221 N.E.3d 1214
Ind.2023Background:
- Spring 2020: Ball State moved all in-person instruction and services online in response to COVID-19 executive orders; students (including Keller Mellowitz) had paid tuition and mandatory fees.
- May 1, 2020: Mellowitz sued Ball State for breach of contract and unjust enrichment, seeking tuition/fee recovery and to represent a class of similarly situated students.
- April 29, 2021: Indiana enacted Pub. L. No. 166-2021 (retroactive to March 1, 2020), including I.C. § 34-12-5-7, which bars class actions against covered entities for contract or unjust enrichment claims arising from COVID-19.
- Ball State moved under Trial Rule 23(D)(4) to require Mellowitz to amend his complaint to eliminate class allegations; the trial court granted the motion but allowed Mellowitz to pursue his individual claims.
- Court of Appeals reversed, finding the statute conflicted with Trial Rule 23; Indiana Supreme Court granted transfer and affirmed the trial court, upholding the statute as constitutional.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Separation of powers — Legislature may not override court rules governing class actions | Section 7 improperly usurps the judiciary by displacing Trial Rule 23 and governing class procedures | Section 7 is a valid legislative enactment that predominantly furthers public policy (limit pandemic liability), not judicial administration | Statute is constitutional under Church framework: it predominantly furthers public policy and does not impermissibly usurp judicial power |
| Takings — retroactive elimination of class action is an uncompensated taking of a vested cause of action | Retroactive ban takes away an accrued cause of action/property (class remedy) without just compensation | No property right in the procedural device of a class action; underlying individual claims remain | No taking: a class action is a procedural device, not a vested property right; Mellowitz can still pursue individual claims |
| Contracts Clause — statute impairs contractual obligations between student and university | Barring class relief substantially impairs contract enforcement and thus the contract itself | Section 7 does not alter Ball State’s contractual obligations to individual students and leaves individual remedies intact | No unconstitutional impairment: contractual rights between Mellowitz and Ball State remain enforceable via individual suit |
Key Cases Cited
- Church v. State, 189 N.E.3d 580 (Ind. 2022) (announces predominant-purpose test for determining whether statute is substantive or procedural)
- Cheatham v. Pohle, 789 N.E.2d 467 (Ind. 2003) (accrued causes of action may qualify as property for takings analysis)
- Guthrie v. Wilson, 162 N.E.2d 79 (Ind. 1959) (statute shortening limitations may be treated prospectively to avoid subverting vested rights)
- Bonney v. Ind. Fin. Auth., 849 N.E.2d 473 (Ind. 2006) (Public Lawsuit Statute as example where legislature imposed class-procedural rules to protect public projects)
- Microsoft Corp. v. Baker, 582 U.S. 23 (2017) (order striking class allegations is functionally equivalent to denial of class certification)
- Creative Montessori Learning Ctrs. v. Ashford Gear LLC, 662 F.3d 913 (7th Cir. 2011) (class certification can create coercive settlement pressure due to magnitude of potential damages)
