COVID-19-CLASS ACTION

July 25th, 2022 by Rieders Travis in Miscellaneous

Lawson v. Pennsylvania College of Technology, PA No. 21-01134 (C.P. Lycoming June 28, 2022) (Linhardt, J.)  Plaintiffs Michael James Lawson, Jr. (“Michael”) and Tara Lawson (“Tara”), son and mother, commenced this case by filing a Class Action Complaint on October 12, 2020 in Philadelphia County. The Complaint seeks reimbursement of money paid to Defendant, a college in Williamsport, for tuition, room, board, and other purposes. The gravamen of the Complaint is that when Defendant switched from in-person learning to remote learning in response to the COVID-19 pandemic, they did not fully refund students sums of money that were paid for, inter alia, in-person lessons, meals, room and board, and activities. In doing so, Plaintiffs allege, Defendant committed numerous breaches of contract and was unjustly enriched. The Complaint contains eight counts, four for breach of contract and four for unjust enrichment, relating to four classes of payment. Counts I and II allege that class members entered into a contract with Defendant, agreeing to pay tuition in exchange for, inter alia, “access to campus facilities, access to campus activities, and live, in-person instruction in a physical classroom.” Plaintiffs contend that Defendant retained all tuition moneys paid despite switching from in-person education to remote education in the middle of the Spring 2020 semester, and in doing so “provided a materially different product” than the one class members paid tuition for. This is especially egregious, Plaintiffs allege, given that Defendant emphasizes trades and hands-on learning, which means that many of its programs (such as diesel technology, Michael’s course of study) are not amenable to remote education. Counts Ill and IV allege that class members paid “a myriad of fees that are either related to courses or included under the guise of tuition,” such as fees for facilities, technology infrastructure support, health services, social activities, and lab fees. When Defendant switched to online learning, Plaintiffs contend, Defendant retained these fees despite the services they paid for being inaccessible to class members. Counts V and VI allege that when Defendant switched to remote learning, it closed its on-campus housing facilities, requiring that on-campus students vacate. Plaintiffs contend that Defendant provided “partial refunds, equal to four weeks of housing charges,” despite “student [being] evicted with approximately eight weeks remaining in the semester.” Counts VII and VIII allege that many students purchased meal plans from Defendant, but that when Defendant switched to remote learning, it offered, as with housing, “partial refunds equal to four weeks of meal charges” despite there being approximately eight weeks remaining in the semester. Plaintiffs seek certification of a class, damages for themselves and class members, and a number of fees and remedies particular to the class action context. On December 18, 2020, Defendant filed Preliminary Objections to the Complaint. Defendant raised eight separate objections, the first of which was to venue in Philadelphia County. Shortly thereafter, Defendant filed a motion to transfer the action to Lycoming County. The Philadelphia County Court of Common Pleas granted the parties a period of discovery limited to the issues of forum and venue, and on October 6, 2021 the Philadelphia County Court of Common Pleas sustained Defendant’s first preliminary objection and transferred the case to this Court. Following the transfer, this Court held a conference with the parties on February 18, 2022, at which time all parties agreed that Defendant’s remaining preliminary objections were outstanding and ripe for decision. The Court concludes that Tara has satisfactorily alleged standing. Essentially, Tara alleges that she paid money to Defendant under the impression that Defendant would provide a product of a certain character to Michael, but Defendant ultimately delivered either a product of a different, lesser character or no product at all, keeping a disproportionately large percentage of the money Tara paid. The Complaint does not allege that Tara paid Michael money which he then contributed to the costs described in the Complaint; rather, the Complaint alleges that Tara paid this money to Defendant. This allegation, modest though it is, sufficiently alleges that Tara suffered harm to her financial interests beyond that sustained by the general public. Further, the fact that Michael attended Defendant college and Tara did not, does not render the potential reimbursement of her payments a “remote consequence” of a judgment in this case. For the foregoing reasons, the Court overrules Defendant’s first preliminary objection.

Here, however, the Court concludes that Plaintiffs have not alleged the existence of the contract or its provisions with sufficient specificity because they have not attached many of the materials they claim form the basis of the contract. Plaintiffs claim that Defendant breached the contract between itself and students by, inter a/ia:

  • Promising that students would receive live, in-person education if they paid higher tuition than their remote classmates, but then providing online education to all students while retaining the additional payments made by students who paid a premium for in-person education;
  • Retaining numerous specific fees that were tied to specific benefits, services, and programs that Defendant ultimately failed to provide;
  • Reimbursing students for only four weeks of housing costs despite preventing them from utilizing on-campus housing for approximately eight weeks; and
  • Reimbursing students for only four weeks of meal plan costs despite the cafeteria being closed for approximately eight weeks.

The Court can only evaluate whether the alleged contract actually contains these terms and binds Defendant to honor them by considering the full context of the alleged contract between the parties, and the Court can only determine the full context of the alleged contract if all of the writings that comprise it are attached to the Complaint or summarized in relevant part. This is also the only way for Defendant to receive full notice of the claims against it and avoid unfair surprise. The Court may ultimately determine that the allegations in the Complaint are stated with sufficient specificity and in fact form a contract, but it cannot make this determination until it sees the alleged contract in full. For the foregoing reasons, the Court sustains Defendant’s third preliminary objection. The Court will provide Plaintiffs twenty (20) days to file an Amended Complaint including the documents Plaintiffs contend constitute the full contract and identifying the location in the alleged contract of each provision Plaintiffs allege the Defendant breached. Even accepting Defendant’s argument that this decision was pedagogical, a fair reading of Plaintiffs’ Complaint shows that they are not attacking any pedagogical elements of Defendant’s decision to shut down the campus. Rather, they are contesting the financial elements of the decision to transition to entirely online learning without providing refunds or reimbursement to students who paid extra for in-person learning. For the foregoing reasons, the Court overrules Defendant’s fourth preliminary objection. Because the existence of a written contract is incompatible with the existence of a quasi contract, Pennsylvania courts have held that a plaintiff must plead these causes of action in the alternative.  At least one Pennsylvania case has held similarly with respect to contracts implied in fact. Therefore, the Court concludes that under Rule 1020(a) Plaintiffs must plead a breach of an implied contract in a separate count from claims for breach of an express contract or unjust enrichment. For the foregoing reasons, the Court sustains Defendant’s fifth preliminary objection. Plaintiffs shall have twenty (20) days to file an amended complaint pleading claims for breach of express contract and breach of implied contract in separate counts.  The Court concludes that Plaintiffs have permissibly pied unjust enrichment in the alternative to their contractual claims under 1020(c). Further, the Court concludes that Plaintiffs have sufficiently alleged “benefits conferred on defendant by plaintiff, appreciation of such benefits by defendant, and acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value” as is necessary to state a claim for unjust enrichment. For the foregoing reasons, the Court overrules Defendant’s sixth preliminary objection.  As written, the Complaint requests attorneys’ fees as part of its prayer for relief, but does not identify any exception to the American Rule. Typically, class action attorneys’ fees are not an additional sum to be recovered from the defendant but are rather awarded by the court, coming from the judgment or settlement. As such, a party seeking class certification need not plead a demand for attorneys’ fees under Rule 1717 unless that party is relying on some positive of law to recover attorneys’ fees from the opposing party. Here, Plaintiffs have explicitly noted that they are not seeking attorneys’ fees beyond those typically awarded from the judgment or settlement in the class action context. For the foregoing reasons, the Court sustains Defendant’s seventh preliminary objection. To avoid confusion, Plaintiffs’ request for attorneys’ fees is stricken from the Complaint, without prejudice to Plaintiffs to seek an award of attorneys’ fees from settlement or judgment proceeds.

Attorney Cliff Rieders

Attorney Cliff RiedersCliff Rieders is a Nationally Board Certified Trial Lawyer practicing personal injury law. A large part of his practice involves multi-district litigation, including cases related to pharmaceuticals, vitamin supplements and medical devices. He is admitted in several state and federal courts, as well as the Supreme Court of the United States. Rieders is the past regional president of the Federal Bar Association and is a life member of the distinguished American Law Institute, which promulgates proposed rules adopted by many state courts. He is a past president of the Pennsylvania Association for Justice, formerly Pennsylvania Trial Lawyers Association. As a founder of the Pennsylvania Patient Safety Authority, he served on the Board for 15 years.

Not only has Rieders held many highly esteemed, leadership positions, he authored legislation related to the Patient Safety Authority and the Mcare Act, which governs medical and hospital liability actions in Pennsylvania. He authored texts upon which both practitioners and judges rely, including Pennsylvania Malpractice Laws and Forms, and Financial Responsibility Law Issues in Pennsylvania, the latter governing auto and truck collisions in Pennsylvania. In addition, he wrote several books on the practice of law in Pennsylvania regarding wrongful death and survivor actions, insurance bad faith, legal malpractice claims and worker rights, among others. Rieders also serves as a resource to practitioners as a regular speaker for Celesq, an arm of the world’s largest legal publisher, Thomson Reuters West Publishing.

As recognition of his wide range of contribution to his profession and of his dedication to protecting the rights of his clients, he received numerous awards, among them the George F. Douglas Amicus Curiae Award, the Milton D. Rosenberg Award, the B’nai B’rith Justice Award, and awards of recognition from the Pennsylvania Trial Lawyers. [ Attorney Bio ]