Key Developments in COVID-19 Tuition Refund Class Actions against Colleges and Universities
In just two months, more than 110 class action lawsuits have been filed against colleges and universities. These complaints arise out of the COVID-19 pandemic that forced higher education institutions to close their campuses and turn to remote learning to protect the safety of their communities, including their students.
Each lawsuit asserts two or three substantive claims; all assert claims for breach of contract and unjust enrichment, and some add claims for conversion. None of the cases allege that the schools were wrong to close their campuses as the pandemic spread. Instead, the plaintiffs in the cases seek the refund of some portion of tuition paid for the spring semester of 2020 on the alleged basis that there is purportedly a difference in value between on-campus education and remote learning.
Commonalities, patterns, and trends have emerged from the dozens of complaints, and below are key observations about the tuition refund class actions filed as of this date:
- May was the worst month yet, but the curve may be flattening. Just one complaint was filed in March, and only five were filed in the first half of April; 34 were filed in the second half of April, 47 in the first half of May, and 21 in the second half of May. It is too early to know if the pace of filings has already peaked and is in a downturn. But the slower filing rate in the second half of May could represent a coming pause in activity by the first-acting plaintiff’s firms, to perhaps be followed by imitation lawsuits by other firms that will come later in the summer. Or, the Memorial Day holiday may simply have temporarily slowed filings. We don’t know whether this downward trend will continue, but month-over-month, May was clearly the worst yet for higher education defendants.
- Complaints have been filed mostly in the federal district court where the institution is located. Roughly 95% of class action complaints have been filed in federal district court. Those filed in state court are likely subject to removal based on the relaxed diversity requirements of the Class Action Fairness Act of 2005. Although a small number of suits have been brought in the district where a student-plaintiff resides but the institution has no campus, the vast majority are filed in a district where the institution has a physical presence.
- Suits are spread across the country, in all regions. Filings have been regionally dispersed. The leading states with federal court filings are New York (38), California (14), New Jersey (11), Massachusetts (10), and Pennsylvania (8). The remaining federal cases fall across other regions including the Southeast (18), Midwest (7), New England (4), Southwest (4), and Pacific Northwest (1).
- A handful of plaintiff’s firms are behind the majority of filings. Three firms are behind more than half of all filings: Bursor & Fisher PA (40), Anastopoulo Law Firm (22), and Hagens Berman Sobol Shapiro LLP (9). Only 10% of all cases have been filed by a plaintiff’s firm working on only one case, meaning the vast majority have been filed by firms bringing multiple cases.
- Filings to date have focused on large university systems. So far, the actions filed have focused on large university systems with enrolled students that number in the tens of thousands. More than 90% of all defendants are universities, with only a handful of colleges facing litigation. While it is possible that these institutions will remain the targets of these class action suits, it is possible that later filings will focus on smaller colleges and universities.
- Many institutions are facing multiple suits. Just because an institution has been named as a defendant once does not mean the college or university will not face multiple complaints. Of the more than 75 institutions that have been targeted with class action suits to date, at least 19 are facing multiple actions.
We are continuing to provide updated coverage of COVID-19 class action cases as the pandemic continues to unfold, available on our Filed and Anticipated Cases tracker. Our earlier alert, Navigating the Tuition Refund Class Action, provides our analysis of cases filed in April 2020. For more information on class action litigation related to COVID-19, please contact Don Frederico, Lucus Ritchie, or Melanie Conroy.