By Bill Wichert

Law360 (May 25, 2021, 4:11 PM EDT) -- The Stevens Institute of Technology has fallen short in trying to erase a proposed class action over its switch to all-virtual classes amid the COVID-19 pandemic, with a New Jersey federal judge ruling Tuesday that a student cannot pursue tuition reimbursement claims but may go after the school for not refunding fees.

In deciding Stevens' bid to toss plaintiff Leah Mitelberg's complaint, U.S. District Judge Susan D. Wigenton said the cybersecurity student's breach of contract and unjust enrichment claims may go forward with respect to the fees she paid as part of what she believed would be an in-person learning experience at the Hoboken, New Jersey, educational institution.

Addressing the unjust enrichment claim, Judge Wigenton said Mitelberg "plausibly alleges that defendant received the benefit of her fee payments and that retention of those payments would be unjust because defendant did not render in-person services or activities from March 11, 2020 through the semester's end."

The judge reached a similar conclusion in analyzing the breach of contract claim.

Mitelberg "plausibly alleged" that there was "a valid contract for access to general student services and activities," that Stevens "breached its contractual obligations by failing to provide access to such services and activities" and that there is "a causal connection between defendant's breach and plaintiff's damages," the judge said.

"Unlike plaintiff's claim for tuition reimbursement, her general services fee and student activity fee do not necessarily encompass her education; rather, they plausibly facilitate her access to university facilities and resources," Judge Wigenton said.

But Mitelberg cannot proceed with breach of contract and unjust enrichment claims over Stevens' decision to keep her tuition after the transition to all-remote learning, the judge said.

That's in part because of the "express reservation of rights," or ROR, clause in Stevens' academic catalog for the 2019–20 school year, according to the judge.

The provision states that the school "'reserves the right to change the information, regulations, requirements, procedures and policies announced in th[e] catalog including but not limited to: requirements for admission; graduation or degrees; scheduling; credit or content of courses; fees; and calendars,'" the judge wrote in her opinion.

"Because defendant expressly retained the right to alter requirements and procedures, its transition to virtual instruction during the 2020 spring semester falls within its purview under the ROR," Judge Wigenton said.

Judge Wigenton also found that Stevens "did not deviate from its responsibility to act in good faith and deal fairly with its students amidst the unprecedented COVID-19 pandemic," noting that the school transitioned to all-remote instruction to comply with government orders aimed at curbing the spread of COVID-19.

"These reasons, coupled with the absence of allegations that defendant could have utilized another safe learning option, establish that the physical closure was not only fair, but carried out in good faith for the health and safety of defendant's students, faculty, and staff," the judge said.

Mitelberg's lawsuit is one of several proposed class actions launched against colleges and universities in the Garden State and across the country over the institutions' termination of in-person classes as a result of the pandemic during the spring semester of 2020. Her father previously filed a nearly identical suit that was later dismissed for lack of standing.

As in a number of similar cases, Mitelberg has said she and other students did not get the in-person experiences they paid for and were entitled to a refund of the prorated share of tuition and fees for the services Stevens failed to provide.

Mitelberg has claimed she paid about $31,671 in tuition and fees for the 2020 spring semester, including a $710 general services fee and a $230 student activity fee. Stevens has provided a partial refund of housing costs, but the school has retained all tuition and fees, according to her complaint.

While Judge Wigenton said Mitelberg may pursue her breach of contract and unjust enrichment claims in connection with her fees, the judge tossed her claims of conversion and money had and received.

The judge said the conversion claim for tuition is dismissed since that count "merely restates" Mitelberg's breach of contract claim. She also found that "neither in-person education nor tuition/fee reimbursement fall under the definition of 'chattel' that the tort of conversion covers."

The money had and received claim as to Mitelberg's tuition cannot survive since the requisite elements "mirror unjust enrichment," according to the judge. As it relates to her fees, that claim is "duplicative" of her unjust enrichment claim and thus must be dismissed, the judge said.

Counsel for the parties did not immediately respond to requests for comment Tuesday.

Mitelberg is represented by Philip L. Fraietta and Alec M. Leslie of Bursor & Fisher PA.

Stevens is represented by Angelo A. Stio III and Michael E. Baughman of Troutman Pepper.

The case is Leah Mitelberg v. Stevens Institute of Technology, case number 2:21-cv-01043, in the U.S. District Court for the District of New Jersey.

--Editing by Andrew Cohen.

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