Conley v. Fordham University

Background

Cooper Conley and Henry Wallace, who were undergraduate students at Fordham University during the spring 2020 semester, brought this putative class action on behalf of themselves and other similarly situated students. They alleged that Fordham breached its contractual obligations and was unjustly enriched when it canceled in-person classes and activities, restricted campus access and services, and provided virtual classes for the rest of the semester while retaining tuition and fees. They sought damages, restitution, and partial refunds based on the difference between the value of the promised in-person services and the value of the services actually provided.

The students brought the case under the Class Action Fairness Act of 2005 (CAFA). Fordham did not dispute that the complaint initially alleged CAFA’s basic jurisdictional requirements. Those requirements include a proposed class of at least 100 members, citizenship by at least one class member different from the defendant’s citizenship, and more than $5 million in dispute.

Fordham’s Motion

Fordham moved to dismiss under Rule 12(b)(1), which addresses the federal court’s subject-matter jurisdiction. Fordham argued that the court should decline to exercise CAFA jurisdiction under the statute’s “interests of justice” exception. That exception permits a federal court, after considering the totality of the circumstances, to decline jurisdiction when more than one-third but less than two-thirds of the proposed class members and the primary defendants are citizens of the state where the action was filed.

The court evaluated the statutory factors, including the national or interstate importance of the claims, the governing law, whether the case had a connection to the forum, the makeup of the proposed class, and whether similar class actions had recently been filed. The factor concerning whether the case was pleaded to avoid federal jurisdiction did not apply because the students filed the action in federal court.

Court’s Analysis

Fordham submitted an affidavit stating that approximately 15,060 students would qualify for the proposed class and that 7,494—about 50 percent—were New York residents. The affidavit stated that 1,859 students, about 12 percent, were from New Jersey, while the remaining approximately 38 percent were from at least 45 other states, countries, and territories. The students did not dispute these figures.

Judge Garnett concluded that most factors favored dismissal. The claims arose under New York contract and unjust-enrichment law, rather than federal law. The alleged conduct occurred in New York, Fordham’s campuses were located in New York, and the case involved New York executive orders and other state measures responding to the COVID-19 pandemic. New York residents made up approximately half of the proposed class, a larger group than residents of any other state, while the remaining class members were widely dispersed.

The court also relied on similar decisions involving students’ claims against other New York universities and on a recent Second Circuit decision that identified disagreement about how New York law applies to these circumstances and sent a related legal question to the New York Court of Appeals. The court rejected the students’ arguments that the national importance of the pandemic or the presence of Fordham’s campus in the federal district required the case to remain in federal court.

Ruling and Effect

The court GRANTED Fordham’s motion to dismiss and declined to exercise jurisdiction under CAFA pursuant to the interests-of-justice exception. The Clerk of Court was directed to close the case. The court expressly stated that the ruling did not address the merits of the students’ contract and unjust-enrichment claims or their ability to file the action in another court.