ERIE – An undergraduate student who filed a class action lawsuit against Gannon University, claiming that he and others were deprived of the on-campus education and experience they paid for when the COVID-19 pandemic occurred and learning shifted to remote status, now looks to have the case settled for $1.1 million.
Andrew Engel (individually and on behalf of all others similarly-situated) first filed suit in the U.S. District Court for the Western District of Pennsylvania on Aug. 18 versus Gannon University, of Erie.
“Higher education is no different from any other industry in as much as consumers (i.e., students) have the ability to shop between different educational products offered by competitive institutions before ultimately purchasing the product that is right for them. Some colleges and universities offer an educational product without access to a campus or in-person community, while others offer an educational product with access to a varied suite of services, activities, facilities, and experiences through an on-campus, in-person educational experience,” the suit stated.
“Gannon offers students the option to pick either: (1) Online classes, or (2) an on-campus, in-person educational experience at its Erie, Pennsylvania campus. Plaintiff, an undergraduate student during the Spring 2020 semester, chose and paid tuition and fees to enroll in Gannon’s on-campus, in-person education program, including all the benefits and services associated therewith for the entirety of the semester. Plaintiff’s paid-for experience was cut short mid-way through the Spring 2020 semester, when that in-person educational experience was taken away from plaintiff and other students at Gannon.”
The suit continued that in March 2020, Gannon, like many other colleges and universities, transitioned to remote, online-only education, canceled on-campus recreational events, canceled student activity events and ordered students to refrain from going on campus – thus making all on-campus education, services and amenities no longer available to Gannon students for the remainder of the Spring 2020 semester.
“Despite the harsh reality that students could no longer enjoy the benefit of the bargain for which they pre-paid, Gannon refused to provide a prorated refund of tuition or fees tied to on-campus education, services, and amenities that were not available to students for a significant part of the Spring 2020 semester. Indeed, upon transitioning to online-only education in March 2020, Gannon only pro-rated room and/or board charges for students for the Spring 2020 semester. Accordingly, Gannon’s students lost the benefits of the bargain for services and the experience they paid for but could no longer access or use following the school’s transition to remote learning in March 2020. By not giving pro-rated refunds for tuition or fees charged for on-campus education and services not provided, Gannon breached its contracts with students or was otherwise unjustly enriched,” the suit said.
“It cannot be disputed that the circumstances underlying this legal action are unfortunate and unprecedented. However, the students did not choose these circumstances, and they certainly did not agree to pay tuition and fees for online-only education and services. It is unfair and unlawful for Gannon to retain tuition and fees for campus-based, in-person education and services not being provided and to pass the financial losses on to its students. Importantly, plaintiff does not challenge Gannon’s discretion in adhering to federal, state and local health guidelines, but rather challenges Gannon’s decision to retain the tuition and fees, paid by plaintiff and other students for in-person education, experiences, access to campus, and services, without providing such for the entire duration of the Spring 2020 semester.”
Specifically, the lawsuit seeks “disgorgement of the pro-rated, unused amounts of the fees that plaintiff and other putative class members paid, but for which they (or the students on behalf of whom they paid) were not provided the benefit, as well as a partial pro-rated tuition reimbursement representing the difference in fair market value between the on-campus product for which they had paid, and the online product that they received.”
On Sept. 14, Gannon University responded with an answer to the complaint, inclusive of affirmative defenses.
“Defendant Gannon University admits that plaintiff Andrew Engel was enrolled as a student in the Spring 2020 semester. Gannon University further admits that pursuant to Pennsylvania Gov. Wolf’s order regarding temporary closures of all non-life sustaining businesses in light of the COVID-19 pandemic, Gannon University suspended in-person classes effective March 16, 2020. Gannon University further denies plaintiff Andrew Engel suffered any damages – plaintiff Andrew Engel’s financial aid was in excess of his tuition and fees; plaintiff Andrew Engel remitted $1,186.00 for room and board and dining services but was refunded and/or credited a total of $442.00 for the Spring 2020 semester,” the answer stated, in part.
“In further response, throughout the Spring 2020 semester, Gannon University continued services deemed to be essential and other enrichment and engagement opportunities through Virtual Knights, which included police and safety, health center and counseling services, library services (such as tutoring and writing support), information and technology services, and recreational and wellness center services.”
Gannon University continued that it “credited and/or refunded student accounts for housing and meal plan fees, remitted two weeks’ pay to student employees unable to work due to closures and distributed CARES Act funding”, along with “denying that any students lost the benefits of services during the Spring 2020 semester” and adding that “online instruction for courses commenced March 23, 2020, and essential services continued throughout the Spring 2020 semester.”
The answer further provided 17 separate affirmative defenses on the university’s behalf, and as they relate to the named plaintiff and class members.
“The class action complaint fails to state claims against defendant Gannon University upon which relief can be granted. The claims set forth in the class action complaint are barred in whole or in part by the doctrines of laches, estoppel or waiver. The claims set forth in the class action complaint are barred in whole or in part by the defense of payment. The class action complaint fails to state claims against defendant Gannon University upon which an award of attorneys’ fees and costs can be based. The claims set forth in the class action complaint are barred for lack of subject matter jurisdiction to the extent plaintiff Andrew Engel or other purported members of the class lack standing to bring their claims in either an individual or representative capacity,” per those defenses.
“The claims set forth in the class action complaint cannot be brought as a class action because the purported members of the proposed class are not similarly situated. Plaintiff Andrew Engel’s allegations that this action should be certified as a class action fail as a matter of law because plaintiff Andrew Engel cannot allege facts sufficient to warrant class certification and/or an award of class damages, pursuant to Rule 23 of the Federal Rules of Civil Procedure. The class action complaint fails to state a cause of action for class action or relief to the extent that the claims of plaintiff Andrew Engel are not common and/or typical of the claims of other putative members of the proposed class, as required by Rule 23 of the Federal Rules of Civil Procedure. The class action complaint fails to state a cause of action for class action or relief because the individualized nature of plaintiff Andrew Engel’s and putative class members’ claims predominate and thus make class treatment inappropriate. Defendant Gannon University at all times during the Spring 2020 semester acted in good faith and without any intent to deprive plaintiff Andrew Engel (or any of the alleged class members) of any benefit to which they were entitled.”
The university reiterated that, in its view, Engel and any individuals he seeks to represent did not suffer any damage as it relates to Gannon University's operations during the Spring 2020 semester.
UPDATE
On Jan. 25, plaintiff counsel filed an unopposed motion for the Court to preliminarily approve a release of all claims in the class action settlement for $1.1 million, finding that amount to be “fair, reasonable and adequate.”
“Plaintiff, on behalf of himself and a proposed class of individuals, has agreed to settle all claims against Gannon as to tuition and fees paid during the Spring 2020 semester. Plaintiff alleges that Gannon contracted with, charged and collected from its students funds for in-person education and on-campus access and services, but that Gannon failed to deliver an in-person education and on-campus access and services when, in response to the COVID-19 pandemic, Gannon moved all classes to online-only and constructively closed the campus,” the motion stated.
“As set forth in the settlement agreement, all students who do not opt-out of the settlement will receive a payment under the settlement in consideration for the release of their claims against Gannon. All students will receive a pro rata portion of the net settlement fund based on the ratio between (a) the total amount of Spring 2020 tuition and fees assessed to potential settlement class members enrolled at Gannon during the Spring 2020 semester to (b) the total amount of Spring 2020 tuition and fees assessed to each individual potential settlement class member enrolled at Gannon during the Spring 2020 semester, less Financial Aid, unpaid balances related to the Spring 2020 term as reflected on the settlement class member’s account with Gannon, and any refunds already distributed related to Spring 2020 semester.”
The motion added that the parties stipulated to define the class, numbering approximately 3,900 individuals as: “All graduate and undergraduate students enrolled at Gannon who paid tuition and/or the mandatory fees to attend in-person class(es) during the Spring 2020 semester at Gannon but had their class(es) moved to online learning.”
“The proposed settlement amount is a non-reversionary cash payment of $1,100,000. In accordance with the settlement agreement, the settlement administrator shall make deductions from the settlement amount for court-approved attorneys’ fees and reasonable litigation costs, fees and expenses for the settlement administrator, and any court-approved case contribution award to the plaintiff, in recognition of the risks and benefits of his participation and substantial services he performed,” the motion stated.
“Should the Court grant preliminary approval of the settlement, Gannon shall pay the settlement amount into an escrow account with the settlement administrator within 10 business days after the Court enters the preliminary approval order. Within 60 days after final approval, the settlement administrator will send settlement class members their portion of the settlement benefit by check, Venmo or PayPal. The settlement administrator will pay all legally-mandated taxes prior to distributing the settlement payments to settlement class members. Settlement class members shall have 180 days from the date of distribution of the checks to cash their check for the settlement benefit. All funds for uncashed settlement checks shall, subject to Court approval, be divided equally and distributed to The Erie Community Foundation and Our West Bayfront.”
The plaintiff is represented by Gary F. Lynch and Nicholas A. Colella of Lynch Carpenter in Pittsburgh, plus Anthony Alesandro of Leeds Brown Law in Carle Place, N.Y.
The defendant is represented by Jamie R. Schumacher and Nathan P. Venesky of MacDonald Illig Jones & Britton, in Erie.
U.S. District Court for the Western District of Pennsylvania case 1:23-cv-00244
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com