Patel v. Univ. of Vt.

NILAY KAMAL PATEL, RACHEL A. GLADSTONE, ELIJAH BLOW,and AVERY ARROYO, Plaintiffs, v. UNIVERSITY OF VERMONT ANDSTATE AGRICULTURAL COLLEGE, Defendant.

Case No. 5:20-cv-61

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF VERMONT

July 22, 2021

DECISION ON MOTION TO DISMISS AND RENEWED MOTION TO DISMISS

(Docs. 63, 69)

In this putative class action, students at the University of Vermont ("UVM") seek to recover contract damages for "the difference in value of live in-person instruction versus online distance learning, as well as the value of the unused portion of on-campus housing costs in UVM residence halls and other housing . . . along with the value of the unused portion of each meal contract and the value equal to a prorated share of fees." (Am. Compl., Doc. 65 ¶ 31.) The case arises from the migration of the bulk of university instruction to an on-line format during the spring of 2020 due to the COVID-19 health crisis.

On March 15, 2021 the court dismissed claims relating to the room, board, and comprehensive fee portion of the lawsuit on the ground that reduction or reimbursement in the event of a health emergency was excluded by the language of the contract between the parties. (Doc. 57.)¹ The March 15 decision permitted Plaintiffs' claims for refund of tuition to proceedbeyond the initial review afforded by the motion to dismiss. In the court's view, the terms of the "implied-in-fact contract" between the students and the university would have to await factual development.

Since the ruling on the motion to dismiss, a new issue has arisen. Neither of the two original named plaintiffs, Nilay Kamal Patel and Rachel A. Gladstone, personally paid any tuition to UVM for the spring semester 2021. UVM seeks the dismissal of these two plaintiffs under Fed. R. Civ. P. 12(b)(1) on standing grounds. The court heard argument on the standing issue on June 7, 2021. The court has also considered the parties' post-hearing supplemental briefs. (Docs. 74, 75.)

Background

Mr. Patel was an exchange student from the University of Leeds in Britain. (See Decl. of Kim Howard, Doc. 63-4.) The parties agree that UVM and the University of Leeds operate a student exchange program under which students from one school may attend the other without paying tuition directly to the university they are visiting. In Mr. Patel's case, the tuition requirement for his semester abroad at UVM was satisfied by whatever he paid to Leeds. (His attorneys were unable to say at oral argument whether he paid anything at all at Leeds.)

Ms. Gladstone's tuition was covered in full by a combination of scholarship aid provided through UVM and federal Pell grants provided by the United States government; she will not be required to repay any of the scholarships, grants, or awards. (See Decl. of Marie Johnson, Doc. 63-2.) The combination of these two sources exceeded her tuition obligation by approximately $1,000. (Id. ¶ 6.) This amount was applied to her room and board costs. At the end of the spring 2020 semester, she received a partial refund from UVM which offset all except$123.00 of her student loan obligation for the semester. (Aff. of Pls.' damages expert Mark Kantrowitz, Doc. 66-1 ¶ 6.) Ms. Gladstone has now successfully graduated from UVM.

Analysis

The proposed dismissal of Mr. Patel and Ms. Gladstone from this lawsuit would not end the case. The First Amended Class Action Complaint ("Amended Complaint") includes two new plaintiffs who paid tuition to UVM. The narrow issue presented by the current motion to dismiss concerns the standing of Mr. Patel and Ms. Gladstone only.²

I. Rule 12(b)(1) Standard

"A district court properly dismisses an action under Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction if the court 'lacks the statutory or constitutional power to adjudicate it . . . .'" Cortlandt St. Recovery Corp. v. Hellas Telecomms., S.A.R.L., 790 F.3d 411, 417 (2d Cir. 2015) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)). Such jurisdiction is lacking where constitutional (Article III) standing is absent. Carter v. HealthPort Techs., LLC, 822 F.3d 47, 54 (2d Cir. 2016). "[S]tanding must be assessed as to each plaintiff . . . ." Seife v. United States Dep't of Health & Human Servs., 440 F. Supp. 3d 254, 272 (S.D.N.Y. 2020). This is also true in class actions: "[E]ven named plaintiffs who represent a class 'must allege and show that they personally have been injured, not that injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent.'" Lewis v. Casey, 518 U.S. 343, 357 (1996) (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 40 n.20 (1976)); see also TransUnion LLC v. Ramirez,141 S. Ct. 2190, 2208 (2021) ("Every class member must have Article III standing in order to recover individual damages.").

UVM has attached evidence outside the pleadings in support of its motion to dismiss: the declarations of Ms. Johnson and Ms. Howard cited above. Thus the Rule 12(b)(1) motion is "fact-based" and Plaintiffs "need to come forward with evidence of their own to controvert that presented by [UVM] 'if the affidavits submitted on a 12(b)(1) motion . . . reveal the existence of factual problems' in the assertion of jurisdiction." Carter, 822 F.3d at 57 (ellipsis in original; quoting Exch. Nat'l Bank of Chicago v. Touche Ross & Co., 544 F.2d 1126, 1131 (2d Cir. 1976)). "However, the plaintiffs are entitled to rely on the allegations in the Pleading if the evidence proffered by the defendant is immaterial because it does not contradict plausible allegations that are themselves sufficient to show standing." Id.

II. Plaintiffs' Request for Discovery

Plaintiffs argue that they are entitled to discovery if UVM's motion is "treated as a summary judgment motion." (Doc. 66 at 4.) According to Plaintiffs, proof of some of the facts that UVM has asserted "are solely within its control—such as how it allocates scholarship money and how its private grants and scholarships are funded, awarded and managed." (Id.) The court rejects that argument.

The court is not treating UVM's motion as one for summary judgment under Fed. R. Civ. P. 56. "The only relevance of Rule 56 to a motion under Rule 12(b)(1) is that a body of decisions has developed under Rule 56 that offer guidelines which assist in resolving the problem encountered if the affidavits submitted on a 12(b)(1) motion should reveal the existence of factual problems." Exch. Nat'l Bank of Chicago, 544 F.2d at 1131. No such factual problemsare present here. The detailed facts that Plaintiffs say are solely within UVM's control are not essential for resolution of the motion.

III. Constitutional Standing

Traditional standing doctrine takes two forms: constitutional and prudential. See generally 15 Wm. Moore et al., Moore's Federal Practice - Civil § 101.22 (3d ed. 2021). "Constitutional standing is grounded in Article III's provision that limits the jurisdiction of the federal courts to cases and controversies." Id.; see also TransUnion, 141 S. Ct. at 2203; California v. Texas, 141 S. Ct. 2104, 2113 (2021); Am. Psychiatric Ass'n v. Anthem Health Plans, Inc., 821 F.3d 352, 358 (2d Cir. 2016). Prudential standing is a judge-made doctrine further defining which plaintiffs may bring particular types of claims. Am. Psychiatric Ass'n, 821 F.3d at 358.

The parties and the court are primarily concerned here with constitutional standing. Constitutional standing has three traditional elements: (1) the plaintiff must have suffered an injury in fact (an invasion of a legally protected interest that is concrete, particularized, and actual or imminent); (2) there must be a causal connection between the injury and the conduct complained of; and (3) it must be likely that the injury is redressable by a favorable decision. Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547-48 (2016) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992)); see also McMorris v. Carlos Lopez & Assocs., LLC, 995 F.3d 295, 299-300 (2d Cir. 2021). "'The party invoking federal jurisdiction bears the burden of establishing' each element of standing, which 'must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at successive stages of litigation.'" McMorris, 995 F.3d at 300 (quoting Lujan, 504 U.S. at 561); see also TransUnion, 141 S. Ct. at 2207.

UVM argues that "Plaintiffs have no injury in fact because they did not actually pay any tuition to UVM in Spring 2020." (Doc. 63-1 at 8.) Plaintiffs attack that argument as "conflat[ing] the contractual concepts of consideration and damages with the constitutional concept of 'injury in fact' required under Article III." (Doc. 66 at 2.) Plaintiffs argue that they were injured because "Defendant breached a contract" and because Plaintiffs "did not receive the in-person classes Defendant promised to provide." (Doc. 66 at 5; see also Doc. 74 at 5 (asserting that Plaintiffs were injured because "the quality of the overall educational experience was significantly less than promised.").) In its reply, UVM insists that Mr. Patel and Ms. Gladstone's breach-of-contract claims cannot satisfy the elements of Article III standing. (Doc. 71 at 3.) UVM further argues that the court need not resolve the parties' disagreement over the "injury in fact" element because Mr. Patel and Ms. Gladstone's claims fail to satisfy the traceability and redressability elements. (Id.)

The court recognizes that injury-in-fact is the "first and foremost of standing's three elements." Spokeo, 136 S. Ct. at 1547 (cleaned up). In this case, however, the court elects to focus on the redressability element. The court requested additional briefing on that issue (Doc. 73) and has considered the parties' responses (Docs. 74, 75). Plaintiffs have the burden to establish that their injury "would likely be redressed by the requested judicial relief." McMorris, ...