Ninth Circuit Dismisses Oregon Students’ Lawsuit Seeking COVID-19 Tuition Refund

File photo of a judge's gavel. Joe Raedle/Getty Images

A federal appellate court has dismissed a case filed by two Oregon State University students alleging the school breached contracts with them by moving classes online during the COVID-19 pandemic yet still charged full tuition.

In an opinion issued on July 8, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit unanimously upheld a lower court’s ruling, which found that the plaintiffs could have taken the full refund the university had offered.

The plaintiffs, students Danielle Pranger and Garrett Harris, paid tuition for the spring semester of 2020, when the OSU closed its campus and shifted to online instruction in response to the pandemic. They continued to enroll in online courses for spring 2020 and subsequent terms.

In March 2021, Mr. Pranger and Mr. Harris sued the OSU for alleged breach of contract. The university, they argued, made a promise to provide in-person classes and access to on-campus services in exchange for tuition and fees, but ultimately failed to deliver that promise after shifting to a remote learning environment.

Seeking to have the case dismissed, the OSU argued that the Oregon governor’s stay-at-home orders had made it impossible to fulfill that contract.

The public university further argued that the two students did agree to a new, modified contract, since they choose to move on with online classes despite being provided an option to receive a full refund without academic penalty.

U.S. District Judge Marco Hernandez agreed with both arguments. In his May 2023 opinion dismissing the suit, the judge emphasized that the students “affirmatively paid tuition” and completed classes, although the OSU announced that classes would be conducted remotely before the spring semester of 2020 began.

“Plaintiffs would not have suffered any loss, financial or otherwise, if they had chosen to pause or even discontinue their education at OSU,” Judge Hernandez wrote. “By paying full tuition and attending classes throughout each term in which only remote instruction was provided, Plaintiffs unambiguously manifested assent to the modified terms of the contracts.”

The July 8 opinion reaffirmed the judgement. According to the Ninth Circuit, the OSU students entered a modified contract with the school when they continued their enrollments, received academic credit, and did not seek a refund of their tuitions and fees.

The lawsuit against OSU was among a flurry of litigation over universities switching to online classes in 2020 at the onset of the COVID-19 pandemic. Across the nation, different appeals courts have both upheld and reversed lower-court dismissals.

In April 2023, the U.S. Court of Appeals for the Second Circuit overturned a lower court’s ruling to allow a lawsuit seeking reimbursement of tuition and fees from New York University to proceed. On appeal, the Second Circuit ruled that the relationship between a university and its students is “contractual in nature,” and that specific promises set forth in a school’s promotional material can “establish the existence of an implied contract.”

More recently, in January, George Washington University paid $5.4 million to settle with former students who sued on breach-of-contract claims. The settlement was reached after the U.S. Court of Appeals for the D.C. Circuit revived the suit.