Never Let a Crisis Go to Waste: Plaintiffs’ Lawyers Target Colleges and Universities for COVID-19 Responses

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As the number of COVID-19 cases began to rise in the United States, colleges and universities around the country took proactive steps to limit the spread of the disease on campuses. Students were asked to return home; faculty and students transitioned to online classes; and staff who were able to work remotely were asked to do so. While these changes were disruptive and altered the traditional college experience, they were necessary to prevent college dormitories and campuses from becoming COVID-19 hot spots. Ultimately, the shift to remote learning became mandatory in the face of state and local stay-at-home orders.

Although students are still taking courses and faculty are still teaching at institutions of higher education, plaintiffs’ lawyers are rushing to file lawsuits on behalf of students seeking reimbursement for tuition, fees, and room and board. These cases are being brought as putative class actions on behalf of all similarly situated students. Most of the lawsuits assert claims for breach of contract and unjust enrichment on the theory that the named plaintiffs and their classmates were promised an “on-campus” education. A few others assert claims for conversion. The lawsuits allege tens of millions of dollars in damages. Not surprisingly, these lawsuits are being brought and presumably funded by plaintiffs’ lawyers who specialize in commercial and employment class action litigation and who hope to recover millions of dollars in attorneys’ fees themselves.

For many institutions, these lawsuits represent more than an attack on their emergency response to the pandemic. Many colleges and universities rely on tuition, fees, and room and board to meet their annual budgetary needs, with some running deficits each year. As a result, if these lawsuits are successful, they could have dire financial consequences. But whether these lawsuits will, in fact, be successful is yet to be seen, and there are some obvious weaknesses in the plaintiffs’ lawyers’ theories that will make the claims difficult to prevail on.

Where we are

Virtually every college and university in the United States has cancelled in-person learning and sent students home for the remainder of the academic year. Some institutions of higher education took these steps proactively, often in conjunction with spring break, while others did so in response to government-mandated business closures orders and social distancing guidelines. But this does not mean that education has stopped or that colleges and universities’ resources are sitting idle. Even though campuses are currently closed to most students, courses have continued online, credits are being earned and degrees will be conferred over the coming weeks, albeit virtually. Research activities continue, including those related to treatments and vaccines for COVID-19. Some students still live in residence halls because they cannot return home. Career services, financial aid, and other student services remain operational. Student organizations continue to meet virtually and operate. Building facilities and public safety teams continue to report to work on campus.

At the same time, students are understandably upset about losing out on the traditional college experience and instead being quarantined with their parents and siblings, often far away from friends and significant others, and having to attend classes remotely and taking exams online. Many students were on break when they learned that they could not return to school and with little notice. With the total cost of college oftentimes exceeding $50,000 per year, many students (or their parents) question why they should have to pay tuition, fees, and room and board when they are seemingly not getting the benefits thereof.

The plaintiffs and their claims

Never one to let a crisis go to waste, the plaintiffs’ bar is hard at work filing class action lawsuits against many colleges and universities, seeking to recover tuition, fees, and room and board on behalf of students (and a hefty contingency fee for themselves). The lawsuits are being brought on behalf of undergraduate and graduate students. The claims are typically brought on behalf of three putative classes that largely overlap at many institutions: (1) students who paid tuition, (2) students who paid mandatory fees, and (3) students who paid room and board. The claims asserted are typically for breach of contract and unjust enrichment, and in a few instances, conversion. Because these are common law claims, the lawsuits have been filed in many different jurisdictions against many different colleges and universities.

To date, more than 50 putative class actions have been filed nationwide. These lawsuits are being driven by the lawyers, not the students who serve as the named plaintiffs. These lawsuits are being brought by a handful of plaintiffs’ class action lawyers who are often competing with each other to bring these claims. As a result, some universities have been hit by more than one lawsuit brought by competing class action law firms. Not surprisingly, this is mostly about fees. Many class action lawsuits ultimately settle, and the plaintiffs’ lawyers typically recover a large percentage of the settlement fund for their efforts, with the remainder being spread out among the hundreds, if not thousands, of class members. Oftentimes in commercial class action settlements like these, class members do not recover any money, but instead receive coupons or credits toward future purchases.

Potential weakness in the plaintiffs’ claims

Because the plaintiffs are bringing common law breach of contract claims, they would have to prove that there was an actual contract and that the college or university breached a material term. This may prove problematic as to tuition, since students have, for the most part, been receiving the benefits of their tuition in the form of continued online courses, academic credits, and degrees being conferred. It would thus be difficult for this putative class to prove any harm other than some highly speculative claim that classroom learning is superior to remote learning. Even if plaintiffs’ lawyers could make such a showing in some instances, it would likely be difficult to certify a class on this basis since students’ experiences may depend on their field of study, academic standing (i.e., class year), or degree program (i.e., undergraduate vs. graduate). It would also be difficult to put together a non-speculative theory of damages. As to other claimed damages, the claims likely turn on what the agreements say. Most colleges and universities specifically state that fees are mandatory and non-refundable. This seemingly forecloses a breach of contract claim. As to room and board, many colleges and universities have pro-rated these costs already.

Putting aside these problems, most colleges and universities make clear that matriculation as a student is subject to their established policies. Institutions of higher education are expected to have emergency response plans, including those relating to pandemics. Thus, the “contract” necessarily includes these plans. While the lawsuits often reference a college’s advertising about its campus and the on-campus experience, students do not have an absolute right to be on campus and to receive in-person instruction. This may be no different than cases brought by students who have been expelled for misconduct or academic reasons. While the students in those cases often attempt to recover the same damages asserted now in these class actions, courts have recognized that the “contract” between a student and a university includes and is subject to the institution’s policies. The logic (and holdings) of these cases should control now.

Moreover, the lawsuits ignore the reality that confronted colleges and universities. Even if they did not maintain an explicit policy permitting the transition to remote learning, the pandemic, along with the resulting government shut down orders, were a force majeure event warranting the shift to remote learning. The alternative posed by the lawsuits—that colleges and universities had a contractual obligation to keep their campuses open to avoid breach—was an impossibility. Indeed, doing so would have exposed institutions of higher education to tort claims by students who became ill with the disease or even wrongful death suits. And many students simply would not have returned after spring break, or left shortly thereafter, as states began to shut down most businesses, creating even more complex issues for plaintiffs’ lawyers to base claims on.

Finally, even if these contract claims were to make it to a jury (which we doubt), it is hard to see jurors in most jurisdictions—many of whom have lost jobs themselves, or are close to someone who has (if not family members and friends who have lost their lives), and may never have had the opportunity to attend college—being sympathetic to college students who have largely received the benefit of their tuition dollars, even if they could not participate in campus life for part of the semester.

As for the unjust enrichment claims, because colleges and universities typically require students to sign some form of contract concerning the payment of tuition, fees, and room and board, those claims are unlikely to be successful as well. Unjust enrichment is an equitable remedy and is unavailable in most jurisdictions where there is a contract, even if the contract claims are unsuccessful. Rather, the plaintiffs would have to show that there was no relevant contract that governs the payment of one or all of the categories of potential damages.

Public colleges and universities face their own set of complications during these difficult times, as a portion of their budgets come from state coffers, which are currently being depleted fighting the pandemic. Indeed, several state universities have received public records requests for communications concerning tuition refunds, a type of “free discovery” that private institutions are not subject to. Public institutions may have a unique defense not available to private institutions, however, in the form of sovereign immunity, so long as the state has not waived it by legislation. This could substantially curtail, if not eliminate altogether, any claims for damages.

Conclusion

All is certainly not lost for colleges and universities that are faced with lawsuits of this nature. There are several viable defenses and procedural hurdles that plaintiffs’ lawyers will have to overcome to prevail, and they are far from slam dunk claims. In fact, it is unlikely that they will be successful. But plaintiffs’ lawyers are no doubt counting on colleges and universities, which are typically risk averse and prefer to avoid public confrontations, to enter into quick settlements (that will primarily benefit the lawyers) so as to avoid the time and expense of litigation, and potentially bad press. There are good reasons for schools to fight these claims, however. Any settlement diverts resources away from the mission of the organization. Further, as officials warn of multiple waves of the COVID-19 pandemic, these issues could recur. Fighting and winning these cases now may, like fighting the pandemic itself, help prevent the spread of these cases and deter multiple waves of lawsuits. In other words, flattening the curve of these opportunistic class actions.