Reynolds v. Concordia University, St. Paul

Background

Amelia Reynolds enrolled in Concordia’s accelerated nursing program in July 2020. She alleged that Concordia’s handbooks, registration materials, syllabi, website, and other materials promised clinical practice, nursing simulation labs, skills labs, and other hands-on instruction. Reynolds alleged that Concordia provided substantially less than promised during the Fall 2020, Spring 2021, and Summer 2021 semesters while continuing to charge full tuition and related fees.

Reynolds brought the case as a proposed class action. She asserted claims for breach of contract, unjust enrichment, promissory estoppel, negligent misrepresentation, reckless misrepresentation, and violations of Oregon’s Uniform Trade Practices Act. She sought damages and an injunction requiring truthful information and preventing Concordia from charging or retaining tuition and fees for services it did not provide.

Standing for Injunctive Relief

Concordia argued that Reynolds lacked standing—the constitutional authority to seek relief in federal court—to pursue an injunction because she had graduated. The court agreed. An injunction requires a real and immediate threat of future harm, and Reynolds did not allege that she might enroll at Concordia again or otherwise face future harm from the alleged conduct. The court dismissed her claims insofar as they sought injunctive relief for lack of subject-matter jurisdiction, without prejudice.

Claims Related to the St. Paul Campus

Concordia argued that claims involving its St. Paul campus should be dismissed because Reynolds had enrolled through the Portland campus and had not alleged facts about instruction at St. Paul. The court rejected that argument. Reynolds alleged that Concordia made similar promises about the accelerated nursing program at both campuses and that Concordia curtailed those experiences and collected tuition and fees from students at both campuses. The court found those allegations sufficient at the motion-to-dismiss stage.

Choice of Law

The court applied Minnesota law to Reynolds’s common-law claims. Concordia had argued that Oregon law governed and identified supposed differences between Oregon and Minnesota law. The court found no outcome-determinative conflict on the issues presented. The court also considered the Oregon statutory claims on their merits because the parties identified no conflict with Minnesota law and Reynolds’s allegations connected her claims to Oregon.

Breach of Contract

The court denied dismissal of Reynolds’s breach-of-contract claim. Under Minnesota law, materials such as handbooks and similar documents may form part of a student’s contract with a private educational institution when they contain specific promises. Reynolds plausibly alleged that Concordia promised clinical, simulation, and lab experiences in exchange for tuition and fees and then failed to provide them.

The court also found that Concordia’s disclaimers and reservations of rights did not make the claim implausible at this stage. Those provisions could reasonably be read as ambiguous when compared with Concordia’s repeated and specific promises about clinical and lab instruction. Reynolds also plausibly alleged damages, including the loss of promised instruction and lab-related resources for which she paid.

Unjust Enrichment

The court denied dismissal of the unjust-enrichment claim. Unjust enrichment is an equitable claim based on a defendant’s retaining a benefit when fairness requires payment. Although a plaintiff generally cannot recover unjust enrichment when an enforceable contract governs the dispute, a plaintiff may plead unjust enrichment in the alternative when the existence, scope, or enforceability of the contract remains uncertain.

The court found that Reynolds plausibly alleged that Concordia knowingly retained tuition and fees for in-person clinical, simulation, and lab experiences that it did not provide. The court stated that further factual development could clarify Concordia’s contractual obligations and whether pandemic-related circumstances affected those obligations.

Promissory Estoppel

The court denied dismissal of the promissory-estoppel claim. Promissory estoppel can provide a remedy when a clear promise induces reasonable and detrimental reliance, even if no enforceable contract exists. Reynolds plausibly alleged that Concordia repeatedly promised clinical and simulation instruction, that she relied on those promises when enrolling and reenrolling, and that she paid tuition and fees without receiving the promised experiences.

The court rejected Concordia’s argument that Reynolds could not reasonably rely on promises of in-person instruction during the pandemic. At the pleading stage, the allegations supported the possibility that Reynolds reasonably expected Concordia to provide the promised clinical and lab experiences, particularly because Concordia continued making similar representations after the pandemic began.

Negligent Misrepresentation

The court dismissed Reynolds’s negligent-misrepresentation claim under Rule 12(b)(6), which allows dismissal when a complaint does not plausibly state a legal claim. Under Minnesota law, negligent misrepresentation requires a duty of care. The court found that Reynolds had not plausibly alleged that Concordia owed her such a duty.

The court characterized the parties’ relationship as an arm’s-length commercial transaction involving payment for educational services. Reynolds’s allegations concerned Concordia’s promises to provide those services, not information supplied to guide her in a separate business or professional transaction. The court also rejected her argument that Concordia’s greater control over the educational services created the required special relationship. The claim was dismissed with prejudice, as stated in the order.

Reckless Misrepresentation

The court denied dismissal of Reynolds’s reckless-misrepresentation claim. Reckless misrepresentation involves a positive, unqualified statement made while the speaker is consciously ignorant of its truth or knows the supporting information is inadequate or unreliable. Reynolds plausibly alleged that Concordia repeatedly promised clinical, simulation, and lab experiences after it had already eliminated or reduced those experiences and that she relied on those statements when enrolling and reenrolling.

Oregon Uniform Trade Practices Act Claims

The court dismissed Reynolds’s claims under Oregon’s Uniform Trade Practices Act. For claims under several provisions, Reynolds needed to plausibly allege that the nursing education was a service primarily purchased for personal, family, or household use. The court concluded that a bachelor’s nursing program is ordinarily purchased for commercial or economic purposes, such as pursuing employment, and therefore was not a qualifying personal service under those provisions.

The court also dismissed Reynolds’s claim that Concordia caused confusion about its affiliation with Orbis Education, LLC. Reynolds alleged that Orbis helped design and manage the program, but she did not plausibly connect that affiliation to her alleged loss. The court found that she had not alleged an ascertainable loss caused by the conduct covered by that statutory provision. The Oregon statutory claims were dismissed without prejudice under Rule 12(b)(6), as stated in the order.

Disposition

Judge Tostrud’s order granted in part and denied in part Concordia’s motion to dismiss. The order dismissed the injunction-related claims without prejudice for lack of subject-matter jurisdiction, dismissed the negligent-misrepresentation claim with prejudice under Rule 12(b)(6), dismissed the Oregon Uniform Trade Practices Act claims without prejudice under Rule 12(b)(6), and denied the motion in all other respects.