51 F.4th 101
5th Cir.2022Background
- In Spring 2020 Tulane moved all classes online and evacuated campus mid-semester in response to COVID-19; it did not refund pre-paid tuition and most fees (Tulane issued a separate housing/dining rebate).
- Plaintiffs (two students, on behalf of a putative class) paid residential tuition and mandatory fees and allege they bargained for in-person instruction and access to on-campus services.
- Plaintiffs relied on Tulane materials (course catalog with class locations/times, credit-hour/contact-time policy, marketing, historic practice, and differential pricing for online v. in-person) to allege an enforceable bargain.
- Tulane relied on an Agreement & Disclosure Statement (A&DS) and refund language, and argued educational-malpractice principles and assent to terms bar recovery.
- The district court dismissed all claims with prejudice; the Fifth Circuit reversed in part, holding implied-in-fact contract claims (tuition and certain fees), unjust enrichment (as alternative), and conversion claims were plausibly pleaded and remanding for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the breach-of-contract claim barred as educational malpractice? | Students: claim is not about academic quality but that Tulane failed to deliver the product bargained for (in-person instruction/facilities). | Tulane: Plaintiffs challenge the quality/mode of instruction and thus implicate educational-malpractice bar and need to plead arbitrary/irrational conduct. | Not barred: Fifth Circuit holds plaintiffs challenge delivery of promised product, not academic quality, so educational-malpractice doctrine does not preclude the contract claim at pleading stage. |
| Does the A&DS (Financial Responsibility Agreement) preclude implied contract or refund claims? | Students: A&DS is not the full agreement, ambiguous, and record does not show plaintiffs assented to its terms. | Tulane: A&DS is an integrated agreement that disclaims refunds and makes fees nonrefundable, foreclosing claims. | A&DS not dispositive at pleading stage: court may consider it but cannot hold it preclusive because (1) it does not itself set educational terms, (2) ambiguity and lack of proof of assent preclude dismissal. |
| Did plaintiffs plausibly allege an express or implied-in-fact contract for in-person instruction and for specific fees? | Students: Catalog, credit-hour/contact-time policy, marketing, historic practice, and price differential support an implied-in-fact promise of in-person instruction and services tied to fees. | Tulane: No explicit contractual promise; reservation-of-rights in catalogs and absence of cheaper online analogues undermine implication. | Plaintiffs failed to plead an express promise but plausibly pleaded implied-in-fact contracts for in-person instruction and for several specific fees tied to on-campus services; factual disputes (e.g., reservation language, assent) remain for discovery. |
| Are unjust enrichment and conversion claims plausible alternatives? | Students: Tulane was enriched and students impoverished when services were not provided; unjust enrichment and conversion alleged as alternatives if no contract governs. | Tulane: Plaintiffs received online instruction and/or assented to retention of funds; conversion/unjust enrichment inappropriate where contract governs or assent occurred. | Claims are plausible at this stage: unjust enrichment may proceed as an alternative; conversion survives because plaintiffs plausibly allege wrongful retention and lack of ratification as a matter of law. |
Key Cases Cited
- Brown v. Iqbal, 556 U.S. 662 (pleading standard for plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility requirement for complaints)
- Ross v. Creighton Univ., 957 F.2d 410 (7th Cir.) (distinguishing claims about non‑performance of promised services from academic‑quality disputes)
- Miller v. Loyola Univ. of New Orleans, 829 So. 2d 1057 (La. App. 4 Cir. 2002) (recognizing educational malpractice bar but permitting contract claims where specific services were promised)
- Guidry v. Our Lady of the Lake Nurse Anesthesia Program, 170 So. 3d 209 (La. App. 1 Cir. 2015) (course materials and catalogs may form part of educational contract)
- Gociman v. Loyola Univ. of Chicago, 41 F.4th 873 (7th Cir. 2022) (similar COVID‑era implied contract holding for in‑person promises)
- Shaffer v. George Washington Univ., 27 F.4th 754 (D.C. Cir. 2022) (damages may be measured via pre‑existing pricing disparities between online and in‑person offerings)