Golden Gate University Law Students Sue Over Law School's Closing

As a member of the Valparaiso University Law School diaspora, I am always intrigued by stories about closing law schools.  As Christine Charnosky reported for Law.com in March, the ABA has approved a teach-out plan for Golden Gate University Law School (the Law School), which has shuttered its J.D. program. Financial struggles and low bar passage brought down the law school. My heart goes out to faculty and staff, whose fine qualities often do not translate into financial viability or professional success for students, especially in California, given its notoriously difficult bar exam.  I know how it feels to try to keep a law school alive in such circumstances, and I hope that everyone finds a happy new home.  If it's any consolation, almost all of my colleagues from Valpo landed great jobs, while others are enjoying their retirements -- a few years ahead of schedule.  Golden Gate will continue to offer law courses for its graduate and undergraduate programs.  It's not clear how many faculty members it will retain for those purposes.

Students will be able to finish their legal training at the University of San Francisco Law School or at the Mitchell-Hamline Law School.  But not all students are accepting the offer.  In February, four students and the Golden Gate University Alumni Association filed a suit in state court alleging claims for breach of contract and fiduciary duty, promissory estoppel, fraud, and unlawful business practices.  They sought injunctive relief and the appointment of a receiver.  They followed up in June with a motion for injunctive relief.

The allegations of the complaint are based on the fact that the Law School's Dean announced the closure of the Law School at a time when the ABA had not yet approved the Law School's teach-out plan.  Doing so, the complaint alleges was a breach of a contract, embodied in the Law School's Student Handbook.  The complaint further alleges an implied contract under California law that educational institutions will not close prior to students' graduation.  As we learned from the COVID cases, whether or not a Student Handbook constitutes a contract, or whether one can be implied usually involves more than blanket allegations that, e.g., the Handbook "undoubtedly" constitutes a contract.

The Promissory Estoppel claim is based on a promise to the student-plaintiffs of a three-year full-tuition scholarship.  If, as I expect, Golden Gate plans to pay the tuition for the students so that they can complete their educations at other law schools, it is hard to see how the students suffer monetary harm.  In their motion for injunctive relief, the students allege that they will be harmed by being required to move to Minnesota, so maybe that's right.  But Mitchell-Hamline offers a blended-learning program, which may have been the reason why it was chosen as a partner for the teach-out.  While the Law School has yet to detail its plans for reimbursing students for travel to Minnesota, that does seem to be the plan, as acknowledged in the brief in support of the plaintiffs' request for injunctive relief.

The remaining causes of action seem to me a stretch, but I can't claim sufficient familiarity with the relevant bodies of law to comment beyond that.  But the bigger challenge it seems to me is the appropriate remedy even if they do succeed on their claims.  The ABA has now approved the Law School's teach-out plan, so the alleged improprieties that were the original basis for the complaint seem to have been remedied, at least in part.  They seem to want the court to order Golden Gate University to allow them to complete their degrees.  But there are only four of them.  I can't see a court ordering a J.D. program to remain open because four students don't want to travel to Minnesota.  One plaintiff is foregoing her scholarship and transferring to a different law school because Mitchell-Hamline does not have a robust enough program in her desired field. 

According to Julianne Hill reporting for the ABA Journal, the court has set a hearing on the request for injunctive relief for September 13th.  By then, students will be well into their first semesters at the partner law schools.  That seems like something like a pocket denial of the injunction, and then the only question would be whether students are entitled to damages.