Consumer Law

Contract remedies again prove broader than false advertising for pandemic-related suits

Contract remedies again prove broader than false advertising for pandemic-related suits

In re Columbia Tuition Refund Action, No. 20-CV-3208 (JMF)
& 20-CV-3210 (JMF), — F.Supp.3d —-, 2021 WL 790638 (S.D.N.Y. Feb. 26,
2021)

These are two putative class actions against Columbia and
Pace based on allegedly broken promises due to the pandemic. “The cases are not
formally consolidated, but the Court addresses the two motions together because
they raise similar issues.” The claims survive only to the extent that they
plausibly alleged violations of specific contractual promises for particular
services or access to facilities.

Thus, some but not all breach of contract claims survived.
For example, plaintiffs failed to plead that Columbia made a specific promise
of exclusively in-person instruction. “[R]eferences to classroom locations and
physical attendance requirements in Columbia’s syllabi, departmental policies
and handbooks, and course registration portal … merely memorialize the
pre-pandemic practice; they offered no guarantee that it would continue
indefinitely.” References in Columbia’s marketing materials to “the on-campus
experience” were often mere puffery “too vague to be enforced as a contract,” such
as a statement in a University publication that “Columbia is an in-person kind
of place.”

However, the instructional format claim against Pace
survived because the plaintiff alleged that the course registration portal on
Pace’s website stated that “[o]n-campus” courses would be “taught with only
traditional in-person, on-campus class meetings.” On a motion to dismiss, it
was ambiguous whether Pace’s disclaimer that “unforeseen circumstances may
necessitate adjustment to class schedules” and that “[t]he University shall not
be responsible for the refund of any tuition or fees in the event of any such
occurrence …. Nor shall the University be liable for any consequential
damages as a result of such a change in schedule” applied to a shift online.

And the Columbia plaintiffs did plead that Columbia breached
a contract to provide access to certain campus facilities and activities in
exchange for mandatory student fees. Resolving this claim involved no
intervention into academic judgment, and bad faith was not an element. So too
for similar Pace claims. But unjust enrichment wasn’t available where it merely
duplicated the contract claims, and conversion also wasn’t available.

NYGBL 349 and 350:  Plaintiffs
failed to allege that the universities’ representations were materially
misleading. “Plaintiffs cite, and the Court has found, no case holding that a
plaintiff can state a claim under Section 349 or 350 where the defendant
neither knew nor could have known that its commercial acts or practices were
false.” [A reversal of the usual result: contract claims are usually much
narrower than unfair trade practices claims.]

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