Boston University Succeeds in Thwarting a Class-Action COVID Suit Through Impracticability

It’s been a few months since we last reported on a COVID case against a university.  On April 7th, the U.S. District Court for Massachusetts granted a motion for summary judgment by Boston University (BU — East Campus pictured at right) in In re: Boston University COVID-19 Refund Litigation 

The court first addressed BU’s Daubert challenge to plaintiffs’ expert witness.  Without casting aspersions on the expert’s testimony, the court granted BU’s motion to exclude the testimony.  The expert adhered to the instructions provided him by plaintiffs’ attorneys, but those instructions were based on faulty legal premises.  Garbage in; garbage out.

Based on its resolution of the Daubert challenge, it is not surprising that the court found that plaintiffs had not made out a claim for harm due to BU’s decision to move classes online in response to the COVID-19 pandemic.  BU had sought to raise an impracticability defense to liability.  The court rejected that defense on an earlier motion.  BU now sought reconsideration in light of the Supreme Judicial Court’s decision in Le Fort Enterprises, Inc. v. Lantern 18, LLC, 491 Mass. 144 (2023), in which the court clarified that summary judgment can be granted based on impracticability if material facts are not in dispute.

Under Massachusetts law, a party seeking to defend against contractual liability based on impracticability must show

(1) an event occurring after the execution of the contract makes the contract’s performance impossible or impracticable; (2) nonoccurrence of the event was a basic assumption on which the contract was made; and (3) the party who seeks to have his or her performance excused did not cause the event.

Plaintiffs did not challenge prongs 1 or 3.  But the court made short work of plaintiffs’ arguments that the nonoccurrence of the  COVID pandemic was not a basic assumption.  Performance in this case was not just impracticable; it was impossible due to a Governor’s emergency order rendering the continuation of in-person education not merely unsafe but illegal.  Here the court’s reasoning is a bit slippery, as it conflates the basic assumption analysis with the question of who bears the risk of the occurrence of the unforeseen event.  But the court acknowledges that plaintiffs might still be entitled to recover in restitution, if they could only establish the difference between what they paid for and what they received.  Unfortunately, because the court excluded their expert report, plaintiffs provided no basis for recovery in restitution. 

I’m not sure if this is the end of the matter.  There’s no discussion of whether plaintiffs are permitted to submit an alternative calculation of damages which could be a basis to allege entitlement to some recovery.

While we’re on the topic of COVID litigation against colleges and universities, we note that UVA law’s John Setear has just posted a new article on SSRN on the subject.  The article, COVID, Contracts, and Colleges is forthcoming in the West Virginia Law Review.

Here’s the abstract:

This Article examines the legal issues underlying hundreds of lawsuits, claiming unjust enrichment or breach of contract, brought by students who paid full tuition to institutions of higher education but who, because of COVID, did not receive the full complement of in-person instruction.

The Article advances three fundamental conclusions. First, the law governing liability favors students, especially because of the starkness of the breach or deprivation visited upon them. Second, the law governing damages favors the educational institutions, especially because COVID caused colleges to unbundle certain aspects of their services that they have historically only provided simultaneously with high-quality faculty and plentiful opportunities for students to interact intellectually. The recency of that unbundling hinders a market-oriented evaluation of the component values and thus reduces the chances of an award of damages to the students. Third, this rapid unbundling reveals a difficulty—which can extend beyond the specifics of colleges offering education in a time of COVID—in the law’s pervasive use of market-oriented measures of damages even when change in the marketplace is rapid and improvisational.

The Article hopes to bring clarity to an area where courts have not ruled consistently and no trials have occurred, and where scholars have examined the effects of COVID on contracts only at a much more general level.