STUDENT A, STUDENT C, and STUDENT D, individually and on behalf of others similarly situated v. LIBERTY UNIVERSITY, INC., d/b/a, LIBERTY UNIVERSITY
Case No.: 6:20-cv-00023
5/5/2022
Judge Norman K. Moon
CLERKS OFFICE U.S. DIST. COURT AT LYNCHBURG, VA FILED JULIA C. DUDLEY, CLERK BY: s/ CARMEN AMOS DEPUTY CLERK
This is a putative class action case brought by several students at Liberty University, seeking a refund for various fees and room and board they paid for the Spring 2020 semester. Plaintiffs argue that they and other class members did not receive the benefit of those on-campus activities and services that they paid for, when, they argue, Liberty effectively closed its campus that semester in response to the COVID-19 pandemic.
As this case is before the Court on Liberty‘s motion to dismiss, the Court must accept the truth of factual allegations pleaded in the amended complaint. So doing, the Court concludes that Plaintiffs have stated valid, plausible claims for breach of contract and unjust enrichment against Liberty under Virginia law. However, Plaintiffs’ claims for conversion and that Liberty violated the Virginia Consumer Protection Act fail as a matter of law.
Background1
Liberty University is an evangelical Christian, liberal arts institution in Lynchburg, Virginia. Am. Compl. ¶ 23, Dkt. 17. It began Spring semester classes on January
Plaintiffs allege that from January to March 2020, Liberty leadership had “dismissed the seriousness of the pandemic,” including calling the response an “overreaction.” Id. ¶ 38; id. ¶ 3. Nonetheless, in March 2020, Liberty announced that on account of the COVID-19 pandemic, it would “transition most residential classes to an online format starting . . . March 23 [2020].” Id. ¶ 2.
The “students who lived in on-campus housing were not expressly forced to move out of their housing.” Id. Indeed, Plaintiffs allege that Liberty “purport[ed] to remain open while classes ha[d] moved online.” Id. But Liberty had “stopped providing the services and activities for which Plaintiffs and the other Class members paid fees.” Id. ¶ 5. For instance, Plaintiffs allege that they and other class members had paid for the Spring 2020 semester “fees includ[ing] campus fees and the cost of room and board,” which fees included $3,780 - $4,450 for “dining plans,” $4,750 to $8,000 per year in “housing,” $285 in an optional “auto registration fee,” $340 for a “student health fee,” $770 for the undergraduate “activity/student center fee” and $285 per semester for the graduate students, “course fees” that varied by program, and specific “activity fees” for the Divinity School, Law School, and College of Osteopathic Medicine (as well as other fees for the College). Id. ¶ 31. Some students had also paid for parking decals, which fees Liberty refused to refund. Id. ¶ 32. While Liberty had “agreed to provide the services or activities that each fee was intended to cover,” id. ¶ 33, Liberty “stopped providing the services and activities for which the Plaintiffs and other Class members paid fees,” id. ¶ 5. Liberty “converted all meals to take-out only,” “closed all indoor recreation and fitness centers,” “moved all Convocations and Campus Church online,” “ended student organization activities,” “suspended team sports,” “closed campus to visitors,” “encouraged work from home for staff,” “postponed commencement,” and “prohibited gatherings of ten or more people.” Id. ¶ 6. On or about March 23, 2020, Liberty had moved most of its residential classes to an online format. Id. ¶ 43. Accordingly, faced with a campus that had “effectively been shut down,” Plaintiffs allege that “most students chose to leave campus.” Id. ¶ 8.
Plaintiffs allege that Liberty has “refused to refund to students and their families the unused portions of the fees that they each paid to cover the costs of certain on-campus services and activities, which [were] no longer available to students.” Id. ¶ 10. Any refunds provided were “a mere fraction” of what Liberty owes for the unused fees. Id. Plaintiffs allege that Liberty opted instead to offer a $1,000 credit as a “customer service measure,” to students who chose not to return to their campus residence halls for the remainder of the Spring 2020 semester, which would be applied to Fall 2020 charges. Id. ¶¶ 12, 48. The credit was unavailable to students who were not returning to Liberty in Fall 2020. Id. ¶ 48. Eligible students had to decide whether to take the credit by March 28, 2020. Id. Otherwise, “Liberty has refused to provide its students and their families with any refund of the miscellaneous campus fees they paid for the Spring 2020 semester that were unused or for which they had not received a benefit.” Id. ¶ 50. Liberty has rejected students’ requests that Liberty return any campus fees. Id. ¶ 53.
This case is brought by three individual plaintiffs2 on behalf of the putative class, identified as Student A, Student C, and Student D.3 Student A is an out-of-state student, who “paid fees for the Spring 2020 semester,” but will not receive benefits from those fees “because Liberty transitioned all of its classes online, shut down on-campus services and activities, and made it so that Student A ha[d] no reason to go to campus . . . .” Id. ¶ 18. Student C and Student D are also out-of-state students, who “paid fees and the cost of room and board for the Spring 2020 semester, the benefits of which [they] will no longer receive, because Liberty transitioned all of its classes online, shut down on-campus services and activities, encouraged or forced students to move out of their on-campus housing, and made it so that [they] ha[d] no reason to go to campus.” Id. ¶ 20–21. Students C and D had not returned to Liberty‘s campus since before Spring break. Id.
Plaintiffs allege that Student A “has not been offered any refund of the fees paid for the Spring 2020 semester.” Id. ¶ 18. Students C and D were “not offered a sufficient refund of the Spring 2020 semester room and board costs, or any refund of the fees paid for the Spring 2020 semester.” Id. ¶ 20–21.
Plaintiffs brought this lawsuit against Liberty, filing the operative amended complaint. See Am. Compl. Therein, Plaintiffs have brought four causes of action against Liberty: breach of contract, unjust enrichment, conversion, and lastly violation of the Virginia Consumer Protection Act (“VCPA“),
Liberty filed two motions in response. First, Liberty filed a Motion to Strike, or in the alternative, Motion for a More Definite Statement. Dkt. 19. Second, Liberty filed a Motion to Dismiss. Dkt. 23. The parties have briefed both motions, Dkts. 20, 22, 31, 32, 35, 36, as well as Plaintiffs’ Motion for Leave to File a Sur-reply, Dkts. 37, 38, and Liberty‘s Motion for Leave to file a Sur-reply, Dkts. 65, 66, 70, and the Court heard oral argument thereon. The parties have since filed numerous notices of supplemental authority, advising the Court of various courts around the Country that have ruled upon some similar claims against colleges and universities. The Court appreciates the capable briefing and argument of the parties, and these motions are ripe for resolution.4
Standard of Review
“A motion to dismiss pursuant to
Under
- a short and plain statement of the grounds for the court‘s jurisdiction, unless the court already has jurisdiction and the claim needs no new jurisdictional support;
- a short and plain statement of the claim showing that the pleader is entitled to relief; and
- a demand for the relief sought, which may include relief in the alternative or different types of relief.
Under
Motion to Dismiss
1. Breach of Contract
Liberty argues that Plaintiffs failed to state a claim for beach of contract. Dkt. 22 at 6–8; Dkt. 35 at 3–4. Liberty contends that Plaintiffs have only “vaguely” alleged that they “entered into contracts with Liberty” under which Plaintiffs would pay fees and “Liberty would provide services and make available activities to students.” Dkt. 22 at 6 (quoting Am. Compl. ¶ 71). But, Liberty writes, Plaintiffs have not attached or identified any contracts encompassing those terms. Dkt. 22 at 6. In Liberty‘s view, Plaintiffs’ identification of “examples” of fees students paid for the 2019-2020 academic year “fails to identify which fees Plaintiffs actually paid under their individual student contract(s) for the Spring 2020 semester, the amount of those fees, what they were supposed to receive in return for those fees, and what services they did not receive that they were supposed to receive.” Id. (citing Am. Compl. ¶¶ 18–21, 31–33). Thus, Liberty argues that Plaintiffs have failed to identify the breach of any identifiable promise or contractual provision that Liberty breached, which renders the allegation of breach of contract just a bare legal conclusion that should be dismissed. Id. at 6–7.
Plaintiffs contend that they stated a valid breach of contract claim. Dkt. 32 at 4–6. In Plaintiffs’ telling, they have alleged “a very simple contract claim, supported by adequate and plausible factual allegations.” Id. at 5. Namely, that “Liberty‘s students paid money in return for access to services or activities that each fee was intended to cover,” but that Liberty “breached that contract by either materially altering the nature of those available services (i.e., carry-out only dining) or eliminating them altogether (i.e., the student recreation center),” but yet retained the students’ money. Id. Plaintiffs emphasize Liberty‘s concession that it “does not dispute that various fees at issue in the Amended Complaint arise out of the contractual relationship between Liberty and each individual student.” Id. at 5 (quoting Dkt. 22 at 9 n. 3).
“The elements of a breach of contract are: (1) a legally enforceable obligation of a defendant to a plaintiff; (2) the defendant‘s violation or breach of that obligation; and (3) injury or damage to the plaintiff caused by the breach of obligation.” MCR Fed., LLC v. JB&A, Inc., 808 S.E.2d 186, 195 (Va. 2017) (quoting Filak v. George, 594 S.E.2d 610, 614 (Va. 2004)). In determining the existence of a contract, Virginia law follows familiar principles that “mutuality of assent—the meeting of the minds of the parties—is an essential element of all contracts.” Phillips v. Mazyck, 643 S.E.2d 172, 175 (Va. 2007) (citation omitted). “A contract is legally enforceable only when an offer is accepted and valuable consideration exchanged.” Irving v. PAE Gov‘t Servs., Inc., 249 F. Supp. 3d 826, 837 (E.D. Va. 2017) (citation omitted). Therefore, to allege the existence of an enforceable contract, “there must be mutual assent of the contracting parties to terms reasonably certain under the circumstances in order to have an enforceable contract.” Allen v. Aetna Cas. & Sur. Co., 281 S.E.2d 818, 820 (Va. 1981); see also R.K. Chevrolet, Inc. v. Hayden, 480 S.E.2d 477, 480 (Va. 1997) (“A contract will be enforced if its obligations are reasonably certain.“).
The Court concludes that Plaintiffs have plausibly stated a breach of contract claim. Plaintiffs have not, as Liberty argues, failed to allege reasonably certain material terms of their contractual agreement.
In addition, and also relevant to the second element (the defendant‘s violation or breach of that obligation), Plaintiffs allege that while they paid such fees, see, e.g., id. ¶¶ 18, 20–21, 30–31, 72, Liberty failed to fulfill its end of the bargain to provide such services or activities, see, e.g., id. ¶¶ 1, 5, 18, 20–21, 73. Plaintiffs further explain how Liberty failed to provide many of such services, by, for example, “convert[ing] all meals to take-out only,” “clos[ing] all indoor recreation and fitness centers,” “mov[ing] all Convocations and Campus Church online,” “end[ing] student organization activities,” “suspend[ing] team sports,” “clos[ing] the campus to visitors,” “encourag[ing] work from home for staff,” “postpon[ing] commencement,” and “prohibit[ing] gatherings of ten or more people.” Id. ¶ 6. Plaintiffs allege that they suffered damages in that they were unable to receive the benefits of campus fees and room and board, for which they had paid. See id. ¶¶ 18, 20–21, 30–31, 72–74. The Court further notes Liberty has acknowledged that it “does not dispute that various fees at issue in the Amended Complaint arise out of the contractual relationship between Liberty and each individual student.” Dkt. 22 at 9 n. 3; Dkt. 35 at 5 (Liberty, writing that it “does not dispute that the fees at issue are part of the contractual relationship that Liberty has with each of its students“).
The Court reiterates, on a motion to dismiss, Plaintiffs’ complaint is not required to include “heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face,” Twombly, 550 U.S. at 570, and in making that determination, all factual allegations contained in the complaint are taken as true and all reasonable inferences drawn in Plaintiffs’ favor, King, 825 F.3d at 212. Plaintiffs’ contract claims may—in whole or in part—ultimately be subject to challenge upon consideration of any documents that describe in more detail the terms of payment of fees and provision of the on-campus services, activities and
2. Unjust Enrichment
Plaintiffs’ second claim is for unjust enrichment. Am. Compl. ¶¶ 75–80. Plaintiffs allege that they and other class members paid fees “which were intended to cover services and activities for the Spring 2020 semester,” and that, “[i]n exchange, students were entitled to receive those services and activities for the entire semester.” Id. ¶ 77. However, they allege that on or about March 23, 2020, “Liberty moved classes online and stopped providing services and activities the fees were intended to cover.” Id. ¶ 78. Elsewhere, Plaintiffs described the services and activities at issue, including the range of cost for dining plans, housing, an optional auto registration fee, student health fee, course fees (that vary by program), an “activity/student center fee,” School of Divinity and School of Law activity fees, and College of Osteopathic Medicine activity, lab, insurance and “first year” fees.” Id. ¶¶ 30–31. Plaintiffs allege that Liberty has retained the fees paid by Plaintiffs and other class members, “without providing the services and activities for which they paid and, as such, has been enriched.” Id. ¶ 79. Accordingly, Plaintiffs contend that “[e]quity requires Liberty to return the unused, prorated portion of the fees paid by Plaintiffs and other class members.” Id. ¶ 80.
Liberty argues that Plaintiffs’ unjust enrichment claim fails because they had alleged in count one “that express contracts exist that allegedly cover the same fees that Plaintiffs seek to recover in their unjust enrichment claim.” Dkt. 22 at 9. Liberty “does not dispute that various fees at issue in the Amended Complaint arise out of the contractual relationship between Liberty and each individual student.” Id. at 9 n. 3. Liberty argues that under Virginia law, “the existence of an express contract covering the same subject matter of the parties’ dispute precludes a claim for unjust enrichment.” Id. at 8–9 (quoting originally CGI Fed. Inc. v. FCi Fed., Inc., 814 S.E.2d 183, 190 (Va. 2018)). Accordingly, because “Plaintiffs allege that express contract(s) with Liberty remain in effect and cover the same fees that form the basis of their unjust enrichment claim,” Liberty argues that the unjust enrichment count must be dismissed. Dkt. 22 at 9.
Plaintiffs counter that, “while it is generally true that breach of contract claims and unjust enrichment claims are mutually exclusive at the remedy stage,” they can be pled together in the alternative at the pleading stage of a case. Dkt. 32 at 7. Plaintiff cites Virginia authority for the proposition that, “broad statements such as ‘there can be no unjust enrichment in contract cases’ are ‘plainly erroneous.‘” Id. at 6 (quoting James G. Davis Constr. Corp. v. FTJ, Inc., 841 S.E.2d 642, 648 (Va. 2020)) (citation omitted). Plaintiffs argue the validity, or the enforceability of any contract provisions are expected to be at issue—such as if Liberty does
Unjust enrichment “is an implied contract action based upon the principle that ‘one person . . . may not enrich himself unjustly at the expense of another.‘” CGI Fed. Inc., 814 S.E.2d at 190 (quoting Rinehart v. Pirkey, 101 S.E. 353, 354 (Va. 1919)). A claim for unjust enrichment in Virginia is available when (1) a plaintiff “conferred a benefit” on a defendant; (2) the defendant “knew of the benefit and should reasonably have expected to repay” the plaintiff; and (3) the defendant “accepted or retained the benefit without paying for its value.” T. Musgrove Constr. Co., Inc. v. Young, 840 S.E.2d 337, 341 (Va. 2020). The measure of recovery for an unjust enrichment claim “is limited to the benefit realized and retained by the defendant.” Id.
To be sure and as Plaintiffs concede, they would not be able to “simultaneously recover in contract and in equity.” McPike v. Zero-Gravity Holdings, Inc., 280 F. Supp. 3d 800, 809 (E.D. Va. 2017) (citing cases) (emphasis added). But it is a separate issue whether a plaintiff can be permitted to plead such counts in the alternative. See
This is not a case where neither party contests the “applicability and enforceability” of a contract. Rather, the “the applicability or enforceability” of a contract between Plaintiffs and Liberty governing the terms of Plaintiffs’ payment of the specified fees and Liberty‘s retention thereof, appears to be very much in dispute. For instance, Liberty argues that “Plaintiffs have failed to allege the ‘reasonably certain’ terms of the purported contract(s) they entered into with Liberty, and thus, any conduct by Liberty that could constitute a breach of such contract(s).” Dkt. 22 at 8 (emphasis added).5 Further, Liberty‘s concession about the existence of a contractual relationship is itself limited and equivocal, stating that: “Liberty does not dispute that various fees at issue in the Amended Complaint arise out of the contractual relationship between Liberty and each individual student.” Id. at 9 n. 3 (emphases added). Later, Liberty wrote that it
district court‘s dismissal of students’ unjust enrichment claims. Shaffer v. George Washington Univ., 27 F.4th 754, 767 (D.C. Cir. 2022). The court acknowledged that, “insofar as the terms of the contracts govern the provision and displacement of in-person education and services, as well as the University‘s retention of tuition and fees, the contracts between Plaintiffs and the Universities may preclude an unjust enrichment claim.” Id. (cleaned up). But that did not resolve the issue, because the plaintiffs brought “their unjust enrichment claims as an alternative ground of liability in the event the District Courts conclude that no viable contract governs the provision of in-person education and services.” Id. And the court held that “[i]n these cases, where the nature and enforceability of any promises the Universities made remain unresolved, Plaintiffs’ alternative claims for unjust enrichment may proceed past the pleadings stage,” noting that “[t]he Federal Rules of Civil Procedure expressly allow parties to advance inconsistent and alternative theories of recovery at the pleadings stage.” Id. Accordingly, the court concluded that “[b]ecause Plaintiffs plausibly allege they conferred a benefit—i.e., their tuition and certain fee payments—to the University and that the Universities unjustly retained those benefits, Plaintiffs state claims for unjust enrichment.” Id. at 769.
The Court concludes that, at the motion to dismiss stage of the case, Plaintiffs have adequately pleaded allegations of fact that, taken as true, would state a plausible unjust enrichment claim. Plaintiffs have pleaded that they conferred a benefit on Liberty as by the payment of “various campus fees and the cost of room and board,” Am. Compl. ¶ 31; that Liberty knew of and took Plaintiffs’ fees and agreed to provide services those fees were intended to cover (i.e., dining plans, housing, campus auto registration, etc.), and should reasonably have been expected to pay those fees back, id. ¶¶ 30–34; and that Liberty accepted that benefit (the fees) without providing the accompanying services or reimbursing the fees, id. ¶¶ 49–51. See also id. ¶¶ 1, 8–10, 13, 18, 20–21, 27–34, 49–51, 77–80. Plaintiffs properly pleaded this unjust enrichment count in the alternative, which may proceed past the pleadings stage.
3. Conversion
Plaintiffs’ third claim is for conversion. Am. Compl. ¶¶ 81–89. Therein, Plaintiffs allege that they and other class members “have a right to the services and activities that were supposed to be provided in exchange for their payments of fees to Liberty.” Id. ¶ 83. Plaintiffs allege that Liberty “intentionally interfered with the rights of Plaintiffs and the other Class members” when it moved classes online, discontinued services and activities were
In addition, Plaintiffs allege that Liberty unlawfully “retain[ed] the fees paid by Plaintiffs and other Class members.” Id. ¶ 84. For example, Student B and other class members “demanded the return of the pro-rated, unused fees for the remainder of the Spring 2020 semester.” Id. ¶ 86. Thus, Plaintiffs allege that they Liberty caused them monetary damages “in that [Plaintiffs] paid fees for services and activities that will not be provided,” and they contend that they “are entitled to the return of pro-rated, unused portion of the fees paid, through the end of the semester.” Id. ¶¶ 88–89.
Liberty argues that Plaintiffs’ allegations that it “wrongfully converted their right to receive in-person instruction and participate in activities on campus” is “precisely the type of undocumented intangible assets that cannot support a conversion claim.” Dkt. 22 at 11 (emphases omitted). Further, Liberty contends that while money can “in certain instances, support a conversion claim, the money must take the form of an identifiable fund, such as a bag of money or identifiable settlement proceeds.” Id. (internal quotation marks and citations omitted). Liberty argues that Plaintiffs have failed to include such allegations of an identifiable fund in their complaint. Id. Plaintiffs argue, by contrast, that “[t]he fees withheld by Liberty were meant for a specific, identifiable purpose to provide access to the connected services and activities.” Dkt. 32 at 8. Thus, Plaintiffs contend, these facts sufficiently establish a claim of conversion under the Supreme Court of Virginia‘s decision in PGI, Inc. v. Rathe Prods., Inc., 576 S.E.2d 438, 443 (Va. 2003), in which the court held that failure to turn over settlement proceeds constituted conversion. Dkt. 32 at 8.
Conversion is “any wrongful exercise or assumption of authority over another‘s goods, depriving him of their possession; and any act of dominion wrongfully exerted over property in denial of the owner‘s right, or inconsistent with it.” Mackey v. McDannald, 842 S.E.2d 379, 387 (Va. 2020) (citation omitted, cleaned up). Although a claim for conversion “typically applies only to tangible property,” Virginia law does recognize a claim for conversion of “intangible property rights that arise from or are merged with a document, such as a valid stock certificate, promissory note, or bond“—but to establish such claim, the plaintiff “must have both a property interest in and be entitled to immediate possession of the documented intangible property.” Id. (quotation marks and citations omitted). “The tort of conversion can also apply to money, including settlement proceeds wrongfully withheld.” Grayson v. Westwood Buildings L.P., 859 S.E.2d 651, 679 (Va. 2021). However, “[u]nder Virginia law, money can only be the subject of a conversion claim in limited circumstances, including when it is part of a segregated or identifiable fund.” Northstar Aviation, LLC v. Alberto, 332 F. Supp. 3d 1007, 1020 (E.D. Va. 2018) (internal quotation marks and citation omitted).
Plaintiffs have not pleaded a plausible conversion claim under Virginia law. Liberty‘s alleged deprivation of Plaintiffs’ “right to the services and activities that their fees were intended to be used for,” Am. Compl. ¶ 85 (emphasis added), id. at ¶ 84, does not support a claim for conversion. This does not claim that Liberty engaged in any “wrongful exercise or assumption of authority . . . over another‘s goods“—which “typically applies only to tangible property—neither over any ‘intangible
Plaintiffs also alleged that Liberty unlawfully retained “the fees paid by Plaintiffs and other Class members,” including refusing to return the “pro-rated, unused fees for the remainder of the Spring 2020 semester.” Am. Compl. ¶¶ 84, 86. However, Plaintiffs’ conversion claim fails with respect to the fees too. In Virginia, “money can only be subject of a conversion claim in limited circumstances, including when it is part of a segregated and identifiable fund.” Stallard v. Bank of Am., N.A., 137 F. Supp. 3d 867, 876 (E.D. Va. 2015) (citing Jones v. Countrywide Home Loans, Inc., No. 4:09-cv-162, 2010 WL 6605789, at *5 (E.D. Va. Aug. 24, 2010)); Fed. Ins. Co. v. Smith, 63 F. App‘x 630, 638 (4th Cir. 2003) (explaining, “[s]o long as money is kept separate and identifiable, it can be converted.“). Plaintiffs’ complaint fails to include factual allegations that, taken as true, would establish that the fees (or portions thereof) sued over were part of any segregated, specific, or otherwise identifiable fund. See Alberto, 332 F. Supp. 3d at 1020 (“A segregated or identifiable fund is one separate from the defendant‘s general funds and one to which plaintiff is entitled.“) (internal quotation marks and citation omitted). The allegations here are far afield from the circumstances in the PGI case, in which a settling party deposited $250,000 in settlement proceeds into its account, and failed to honor its agreement to share that settlement with a company in partnership with it. See PGI, Inc., 576 S.E.2d at 443. Moreover, the Court notes that the vast majority of non-Virginia precedent addressing similar claims against universities or colleges for failure to return some portion of tuition or on-campus related fees on account the COVID-19 pandemic has similarly concluded that conversion claims similarly fail on this or other grounds.8
4. Virginia Consumer Protection Act
Finally, in count four, Plaintiffs allege that Liberty violated the Virginia Consumer Protection Act (“VCPA“),
Liberty first argues that the “economic loss rule” precludes Plaintiffs’ VCPA claim, because “Plaintiffs fail to allege a duty that exists independently of the parties’ contract(s).” Dkt. 22 at 13. Liberty contends that the alleged misrepresentations occurred “after Plaintiffs paid Spring 2020 semester fees and entered into contract(s) with the University,” and thus Plaintiffs could not show that Liberty‘s statement “induced them to pay fees for the Spring 2020 semester or affected any other aspect of their purported consumer transactions with the University.” Id. at 14. Thus, “[b]ecause the duty alleged breached by Liberty to provide certain services and activities exists solely by virtue of the parties’ contract(s),” Liberty argues that the economic loss rule bars Plaintiffs’ VCPA claim. Id. Second, Liberty contends that Plaintiffs have failed to allege the elements of a plausible VCPA claim, including the element that Plaintiffs relied on Liberty‘s purported misrepresentations and that they suffered damages as a result. Id. at 15–17.
For their part, Plaintiffs argue that they stated a valid and plausible claim under the VCPA. Dkt. 32 at 9–21. At the outset, Plaintiffs appear to concede that their claims “Liberty has kept the students’ money despite not providing the services that they money was supposed to buy,” is the subject not of the VCPA claim, but rather “the breach of contract, unjust enrichment, and conversion claims.” Id. at 9. Rather, they argue that Plaintiffs that their VCPA claim “focus[es] on Liberty‘s actions and statements surrounding its decision to keep that money.” Id. at 9. They challenge Liberty‘s alleged “improperly and unfairly whipsawing its students with confusing, often contradictory statements” about whether Liberty remained “open,” putting them in an “untenable situation” whether “to accept the so-called ‘customer service’ measure of a $1,000 credit against future costs.” Id. at 10. Specifically, they contend that “students had to make this decision” whether to accept the $1,000 credit, during a five-day period that “Liberty was trumpeting that campus remained ‘open’ and was downplaying the severity and scope of the pandemic.” Id. Plaintiffs argue that therefore “the credit would take away a student‘s choice about the future—the only way to realize the value would be to commit to returning to Liberty the following semester, thus allowing Liberty to secure even more money for itself.” Id.
The VCPA was passed “to promote fair and ethical standards of dealings between suppliers and the consuming public.”
The Court concludes that Plaintiffs have failed to plead a plausible VCPA claim. Plaintiffs’ claims, to the extent they would concern Liberty‘s improper retention of the fees already collected, are a matter for the breach of contract or unjust enrichment claims, not the VCPA claim based on Liberty‘s later alleged misrepresentations. See, e.g., Lissmann v. Hartford Fire Ins. Co., 848 F.2d 50, 53 (4th Cir. 1988) (citing Colonial Ford Truck Sales, Inc. v. Schneider, 325 S.E.2d 91 (Va. 1985)) (“Colonial Ford distinguishes between a statement that is false when made and a promise that becomes false only when the promisor later fails to keep his word. The former is fraud, the latter is breach of contract.“). Plaintiffs appear to acknowledge this principle of Virginia law when they write that their “VCPA claims do not merely spring from the fact that Liberty has kept the students’ money despite not providing the services that the money was supposed to buy. That is dealt with by the breach of contract, unjust enrichment, and conversion claims.” Dkt. 32 at 9. And there is no argument that Liberty initially collected the various fees at issue in bad faith or with knowledge that it did not at that time intend to fulfill its provision of services accompanying those fees. See id. at 8 (“there is no allegation that Liberty charged the fees before the semester began in bad faith“).
Plaintiffs rather focus their VCPA claim on Liberty‘s alleged “confusing and misleading guidance and representations both about the status of the institution and the nature of the danger posed by COVID-19.” Id. at 9. They further focus on the “customer
*
In summary of the Court‘s analysis on Liberty‘s motion to dismiss, the Court has concluded that two of Plaintiffs’ claims against Liberty proceed past the motion to dismiss stage, namely, Plaintiffs’ claims for breach of contract (count one) and unjust enrichment (count two). The Court has determined that Plaintiffs’ remaining claims for conversion (count three) and for violation of the VCPA (count four), fail to state a plausible claim to relief and accordingly must be dismissed.
Motion to Strike or For More Definite Statement
The Court next will take up Liberty‘s motion to strike or, in the alternative, for a more definite statement. See Dkt. 19. With respect to the portion of that motion requesting a more definite statement under
Liberty‘s argument lacks merit.
Thus, if “the complaint conforms to Rule 8(a) and it is neither so vague nor so ambiguous that the defendant cannot reasonably be required to answer, the district court should deny a motion for a more
In this motion, Liberty also challenges the named Plaintiffs’ attempt to litigate this action anonymously. Specifically, Liberty contends that Plaintiffs have not provided such reasons as would “rebut the presumption of openness that judicial proceedings enjoy.” Dkt. 20 at 2, 5.
Plaintiffs responded and attached exhibits and declarations, which they contend establish the relevant factors weigh in favor their request. Dkt. 31. The Court will address the parties’ specific arguments in the context of its analysis of the relevant factors. Against a backdrop of “general presumption of openness of judicial proceedings,” the Fourth Circuit has explained that only in “rare” cases are requests to so proceed warranted. James v. Jacobson, 6 F.3d 233, 238 (4th Cir. 1993). Thus, the Fourth Circuit advises that “when a party seeks to litigate under a pseudonym, a district court has an independent obligation to ensure that extraordinary circumstances support such a request by balancing the party‘s stated interest in anonymity against the public‘s interest in openness and any prejudice that anonymity would pose to the opposing party.” Doe v. Pub. Citizen, 749 F.3d 246, 274 (4th Cir. 2014). This decision is committed to the trial court‘s discretion. James, 6 F.3d at 238. All agree that James supplies the relevant analytical framework. See Dkt. 20 at 6; Dkt. 31 at 5–9; Dkt. 36 at 3–12. On this record, consideration of these factors supports Plaintiffs’ request at present.
To be sure, several James factors weigh somewhat against Plaintiffs’ request. The first is “[w]hether the justification asserted by the requesting party is merely to avoid the annoyance and criticism that may attend any litigation or is to preserve privacy in a matter of sensitive and highly personal nature.” Id. at 238. On the latter issue, Plaintiffs seek reimbursement from Liberty for room and board, auto registration, student health, activity or student center fees, or parking passes, and other such fees, Am. Compl. ¶¶ 30–32, which are not matters of a “sensitive and highly personal nature” as would implicate certain privacy interests, James, 6 F.3d at 238; compare Doe v. Va. Polytechnic Inst. & State Univ., No. 7:21-cv-378, 2022 WL 972629, at *2 (W.D. Va. Mar. 30, 2022) (sexual assault cases “involve[ ] sensitive and highly personal facts that can invite harassment and ridicule,” thereby satisfying this factor). (But that is not to say Plaintiffs are only seeking to avoid annoyance and criticism that may accompany any litigation).
Another factor concerns “the ages of the persons whose privacy interests are sought to be protected.” James, 6 F.3d at 638. Plaintiffs are college students. Am. Compl. ¶¶ 18, 20–21. And Plaintiffs concede that “age is not a direct
Yet on this record, the fact that those James factors weigh somewhat against Plaintiffs’ request in this case is not determinative. The remaining factors and reasons proffered suffice to counterbalance those factors. Significantly, named Plaintiffs argued and provided evidence to support more than a mere “general fear” of retaliation or mere embarrassment against students for taking the specific positions that Plaintiffs have in this litigation. See Doe v. Pittsylvania Cnty., 844 F. Supp. 2d at 733; see also Dkt. 31-2 ¶¶ 10–17, 20–21, 22; Dkts. 31-3 – 31-5; accord Dkt. 31-7 ¶¶ 24, 26–27. Plaintiffs’ argument is grounded not only in statements of former leadership of Liberty, see Am. Compl. ¶¶ 2–4, 22, 38, 55–58, as Liberty had argued. The Court also considers the fifth James factor, concerning potential “unfairness to the opposing party,” James, 6 F.3d at 238, as being significantly mitigated by named Plaintiffs’ willingness to provide names and other discovery to certain Defense counsel and limited persons at Liberty so that they could prepare its defense. See, e.g., Dkts. 37, 37-1. Having so found, Liberty‘s request to strike or to move for a more definite statement on this basis will be denied. See Dkt. 19. The Court will permit Plaintiffs to so proceed under their pseudonyms at this time.9
Conclusion
For the reasons set forth above, the Court has determined that Plaintiffs’ amended complaint includes sufficient factual allegations that, taken as true, state a plausible claim for breach of contract and for unjust enrichment. However, the amended complaint fails to state a plausible conversion or VCPA claim. Accordingly, Liberty‘s motion to dismiss will be granted in part and denied in part, to that extent. The Court has also concluded that Liberty‘s motion to strike, or, in the alternative, for a more definite statement will be denied.
The Clerk of Court is directed to send a certified copy of this Memorandum Opinion and the accompanying Order to all counsel of record.
Entered this 5th day of May, 2022.
NORMAN K. MOON
SENIOR UNITED STATES DISTRICT JUDGE