Abuelhawa v. Santa Clara University

Background

Three Santa Clara University law students—Lilas Abuelhawa, Kelly Wynne, and Leonardo Kim—brought a proposed class action against Santa Clara University concerning the university’s decision to move instruction online during the COVID-19 pandemic. The university temporarily suspended in-person classes on March 10, 2020, and announced on March 16, 2020, that the Spring 2020 term would remain online. The students alleged that they paid for in-person educational services, on-campus facilities, and related experiences that the university did not provide.

The first amended complaint asserted claims for breach of an implied-in-fact contract, violation of the “unfair” prong of California’s Unfair Competition Law, and unjust enrichment. The students relied on statements in course materials, student bulletins, and the university’s website, including course locations, references to campus life, and descriptions of in-person education. They alleged that these statements promised either in-person instruction or tuition refunds. They did not challenge the quality of online instruction itself.

The first amended complaint also asserted a conversion claim and a claim under the “unlawful” prong of the Unfair Competition Law. The students withdrew those claims in their opposition to the motion to dismiss.

Legal standard

Santa Clara University moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not allege enough facts to state a legally plausible claim. In deciding that motion, the court accepted the complaint’s factual allegations as true and viewed them favorably to the students, but it did not have to accept legal conclusions presented as facts.

Implied-in-fact contract claim

The court held that California law requires a student alleging an implied contract with a university to identify a specific promise that the university breached. General statements or expectations in university publications do not create contractual obligations.

The students pointed to course listings identifying on-campus locations, website statements about campus life, and a course-catalog questionnaire asking whether a student’s learning style was suitable for online learning. The court concluded that none of these statements was a definite, specific, or explicit promise that Santa Clara University would continue in-person instruction despite a global pandemic. The court therefore granted the motion to dismiss the implied-in-fact contract claim.

The court did not reach Santa Clara University’s alternative argument that financial disclaimers in the tuition-refund schedule and student bulletins barred the contract claim. Because the court found that the students had not adequately pleaded a specific promise, it allowed them leave to amend.

Unfair Competition Law claim

The students’ claim under the “unfair” prong of California’s Unfair Competition Law was based on the same alleged failure to provide in-person instruction underlying the contract claim. The court concluded that the unfair-competition claim failed for the same reason: the students had not adequately pleaded a specific promise by the university. The court granted the motion to dismiss that claim but allowed leave to amend.

Unjust enrichment claim

The court held that California does not recognize unjust enrichment as a separate cause of action. It rejected the students’ reliance on decisions involving narrow circumstances, including an insurance dispute, and concluded that those decisions did not support an independent unjust-enrichment claim here. Because amendment would be futile under California law, the court granted the motion to dismiss the unjust-enrichment claim and dismissed it with prejudice.

Other claims and disposition

Because the students withdrew the conversion claim and the Unfair Competition Law claim under the “unlawful” prong, the court dismissed both claims with prejudice.

The court granted Santa Clara University’s motion to dismiss the first amended complaint. It dismissed the implied-in-fact contract and “unfair” Unfair Competition Law claims with leave to amend, and dismissed the unjust enrichment, conversion, and “unlawful” Unfair Competition Law claims with prejudice. The students had 30 days from the date of the order to file a second amended complaint. The court stated that failure to meet the deadline or cure the identified deficiencies would result in dismissal of the deficient claims with prejudice. The court also barred adding new causes of action or parties without permission or agreement as allowed by the Federal Rules of Civil Procedure.