Patel v. Univ. of Vt. & State Agric. Coll.

• Decision Date: 01 October 2021
• Docket Number: 5:20-cv-61
• Court: U.S. District Court — District of Vermont
• Parties: NILAY KAMAL PATEL, RACHEL A. GLADSTONE, ELIJAH BLOW, and AVERY ARROYO, Plaintiffs, v. UNIVERSITY OF VERMONT AND STATE AGRICULTURAL COLLEGE, Defendant.

NILAY KAMAL PATEL, RACHEL A. GLADSTONE, ELIJAH BLOW, and AVERY ARROYO, Plaintiffs,
v.
UNIVERSITY OF VERMONT AND STATE AGRICULTURAL COLLEGE, Defendant.

No. 5:20-cv-61

United States District Court, D. Vermont

October 1, 2021

DECISION ON MOTION FOR RECONSIDERATION (DOC. 77)

GEOFFREY W. CRAWFORD, UNITED STATES DISTRICT CHIEF JUDGE

The COVID pandemic arrived on American shores in earnest in March 2020 with consequences for most of our residents. In the case of colleges and universities, these consequences included the widespread use of remote learning. This development disappointed many who preferred to be on-campus, learning in live classrooms. In the weeks following university decisions to reduce or eliminate on-campus instruction, students and their counsel filed lawsuits across the United States seeking refunds of tuition payments and other expenditures. This lawsuit, filed in April 2020, is no exception.

The case has passed through two early phases. The court has previously ruled that the contract language in the student handbook and similar materials bars a claim for refund of room and meal charges. (Doc. 57.) At the same time, the court declined to dismiss the claim for tuition refunds and allowed that part of the case to go forward. After this ruling, the parties and the court learned that the two named plaintiffs-Nilay Patel and Rachel Gladstone-had not actually paid tuition. Mr. Patel was an exchange student from the University of Leeds in Britain.

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UVM has a reciprocal agreement with Leeds permitting exchange students to attend without paying tuition to the host institution. Ms. Gladstone received scholarships and grants in excess of the tuition for her final spring semester. She graduated successfully in May 2020.

The news that the named plaintiffs had not actually paid tuition did not end the case. They were quickly joined by two more students who did pay tuition. These students seek to serve as class representatives in a class action aimed at collecting tuition refunds for thousands of UVM students. Issues concerning the terms of the implied contract between the university and its students and the application of these terms to a pandemic emergency as well as the suitability of the class action vehicle remain for later decision.

The court granted the motion to dismiss Mr. Patel and Ms. Gladstone from the lawsuit on standing grounds. (Doc. 76.) In the court's view, they lacked constitutional standing to seek the return of tuition they had not actually paid. They have filed a timely motion for reconsideration. (Doc. 77.) UVM has filed an opposition (Doc. 83) and Plaintiffs filed a reply on August 26, 2021 (Doc. 85).

The court turns to the five issues raised by Plaintiffs. The court considers these issues in the context of the usual standard for reconsideration. See Cho v. Blackberry Ltd., 991 F.3d 155, 170 (2d Cir. 2021) (alterations in original) (quoting Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Tr., 729 F.3d 99, 108 (2d Cir. 2013)) (noting strict reconsideration standard: "[A] party may move for reconsideration and obtain relief only when the [party] identifies an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.").

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I. Need for Discovery

In ruling on the standing question, the court relied upon one core fact: neither Mr. Patel nor Ms. Gladstone paid tuition at UVM during the spring semester of 2020. This is hardly a fact that lies within the exclusive knowledge of one party or another. Nor is it disputed.

In the case of Mr. Patel, there is no doubt that exchange students from the University of Leeds who attend UVM for a semester do not pay tuition to UVM. The same is true when a UVM student travels to Leeds. When the court asked Plaintiffs' counsel whether Mr. Patel paid tuition at Leeds for his spring term at UVM, the attorneys did not know. They now question whether he ever arrived at UVM at all. For purposes of standing, however, there is no dispute that Mr. Patel's tuition was covered by the exchange arrangement in place between UVM and Leeds. Mr. Patel is in the best position to tell the court whether he paid any tuition in Britain. He has made no such allegation even now when it is clear that the payment of tuition is central to the court's resolution of the standing issue in his case. Discovery into the history and administration of the exchange agreement between the two schools will not change the fact that he paid no tuition for his education at UVM.

In the case of Ms. Gladstone, there is no doubt that the total of her scholarships and grants for the spring semester in 2020 exceeds the amount of her tuition. The university has provided information from outside of the complaint that following university policy, it credited these moneys first to tuition and second to room and board and other costs. Plaintiffs have retained an expert to examine this proposition. Mr. Kantrowitz has submitted a report. He has broad expertise in student financial aid. He reviewed the details of Ms. Gladstone's financial aid during the spring semester of 2020. He did not report that she paid any tuition either. Instead, he

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reported that she borrowed $3, 503 in student loans and received a refund of $3, 380 with a net balance due of $123. (Doc. 66-1.)

There is no mystery here. Mr. Kantrowitz does not dispute UVM's statement that Ms. Gladstone's grants exceeded her tuition obligation. He states only that "[m]oney is fungible." (Doc. 66-1 ¶ 5.) He describes her student loan and her refund. It is undisputed that UVM voluntarily refunded a portion of its students' living expenses after closing meal halls and residences. Any doubts about the details of Ms. Gladstone's payments are resolved by the scrutiny these received from her own expert. Mr. Kantrowitz has the expertise to determine whether Ms. Gladstone paid tuition. Clearly she did not since Mr. Kantrowitz identifies only a shortfall of $123 following her refund of living expenses.

Ms. Gladstone argues that she needs discovery to find out if UVM really applies scholarship aid first to tuition as stated by Marie Johnson, Director of Student Financial Services, in her affidavit. (Doc 63-2.) Ms. Johnson supplied a copy of the written UVM policy concerning the order of payment assignment. (Doc. 63-3.) This policy requires the prioritization of "charges in the following order" with exceptions for parking tickets and other exceptions not relevant here. The order is unsurprising: tuition first followed by the "comprehensive fee," room charges, meal plan charges, and other fees. Ms. Gladstone, her expert, and her attorneys all know the amount of her tuition ($20, 640), her grants and scholarship ($21, 722), and the manner in which UVM applied these grants first to her tuition and second to her other obligations. Discovery will not change the simple math that demonstrates that she did not pay tuition herself during the spring semester of 2020.

The details of Mr. Patel and Ms. Gladstone's tuition payments are sufficiently known to both sides that no discovery on these issues is necessary or appropriate.

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II. The Relief Sought and the "Educational Malpractice" Doctrine

The court followed the plaintiffs' lead in identifying the relief sought as a refund of tuition. That is how the Amended Complaint is drawn. Plaintiffs argue in their motion for reconsideration that it seeks something different from a refund: "consequential damages." They point to paragraph 31 of the Amended Complaint, which seeks "an amount representing the difference in value of live in-person instruction versus online distance learning, as well as the value of the unused portion of [housing and meal costs and student fees.]" (Doc. 65 ¶ 31.) That request is incorporated into each of the six counts in the pleading. (Id. ¶¶ 51, 59, 67, 73, 78, 83.)

Vermont decisional law recognizes two primary measures of money damages for breach of contract: the loss of expectancy, frequently defined as loss of profit, or, alternatively, the return of some or all of the cost of performance to the non-breaching party through a restitution-based award. Foti Fuels, Inc. v. Kurrle Corp., 2013 VT 111, ¶ 37, 195 Vt. 524, 90 A.3d 885. These alternatives are consistent with contract remedies in American law generally. Compare Restatement (Second) of Contracts § 347 with Restatement (Third) of Restitution § 38.

The expectancy measure of damages model is a poor fit for Plaintiffs' claim since it would require the factfinder to determine the value of a single semester of in-person education, reduced by its cost to the student, in order to calculate the net benefit. From this amount, the factfinder would subtract the benefit, if any, of remote attendance. These calculations would be subject to "the tests of causation, certainty and foreseeability, and, in addition, be reasonably supposed to have been in the contemplation of both parties at the time they made the contract." A. Brown, Inc. v. Vt. Justin Corp., 148 Vt. 192, 196, 531 A.2d 899, 902 (1987). The simple recitation of the damage formula illustrates the impossibility of applying...