Shaffer v. George Wash. Univ.

• Decision Date: 08 March 2022
• Docket Number: No. 21-7040, No. 21-7064,21-7040
• Citation: 27 F.4th 754
• Parties: Mark SHAFFER, individually and on behalf of all others similarly situated, et al., Appellants v. GEORGE WASHINGTON UNIVERSITY and Board of Trustees of George Washington University, Appellees Maaz Qureshi, individually and on behalf of all others similarly situated, et al., Appellants v. American University, Appellee
• Court: U.S. Court of Appeals — District of Columbia Circuit

27 F.4th 754

Mark SHAFFER, individually and on behalf of all others similarly situated, et al., Appellants

v.GEORGE WASHINGTON UNIVERSITY and Board of Trustees of George Washington University, Appellees

Maaz Qureshi, individually and on behalf of all others similarly situated, et al., Appellants

v.American University, Appellee

No. 21-7040

No. 21-7064

United States Court of Appeals, District of Columbia Circuit.

Argued January 14, 2022

Decided March 8, 2022

Daniel J. Kurowski argued the cause for appellants Mark Shaffer, et al. With him on the briefs were Steve W. Berman, Glenn Ivey, and Andrew S. Levetown.

Alan Schoenfeld argued the cause for appellees. With him on the brief were Jamie Gorelick, Bruce M. Berman, Susan Pelletier, and Swapna Maruri.

Jessica L. Ellsworth and Nathaniel A. G. Zelinsky were on the brief for amici curiae American Council on Education and 18 Other Higher Education Associations in support of appellees.

Roy T. Willey argued the cause for appellants Maaz Qureshi, et al. With him on the briefs was Curtis A. Boykin.

Alan Schoenfeld argued the cause for appellee. With him on the brief were Bruce M. Berman and Susan Pelletier.

Jessica L. Ellsworth and Nathaniel A. G. Zelinsky were on the brief for amici curiae American Council on Education and 18 Other Higher Education Associations in support of appellee.

Before: Millett and Jackson,^* Circuit Judges, and Edwards, Senior Circuit Judge.

Edwards, Senior Circuit Judge:

The two cases that we consider in this appeal, like many others that have been litigated across the country, are by-products of the COVID-19 pandemic. As described by the amici higher education institutions:

In March 2020, America faced a rapidly-evolving crisis. For colleges and universities, the challenges were acute. Dormitories, classrooms, research laboratories, libraries, and arenas risked spreading COVID-19, endangering students, faculty, staff[,] and surrounding communities. To safeguard public health and to comply with shelter-in-place orders, higher education institutions pivoted in the moment. They physically closed campuses in large part, while searching for and inventing solutions to allow them to continue to serve their students in unpredictable and unprecedented times. For colleges and universities—like so many other sectors of society—virtual platforms were part of the answer. [Online] [p]rograms like Citrix, Microsoft Teams, and Zoom meant students could complete the last portion of their spring semester courses without interruption.

Br. for Amici Curiae American Council on Education and 18 Other Higher Education Associations 8. These colleges and universities contend that their "rapid transition [to] online [educational services, in place of in-person educational activities] was no small feat. ... [And] [a]s a result of these efforts, ... the class of 2020 graduated on time at institutions around the country." Id . at 8-9.

Many students and their parents see the matter very differently. For example, the Appellants in one of the cases here on appeal contend that:

[T]he COVID-19 global pandemic disrupted the daily lives of nearly all Americans. ... [Students] who paid tens of thousands of dollars in tuition and fees to get an in-person educational experience, including all of the services, opportunities, and activities that come therewith, [had] that in-person experience ripped away. Students ... could have enrolled in one of the country's many online learning institutions – at a far cheaper cost – but opted to pay a premium for an in-person educational experience. Many students undertook significant debt to make these tuition and fee payments. Nonetheless, [the universities have] refused to refund a penny of the tuition students ... paid for an in-person educational experience.

Qureshi Appellants’ Br. 1.

The Appellees in the cases before the court, American University ("American") and George Washington University ("GW") (together, "Universities" or "Defendants"), responded to the COVID-19 pandemic, just as did many other schools, by transitioning from in-person to online learning programs and largely shutting down campus activities. In two separate actions, students and parents (collectively, "Plaintiffs") filed complaints in the District Court claiming that the Universities violated contractual commitments to their students when they transitioned to online educational activities and declined to refund any portion of their students’ tuition payments and fees. Plaintiffs also alleged, in the alternative, that the transitions to online learning unjustly enriched the Universities. Defendants moved to dismiss the actions for failure to state a claim, and the District Courts granted their motions. See Shaffer v. George Washington Univ. , Civ. No. 20-1145, 2021 WL 1124607, at *2-3 (D.D.C. Mar. 24, 2021), reprinted in Shaffer Joint Appendix ("J.A.") 1936-39; Crawford v. Presidents & Dirs. of Georgetown Coll. , 537 F. Supp. 3d 8, 17-30 (D.D.C. 2021) (" Qureshi "), reprinted in Qureshi Deferred Appendix ("App.") 55-78. Plaintiffs now appeal. Applying District of Columbia law to the novel and challenging issues that these cases present, we affirm in part and reverse in part the judgments of the District Courts and remand the cases for further proceedings.

First, we affirm the District Courts’ dismissals of Plaintiffs’ claims that the Universities breached express contracts promising in-person educational instruction, activities, and services in exchange for tuition and fees. The materials cited by Plaintiffs do not support these claims. However, we hold that Plaintiffs’ complaints plausibly allege that the Universities breached implied-in-fact contracts for in-person education. Plaintiffs’ factual allegations, combined with the reasonable inferences drawn from them, suffice to support their claims that the Universities promised to provide in-person instruction in exchange for Plaintiffs’ tuition payments.

Plaintiffs also plausibly allege that the Universities impliedly promised to provide on-campus activities and services in exchange for some of the student fees at issue. The Shaffer Plaintiffs state a claim for breach of contract as to the additional course fees, but not as to the student association fee. The Qureshi Plaintiffs state a claim for breach of contract as to the sports center fee, but not as to the activity fee, technology fee, or Metro U-Pass fee.

We therefore reverse the District Courts’ dismissals of Plaintiffs’ implied-in-fact contract claims with respect to tuition and some – but not all – of the fees at issue. We note that the Universities will likely have compelling arguments to offer that the pandemic and resulting government shutdown orders discharged their duties to perform these alleged promises. However, because the Universities have not raised any such defense before this court, we leave the issue to the District Courts to resolve in the first instance.

Furthermore, we reverse the District Courts’ dismissals of Plaintiffs’ unjust enrichment claims. Plaintiffs were free to raise unjust enrichment claims in the alternative to their breach-of-contract claims. The complaints contain sufficient plausible factual allegations to reasonably infer that Plaintiffs provided the benefit of tuition and certain fees under a contract that does not cover the issue in dispute, or is invalid, subject to avoidance, or otherwise ineffective. This inference does not affect the plausibility of the breach-of-contract claims because Plaintiffs are allowed to advance inconsistent and alternative theories of recovery. The District Courts must first determine the contours of any promises governing in-person educational instruction and activities, the Universities’ duties to perform any such promises, and the Universities’ rights (if any) to retain already-paid tuition and fees even if on-campus instruction were cancelled. After these matters have been resolved, Plaintiffs may then be in a position to pursue their claims for unjust enrichment.

Next, we affirm the District Court's dismissal of the Qureshi Plaintiffs’ conversion claim. This claim fails because Plaintiffs do not plausibly allege a possessory interest in a specific, identifiable fund of money.

Finally, we reverse and remand the District Court's dismissal of the Qureshi Plaintiffs’ D.C. Consumer Protection Procedures Act claim, as the trial court's analysis turned on its mistaken conclusion that Plaintiffs failed to plausibly allege that the University promised in-person instruction and activities in exchange for tuition and certain fees.

I. BACKGROUND

These cases are before the court on review of motions to dismiss. Therefore, we recite the facts as Plaintiffs allege them, with reasonable inferences drawn in their favor. See VoteVets Action Fund v. U.S. Dep't of Veterans Affs. , 992 F.3d 1097, 1102 (D.C. Cir. 2021).

George Washington University and American University are institutions of higher learning located in Washington, D.C. GW offers approximately fifty on-campus doctorate programs and ten online doctorate programs. It offers seventy-five on-campus undergraduate programs and nine online undergraduate programs. GW charges significantly higher rates for its on-campus programs than for the online counterparts.

American also offers a variety of on-campus degree programs. It does not offer undergraduate online degrees, although it does offer some undergraduate online courses. American's Online Learning programs are "listed independently on a separate web page, where separate policies and cost information depend[ ] on the individual online program." Qureshi Compl. ¶ 116, App. 21.

Plaintiffs paid all tuition and fees required for enrollment in on-campus instruction and experiences for the spring 2020 semester. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic; travel and assembly restrictions in the United States quickly followed. In response to the pandemic, the Universities shifted all on-campus classes...