 2020 room and board
fees, but reduced these reimbursements by the net of a reimbursed student’s
financial aid. 

Contract: For a student contract claim, “only specific
promises … in a school’s bulletins, circulars[,] and handbooks, which are
material to the student’s relationship with the school,” are enforceable.” In
other words, “[g]eneral policy statements and broad and unspecified procedures
and guidelines will not suffice.” The court therefore refused to recognize “an
implied promise for on-campus education based on the nature of defendant’s
dealings with the school,” but did consider the CLASS program to qualify based
on the allegations. RPI’s catalog claims that the CLASS program provides a
“time-based clustering and residential commons program” touted as an
“award-winning First-Year Experience” that “extends learning across the
spectrum of student residential life,” which “fits the bill of a specific
promise,” at least for Rule 12 purposes. Generic and vague terms such as “fair
and equal treatment” “are of an entirely different character than the specific
programs the Plan formulates.”

Although Paynter v. New York University, 319 N.Y.S.2d 893 (Sup.
Ct. App. Div. 1st Dep’t 1971), dismissed a breach of contract claim after the
defendant university completely shut classes down in response to civil unrest, “there
is a world of difference between canceling some classes—in the absence of any
affirmative guarantee on the number of classes to be held—and not affording
students services and benefits for an extended period of time despite such a
promise.” And in Chong v. Northeastern University, which dismissed a similar pandemic
breach of contract claim against a university, “the plaintiffs in that case
failed to provide any promise more concrete than a document that amounted to an
agreement to pay tuition in exchange for classes,” though, notably, the court
allowed plaintiffs’ claims alleging a breach of contract for not refunding
those plaintiffs’ activity fees to proceed.

Nor was this a disguised and prohibited “educational malpractice”
claim. Plaintiffs were arguing that, “regardless of fault, the value of the
on-campus experience defendant plausibly promised them is greater than the
value of the remote experience they received. That can be true even if
defendant made every choice reasonably, or even perfectly…. [M]uch as defendant
would make of the fact that it was forced to shut down, that does not answer
whether it or its students should bear the cost of that outcome.” True, RPI
also lost from shutting down, but maybe it should bear more of the loss.

As for the refunds-minus financial aid, plaintiffs
sufficiently alleged that this was unfair because financial aid was paid in a
flat amount based on family income regardless of whether they live on campus or
purchase a meal plan:

Because plaintiffs have plausibly alleged
a promise of room and board in exchange for their payment of the associated
fees, RPI is saddled with an ongoing duty of good faith and fair dealing in
carrying out that promise. Withholding repayment to plaintiffs for a service
that they did not receive because of an entirely unrelated consideration could
plausibly violate that duty, and thus plaintiffs’ claims must survive for now.
In addition, the Court is concerned that defendant’s policy in fact seems to
directly target the students most in need of a refund.

Unjust enrichment claims, pled in the alternative, and
promissory estoppel claims likewise survived (despite uncertainty about the ultimate validity of promissory estoppel given the actual contract), but conversion failed because
there was no way to identify plaintiffs’ specific money in the pool of RPI
funding.

GBL §§ 349 and 350: It was not enough to allege that RPI
advertised on-campus learning. Even without an intent requirement, “[n]o
reasonable consumer would expect a university to remain open for in-class
instruction in the face of a pandemic and a state-mandated shutdown, regardless
of whether the school advertised on-campus learning as a strength.” In a
footnote, the court pointed out that §350 doesn’t have a distinct reliance
requirement, contrary to the Second Circuit’s “frequent imputation …, which the
New York Court of Appeals has specifically identified as an error.”

 

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