Qureshi v. Am. Univ.

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MAAZ QURESHI, MATTHEW RABINOWITZ, and DANISH ARIF, individually and on behalf of others similarly situated, Plaintiffs, v. AMERICAN UNIVERSITY, Defendant.

Nos. 20-cv-1141(CRC), 20-cv-1454 (CRC), 20-cv-1555 (CRC)

United States District Court, District of Columbia

March 7, 2023

MEMORANDUM OPINION AND ORDER

CHRISTOPHER R. COOPER UNITED STATES DISTRICT JUDGE

This lawsuit concerns a group of American University undergraduate students who sued their school for a partial refund of tuition and fees they paid for the spring 2020 semester which was disrupted by the onset of the COVID-19 pandemic. Following the D.C. Circuit's partial reversal of this Court's prior dismissal of these claims, American now renews its motion to dismiss with respect to Plaintiffs' claim under the D.C. Consumer Protection Procedures Act. For the following reasons, and in light of the D.C. Circuit's opinion in this case, the Court will deny the renewed motion to dismiss.

I. Background

Because the Court has already recounted the relevant factual background at length in its previous opinion in this case, it provides only a brief summary here. In the spring of 2020, Plaintiffs Maaz Qureshi, Matthew Rabinowitz, and Danish Arif (collectively, “Plaintiffs”) were enrolled as undergraduate students at American University, a private university in Washington, D.C. Consolidated Amended Complaint (“Compl.”) ¶¶ 6, 13. They paid tuition for the semester, id. ¶ 127, plus mandatory fees including an “activity fee,” a “sports center fee,” a “technology fee,” and a “Metro U-Pass fee,” id. ¶¶ 33, 164. Plaintiffs allege that American, through its website, marketing material, advertisements, course catalog, syllabi, and other documents, promised and sold them “on-campus instruction and the on-campus experience as key reasons that a student should choose to attend American.” Id. ¶¶ 24-26, 86, 115-16, 118-26. In response to the COVID-19 pandemic, however, American shifted its instruction to a fully online format beginning in March 2020, continuing through the end of the spring 2020 semester, id. ¶¶ 46-47, but it refused to refund any portion of the tuition and fees Plaintiffs and other students paid at the outset of the semester, before the pandemic began, id. ¶¶ 3, 193.

In May and June 2020, Plaintiffs filed three separate class action complaints against American based on the switch to remote learning. The Court consolidated the Plaintiffs' cases, see Minute Order (July 3, 2020),^[1]and they filed an amended complaint alleging causes of action for breach of contract, unjust enrichment, conversion, and unlawful and deceptive trade practices in violation of the D.C. Consumer Protection Procedures Act (“CPPA”). See Compl. ¶¶ 76-211. American moved to dismiss the complaint, and this Court granted the motion as to all of Plaintiffs' claims. As relevant here, the Court concluded, with respect to the breach of contract claim, that American “impliedly promised, at most, to make a good-faith effort to provide on-campus education, while retaining the right to deviate from the traditional model if they reasonably deemed it necessary to do so.” Crawford v. Presidents & Dirs. of Georgetown Coll., 537 F.Supp.3d 8, 22 (D.D.C. 2021). Based on the conclusion that “American made no express or implied representation that it would provide uninterrupted in-person education regardless of the circumstances”-including a public health emergency arising from a once-in-a-century global pandemic-the Court also dismissed Plaintiffs' CPPA claim for failing “to allege that American made any false or misleading representation or omission about what it would provide in exchange for tuition” or fees. Id. at 26, 29.

Plaintiffs appealed, and the D.C. Circuit affirmed in part and reversed in part. See Shaffer v. George Washington Univ., 27 F.4th 754 (D.C. Cir. 2022).^[2] Specifically, the Circuit reversed this Court's dismissal of Plaintiffs' breach of contract claims relating to tuition and to two of American's student fees, reversed the dismissal of Plaintiffs' unjust enrichment claims, affirmed the dismissal of the conversion claim, and reversed the dismissal of the CPPA claim. See id. at 766-67, 770. With respect to the breach of contract claim, the court held that “Plaintiffs adequately allege the Universities breached an implied-in-fact contract to provide inperson education in exchange for tuition.” Id. at 763. Assessing American's marketing and communications materials, combined with its “historic practice of providing on-campus instruction to students who pay the tuition associated with traditional on-campus-rather than online-education,” the court held that “‘a reasonable person would have assumed that the Universit[ies] intended to bind' themselves to providing in-person education in exchange for retaining Plaintiffs' entire tuition payments for traditional on-campus degree programs.” Id. at 764 (alteration in original) (quoting Basch v. George Washington Univ., 370 A.2d 1364, 1367 (D.C. 1977)).

As for Plaintiffs' CPPA claim, the Circuit held that this Court's dismissal “rested on its conclusion that Plaintiffs failed to allege that the University was bound by any implied-in-fact agreements relating to any commitments made to provide campus-based programs and facilities throughout the semester,” and so the Circuit accordingly reversed the dismissal of that claim and remanded for this Court “to reconsider American's motion to dismiss the CPPA claim in light of our analysis of Plaintiffs' breach-of-contract claims.” Id. at 770. In particular, the Circuit noted that, on remand, this Court “may be required to consider American's alternative argument that the University is not subject to the CPPA” under an exception from CPPA liability for nonprofits “if the claim is ‘based on membership services' or ‘training or credentialing activities.'” Id. (quoting D.C. Code § 28-3905(k)(5)). The court “express[ed] no opinion” on these questions. Id.

After remand, American filed a renewed partial motion to dismiss focused on Plaintiffs' CPPA claim. That renewed motion is fully briefed and ripe for decision.

II. Legal Standards

To survive a motion to dismiss under Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Court treats the factual allegations of the complaint as true “and must grant plaintiff ‘the benefit of all inferences that can be derived from the facts alleged.'” Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C. Cir. 2000) (quoting Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir. 1979)).

III. Analysis

The D.C. CPPA makes it unlawful “for any person to engage in an unfair or deceptive trade practice, whether or not any consumer is in fact misled, deceived, or damaged thereby.” D.C. Code § 28-3904. The statute defines unfair or deceptive trade practices to include, among other things, representing that goods or services have characteristics that they do not have, representing that goods or services are of a particular standard, quality, or style if in fact they are of another, and misrepresenting or failing to state a material fact which has a tendency to mislead. Id. §§ 28-3904(a), (d), (e), (f). “When used as an adjective” under the statute, the word “consumer” “describes anything, without exception, that” a “person does or would purchase, lease (as lessee), or receive and normally use for personal, household, or family purposes.” Id. § 28-3901(a)(2)(B). The statute likewise defines “goods and services” broadly to include “any and all parts of the economic output of society, at any stage or related or necessary point in the economic process, and includes consumer credit, franchises, business opportunities, real estate transactions, and consumer services of all types.” Id. § 28-3901(a)(7). Because the “purpose of the CPPA is to protect consumers from a broad spectrum of unscrupulous practices by merchants,” the statute “should be read broadly to assure that the purposes are carried out.” Mod. Mgmt. Co. v. Wilson, 997 A.2d 37, 62 (D.C. 2010).

In its renewed motion to dismiss Plaintiffs' CPPA claim, American reiterates two arguments first raised in its 2020 motion to dismiss. First, American contends that the CPPA does not apply to claims raised against it because the statute includes a carve-out for actions brought “against a nonprofit organization” based on “membership in such organization, membership services, training or credentialing activities, . . . or any other transaction, interaction, or dispute not arising from the purchase or sale of consumer goods or services in the ordinary course of business.” D.C. Code § 28-3905(k)(5); Renewed Mot. to Dismiss (“Renewed MTD”) at 2-5. Second, American contends that, even if the CPPA applies to it, Plaintiffs have not alleged an unfair or deceptive practice because they have not alleged that the University's representations about its offerings were “misleading or false at the time they were made.” Renewed MTD at 5-6. The Court addresses each of these contentions in turn.^[3]

A. The Nonprofit Exception

First American contends that, as a nonprofit organization, it falls within § 28-3905(k)(5)'s carve-out for nonprofits because Plaintiffs' claims, which concern the method and format of instruction provided to students during the COVID-19 pandemic, pertain to “training or credentialing activities.” Renewed MTD at 2-3; MTD at 25-26. American's position, then, is that “training or credentialing activities” should be read to encompass undergraduate education. To be sure, the dictionary definition of “train” and “creden...