Hogan v. S. Methodist Univ.
| Decision Date | 29 March 2022 |
| Docket Number | Civil Action 3:20-CV-02899-X |
| Parties | LUKE HOGAN, on behalf of himself and other individuals similarly situated, Plaintiff, v. SOUTHERN METHODIST UNIVERSITY, and other affiliated entities and individuals, Defendant. |
| Court | U.S. District Court — Northern District of Texas |
There are many different reactions to remote learning. Some think it a wonderful creation that helped education continue during the COVID-19 pandemic. Others think remote learning is [1] Luke Hogan might not go that far, but he sure wasn't happy when his school, Southern Methodist University (SMU) shifted to online learning during and because of the pandemic. So he sued and seeks to represent a class of affected SMU students to obtain a pro rata refund of tuition and fees for SMU's shift to online learning.
SMU moved to dismiss the suit, claiming Texas's shiny new Pandemic Liability Protection Law bars Hogan's claim there is no actionable contract, and Hogan's claims for conversion and unjust enrichment fail as a matter of law. (Doc. No. 32). Hogan thinks all his claims are awesome and the Pandemic Liability Protection Law is unconstitutionally retroactive.
The Court agrees with SMU for several reasons. On the contract claim, Hogan never points to a specific provision where SMU promised in-person learning. Hogan's conversion claim is based on converting either an intangible right to in-person education or converting money, and Texas disallows conversion claims for intangible rights and money. Hogan's unjust enrichment claim fails because it requires him to plead fraud, duress, or undue advantage, which Hogan did not plead or suggest he could. As such, all of Hogan's claims fail as a matter of law.
But if the Court is wrong and Hogan stated viable claims, the Texas Pandemic Liability Protection Law bars Hogan's claim for money (but not his claim for declaratory or injunctive relief). The law is not unconstitutionally retroactive as applied to Hogan. It operates to extinguish his claim for money but not other relief and serves a compelling government interest by broadly covering businesses and educational institutions for health and safety reasons. Plus, there is no demonstration that Hogan has strong claims even without the new law barring his claim for money. These facts show that on balance, Texas courts would uphold the new law.
For these reasons, as more fully explained below, the Court GRANTS SMU's motion to dismiss and DISMISSES WITH PREJUDICE Hogan's claims.
Hogan paid tuition and fees to attend SMU in the spring of 2020. In March 2020, SMU announced that because of COVID-19, it would transition all in-person classes and college experiences online for the remainder of the semester. Hogan filed this suit, making class allegations and claiming SMU failed to provide the in-person classes and experiences for which he allegedly bargained when he paid his tuition and fees. Hogan seeks a pro-rata refund of the amount he overpaid. He graduated at the end of the Spring 2020 semester.
Hogan alleges he and other students paid approximately $25, 000 in tuition and $3, 180 for a mandatory general fee (as well as other class-specific fees) for the Spring 2020 semester. When COVID-19 made its presence known, SMU shifted to online learning on or around March 12, 2020. Hogan claims SMU stopped providing the services or facilities the mandatory fee covers. At bottom, Hogan claims he and his peers paid tuition and fees for “for a first-rate education and on-campus, in person educational experiences, with all the appurtenant benefits offered by a first-rate university[, ]” but were instead provided a materially different alternative.[2] He seeks a pro rata refund of tuition, fees, and other expenses SMU failed to deliver.
SMU moved to dismiss on a variety of grounds, one of which is that the new Texas Pandemic Liability Protection Law bars Hogan's claims. Hogan responded, arguing among other things that the new law is unconstitutionally retroactive. That argument triggered Hogan's duty to notify the Texas Attorney General of his challenge to the constitutionality of a state law, [3] which Hogan did on October 22, 2021.[4]
Hogan filed this purported class action in state court. SMU removed it to federal court based on the federal Class Action Fairness Act. Hogan moved to remand it to state court, which this Court denied. Hogan then filed a federal complaint, which SMU moved to dismiss.
Under Federal Rule of Civil Procedure 12(b)(6), the Court evaluates the pleadings by “accepting all well-pleaded facts as true and viewing those facts in the light most favorable to the plaintiff.”[5] To survive a motion to dismiss, the claimant must allege enough facts “to state a claim to relief that is plausible on its face.”[6] “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”[7] “The plausibility standard is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.”[8]“[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'”[9]
SMU makes several arguments in its motion to dismiss. Globally, SMU argues that Texas's new Pandemic Liability Protection Law bars all of Hogan's claims, or the claims are for educational malpractice which courts routinely dismiss. Specifically, SMU contends Hogan fails to state a viable claim for breach of contract (express or implied), conversion, or unjust enrichment. The Court must take the non-constitutional arguments first and reaches the Pandemic Liability Protection Law (wrapped up in a constitutional challenge) at the end as an alternate basis to support dismissal of Hogan's request for money.
A. Breach of Contract and Educational Malpractice
SMU argues the Student Rights and Responsibilities agreement is the governing contract, and it personally obligates students to pay tuition, fees, and other charges without any reference to in-person education. And SMU further argues that Hogan is bringing an educational malpractice claim, which Texas and other courts foreclose. Hogan counters that he is bringing a breach claim and that the Student Rights and Responsibilities agreement is not a contract, is ambiguous, and isn't the entirety of the contractual relationship between SMU and the students. The Court concludes Hogan isn't bringing a precluded educational malpractice claim but is instead bringing a contract claim that fails because he hasn't identified a promise of in-person education.
In Texas, a breach of contract plaintiff must allege: “1) the existence of a valid contract; 2) performance or tendered performance by the plaintiff; 3) breach of the contract by the defendant; and 4) damages to the plaintiff resulting from the breach.”[10] But out of respect for university freedom, federal courts engage in “restrained judicial review of the substance of” a university's “academic decisions.”[11]As the Fifth Circuit has observed, “we know of no case which holds that colleges and universities are subject to the supervision or review of the courts in the uniform application of their academic standards.”[12] And the Texas Supreme Court has recognized universities' broad authority to make their own decisions about the educational process.[13] So which is SMU's choice to shift to online learning-a decision governed by a contract term, or an educational process decision? Hogan has not pointed to a specific term in a contract, express or implied, that guarantees in-person education. This is something federal courts hold breach of contract plaintiffs to.[14] This principle is less about breach claims and more about federal pleading standards.[15]
Here are Hogan's allegations about the contracts that SMU allegedly breached:
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