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April 30, 2021

Lit Alerts—April 2021

A Publication of the Litigation Practice Group

COVID Closures: University Dodges Claims Over Move to Online Instruction

An Illinois federal judge tossed a proposed class action filed by a Lewis University student seeking tuition refunds in the wake of COVID-19-related campus closures this month, saying she hadn't alleged the university made a promise to provide in-person classes.

The gravamen of the plaintiff’s lawsuit was that Lewis, which delivered only on-line instruction through the remainder of the 2020 school year in light of COVID-19, was liable for breach of contract and unjust enrichment because it retained the full amount of student tuition and fees.

Rejecting this argument, the court found that marketing materials, advertisements, publications, strategic plans and other documents advertising in-person learning did not form a part of Miller’s contract with Lewis University. And even if they did, they represented “unenforceable aspirations[s]” of the university, rather than enforceable promises.

Nor was the university’s spring semester course schedule description of in-person and face-to-face teaching methods an enforceable promise, for two reasons. The schedule itself contained a reservation that it was subject to change without notice; and Lewis reserved the right to cancel courses or change class times, location or instructors unilaterally. The schedule’s statements about class format thus could only be considered informative, rather than promissory, in nature. An unjust enrichment claim could not stand either because that claim was premised on the university's alleged failure to fulfill contractual terms.

The court noted that it was “sympathetic to all who have been aggrieved by the pandemic, [but] not all grievances are redressable by courts of law." Miller was given leave to attempt to plead viable claims.

Arbitration: Waiver of Appeal Enforceable under Federal Arbitration Act

The US Court of Appeals for the Fourth Circuit in April held as a matter of first impression that a waiver, in an arbitration agreement governed by the Federal Arbitration Act (FAA), of the right to appeal a district court's decision confirming or vacating an arbitration award is valid and enforceable. Beckley Oncology Assocs., Inc. v. Abumasmah, No. 19-1751, 2021 WL 1306120 (4th Cir. Apr. 8, 2021). The Fourth Circuit follows the Tenth Circuit in finding such waivers enforceable. See MACTEC, Inc. v. Gorelick, 427 F.3d 821, 830 (10th Cir. 2005); but cf. In re Wal-Mart Wage & Hour Employment Practices Litigation, 737 F.3d 1262, 1268 (9th Cir. 2013) (“[p]ermitting parties to contractually eliminate all judicial review of arbitration awards would not only run counter to the text of the FAA, but would also frustrate Congress's attempt to ensure a minimum level of due process for parties to an arbitration.”) (emphasis added).

In Beckley, the arbitrator awarded relief to Dr. Abumasmah in a compensation dispute following Beckley Oncology Association's (BOA) termination of his employment. The employment agreement between BOA and Abumasmah purported to waive both judicial and appellate review of the arbitrator's decision. Because the appellate waiver was enforceable, the Fourth Circuit dismissed BOA's appeal. The court held that it is “black letter law that judicial review of an arbitration award in federal court is substantially circumscribed.” Id. at *4 (citations omitted). It rejected BOA’s arguments, because “the FAA forecloses all but the most limited review,” and the provision itself “waive[d] two things: the right to judicial review and the right to appellate review of the arbitrator's decision.” Id.

© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.