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The Hechinger Report
Covid-19 lawsuits and liability
By Delece Smith-Barrow
For colleges and universities, their ability to stave off lawsuits is
becoming almost as critical as their ability to keep their students,
faculty and campuses Covid-19 free.
Since they abruptly closed campuses in March, dozens of institutions
have been sued in class- action lawsuits for delivering an inadequate
educational experience that the plaintiffs hadn’t signed up for, which
could be called a breach of contract. Colleges are fighting these
lawsuits while also facing massive financial losses. New York
University was sued on April 24 and just three days later announced it
was expecting a revenue shortfall of $150 million for the summer alone.
Michigan State University, which was also sued in April, announced last
month that it estimates a loss of $50 million to $60 million in fiscal
year 2020, and a loss of $150 million to $300 million in fiscal year
2021.
Now higher education organizations have asked Congress for legal
protection from negligence lawsuits as colleges prepare to open their
campuses again. In a May 28 letter to the top four Congressional
leaders, the American Council on Education and 76 other organizations
asked Congress to “quickly enact temporary and targeted liability
protections related to the COVID-19 pandemic.”
“As we think about colleges helping to participate in the reemergence
to something approaching normal as we come out of the Covid-19
challenge, colleges have to make hundreds, maybe thousands of decisions
impacting all sorts of stuff,” said Peter McDonough, vice president and
general counsel at ACE. “Schools are being left to make their own
judgments of what to do and how to do it. And that’s fine, but each one
is an opportunity for Monday morning quarterbacking of whether it was
reasonable. And that's an opportunity for a negligence lawsuit to be
brought.”
And if the spring is any indication of what’s to come, institutions
have reason to worry that students and their parents could sue in
droves.
In April, the law firm Dechert LLP led a webinar about class action lawsuits and coronavirus and about 90 universities attended.
It outlined “the broader policy considerations that schools were
dealing with, in terms of safety versus education and reputational
risks,” said Christina Sarchio, co-chair of the business disputes and
litigation group at Dechert. “And then we looked at the contracts, we
looked at the agreements that some schools had, and they tend to be
similar from university to university. And so we were able to provide
an analysis of what kinds of claims we thought the plaintiffs would
bring, putting on that hat, and then what kinds of defenses we thought
universities could have.”
Institutions have to pay to fight these lawsuits, of course. And while
it’s impossible to predict who will win or lose, if a college were to
lose, the financial impact could be devastating.
In these class-action lawsuits, thousands of students could reap the
benefit if the plaintiffs win. The benefit, in many of these cases,
would be a refund for some of the tuition.
“You have a public institution that, for instance, charges $3,850 per
semester,” Sarchio said. “You’re trying to figure out if you want to
get back 20 percent of tuition per student per semester. That’s about
$770 per student. You multiply that by 30,000 students, now you have
$23 million dollars at issue.”
Purdue University in Indiana, the University of North Carolina system
and the University of Vermont recently announced plans for students to
return to campus this fall. All three are also simultaneously battling
class-action lawsuits.
There are no federal or local standards for how to bring students
safely back to campus. Today, college presidents have gathered in
Washington, D.C., to speak in front of the Senate’s Health, Education,
Labor and Pension committee about how to safely reopen. But because
every institution is different, we’re not likely to see a uniform set
of rules for reopening. Without liability protection, students could
sue for negligence because their campus didn’t institute the type of
precautions that another campus implemented, McDonough said.
“There’s no play book for the reopening of America in the Covid-19 era. It’s leaving every school out there exposed,” he said.
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