The BUSKLAW January Newsletter: Pandemic and the Promise of an In-Person Education: "We're Payin' for this Stuff!"
A recent decision out of the U.S. District Court (Judge David Hurd) for the Northern District of New York, Ford, et al v. Rensselaer Polytechnic Institute, examines the consequences of an educational institution's pandemic-induced failure to honor its promises for in-person, campus-centered instruction.
Plaintiffs are students of Rensselaer Polytechnic of Troy, NY ("RPI"). RPI markets itself as providing a unique educational experience through intense campus-based instruction, mandating that all first and second-year students live on campus and even spend the summer between their second and third years on campus "to afford more meaningful interaction with RPI's professors." When the Covid pandemic caused RPI to replace on-campus instruction with on-line learning and shut down all campus activities, Plaintiffs sued RPI for damages resulting from the alleged lesser value of their remote education. RPI asked the Court to dismiss their claims. The resulting decision is instructional; educational institutions would do well to heed the Court's reasoning in refusing to dismiss the students' breach-of-contract claims against RPI. And although the case was decided under New York law, courts in other States may look to this decision if faced with similar claims.
Let's start with the basics. First, Judge Hurd found that there was an implied contract between the students and RPI (i.e., a student complies with the school's terms and conditions and receives a degree in return), and implicit in that contract is the requirement that the school must act in good faith in dealing with its students. Second, the terms of the contract must be carefully considered. Vague promises - akin to puffery - (e.g., "enroll in our college and you will receive the best education for your money") are not enforceable. But you must examine a school's bulletins, circulars, and handbooks for specific promises material to the student's relationship with the school, and these are enforceable. And that is what Judge Hurd did here, noting that RPI's circulars described a mandatory on-campus learning experience that was integral to attending its school. One important factor was RPI's repeatedly using "we will" provide students certain campus-centered learning programs, rather than "strive to" provide or some other non-declaratory language. The Court found that in switching from in-person learning to on-line classes because of the pandemic, RPI did not keep these promises. So the value of the education provided to its students was diminished.
RPI argued that the pandemic forced it to discontinue in-person learning and suffered losses just like the students did, so its breach of contract was unforeseeable and without fault. But Judge Hurd wasn't impressed with this argument, finding that it didn't excuse RPI's failure to make good on its promises nor the students having to bear the loss from that failure.
In conclusion, the Court found that the "purpose of the litigation was not to apportion blame but only to ensure that the hardship imposed by the present state of the world falls justly." So Plaintiffs' claims for damages resulting from RPI's breach of its implied contracts with the students will proceed to discovery. Of course, the extent of the Plaintiffs' damages will be hotly debated going forward and I suspect, difficult to establish. But that's the stuff lawsuits are made of. RPI may yet emerge with its academic reputation largely intact (but its assets diminished, especially if the Court certifies the case as a class action, the class consisting of all RPI students).
Here's the bottom line for anyone marketing goods or services: puffery is harmless, but explicit promises can cause trouble if they aren't kept - even in the middle of a pandemic. So pull out your print or digital sales brochures, circulars, handbooks (and IT vendors, your statements of work) and read them carefully!
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