Tapinekis v. Pace University

Background

The case began as a proposed class action seeking partial refunds of tuition and fees after Pace closed during the Spring 2020 semester and changed in-person classes to online instruction. An earlier ruling allowed two contract claims to proceed: one concerning the change in instructional format and one concerning fees for on-campus facilities and activities.

During discovery, the court allowed Elizabeth Tapinekis to replace Xaviera Marbury as the named plaintiff, but ruled that only the contract claim concerning mandatory fees for on-campus facilities and activities could proceed. The remaining fees identified in the Second Amended Complaint were a general fee, a student activity fee, a health center fee, and a technology fee.

Pace’s jurisdictional motion

Pace moved under Rule 12(b)(1), which permits dismissal when a federal court lacks subject-matter jurisdiction. Pace argued that, after the instructional-format claim was removed, the remaining claim no longer met the Class Action Fairness Act’s requirement that the amount in controversy exceed $5 million.

For a case brought under that statute, the party asserting federal jurisdiction must show a reasonable probability that the amount in controversy exceeds $5 million. The complaint’s amount is generally presumed to be a good-faith representation, but the opposing party can defeat jurisdiction by showing to a legal certainty that the amount recoverable is below the threshold.

Court’s analysis

Pace submitted a declaration stating that the four identified fees totaled $6,774,274 for the Spring 2020 semester. Both sides agreed that students could recover only a portion because Pace closed in March, during the semester. Tapinekis argued that students could recover 61% of the fees; Pace argued for no more than 55%. Even under Tapinekis’s higher figure, 61% of $6,774,274 was $4,132,307, below the $5 million requirement.

Tapinekis argued that the phrase “including but not limited to” in the Second Amended Complaint allowed her to seek refunds for additional fees. The court rejected that argument. Tapinekis’s records showed that she had been assessed only the four listed fees, so she could not establish the personal injury needed to challenge other fees. The court also noted that the complaint did not identify additional fees or state a contract claim based on them.

The court therefore held that Pace had shown to a legal certainty that the amount recoverable did not meet the federal jurisdictional threshold. The court did not reach the underlying merits of Tapinekis’s contract claim.

Disposition

The court dismissed Tapinekis’s claims without prejudice for lack of subject-matter jurisdiction. It explained that a federal court cannot dismiss a case with prejudice when federal jurisdiction is absent. The court also stated that the complaint had already been amended twice and that Tapinekis could not demonstrate that another amendment would survive dismissal. The clerk was directed to terminate Pace’s motion, enter judgment consistent with the opinion, and close the case.