Arizona Universities Beat COVID-19 Class Refund Claims

By Lauren Berg
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Law360 (July 30, 2020, 10:06 PM EDT) -- An Arizona federal judge on Wednesday tossed a putative class action filed by parents looking to get refunds after three public universities shut down their campuses and went online amid the coronavirus pandemic, saying they failed to notify the schools before filing their lawsuit as required by state law.

U.S. District Judge John J. Tuchi granted the Arizona Board of Regents' motion to dismiss the putative class action, finding the parents didn't give the three schools — the University of Arizona, Arizona State University and Northern Arizona University — a chance to investigate and assess their liability.

Arizona law requires a plaintiff to file a notice of claim with a public entity before suing it for damages, according to the seven-page order, a notice that gives the entity a chance to look into the claims and consider the possibility of a settlement before proceeding to litigation.

The parents, whose children attend the three universities, filed suit in late March following the outbreak of the novel coronavirus that causes COVID-19. In response to the outbreak, the parents said the universities either encouraged or forced students to move out of on-campus housing, moved all classes online, and canceled campus events

But the schools didn't refund the cost of room and board or other fees for services, the parents said.

The suit included claims of breach of contract and unjust enrichment and conversion, and sought refunds for the parents and an injunction barring the universities from retaining the prorated, unused money paid for room and board.

In his order Wednesday, Judge Tuchi said that because the claims request monetary damages, they are subject to Arizona's notice of claim statute.

"Plaintiffs' argument that because they merely seek return of their own money, as opposed to new or reallocated funds, is unavailing," the judge said.

The judge also rejected the parents' arguments that they should be excused from filing a notice of claims and that because noncompliance with the statute is an affirmative defense, dismissal for lack of compliance is premature. The judge said failure to comply with the statute bars an action.

The parents also argued the Arizona Board of Regents waived its right to rely on the notice of claim statute because the parents and potential class members requested refunds and were steadfastly refused. But the judge rejected that argument as well, saying it didn't matter whether the board knew about certain demands made by the parents.

There has been a wave of litigation against colleges and universities across the country since the coronavirus outbreak forced most institutions to shut down and send students packing.

In April, the University of California, California State University, Vanderbilt University and Fordham University were slammed with suits as students and parents demanded refunds for campus fees, room and board, and tuition.

CSU has since asked a federal judge to toss the suit accusing it of withholding campus fees, saying it's immune from the lawsuit under the 11th Amendment because it is an entity of the state rather than a "person."

Ivy League students have also sued Columbia University, Cornell University, Dartmouth College and Harvard University, while Michigan State University, Pace University, the University of Miami and Drexel University were accused of withholding tuition and fees.

Earlier this month, Temple University urged a Pennsylvania federal judge to ax a suit seeking tuition refunds, saying there was no contractual provision between students and the school requiring that it provide in-classroom instruction as opposed to the online-only classes that were ordered as the coronavirus first took hold.

On Wednesday, the mother of a Rutgers University student dropped a proposed class action seeking reimbursement for tuition paid for courses that were reduced to online instruction.

A representative for the Arizona Board of Regents declined to comment Thursday, and counsel for the parents did not immediately respond to a request for comment.

The parents are represented by Robert D. Ryan of the Law Offices of Robert D. Ryan PLC, Matthew S. Miller of Matthew S. Miller LLC, Adam J. Levitt, Amy E. Keller and Laura E. Reasons of DiCello Levitt Gutzler LLC, Clifford P. Bendau III and Christopher J. Bendau of Bendau & Bendau PLLC, Gary F. Lynch and Edward W. Ciolko of Carlson Lynch LLP, and James L. Simon of the Law Offices of Simon & Simon.

The Arizona Board of Regents is represented by Robert H. McKirgan, Jessica L. Fuller, Jennifer Lee-Cota and Yalda Godusi of Lewis Roca Rothgerber Christie LLP.

The suit is Andrew Rosenkrantz et al. v. Arizona Board of Regents, case number 2:20-cv-00613, in U.S. District Court for the District of Arizona.

--Additional reporting by Hailey Konnath, Julia Arciga, Chris Villani, Matt Fair and Jeannie O'Sullivan. Editing by Philip Shea.

For a reprint of this article, please contact reprints@law360.com.

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