Immigrants Can Sue Department of Homeland Security for Breach of Contract

As alleged in the complaint, the Department of Homeland Security (DHS) offered classes to unsuspecting immigrants at the "University of Farmington."  Members of the proposed plaintiff class paid thousands of dollars, but the University of Farmington, notwithstanding its very real-looking logo (left), was a ruse, set up to target fraud involving student visas. Once the government sting operation was exposed as a scam, plaintiffs allege they were offered neither the education for which they had paid nor a refund.  The named plaintiff paid $12,500 in tuition for courses that purportedly would lead to masters degree in information technology. 

They sued in the U.S. Court of Federal Claims, alleging breach of contract and breach of the duty of good faith and fair dealing.  That court dismissed for lack of subject-matter jurisdiction under the Tucker Act. The government claimed to be acting in its sovereign capacity and had not consented to suit.

In Ravi v. United States, the Federal Circuit reversed. The Federal Circuit diverged from the Court of Federal Claims in their understanding of a 1981 precedent, Kania v. United States, 650 F.2d 264 (Ct. Cl. 1981).  In fact, the Federal Circuit generally eschews the locution "sovereign capacity doctrine," relied on by the government at the Court of Federal Claims, finding the phrase confusing given that the government always acts in a sovereign capacity.  Kania is readily distinguishable -- it was about a government promise to a prospective witness in the context of a criminal proceeding.  The promise seemed to be that in exchange for testimony in proceeding A, the witness would not be prosecuted in proceeding B. Mr. Ravi's case lacked the criminal element as well as an unrelated case.  It was a straightforward promise from the government to provide educational services in exchange for payment.

Plaintiffs still have many barriers to overcome, and the case is remanded for further proceedings. Still, the case is important because it goes to great lengths to clarify the narrowness of the Kania precedent.  

Hat tip to Carrie Rosenbaum (right), who teaches both contract and immigration law, for sharing the case with me, and hats off to Anna Nathanson and Amy Norris for their win on the case.