“Unjust Enrichment”: Federal Court Rules That the University of Delaware Can Be Sued For Refunds Due To Shift To Virtual Classes

There is a major new ruling in Delaware that could impact universities and colleges across the country. A federal judge ruled in favor of allowing students at the University of Delaware to proceed with their claim that the school “unjustly enriched itself” during the COVID-19 pandemic. Judge Stephanos Bibas found the claims (and demand for partial refunds) “plausible.” While not controlling precedent outside of Delaware, the ruling could encourage other such challenges across the country.

The court noted that the case turned on the basic contracts principle that “if someone ‘renders performance under the contract, but the contract is then excused because of a ‘change of circumstances,’ he still “has a claim in restitution … as necessary to prevent unjust enrichment.” The court relied on the Restatement (Third) of Restitution and Unjust Enrichment §34; see also Restatement (Second) of Contracts §272. The court rejected conversion claims.

Judge Bibas offered a strong rejection of the interchangeability of in-person and virtual classes: “Similarly, the students insist, being on campus is a core part of the educational deal: it is “so basic to the bargain” between students and an in-person university. They may be right.”

The students sued UD for “breached contractual obligations” after it closed the campus and moved to online instruction last spring. UD argued that it “expressly reserved” the right to switch to virtual instruction. Notably, Judge Bibas held that it did not matter if UD never made an express promise:

“True, the school never promised them expressly. But promises need not be express to be enforceable. By its statements and history of offering classes in person, the school may have implied a promise to stay in person. So the students deserve a chance to press their contract claims. 3 To be sure, even if there was a promise, the school was probably justified in breaking it. But that would not end the case. Though impossibility might excuse the broken promise, the school should not be unjustly enriched. So it may need to return the money it saved, if any, by going online.”

The school also challenged the standing of parents who paid for their child’s tuition and fees because they were not obligated to handle such costs. The school also argued that parents “were not personally deprived of campus services or forced to take allegedly inferior online courses.” However, Bibas again demurred: “I disagree. If the parents are right, they suffered a simpler injury: The school wrongly took their money. It promised to use the money for one purpose but did not.”

I expect most courts would find that the switch to virtual classes was a responsible and reasonable shift in the pandemic. The students were promised an education and schools worked hard to supply it under highly unusual circumstances, including local and state laws barring large group gatherings. That however does not account for some fees, including dorm rent, that may not have been reimbursed fully by schools. Some of those fees may have paid for services that were not in fact rendered.

Bibas was a respected law professor at the University of Pennsylvania before joining the bench after a nomination by President Trump in 2017.  He has a stellar legal background in both academia and practice.

Here is the opinion: Ninivaggi v. University of Delaware

11 thoughts on ““Unjust Enrichment”: Federal Court Rules That the University of Delaware Can Be Sued For Refunds Due To Shift To Virtual Classes”

  1. The students should also sue the universities for any side effects associated with mandated vaccines; their families should do the same for any deaths from mandated vaccines.

  2. Is B— S— a legal term?

    The college “expressly” promised in-class instruction through traditional, customary, long-standing, and publicly understood past practices, and it must have immediately provided pro-rated refunds.

    The college must pay damages for its deliberate act of attempting to defraud, and its wilful failure to effect the aforementioned indicated refund.

    The college must reimburse all parties, including students, the court and any and all related governmental levels, for costs, fees, etc.

  3. There is a paradoxical situation, in terms of the work the professor does and the the course content that the student receives.
    Most teachers find it harder to do a online version, and very hard to test with academic integrity (cheating is rampant on online testing). ( Some teachers simply write a huge number of versions of the test, a very time consuming procedure.) As almost all college, grade school and high school teachers know, it is difficult to monitor students when doing live classes. So the teacher has much more work in the process of teaching and usually has to put much of the content of the class on line as well, outlines graphs charts and so on. I simply stopped teaching after the spring of 2020 since the two sections I was teaching became a full time job with the same pay.
    On the other hand, the online versions are lame compared to in class learning results. Many parents feel that their children simply wasted last year’s schooling effort. Even with dedicated teachers, the distance learning waters down what is presented. ( This is particularly evident in any college or high school class that regularly needs labs, projects or in class presentations by students).
    The paradox is this: professors and other teachers on average work harder when forced to use online classes whereas the students receives less content learning. I side with the students since, contractually, what they are getting for their online course high tuitions is much less than in person classes.
    The larger issue is that lowering the quality of education is terrible. Unless we want socialized guarantees of a certain standard of living, people have to earn their livings. The way to increase earning power is through education and experience. The capacity for raising one’s standard of living is improved by education, not by government handouts.
    The risk reward for masks cannot just be a calculus of lives. We regularly accept 30-40 thousand automobile deaths per year for the impact that easy transportation has on our lives. We even accept the small risks of skydiving, hang-gliding, rock climbing and shooting rapids for the mere enjoyment of thrilling experiences. It looks like we are going to have to bite the bullet and sooner or later let mask-muzzling be a matter of choice, especially since the problem of flu spread is not going away. We can’t have bad education go on forever.

    1. Regarding the fact that teachers work harder to provide online content, it’s not the teachers who are getting unjustly enriched. It’s not like the university is passing that money along to the faculty. The faculty gets paid the same, i.e. very little. It’s the university that pockets the extra cash. One of my former students said they were actually charged an additional fee for online classes. This will be very interesting to see if other students take the ball and run with it as I hope they do.

  4. How much of this “enrichment” is tied into federally guaranteed student loans? Did UD and other schools that received federal funds violate those contracts?

  5. This ruling isn’t going to matter anyway. The democrats are going to provide free college education, so this will become a mute point.

  6. I had wondered whether these types of cases would be coming along. The “unjust enrichment” theory really works here.

  7. Great!

    Many injustices were committed in the name of Covid, most of them leading to payers (including taxpayers) not receiving full value.

    Understand “force majeur”, but many entities (government agencies and teachers unions being prime examples) used the opportunity to collect pay and stop working.

    Try to get a passport. Yet nobody at any passport office missed a paycheck.

    The teachers (mostly) got a very reduced work year.

    Universities mostly cut hourly workers to reduce overhead while salaried staff just worked less and students paid the same and got less.

    Most of these injustices will not be corrected, but we need to recognize the profiteers.

  8. It makes sense to me. Maybe UD will be forced to pare down what I presume is a bloated administration

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