Amirazodi v. Capella Educ. Co.
| Decision Date | 14 May 2021 |
| Docket Number | NO. 3:21-cv-00074,3:21-cv-00074 |
| Parties | NAZLE AMIRAZODI, Plaintiff, v. CAPELLA EDUCATION COMPANY, Defendant. |
| Court | U.S. District Court — Middle District of Tennessee |
MEMORANDUM
Plaintiff Nazle Amirazodi, a Tennessee resident, filed a pro se Second Amended Complaint ("Complaint") asserting state law claims against Capella Education Company ("Capella"), a Minnesota corporation.1 (Doc. No. 8). The Complaint is now before the Court for an initial review.
The Court must conduct an initial review and dismiss any complaint filed in forma pauperis if it is frivolous, malicious, fails to state a claim upon which relief may be granted, or seeks monetary relief against a defendant who is immune from such relief. 28 U.S.C. § 1915(e)(2)(B); see also Ongori v. Hawkins, No. 16-2781, 2017 WL 6759020, at *1 (6th Cir. Nov. 15, 2017) ().
"Pro se complaints are to be held to less stringent standards than formal pleadings drafted by lawyers, and should therefore be liberally construed." Williams v. Curtin, 631 F.3d 380, 383 (6th Cir. 2011); Erickson v. Pardus, 551 U.S. 89, 93 (2007) (citing Estelle v. Gamble, 429 U.S. 97 (1976)). Even under this lenient standard, however, pro se plaintiffs must meet basic pleading requirements and are not exempted from the requirements of the Federal Rules of Civil Procedure. Martin v. Overton, 391 F.3d 710, 714 (6th Cir. 2004); see also Brown v. Mastauszak, 415 F. App'x 608, 613 (6th Cir. 2011) (); Young Bok Song v. Gipson, 423 F. App'x 506, 510 (6th Cir. 2011) ().
In reviewing the Complaint, the Court applies the standard for Rule 12(b)(6) of the Federal Rules of Civil Procedure. Hill v. Lappin, 630 F.3d 468, 470-71 (6th Cir. 2010). The Court "must (1) view the Complaint in the light most favorable to Plaintiff and (2) take all well-pleaded factual allegations as true." Tackett v. M & G Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir. 2009) (citing Gunasekera v. Irwin, 551 F.3d 461, 466 (6th Cir. 2009) (citations omitted)). The Court must then consider whether the factual allegations "plausibly suggest an entitlement to relief," Williams, 631 F.3d at 383 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009)), that rises "above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The Court need not accept as true "unwarranted factual inferences," DirectTV, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007) (quoting Gregory v. Shelby Cnty., 220 F.3d 433, 446 (6th Cir. 2000)), and "legal conclusions masquerading as factual allegations will not suffice." Eidson v. Tenn. Dep't of Children's Servs., 510 F.3d 631, 634 (6th Cir. 2007).
The liberally-construed Complaint contains the following factual allegations. Capella is a for-profit online university. (Doc. No. 6 at 8-11). Plaintiff chose to attend Capella because it offered a program designed around adult learners and promised to help those students succeed "within [their] degree program and professionally," through flexibility, affordability, and financial resources. (Id. at 7, 10). Specifically, Capella promised prospective students that they could earn a degree "on their terms," and it offered students "help" to reach their goals. (Id. at 13). In one such ad, Capella touted:
(Id.) Capella also promised to help students find ways to fund and complete their academic program: "Paying For Your Degree . . . In changing times, we're ready to help you find ways to pay for your degree, to support your academic and financial success." (Id. (emphasis in original)).
Based on Capella's promises, Plaintiff enrolled from 2015-17. (Id. at 7). Plaintiff thereafter incurred approximately $80,000 in student loan debt to pay for Capella's academic program. (Id. at 7, 20). After three years, Plaintiff had completed all required coursework for graduation. (Id. at 7). Capella informed Plaintiff that the final step was to complete a "Capstone Project," which is essentially an application to graduate. (Id.) Plaintiff, however, had used the maximum financial aid. (Id.) She therefore contacted Capella and asked for available options, including creating a payment plan. (Id.)
The Complaint alleges that Capella made "no reasonable effort . . . to help [Plaintiff] complete the program," and that no one from Capella offered to assist Plaintiff in figuring out how to pay remaining tuition "on her terms." (Id. at 16). Rather, Capella informed Plaintiff that therewere no options other than full payment of outstanding debt up front. (Id. at 7). Numerous Capella representatives gave Plaintiff the same answer: full payment or she could not graduate. (Id.) Finally, Plaintiff agreed to pay and informed Capella that she would need time to raise the funds. (Id.) A Capella representative told Plaintiff that was "fine." (Id.)
Despite this assurance, Capella sent Plaintiff's $3,200 balance to collections and a debt collector began "harass[ing]" her. (Id.) Plaintiff has never been able to get any reasonable answer from Capella about the nature of this purported debt. Capella has ignored emails from Plaintiff begging for information, options, and assistance, or simply referred Plaintiff to the debt collector. (Id. at 17-18). But some Capella representatives have given Plaintiff conflicting explanations regarding the nature of the debt or denied that any debt was sent to collections. (Id. at 7). To Plaintiff's surprise, a recently-obtained financial statement describes the debt as including never-before-disclosed fees for past semesters when Plaintiff was fully covered by financial aid. (Id. at 17). Meanwhile, the debt collector has continued to harass Plaintiff "day and night" on behalf of Capella for the $3,200 debt. (Id. at 7).
The Complaint alleges that Capella's promises were a "smoke and mirrors" marketing campaign intended to enhance enrollment rates. (Id. at 11). Specifically, that Capella falsely promises students, including Plaintiff, affordability and successful completion of the program in order to "lure [them] in [and] boost revenue with no intent to see [those promises] through." (Id. at 11). Thus, at bottom, Capella promised Plaintiff and other students "a lot more than was provided." (Id.) The Complaint alleges that that it is "abundantly clear" that Capella had "zero intention" to help Plaintiff graduate and "in no way tried to help [her] complete the program and obtain [her] degree." (Id. at 8-9).
Furthermore, Capella is unwilling to allow Plaintiff access to the degree she earned despite an investment of years of time and all her available financial resources.2 (Id. at 8). According to the Complaint, Capella misled Plaintiff, used "extreme measures" to collect tuition payment, used "bully tactics," and "left [Plaintiff] with nothing," merely a "hostage" and "victim of predatory online learning" with severely damaged credit and personal finances. (Id. at 9, 11).
Liberally construed, the Complaint brings several causes of action under Tennessee law: (1) unfair or deceptive acts in violation of the Tennessee Consumer Protection Act ("TCPA"); (2) fraudulent misrepresentation; (3) breach of contract; (4) unjust enrichment; (5) negligence; and (6) strict liability. The Court addresses each claim in turn.
Plaintiff first brings claims under the TCPA, which outlaws "[u]nfair or deceptive acts or practices affecting the conduct of any trade or commerce." Tenn. Code Ann. § 47-18-104(a). The TCPA creates a cause of action for damages available to "[a]ny person who suffers an ascertainable loss of money or property, real, personal, or mixed, or any other article, commodity, or thing of value wherever situated, as a result of the use or employment by another person of an unfair or deceptive act or practice described in § 47-18-104(b)." Tenn. Code Ann. § 47-18-109(a)(1). Section 47-18-104(b) includes a long list of acts encompassed by the definition of "unfair or deceptive act or practice." In order to plead a claim under the TCPA, Plaintiff must plausibly allege that: (1) Capella engaged in an unfair or deceptive act or practice declared unlawful by the TCPA,and (2) Capella's conduct caused an "ascertainable loss of money or property, real, personal, or mixed, or any other article, commodity, or thing of value wherever situated[.]" Young v. Black & Decker (U.S.), Inc., No. 3:20-cv-519, 2021 WL 1292528, at *1 (M.D. Tenn. Apr. 7, 2021) (quoting Tucker v. Sierra Builders, 180 S.W.3d 109, 115 (Tenn. Ct. App. 2005)); Borla Performance Indus., Inc. v. Univ. Tool & Eng'g, Inc., No. E201400192COAR3CV, 2015 WL 3381293, at *12 .
Importantly, the TCPA "is to be liberally construed to protect consumers and others from those who engage in deceptive acts or practices." Young, 2021 WL 1292528, at *1 (citing Haverlah v. Memphis Aviation, Inc., 674 S.W.2d 297, 305 (Tenn. Ct. App. 1984)); McCollum v. Peters, No. E201402082COAR3CV, 2015 WL 4485557, at *6-7 (Tenn. Ct. App. July 23, 2015) (citing Signature Designs Grp., LLC v. Ramko, No. M2011-01086-COA-R3-CV, 2012 WL 2519037, at *14 (Tenn. Ct. App. 2012)). Thus, the Tennessee courts broadly define a "deceptive" act or practice as any "one that causes or tends to cause a consumer to believe what is false or that...
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