608 F.Supp.3d 268
E.D.N.C.2022Background
- Plaintiffs are three CFA high‑school students (Elizabeth, Charlotte, Natalie). Natalie was allegedly targeted by repeated, sexual‑violence‑themed comments and jokes by male classmates during a year‑long AP Literature course; she suffered panic attacks, sought counseling, and was isolated from class activities.
- School staff (teacher, counselor Tobi Ragon, dean Jamison Fee) were notified multiple times; plaintiffs allege the school's responses were ineffective, shifted burdens onto Natalie, and left investigations unclear or incomplete.
- Elizabeth organized/posted a Change.org petition (with ~27 student signatures) objecting to certain male students speaking at graduation; CFA convened an Honor Council, required apology letters, then excluded Elizabeth from graduation events and suspended her email; Charlotte was later denied re‑enrollment, with CFA citing parents' lack of cooperation/support of the disciplinary process.
- CFA had received a PPP loan (applied 4/30/2020; funded 5/4/2020; forgiven 6/15/2021). Plaintiffs allege PPP is "federal financial assistance," bringing CFA within Title IX for the loan's duration.
- Claims: Title IX sex discrimination (Natalie), Title IX retaliation (Elizabeth and Charlotte), intentional infliction of emotional distress (IIED), negligent infliction of emotional distress (NIED), breach of enrollment contracts and implied covenant; CFA moved to dismiss under Rule 12(b)(6).
- Decision: Court denies CFA's motion in part and grants in part — Title IX claims (Natalie: discrimination; Elizabeth & Charlotte: retaliation) and breach of contract claims survive; IIED and NIED claims are dismissed without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CFA received "federal financial assistance" under Title IX via its PPP loan | PPP loans are loans/arrangements made under SBA authority and therefore are federal financial assistance that trigger Title IX obligations | PPP is merely a guaranty/contract of guaranty or otherwise not "federal financial assistance" for recipients; thus Title IX does not apply | Court: PPP loan qualifies as federal financial assistance (a loan and an arrangement through an intermediary), so Title IX plausibly applies for loan duration |
| Whether Natalie's allegations state a Title IX student‑on‑student harassment claim (severe, pervasive, deliberate indifference) | Repeated rape/violence jokes directed at Natalie (knowing her prior assault), panic attacks, altered coursework and remote attendance, and school staff failed to adequately intervene | CFA contends harassment was not severe/pervasive enough and school responses were reasonable | Court: Allegations plausibly satisfy Davis factors; Natalie states a Title IX claim (severe/pervasive effect and deliberate indifference) |
| Whether Elizabeth and Charlotte state Title IX retaliation claims | Elizabeth engaged in protected activity (reporting and the petition); sanctions and exclusion from graduation were retaliatory; Charlotte's non‑renewal was a third‑party reprisal tied to Elizabeth's protected activity | CFA argues petition was not protected or that actions were not retaliatory | Court: Both sisters plausibly plead retaliation; petition and reports were protected and sanctions/non‑re‑enrollment are materially adverse (Thompson third‑party theory applies) |
| Whether state tort and contract claims survive (IIED, NIED, breach of contract / covenant) | Plaintiffs allege emotional distress and that CFA breached enrollment contracts and handbook commitments (anti‑retaliation language, predictable sanctions) | CFA argues IIED/NIED fail North Carolina's high standards and contract claims don't plausibly allege breach or bad faith exercise of discretion | Court: IIED and NIED dismissed (fail NC standards / claims frame intentional conduct as negligent); breach of contract and covenant claims survive for Elizabeth and Charlotte (contract incorporated handbook; discretionary non‑renewal must be exercised in good faith) |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (standards for plausibility pleading)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state a plausible claim)
- Davis v. Monroe Cnty. Bd. of Educ., 526 U.S. 629 (1999) (student‑on‑student Title IX liability standard)
- Jackson v. Birmingham Bd. of Educ., 544 U.S. 167 (2005) (private cause of action for Title IX retaliation)
- NCAA v. Smith, 525 U.S. 459 (1999) (receipt of federal assistance through an intermediary counts for recipient status)
- U.S. Dep't of Transp. v. Paralyzed Veterans of Am., 477 U.S. 597 (1986) (limits on following federal aid beyond intended recipient)
- Grove City Coll. v. Bell, 465 U.S. 555 (1984) (recipient concept under federal‑assistance statutes)
- Feminist Majority Found. v. Hurley, 911 F.3d 674 (4th Cir. 2018) (Title IX application to private schools receiving federal assistance)
- Jennings v. Univ. of N.C., 482 F.3d 686 (4th Cir. 2007) (Title IX recipient element and standards)
- Thompson v. N. Am. Stainless, LP, 562 U.S. 170 (2011) (third‑party retaliation theory)
- In re Gateway Radiology Consultants, P.A., 983 F.3d 1239 (11th Cir. 2020) (context on SBA section 7(a)/PPP structure)
- Springfield Hosp., Inc. v. Guzman, 28 F.4th 403 (2d Cir. 2022) (PPP as SBA loan program treated under section 7(a))