Hickey v. Univ. of Pittsburgh

81 F.4th 301

Claire HICKEY; Akira Kirkpatrick; Valeri Natoli;

Candace N. Graham; Carly Swartz; Nicholas Bowes,on behalf of themselves and all others similarly situated, Appellants v. UNIVERSITY OF PITTSBURGH

Brooke Ryan, individually and on behalf of all others similarly situated;

Christina Fusca, on behalf of herself and all others similarly situated, Appellants v. Temple University

No. 21-2013

No. 21-2016

United States Court of Appeals, Third Circuit

Argued January 25, 2023

Filed: September 6, 2023

On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. No. 2-20-cv-00690), District Judge: Honorable William S. Stickman, IV

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 5-20-cv-02164), District Judge: Honorable John M. Gallagher

Gary F. Lynch [ARGUED], Lynch Carpenter, 1133 Penn Avenue, 5th Floor, Pittsburgh, PA 15222, Jeffrey A. Klafter, Seth R. Lesser, Klafter Lesser, Two International Drive, Suite 350, Rye Brook, NY 10573, Eric Poulin, Poulin, Willey & Anastopoulo, 32 Ann Street, Charleston, SC 29403, Roy T. Willey, IV, Anastopoulo Law Firm, 32 Ann Street, Charleston, SC 29403, Counsel for Appellants Claire Hickey, et al

Stuart A. Carpey, Suite 400, 600 W Germantown Pike, Plymouth Meeting, PA 19462, Edward W. Ciolko, Nicholas Colella, Jamisen A. Etzel, Gary F. Lynch [ARGUED], Lynch Carpenter, 1133 Penn Avenue, 5th Floor, Pittsburgh, PA 15222, Eric Poulin, Poulin, Willey & Anastopoulo, 32 Ann Street, Charleston, SC 29403, Roy T. Willey, IV, Anastopoulo Law Firm, 32 Ann Street, Charleston, SC 29403, Counsel for Appellants Brooke Ryan, et al

James C. Martin [ARGUED], Colin E. Wrabley, Reed Smith, 225 Fifth Avenue, Suite 1200, Pittsburgh, PA 15222, Counsel for Appellees University of Pittsburgh

Gerard A. Dever, Roberta D. Liebenberg, Fine Kaplan & Black, One S Broad Street, Suite 2300, Philadelphia, PA 19107, Burt M. Rublin, Ballard Spahr, 1735 Market Street, 51st Floor, Philadelphia, PA 19103, Counsel for Appellees Temple University

Jessica L. Ellsworth, Nathaniel A.G. Zelinsky, Hogan Lovells US, 555 Thirteenth Street NW, Columbia Square, Washington, D.C. 20004, Counsel for Amicus Appellees American Council on Education, et al

Michael E. Baughman, Christopher R. Healy, Troutman Pepper, Two Logan Square, 18th and Arch Streets, Philadelphia, PA 19103, Counsel for Amicus Appellees Association of Independent Colleges and Universities of Pennsylvania, et al

Before: HARDIMAN, KRAUSE, and MATEY, Circuit Judges.

OPINION OF THE COURT

KRAUSE, Circuit Judge.

Like many colleges and universities across the country, the University of Pittsburgh and Temple University responded to the novel coronavirus pandemic by transitioning to remote learning in March 2020. Their former students—now Appellants in this consolidated class-action appeal—do not challenge the wisdom of those decisions. But they do seek partial refunds of tuition and fees on the grounds that they received a materially different educational experience than they were promised and that they were denied access to on-campus facilities and services for which they paid specific fees.

Both District Courts in the underlying cases granted the Universities' motions to dismiss for failure to state a claim. For the following reasons, we will affirm in part, reverse in part, and remand for further proceedings.

I. Background

The University of Pittsburgh ("Pitt") and Temple University ("Temple") are institutions of higher learning located in Pittsburgh and Philadelphia, respectively. Both universities offer traditional, on-campus educational programs. Temple also offers fully online distance-learning programs, which are separately advertised and priced. Appellants are former Pitt and Temple students (collectively, "the Students") who enrolled in the Universities' traditional on-campus programs for the Spring 2020 semester.¹

To enroll, the Students were required (1) to pay tuition and mandatory fees, and (2) to sign a Financial Responsibility Agreement ("FRA") via an online registration portal. The Pitt fees included a student activity fee; a wellness fee; a computing and network services fee; and a security, safety, and transportation fee. Temple charged one "University Services" fee that funded numerous on-campus services and applied only to in-person students. Students at both universities also pre-paid housing and dining fees if they anticipated use of those services.

The FRAs—on which the District Courts relied to dismiss the Students' claims—are one to two-page documents obligating students to timely pay tuition and fees and providing the Universities with certain collection rights if those payments are not made.

As relevant here, Temple's FRA provides:

• "[B]y registering for classes at Temple University, I agree to pay all assessed tuition and fees that result from my initial registration and/or future drop/add activity. I understand that I am responsible to pay for all classes in which I am registered after the final day of the term's drop/add period[.]" Temple App. 139.

Pitt's FRA provides:

• "I understand that when I register for any class at the University of Pittsburgh, or receive any service from the University of Pittsburgh, I accept full responsibility to pay all tuition, fees and other associated costs assessed as a result of my registration and/or receipt of services," Pitt App. 53;

• "[M]y registration and acceptance of these terms constitutes a Promissory Note agreement . . . in which the University of Pittsburgh is providing me educational services," id.; and

• "[I]f I drop or withdraw from some or all of the classes for which I register, I will be responsible for paying all or a portion of tuition and fees in accordance with the published tuition refund schedule . . . ," id.

In addition, Pitt's FRA—but not Temple's—contains an integration clause stating that the FRA "constitutes the entire agreement between the parties with respect to the matters described." Id. at 54.

Pitt and Temple's Spring 2020 semesters began on January 6, 2020, and January 13, 2020, respectively. As usual, students who enrolled in the traditional on-campus programs received in-person instruction and access to campus facilities. Midway through the semester, however, on March 11, 2020, then-Governor Wolf ordered a temporary closure of all non-life sustaining businesses in light of the rising number of COVID-19 cases in Pennsylvania. That same day, the World Health Organization declared COVID-19 a global pandemic.²

In response, the Universities closed campus buildings, canceled all on-campus student events, announced that classes would be conducted online for the remainder of the semester, and urged students not to return to campus housing.³ Neither university offered any reduction in tuition or mandatory fees. Temple issued pro-rata housing and dining refunds for all students, while Pitt did so only for students who moved out by April 3, 2020.

Seeking additional recompense, the Students, on behalf of themselves and others similarly situated, brought suit against their respective institutions for breach of contract, or, in the alternative, unjust enrichment.⁴ The Students alleged that they "paid tuition for a first-rate education and educational experience" but "were provided with a materially different product" and likewise "paid fees for services and facilities which are simply not being provided." Pitt App. 29-30; see Temple App. 102-05 (similar). Their theory was not that written contracts, like the FRAs, provided for in-person classes or services, but rather that "[t]he terms of this contract [we]re as implied or set forth" through the Universities' "website[s], academic catalogs, student handbooks, marketing materials and other circulars, bulletins, and publications," which described the benefits of campus life. Temple App. 110; see Pitt App. 41 (similar). As additional evidence of this implied promise, they pointed to the Universities' pre-pandemic practices of holding in-person classes and the reduced pricing for online courses.

By way of remedy, the Students sought pro-rated tuition and fees reflecting the difference in value between what they purportedly bargained and paid for—in-person classes and services—and what they received—a fully remote experience for the latter half of the Spring 2020 semester. Likewise, they sought disgorgement of any profits that the Universities retained by moving online. The Pitt Students (only) also sought reimbursement for unused housing and dining fees for those who did not move out by April 3 and thus did not receive pro-rated refunds.

Both actions, however, were dismissed under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim. As for the contract claims, the District Courts found the FRAs to be fully integrated agreements that governed the parties' relationships with respect to the collection of tuition and fees and that did not require in-person instruction or services. The Courts also found that, even if the FRAs did not govern, the Students failed to state a breach of implied contract claim because they did not identify any specific and identifiable promise that the Universities had broken. As for the unjust enrichment claims, the Courts determined that they were foreclosed by the FRAs and that, in any event, the Students failed to plausibly plead that the Universities' retention of funds was unjust under the circumstances. The Students timely appealed. We consolidated these cases for review.

II. Jurisdiction and Standard of Review

The District Courts had jurisdiction under 28 U.S.C. § 1332(d)(2)(A). We have appellate jurisdiction under 28 U.S.C. § 1291.

We review a district court's ruling granting a motion to dismiss de novo. Doe v. Univ. of the Scis., 961 F.3d 203, 208 (3d Cir. 2020) (citation omitted). We accept as true all factual allegations in the complaint and ask whether, viewing those facts in the light most favorable to pla...