Universities in New Jersey Are Immune from COVID Suits

This one starts out like many other cases we have covered in which students sue their universities for switching to remote learning in March 2020.  Plaintiffs in Mueller v. Kean University, students at New Jersey universities, sued alleging breach of contract, unjust enrichment, conversion, or money had and received.  Plaintiffs sought to recover part of the tuition and fees they paid on the ground that the education they received did not conform to their expectations. 

However, this case goes differently because of New Jersey's Emergency Health Powers Act (EHPA). which rendered the universities immune to suit because they acted in compliance with the New Jersey governor's executive orders relating to the COVID pandemic.  The governor issued a series of executive orders between March 16th and 21st that ordered all institutions of higher learning within the state to cease in-person operations.  

Kean University conceded that the online education it provided to students during the Spring 2020 semester was "inherently different" from in-person learning and that it charged more for in-person education than for online programs.  Nonetheless, it refunded only room and board fees but not tuition or other fees, claiming that the EPHA rendered it immune to suit.  The trial court agreed. 

Montclair State University argued both that it was immune to suit and that it had not breached any contractual obligations, having found a way to continue offering educational services to students through online programs.  Here too, the trial court dismissed the complaint based on immunity under the EPHA.  

On appeal, plaintiffs argued that the EPHA immunizes the universities only with respect to liability for "injuries," suggesting that they cannot be sued in tort but that contracts claims may proceed.  The court rejected this argument, noting that the EPHA exempts entities for harms to "property" and defines property to included, among other things, money.  As a result, the court concluded, the EPHA also immunizes the universities against contracts claims.  No action by the universities suggested that they had waived their immunity.

Finally, plaintiffs argued that giving effect to the EPHA in this way violates the constitutional prohibition on state impairments of contracts.  But that constitutional provision has been construed to permit state adjustment of contracts pursuant to the state's general welfare powers.  Plaintiffs did not argue that either the executive orders at issue or the universities' decisions to shut down were unreasonable or unnecessary, and so they did not meet the standard for a contracts clause challenge.