Sid DeLong on Burt v. Bd. of Trustees

“I Paid for a First-Class Ticket, But They Made Me Fly Coach”: Restitution of Tuition After Switching From In-Person to On-Line Classes

Sidney W. DeLong

In Burt vs Board of Trustees of the University of Rhode Island (D.R.I. 2021) noted by Jeremy Telman, students claimed return of part or all of their tuition for the switched semester on grounds of unjust enrichment, the school having been paid for services and benefits that it did not supply.

Analysis. The court denied on Rule 12 (b) (6) grounds student claims for restitutionary return of tuition paid for in-person classes on three grounds of interest to contract theory.

The first was that, in all the marketing materials by which the schools persuaded students to enroll, the schools never expressly promised to teach on the campus with in person classes, so that a switch to on-line classes did not breach any contract with the students. The court dismissed general references touting on-campus facilities and experiences as “puffery,” implying that no reasonable student would have relied on them as binding promises. It found no breach alleged of the more specific promises made about particular courses.

The court also refused to find any implied promise to conduct in-person, on-campus classes from the visual marketing material picturing such instruction, the course of dealing that had provided such instruction for years, or from the school’s practice of charging higher tuition for in-person classes than it did for on-line classes.

To the students no doubt this was rather like an airline selling first-class tickets, herding the buyers into coach, and then arguing that “We never actually promised to seat you up front in roomier seats, serve you free drinks and goodies, or treat you any different from our coach passengers. Look at your ticket!” Under Article 2, any description of the goods that becomes part of the basis of the bargain creates an express warranty that the goods would conform to the description. U.C.C. § 2-313. The schools’ use of vividly descriptive marketing materials was intended to become part of the basis of the bargain that the credulous students thought they were paying all that money for. The court’s holding that as a matter of law no implied promise of in-person classes resulted from the schools’ recruitment practices evinces a blinkered literalism more appropriate to the eighteenth century than the twenty-first.

Equally formalistic was the second reason the student claims failed. Even if such promises had been made, the schools expressly reserved the discretion to cancel or change any classes offered in the course catalogue, apparently even after students had paid for them and had begun to attend class. It was right there in the fine print. The court held that such discretion was designed precisely to deal with emergencies such as the pandemic. It was unnecessary to hold that the discretion was limited by good faith, a holding that would have been problematic given the court’s ruling on the first issue.

To move to the third issue, denial of restitution, the court failed to explain why the exercise of the discretionary power to shift classes on-line should not entitle students to restitution. If the in-class performance had been completely excused by impracticability, for example, the students should have recovered tuition payments for the excused performance in order to prevent unjust enrichment. See Restatement (Second) of the Law: Contracts § 272. In this case, the court found that retention of tuition was not unjust because the universities provided on-line education and the students earned academic credits, as promised.

As an aside, it may have been difficult to show that the switch to on-line training “enriched” the schools by reducing their costs. At least for schools that were not already offering on-line classes for all subjects, the mid-semester switch significantly increased expenses in technology, lesson-planning, teaching assistants, etc. It is not clear whether the switch saved any variable costs associated with in-person classes. It is also unclear whether ending on-campus housing and student services reduced or increased the associated costs. In any event, it is likely that the schools had already spent the tuition dollars the students were seeking.

Other Reflections.

It is undeniable that many students did not get what they thought they had been promised and had paid for. All the schools had offered on-line courses at lower tuition than what the plaintiffs had paid when they elected the in-person classes. The switch to on-line classes after tuition for in-person classes had been paid feels like a classic bait-and-switch and the fine print disclaimers don’t help.

Was the contract analysis sufficient? Even if the promotional literature did not create enforceable obligations at the time of enrollment, might additional contractual obligations have arisen after the students’ initial decision to enroll? Consider how many different contracts students and colleges might be thought to enter into. There is the enrollment contract, the individual class registration contract, the dormitory lease, the meal plan, the student services contract, health services contract, the scholarship contract, the student conduct code contract, the athletic contract, the privacy and reporting contract. The terms of many of these contracts are not mutually agreed upon or even expressed, but students pay tens of thousands of dollars for them and must enjoy some enforceable rights as a result.

The decision should not obscure the growing public awareness that the relationship between students and institutions of higher learning is contractual. It is simply untenable that, in recruiting persuade students to enroll for four years of education, a college makes no enforceable promises about the nature of the services it will provide, or that all of the descriptions that it proffers are only aspirational puffery which no reasonable person would take literally in making a major financial decision, or that fine-print reservations of discretion effectively render illusory any promises that may be inadvertently made in the literature. Nor is it clear that enforceable contracts were not made when, after matriculation, students registered for specific courses, with specific professors, at specific locations, and paid tuition for those specific courses in advance. While schools may reserve the right to cancel the course without penalty, few would claim they could do so without refunding the tuition. And even after Burt, few would claim the outright privilege of substituting an on-line course for an in-person course without offering a tuition refund.

On the Lighter Side. For the readers of this blog, I think there may be a more unsettling message in growing recognition that the professor-student relationship is contractual. The days of professors bemoaning “consumerist” student perspectives on the business of education are past. There seems to be something about charging students $150,000 for the experience that tends inevitably to commercialize the relationship. Nevertheless, it is sobering to tell a class of first-year contracts students that your law school owes them enforceable contractual obligations and that you will teach them how to enforce them. Especially sobering given that the grim employment market has led law students to sue their alma maters for misrepresentation and fraudulent failure to disclose employment and bar passage data at the time of enrollment.

The situation recalls the story about the Sophist (the law professor of his day) whose contract with his student provided that tuition was due when the student won his first case (a sort of educational contingency fee a modern law professor would not dare propose). When the student failed to win any cases after “graduation,” the Sophist sued for his tuition. The Sophist argued that if he won his suit, the student would owe the tuition by virtue of the court’s judgment, while if he lost his suit, the student (having won his first case) would then owe the tuition under the contract. The student, having been well-taught, made the obvious counter-arguments: “Either the court rules in my favor, meaning I owe you nothing, or the court rules against me, meaning I have not won my first case and again I owe you nothing.”

One hopes that, facing a tight job market, our law graduates do not exercise their newly-minted skills in suing us for return of their tuition. But if they succeed, we can at console ourselves when we write the checks that their legal education was useful after all.