Students Lose Suit Seeking Tuition Reimbursement for Lack of In-Person Classes During COVID-19

Each semester, millions of students fill out millions of forms as they register for university classes. Few, however, consider that these forms are contracts with their universities. And those contracts do not state what would happen if in-person classes are canceled because of a pandemic. Students who filed a class-action lawsuit for tuition refunds got their answer on March 17, when a federal judge ruled that they will not get tuition refunds or any other awards as a result of their university’s decision to teach all classes remotely.

U.S. District Court Judge George B. Daniels of the Southern District of New York granted New York University’s (NYU) motion to dismiss the class-action lawsuit by graduate student plaintiff Daniel Zagoria for breach of contract, unjust enrichment and a refund of tuition and fees. While plaintiffs argued that the university’s marketing materials and course descriptions are the equivalent of a “promise to provide students with in-person instruction,” the court was not persuaded.

Judge Daniels said that NYU’s statements “do not rise to the level of a specific promise,” and plaintiffs failed to provide any “express language” that NYU promised in-person classes. The lack of such a specific promise bars a successful breach of contract award. He said that breach of contract actions must be “grounded in text and may not be inferred from conduct of the parties.”

Plaintiff’s unjust enrichment claim and claim for refunds of tuition and fees were also based on the contract, and were thus dismissed as “duplicative.”

The University said it was please with the decision, which it always considered to be without merit.

Zagoria’s suit was filed last May 8 on behalf of himself and other similarly situated students. Plaintiffs argued that when NYU shut down its campus, he and his fellow students did not get “what they bargained for,” and NYU is therefore “saddling wholly innocent students with mounting debt...for services they are not receiving and facilities that are not provided.” Zagoria, a master's student at NYU's Schack Institute of Real Estate, is paying more than $2,000 per credit hour for his education, which he argued is now excessive because he is getting “an inferior academic experience when classes went virtual as a result of the state's pandemic shutdown.”

In August 2020, NYU filed a motion to dismiss because remote learning is not “ineffective” as Zagoria claims. NYU argued that it met its contractual obligations despite the pandemic. "Every day, teachers worked to deliver NYU's intellectually stimulating and creative learning environment in new and different ways… And, at the end of the semester, thousands of NYU students received education credits and earned their degrees," they said.

In his ruling on March 8, Judge Daniels pointed out that Zagoria had received a refund for fees associated with the travel portion of his tuition payment that was associated with a promised educational trip to Europe. He had alleged that visits to Paris and Amsterdam were supposed to be included so students could survey actual properties. Due to COVID-19, these visits had to take place virtually.

He then discussed the educational malpractice doctrine that “precludes courts from adjudicating claims regarding the sufficiency or quality of education provided by educational institutions.” The university argued that this doctrine applies, but, while it is useful in other cases that center strictly on the quality of education received, is not controlling here because this is strictly a contract dispute.

Precedent does not allow courts to ”evaluate the course of instruction” or “review the soundness of teaching methods,” the judge said. But this case is an “exercise in contract interpretation which is the province of this court and does not require the questioning of the academic judgments of educational professionals.”

The NYU case is one of over a hundred class-action complaints filed by students who want refunds and other awards because they do not believe that remote learning is the equivalent of in-person instruction. While some students have prevailed, others like Zagoria, have failed. One key difference is that winning plaintiffs showed “specific statements” about in-person education programs, which NYU did not make. Cases are ongoing at many universities, including Harvard, Dartmouth and universities in the Arizona and California state systems.

The court granted Zagoria leave to amend by April 1, if such amendments would “not be futile.”