First Circuit Upholds Massachusetts Law Barring COVID-19 University Student Refund Claims Against Constitutional Challenge

At a Glance

  • The First Circuit held that Law 80 — which immunizes Massachusetts colleges and universities for monetary claims based on certain actions during the Spring 2020 semester — was retroactively applicable, did not violate due process, and barred the plaintiffs’ claims.
  • In 2023, the Eleventh Circuit upheld summary judgment in favor of the University of Miami, deferring to the university’s judgment regarding the education of students and enforcing contractual language providing administrators with discretion during emergency conditions.
  • Later in 2023, the First Circuit ruled in favor of the University of Rhode Island, affirming the trial court’s grant of the university’s motions for dismissal (regarding the tuition claims) and summary judgment (regarding the fee claims) on various grounds.

On May 22, 2024, the First Circuit denied panel rehearing and rehearing en banc on its decision to uphold summary judgment in favor of Boston University. See Dutra v. Boston University, No. 23-1385, 96 F.4th 15 (1st Cir. Mar. 13, 2024). The First Circuit held that Law 80 — which immunizes Massachusetts colleges and universities for monetary claims based on certain actions during the Spring 2020 semester — was retroactively applicable, did not violate due process, and barred the plaintiffs’ claims.1

Although Law 80 was not enacted until August 9, 2023, it applied “to claims commenced on or after March 10, 2020, “for which a judgment has not become final before the effective date of this section and which were based on acts or omissions that occurred during the spring 2020 academic term.” The First Circuit utilized a three-factor test to evaluate whether Law 80’s retroactive application was constitutionally permissible:

  1. the nature of the public interest which explicitly or may have motivated the Legislature to enact the retroactive statute;
  2. the nature of the rights affected retroactively and the reasonableness of any reliance expectations on those rights; and
  3. the extent or scope of the statutory effect or impact, including whether the statute is appropriately and narrowly tailored.

As to the first factor, the First Circuit found two major plausible and reasonable public interest legislative motivations underlying Law 80’s enactment: (1) protection of public health and safety interests and (2) securing compliance with government health orders. Law 80’s requirement that any relevant conduct must be “reasonably related to public health and safety interests” and also that immunity did not apply to acts or omissions that were malicious or in bad faith provided evidence of motivation to protect public health and safety interests. The First Circuit identified other underlying motivations for Law 80’s enactment:

  • The need to correct the disproportionate financial impact felt by higher education institutions due to good-faith compliance with the COVID-19 emergency orders
  • The need to ensure that higher education institutions would not hesitate to follow prospective emergency public health orders meant to protect the safety of students and others
  • The fact that securing compliance would likely reduce economic and other strains on the government as it coped with a public health emergency
  • The determination that the litigation risks and costs accompanying past universities’ compliance could deter them from future compliance
  • The fact that the negative financial effects that higher education institutions experienced during the Spring 2020 semester were ongoing

As to the second factor, the First Circuit reasoned that the plaintiffs could not have reasonably continued to expect on-campus classes and services when Massachusetts’ governor had ordered practically all large in-person gatherings to cease. The affirmative defenses of impossibility and frustration of purpose based on the university’s compliance with the governor’s orders meant that the plaintiffs no longer had any reasonable reliance on the performance of “illegal contracts.”2

As to the third and last factor, the First Circuit found that Law 80 was narrowly drawn (in time and scope) to address the problem perceived by the Massachusetts Legislature. Specifically, Law 80 limits immunity to claims commenced on or after March 10, 2020, for which a judgment has not become final before August 9, 2023 (i.e., Law 80’s effective date). Further, Law 80 limits immunity to claims based on acts or omissions that occurred during the Spring 2020 academic term. Further, Law 80 explicitly does not provide immunity for malicious or bad-faith conduct.

Balancing those three factors, the First Circuit held that Law 80 does not violate due process.

In Conclusion

This is the third federal appellate decision concerning an order granting summary judgment in a COVID-19 student refund case. Last year, the Eleventh Circuit upheld summary judgment in favor of the University of Miami, deferring to the university’s judgment regarding the education of students and enforcing contractual language providing administrators with discretion during emergency conditions. See Dixon v. University of Miami, 75 F.4th 1204 (11th Cir. July 31, 2023). See our prior discussion of Dixon. Later that year, the First Circuit ruled in favor of the University of Rhode Island, affirming the trial court’s grant of the university’s motions for dismissal (regarding the tuition claims) and summary judgment (regarding the fee claims) on various grounds. See Burt v. University of Rhode Island, 84 F.4th 42 (1st Cir. Oct. 13, 2023)3. Multiple summary judgment decisions in other COVID-19 college and university student refund cases are pending appeal. See, e.g., Omori v. Brandeis University, No. 24-1084 (1st Cir.); Bergeron v. Rochester Institute of Technology, No. 23-271 (2d Cir.); Beck v. Manhattan College, No. 23-1049 (2d Cir.); Michel v. Yale University, No. 23-222 (2d Cir.); and Pranger v. Oregon State University, No. 23-35393 (9th Cir.).

FOOTNOTES

  1. The First Circuit affirmed the district court on alternate legal grounds than those relied upon by the district court. Law 80 was not enacted until after the plaintiffs had already appealed the district court’s grant of summary judgment on grounds related to damages. Because the First Circuit held that Law 80 barred the plaintiffs’ claims outright, it did not address the district court’s decision regarding damages.
  2. The court held that even if there were a possible restitution claim (such as unjust enrichment), such a claim would be defeated because the university gave considerable value in exchange for its online programs and services.
  3. As to the summary judgment issues, the First Circuit held that: (1) the university fulfilled its contractual obligations arising out of the fees for student activities, capital projects, health services, and technology; (2) the university was discharged from any contractual obligations arising out of the fees for the Memorial Union and Fitness Center due to substantial frustration by the governor’s emergency orders; and (3) there was no evidence that the university unjustly benefitted from its retention of the fees paid by the plaintiffs.

 

Source:  https://www.jdsupra.com/legalnews/first-circuit-upholds-massachusetts-law-3556688/

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