Lannan v. Bd. of Governors of the Univ. of N.C., 316PA22

In Fall 2020, North Carolina State University (NCSU) and UNC-Chapel Hill (UNC-CH) shifted classes online and significantly restricted on-campus activities due to COVID-19, while keeping mandatory fees and some parking fees fully in place without adjustment.
Students Lannan and Kuehn (plaintiffs) sued the UNC Board of Governors seeking refunds for mandatory student fees and parking permits, claiming breach of contract.
Plaintiffs alleged that the itemized bills, website communications, and fee descriptions constituted express contracts for specific services and access; the universities' denial of those due to pandemic restrictions constituted breach.
The Board moved to dismiss based on sovereign immunity, arguing that no enforceable contract existed due to statutory requirements and that sovereign immunity was a bar.
The trial court allowed the contract claims to proceed but dismissed a separate constitutional 'Corum' claim; the Court of Appeals affirmed, finding the complaint alleged at least an implied-in-fact contract sufficient to overcome immunity.
The Supreme Court took up discretionary review, focusing on whether express or implied contracts existed, if sovereign immunity applied, and if the complaint sufficiently stated claims.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Do mandatory fees form the basis of a contract, or are they purely statutory?	Fees, through itemized bills and communications, are contractual offers for services.	The fees are mandated by statute, more like taxes, and cannot be contractual.	Did not consider statutory argument (deemed waived on appeal).
Does sovereign immunity bar breach of contract claims here?	Sovereign immunity is waived by entering valid contracts.	Only express contracts waive immunity; no express contract pled.	Sovereign immunity is waived by sufficiently pled express contracts.
Did the complaint allege enforceable contracts (express or implied)?	Plaintiffs allege express (and alternatively, implied-in-fact) contracts via communications and payment.	At best, only implied contracts alleged, which do not waive immunity except in employment.	Complaint alleges express contracts; suffices at pleading stage.
Did plaintiffs plead sufficient facts to state a contract claim under Rule 12(b)(6)?	Allegations of offer, acceptance, consideration, and breach are sufficient.	No meeting of the minds; posted policies state no refunds, some fees don't promise personal services.	Complaint survives motion; plaintiffs have stated facially sufficient contract claims.

Smith v. State, 289 N.C. 303 (N.C. 1976) (state waives sovereign immunity by entering valid contracts)
Whitfield v. Gilchrist, 348 N.C. 39 (N.C. 1998) (sought to distinguish express from implied-in-fact contracts for immunity waiver)
Corum v. University of North Carolina, 330 N.C. 761 (N.C. 1992) (sovereign immunity cannot bar direct constitutional claims)
Guthrie v. N.C. State Ports Auth., 307 N.C. 522 (N.C. 1983) (waivers of sovereign immunity are not lightly inferred)
Creech v. Melnik, 347 N.C. 520 (N.C. 1998) (implied-in-fact contracts are generally enforceable like express contracts)
Wray v. City of Greensboro, 370 N.C. 41 (N.C. 2017) (valid contract waives State’s sovereign immunity to contract’s extent)
Dodds v. St. Louis Union Tr. Co., 205 N.C. 153 (N.C. 1933) (elements of contract: offer and acceptance)
Snyder v. Freeman, 300 N.C. 204 (N.C. 1980) (courts look to conduct to determine implied-in-fact contracts)