UNC System Claims ‘Massive Liability’ Due to Fees Paid During COVID Shutdown

The University of North Carolina system argues that a recent decision by the North Carolina Court of Appeals exposes the university to “massive liability”. The decision would allow NC State and UNC-Chapel Hill students to sue for fees paid during COVID-19 campus closures.

University officials on Tuesday filed documents asking the North Carolina Supreme Court to hear the case. The state’s highest court already issued an order on Oct. 21 temporarily preventing the trial from moving forward.

In a related memo, a group representing NC defense attorneys filed a brief supporting the UNC system case on Tuesday.

North Carolina State graduate student Joseph Lannan and UNC-CH undergraduate Landry Kuehn seek reimbursement of fees paid in fall 2020, when their campuses were closed for most students . Lannan and Kuehn argue that their schools broke “implied in fact” contracts with students at the two flagship campuses.

“The Court of Appeals allowed the breach of contract claim to proceed, finding that by simply asserting the existence of an implied contract, the plaintiff had avoided the sovereign immunity of the university,” wrote officials. lawyers representing the university’s board of trustees. “The Court of Appeal also failed to take into account that the students knew that when it came time to pay the tuition they would not be reimbursed.”

“The panel’s decision exposes the University to massive liability in this matter following claims by tens of thousands of students seeking reimbursement of fees of nearly $1,000.00 each,” the memoir added. the UNC. “And the decision opens the University to future legal action by its students for any changes in any aspect of student life, even if those changes were necessary in the interest of public safety.”

“Equally concerning is the fact that under the Court of Appeals decision, anyone who pays a fee to a state agency will be able to plead breach of implied contract and proceed to discovery and possibly at trial without any regard for sovereign immunity,” according to the brief.

The NC Association of Defense Attorneys raised its own concerns in an amicus curiae brief.

“[T]The Court of Appeal found that since the plaintiffs believed the fees entitled them to an on-campus experience, they sought relief. If the state waives its immunity just [by] charge a fee, then fee-funded government operations statewide will be reduced or
even eliminated,” attorney Steven Bader wrote. “It’s especially troubling if the plaintiff doesn’t even need to prove that the state charged a fee for a specific service.”

The group of defense attorneys argues the case could have implications beyond state government. “Private businesses will also be affected,” Bader wrote. “Following Lannan, fee payers in almost any context can characterize a fee as an implied contract in effect, even if the company makes no promises about a customer’s experience and advertises ‘no refunds.’ such allegations are ripe for class action lawsuits.”

Lannan and Kuehn filed papers Oct. 27 urging the state Supreme Court to allow their lawsuit to continue.

“In the fall 2020 semester, despite the pandemic, 14 of the 16 constituent universities continued with campus life, keeping campus facilities open. However, two universities, North Carolina State University (NCSU) and the University of North Carolina at Chapel Hill (UNC-CH), have closed their campuses, expelled students (other than athletes) from campus, closed student unions and recreational facilities, canceled all artistic performances and barred access to sporting events,” lawyers for the students argued. “NCSU and UNC-CH charged students fees for many activities they closed.”

“It was not, as the defendant the Board of Governors of the University of North Carolina … seeks to euphemize, a simple change in the mode of teaching: it was a total closure of the campus, with the eviction of non-athletic students from campus housing,” according to the students’ brief.

“Disregarding the constitutional mandate that people have access to the University of North Carolina at no cost ‘whenever possible,’ the Board refused to return a penny of the millions of hard-earned dollars it raised in tuition fees, even though he never provided the services for which those fees were paid,” the students argued.

The state Supreme Court will decide whether to hear the university’s appeal. If not, the case will be returned to a trial court for further action.

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