Nguyen v. Stephens Institute

Background

Duy Nguyen, identified as a student at the Academy of Art University, sued Stephens Institute doing business as Academy of Art University and Does 1–50. He alleged that the school breached its contract when on-campus classes moved online in Spring 2020 because of the COVID-19 shutdown and San Francisco’s shelter-in-place order. He alleged that the school should return proportional portions of tuition and fees for services that were not provided after the school shut down on or around March 11, 2020.

The standing issue arose during briefing on a pending motion for class certification. The court noted that undergraduate students paid the same tuition rate for on-campus and online courses during the 2019–2020 academic year: $963 per unit or hour. The students and school did not distinguish the price or value of tuition based on whether classes were held in person or online.

The court also noted that the school charged a $30 Student Activity Fee for campus-based services, facilities, and activities, but credited that fee to students when the school went entirely online. Nguyen admitted that he received reimbursement of that fee. The remaining course fees varied substantially by course, depending on the coursework, activities, and equipment required.

Court’s analysis

Article III standing is the constitutional requirement that a plaintiff show an actual injury that was caused by the defendant’s conduct and could likely be remedied by a favorable court decision. The court stated that Nguyen had to support his allegation that the school’s alleged breach of contract injured him.

Because tuition did not cost more for in-person instruction, and because the Student Activity Fee was returned, the court identified course-fee reimbursement as the only remaining possible measure of damages. The court said it was unclear whether Nguyen qualified for reimbursement because he had not requested it. It also observed that course-fee damages varied significantly from course to course and might not provide a sufficient basis for class-wide treatment.

Order

The court ordered Nguyen to show cause in writing why he could pursue his only remaining breach-of-contract claim. The excerpt does not display the deadline for Nguyen’s written response. It states that the defendant could file a response by September 13, 2023.

This was an order requiring an explanation about standing; the excerpt does not state that the court dismissed the case, dismissed the claim, or ruled on the motion for class certification. Judge Jeffrey S. White signed the order.