Challenge to UC fees during pandemic can go to trial, court of appeal says

Breach of contract claims by students who sued the Regents of the University of California over remote instruction during the COVID-19 pandemic were adequate to survive a demurrer by the defendants in Los Angeles County Superior Court, the 2nd District Court of Appeal ruled on Tuesday.

"This case comes to us only at the initial demurrer stage of litigation and we hold plaintiffs adequately allege claims for breach of implied contract sufficient to survive demurrer," the decision read. "The only element of an implied contract claim that is in question here, i.e., whether the provision of an in-person, on-campus education was a term of the contract, is satisfied by plaintiffs' allegations regarding the UC System's statements in marketing materials, course catalogs, and class schedules."

Acting Presiding Justice Lamar W. Baker wrote the decision, with Associate Justice Dorothy C. Kim and San Bernardino County Superior Court Judge Corey G. Lee, sitting by designation, concurring. Their ruling vacated the Superior Court decision to uphold defendants' demurrer and remanded the case for further proceedings. Sean Stoffel v. The Regents of the University of California, B327279 (Cal. App. 2nd Dist. June 25, 2024) (unpublished).

"Plaintiffs have sufficiently alleged that the Regents specifically promised them an on-campus educational experience and that they paid fees for on-campus services. Plaintiffs do not allege the fees were used improperly. Rather, they allege they did not receive the benefit of their bargain with the Regents when paying the fees. That suffices to survive the Regents' demurrer on that score," Baker wrote.

Neil J. Swartzberg of Pearson Warshaw LLP in San Francisco, who represents the plaintiffs, welcomed the decision in an email on Tuesday. "We are pleased with the Court's opinion and look forward to moving forward with the case on behalf of our clients and the putative class," Swartzberg said.

Raymond A. Cardozo of Reed Smith LLP in San Francisco, who represents the UC Regents, did not respond to emailed or phoned inquiries by press time on Tuesday.

Plaintiffs first filed lawsuits against the Regents in April 2020 after its schools made online classes compulsory during the initial COVID-19 lockdowns while still charging full tuition. A consolidated class action complaint followed in March 2021with claims of a breach of express contract, breach of implied-in-fact contract for tuition, breach of implied-in-fact contract for fees and a quasi-contract claim. UC Remote Cases, JCCP5112 (L.A. Sup. Ct., filed July 13, 2020).

In 2022, the Regents successfully demurred to the consolidated complaint.

"The court found plaintiffs had not sufficiently alleged a specific promise of in-person, on-campus education, which was required to state a valid cause of action for an implied contract between a student and university," the decision read. "The trial court specifically found none of the UC System marketing materials and publications included a specific promise for an on-campus instruction or experience or a specific promise to keep students on campus during a pandemic despite government orders prohibiting physical gathering."

However, the Court of Appeals panel found in its ruling that an implied contract existed between the students and the school when the students accepted their offers of enrollment.

"The UC System's emphasis on the value of its in-person and on-campus offerings is threaded throughout portions of its marketing materials, and that, combined with the course catalogs and other writings mentioned in the operative complaint, amount to definite statements regarding the nature of the education it agreed to provide: an in person, on-campus education," the decision read.