Earlier this month, a judge for the United States District Court for the District of Massachusetts ruled favorably for Northeastern University in a breach of contract lawsuit stemming from the COVID-19 pandemic and the University’s move from in-person to online classes. In Chong et al. v. Northeastern University, two students, one an undergraduate and one a graduate student, brought suit against Northeastern—for themselves and all similarly situated students—alleging that Northeastern breached its tuition contract, called an Annual Financial Responsibility Agreement when it switched from in-person classes to online classes and closed its on-campus facilities in March 2020, without offering any refund of tuition or fees. On October 1st, a judge ruled that that Northeastern was not obligated to refund student tuition, noting that the contract did not promise in-person instruction. However, the decision did leave open the possibility that students may be entitled to recoup the $60 campus recreation fee.
In reaching its conclusion, the court focused closely on the language of the tuition contract and the fact that it did not include an express right to in-person instruction. Instead, the contract tied the payment of tuition to the registration of courses and receipt of services, not to the receipt of any particular method of course instruction. As a result, the court dismissed the claims for breach of contract and unjust enrichment as to tuition. However, the court held that the plaintiffs may be entitled to recoup the $60 campus recreation fee because the fee was meant to give students the option to attend athletic events and use of the fitness facilities, both of which were closed when Northeastern shut down the campus in March 2020. According to the ruling, other fees (i.e. student activity fee, student center fee, undergraduate fee) were not refundable because they were paid to “support” certain facilities, not to gain access to any on-campus facility or resource. As a result of the ruling, the case is able to continue forward but with much less at stake for Northeastern.
Though this is just one decision among similar pending tuition refund lawsuits, it is good news for schools and yet another reminder that contract language matters.
The full text of the court’s decision may be found here.