Koenigsberg v. The Board of Trustees of Columbia University in the City of New…

Background

Alexandra Koenigsberg, Maxwell Koenigsberg, and Olga Stambler brought a proposed class action against The Board of Trustees of Columbia University in the City of New York. The complaint alleged that Columbia reported false or misleading information to U.S. News & World Report concerning matters such as class size, faculty credentials, full-time faculty, student-faculty ratio, instructional spending, research spending, and student outcomes. Plaintiffs alleged that this information caused Columbia to receive a higher ranking than it should have received and caused them to pay $85 application fees that they would not have paid had they known the alleged truth.

The complaint asserted claims under Sections 349 and 350 of the New York General Business Law, which address deceptive business practices and false advertising, respectively. It also asserted a New York unjust-enrichment claim seeking restitution of the application fees. Columbia moved to dismiss for lack of standing under Federal Rule of Civil Procedure 12(b)(1) and for failure to state a claim under Rule 12(b)(6).

Standing

The court rejected Columbia’s standing argument. At the pleading stage, the court accepted as true the allegation that the plaintiffs would not have paid the application fee if they had known that Columbia’s ranking was based on falsified data. The court concluded that paying for one thing and receiving something else could constitute a concrete financial injury sufficient to establish standing, even though that allegation did not necessarily state a valid claim under New York’s consumer-protection laws.

New York General Business Law Claims

The court held that the claims under Sections 349 and 350 were time-barred. The plaintiffs paid the application fees in 2018, but filed the complaint on February 7, 2023. Because these claims generally must be filed within three years of the injury, the claims were untimely unless equitable tolling applied.

The court found that equitable tolling did not apply. The alleged misrepresentations to U.S. News formed the basis of both the consumer-protection claims and the plaintiffs’ tolling argument. The plaintiffs also had not alleged facts showing that Columbia prevented them from discovering or pursuing their claims before the limitations period expired.

The court separately ruled that the plaintiffs had not alleged the actual harm required for claims under Sections 349 and 350. The plaintiffs sought recovery of the $85 application fee, but did not allege that Columbia’s representations increased the fee or that they received less than the value of a service they purchased. Their theory that they would not have applied to Columbia absent the alleged deception was insufficient because, under the governing New York law, alleging that a consumer would not have made a purchase is not by itself a legally cognizable injury. The court also declined to consider theories raised only in the opposition brief, including alleged time and effort spent on the applications and a possible price-premium theory, because those theories were not alleged in the complaint.

Unjust-Enrichment Claim

The court dismissed the unjust-enrichment claim as duplicative of the General Business Law claims. The claim relied on the same alleged conduct and sought the same remedy—the return of the application fees. The plaintiffs did not explain how the unjust-enrichment claim differed from their other claims, and pleading it as an alternative theory did not save it from dismissal.

Disposition

Judge Paul G. Gardephe granted Columbia’s motion to dismiss. The court directed the Clerk of Court to enter judgment for Columbia and close the case. The opinion does not state that the dismissal was with or without prejudice.