Two Universities Defeat COVID Claims

For years now, we have been following cases in which students sue their universities alleging breach of contract or unjust enrichment based on the universities’ decisions to close their campuses because of the COVID pandemic in the Spring of 2020. The cases have become a useful teaching tool for me. Not all relationships are contractual. Not all components of a contractual relationship entail enforceable promises. Some universities were incredibly sloppy in failing to protect themselves against allegations of contractual promises of in-person, on-campus education. No doubt, a lot of university counsel have been reviewing student handbooks, course catalogues, and promotional materials carefully since 2020.

Jonathan Michel was a Yale University (Yale) undergraduate in Spring 2020, and he filed a putative class-action against the university, alleging promissory estoppel and unjust enrichment because the online education he received was worth less than the in-person education he was allegedly promised. A trial court dismissed Mr. Michel’s claims in January 2023, finding that he had suffered no financial detriment. In August, 2o24, in Michel v. Yale University, the Second Circuit affirmed, but on interesting and different grounds. Construing a “Temporary Suspension Provision” in Yale’s Undergraduate Regulations as a force majeure clause, the Court found that Yale was contractually entitled to suspend classes. Plaintiff’s unjust enrichment claim was then foreclosed because the parties’ relationship was governed by an implied contract. The decision is quite narrow, turning on whether Yale “suspended” or merely “modified” its operations. Only the former would bring what took place on campus in Spring 2020 within the ambit of the Temporary Suspension Provision, and the Court rather generously found that what happened in Spring 2020 was a “suspension.”

Scott Schmidhauser was a dental student at Tufts University (Tufts) in the Spring of 2020. He too brought a putative class action on behalf of similarly-situated students, challenging Tufts’ refusal to issue refunds after switching to remote education in response to the COVID epidemic. In Schmidhauser v. Tufts University, the District Court for the District of Massachusetts dismissed plaintiff’s motion for class certification as moot. It granted Tufts’s motion to dismiss all of Mr. Schimdhauser’s claims.

Mr. Schmidhauser’s claim as to the Spring of 2020 was foreclosed by Section 80, a Massachusetts statute that immunizes Massachusetts universities from suits arising out of payments of tuition or fees for the Spring 2020 semester, so long as the university offered online education. The First Circuit reviewed the constitutionality of the Section 80 in Dutra v. Trustees of Bos. Univ. and upheld it. The District Court saw no need to review those findings.

Mr Schmidhauser attempted to bring claims relating to other semesters, and I’m not sure why the court did not consider sanctioning his attorneys for doing so. Mr. Schmidhauser either did not enroll in courses or was under suspension during those semesters. In addition, the court noted that Tufts could have availed itself of the excuses of impossibility and illegality, as it would have been both impossible and illegal for the school to continue with in-person education when the governor had ordered the schools to close their campuses. That part of the ruling is daft. Illegality doctrine does not apply to contracts that become illegal during performance, and both doctrines turn on allocation of risk, which probably would not come out great for the university.

The court then notes that Mr. Schmidhauser could recover in restitution notwithstanding such excuses. However, Mr. Schmidhauser’s allegation of unjust enrichment were conclusory. The court points out that it is not hard to allege that tuition for in-person education is higher than costs for online education. For unknown reasons, plaintiff failed to make any such allegations.  I’m not sure why the court bothered with this analysis. Section 80 is not limited to contractual claims.

To me, these cases highlight some of the worst aspects of our litigious society. No institution was ready for COVID. We had not seen this sort of global pandemic in 100 years. Universities scrambled to continue to fulfill their educational missions while prioritizing the health of students, faculty, and staff. My daughter was a Freshman at a private university when COVID hit. I know that COVID diminished her educational experience, but I also believe that her university took all measures that it could take to limit the harm to that experience while also safeguarding student health. We did not get full value, but it is hard to quantify the loss, and I would not want to jeopardize higher education so that I could get a few thousand dollars in tuition and fees refunded. These law suits are just ugly.

Even where universities made mistakes in their promotional materials and student handbooks, making representations that COVID made it impossible for them to keep, I do not think these lawsuits have the potential to make the named parties significantly better off, unless the named parties have always dreamed of being named parties in a class-action suit. Rather, they just evidence structures that have developed, uniquely in the United States, that make the initiation of litigation a first, rather than a last resort.