Payne v. Howard University, Civil Action No. 2020-3792

Two putative class actions filed after universities canceled in-person Spring 2020 instruction due to COVID-19: Montesano v. The Catholic University of America and Payne v. Howard University.
Plaintiffs allege universities moved classes online, closed campus facilities, expelled students from campus, and retained tuition and campus-related fees without reimbursement.
Claims: breach of contract and, alternatively, unjust enrichment (both cases); conversion claim (Howard only).
Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(6), arguing academic-judgment deference, reservation-of-rights clauses in catalogs, and lack of an enforceable promise.
Court held plaintiffs plausibly pleaded implied contracts (including access to campus and in-person education) and unjust enrichment; denied Catholic University’s motion; denied in part and granted in part Howard’s motion (conversion dismissed).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether plaintiffs plausibly alleged a contract obligating in-person education	Catalogs, course listings, and university communications created an express or implied contract promising in-person services in exchange for tuition	Catalog disclaimers and reservation-of-rights mean no enforceable promise; courts should defer to universities' academic judgments	Court: Plaintiffs plausibly alleged an implied contract for in-person services; claims survive 12(b)(6) as to breach
Whether reservation-of-rights/disclaimers bar plaintiff claims	Reservations do not reasonably permit wholesale elimination of fundamental campus/in-person benefits; implied covenant of good faith limits reservations	Broad reservation language lets universities change formats and avoid breach	Court: Reservations allow some changes but cannot render core promises illusory; scope undecided on pleadings
Whether unjust enrichment is a viable alternative remedy	Tuition/fees conferred a benefit that defendants retained unjustly when services were removed	Presence of a (potential) contract undermines unjust enrichment	Court: Unjust enrichment plausibly pleaded as an alternative and may proceed
Whether conversion claim (Howard) is cognizable	Plaintiffs sought recovery for retained tuition as conversion of funds	No specific, identifiable fund was alleged	Court: Conversion claim dismissed for failure to allege an identifiable fund

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (application of plausibility standard)
Tsintolas Realty Co. v. Mendez, 984 A.2d 181 (D.C. 2009) (elements of breach of contract)
Basch v. George Washington Univ., 370 A.2d 1364 (D.C. 1977) (university publications can form part of student contract)
Allworth v. Howard Univ., 890 A.2d 194 (D.C. 2006) (courts must not substitute judgment for academic decisions)
M & G Polymers USA, LLC v. Tackett, 574 U.S. 427 (2015) (avoid contract constructions rendering promises illusory)
Paul v. Howard Univ., 754 A.2d 297 (D.C. 2000) (implied covenant of good faith and fair dealing)
Eisenberg v. Eisenberg, 357 A.2d 396 (D.C. 1976) (discussion of good-faith limitation on approval discretion)
News World Commc’ns, Inc. v. Thompsen, 878 A.2d 1218 (D.C. 2005) (elements of unjust enrichment)
Vila v. Inter-Am. Inv., Corp., 570 F.3d 274 (D.C. Cir. 2009) (unjust enrichment may be available despite contractual relationships)
EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621 (D.C. Cir. 1997) (materials courts may consider on a 12(b)(6) motion)
Edwards v. Ocwen Loan Servicing, LLC, 24 F. Supp. 3d 21 (D.D.C. 2014) (conversion requires a specific identifiable fund)