Court reinstates suit seeking COVID-related tuition reimbursement

In a ruling comparable to at least two other federal appeal court decisions, a federal appeals court on Tuesday reinstated putative class action litigation filed by a university student seeking tuition reimbursement stemming from her school’s move to COVID-19-related online classes.

Allison King signed a “financial responsibility agreement” to secure her enrollment at Waco, Texas-based Baylor University for spring 2020, paying $21,240 in tuition plus other fees, according to the ruling by the 5th U.S. Circuit Court of Appeals in New Orleans in Allison King v. Baylor University.

Classes moved online beginning in March 2020 because of the pandemic, and Baylor decided not to issue any refunds for tuition as well as for other fees, aside from prorating meal plans, the ruling said.

Ms. King filed suit against the university in June 2020 in U.S. District Court in Waco, charging breach of contract, or alternatively unjust enrichment, and requesting refunds of student fees and prorated tuition reimbursement.

The district court dismissed the case. A three-judge appeals court panel reinstated Ms. King’s breach of contract claim. The financial agreement “is an enforceable contract but the district court did not consider whether the contractual term ‘educational services’ in the contract is ambiguous,” it said. “That a contract is enforceable does not mean its terms are unambiguous.”

The lower court “also failed to meaningfully interpret ‘educational services’ in light of the circumstances surrounding the FRA’s formation,” the ruling said. It did uphold dismissal of Ms. King’s unjust enrichment claim.

A concurring opinion states that Ms. King “alleges a straightforward breach of contract claim: I paid for something, you changed the deal to give me something worth less, and I want some money back. Many courts around the country faced with similar allegations have refused to dismiss them.”

Baylor attorney Russell H. Falconer, a partner with Gibson, Dunn & Crutcher LLP, issued a statement that said in part, “We are pleased that the Fifth Circuit rejected significant portions of the plaintiff’s case and recognized that Baylor has several potentially viable defenses that the court’s decision did not address. 

“We look forward to presenting those defenses to the district court and are confident the district court will once again dismiss the claims in this lawsuit.”

Plaintiff attorneys did not respond to requests for comment.

In July, a federal appeals court reversed a lower court and held in a divided opinion that students at Loyola University in Chicago can pursue breach of contract litigation in connection with the COVID-19-related cancellation of their in-person classes.

And in March, the U.S. Court of Appeals for the District of Columbia overturned lower court rulings and reinstated litigation filed by George Washington University and American University students seeking tuition and fee refunds because of the institutions’ COVID-19-related moves to online classes.