Hassan v. Fordham University

Background

Kareem Hassan sued Fordham University individually and on behalf of people who paid tuition and other fees for the Spring 2020 semester and alleged that they lost the benefit of the education they paid for after Fordham suspended in-person instruction and moved classes online. His earlier complaint asserted breach of contract, unjust enrichment, conversion, and money had and received. On January 28, 2021, the court dismissed those claims and allowed Hassan to seek permission to amend.

Hassan then moved to file a Proposed Second Amended Class Action Complaint asserting breach of contract and unjust enrichment. Fordham opposed the motion. Under Rule 15(a)(2) of the Federal Rules of Civil Procedure, courts generally should allow amendments when justice requires, but may deny leave when amendment would be futile. An amendment is futile if the proposed complaint could not survive a motion to dismiss for failure to state a claim.

Contract claims

The court reconsidered part of its January 28 analysis. It had previously stated that Hassan needed to allege that Fordham acted arbitrarily or in bad faith to plead breach of contract. The court withdrew that requirement for a claim involving a university’s alleged promise to provide specific, nonacademic services. The court distinguished such promises from academic judgments, which receive greater judicial deference. It held that a plaintiff need not plead arbitrary or bad-faith conduct when alleging that a university breached a written promise to provide a specific service.

The court found that the Proposed Second Amended Complaint adequately alleged at least one such promise. Hassan alleged that Fordham promised students access to on-campus computer facilities, that Fordham breached that promise when it shut down campus and moved to remote learning, and that Fordham retained the Technology Access Fee. At the amendment stage, the court had to accept those factual allegations as true. It also declined to hold, as a matter of law, that Fordham’s alleged additional technology costs meant Hassan could not have suffered damages.

The court did not find a specific promise to provide only live, in-person classes. It concluded that the Strategic Plan, website statements, course catalog, and the absence of a reservation of rights did not identify a specific promise that all classes would remain in person and on campus.

Unjust-enrichment claim

The court denied leave to amend the unjust-enrichment claim. It found that the Proposed Second Amended Complaint did not cure the earlier deficiency concerning the lack of allegations of tortious or fraudulent conduct. Allegations that Fordham acted in bad faith or arbitrarily by issuing some refunds while retaining other fees were not enough.

The court also found amendment futile because the unjust-enrichment allegations duplicated the breach-of-contract allegations and the parties did not dispute that they had a contractual relationship. Under the New York law discussed by the court, unjust enrichment is unavailable when it simply duplicates or replaces a contract claim.

Disposition

Judge Kimba M. Wood granted in part and denied in part Hassan’s motion for leave to amend. Hassan was permitted to file a Second Amended Class Action Complaint consistent with the opinion, including a contract claim concerning access to on-campus computer facilities and the Technology Access Fee. The court denied leave to amend the unjust-enrichment claim and did not find sufficient allegations of a specific promise to provide in-person instruction. The court ordered Hassan to file the amended complaint by April 16, 2021, and Fordham to answer by May 7, 2021. It also stated that the specified portion of the January 28 opinion was superseded.