In re University of Southern California Tuition and Fees COVID-19 Refund Litigation
695 F.Supp.3d 1128
C.D. Cal.2023Background
- Plaintiffs are USC students (proposed class ≈ 45–48k) who paid or were obligated to pay tuition/fees for Spring 2020; USC moved in-person instruction online mid-semester because of COVID-19.
- Plaintiffs sued seeking refunds, asserting breach of (implied) contract, quasi-contract/restitution, and UCL (unfair prong); they proposed a class of all students who paid/owed Spring 2020 tuition and fees.
- USC moved for judgment on the pleadings on the breach claim (invoking impossibility); parties submitted competing expert reports: Dr. Hal Singer (Plaintiffs’ conjoint/willingness-to-pay survey estimating large per‑student valuation loss and class damages), John Hansen (USC’s CPA, concluding no classwide harm), and Dr. Ronald Wilcox (USC expert critiquing Singer).
- The court found (and took briefing/hearing on) Daubert/Rule 702 challenges to experts, Comcast/Daubert fit issues for class damages models, and Rule 23 class-certification prerequisites (numerosity, commonality/predominance, typicality, adequacy, superiority).
- Rulings: court GRANTED USC’s motion for judgment on the pleadings as to Plaintiffs’ breach claim (impossibility); DENIED USC’s Daubert motion to exclude Dr. Singer; DENIED Plaintiffs’ motions to strike Hansen and Wilcox; and GRANTED Plaintiffs’ motion to certify a class as to quasi‑contract (restitution) and UCL (unfair) claims. Class representatives and class counsel were appointed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1) Motion for judgment on the pleadings — breach of contract | Plaintiffs wanted to preserve breach (seeking contract-style recovery/restitution). | USC: performance was impossible due to government COVID orders; impossibility excuses breach and limits relief to restitution/quasi-contract. | GRANTED for USC: impossibility bars breach damages; restitution/quasi-contract remains available, so breach claim dismissed. |
| 2) Exclude Plaintiffs’ expert (Dr. Hal Singer) under Daubert/Rule 702 | Singer: conjoint CBC is accepted in literature to measure willingness-to-pay; his survey estimates classwide fair‑market valuation loss; methodology appropriate for restitution valuation. | USC: survey flawed (not USC students), ignored supply-side/tuition-setting, failed to model COVID‑risk, produced implausible responses; results unreliable for class damages. | DENIED: court found conjoint proper method here; methodological criticisms go to weight, not admissibility; supply‑side omission is not fatal given university pricing context. |
| 3) Plaintiffs’ motions to strike Hansen and Wilcox | Plaintiffs: Hansen parrots USC documents and is unreliable; Wilcox unhelpful because he did not run his own survey and applied wrong standard. | USC: Hansen qualified and offers probative evidence on lack of classwide harm; Wilcox legitimately critiques Singer; lack of alternative survey goes to weight. | DENIED: court found both reports admissible; many critiques are merits/cross‑examination issues, not grounds for exclusion at class stage. |
| 4) Class certification under Rule 23(b)(3) for quasi‑contract and UCL (unfair) claims | Plaintiffs: common promise of in-person education, common classwide injury measurable (Singer), numerosity/typicality/adequacy satisfied; class device superior. | USC: individualized issues (who saw promises, use of campus services, financial aid, varying harms, damages model fails Comcast). | GRANTED: numerosity, typicality, adequacy conceded/satisfied; commonality and predominance found met for restitution/UCL unfair prong; individualized issues (damages, some defenses) do not defeat predominance. |
Key Cases Cited
- Daubert v. Merrell Dow Pharm., 509 U.S. 579 (1993) (trial courts act as gatekeepers on expert admissibility; methodology and reliability required)
- Comcast Corp. v. Behrend, 569 U.S. 27 (2013) (a damages model must be tied to the plaintiffs’ theory of liability for class certification)
- Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (Rule 23 requires a rigorous analysis of commonality and predominance)
- Amgen Inc. v. Connecticut Ret. Plans & Trust Funds, 568 U.S. 455 (2013) (limits on merits inquiry at certification; merits considered only insofar as relevant to Rule 23 analysis)
- Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442 (2016) (class cohesion/predominance can be satisfied when common proof establishes liability even if individual damages vary)
- Pulaski & Middleman, LLC v. Google, Inc., 802 F.3d 979 (9th Cir. 2015) (restitution under UCL can be adjudicated on a class basis; focus on value at time of purchase)
- City of Vernon v. City of Los Angeles, 45 Cal.2d 710 (Cal. 1955) (when performance is impossible, recovery limited to fair value of the benefit actually received)