Case Information
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
____________________________________________
EMILIO ESPEJO, individually and on behalf of
all others similarly situated ; ALEC FABER,
individually and on behalf of all others similarly
situated ; and AHNAF RAHMAN, individually and
on behalf of all others similarly situated ,
Plaintiffs, vs. 3:20-CV-467
(MAD/ML) CORNELL UNIVERSITY,
Defendant.
____________________________________________ OF COUNSEL:
APPEARANCES: CHERUNDOLO LAW FIRM, PLLC JOHN C. CHERUNDOLO, ESQ. AXA Tower One, 15th Floor
100 Madison Street
Syracuse, New York 13202
Attorneys for Plaintiffs
ANASTOPOULO LAW FIRM, LLC ROY T. WILLEY, IV, ESQ.
32 Ann Street ERIC POULIN, ESQ.
Charleston, South Carolina 29403 BLAKE G. ABBOTT, ESQ.
Attorneys for Plaintiffs
BURSOR & FISHER, P.A. MAX STUART ROBERTS, ESQ. 888 7th Avenue PHILIP LAWRENCE FRAIETTA, ESQ. 3rd Floor
New York, New York 10106
Attorneys for Plaintiffs
BURSOR & FISHER, P.A. SARAH WESTCOT, ESQ.
701 Brickell Avenue
Suite 1420
Miami, Florida 33131
Attorneys for Plaintiffs TOPTANI LAW PLLC EDWARD TOPTANI, ESQ.
375 Pearl Street
Ste 1410
New York, New York 10038
Attorneys for Plaintiffs
LYNN LAW FIRM, LLP KELSEY W. SHANNON, ESQ. M&T Bank Building
101 South Salina Street, Suite 750
Syracuse, New York 13202
Attorneys for Plaintiffs
CARLSON LYNCH, LLP EDWARD CIOLKO, ESQ.
1133 Penn Avenue GARY F. LYNCH, ESQ.
Ste 5th Floor JAMES PATRICK MCGRAW, III, ESQ. Pittsburgh, Pennsylvania 15222
Attorneys for Plaintiffs
CARLSON LYNCH, LLP KATHLEEN P. LALLY, ESQ.
111 W. Washington Street
Suite 1240
Chicago, Illinois 60602
Attorneys for Plaintiffs
CORNELL UNIVERSITY VALERIE L. DORN, ESQ.
OFFICE OF COUNSEL ADAM PENCE, ESQ.
300 CCC Building
235 Garden Avenue
Ithaca, New York 14853
Attorneys for Defendant
JENNER, BLOCK LAW FIRM - ISHAN KHARSHEDJI BHABHA, ESQ. DC OFFICE LAUREN J. HARTZ, ESQ.
1099 New York Avenue, Suite 900
Washington, DC 20001
Attorneys for Defendant
JENNER & BLOCK LLP PAUL RIETEMA, ESQ.
353 N. Clark Street
Chicago, Illinois 60654
Attorneys for Defendant
Mae A. D'Agostino, U.S. District Judge:
MEMORANDUM-DECISION AND ORDER
I. INTRODUCTION
On April 23, 2020, Olivia Haynie filed this putative class action against Defendant Cornell University alleging breach of contract, unjust enrichment, and conversion stemming from Cornell's decision to close its campus and transition to online learning in response to the COVID- 19 pandemic. See Dkt. No. 1. On April 25, 2020 and May 31, 2020, Plaintiffs Faber and Rahman, respectively, filed nearly identical class action complaints against Cornell University. See Faber v. Cornell , No. 3:20-CV-471, Dkt. No. 1 (N.D.N.Y.); Rahman v. Cornell University , No. 3:20-CV-592, Dkt. No. 1 (N.D.N.Y.). On August 18, 2020, Plaintiffs filed a motion to consolidate these actions. See Dkt. No. 27. The motion to consolidate was granted, and, soon thereafter, Plaintiffs filed an amended consolidated complaint. See Dkt. Nos. 32, 33. In the amended complaint, Plaintiffs added Emilio Espejo as a Plaintiff to this action. See Dkt. No. 33. On October 29, 2020, Plaintiff Haynie voluntarily dismissed her claim. See Dkt. Nos. 36, 37.
On November 10, 2020, Defendant filed a motion to dismiss Plaintiffs' complaint in its entirety. Dkt. No. 38. Plaintiffs oppose the motion. See Dkt. No. 39. At the parties' request, the Court held oral argument on the motion on February 8, 2021. Presently before the Court is Defendant's motion to dismiss. For the following reasons, Defendant's motion is granted in part and denied in part.
II. BACKGROUND
Plaintiffs bring this case as a result of Cornell's decision not to issue certain refunds for the Spring 2020 semester after all classes were transitioned to an online format, most campus buildings were closed, and students were required to leave campus due to the COVID-19 pandemic. Plaintiffs are students, or parents of students, who were enrolled at Cornell University during the Spring 2020 term. See Dkt. No. 33 at ¶¶ 9-11, 18.
Cornell's Spring 2020 semester began on January 21, 2020. See id. at ¶ 36. As a result of
the COVID-19 pandemic, Defendant announced on March 13, 2020, that it was suspending all classes effective immediately. See id. at ¶ 39. The same day, Cornell announced that all undergraduate and most professional students were required to leave campus no later than March 29, 2020, unless the students received an exception. See id. at ¶ 40. The announcement also "strongly encouraged" students to leave campus prior to the deadline. See id. Although not alleged in the complaint, Defendant states that online instruction of students began on April 6, 2020. Dkt. No. 38-1 at 11.
Cornell has since announced that it has, or soon will, issue refunds on room and board fees to be pro-rated from the March 29, 2020 closure. See id. at ¶ 50. However, Cornell has refused to offer refunds on tuition or other fees for the Spring 2020 term. See id. at ¶¶ 47-49. Plaintiffs bring this action on behalf of all people who paid tuition, fees, and room and board for – or on behalf of – students enrolled in classes for the Spring 2020 term. at ¶ 55.
III. DISCUSSION
A. Legal Standard
A motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) of the Federal
Rules of Civil Procedure tests the legal sufficiency of the party's claim for relief.
See Patane v.
Clark
,
To survive a motion to dismiss, a party need only plead "a short and plain statement of the
claim,"
see
Fed. R. Civ. P. 8(a)(2), with sufficient factual "heft to 'sho[w] that the pleader is
entitled to relief[,]'"
Bell Atl. Corp. v. Twombly
,
Under Article III of the United States Constitution, a federal court may only exercise
subject matter jurisdiction over cases in which the plaintiff has standing.
See Lujan v. Defenders
of Wildlife
,
To establish an "injury in fact," a plaintiff must show that he or she suffered "an invasion
of a legally protected interest which is (a) concrete and particularized, and (b) 'actual or imminent,
not "conjectural" or "hypothetical."'"
Lujan
,
Here, Plaintiff Espejo's standing is based solely on the fact that he paid tuition for his
child. Dkt. No. 33 at ¶ 9; Dkt. No. 39 at 31-32. Plaintiffs do not allege that Plaintiff Espejo's
child is a minor, that he directly contracted with Cornell, or that he is an intended third-party
beneficiary.
See generally
Dkt. No. 33. Without such allegations, Plaintiff Espejo cannot
demonstrate injury-in-fact. Therefore, this Court, as have many others considering similar issues,
finds that Plaintiff Espejo does not have standing to advance his claim.
See Bergeron v.
Rochester Inst. of Tech.
, No. 20-CV-6283,
"To state a claim for breach of contract under New York law, 'the complaint must allege:
[(1)] the formation of a contract between the parties; [(2)] performance by the plaintiff; [(3)]
failure of defendant to perform; and [(4)] damages.'"
Nick's Garage, Inc. v. Progressive Cas. Ins.
Co.
,
"Under New York Law, 'a contract implied in fact may result as an inference from the
facts and circumstances of the case, although not formally stated in words, and is derived from the
"presumed" intention of the parties as indicated by their conduct.'"
Leibowitz v. Cornell
University
,
"Under New York law, an implied contract is formed when a university accepts a student
for enrollment: if the student complies with the terms prescribed by the university and completes
the required courses, the university must award him a degree."
Papelino v. Albany College of
Pharm. of Union Univ.
,
1. Tuition
During oral argument, both parties agreed that, under New York law, an implied contractual relationship exists between the parties. The dispute surrounds the extent of the parties' agreement. [1] Cornell argues that Plaintiffs' breach of contract claim based on Cornell's decision not to refund tuition fails because Plaintiffs cannot identify a sufficiently specific promise for in- person instruction or a refund absent such instruction. See Dkt. No. 38-1 at 14. In opposition, Plaintiffs argue that a number of written and oral statements from Cornell's website, academic catalogs, student handbooks, correspondence, marketing materials, and other circulars, bulletins and publications combine to create a specific promise for in-person instruction. See Dkt. No. 33 at ¶ 73; Dkt. No. 39 at 12-13.
In support of their claim, Plaintiffs point to Cornell's Class Roster, which indicated whether a course is scheduled to be taught in-person or online and included a building and classroom assignment. See Dkt. No. 33 at ¶¶ 12-13, 26-27, 111-13. Such allegations have been found insufficient to constitute a specific promise for in-person instruction. See Hassan , 2021 WL 293255, at *5-6. Plaintiffs also rely on Cornell's academic policies, specifically pointing to a section entitled "Attendance and Class Meeting Times." See Dkt. No. 33 at ¶ 28. However, the document referenced by Plaintiffs makes no promise that classes must be in-person. See id. In fact, even the quoted portions of the policy lack any reference to in-person classes. See id. Plaintiffs quote a portion of the policy which states that "[s]tudents are expected to be present throughout each semester at all meetings of classes for which they are enrolled." (emphasis added). Noticeably absent is the promise that the "meetings of classes" must be held in person.
Plaintiffs also cite to various marketing materials which discuss campus activities and
groups; the beauty of Ithaca, New York and the Finger Lakes Region; diversity among Cornell's
population; campus amenities, including access to library spots, study rooms, cafes, and dining
halls; student/teacher ratios; and sports and intramural leagues.
See id.
at ¶¶ 23, 80, 81-86, 98-
108. Courts considering similar allegations regarding access to libraries and campus activities
have found that such statements do not constitute a promise for in-person instruction.
See Oyoque
v. DePaul Univ.
, No. 20 C 3431,
Plaintiffs also cite to vague statements from Cornell or members of its staff to support their claim. For example, Plaintiffs attribute the following statement to Cornell: "[W]e don't separate life and education. At Cornell, living is learning." See Dkt. No. 33 at ¶ 87. Plaintiffs also cite to a letter from Cornell's Associate Provost of Enrollment, which states: "I look forward to having you join[] with the students and faculty here who, together, contribute to the tradition of excellence, intellectual ingenuity, and diversity that has always distinguished Cornell University." at ¶ 94. The Court finds that neither of these statements make any promise that instruction will occur in-person.
Although the Court is not persuaded that the vast majority of Plaintiffs' allegations give rise to a contractual agreement for in-person instruction, one of Plaintiffs' allegations is notable. In their complaint, Plaintiffs cite to the following portion of Cornell's mission statement: "Cornell's mission is to discover, preserve, and disseminate knowledge; produce creative work; and promote a culture of broad inquiry throughout and beyond the Cornell community ... Within the context of great diversity, a Cornell education comprises formal and informal learning experiences in the classroom, on campus, and beyond." [2] See id. at ¶ 77.
In listing what comprises a Cornell education, Cornell specifically includes "experiences
in the classroom" and "on campus." Courts considering similar allegations have found that the
plaintiffs plausibly alleged a promise for in-person instruction.
McCarthy v. Loyola
Marymount Univ.
, No. 20-CV-4668,
Although motions such as these are currently being decided across the country, there is
very little precedent applying New York contract law to these issues. In support of its motion,
Defendant cites to the recent decision in
Hassan
,
In Ford , Rensselaer Polytechnic Institute ("RPI") operated a program that relied on a "time-based clustering and residential commons program" and that required students to be on campus for specific portions of the program. See id. at *4. Additionally, RPI issued a plan in which they made a number of assertions that began with the phrase "we will," and were ultimately found to be plausible allegations of a promise for in-person instruction. at *4-5. Certainly, Cornell has not made as many assertions with respect to in-person education as RPI did, nor is there any indication that Cornell requires students to reside on campus for any part of their education. However, both this case and Ford include an explicit statement from the university indicating that the education for which Plaintiffs paid tuition includes an on-campus component.
At this early stage, drawing all reasonable inferences in Plaintiffs' favor, the Court finds that Plaintiffs have plausibly alleged a specific promise for in-person instruction. Accordingly, Cornell's motion to dismiss is denied with respect to this claim.
2. Room and Board
Plaintiffs allege that the parties entered into a contract which provided that Plaintiffs would pay fees for room and board in exchange for access to on-campus housing and/or dining for the Spring 2020 semester. Dkt. No. 33 at ¶ 176. Plaintiffs further allege that they upheld their end of the bargain, but that Defendants constructively evicted them beginning on March 13, 2020. See id. at ¶¶ 177-78. However, as Plaintiffs acknowledge, Defendant has provided refunds for room and board pro-rated from March 29, 2020. See id. at ¶¶ 178-184. It is Plaintiffs' position that they should receive refunds pro-rated from the date that they were constructively evicted: March 13, 2020. See id.
The Court notes that although students were encouraged to leave campus as soon as
possible, they were not required to leave until March 29, 2020.
See id.
at ¶¶ 40, 181-84. Such
encouragement, absent allegations that Cornell attempted to prevent Plaintiffs from accessing
their housing before March 29, 2020, is not sufficient to constitute a breach of contract. As there
is no such allegation in this case, Plaintiffs have not sufficiently alleged breach with respect to
this claim.
See In re Boston Univ. COVID-19 Refund Litig.
, — F. Supp. 3d —,
3. Fees
In the complaint, Plaintiffs allege that they were charged a mandatory Student Activity Fee and other optional fees such as fitness center fees and student health fees. Dkt. No. 33 at ¶ 147. Plaintiffs further claim that they entered into a contract with Cornell which provided that, in exchange for payment of the fees, Cornell would provide or make available the services, access, and/or programs related to those fees. See id. at ¶ 152. Finally, Plaintiffs allege that Cornell breached those agreements by failing to provide access to those facilities and services for a portion of the Spring 2020 semester but has refused to offer refunds of those fees. at ¶¶ 153-58.
Defendant, citing
Chong v. Northeastern University
, — F. Supp. 3d —, 2020 WL
5847626, * 4 (D. Mass. 2020), argues that Plaintiffs' allegations regarding the fees are too vague
and conclusory to survive a motion to dismiss.
See
Dkt. No. 38-1 at 22. It is true that the
plaintiffs in
Chong
alleged the amount of each fee.
See Chong
,
Here, Plaintiffs allege that the fees at issue provide students with "services, access,
benefits, and programs for which the fees were described and billed."
See
Dkt. No. 33 at ¶¶ 150,
152. For example, the complaint alleges the following: "the Cornell Fitness Center []Membership
'provides
access
to all group fitness classes and our five fitness centers.'" at ¶ 151
(emphasis added). Accordingly, drawing all reasonable inferences in Plaintiffs' favor, the Court
finds that Plaintiffs have plausibly alleged a breach of contract claim with respect to these fees.
See Chong
,
D. Unjust Enrichment
To assert a viable claim for unjust enrichment under New York law, a claimant must
allege facts establishing: "(1) that the defendant benefitted; (2) at the plaintiff's expense; and (3)
that equity and good conscience require restitution."
Kaye v. Grossman
,
The Federal Rules of Civil Procedure permit alternative pleading at this stage of the litigation. See Fed. R. Civ. P. (8)(d) ("A party may set out two or more statements of a claim or defense alternatively or hypothetically, either in a single count or defense or in separate ones"). Thus, "at this early stage of the litigation, it is reasonable to permit plaintiffs to plead unjust enrichment claims in the alternative to their breach of contract claims." Casey v. Citibank , 915 F. Supp. 2d 255, 265 (N.D.N.Y. 2013) (citation omitted). However, Defendant also argues that Plaintiffs have not sufficiently alleged an unjust enrichment claim. Dkt. No. 38-1 at 27.
When considering an unjust enrichment claim, "[t]he mere fact that a benefit is bestowed
on a defendant is insufficient."
Hassan
,
Here, Plaintiffs allege that Defendant is in a much better position to bear the financial burden of the COVID-19 pandemic than the students. However, Plaintiffs have not alleged, nor can the Court conclude, that Defendant's refusal to refund tuition and fees and offer only partial refunds of room and board was tortious or fraudulent. See id. at *10-11. Accordingly, the Court finds that Plaintiffs have not sufficiently pleaded that equity and good conscience require restitution. Thus, Defendant's motion to dismiss Plaintiffs' unjust enrichment claims is granted. E. Conversion
Under New York law, "[c]onversion is 'an unauthorized assumption and exercise of the
right of ownership over [property] belonging to another to the exclusion of the owner's rights.'"
Traffix v. Herold
,
When money, rather than a chattel, is the property at issue, it must be specifically
identifiable.
See 9310 Third Ave. Assoc., Inc. v. Schaffer Food Serv. Co.
,
Here, Cornell correctly argues that Plaintiffs' conversion claim must fail because it is
based on the same allegations as those alleged in their breach of contract claim.
See
Dkt. No. 38-
1 at 26. Plaintiffs allege that they paid "tuition fees and others" and that Cornell failed to provide
the services for which Plaintiffs paid.
See
Dkt. No. 33 at ¶¶ 205-08. The relief sought for this
claim is the return of the paid tuition and fees.
See id.
at ¶ 214. These allegations and the relief
sought are the same as those underlying Plaintiffs' breach of contract claims. at ¶¶ 67-129,
145-59, 174-87. Thus, Plaintiffs' conversion claim must be dismissed.
See Hassan
, 2021 WL
293255, at *11-12;
AD Rendon Communs., Inc.
,
Alternatively, Plaintiffs have not plausibly alleged that the converted money is specifically
identifiable. Although Plaintiffs allege that such payments were made to a specific fund for
specific and identifiable purposes, this allegation is not plausible.
See
Dkt. No. 33 at ¶ 205. As
Cornell correctly notes, Plaintiffs have failed to identify a cognizable property interest for
purposes of a conversion claim. Certainly, an "in-person, on campus experience" is the sort of
intangible property which may not serve as the basis of a conversion claim.
See Hassan
, 2021
WL 293255, at *11 (citing
Sun Gold, Corp. v. Stillman
,
F. New York General Business Law Sections 349 and 350
Here, Plaintiffs allege that Cornell's marketing materials created a reasonable expectation that Plaintiffs would receive an in-person educational opportunity and on-campus experience. Dkt. No. 33 at ¶¶ 221-24. Plaintiffs allege that such promises constitute unfair business practices and were deceptive and injurious to Plaintiffs in light of Cornell's closure and transition to online learning. at ¶¶ 226-27. Cornell argues that Plaintiffs' General Business Law claims should be dismissed because they are improperly based on an alleged failure to disclose a hypothetical possibility and, alternatively, no reasonable consumer acting reasonably under the circumstances would be misled by Cornell's statements. See Dkt. No. 38-1 at 29-30. In response, Plaintiffs argue only that the claims are sufficiently pled. Dkt. No. 39 at 28-30.
Omissions are actionable under the New York General Business Law "'where the business
alone possesses material information that is relevant to the consumer and fails to provide this
information.'"
In re Sling Media Slingbox Adver. Litig.
,
It cannot reasonably be said that Cornell had knowledge that a global pandemic would
force the closure of colleges and universities across the country and require transition to online
learning. Nor have Plaintiffs plausibly alleged that Cornell was aware of the possibility of a
pandemic and failed to disclose that information to potential students. An unforeseen pandemic
forced the closure of institutions of all kinds across the world. The Governor of New York issued
an executive order prohibiting in person, on-campus instruction.
See Hassan
,
IV. CONCLUSION
After carefully reviewing the entire record in this matter, the parties' submissions and the applicable law, and for the above-stated reasons, the Court hereby
ORDERS that Defendant's motion to dismiss (Dkt. No. 38) is GRANTED in part and DENIED in part [3] ; and the Court further
ORDERS that the Clerk of the Court shall serve a copy of this Memorandum-Decision and Order on the parties in accordance with the Local Rules.
IT IS SO ORDERED.
Dated: March 3, 2021
Albany, New York
Notes
[1] Cornell also attempts to construe Plaintiffs' breach of contract claim as an educational
malpractice claim. Dkt. No. 38-1 at 23. As the parties are aware, educational malpractice
claims are impermissible under New York law.
See Papelino
,
[2] Although the Court accepts this factual allegation as true, as it must, the Court notes that it has not been provided a copy of the entire mission statement or any information on the date when it became effective. Interestingly, the language from the mission statement went unmentioned by the parties in briefing on this motion and at oral argument.
[3] The following claims survive this motion to dismiss: Plaintiffs' breach of contract claims with respect to tuition and miscellaneous fees.