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Law360 (May 27, 2021, 8:01 PM EDT) -- A New Jersey federal judge on Thursday tossed a proposed class action by a Seton Hall University student seeking a partial tuition refund over the cancellation of in-person classes due to the COVID-19 pandemic, reasoning that the school did what it could to make it up to the students.
U.S. District Judge Madeline Cox Arleo shut down Hannah Kostic's contention that the school breached its contract to provide in-person classes in exchange for tuition payments, citing the state's case law finding that isolated provisions in a student manual or course catalog don't give rise to an express contractual relationship.
Rather, courts consider such claims under the "quasi-contract" theory that takes into consideration whether a university acted in good faith and dealt fairly with its students, the decision said. But Kostic didn't allege facts to the contrary about Seton Hall, according to the decision.
Seton Hall suspended in-person instruction to comply with Gov. Phil Murphy's emergency declaration and to "protect the health of its students and faculty," according to the decision.
"Moreover, Seton Hall continued to offer its students credits earned, ensured that students would receive their diplomas, and offered students more flexibility by broadening its pass/fail procedures," the decision said. "The amended complaint recognizes these facts, which belie a finding of bad faith. Therefore, the amended complaint has failed to allege that defendant breached any quasi-contractual duty to Kostic."
Even if the school's course catalog did create an express contractual relationship, it doesn't contain terms requiring in-person instruction, and it also explicitly gives the school the right to make changes to its curriculum "'as certain circumstances require,'" the decision said.
"Transitioning classes to remote learning due to the COVID-19 pandemic no doubt falls within Seton Hall's authority reserved in the course catalog," the decision said.
New Jersey courts have consistently come to that conclusion, Judge Arleo noted, invoking Dougherty v. Drew University. In Dougherty, which involved nearly identical allegations, U.S. District Judge Kevin McNulty ruled in April that Drew's transition to virtual education during the 2020 school year was permitted under the school's reservation of rights clause allowing it to modify its academic program.
Kostic argued that the course catalog's reservation of rights is overly broad and not ripe for review at this stage of the litigation, but the judge found that to be "unpersuasive," the decision said. The judge was likewise unswayed by Kostic's reliance on other university publications.
Judge Arleo also said Kostic's other claims, such as unjust enrichment and conversion, fail as a matter of law.
The complaint was filed in May 2020 with Samuel Schoening as the named plaintiff. Kostic and her father, Jeffry, replaced Schoening as the named plaintiffs in an amended version of the complaint filed in September.
Kostic claimed she paid $12,025 in tuition and fees for the spring 2020 semester, when the pandemic swept the nation and Gov. Murphy issued an executive order in March shutting down nonessential businesses. Classes thereafter were offered only in online format, the amended complaint said.
At the time, Kostic was pursuing a degree in audio and visual media, with a concentration in sound production and a minor in sports media.
"The audio and visual media, sound production, and sports media programs at Seton Hall rely extensively on in-person instruction, peer collaboration and access to Seton Hall's facilities. None of these resources were available to Ms. Kostic while in-person classes were suspended," the amended complaint said.
Kostic sought a pro-rated portion of tuition and fees representing the portion of the semester when classes moved online and campus services were no longer being provided.
Seton Hall in August asked the court to toss the original complaint, saying claims of "educational malpractice" are barred under state law.
Counsel for the parties didn't immediately respond to requests for comment Thursday.
Kostic is represented by Joseph I. Marchese, Philip L. Fraietta and Sarah N. Westcot of Bursor & Fisher PA.
Seton Hall is represented by Angelo A. Stio III, Michael E. Baughman and Robyn R. English-Mezzino of Troutman Pepper Hamilton Sanders LLP.
The case is Samuel Schoening v. Seton Hall University, case number 2:20-cv-05566, in the U.S. District Court for the District of New Jersey.
--Additional reporting by Bill Wichert. Editing by Janice Carter Brown.
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