[00:00:00] Speaker 04:
Case number 21-7040, Mark Schaffer, individually and on behalf of all others similarly situated at balance, versus George Washington University and Board of Trustees of George Washington University, 20 CV 1417.

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And case number 21-7064, Mascareschi, individually and on behalf of all others similarly situated at balance, versus American University.

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Mr. Kurowski, for the Mark Schaffer,

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Mr. Wheely for the appellant, Mass.

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Kurowski.

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Mr. Schoenfeld for the appellee, George Washington University.

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Mr. Schoenfeld for the appellee, American University.

[00:00:42] Speaker 05:
Good morning, Mr. Kurowski.

[00:00:43] Speaker 05:
For afternoon, is it afternoon?

[00:00:45] Speaker 05:
No, it's still morning.

[00:00:46] Speaker 00:
We're still good, Your Honor.

[00:00:49] Speaker 00:
Good morning.

[00:00:50] Speaker 00:
May it please the court.

[00:00:51] Speaker 00:
My name is Daniel Kurowski, and I represent the appellants in the Schaeffer versus George Washington University.

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And our clients were plaintiffs in the matter before the district court and our clients paid George Washington University, not simply to obtain a diploma and receive credits, but they paid amounts of money that were very large in order to have the opportunity to go to college.

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And so in accordance with the written materials that George Washington itself drafted throughout the history of our clients interactions with George Washington,

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And through the first half of the spring 2020 semester, your honors, they received just that.

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But during the second half of the spring 2020 semester, George Washington provided something that nobody bargained for.

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Students attended school away from campus, barred from facilities, resources, and facilities that accompany an on-campus education and

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for which they had always received throughout the history of their interactions with George Washington.

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So when George Washington converted to remote learning in the spring of 2020 in response to the coronavirus pandemic, it provided some refunds for some things like room and board, but it refused to provide pro rata refunds for things like tuition, certain mandatory fees.

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And as a result of that, we filed suit on behalf of our clients.

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Now, unfortunately, from our perspective, the case was dismissed at the motion to dismiss stage.

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But consistent with the requirements set out in rule eight and the federal rules of civil procedure and when applying basic contract law and including contract law as it applies in the educational context within the law of the District of Columbia,

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We alleged each and every element necessary to plead an unjust enrichment.

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If there's a, I say this with hesitation, given that there's some snow predicted in our weather, but if there were a big snow storm that shut down sort of everything and power is out for a week of classes.

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And so they aren't able to provide on campus education or classes or activities for that week

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till the powers restored and the ice is scraped off the road.

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Would that be a breach of contract or is it the length of time that's at issue here?

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I'd say at the start one that sort of

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short temporary scenario is not our case.

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And this is a situation- I know that's not your case.

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I'm asking the legal contract, your theory of the contract here.

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Sure.

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And so take my hypothetical and everything's shut down for, you know, some Monday to Friday due to lack of electricity, ice covered roads, streets, no classes, no activities can be provided.

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Is that a breach of contract or does the contract allow for short interruptions?

[00:04:20] Speaker 01:
Sure.

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I think going back to the situation, that's a type of situation I think

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we would not say it's a breach of contract in this instance because of the short duration of it.

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And I think part of the reason for that is when courts within DC are looking at contracts and interpreting contracts, one of the things that they're looking for is you're looking at the conduct of the parties and the situation and the milieu in which they've dealt is the kind of the way that one court has put it.

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And so when you're looking at the way that they've

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the parties have dealt with each other in the past and the way that they, and sort of what their reasonable expectations are, I think.

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Okay, so the contract that you're envisioning is to provide, I'm just gonna call it as a shorthand, on-campus education.

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That's the classes and the activities, opportunities to notice sort of buildings and specialized services and things.

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On-campus education includes within it a recognition that there can be

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extreme circumstances can interrupt it, at least for a short period of time.

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To a certain extent, I think the way that we've put it and I think I better phrase it, Your Honor, is that, you know, although we, you know, understand that certain things happen and classes could be canceled or campus events might be rescheduled, you know, one thing would remain constant and that is that, you know, the bargain was for an on-campus education

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benefits that accompany it.

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And if there's sort of a temporary interruption in that, I can't say we'd be before this court and bring a case on it.

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I'm not asking whether you'd be bringing a lawsuit.

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I'm asking what your vision of the contractual obligation is.

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It allows for those short interruptions.

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We wouldn't object to that, those short.

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I'm asking an objection.

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I'm asking your vision of the contract terms.

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You agree that because we're dealing with, you know, we don't have a nice Four Corners contract here.

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So the different sources you're drawing from, you would agree that those do not obligate them to provide the full panoply of on-campus education in extreme circumstances.

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for short periods of time.

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The problem is here, it was, I guess, functionally half a semester.

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I think in some, yes, Your Honor, I'd agree.

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And then if, do you dispute, I mean, because I read your complaint and tell me if I'm wrong, that there's not really a dispute here that neither GW or AU just said, huh, professors would all like to go on vacation.

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We're just going to switch to online education.

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That it was all caused by

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the COVID pandemic.

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Is that, are we agreed on?

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That's not a fact that's in dispute, that the transition to online or remote learning was caused by the pandemic.

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We have alleged in our complaint that the transition occurred because of the pandemic.

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And do you, you don't dispute that in fact, at least as of March 24th, it would have been illegal

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for GW or the American University to operate on campus, provide on campus lessons or activities because all non-essential businesses have been shut down by order of the mayor.

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I don't think that that was as deep clearly played in the case.

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So I can't.

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I'm asking this.

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I don't know what part wasn't played.

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You said COVID caused the shutdown.

[00:08:17] Speaker 00:
Yeah.

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In traditional notice of the mayor of mayor Bowser's lockdown order.

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Sure.

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And I think my point was toward this way that whether it was illegal or not.

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And I don't think that we flush that out before the district court.

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You don't need to.

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You don't need to do at least concede that it was infeasible.

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that they could not, under the circumstances, actually provide in-person instruction during this time.

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I think that, you know, we would agree that, but I think that has important consequences, Your Honor, and what that involves is

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issues of impossibility and when we're- Well, not necessarily.

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And I don't want to jump into, maybe Judge Millett is going there.

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That is.

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Yeah, so not necessarily.

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I think that may actually have an implication for the kind of promise that you need to have had the university to make in order to state a claim for breach in this case, right?

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I mean, it seems to me that if you concede

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that it was infeasible for the university to actually provide in-person instruction.

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Then in order to state a claim for breach, you needed the university to promise to provide in-person instruction no matter what, right?

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It had to be an unconditional guarantee of in-person instruction because if their promise was we will provide in-person instruction as long as it's feasible,

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or we will do our best to provide in person instruction or some conditional promise like that, then you lose because we know it wasn't feasible.

[00:10:01] Speaker 06:
We know they did their best.

[00:10:03] Speaker 06:
So the only thing that gets you to actual reach in this case is if the university said, we guarantee you not necessarily explicitly, they could have said it implicitly, but it had to be a guarantee

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of in-person instruction.

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And so I'd like to know whether you actually allege that they essentially made a money back guarantee in this way.

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And if you do allege that, is it plausible that a university would make that kind of guarantee to their students, especially when they have reserved the right to change programs, et cetera, et cetera?

[00:10:41] Speaker 00:
Sure, Your Honor.

[00:10:42] Speaker 00:
And breaking that apart, I think there's some parts that I would agree with you on and some parts I think I disagree with you on.

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I think starting from the first instance, did George Washington have to say, we agree no matter what or no matter the circumstances to provide in-person education?

[00:11:02] Speaker 00:
GW didn't say that one way or the other.

[00:11:05] Speaker 06:
No way.

[00:11:06] Speaker 06:
Let me just be clear.

[00:11:07] Speaker 06:
I'm not saying that they had to.

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make an express statement.

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I'm not saying that they had to actually say it.

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I agree that they can promise implicitly.

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But the question is, what was the promise?

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What did they actually promise to do?

[00:11:25] Speaker 06:
So they could have implicitly, I suppose, promised money back guarantee kind of certainty that you would be able to go to class, right?

[00:11:36] Speaker 06:
Fine.

[00:11:37] Speaker 06:
But where is that in terms of the allegations or the facts in this case?

[00:11:43] Speaker 00:
Gotcha.

[00:11:44] Speaker 00:
Gotcha.

[00:11:44] Speaker 00:
I think that there's a number of principles under DC law that we use in order to to assert a plausible claim for breach of contract in this case.

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And so when courts are construing contracts involving universities and students, you know, it's not a clean document.

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There's no, of course,

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document titled contracts.

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So we're looking at things like communications, but not just communications, your honor.

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We're also looking at the usual practices and reasonable expectations.

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And so there's a whole line of case law in DC that recognizes that contracts are to be read by reference to the norms of conduct and the expectations founded upon them.

[00:12:27] Speaker 06:
But don't we have the bash case that says expectations are not enough to establish a binding promise?

[00:12:34] Speaker 06:
I thought we had that line of authority too.

[00:12:38] Speaker 00:
Well, I think the Basch case is helpful in a general regard, but you know, I think it's certainly not helpful to an addition for one important reason.

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And that is Basch was a summary judgment decision.

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And so there's an opportunity for fact finding that occurs as a part of that and discovery happened.

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Can you narrow in very kind of focused

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on what it is that you're alleging the university promised to your students.

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And am I right or wrong that as a matter of law, under these particular circumstances, that promise had to be unconditional in terms of the university saying, essentially, not saying, but acting as if you have to be able to have the in-person experience no matter what.

[00:13:32] Speaker 00:
The promise did not have to be unconditional.

[00:13:36] Speaker 06:
Why not?

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George Washington could have drafted a disclaimer or a reservation of right that was so clear and unambiguous that it could provide itself an out.

[00:13:51] Speaker 06:
And I think the problem gets to- No, an out from what though, right?

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You're asking us to infer an implied promise.

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So I'm just trying to figure out whether it makes any sense to infer that they intended to make the kind of promise that would bind them to providing in-person instruction no matter what.

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And I think you have to have that because if they were to, you know, I could agree with you that there was some promise here

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And that that promise might even encompass in-person instruction, that they promised that you would have an in-person experience.

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The question is, was that promise a conditional one, right?

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That you would have an in-person experience so long as we're able to provide it, as long as it's feasible for us to do so.

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Why isn't that the sort of outer bounds of the plausible promise that the university makes to its students about in-person?

[00:15:01] Speaker 00:
Because the university never made such a statement limiting when it would or would not provide in-person education.

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And so that's why we're falling back on default.

[00:15:12] Speaker 05:
Maybe they couldn't just say, oh, we don't think it's feasible.

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We just had to pay.

[00:15:16] Speaker 05:
some huge amount of our endowment to settle some litigation or something.

[00:15:20] Speaker 05:
So that's not just that it's not feasible.

[00:15:23] Speaker 05:
But is it not an inherent component of every contract that compliance in violation of law is not required?

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Courts can't enforce a contract if it's terms, if it's operation.

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Even if initially it was a valid contract, something happened.

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And now it would be unlawful for one party to comply.

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Does that have to be written or is that just not inherent?

[00:15:56] Speaker 05:
There's plenty of case law that courts will not enforce contractual obligations that themselves are contrary to law.

[00:16:04] Speaker 05:
That's got to be part of this contract, doesn't it?

[00:16:08] Speaker 00:
I think as a matter of general fundamental principles,

[00:16:12] Speaker 00:
You're right, your honor.

[00:16:13] Speaker 05:
I don't want to ask about general fundamental principles.

[00:16:16] Speaker 05:
I want to ask, isn't that inherently a part of whatever contract you had here, that compliance that requires illegal conduct?

[00:16:26] Speaker 05:
For example, if GW had said, we're going to keep having classes.

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And if you do not show up, or if you show up, we're going to mask and kick you out.

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If you don't show up, we're going to mark you absent.

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and five absences lead to a failing grade.

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So if the school kept going and forced students to come or fail, surely students could say, you can't enforce that.

[00:16:54] Speaker 05:
That's a breach of contract.

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You can't force us to engage in unlawful conduct and violation of the district order and an imperil of our own health.

[00:17:05] Speaker 05:
Wouldn't they?

[00:17:06] Speaker 05:
Could the students bring such a claim in such a situation?

[00:17:09] Speaker 00:
I don't know if in that situation they could, Your Honor, because the way that, well, and I'm trying to break it apart a little bit here.

[00:17:16] Speaker 00:
It might be where the disconnect is.

[00:17:19] Speaker 00:
When we're looking at contracts in the educational context and an implied contract situation, you're looking at historically, how have the people dealt with each other?

[00:17:28] Speaker 00:
And the way that you presented it, Your Honor, involves novel fact issues that aren't here.

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But I'd like to say backing up,

[00:17:36] Speaker 05:
I'm just presenting from the flip side, my exact point about can one party compel circumstances of change?

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I'm not talking about a contract that's illegal of an issue, right?

[00:17:47] Speaker 05:
Circumstances change.

[00:17:49] Speaker 05:
And so if it's unlawful for the student to do their part or if it's unlawful for the university to do its part.

[00:17:58] Speaker 05:
And that's in every contract, isn't it?

[00:18:01] Speaker 00:
I would say yes, to a certain extent, Your Honor, implied, if anything, under the law.

[00:18:06] Speaker 00:
But I think what the important thing and distinction to keep in mind here is that in such a situation, that doesn't mean people are left without any remedies.

[00:18:17] Speaker 00:
But there's no breach.

[00:18:19] Speaker 00:
There's no breach.

[00:18:21] Speaker 06:
Judge Millett's point is that there's no breach in that case.

[00:18:24] Speaker 06:
If that's in every contract, then setting it up the way that I would think about it, that's a condition.

[00:18:30] Speaker 06:
That the party is saying, I will offer you in person classes so long it is not unlawful to do so.

[00:18:39] Speaker 06:
So that if that's the contract in this situation, it would have been unlawful so there's no breach.

[00:18:46] Speaker 00:
Right.

[00:18:49] Speaker 00:
there is no breach.

[00:18:50] Speaker 00:
I think the way that your honors have been phrasing it involves a lot of different fact issues and questions above and beyond the question of whether we have pled a breach.

[00:18:58] Speaker 05:
And the way that we've- I'm not sure this isn't anything that's not apparent from the face of your complaint and judicial notice of the mayor's lockdown order.

[00:19:07] Speaker 05:
But I think the point is that when a contract that's perfectly lawful contract becomes

[00:19:13] Speaker 05:
due to circumstances beyond anyone's control legally unenforceable by a court, right?

[00:19:18] Speaker 05:
A court could assume a court couldn't say you've reached the contract by not taking these illegal actions.

[00:19:26] Speaker 05:
It's just a launch pad into unjust enrichment, isn't it?

[00:19:31] Speaker 00:
Correct.

[00:19:31] Speaker 00:
If a contract remedy would not be available.

[00:19:33] Speaker 00:
That's a different question.

[00:19:34] Speaker 05:
If we can't, the enforcement of the contract is no longer something a court can do, that doesn't mean

[00:19:42] Speaker 05:
that you know you may win or lose, but it doesn't mean that you wouldn't get the opportunity to say there was never an agreement that the students would bear the full cost of such that we are only one party would bear the full cost of such a development.

[00:19:56] Speaker 05:
I mean, that's a whole nother issue.

[00:20:00] Speaker 03:
Ask a couple of questions.

[00:20:03] Speaker 03:
I, I saw your complaint

[00:20:07] Speaker 03:
The background for me, and you can tell me if I'm misreading it, the background for me that DC law is pretty clear over a long period of time that the relationship between the university and a student is contractual in nature.

[00:20:20] Speaker 03:
So we know that there is a contractual commitment coming from the university.

[00:20:25] Speaker 03:
And I thought what your claim was that the university reading all of the relevant materials and especially using the implied and fact tests

[00:20:36] Speaker 03:
What you're saying is that the university promised that as a general practice, we offer live education on campus as a general practice.

[00:20:48] Speaker 03:
And that is our promise to you.

[00:20:50] Speaker 03:
And so there are any number of examples that I could give.

[00:20:53] Speaker 03:
There was one in the district court in Delaware, I asked council, for example, could the university announce, oh, you know, we're running out of money.

[00:21:01] Speaker 03:
You have to learn on your own now.

[00:21:05] Speaker 03:
Is that permissible?

[00:21:07] Speaker 03:
And no one's seen, no one on either side was confused that that breached the implied promise made by the University, which was as a general practice, we're having live education and campus arrangement.

[00:21:21] Speaker 03:
I understood some of the claims that my colleagues are raising to be matters that could be raised in a motion to dismiss case.

[00:21:32] Speaker 03:
as defenses raised by the universities.

[00:21:34] Speaker 03:
That is, it was impossible, it was unlawful, whatever, and we could not have lived up to that implied contract.

[00:21:44] Speaker 03:
And you might lose on that pretty readily.

[00:21:46] Speaker 03:
And I think it's easy to see the pandemic being raised as a defense to your implied contract claim.

[00:21:54] Speaker 03:
And then the last piece, again, I just want to make sure I'm understanding your thinking, the last piece

[00:22:00] Speaker 03:
of what I understood was that you were saying in any event, it doesn't matter because we surely have an unjust enrichment claim and the possibility of restitution here.

[00:22:18] Speaker 03:
If the universities, both of these universities distinguish between live versus online and they charge differently, they've already valued them differently.

[00:22:29] Speaker 03:
They charge substantially more for the regular live education and campus arrangements.

[00:22:38] Speaker 03:
And in one of them, they say, but you can be admitted and go online and get a degree, but you're not going to get what those who are paying the bigger money for.

[00:22:47] Speaker 03:
So what you were saying is in your view, you think there is restitution that's due, but once again,

[00:22:55] Speaker 03:
We certainly can't decide that on a motion to dismiss.

[00:22:58] Speaker 03:
And as I understand your argument, they may win fairly quickly on your employee contract claim.

[00:23:05] Speaker 03:
And as I read your claim, there is a promise that our general practice is live and you still may lose it because the pandemic knocks it out.

[00:23:13] Speaker 03:
But that is a matter that should not be decided on a motion to dismiss because there are terms on the implied terms

[00:23:21] Speaker 03:
To be filled out and we haven't filled them out yet.

[00:23:23] Speaker 03:
Am I am I understanding you correctly.

[00:23:26] Speaker 00:
I think on a whole your honor I think that's a fair accurate and summary, and the only sort of quibble I'd say is in terms of the issues of illegality or whether the pandemic prevented.

[00:23:39] Speaker 00:
the contract from being executed.

[00:23:41] Speaker 00:
I think there's two points on that.

[00:23:43] Speaker 00:
One, that involves fact questions, not appropriate for resolution on a motion.

[00:23:47] Speaker 03:
That's what I just said.

[00:23:48] Speaker 00:
OK.

[00:23:49] Speaker 05:
Then we're on the same page.

[00:23:51] Speaker 00:
Hang on.

[00:23:51] Speaker 05:
There's DC's there.

[00:23:53] Speaker 03:
I'm sorry.

[00:23:54] Speaker 03:
Let me just finish.

[00:23:55] Speaker 03:
All I said was, and I don't know what the answer to it is, all I said was that my understanding of your claim is it's a motion to dismiss.

[00:24:04] Speaker 03:
And at least in the cases in which I've read, it seems

[00:24:10] Speaker 03:
correct answer.

[00:24:11] Speaker 03:
That is, you don't decide this on a motion to dismiss.

[00:24:14] Speaker 03:
There may be defenses that the university can raise and they may be able to win them quickly.

[00:24:19] Speaker 03:
But in any event, you can't do it on a motion to dismiss.

[00:24:22] Speaker 03:
And the last piece of my understanding your argument is you complete alternatively under federal rules.

[00:24:29] Speaker 03:
And there's an argument in here in these two cases

[00:24:33] Speaker 03:
one of the judges has suggested you can't plead in the alternative.

[00:24:38] Speaker 03:
And I think you're saying, and I don't understand how you can't, you certainly can plead in the alternative, the express contract, the implied contract, and the unjust and risk enrichment.

[00:24:50] Speaker 03:
Have I got your position correct?

[00:24:52] Speaker 00:
That is correct, your honor.

[00:24:55] Speaker 05:
I just wanted to follow up.

[00:24:56] Speaker 05:
Go ahead, Judge Millett.

[00:25:00] Speaker 05:
The DC Circuit law that explicitly holds that an affirmative defense may be raised by pre-answer motion under Rule 12, that is our 12th through 6th stage, when the facts that give rise to the defense are clear from the face of the complaint.

[00:25:19] Speaker 05:
And it's clear from the face of the complaint, and you've agreed here that the reason, the one and only reason that these two universities

[00:25:28] Speaker 05:
halted the provision of on-campus education, to which you claim contractual entitlement, was a pandemic, a public health emergency, which in very short order became subject to a lockdown order enforceable by civil and criminal penalties in the District of Columbia, none of which is disputed, all of which is on the face of your complaint or if we can take judicial notice.

[00:25:55] Speaker 05:
of the lockdown order that ensued from the pandemic causation that you have acknowledged.

[00:26:00] Speaker 05:
And so we don't really have to wait for a later summary judgment in this very unusual circumstance.

[00:26:11] Speaker 05:
I mean, that's what struck me.

[00:26:12] Speaker 05:
No one disputes what happened, why this happened, and no one seems to dispute that had there not been a pandemic, you all would have stayed on campus for the rest of the semester.

[00:26:22] Speaker 05:
And I don't hear any dispute, but please tell me if this is one of the facts you think you need to look into, that it would have been contrary to the directions of public health officials locally, nationally, and internationally to continue holding classes.

[00:26:42] Speaker 05:
And it would have been once the lockdown order was issued,

[00:26:45] Speaker 05:
in violation of district law to have held classes.

[00:26:49] Speaker 05:
So this is an unusual type of contract claim.

[00:26:52] Speaker 05:
And it's pretty settled as well on this motion to dismiss that a court, even if it's a perfectly valid contract, a court can't enforce terms that become contrary to law.

[00:27:05] Speaker 05:
So I don't understand why.

[00:27:07] Speaker 05:
Please explain to me more what facts you think

[00:27:11] Speaker 05:
need to get developed on this narrow question of whether a court could hold that the obligation to provide on-campus education continued at a minimum after the lockdown order was issued?

[00:27:26] Speaker 05:
What facts need to be developed that would have allowed GWRAU to continue providing on-campus education after the lockdown order?

[00:27:35] Speaker 00:
Sure.

[00:27:36] Speaker 00:
I think, one, the facts would include whether and to what extent

[00:27:41] Speaker 00:
and the breadth of which the applicable orders that were used.

[00:27:52] Speaker 05:
That's not a fact.

[00:27:53] Speaker 05:
That's reading the law.

[00:27:54] Speaker 05:
I mean, we can pull it up.

[00:27:55] Speaker 05:
Pull it up.

[00:27:57] Speaker 03:
What are you saying?

[00:27:58] Speaker 03:
Whether the classes were mass gatherings that were prohibited?

[00:28:01] Speaker 03:
I mean, is that the way you're cutting it?

[00:28:03] Speaker 03:
You may be right.

[00:28:04] Speaker 03:
The law didn't say, I don't know this.

[00:28:07] Speaker 03:
The law didn't say,

[00:28:09] Speaker 03:
universities can't have classes, as I recall.

[00:28:12] Speaker 03:
I thought the law said focus more on math.

[00:28:16] Speaker 03:
Is that what you're talking, I'm asking, is that what you're talking about?

[00:28:19] Speaker 00:
It is, your honor.

[00:28:20] Speaker 00:
So for example, could- That's not the lockdown order.

[00:28:24] Speaker 05:
The lockdown order allowed public and private universities to remain open solely for the purpose of facilitating distance learning and distance operations, modifying facilities,

[00:28:36] Speaker 05:
to address the public health issues.

[00:28:40] Speaker 05:
And then, you know, there was transition time on university housing.

[00:28:44] Speaker 05:
That's not on-campus education.

[00:28:45] Speaker 05:
On-campus education was forbidden by the lockdown order.

[00:28:48] Speaker 00:
And the reason why I think that's a That's not a fact question.

[00:28:51] Speaker 05:
That's a law question.

[00:28:53] Speaker 00:
Sure, Your Honor.

[00:28:53] Speaker 00:
And I think where I'm struggling with responding to, Your Honor, in the way that you phrased it is because, you know, I'm stepping back to the

[00:29:02] Speaker 00:
concept where, you know, principles and contracts are to be read in light of the conditions and circumstances existing at the time that they were entered into.

[00:29:11] Speaker 00:
And the pandemic and everything is a subsequent situation.

[00:29:14] Speaker 00:
And so when you have something that comes up later... No, counsel, no.

[00:29:19] Speaker 03:
Judge Mollett and Judge Jackson are right that if the law, and I just don't remember the details now, we're all so sick of this that we can't even remember anything.

[00:29:28] Speaker 03:
If the law really effectively said

[00:29:31] Speaker 03:
Classes cannot happen.

[00:29:33] Speaker 03:
They have to be closed down.

[00:29:35] Speaker 03:
And you use remote learning.

[00:29:37] Speaker 03:
I mean, however, I'm doing it in a very loose way.

[00:29:40] Speaker 03:
But if that's what the law said, and everyone knows that, we're not going to take that past the motion to dismiss if you're in that situation.

[00:29:50] Speaker 03:
And you're not claiming the law is impermissible.

[00:29:54] Speaker 03:
Why would we take that past?

[00:29:56] Speaker 03:
The restitution and unjust dismissal, I'm sorry,

[00:30:01] Speaker 03:
in any event.

[00:30:02] Speaker 03:
That's a different issue.

[00:30:04] Speaker 03:
I don't know how that can possibly survive.

[00:30:07] Speaker 06:
Mr. Schaeffer, can I just sort of summarize this in a different... I mean, not Mr. Excuse me, Mr. Schaeffer, Mr. Kuroski.

[00:30:13] Speaker 06:
Can I summarize this in a little different way what I hear is going on here?

[00:30:18] Speaker 06:
And it's sort of what I alluded to to begin with.

[00:30:21] Speaker 06:
I actually don't see this as accelerating the impossibility defense

[00:30:27] Speaker 06:
because the defense only occurs and is only necessary if we believe that there was a breach, right?

[00:30:34] Speaker 06:
If the defendant were to say, yes, we breached the contract, we had promised X, we did not give X, that is a breach of contract, but here's our defense impossibility, right?

[00:30:49] Speaker 06:
What I thought this case was about was whether and to what extent the university made a promise

[00:30:57] Speaker 06:
to continue education in person under all circumstances.

[00:31:04] Speaker 06:
And the reason why you had to have that in my view is because you have conceded that it was infeasible, unlawful or whatever for the university to continue.

[00:31:16] Speaker 06:
So the only way you have a breach, the only way you're able to say they did something that we now are entitled to get a remedy for

[00:31:26] Speaker 06:
right, they broke their promise, is if they had promised you that they would go forward regardless, right?

[00:31:35] Speaker 06:
Initially, when the promise was made, we are giving you a money back guarantee that you will get in-person instruction under all circumstances.

[00:31:44] Speaker 06:
And so then you come and say, yeah, we know that you couldn't give it, but you promised us that under all circumstances, we'd be entitled to it.

[00:31:53] Speaker 06:
So you've reached.

[00:31:54] Speaker 06:
And my worry,

[00:31:56] Speaker 06:
is that in this situation that we have right here, we don't have any written language from the university.

[00:32:02] Speaker 06:
You're correct about that.

[00:32:04] Speaker 06:
So we're all trying to figure out what the university implicitly promised.

[00:32:10] Speaker 06:
And where I get hung up is trying to find an implicit promise of the university that they would go forward under all circumstances.

[00:32:21] Speaker 06:
I don't see that in the materials.

[00:32:23] Speaker 06:
I don't see the circumstances as even plausibly giving rise to that, especially when they had language in their various materials that gave them the right to make changes.

[00:32:36] Speaker 06:
The other thing that I think I would like for you to speak to, perhaps, and I know your other counsel should have an opportunity, so maybe you want to pitch this to him, is this notion of in-person versus

[00:32:51] Speaker 06:
online learning and the difference in the value, I don't really know whether that hurts you or helps you.

[00:32:58] Speaker 06:
And let me tell you why I think that's the case, because we're also trying to figure out what is the core of the product that is being offered by a university.

[00:33:08] Speaker 06:
And one could conceive of that core as instruction classes toward credits

[00:33:18] Speaker 06:
that you can put to get a degree at the university, or instruction for credit toward a degree.

[00:33:25] Speaker 06:
That happens whether it's online or in person.

[00:33:29] Speaker 06:
That seems to me like the core.

[00:33:31] Speaker 06:
And the fact that the university could offer different products, one that's in person versus one that's online, to me indicates that the in-person nature of it is actually not.

[00:33:45] Speaker 06:
the core of it, that that's kind of ancillary.

[00:33:47] Speaker 06:
You pay more for that if you want it in that format, but the real thing is just getting classes for credit that you can put toward a degree.

[00:33:57] Speaker 06:
And that you've gotten that whether you did it, you know, during a pandemic time online or not, and therefore the university has not actually reached the core of what it is that it promised to its students.

[00:34:13] Speaker 06:
So I don't know if you want to react to that or you want to, you know, you want to wait, let Mr. Wiley do it.

[00:34:20] Speaker 00:
Sure.

[00:34:20] Speaker 00:
I'll offer my thoughts, your honor.

[00:34:22] Speaker 00:
And then, you know, certainly if you want to ask questions of Mr. Willie, you know, I don't know how you want to split up our time across the people.

[00:34:29] Speaker 00:
And I understand, you know, we're certainly past the time.

[00:34:32] Speaker 00:
And I'd say that, one, in terms of the points your honor made about the core of the deal, the core of the deal that you would describe sounds to me to be different than the core of the deal that we've described.

[00:34:43] Speaker 00:
And the core of the deal that we've described is emphasized as the importance of the in-person education.

[00:34:49] Speaker 03:
And so when we're stepping back to apply- I mean, I want to, because there is a difference in understanding, I want to make sure it's clear in my head what your position is, not who's right.

[00:34:59] Speaker 03:
your position.

[00:34:59] Speaker 03:
My understanding was you were saying nothing more than, and indeed the materials you'll point to don't say anything more than, this applied deal that as a general practice will give live on-campus education.

[00:35:12] Speaker 03:
Nothing more, nothing about no matter what.

[00:35:15] Speaker 03:
There was no, you're not claiming there was a no matter what promise, is that right?

[00:35:20] Speaker 00:
That's correct, Your Honor, and I'll add that, you know, that no matter what issue

[00:35:26] Speaker 00:
I disagree with that's a point George Washington has made in their brief that, you know, there's no promise of no matter what that matters because George Washington, you know, we're looking at the bulletin.

[00:35:36] Speaker 00:
It could have drafted the terms differently.

[00:35:38] Speaker 00:
It could have expressly reserved the schools.

[00:35:41] Speaker 03:
I'm just asking.

[00:35:41] Speaker 03:
I want to just confirm because there is a difference here.

[00:35:44] Speaker 03:
I just want to confirm my understanding.

[00:35:46] Speaker 03:
Your complaint is not that they breached the contract because we think they made a promise of on campus live no matter what.

[00:35:55] Speaker 03:
my understanding was you were saying nothing more than their promise is that as a general practice, it would be alive and on campus.

[00:36:06] Speaker 03:
Is that right?

[00:36:07] Speaker 00:
That's right.

[00:36:07] Speaker 00:
They promise in-person instruction, your honor.

[00:36:10] Speaker 03:
As a general practice.

[00:36:14] Speaker 00:
As a general practice and as it applies here.

[00:36:17] Speaker 06:
No, so why was there a breach?

[00:36:20] Speaker 06:
If the promise was

[00:36:21] Speaker 06:
We will give you in-person instruction as a general practice, not as a no matter what, as a general practice, why under these circumstances where you concede that they couldn't do it under these circumstances, it was infeasible, it was unlawful, why is there a breach?

[00:36:41] Speaker 06:
Why is that a breach of the promise to not give it under these circumstances?

[00:36:46] Speaker 06:
Because this was not a general ordinary situation.

[00:36:48] Speaker 06:
This was the unusual situation.

[00:36:51] Speaker 06:
They didn't break their promise, right?

[00:36:53] Speaker 00:
They didn't break their promise.

[00:36:54] Speaker 00:
Well, I think in this instance, it would kind of have to be tie in with the fact that there was no refund provided.

[00:37:00] Speaker 00:
So, for example, in addition to closing the campus, for example, one of the things that are not at issue is room and board.

[00:37:10] Speaker 00:
So students were sent home and those students that received room and board that went off campus,

[00:37:16] Speaker 00:
received refunds for their day.

[00:37:18] Speaker 06:
But those are based on different promises, right?

[00:37:21] Speaker 06:
There are other promises that relate to room and board.

[00:37:25] Speaker 06:
You pay this extra money and you get to stay in the dorm, right?

[00:37:29] Speaker 06:
You pay this extra money and you get a certain number of meals.

[00:37:33] Speaker 06:
Those are other promises that required, because those are the core of those promises, a refund because they paid the extra money and they couldn't stay in the dorm.

[00:37:43] Speaker 06:
So fine, with respect to tuition,

[00:37:46] Speaker 06:
Right?

[00:37:47] Speaker 06:
If Judge Edwards is correct, and if your complaint is read to be the promise that you'll have in-person education classes as a general matter, not no matter what, but as a general matter, why is there a breach in this case?

[00:38:05] Speaker 00:
Because George Washington kept the entirety of the money, even though it delivered a different product.

[00:38:12] Speaker 05:
Okay, so I think what you're saying is there were two promises here.

[00:38:16] Speaker 05:
The default rule is first one is on campus education as a default rule, and we don't have to decide on what terms they could change it because in this case, it was driven by external circumstances that the law wouldn't allow them to do it so that whatever might or might not fall in the.

[00:38:36] Speaker 05:
general rule or presumption of when they could change that provision of on-campus education, this one has to be right that they could stop it.

[00:38:46] Speaker 05:
But you're saying there's a second promise that you're implying, right or wrong, but your complaint is alleging is that if all the students are getting is online classes, then all they should be paying is your online tuition.

[00:39:05] Speaker 05:
And so there was a promise that if you turned us into online students and no longer on-campus students, at least for a significant period of time, we'll give you a snow day or two, then at that point, you wouldn't treat us financially like still on-campus students.

[00:39:22] Speaker 05:
So there's two promises.

[00:39:24] Speaker 05:
Am I saying it right?

[00:39:26] Speaker 00:
I think breaking it apart, Your Honor, that sounds right.

[00:39:29] Speaker 00:
And I think both of them kind of come down to the notion that, you know,

[00:39:34] Speaker 00:
our clients didn't receive the benefit of their bargain.

[00:39:37] Speaker 06:
But I have to say, Mr. Kharaki, they reduced to the same thing.

[00:39:41] Speaker 06:
I don't see two promises.

[00:39:43] Speaker 06:
The second promise is just a money back guarantee that you're going to be on campus, right?

[00:39:50] Speaker 06:
I mean, you can't hold both of those in the same set of circumstances.

[00:39:56] Speaker 06:
What Judge Millett has said effectively, I think, with respect to the second promise is, unless you're on campus, you get your money back.

[00:40:04] Speaker 06:
that that's the promise.

[00:40:06] Speaker 06:
And I just want to know, is that what you are alleging that they said?

[00:40:09] Speaker 06:
And is it plausible that the university would have made that promise to its students, knowing that ice storms happen, knowing that programs have to change?

[00:40:21] Speaker 06:
Is it plausible to believe that the university would have given the students a money back guarantee concerning on campus experience?

[00:40:30] Speaker 06:
I think that is really what you have to establish.

[00:40:34] Speaker 00:
And your honor, that's where I disagree.

[00:40:36] Speaker 00:
I think those are things that GW could have written down and concluded that they said, you know, and that they said, you know, no money back if we have to cancel or go to classes online.

[00:40:50] Speaker 00:
They could have said that, but they didn't.

[00:40:52] Speaker 00:
And so when we're done with what we're left with is application of general contract principles and

[00:40:59] Speaker 05:
Nothing in the lockdown order forbids them from, there's nothing unlawful about, if you're right, about them reimbursing some tuition, right?

[00:41:10] Speaker 05:
That doesn't stop them from that aspect.

[00:41:13] Speaker 00:
Correct.

[00:41:13] Speaker 00:
And the lockdown order certainly doesn't eliminate our opportunities to seek a remedy or limit students' remedies, whether expressly or impliedly.

[00:41:22] Speaker 05:
That's your unjust enrichment argument.

[00:41:25] Speaker 05:
If the law descended and said this contract

[00:41:29] Speaker 05:
can't be enforced anymore, then you would go to unjust enrichment and argue about whether there was this agreement to partial money back or partial money back guarantee.

[00:41:44] Speaker 05:
That's the whole other argument, but that would be done under the guise of unjust enrichment because courts can't enforce, can't say there was a legal obligation to keep providing on-campus education in these circumstances.

[00:41:57] Speaker 00:
that is where unjust enrichment would come in to fill the void.

[00:42:01] Speaker 00:
And, you know, certainly in our case, we weren't able to not fill in the void, would come in to provide a remedy.

[00:42:10] Speaker 00:
And so, you know, I think that that's generally correct, your honor.

[00:42:15] Speaker 00:
Unless you have any additional questions specific to me, I'd certainly- My colleagues have any more questions for Mr. Korosky?

[00:42:22] Speaker 00:
give Mr. Wiley a time to address the issues as well.

[00:42:27] Speaker 05:
Is it Mr. Wiley or Wiley?

[00:42:28] Speaker 05:
I'll let him answer.

[00:42:29] Speaker 05:
You don't have to answer that.

[00:42:32] Speaker 02:
Good morning, Your Honors.

[00:42:32] Speaker 02:
It's Roy Wiley, and I represent the Qureshi plaintiffs against American University.

[00:42:37] Speaker 02:
I also represent the Montesano plaintiffs and the case against Catholic University, which survived the motion to dismiss in this circuit.

[00:42:45] Speaker 02:
And what I would say is this.

[00:42:46] Speaker 02:
Let me start with Judge Jackson's

[00:42:50] Speaker 02:
question about breach, because I do think that that cuts to the heart of the matter.

[00:42:55] Speaker 02:
And I think it's important to note that in American contract jurisprudence, we do not disclaim in the affirmative.

[00:43:02] Speaker 02:
That is to say that a contract does not need to say that I will perform it on Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, and Sunday.

[00:43:11] Speaker 02:
In other words, if it's not disclaimed in the negative, if that contract does not say that it is not in effect on Sundays, then it is always in effect.

[00:43:20] Speaker 02:
and I am always expected to perform under that contract.

[00:43:23] Speaker 02:
And so contracts.

[00:43:25] Speaker 05:
Unless the law requires otherwise.

[00:43:28] Speaker 02:
Right, Judge Millett.

[00:43:29] Speaker 02:
And that's where I'm going to next.

[00:43:31] Speaker 06:
Before you go, is it your position, I take from what you've just said, that a party or two parties cannot agree to a conditional contract?

[00:43:46] Speaker 06:
They cannot make promises that are conditional?

[00:43:50] Speaker 02:
Two parties can agree to a conditional contract.

[00:43:54] Speaker 02:
And I think the important part of that here is the fact that one of those parties, American University, has been in existence and operated a campus during pandemics.

[00:44:04] Speaker 02:
American University operated a campus during the Spanish influenza pandemic, during the polio pandemic.

[00:44:10] Speaker 02:
during the H1N1 pandemic and others and had the ability.

[00:44:14] Speaker 06:
So given that, your argument then is that it is plausible for us to conclude that when American made this promise, it intended it to be unconditional, meaning it was saying

[00:44:29] Speaker 06:
You come to campus you come on in person under all circumstances see previously even in prior pandemics, we were able to operate so our promise to you is you guaranteed in person that's how you read the circumstances.

[00:44:48] Speaker 02:
Yes, and at worst, it's a factual question as to what the course of dealing and reasonable expectations of the students were under the circumstance.

[00:44:56] Speaker 02:
And that's where we get into Judge Millett's question about the snow days.

[00:45:00] Speaker 02:
We know that in Washington DC or in Boston, where I went to college, we have snow days regularly.

[00:45:08] Speaker 02:
Washington DC deals with snow days quite differently.

[00:45:11] Speaker 02:
American University deals with snow days quite differently than Harvard deals with snow days, for example.

[00:45:17] Speaker 02:
And the course of dealing between the parties and the reasonable expectations between the parties are what come into play and that circumstance.

[00:45:25] Speaker 02:
But here we actually have historical precedent where American University had the ability and they could have contracted.

[00:45:33] Speaker 05:
Was there a lockdown order with the 1919 pandemic?

[00:45:37] Speaker 02:
That is not in the record.

[00:45:40] Speaker 02:
But what I will tell you is this, that this is not an enforcement action.

[00:45:45] Speaker 02:
And so the lockdown order is almost immaterial as to the motion to dismiss stage, because we are not asking for specific performance of the contract.

[00:45:54] Speaker 05:
And if you read the papers... You're saying you don't want specific performance, but you want damages because from March 24th on, you want damages.

[00:46:06] Speaker 05:
they breached the contract by not continuing to provide on-campus education.

[00:46:11] Speaker 02:
Right.

[00:46:12] Speaker 05:
And precisely because... But a court could not issue an order that said... How could a court issue an order that says, under this contract, they were obligated to continue providing on-campus education, notwithstanding the lockdown order?

[00:46:32] Speaker 05:
You know, the performance of time is long since run, but a court would define a breach on your theory, we would have to say it breached the contract not to provide on campus education after the lockdown.

[00:46:48] Speaker 02:
It did breach the contract.

[00:46:50] Speaker 02:
I don't think that there's any question about that in the different example of a court that is held.

[00:46:55] Speaker 05:
It has said in terms, it is a breach of contract.

[00:47:01] Speaker 05:
not to undertake promised actions that the government has declared unlawful.

[00:47:10] Speaker 02:
The distinction and I think what we are getting at in respect to this contract and other contracts, this contract was prepaid.

[00:47:19] Speaker 02:
So in other words, the students had already performed.

[00:47:21] Speaker 02:
This is not a contract where there is ongoing course of performance from both parties.

[00:47:27] Speaker 02:
The students had already performed in terms of paying the tuition and fees.

[00:47:30] Speaker 05:
That sounds like an issue for unjust enrichment.

[00:47:31] Speaker 05:
I want to focus solely on breach of contract.

[00:47:35] Speaker 05:
And you said they had a contractual obligation, given what happened during the Spanish pandemic, your allegations about that here, that they had a contractual obligation to continue providing on-campus education.

[00:47:53] Speaker 05:
You just said yes to that question.

[00:47:57] Speaker 05:
Tell me what your best case is that you can have a contractual obligation to undertake contact

[00:48:05] Speaker 05:
that is contrary to law.

[00:48:09] Speaker 05:
It might have been lawful beforehand, but now it is contrary to law.

[00:48:13] Speaker 05:
What is your best case for a court saying we can hold?

[00:48:17] Speaker 05:
They still had that contractual obligation.

[00:48:19] Speaker 02:
Well, I think you have to look at the facts here in terms of what we're dealing with in an educational contract, which is- I guess I'm asking you for a case, case law.

[00:48:29] Speaker 02:
There is no educational contract based case that looks at the factual predicate of reasonable expectation.

[00:48:38] Speaker 05:
You don't need an education case for me.

[00:48:40] Speaker 05:
If you can show me any case for any contract where a court has said, it's undisputed that performance, continued performance would be unlawful.

[00:48:53] Speaker 05:
Nonetheless, you breached the contract by not doing so.

[00:48:58] Speaker 02:
Right.

[00:48:58] Speaker 02:
And I don't know that there is a case.

[00:49:00] Speaker 02:
And in an express contract scenario, which, of course, is what most contract cases that come to the court are, there is no factual analysis necessary for that.

[00:49:10] Speaker 02:
Right.

[00:49:11] Speaker 06:
But they have actually made the promise at issue.

[00:49:15] Speaker 06:
This is my point, which is slightly different than Judge Millett's, which is she says a contractual obligation is the key and whether or not it could still be performed in this way, even though it was unlawful.

[00:49:27] Speaker 06:
I say, is there even a contractual obligation in this situation?

[00:49:33] Speaker 06:
Because notwithstanding the university's prior activity and whatnot, we have to determine what the university intended to promise its students, implicitly.

[00:49:47] Speaker 06:
No, I'm wrong about that.

[00:49:48] Speaker 06:
Isn't it the intent of the parties with respect to the promise, what governs in the contract situation?

[00:49:54] Speaker 02:
No, with respect to the reasonable expectation of the parties, it is what the university would have reasonably expected the students to give it.

[00:50:05] Speaker 02:
And that's on page 12 of our brief.

[00:50:07] Speaker 02:
That's the Giles v Howard University case.

[00:50:09] Speaker 02:
And that is exactly the point.

[00:50:11] Speaker 02:
You've honed in on exactly the point, which is this.

[00:50:14] Speaker 02:
What expectation would the students have with respect to that contract if it were to be breached?

[00:50:20] Speaker 02:
And we can look in our case.

[00:50:23] Speaker 06:
I'm sorry.

[00:50:23] Speaker 06:
I'm getting confused.

[00:50:24] Speaker 06:
I'm talking.

[00:50:25] Speaker 06:
I understood that the university had to make a promise to the students and that you were trying to enforce that promise in the context of this breach of contract.

[00:50:36] Speaker 06:
Right.

[00:50:36] Speaker 06:
Am I right about that?

[00:50:38] Speaker 06:
All right.

[00:50:38] Speaker 06:
Correct.

[00:50:38] Speaker 06:
Question is, when we don't have language,

[00:50:42] Speaker 06:
when we don't have an actual written contract that says, I promise to give you in-person instruction.

[00:50:49] Speaker 06:
And we're trying to infer, right, whether there was an implicit promise to that degree.

[00:50:55] Speaker 06:
My question is, what exactly is the university promising?

[00:51:01] Speaker 06:
And I say, you have to think about the university's intent.

[00:51:05] Speaker 06:
What would a university, what did this university intend to promise with respect to this issue?

[00:51:11] Speaker 06:
Am I wrong about that?

[00:51:13] Speaker 02:
I disagree slightly with that.

[00:51:15] Speaker 02:
And let me read you the case site, which is on page 12 of our initial brief.

[00:51:20] Speaker 02:
And it says this.

[00:51:20] Speaker 02:
It's a quote from the Giles v. Howard University case.

[00:51:23] Speaker 02:
The standard is that of reasonable expectation.

[00:51:27] Speaker 02:
meaning the party making the manifestation, the university, should reasonably expect the other party to give it, not what manifestation the university intended the other party to give it, but what manifestation the university.

[00:51:43] Speaker 06:
I'm not talking about the students.

[00:51:44] Speaker 06:
I'm just talking about the promise that the university is making to the students.

[00:51:49] Speaker 06:
I agree.

[00:51:50] Speaker 06:
Okay, so setting aside whatever the students are, what they give the university in terms of the money,

[00:51:56] Speaker 06:
I just want to know what your view is of how we're supposed to understand the promise that the university was making to its students concerning their experiences on campus.

[00:52:08] Speaker 02:
As it is pled in our consolidated complaint, it is a promise to provide with respect to tuition.

[00:52:14] Speaker 02:
And I would note that the tuition and fees claims are separate, but with respect to tuition and in-person on campus educational experience, period.

[00:52:23] Speaker 02:
The university has the ability to come back and challenge that.

[00:52:27] Speaker 02:
And if they do, then we get into the factual question of what should the university have reasonably expected the students to believe they were getting?

[00:52:37] Speaker 02:
And let me give you a factual example.

[00:52:39] Speaker 06:
Before you leave, before you leave to the, I'm very interested in this point.

[00:52:43] Speaker 06:
You say a promise to provide in-person experience, period.

[00:52:49] Speaker 06:
The period matters to me.

[00:52:52] Speaker 06:
because what I'm trying to understand is whether really, even if we saw that in writing in a contract, the university meant promise to provide in-person experiences so long as the law allowed it, so long as it was infeasible, so long at right now.

[00:53:14] Speaker 06:
Maybe they didn't, maybe your argument is no, they meant

[00:53:19] Speaker 06:
in person period, meaning under all circumstances, right?

[00:53:24] Speaker 06:
Is that what your argument is?

[00:53:25] Speaker 06:
Under all circumstances, you get this experience.

[00:53:28] Speaker 02:
That is what we have pled.

[00:53:30] Speaker 02:
And let me tell you why that matters.

[00:53:32] Speaker 02:
Just one, and I'm not leaving.

[00:53:34] Speaker 02:
I'm telling you why that matters.

[00:53:35] Speaker 02:
Why that matters is because it is what the students expected to be provided for what they had already paid.

[00:53:43] Speaker 02:
And I'll give you a factual example.

[00:53:45] Speaker 02:
So in the American University case on paragraphs 55 and 56 of our complaint,

[00:53:51] Speaker 02:
We specifically plead, which is a fact in the case, that American University provided students a 10% discount on tuition and didn't charge some of the fees.

[00:54:03] Speaker 02:
for the summer and fall of 2020, where the students were online.

[00:54:07] Speaker 02:
So now we have a factual question of when the university did that after, did the students reasonably expect that if the university would have gone online in that spring 2020 semester, that they would have received some of the money back?

[00:54:21] Speaker 06:
Because- Let me ask you, why is it our task then to evaluate the plausibility of a promise in that way?

[00:54:31] Speaker 06:
In other words,

[00:54:33] Speaker 06:
Is the student's expectation reasonable when the materials themselves say things like, we reserve the right to change the formatting of our programming, right?

[00:54:46] Speaker 06:
So fine, maybe the students expected that, but we understand from DC law that an expectation is not enough.

[00:54:53] Speaker 06:
And we have some indicia in this record in the materials that you point us to that the university reserved its right to make changes.

[00:55:03] Speaker 06:
to make changes.

[00:55:04] Speaker 06:
So even if the students heard that promise and expected it to be, we get it under all circumstances, how plausible is that the university was actually making that promise?

[00:55:16] Speaker 02:
Well, I think at the outset, we're not really looking at plausibility.

[00:55:20] Speaker 02:
We're weighing facts when we get to that point.

[00:55:22] Speaker 02:
And Judge Friedrich in the Montesano v. Catholic opinion laid it out this way.

[00:55:26] Speaker 02:
She said, the reservation of rights clearly permit the universities to make some changes to course programming and educational services.

[00:55:33] Speaker 02:
yet certain assumptions of the broader implied contract between the universities and their students are so fundamental that the reservation of rights cannot reasonably be interpreted to waive them.

[00:55:45] Speaker 03:
That quote was also in Judge Bibas's decision, who was sitting by as- But neither Bibas nor Frederick are construing the plaintiff's claim to be the university promised

[00:55:58] Speaker 03:
online, I mean, on-campus education, no matter what.

[00:56:02] Speaker 03:
You agreed with my colleague that that's what your claim is.

[00:56:05] Speaker 03:
That seems, that makes no sense to me.

[00:56:08] Speaker 03:
That's what your claim is.

[00:56:09] Speaker 03:
The university has promised on-campus live, no matter what, that's the promise.

[00:56:15] Speaker 03:
That doesn't fit custom and practice.

[00:56:17] Speaker 02:
Well, that's exactly right, Judge Edwards.

[00:56:20] Speaker 02:
And perhaps I was not as specific as I should have been in explaining it.

[00:56:24] Speaker 02:
That is what is pled in this case.

[00:56:26] Speaker 02:
But that is exactly the same reason that I would not bring a case, for example, for a snow day.

[00:56:33] Speaker 02:
Because the custom in practice is a factual question of what is the custom in practice.

[00:56:38] Speaker 02:
But the factual question as to snow days would most definitively be resolved in favor of the university.

[00:56:45] Speaker 03:
No, but my point is your starting point makes no sense to me.

[00:56:48] Speaker 03:
Your starting point is that the university impliedly promised that we will be on campus live no matter what.

[00:56:55] Speaker 02:
until there is factual development?

[00:56:58] Speaker 03:
The materials and the two judges, at least Beaver's certainly doesn't view it that way.

[00:57:04] Speaker 03:
I don't think Friedrich does either, but that doesn't make any sense.

[00:57:08] Speaker 03:
That makes it a little bit harder for us to think about.

[00:57:11] Speaker 03:
But I think they're not the claim can be nothing more than the university is promised as a general practice pursuant to custom and practice.

[00:57:20] Speaker 03:
We will have online

[00:57:22] Speaker 03:
And I'm not sorry, not online.

[00:57:24] Speaker 03:
We will have live and on-campus education.

[00:57:30] Speaker 03:
That's what we are promising.

[00:57:31] Speaker 03:
And for example, it's just like Bibas raised the hypothetical for his parties.

[00:57:36] Speaker 03:
He said, does anyone doubt if the university announced tomorrow, we're losing money.

[00:57:42] Speaker 03:
We're gonna have no more on-campus and no more live.

[00:57:46] Speaker 03:
Is that a breach of the kind?

[00:57:47] Speaker 03:
Everyone agreed, it's a breach.

[00:57:49] Speaker 03:
Because it's inconsistent with custom and practice.

[00:57:53] Speaker 03:
It's not inconsistent with an express promise.

[00:57:56] Speaker 03:
Right.

[00:57:57] Speaker 02:
OK.

[00:57:57] Speaker 02:
And that's where we depart from the factual analysis versus what is pled.

[00:58:01] Speaker 02:
What I am telling you is what is pled in our complaint is that this promise was made.

[00:58:05] Speaker 02:
When you start analyzing the fact.

[00:58:07] Speaker 06:
Which promise?

[00:58:08] Speaker 06:
Which promise?

[00:58:13] Speaker 02:
The university has promised in person, on campus,

[00:58:17] Speaker 02:
educational services, and it's a pertinent benefit to its students.

[00:58:22] Speaker 02:
The university may come in and say, well, that wasn't a reasonable expectation of the students because of X, Y, and Z, but that is a factual question.

[00:58:32] Speaker 03:
You're excluding them no matter what now.

[00:58:34] Speaker 03:
You're not saying it's no matter what.

[00:58:36] Speaker 02:
Well, we don't disclaim in the affirmative.

[00:58:39] Speaker 02:
So if we make a promise in American jurisprudence and contractual law, it is no matter what, unless we have a disclaimer to say it's not.

[00:58:47] Speaker 02:
And let me just add this briefly and then I know Judge Jackson might have a question.

[00:58:52] Speaker 02:
There are other universities, I have about 50 or 60 of these cases nationwide.

[00:58:56] Speaker 02:
There are other universities that have disclaimers in their handbooks that specifically deal with pandemics that have force majeure language, which could have been included.

[00:59:06] Speaker 02:
Parties have a right to contract and the university, of course, I mean, it's not an adhesive contract.

[00:59:12] Speaker 05:
Do you disagree with Mr. Kurowski that implicit, at least implicit in every contract,

[00:59:20] Speaker 05:
is a limitation on performance that would be illegal.

[00:59:27] Speaker 02:
Yes, there is a limitation on performance that would be illegal.

[00:59:33] Speaker 02:
Well, well, on specific performance, you cannot contract to conduct a performance.

[00:59:42] Speaker 05:
I'm just saying that courts cannot enforce a contractual term.

[00:59:47] Speaker 05:
It's built into every contract.

[00:59:50] Speaker 03:
That is unlawful for that party to perform the contract says let's make be ridiculous contract says the university can cut off the head of a student.

[01:00:02] Speaker 03:
If they do poorly in a course.

[01:00:05] Speaker 03:
You think that's

[01:00:06] Speaker 03:
And that's your basis for your claim?

[01:00:09] Speaker 03:
No, of course you can't.

[01:00:11] Speaker 03:
You put that in with the claim, but there's a clear contract provision.

[01:00:15] Speaker 03:
And the reason we're not going to give you the time of day is because it's an impermissible, right?

[01:00:21] Speaker 02:
I agree.

[01:00:22] Speaker 02:
And I agree with that.

[01:00:23] Speaker 02:
I agree with that as a contract principle.

[01:00:25] Speaker 02:
But here is the difference that I'm trying to draw.

[01:00:28] Speaker 02:
And perhaps I'm not being clear.

[01:00:31] Speaker 02:
The students had already agreed to pay X amount

[01:00:36] Speaker 03:
for one thing and in fact had paid right so if i call into the grocer and i say here's my credit card and they immediately charge me for peaches bananas whatever and they know that i normally pick up a week later but they got my money and now for very good lawful reasons there are no peaches and bananas what i get the money back you get your money back

[01:01:06] Speaker 03:
Right.

[01:01:06] Speaker 03:
And so how are we analyzing that under your notion of breach of contract?

[01:01:13] Speaker 02:
You had an implicit contract there.

[01:01:15] Speaker 03:
Even though I paid in advance, what do you say?

[01:01:17] Speaker 03:
I want to hear what you're saying.

[01:01:18] Speaker 02:
I know what I mean.

[01:01:20] Speaker 02:
In that instance, you had an implied sales contract for peaches and bananas, which you prepaid for.

[01:01:25] Speaker 03:
It cannot be performed.

[01:01:27] Speaker 03:
And no one's doubting it.

[01:01:28] Speaker 02:
Correct.

[01:01:29] Speaker 02:
And as a result, it was breached.

[01:01:31] Speaker 02:
And so they owe you the money back under the contract.

[01:01:34] Speaker 05:
And at the very least, at the very point, that's just, I mean, it's the, um, when a contract that was perfectly lawful when entered into becomes due to circumstances beyond either party's control, unlawful to continue performance.

[01:01:52] Speaker 05:
then you can have an unjust enrichment plan.

[01:01:55] Speaker 03:
My bananas and peaches are now unlawful to sell after I paid.

[01:02:00] Speaker 05:
There's been a recall because they're infested.

[01:02:02] Speaker 03:
They cannot be sold because they're dirty.

[01:02:05] Speaker 03:
They are now unlawful when I paid and I paid for them and now I come in.

[01:02:12] Speaker 03:
How do we analyze it?

[01:02:14] Speaker 03:
Can you provide a motion to dismiss?

[01:02:18] Speaker 02:
Yes, let me add one more element to that.

[01:02:21] Speaker 03:
No, no, take my hypothetical.

[01:02:25] Speaker 03:
Don't change my hypothetical.

[01:02:26] Speaker 02:
There's a middleman involved.

[01:02:28] Speaker 03:
No, no, no.

[01:02:29] Speaker 03:
Bananas and peaches, they're unlawful now.

[01:02:34] Speaker 02:
Let me ask you this, if they're unlawful, if that's right, they're unlawful and so the grocer cannot get them, right?

[01:02:43] Speaker 05:
No, the grocer has them sitting here on my shelf.

[01:02:51] Speaker 02:
Yeah, I can't though because the government has said I cannot sell these but the money comes back under contract damages.

[01:02:59] Speaker 02:
Here is how unjust enrichment in that circumstance would come into play and I'll switch to unjust enrichment.

[01:03:05] Speaker 02:
I'm not I'm not because under that hypothetical that is a contract damage.

[01:03:10] Speaker 02:
We have contracted for the purchase of those items

[01:03:15] Speaker 02:
I have paid you, you cannot deliver them to me.

[01:03:18] Speaker 02:
You owe me my money back.

[01:03:20] Speaker 02:
The court cannot specifically enforce that contract and make you deliver the product, but I get- Can I just add to this hypothetical because I think it's very helpful.

[01:03:31] Speaker 06:
I hear what my colleagues are saying about it, but what if the hypothetical was the scenario in which the original agreement

[01:03:42] Speaker 06:
wasn't as clear as you give me the money and I'll give you bananas and peaches.

[01:03:47] Speaker 06:
What if instead the grocer is a local small grocer who only sometimes has these items come into stock and the promise is you can give me the money but I promise to give you the bananas and peaches if I get them from my distributor, right?

[01:04:11] Speaker 06:
If I get them.

[01:04:12] Speaker 06:
And it turns out, right?

[01:04:16] Speaker 06:
And what you are paying for in that original circumstance is essentially incorporating the risk that the grocer might not get them, right?

[01:04:28] Speaker 02:
That is a different promise and it's a factual question about which promise was made.

[01:04:32] Speaker 02:
And let me give you this hypothetical that I've used, which is exactly like that.

[01:04:35] Speaker 02:
And it's the fast food drive-through hypothetical.

[01:04:38] Speaker 02:
Okay.

[01:04:39] Speaker 02:
When I pull up to the fast food drive-through and I place my order, I am reasonably certain, but not as certain as I might be at some places that whatever I order, when I go to window one and pay for it, I'm going to pick it up in window two.

[01:04:54] Speaker 02:
Right.

[01:04:56] Speaker 02:
If for some reason, when I get to window two, my order is wrong.

[01:05:00] Speaker 02:
I'm entitled to my money back under that implied sales contract.

[01:05:03] Speaker 02:
Now imagine this with the illegality argument.

[01:05:06] Speaker 05:
This is why I think things are getting up here, because I was asking the simple question.

[01:05:14] Speaker 03:
Illegality.

[01:05:15] Speaker 05:
Illegality.

[01:05:16] Speaker 05:
It cannot lawfully comply.

[01:05:19] Speaker 05:
And you said that would still be a breach of contracts.

[01:05:21] Speaker 05:
I would love to see a case citation that says, even when performance would be unlawful, we will treat it as a breach of

[01:05:28] Speaker 05:
contract not to have done that.

[01:05:31] Speaker 03:
And I'd really like to hear this too.

[01:05:35] Speaker 03:
I think we're all we're talking about on a motion to dismiss and trying to decide credit your arguments or not.

[01:05:42] Speaker 03:
Do you get past the motion to dismiss when there is a clear conceded illegality?

[01:05:48] Speaker 03:
That's what we're talking about.

[01:05:49] Speaker 03:
There's no dispute that what is now being fought about is unlawful.

[01:05:55] Speaker 08:
You have to do it another way.

[01:05:59] Speaker 03:
That's all we're talking about, because then you would switch, you both say you would then switch to unjust enrichment if you lose on that.

[01:06:08] Speaker 02:
I don't know what you're saying.

[01:06:10] Speaker 02:
I thought I said this before, but let me be very clear.

[01:06:13] Speaker 02:
I am not aware of a case in any court where they have enforced an unlawful contract.

[01:06:22] Speaker 05:
You'll use that verb enforced.

[01:06:25] Speaker 05:
that they have held that it is a breach.

[01:06:27] Speaker 05:
I don't want to get to specific performance.

[01:06:29] Speaker 05:
They have ruled that it is nonetheless a breach of the contract for which you get damages when it would have been unlawful to perform, as opposed to saying enforcement of the contract is not lawfully available.

[01:06:48] Speaker 05:
Courts can't do that.

[01:06:50] Speaker 05:
Right, we can't judge this as a breach.

[01:06:54] Speaker 05:
I'm going to finish this question.

[01:06:55] Speaker 05:
But then you go to unjust enrichment, right?

[01:06:57] Speaker 05:
Judge Jackson's hypothetical would have been, I don't know that anyone would say, I'm going to give you $50 and maybe you'll give me bananas or peaches.

[01:07:05] Speaker 05:
It would be, I'm giving you $50, you'll give me bananas or peaches or you'll give me my money back.

[01:07:10] Speaker 05:
And it seems to me that's why I was asking before, there's sort of two layers.

[01:07:14] Speaker 05:
right promises here and I don't know why everyone has spent their time talking about is it you know education no matter what or is it education with a limit because the question here is of course it can't be no matter what at least as to the narrow question before us of illegality on lawfulness it can't be that just can't be in any contract so all I want to know is the very simple mundane the answer the mundane question can you

[01:07:43] Speaker 03:
when on the face of the papers you've essentially pleaded something that is unlawful.

[01:07:48] Speaker 03:
That's all I want to know.

[01:07:49] Speaker 03:
I don't think you could.

[01:07:52] Speaker 05:
Tell us how you can or what case says you can.

[01:07:54] Speaker 02:
Because, well, performance in this instance.

[01:07:58] Speaker 05:
I think we're just talking about the contract claim, right, Judge Edwards?

[01:08:02] Speaker 02:
You are.

[01:08:02] Speaker 02:
You are, yes.

[01:08:04] Speaker 02:
And performance in this case of that contract is a factual question.

[01:08:08] Speaker 02:
And going to your point, Judge Millett, about snow days, what happens when snow days happen?

[01:08:12] Speaker 02:
The classes are made up.

[01:08:13] Speaker 03:
We don't want to do snow days.

[01:08:15] Speaker 05:
I'm talking about unlawful now pandemics.

[01:08:17] Speaker 02:
No, I understand.

[01:08:18] Speaker 02:
But my point is the university could have said, we are going to honor our contract by making up the classes at such time as it is lawful to do so.

[01:08:28] Speaker 02:
They did not do that.

[01:08:29] Speaker 02:
Instead, they switched to a totally different mode of instruction.

[01:08:33] Speaker 02:
Wait a minute.

[01:08:34] Speaker 05:
You're saying you were damaged here because they didn't wait until fall of 2021 to pick up class?

[01:08:44] Speaker 05:
No student wanted that.

[01:08:46] Speaker 02:
Well, that's, again, a factual question, not a pleading question.

[01:08:49] Speaker 02:
But if the university's position is that it was infeasible or unlawful for us to perform,

[01:08:54] Speaker 02:
there are such times as they would have been able to lawfully perform.

[01:08:58] Speaker 05:
And we knew when that would be and it wasn't going to be during this semester.

[01:09:02] Speaker 02:
It was not going to be during this semester, but we would have then a different case that we don't have here.

[01:09:07] Speaker 02:
And that is a factual question, which we have not been able to develop.

[01:09:10] Speaker 05:
Because again, what we pled was- If you're not arguing for specific performance, that they should all be now let- No, and we did not plead that.

[01:09:18] Speaker 02:
They really wanted to progress towards their degrees.

[01:09:21] Speaker 02:
We were very careful not to plead that as well.

[01:09:23] Speaker 05:
So that's not what it's about.

[01:09:24] Speaker 05:
It's about whether there are, what is the agreement that when I've paid you,

[01:09:31] Speaker 05:
But the law prevents you from performing.

[01:09:36] Speaker 02:
That is a factual question.

[01:09:38] Speaker 05:
It's an unjust enrichment case.

[01:09:39] Speaker 05:
And in the unjust enrichment area, you'll have a dispute, I suppose, about they will have their argument that, in fact, we never promised.

[01:09:48] Speaker 05:
We weren't unjustly enriched because there was always this caveat.

[01:09:52] Speaker 05:
And you'll say, no, there wasn't.

[01:09:54] Speaker 05:
But it just seems to me the wrong place to be having this debate is as a breach of contract.

[01:09:58] Speaker 02:
Well, I would just say that as to the breach, it's a factual question because we did not plead in our complaint that they had to complete that in-person on-campus educational experience during the spring 2020 term.

[01:10:10] Speaker 02:
And in fact, I think when you look at the factual analysis that you raised of the snow day, what happens?

[01:10:15] Speaker 02:
Those classes are made up.

[01:10:16] Speaker 02:
And so when you look at the reasonable expectation of the parties, that would be one potential outcome.

[01:10:22] Speaker 02:
However, the university offered no choice here.

[01:10:25] Speaker 02:
They did not say we were already past the withdrawal deadline.

[01:10:28] Speaker 02:
The university could have also said, we'll give you your money back, but you get no credit.

[01:10:32] Speaker 02:
They did not give the students that option.

[01:10:34] Speaker 05:
I did not see you pleading that your plaintiffs are going to claim damages that they didn't put off their entire educational career for a year and a half.

[01:10:43] Speaker 05:
At that time would have been unknown.

[01:10:45] Speaker 05:
Who would have known how long it would be?

[01:10:46] Speaker 05:
But instead,

[01:10:48] Speaker 05:
So what they really wanted is damages because they didn't get to go back and have classes in the fall of 2021.

[01:10:53] Speaker 05:
Those are factual questions.

[01:10:57] Speaker 05:
I thought the dispute was simply that, well, we've paid tuition and there's another layer to this agreement.

[01:11:04] Speaker 05:
And that is, sure, if the law prevents you from performing, it prevents you from performing.

[01:11:10] Speaker 05:
But if you're going to treat us like online students in which your clients, I assume your clients participated, that's from their factual allegations.

[01:11:17] Speaker 05:
That's what I understand.

[01:11:18] Speaker 05:
they participated, they shouldn't have, if they only got the peaches, but not the bananas, then they get the money back for bananas, right?

[01:11:30] Speaker 05:
You didn't get the rest of the deal.

[01:11:31] Speaker 02:
That's correct.

[01:11:32] Speaker 02:
But my point is when we're looking at breach in a very, in a very narrow focus, it is still a factual question in this case, because there were potentially ways that the university could not have breached the contract even for

[01:11:48] Speaker 02:
the mayor's order.

[01:11:50] Speaker 02:
And so there were things that the university could have done aside from that.

[01:11:54] Speaker 02:
But those are factual questions.

[01:11:57] Speaker 05:
You can say that now, but I'm pretty sure that when they paid that tuition, it was for this semester with these dates.

[01:12:05] Speaker 02:
Yeah, it is for a specific number of classes.

[01:12:08] Speaker 05:
I know what those bills look like.

[01:12:09] Speaker 05:
It's not provided to you now or maybe in three years.

[01:12:13] Speaker 02:
Right.

[01:12:14] Speaker 02:
And I will tell you that some of my clients, when they were given the option, did in fact take the summer and fall semesters off of university because they did not want to go online.

[01:12:23] Speaker 02:
That is not what they had bargained and paid for.

[01:12:26] Speaker 02:
Here, American gave them an incentive to come back by offering them 10% off of tuition on those terms when they were going to be online.

[01:12:33] Speaker 05:
We're not talking about the summer or subsequent semesters when everybody was on full notice of the circumstances.

[01:12:37] Speaker 05:
We're not talking about that.

[01:12:39] Speaker 05:
We're talking about what they were supposed to do with the rest of this one semester that's as I understand it with this case is about you're not saying about anything else.

[01:12:47] Speaker 05:
That's right.

[01:12:48] Speaker 02:
The only reason that I raised this point is just to point out that that the breach that we are discussing with respect to the illegality as a factual question.

[01:12:58] Speaker 02:
Because the question is whether or not the contract had to be breached.

[01:13:01] Speaker 02:
And so you have to look at the reasonable expectations of the students and the course of conduct during that period of time.

[01:13:07] Speaker 02:
There's been no factual development.

[01:13:09] Speaker 05:
And there's a reasonable expectation, you're telling me, that GWRA would have considered, continued, at least for AU, just for you, but would have continued to provide on-campus education March through May.

[01:13:23] Speaker 02:
or given them some of the money back, which is exactly what they did weeks later in the summer 2020 term and did again in the fall 2020 term.

[01:13:31] Speaker 02:
And so that's the question.

[01:13:33] Speaker 06:
It's not, are you going to- Those are the facts that you would do during discovery?

[01:13:41] Speaker 02:
Like I'm trying to- No, the students, no, of course the students would speak about reasonable expectations and you would look at the documents exchanged between the university, but the tuition payments,

[01:13:50] Speaker 02:
The 100% tuition payments were paid for a very specific product and that product was not delivered.

[01:13:57] Speaker 02:
And so then the question is, is a reasonable expectation of the students that that product cannot be delivered for whatever reason that some of that money will be refunded?

[01:14:06] Speaker 02:
And the answer is yes.

[01:14:07] Speaker 02:
The reasonable expectation, if you do not deliver the bananas and the apples,

[01:14:12] Speaker 02:
is that you will refund the appropriate amount of the money under the contract.

[01:14:17] Speaker 06:
Even if you deliver something else, even if there's a substitution, even if Yes, because the and and importantly, in this case, we don't have it in every case.

[01:14:25] Speaker 02:
But in this case, that is what American did in the summer.

[01:14:28] Speaker 02:
They delivered online remote learning.

[01:14:31] Speaker 02:
They did it in the fall and they gave the students a break on the fees and they gave them a 10% break on the tuition.

[01:14:38] Speaker 06:
So yes, not only was it a reasonable expectation, but it's what actually happened subsequent to that, which is pretty good evidence of what- Ordinarily, subsequent conduct is not considered viable evidence of what people intended previously.

[01:14:52] Speaker 06:
I mean, we don't normally take into account, right?

[01:14:56] Speaker 02:
I agree, but we're not looking at intent.

[01:14:58] Speaker 02:
We're looking at reasonable expectation of the student based upon what the university would do.

[01:15:02] Speaker 02:
And I think if you read our complaint, it speaks a lot about

[01:15:06] Speaker 02:
the students expected to be treated fairly.

[01:15:08] Speaker 02:
I mean, this is just about fairness.

[01:15:10] Speaker 02:
It's a prorated refund.

[01:15:11] Speaker 02:
They're not looking for a free semester.

[01:15:13] Speaker 02:
They're not looking for all of the money back.

[01:15:15] Speaker 02:
They're looking for the fair prorated difference between what they prepaid for and what they received in that semester.

[01:15:23] Speaker 02:
And in subsequent semesters, that is what American actually, I think, will contend to deliver to them.

[01:15:28] Speaker 02:
Of course, we could get into a dispute about should it be 10% or 15% or what have you.

[01:15:34] Speaker 02:
But that is evidence that would go to inform the basis of the breach.

[01:15:38] Speaker 05:
It would go to an unjust enrichment claim, all this fairness stuff, doesn't it?

[01:15:44] Speaker 02:
Well, unjust enrichment does have a fairness component, but under every contract, there is a good faith, you know, there's a good faith and fair dealing expectation of the parties.

[01:15:52] Speaker 02:
And so fairness also goes into a contract analysis.

[01:15:59] Speaker 05:
Are there any other questions from my colleagues?

[01:16:02] Speaker 02:
No.

[01:16:02] Speaker 02:
Thank you.

[01:16:03] Speaker 02:
Thank you.

[01:16:04] Speaker 05:
I'll hear from Mr. Schoenfeld.

[01:16:06] Speaker 05:
Am I saying that correctly?

[01:16:08] Speaker 07:
Yes, Your Honor.

[01:16:09] Speaker 07:
That's correct.

[01:16:10] Speaker 07:
Thanks very much.

[01:16:11] Speaker 05:
Just before you start, I know we sort of gave you 10 minutes for each university, but I think we're just going to, you've got 20 minutes on your clock because we want to be able to ask questions about either university at any given point.

[01:16:22] Speaker 05:
So we'll just treat it as a collective period of time for both your clients, if that's okay with you.

[01:16:27] Speaker 07:
Absolutely.

[01:16:28] Speaker 07:
And I think I'm speaking for both of them, unless I specify, but my arguments are common.

[01:16:32] Speaker 07:
I think Judge Jackson's framing of this is exactly right.

[01:16:35] Speaker 07:
The first question here is, what was the promise?

[01:16:38] Speaker 07:
And is it plausible, at the motion to dismiss stage, to allege, or for plaintiffs to have allege, that the university, in fact, made that promise?

[01:16:46] Speaker 07:
The promise we heard from plaintiffs' counsel is, provide in-person education, period.

[01:16:53] Speaker 03:
No, that's not what both plaintiffs said.

[01:16:56] Speaker 03:
the plaintiffs were a part on that.

[01:16:59] Speaker 07:
So I think either one, let me take both iterations of it.

[01:17:02] Speaker 03:
One, but one is they're very different.

[01:17:05] Speaker 03:
And one, the first one said the promise or what we're alleging the promise was that as a matter of general practice, we will have on campus and live education.

[01:17:17] Speaker 03:
That's different from your, your formulation.

[01:17:21] Speaker 07:
So if what the promise in either formulation means is that the university made a promise that it breached when in response to a pandemic, a transition to in-person education, the university never did make that promise.

[01:17:34] Speaker 07:
The university never would make that promise.

[01:17:37] Speaker 07:
And it's implausible to allege that the university made that promise.

[01:17:40] Speaker 07:
And the reason we know it's implausible is for a number of reasons.

[01:17:42] Speaker 07:
Number one, where the university did express terms in words, it reserved its right to make changes as circumstances demanded.

[01:17:50] Speaker 07:
So if the point here is to get into the head of the university and figure out what it meant to promise and what the students expected, what they expected is that the university generally, with respect to any term that might be implied into the contract, reserved its right to make changes as circumstances demand.

[01:18:05] Speaker 03:
Well, what did they generally promise?

[01:18:07] Speaker 03:
I mean, do you disagree with, let me ask you the Beavis question.

[01:18:12] Speaker 03:
Imagine an in-person school that runs a deficit after taking the student's tuition.

[01:18:18] Speaker 03:
It switches to self-directed learning just to save money.

[01:18:21] Speaker 03:
Is that a breach of promise that the students would expect and that the university would understand the students would expect?

[01:18:28] Speaker 03:
So I think it probably is.

[01:18:30] Speaker 03:
I've been in this university game too long.

[01:18:32] Speaker 03:
I cannot imagine you are arguing

[01:18:35] Speaker 03:
that the university would assume the students don't have an expectation, especially where there's a difference between we'll give you online for less and we'll give you on campus for a lot more money.

[01:18:51] Speaker 03:
The students don't reasonably expect that as a general matter, we're coming to classes, there will be a teacher there, we understand there'll be this and that, but that's the way we're gonna be taught and we're paying for that.

[01:19:03] Speaker 03:
You think universities don't get that?

[01:19:05] Speaker 07:
No, I think universities get that.

[01:19:07] Speaker 03:
And they also know they can't just shut it down for any reason and no reason and say, you know, we changed our mind, we're going to put it all on Zoom.

[01:19:14] Speaker 07:
Absolutely.

[01:19:14] Speaker 07:
And they know that the universe, they retain the discretion to make that decision when they need to do so to protect the health and safety of faculty and students.

[01:19:23] Speaker 03:
That's a different question.

[01:19:24] Speaker 03:
I want to make sure I understand that we're together on what I thought was the general understanding

[01:19:30] Speaker 03:
between universities and their students where the university is offering campus in-person education.

[01:19:38] Speaker 03:
Everyone assumes it will be a live place with classes, with classrooms, with teachers talking to students, not Zoom.

[01:19:46] Speaker 03:
That's clear.

[01:19:48] Speaker 07:
It is, Your Honor, but I want to make sure that where we might differ is clear.

[01:19:53] Speaker 07:
As part of that promise, the university retains the discretion

[01:19:57] Speaker 07:
to depart from that general practice where it needs to do so in order to protect the health and safety of the students.

[01:20:03] Speaker 07:
That's expressly clear in the reservation of the rights, and that's also impliedly clear.

[01:20:07] Speaker 07:
I think that's why Mr. Croskey agreed.

[01:20:10] Speaker 05:
Where's it expressly clear?

[01:20:11] Speaker 05:
I mean, you're dealing with, I mean, if you're putting that, are you putting all that in the word necessary?

[01:20:16] Speaker 07:
Well, so I think the reservation of rights confirmed that the universities retain this discretion.

[01:20:21] Speaker 07:
The university

[01:20:22] Speaker 07:
The reservation.

[01:20:23] Speaker 05:
That's the difficulty because I'm talking about the GW reservation for now.

[01:20:27] Speaker 05:
And that says to make, you know, you've got change courses, programs, academic calendar, or to make other changes deemed necessary or desirable.

[01:20:39] Speaker 08:
Correct.

[01:20:40] Speaker 05:
Okay.

[01:20:41] Speaker 05:
So there's nothing spilling out here, health and things like that.

[01:20:44] Speaker 05:
Now, maybe that's why I asked, maybe you're putting that in the word necessary.

[01:20:48] Speaker 07:
Well, so elsewhere.

[01:20:49] Speaker 05:
Okay.

[01:20:51] Speaker 07:
So elsewhere, the reservation of rights, I mean, there's three separate reservation of rights provision for GW.

[01:20:56] Speaker 07:
It also says modify your change requirements, rules and fees without notice whenever circumstances warrants such changes.

[01:21:03] Speaker 07:
But I think there's also, well, so I think there's also a more elemental issue here, which is the law recognizes.

[01:21:13] Speaker 05:
Back up for just a second, please.

[01:21:15] Speaker 05:
Sure.

[01:21:16] Speaker 05:
You said that was spelled out in the reservation of rights.

[01:21:19] Speaker 05:
And what I'm pointing out is that

[01:21:22] Speaker 05:
you've got an incredibly sweeping with reservation rights, which would include Judge Edward's hypothetical because it says, or desirable.

[01:21:32] Speaker 05:
And then you're like, oh, no, we would never do that.

[01:21:35] Speaker 05:
And you all drafted this.

[01:21:38] Speaker 05:
So what I'm trying to understand is how do we know what the limits are

[01:21:47] Speaker 05:
on what you think the agreement was between students and the university on the obligation to provide on what I'm calling on campus education, embracing everything.

[01:21:57] Speaker 05:
How do we know that?

[01:21:59] Speaker 05:
And how can we possibly say this preservation of rights has limitations that you seem to want to give to Judge Antwerp and an answer, but are not in the text of it?

[01:22:10] Speaker 07:
Also, with respect to the reservation of rights, there's an implied constraint of good faith.

[01:22:15] Speaker 07:
And there's a very well-established body in case law about what constitutes good faith, including in the university context.

[01:22:20] Speaker 07:
But implied in any contract where a party has discretion under it, there's an implied limitation for the exercise of good faith.

[01:22:27] Speaker 07:
And so if the idea is the university is just doing it to change money, I think that's a plausible case for a breach of the limits of the reservation of rights.

[01:22:35] Speaker 07:
But I think, again, we might be getting ahead of ourselves, because I still think Judge Shaxson.

[01:22:39] Speaker 05:
If instead, if it wasn't we just want to save money, instead, the day after tuition is due, so everyone has paid full tuition, put aside installment plans.

[01:22:51] Speaker 05:
Let's just say everyone has paid full tuition by X date.

[01:22:55] Speaker 05:
The next day, the university says, pointing to this language or the language in the AU one, our faculty, world renowned faculty,

[01:23:05] Speaker 05:
have a lot of amazing conferences to attend this spring, amazing research to do that is going to profoundly advance the base of knowledge in their respective areas, their ability to teach in future years because they're going to learn so much at these conferences, really the educational opportunities that we can provide,

[01:23:30] Speaker 05:
And the knowledge that our professors can provide to the community in the world will be profoundly enhanced if we go online so our faculty can go to conferences and take research trips for the rest of the semester.

[01:23:44] Speaker 05:
Is that good faith?

[01:23:45] Speaker 07:
No, it's clear to me on the facts as you've alleged that that's bad faith.

[01:23:49] Speaker 03:
That's a breach of the implied contract, right?

[01:23:53] Speaker 07:
Absolutely, Your Honor.

[01:23:55] Speaker 07:
The timing is the day after the semester begins.

[01:23:58] Speaker 07:
These are all facts knowable beforehand.

[01:23:59] Speaker 07:
That's absolutely a very clear breach of the constraint of code faith.

[01:24:03] Speaker 03:
They're making mid-semester.

[01:24:04] Speaker 03:
Don't make it sound like they're making mid-semester.

[01:24:07] Speaker 03:
Thanks for doing that.

[01:24:09] Speaker 07:
I don't think I don't think they could do that on the facts that you've alleged that I still think that's bad.

[01:24:16] Speaker 05:
The language isn't doing much work.

[01:24:19] Speaker 07:
And so I think it's still subject to the limitation of good faith.

[01:24:21] Speaker 07:
And I think it's important just to go back to an observation.

[01:24:24] Speaker 07:
I think you may judge, Malette.

[01:24:25] Speaker 07:
There's no allegation that what motivated the university here was anything other than good faith compliance with the needs of the students and faculty and also the applicable orders.

[01:24:34] Speaker 07:
But again, I don't mean to be the dead horse.

[01:24:37] Speaker 05:
I'm trying to get back to because we've been going in circles for some time now about

[01:24:41] Speaker 05:
Is this a dispute about we'll do it no matter what?

[01:24:47] Speaker 05:
And you're like, no, we won't do it no matter what under any circumstances.

[01:24:50] Speaker 05:
Well, I don't think that's really the dispute.

[01:24:52] Speaker 05:
I think what they want to say is we paid full freight for this semester of on-campus learning.

[01:24:59] Speaker 05:
And you knew that.

[01:25:00] Speaker 05:
We had paid full freight for doing that.

[01:25:04] Speaker 05:
And you don't need to talk about reservation of rights, honestly, that much other than maybe the word necessary, because it was impermissible.

[01:25:16] Speaker 05:
It was unlawful, at least by the time of the lockdown order, for us to have continued providing this on-campus education.

[01:25:23] Speaker 05:
And the real crux of this case is, okay, well, we have full on-campus education tuition in hand.

[01:25:31] Speaker 05:
and circumstances have arisen where we cannot, and no one disputes, we cannot do it.

[01:25:39] Speaker 05:
And so the real contractual dispute, it seems to me, is what happens with that tuition?

[01:25:46] Speaker 05:
Isn't that the real dispute?

[01:25:47] Speaker 05:
No one says.

[01:25:48] Speaker 07:
Yeah, I don't think so.

[01:25:51] Speaker 07:
I think that's a damages question.

[01:25:53] Speaker 07:
And before you get to damages, you need to get to breach.

[01:25:55] Speaker 07:
And before you get to breach, you need to know what the promise was.

[01:25:59] Speaker 07:
So again, just to go back to the kind of elements here, what was the promise?

[01:26:03] Speaker 07:
We heard from both sides, it is a promise to provide in-person instruction.

[01:26:07] Speaker 07:
And I'm not going to add any Cedille at the end as to what grammatical point or phrase comes after it.

[01:26:13] Speaker 07:
A promise to provide in-person instruction.

[01:26:15] Speaker 07:
Did the university make that promise?

[01:26:18] Speaker 07:
If what that promise means is that the university would provide in-person instruction and it breaches that promise when it transitions to remote instruction mid-semester,

[01:26:29] Speaker 07:
the university never made that promise.

[01:26:32] Speaker 05:
What if it made this promise?

[01:26:34] Speaker 05:
If this is how I understand their arguments, although again both of you spent all your time briefing, the brief was all about under any circumstances and it seems to me instead the question is, did they understand that if we pay x amount we'll get on-campus education?

[01:26:51] Speaker 05:
If we have only online education we'll only have to pay x minus y amount.

[01:26:57] Speaker 07:
No.

[01:26:58] Speaker 07:
And for a couple of reasons.

[01:27:01] Speaker 07:
Number one, it's not an apples to apples comparison.

[01:27:04] Speaker 07:
I mean, the American University complaint expressly alleges that there's no undergraduate program offered online at American.

[01:27:10] Speaker 07:
So they didn't make a choice between two different programs.

[01:27:14] Speaker 07:
You don't make allegations, but go ahead.

[01:27:15] Speaker 07:
Plaintiff's complaint includes an explicit allegation that there's no online program for American undergraduates.

[01:27:21] Speaker 07:
So this wasn't a choice between two different modalities where they selected in-person instruction instead of online.

[01:27:27] Speaker 07:
And as to GW, you can't get the degrees that the plaintiffs were attempting to get here online.

[01:27:34] Speaker 07:
You can take certain courses, and you can get certain degrees and certain post-graduate certificates.

[01:27:41] Speaker 07:
But it's not an apples to apples comparison.

[01:27:44] Speaker 07:
So for the in-person instruction, for the students who paid for in-person instruction, again, I do think the question is, what were they promised by the university?

[01:27:51] Speaker 07:
And I think Judge Cooper

[01:27:52] Speaker 07:
said it exactly right.

[01:27:54] Speaker 07:
They were promised a presumption of in-person education.

[01:27:57] Speaker 07:
Everyone understood it.

[01:27:59] Speaker 07:
But the critical question is, did the university, impliedly, bargain away its discretion to make a change that everyone agrees was necessary in light of the pandemic?

[01:28:09] Speaker 07:
And the reason that the difference in- That's not the question.

[01:28:10] Speaker 05:
There's another question.

[01:28:12] Speaker 05:
I don't think they dispute that you had to stop providing on-campus education.

[01:28:17] Speaker 05:
The next question is, do you get to keep

[01:28:21] Speaker 05:
that exceptional amount of money that was paid for something that we are not getting.

[01:28:26] Speaker 05:
So Judge Millett.

[01:28:28] Speaker 05:
We charge less for getting the online stuff.

[01:28:31] Speaker 05:
Now, it sounds like they're all kind of factual disputes about the nature of the online program versus the remote learning that happened here.

[01:28:38] Speaker 05:
But I understand their argument, at least now, to have that to really be about we agreed to pay on-campus education tuition

[01:28:50] Speaker 05:
to get on-campus education?

[01:28:54] Speaker 05:
Had we not?

[01:28:55] Speaker 05:
I apologize.

[01:28:57] Speaker 06:
But didn't you just say that that's not what the promise was?

[01:29:01] Speaker 06:
We agreed to pay that for the presumption that we would get on-campus learning.

[01:29:07] Speaker 06:
That's why, whether it's under all circumstances or not matters.

[01:29:13] Speaker 06:
Because the question is, in fact, what they agreed to pay for.

[01:29:17] Speaker 06:
If they assume away at the beginning that they agreed to pay for getting on campus learning, no matter what, or with the period or whatever, then we've already taken care of the issue.

[01:29:30] Speaker 06:
But the question is, is that in fact what the university promised?

[01:29:35] Speaker 07:
I agree with you entirely.

[01:29:36] Speaker 07:
Yeah, I agree with you entirely, Judge Jackson, about the framing.

[01:29:39] Speaker 07:
But to answer Judge Millett's question first, and I want to make sure I give you a legal answer, not a factual one, since this is a motion to dismiss.

[01:29:46] Speaker 07:
Who gets to keep the money is irrelevant unless you find a promise and a breach.

[01:29:52] Speaker 07:
And there was no promise here, and therefore there was no breach.

[01:29:54] Speaker 05:
That's like asking a different question than Judge Jackson.

[01:29:56] Speaker 05:
I'm asking whether, when we've paid for something that you can no longer give us,

[01:30:04] Speaker 05:
What is your promise due to circumstances beyond your control?

[01:30:07] Speaker 05:
This isn't your choice.

[01:30:08] Speaker 05:
It's not a right that you exercised here.

[01:30:11] Speaker 05:
You couldn't have done it.

[01:30:12] Speaker 07:
Understood, but in that in that circumstance, the promise that was given was a presumption in favor of in-person instruction, which everyone agrees we provided, and then the ability to make a change as circumstances require mid-semester.

[01:30:26] Speaker 07:
In those circumstances, there's no breach because the promise is a presumption.

[01:30:31] Speaker 05:
How do we know the promise didn't include?

[01:30:33] Speaker 05:
This is, I'll try from this way, did not include

[01:30:38] Speaker 05:
If we can't do it, if all you're getting, how do we know what the reasonable expectation of both parties was as to what would have, who would bear the financial consequence of this change?

[01:30:51] Speaker 05:
Because at GW you would get to keep all the money.

[01:30:56] Speaker 05:
How do we know what their reasonable expectations were, what the agreement was as to that?

[01:30:59] Speaker 05:
Isn't that the factual question?

[01:31:02] Speaker 07:
I don't think so.

[01:31:03] Speaker 07:
I mean, the question is whether they can plausibly allege a promise that the university would provide in-person instruction and reserve the right to change the method of instruction operating under good faith, but cede their right to keep the tuition alongside providing remote instruction to everyone.

[01:31:19] Speaker 07:
I mean, again, the question is the plausibility of the implied contractual promise that they're alleging here.

[01:31:25] Speaker 07:
And it's not plausible to allege that the university would have agreed to a presumption of providing in-person education

[01:31:30] Speaker 07:
Reserving its right as universities have since time immemorial.

[01:31:34] Speaker 07:
And I think importantly, DC- Hey, wait, reserving their right to what?

[01:31:36] Speaker 03:
Reserving their right to what?

[01:31:38] Speaker 07:
To respond to emergency circumstances.

[01:31:41] Speaker 07:
And it's not just the reservation of rights, but I think the DC Court of Appeals position in Basch recognizes as a matter of DC law that DC universities- But the thing is, that gets you, all that does is get you to trial, that's all.

[01:31:54] Speaker 07:
I disagree, Your Honor.

[01:31:56] Speaker 03:
Because you're saying, but wait, there were circumstances

[01:31:59] Speaker 03:
that changed what we were agreeing to.

[01:32:02] Speaker 03:
I mean, I'm really having a lot of trouble understanding what you're thinking students, because I think you agree we have the, there is a contractual relationship between the university and the students.

[01:32:14] Speaker 03:
That's a given in this jurisdiction.

[01:32:17] Speaker 03:
And if two or three, use the hypothetical we had before, two or three weeks in, the university, can the university say, we don't want to do it this way anymore.

[01:32:27] Speaker 03:
The faculty voted.

[01:32:29] Speaker 03:
And we're not going to do it.

[01:32:32] Speaker 03:
And so we are going to fulfill our obligation by, you can go to Zoom.

[01:32:40] Speaker 03:
We don't want to do it this way.

[01:32:41] Speaker 03:
And it's not one week.

[01:32:42] Speaker 03:
It's not right after they got the check.

[01:32:45] Speaker 03:
It's two, three weeks in.

[01:32:47] Speaker 07:
Right, I think I'm not hypothetical.

[01:32:49] Speaker 07:
Is it plausible to think that the university would say we will provide in-person education subject to faculty countermand?

[01:32:55] Speaker 07:
No, that's not plausible.

[01:32:57] Speaker 07:
And no one would make that argument in court.

[01:32:58] Speaker 07:
If the promise is we will provide in-person instruction, but we reserve the right, which we will exercise in good faith, which everyone concedes, to make these changes as necessary, that's exactly what everyone expected because that's the way universities have operated.

[01:33:12] Speaker 03:
That doesn't get you passed unjust enrichment though.

[01:33:14] Speaker 03:
You're not suggesting that, right?

[01:33:16] Speaker 07:
Well, I think you got Justin Bruce McClain fails for precisely that reason, because of the promise here that is part of the contract is a promise to provide in person instruction, unless the university makes a determination that it can't to protect health and safety that's one so because.

[01:33:32] Speaker 05:
The instruction it's not about what happens with you pay they agreed to pay.

[01:33:37] Speaker 05:
full-freight tuition for the full on-campus educational experience.

[01:33:41] Speaker 05:
It seems the reservation of rice doesn't talk about retroact, you know, when changes are made after you've paid, what happens?

[01:33:49] Speaker 05:
It seems to me that's maybe the answer is that there wasn't a contractual agreement about what happens with the tuition and that's what needs to get sorted out on just in order.

[01:33:58] Speaker 07:
With respect, Your Honor, I disagree.

[01:34:00] Speaker 07:
I still think that this question of damages only matters if there's a breach of a contract, and there's no breach of a contract, because the term of the contract is that the university will agree to provide in-person education, but reserves the right to make changes as are necessary.

[01:34:14] Speaker 03:
And that's exactly why the unjust... So you're saying reserves the right to keep all of your money for a service they're not going to give you, and that they themselves distinguish from the service they're offering in lieu

[01:34:27] Speaker 03:
the one that they've eliminated that the you're saying the contract is we reserve to keep you all of your money for the full service but we're going to take you into a lesser category and as long as we do that in good faith you're not entitled to any of your money back that's what you're saying that was that's what the deal was i think that is what the deal was and i think that's what was provided here the university provided i just don't where where are you finding that

[01:34:55] Speaker 03:
inability to perform.

[01:34:56] Speaker 03:
I understand why you're arguing it as a matter of strategy, because you want to win the money claim.

[01:35:02] Speaker 03:
But I just don't see any support for that.

[01:35:05] Speaker 03:
Where is this coming from?

[01:35:07] Speaker 03:
There's no doubt in everyone's mind what you mean to do.

[01:35:10] Speaker 03:
And you've agreed to that starting out.

[01:35:12] Speaker 03:
There's no doubt in your mind.

[01:35:13] Speaker 03:
And the students understand the same thing.

[01:35:16] Speaker 03:
And you're saying, but as long as we can give you a good faith explanation as to why we're going to mid semester switch you into

[01:35:24] Speaker 03:
another mode that you clearly have not bought.

[01:35:29] Speaker 03:
Clearly, whether it's offered or not, you clearly have not bought, and the university knows that as well.

[01:35:34] Speaker 03:
As long as we do that in good faith, and we're going to think of something that's in good faith, you're not entitled to anything back.

[01:35:39] Speaker 03:
That was our original deal.

[01:35:41] Speaker 07:
Well, so, your honor, let me, I want to make two observations.

[01:35:44] Speaker 07:
The first one is a factual one.

[01:35:46] Speaker 07:
These students, in pandemic circumstances, these students received the same instruction by the same professors, same material, got the same course credit towards graduation on time.

[01:35:56] Speaker 03:
So I think that we really shouldn't be fighting about qualitatively.

[01:36:02] Speaker 03:
And I understand what the law says in that.

[01:36:03] Speaker 03:
But if you're even making the suggestion,

[01:36:06] Speaker 03:
You're even whispering the suggestion that there's no difference between Zoom-offered education and the in-person, full campus.

[01:36:16] Speaker 03:
That is ridiculous.

[01:36:17] Speaker 03:
And there are very few of us who do this for a livelihood and some are full-time who would agree.

[01:36:23] Speaker 03:
That's an absurd notion.

[01:36:25] Speaker 03:
It is not the same qualitatively.

[01:36:27] Speaker 07:
I completely understand, and I'm not advancing that notion because I think it's legally irrelevant here.

[01:36:32] Speaker 07:
Right, I agree.

[01:36:33] Speaker 07:
And so I think this really just goes to what contract promise was made and whether there was a breach but to go to your example judge Edwards, I think I returned to the first question judge Malette asked about the snow day a breach doesn't become more of a breach because it's a week of snow days versus.

[01:36:49] Speaker 07:
you know, six weeks of a pandemic.

[01:36:51] Speaker 07:
And no one would ever dream to argue that when the university closes for a week and provides remote instruction, the students are locked in their houses in a snowstorm, that there's a breach of contract entitling them to damages.

[01:37:03] Speaker 07:
And it is nowhere to be found in all of contract law.

[01:37:05] Speaker 07:
That's something that is not a breach with respect to a week becomes a breach in six weeks because the circumstances are wildly different.

[01:37:12] Speaker 03:
My formulation of the promise would be that what the university promised is that as a general matter,

[01:37:19] Speaker 03:
pursuant to past practice and custom, we are offering you and asking you to pay for in-person, on-campus learning.

[01:37:29] Speaker 03:
And so, of course, a snow day, and everyone understands, because that's custom and practice.

[01:37:34] Speaker 03:
So there's really not an issue there.

[01:37:35] Speaker 06:
Mr. Schoenfeld, if Judge Edwards is correct, that that is the promise, was there a breach on the alleged facts of this case?

[01:37:45] Speaker 03:
Right.

[01:37:46] Speaker 06:
If the promise, and this is where I'm getting

[01:37:49] Speaker 06:
a little hung up, because I think that if Judge Edwards is correct, and at least one of plaintiff's counsel has framed it this way, that the promise was, generally speaking, you are going to pay for this in-person experience, and as a general matter, based on custom and practice, we're going to provide it.

[01:38:13] Speaker 06:
that the facts in this case, the judicially noticed facts that takes us outside of the general course of affairs, the fact that it was uninfeasible, the fact that it was unlawful means that when the university didn't provide the service pursuant to that promise, they actually did not breach because they only promised to do it

[01:38:42] Speaker 06:
as a general matter in the course of affairs that ordinarily exist.

[01:38:46] Speaker 06:
Am I wrong about that, Mr. Schoenfeld?

[01:38:49] Speaker 07:
I think on that iteration of the promise, you're exactly right.

[01:38:51] Speaker 07:
I mean, again, I think the question of damages is a challenging one, and I don't want to be ungenerous here.

[01:38:58] Speaker 07:
And my kids went to school, and I paid tuition, and they were stuck in my den in front of Zoom for several months.

[01:39:05] Speaker 07:
And so I get all of this.

[01:39:09] Speaker 07:
The question in a breach of contract case is what the promise was and whether it was breached.

[01:39:14] Speaker 07:
And there is no universe in which the plaintiffs can plausibly allege that the university made a promise.

[01:39:19] Speaker 07:
And here it's only an implied promise because I think we all agree there's nothing expressed.

[01:39:23] Speaker 07:
Made an implied promise that they were going to provide in-person instruction no matter the fact that the 11th plague had arrived and that students would be entitled to a refund in those circumstances.

[01:39:34] Speaker 07:
I don't see where.

[01:39:36] Speaker 07:
impliedly or expressly, you get that last tail end about the return of the funds.

[01:39:42] Speaker 05:
I don't see where you get...

[01:39:44] Speaker 05:
that we would keep it all.

[01:39:46] Speaker 05:
I mean, that's the problem.

[01:39:48] Speaker 05:
Maybe the implied contract just didn't address what happens with the payment.

[01:39:57] Speaker 05:
Because I see the reservation rights, the right to change things, but I don't see you saying anywhere, and maybe you can point me to it, that says, or what your evidence of an implicit agreement is, we're going to keep it.

[01:40:09] Speaker 05:
And it's not fair.

[01:40:10] Speaker 05:
Snow days, at the time these contracts printed into,

[01:40:15] Speaker 05:
Education via Zoom was like on a mass scale like this, hadn't happened.

[01:40:21] Speaker 05:
For all you know, hadn't happened.

[01:40:24] Speaker 05:
And so the expectation was no days was my education will get made up.

[01:40:29] Speaker 05:
It'll get made up on campus.

[01:40:32] Speaker 05:
And so the question here is when you just have this legally mandated and the schools to be applauded for the resourcefulness with which they responded,

[01:40:43] Speaker 05:
But you have this change where we cannot provide what you paid for.

[01:40:48] Speaker 05:
And we have the ability to adapt like that.

[01:40:52] Speaker 05:
We have to.

[01:40:53] Speaker 03:
You are also, I've heard you.

[01:40:56] Speaker 05:
Where's that agreement?

[01:40:58] Speaker 03:
Yeah.

[01:40:58] Speaker 03:
And along with that, I want to make sure I'm understanding your argument.

[01:41:04] Speaker 03:
I remember at DC case law that says the fact that you have a breach of contract and unjust enrichment on the table at the same time.

[01:41:13] Speaker 03:
doesn't preclude the unjust enrichment.

[01:41:16] Speaker 03:
I'm looking at Bebas' opinion now.

[01:41:18] Speaker 03:
He clearly assumed, you can tell me if you think he's wrong, he's clearly assumed, citing the restatement, that if the contract, performance under the contract is not possible because of changed circumstances, you still, the claim of unjust enrichment can still be pursued.

[01:41:37] Speaker 03:
You say it cannot be?

[01:41:39] Speaker 07:
So I think when the contract speaks to the issue and the party's rights are dictated by the contract, you don't get to bring an unjust enrichment claim.

[01:41:46] Speaker 07:
And I think DC case law is completely clear on that.

[01:41:50] Speaker 07:
So DC case law allows you to bring an unjust enrichment claim in cases where the contract is invalid or unenforceable, which we don't have here, or where the contract doesn't speak to the relationship at issue.

[01:42:04] Speaker 07:
And I think plaintiff's cases

[01:42:06] Speaker 07:
CAFAsian and APA fee litigation speak to precisely those circumstances, but here we've got a contract.

[01:42:11] Speaker 07:
It just doesn't say what the plaintiffs want it to say.

[01:42:14] Speaker 07:
The implied term here is that the universities will make best efforts to provide an in-person education and they reserve the right to make those changes.

[01:42:23] Speaker 07:
I mean, the idea that the university would bargain away its discretion to make these sorts of changes under these circumstances is completely implausible.

[01:42:32] Speaker 05:
And I think that's the question before you is, is not whether you could attack whether you could stop providing in on campus education.

[01:42:40] Speaker 05:
We didn't have a choice.

[01:42:42] Speaker 05:
Or whether you could adapt.

[01:42:44] Speaker 05:
I get, I get your argument about that.

[01:42:47] Speaker 05:
But I don't see as a separate one about

[01:42:50] Speaker 05:
But who bears the financial consequence of this?

[01:42:54] Speaker 05:
We have collected for something that we know we're not delivering.

[01:42:56] Speaker 05:
We're doing the best we can under the circumstances.

[01:43:00] Speaker 05:
But it's not what any of us thought you were going to get for this money.

[01:43:04] Speaker 05:
None of you thought when they paid in January or February, whatever it was, that this is what you'd be getting for this money.

[01:43:10] Speaker 05:
There was never an agreement about that, or even an expectation about that.

[01:43:13] Speaker 07:
So Your Honor, let me answer the question in two ways.

[01:43:16] Speaker 07:
I think the first one is, again, and I don't mean to be

[01:43:20] Speaker 07:
thick about this, but I don't think you get to the question of damages unless there's a breach.

[01:43:24] Speaker 07:
And you don't get to a breach unless there was a promise.

[01:43:27] Speaker 07:
And here the promise, I don't think I can say it any better than Judge Cooper, but the only plausible promise was a presumption of in-person instruction and a delegation to the university of sub-discretion to make changes that are reasonable in light of the circumstances.

[01:43:42] Speaker 07:
In those circumstances, I think the clear implication is that there is no breach when the university exercises its discretion in that way.

[01:43:50] Speaker 07:
And because there's no breach, there's no entitlement to damages.

[01:43:53] Speaker 07:
The second point I would make is if we are in a universe where we're trying to figure out the difference in value between what the students provide were supposedly promised and what they were provided, I do think we run headlong into this academic deference.

[01:44:08] Speaker 03:
No, no, no.

[01:44:09] Speaker 03:
There's no doubt.

[01:44:10] Speaker 03:
I don't know.

[01:44:11] Speaker 03:
I don't know that you would lose on restitution.

[01:44:13] Speaker 03:
Because I mean, and I don't want you to think my questions are suggesting that I don't know how that comes out.

[01:44:19] Speaker 03:
That's a heck of a fight because I know the other side of this is I know how much time, money and effort the universities and colleges were putting into making the switch.

[01:44:29] Speaker 03:
I don't know how that plays out.

[01:44:30] Speaker 03:
That's a different question entirely.

[01:44:32] Speaker 07:
I understand, and that's why I addressed it strictly to this question of damages, but again, and I don't mean to repeat myself, but I do see this as a very early in the pleadings question of the plausibility of plaintiff's allegation that the university's promise that they would provide in-person instruction and that they breached that promise when they transitioned to remote instruction.

[01:44:53] Speaker 07:
I think Judge Jackson has sort of had the framing correct in that way that again, 12 v 6 motion, plausibility of the allegations,

[01:45:02] Speaker 07:
Is it plausible?

[01:45:03] Speaker 07:
And I think Judge Cooper had it exactly right, and I would just quote his line.

[01:45:07] Speaker 05:
What's not plausible?

[01:45:08] Speaker 05:
I mean, we've read Judge Cooper's decisions.

[01:45:11] Speaker 05:
What's implausible about their contention that tuition will be treated like housing and meal plans, and that is that when you can't do it, and we're not faulting you for not doing it, there will be some prorated refund.

[01:45:31] Speaker 05:
Because I just don't know where I'm discerning that from this contract.

[01:45:39] Speaker 05:
The fact that you would do your best doesn't mean you were going to do your best to house people.

[01:45:43] Speaker 05:
You're going to do your best to feed people.

[01:45:46] Speaker 05:
But you recognized as to those that we need to prorate this.

[01:45:51] Speaker 05:
And so how do we know that there wasn't a similar

[01:45:55] Speaker 05:
understanding between the students and the university or reasonable expectation, at least on the part of the students, that that's what would happen with tuition.

[01:46:05] Speaker 07:
Well, so I think there's two things.

[01:46:09] Speaker 07:
Number one, let's say mid semester, the classics department ups and leaves and moves from GW to Georgetown or GW to some other school.

[01:46:16] Speaker 07:
There's no refund even if the students aren't able to complete their semester as classics majors.

[01:46:21] Speaker 07:
That's never happened.

[01:46:22] Speaker 07:
The university always retains discretion.

[01:46:24] Speaker 07:
to make substitutes, to put people into different programs, to have English teachers teaching classics departments.

[01:46:31] Speaker 07:
That's never been part of the expectation at universities.

[01:46:33] Speaker 07:
Always universities are deemed to be able to exercise.

[01:46:36] Speaker 05:
It's one thing to say we're going to substitute teachers in.

[01:46:39] Speaker 05:
Tell me if there's a case that says, if you said mid semester, sorry, classic students, we can't educate you anymore.

[01:46:46] Speaker 05:
We lost everybody.

[01:46:50] Speaker 03:
I mean, I can't educate you.

[01:46:53] Speaker 05:
What would happen then shaking your head.

[01:46:55] Speaker 03:
I'm wondering where you're getting that notion from.

[01:46:58] Speaker 05:
Yeah.

[01:46:58] Speaker 07:
Well, so I mean, I apologize.

[01:47:01] Speaker 06:
I know what I'm asking.

[01:47:03] Speaker 06:
I guess I'm trying to figure out the hypothetical and its application to the current scenario.

[01:47:09] Speaker 06:
Isn't it more like

[01:47:11] Speaker 06:
we're not gonna educate you with the particular professors that were on the scene at the time in the way, right?

[01:47:20] Speaker 05:
I mean, that's- Sorry, I'm sorry, Judge Jackson.

[01:47:22] Speaker 05:
Can we go back to my question?

[01:47:23] Speaker 05:
Because I was responding to something you said.

[01:47:26] Speaker 05:
And so I get, that's what I said, if we substitute other teachers to teach the classics or something, that may be different.

[01:47:32] Speaker 05:
I just wanna answer to this question.

[01:47:35] Speaker 05:
If you say to them, we can't provide it, you're saying that it's always been understood

[01:47:41] Speaker 05:
Oh, well.

[01:47:43] Speaker 07:
So I mean, faculty leave every semester, department shut down.

[01:47:47] Speaker 05:
Okay, department complete shut down and you can't, all your other teachers are already teaching.

[01:47:52] Speaker 05:
There's nobody to come in and start teaching all these other classes now.

[01:47:54] Speaker 05:
What happened?

[01:47:55] Speaker 05:
What would happen there?

[01:47:56] Speaker 05:
What's your view under the reservation of rights?

[01:47:58] Speaker 05:
You get to keep their tuition?

[01:48:00] Speaker 07:
I think so.

[01:48:00] Speaker 07:
Yeah.

[01:48:01] Speaker 07:
I mean, if you're able to provide an education generally, just not in their major, they have

[01:48:05] Speaker 07:
three and a half other years to complete their major with a reconstituted department.

[01:48:10] Speaker 05:
I think those are- Please don't change my hypothetical.

[01:48:12] Speaker 05:
My hypothetical is, and I'll make it even more detailed for you.

[01:48:17] Speaker 05:
Seniors, we've got to finish this semester to have our credits and we have to get credits in classics.

[01:48:24] Speaker 05:
It's not general credits at this point.

[01:48:26] Speaker 05:
We can't graduate with a classics degree without it.

[01:48:29] Speaker 05:
But the classics department has up and left mid semester.

[01:48:34] Speaker 05:
We've already paid.

[01:48:36] Speaker 05:
but we can't and the university doesn't have faculty available or equipped to come in and pick up teaching these high level courses on classics for the rest of the semester.

[01:48:50] Speaker 05:
But of course you have to make a change because they left.

[01:48:54] Speaker 07:
What's your position?

[01:48:55] Speaker 07:
I think if the university is unable to provide the credits and the progress towards graduation that they promised, that is a breach.

[01:49:03] Speaker 07:
In those circumstances, I think- So that's not within the reservation of rights.

[01:49:07] Speaker 05:
Good.

[01:49:07] Speaker 05:
I just wanted to make sure I understood what you were saying.

[01:49:09] Speaker 07:
Yeah, I think that's right.

[01:49:10] Speaker 07:
I mean, the specific bargain for exchange that's at the heart of these agreements is a number of credit hours for particular tuition dollars.

[01:49:17] Speaker 07:
And everyone concedes that those were provided here.

[01:49:20] Speaker 07:
So the question of how the university changes

[01:49:22] Speaker 07:
instructors, modalities of instruction, course offerings, that's what's left to the discretion of the university.

[01:49:29] Speaker 07:
And I refer the court to the First Circuit's opinion.

[01:49:31] Speaker 05:
Wait, you're saying this to the complete discretion of the university?

[01:49:34] Speaker 05:
I thought there was an agreement upfront that, no, you will provide on-campus education if at least the agreement is to be impossible.

[01:49:46] Speaker 05:
So that's not just totally in your discretion, that's your promise to them

[01:49:50] Speaker 05:
with the, you know, to the extent, at a minimum for this case, at least to the extent lawful.

[01:49:56] Speaker 05:
Yeah, absolutely.

[01:49:57] Speaker 06:
Can I offer another hypothetical that might be illuminating in terms of this particular point?

[01:50:02] Speaker 06:
So the university has glossy magazines and materials that show their wonderful new chemistry lab building that they've created.

[01:50:11] Speaker 06:
It's a million dollars.

[01:50:12] Speaker 06:
It's got all of these wonderful features.

[01:50:16] Speaker 06:
And midway through the semester, students who came to that university paid their tuition upfront, said, we want to be chemistry majors because we were so enticed by your facility.

[01:50:29] Speaker 06:
Midway through the semester, the facility burns to the ground.

[01:50:34] Speaker 06:
And the university has to get restarted, start up the old building, the building that was before related to chemistry.

[01:50:44] Speaker 06:
And no, it was not the expectation.

[01:50:46] Speaker 06:
that students would be getting their chemistry instruction in that other place.

[01:50:53] Speaker 06:
But there we are.

[01:50:54] Speaker 06:
My question is, in that circumstance, do we have a breach?

[01:50:59] Speaker 06:
Do we have a situation in which the students who came to the school expecting that they'd be in the shiny new building get their money back if they're still getting chemistry from the professor

[01:51:12] Speaker 06:
the way that the university promised four credits toward their chemistry degree.

[01:51:17] Speaker 06:
Do they get the money back in that situation?

[01:51:19] Speaker 06:
Is there some sort of breach?

[01:51:21] Speaker 07:
There's no breach and they don't get their money back.

[01:51:23] Speaker 03:
I mean, again, all the buildings burn down.

[01:51:26] Speaker 03:
So every building on campus burns down.

[01:51:30] Speaker 07:
Right, and so.

[01:51:30] Speaker 03:
There's no question the students are not going to win that in a heartbeat, but the every all the buildings are burned down.

[01:51:36] Speaker 03:
University pivots.

[01:51:38] Speaker 05:
One at a time sorry let's just do this one at a time let's look at an answer to judge Edwards question, please.

[01:51:43] Speaker 07:
If the university burns down and let's say GW moves to rest at some gross apartment building.

[01:51:49] Speaker 07:
You know where.

[01:51:50] Speaker 03:
They haven't been able to figure out where they're going to move.

[01:51:55] Speaker 03:
So the next semester, the next school year, they have no particular plans.

[01:52:00] Speaker 03:
The students, they will give us our money back.

[01:52:03] Speaker 07:
For the current semester, which I think is what completes the analogy, if they provide instruction allowing people to get credits over Zoom, there's no breach and they don't get their money back.

[01:52:13] Speaker 07:
If they move to a different physical space, even if it's inconvenient for students, but teachers are teaching in broom closets, but provide the instruction and give them credits towards the orderly progress towards their degrees, I don't think there's a breach and I don't think they get their money back.

[01:52:28] Speaker 05:
What about this?

[01:52:30] Speaker 05:
um they say this i'm going to talk about i'm going to talk about the next semester's and stephanie of time plan to finish out this half a semester we don't have another building to move you to so we're going to move online chemistry majors um and you all had to go home uh but what what the teachers instead of you doing hands-on experiments and learning

[01:52:55] Speaker 05:
The professor will show you videos of other people having done these experiments in the past, and you just have to sit and watch the videos and we'll give you will give you the credits to get your degree.

[01:53:07] Speaker 07:
That's not what happened here, but I'm going to answer your question.

[01:53:12] Speaker 05:
I got it.

[01:53:14] Speaker 07:
I think in those circumstances, there's no breach of contract and the students don't get their money back.

[01:53:18] Speaker 05:
Why did you give them credits to wear their degrees?

[01:53:22] Speaker 05:
So really what GW and AU could have done here is in middle of March it said, we're not going to provide you anything.

[01:53:29] Speaker 05:
We'll just go ahead and credit you for each class for the semester pass fail.

[01:53:33] Speaker 05:
See you next fall.

[01:53:34] Speaker 07:
I don't think that would have been in good faith.

[01:53:36] Speaker 07:
No, I don't think that would have been in good faith.

[01:53:38] Speaker 07:
The university to stand behind undergraduate degrees that someone didn't earn.

[01:53:45] Speaker 05:
They're getting their credits.

[01:53:46] Speaker 05:
You did half the semester, you'd say.

[01:53:47] Speaker 05:
You did half the semester.

[01:53:49] Speaker 05:
So we're going to give you the credits.

[01:53:51] Speaker 05:
You did 51% of the semester.

[01:53:52] Speaker 05:
We'll round up.

[01:53:53] Speaker 05:
You get your credits and you get to progress towards your degree.

[01:53:56] Speaker 07:
I don't think that would be good.

[01:53:58] Speaker 07:
I don't think the university would do that, and I don't think it would be good faith.

[01:54:00] Speaker 07:
I think for the university to give students degrees that they didn't earn or course credits that they didn't earn, I think there's a fair implication of bad faith in that hypothetical.

[01:54:13] Speaker 06:
I'm sorry, did Jackson, did you have more?

[01:54:14] Speaker 06:
I don't know, I was just gonna say, but not in the hypothetical in which the university makes a pivot

[01:54:21] Speaker 06:
right, in good faith to provide the instruction, albeit in a different format, and the albeit in a different format is taken care of by the university's express reservation of rights to make changes to its programs.

[01:54:34] Speaker 06:
That's what I understand your argument to be, and that therefore there's no breach in that situation.

[01:54:41] Speaker 07:
I think that's exactly right.

[01:54:42] Speaker 07:
And the last thing I'll say is I think the reservation of rights is entirely consistent with the way case law, including DC case law, has regarded this type of university decision making.

[01:54:52] Speaker 07:
Bash makes entirely clear that as a matter of law, DC universities retain precisely this type of discretion, and it's not reasonable as a matter of law

[01:55:02] Speaker 07:
for students to have a contrary expectation or believe that universities are not going to make precisely this type of decision.

[01:55:08] Speaker 07:
And that's consistent across the jurisdictions.

[01:55:10] Speaker 07:
I would refer the court to the First Circuit's decision in Quesnagli that makes this point exactly.

[01:55:14] Speaker 07:
But as a matter of DC law, it's entirely clear from Bash.

[01:55:20] Speaker 03:
Before we switch to the other council I just want to let you know it is not entirely clear to me what DC law says about the availability of unjust enrichment in a situation where there is a contract being disputed.

[01:55:33] Speaker 03:
The case law is not as conclusive as you're suggesting that if the contract doesn't cover it, that's the end of it.

[01:55:40] Speaker 03:
No unjust enrichment.

[01:55:41] Speaker 03:
That is not what I'm seeing, but I'm a little bit confused as I just went back and looked at these again.

[01:55:47] Speaker 03:
And I want the other side to know as well, because you've been firm in saying unjust enrichment cannot possibly be in play here.

[01:55:55] Speaker 03:
And that's not what I'm seeing in DC case law.

[01:55:58] Speaker 07:
Sure, so I think that is DC law, but just to answer your question or to explain that there are other bases on which to dismiss or affirm dismissal of the unjust enrichment claim.

[01:56:09] Speaker 07:
There's also nothing unjust here because there was no promise made for all of the reasons that we've been talking about.

[01:56:15] Speaker 03:
We're going round and round on that.

[01:56:17] Speaker 03:
I'm really at the very

[01:56:20] Speaker 03:
limited question as to whether or not will you have a contractual matter that end the discussion on Justin Richmond.

[01:56:27] Speaker 03:
I'm not reading the DC cases to say that.

[01:56:30] Speaker 07:
Understood, Your Honor, and I'll just finish on this point.

[01:56:32] Speaker 07:
My understanding is Faltony-Sachs makes clear that, you know, the idea that if you have a contract, then there's no unjust enrichment claim, that overstates things.

[01:56:40] Speaker 07:
But I do think DC law is clear that unjust enrichment only comes into the picture when the underlying contract is unenforceable for some reason, or where it doesn't cover the dispute between the parties.

[01:56:52] Speaker 07:
Where there's a term, express or implied in the contract,

[01:56:55] Speaker 07:
you can't have an unjust enrichment claim.

[01:56:57] Speaker 07:
And I think given DC law about that very specific circumstances under which a claim, contract claim between a university and a student arises, there's a particular peril in reading unjust enrichment doctrine too broadly to supplement agreements.

[01:57:12] Speaker 05:
So thank you.

[01:57:12] Speaker 05:
Do you agree with the contract?

[01:57:13] Speaker 05:
I think I heard you say if the contract is unenforceable, then unjust enrichment does apply.

[01:57:22] Speaker 07:
So you did just say that.

[01:57:25] Speaker 07:
You did say that.

[01:57:26] Speaker 03:
And that's what the case says.

[01:57:29] Speaker 07:
I think if a contract fails for lack of consideration, for example, then there's the potential of unjust enrichment, which is why, to go to your framing of the case, Judge Millett, about the illegality, that's why I think it's important to consider it in the frame that Judge Jackson has adopted, which is, is it plausible that there was a promise in the first place?

[01:57:47] Speaker 07:
I think when unjust enrichment law talks about a complaint that's or a contract that's unenforceable, what it's getting at as a contract, unjust enrichment is a substitute for a failed contract.

[01:57:57] Speaker 07:
That's not what we have here.

[01:57:58] Speaker 07:
I think that's the easiest way to put it.

[01:58:02] Speaker 05:
All right, do my colleagues have any more questions?

[01:58:06] Speaker 05:
Thank you.

[01:58:07] Speaker 08:
Thank you, your honor.

[01:58:08] Speaker 05:
Giving everyone up a very long time, but it's helpful to discuss this with you all.

[01:58:12] Speaker 05:
We do appreciate the time everyone is committing.

[01:58:14] Speaker 05:
So I understand both of our appellants want to do

[01:58:17] Speaker 05:
Rebuttal.

[01:58:18] Speaker 05:
It's been a long morning, so I'm going to give you each two minutes, please.

[01:58:22] Speaker 05:
And if it's OK with Judge Edwards, I will ask you to start by responding to his question about what happens.

[01:58:30] Speaker 05:
Is unjust enrichment available here?

[01:58:35] Speaker 05:
If, for example, illegality, superseding illegality, not at the initial contract.

[01:58:42] Speaker 02:
You want me to take that one, Dan?

[01:58:45] Speaker 02:
You're welcome to.

[01:58:46] Speaker 02:
Go for it.

[01:58:47] Speaker 02:
Okay.

[01:58:47] Speaker 02:
So Judge Edwards, I would just point to, and it's on page 28 of our initial brief, the Harrington v. Trotman case.

[01:58:55] Speaker 02:
And here's what that case says.

[01:58:57] Speaker 02:
Obviously, it deals with the unenforceable.

[01:58:59] Speaker 02:
So if there was a breach on behalf of the party bringing the claim,

[01:59:05] Speaker 02:
uh, impracticability of performance, frustration of purpose under the statute of frauds or in consequence of the other party's avoidance for some reason as misrepresentation, duress, mistake, or incapacity, uh, a court can grant equitable relief.

[01:59:21] Speaker 02:
And so if you, and that's straight from the re-second, uh, from the restatement of contracts.

[01:59:25] Speaker 02:
I mean, this is black letter contract law.

[01:59:27] Speaker 02:
That is when you have it.

[01:59:28] Speaker 02:
But in fact, DC goes further.

[01:59:30] Speaker 02:
And if you look further down in that case,

[01:59:33] Speaker 02:
DC law allows an equitable claim, unjust enrichment to supplement a breach of contract claim where the damages under the breach of contract claim may be insufficient.

[01:59:44] Speaker 02:
And those cases that are cited are Lee V. Foote with an E, 481 A2D 484, Ingber, I-N-G-B-E-R-V Ross, which is 479 A2D 1256,

[01:59:58] Speaker 02:
and International Tours, which is 491A2D1149.

[02:00:02] Speaker 02:
Those cases actually allow an equitable claim when there is a viable breach of contract claim, but the damages aren't sufficient under that breach of contract claim.

[02:00:14] Speaker 02:
And in fact, Falcone, which we cited this on page 30 of our initial brief, says specifically, the statement that there can be no unjust enrichment in contract cases is plainly erroneous.

[02:00:26] Speaker 02:
DC law not only allows for unjust enrichment in a situation where the contract is impracticable, impossible, or avoidable, but it allows for the equitable claim in a contract claim.

[02:00:37] Speaker 02:
What you can't do under DC law is recover double damages.

[02:00:43] Speaker 02:
You can't recover the same damages on the contract claim that you recover on the unjust enrichment claim.

[02:00:49] Speaker 02:
And so, in a situation where there was an enforceable breach of contract claim, you can't also double down and have unjust enrichment damages, which are duplicative.

[02:00:59] Speaker 02:
But you can have unjust enrichment damages, which supplement if you did not get full relief on your breach of contract claim.

[02:01:06] Speaker 02:
And that's black letter law.

[02:01:08] Speaker 05:
I appreciate that.

[02:01:12] Speaker 05:
I think we all agreed that written into every contract is a limitation on performance that is unlawful.

[02:01:20] Speaker 05:
And if that's the case, does that mean that as of March, whenever the two schools on different dates said we have to go, we can no longer provide on-campus education because of the pandemic, does that mean that there was never a contract, a contractual obligation to provide

[02:01:42] Speaker 05:
There was no contract to provide on-campus education at that point.

[02:01:47] Speaker 05:
And so there's nothing unjust about them retaining the money.

[02:01:52] Speaker 05:
There was always an asterisk next to the tuition bill.

[02:01:57] Speaker 05:
It's part of this implicit agreement that we can't do what's unlawful.

[02:02:04] Speaker 05:
That itself is a limitation on the scope of the contract.

[02:02:08] Speaker 05:
So no breach of contract and no unjust enrichment because it's not unjust because we never promised to provide it in circumstances like this.

[02:02:16] Speaker 05:
We did the best we could.

[02:02:19] Speaker 02:
Well, unjust enrichment simply looks at the inequity between the parties.

[02:02:23] Speaker 02:
And in this case, as Your Honor noted earlier in the argument, the students paid full rate, full fare for something.

[02:02:29] Speaker 02:
And so that is what unjust enrichment would look at.

[02:02:32] Speaker 02:
It's not the intention of the university.

[02:02:35] Speaker 05:
What did they pay full fare for?

[02:02:37] Speaker 05:
They paid full fare for on-campus education at a minimum, at least to the extent permissible by law.

[02:02:46] Speaker 05:
And they got that.

[02:02:47] Speaker 02:
Well, that's an additional provision which might void the contract.

[02:02:51] Speaker 02:
It doesn't say in the contract to the extent permissible by law.

[02:02:55] Speaker 05:
It's not voiding the contract.

[02:02:58] Speaker 05:
It simply says that there's

[02:03:00] Speaker 05:
A limit on what anybody can do.

[02:03:02] Speaker 06:
And Mr. Lilly, the whole problem is that we don't have express language in the contract.

[02:03:07] Speaker 06:
The question is, what did the contract actually say?

[02:03:10] Speaker 06:
So it's not easy to say that term is not in the contract, right?

[02:03:14] Speaker 06:
We don't know what's in the contract.

[02:03:15] Speaker 06:
We're asking what is plausible to have included.

[02:03:20] Speaker 02:
And briefly, if I may, just on that point, because Mr. Schoenfeld indicated in his argument that there was nothing in our complaint related to online learning prior to this.

[02:03:29] Speaker 02:
And there is, if the court looks at paragraphs 21 through 32 of our complaint, we specifically plead.

[02:03:35] Speaker 02:
And American said at the time on its website, quote, we do not offer undergraduate online degrees in all bold.

[02:03:42] Speaker 02:
That has since been removed.

[02:03:45] Speaker 02:
But at the relevant time period, that was on the website.

[02:03:48] Speaker 02:
And there are other things played there with respect.

[02:03:53] Speaker 06:
But of course, the shift here was not to an online degree, right?

[02:03:57] Speaker 06:
I mean, the shift here was a temporary period of online instruction is not the same thing as an online degree.

[02:04:08] Speaker 02:
But that's not Mr. Schoenfeld's argument.

[02:04:10] Speaker 02:
Mr. Schoenfeld's argument is if they deliver the degree in exchange for the tuition, then the deal is done.

[02:04:16] Speaker 06:
And our point is, in the hypothetical, maybe.

[02:04:21] Speaker 06:
Yeah.

[02:04:23] Speaker 02:
No, he specifically said, and he argued at the district court level, that the provision of the credits and the degree in exchange for the money is the deal.

[02:04:33] Speaker 02:
There is no deal for in-person

[02:04:37] Speaker 02:
on campus education between the parties.

[02:04:40] Speaker 02:
And what we have pled in the complaint and what I'm attempting to show you now is not only did we plead those facts, but American even went so far as to say, we don't offer this type of degree.

[02:04:50] Speaker 02:
So there was not only an expectancy on behalf of the students, which is all that we have to prove, but an intention on behalf of the university.

[02:04:59] Speaker 02:
to say that, no, we only offer in-person on campus.

[02:05:03] Speaker 06:
But can you answer Judge Millett's question, which is, even if there was that intention, even if there was that term, isn't it subject to an implicit condition that whatever they're offering, it has to be consistent with the law?

[02:05:20] Speaker 06:
So in other words, implicitly, fine, they agree.

[02:05:23] Speaker 06:
There was a contract for in-person degrees.

[02:05:27] Speaker 06:
But doesn't that have to carry with it, the understanding that whatever it is we're giving you has to be consistent with the law.

[02:05:37] Speaker 02:
And if we can't give it to you, you get the money back.

[02:05:40] Speaker 06:
That's why that's necessary.

[02:05:42] Speaker 06:
Why is that?

[02:05:42] Speaker 06:
Why do you say that that's necessarily implied in this agreement?

[02:05:47] Speaker 06:
That's the that's where I'm getting hungry.

[02:05:48] Speaker 02:
Because that is the very basis of a service contract.

[02:05:52] Speaker 02:
I will pay you for X service.

[02:05:54] Speaker 02:
If for whatever reason you cannot deliver X service, I get money back here.

[02:06:00] Speaker 06:
We're not asking for all the money.

[02:06:01] Speaker 06:
But doesn't that assume that you're you're defining the X service?

[02:06:06] Speaker 06:
To me, they defined it.

[02:06:08] Speaker 06:
No, no, no.

[02:06:08] Speaker 06:
What I'm saying is that if you're saying that it necessarily means I get my money back, then the service that was promised was a

[02:06:18] Speaker 06:
you have to have it or else, right?

[02:06:22] Speaker 06:
If the promise, if it is implicit that you will always get your money back for the service, then what is promised at the beginning is a money back guarantee.

[02:06:36] Speaker 06:
Am I right about that?

[02:06:37] Speaker 06:
I mean, that's what it is.

[02:06:38] Speaker 02:
Yes, that is what a contract is unless it's disclaimed otherwise.

[02:06:42] Speaker 06:
So you're saying that implicit in every contract is a money back guarantee.

[02:06:47] Speaker 06:
that unless you say otherwise, when you are making a promise in the context of a contract, you are guaranteeing that the person will get what is being discussed or they'll get their money back.

[02:07:00] Speaker 06:
There's never a world for you in which you could have a situation like the ones we discussed.

[02:07:06] Speaker 02:
No, unless it is disclaimed.

[02:07:09] Speaker 06:
And didn't they disclaim it in the context of the reservation of rights?

[02:07:13] Speaker 06:
No.

[02:07:14] Speaker 06:
No, they didn't.

[02:07:16] Speaker 02:
OK.

[02:07:16] Speaker 02:
No, and we dedicated a lot of briefing.

[02:07:17] Speaker 02:
I mean, we dedicated a lot of briefing to this and that the reservation is so vague, it would not even under under Williston on contracts.

[02:07:25] Speaker 02:
It is plainly unenforceable.

[02:07:27] Speaker 02:
I mean, they essentially say in that disclaimer that we can cancel this whenever we want.

[02:07:34] Speaker 02:
And that is not enforceable as a matter of contractual provisions.

[02:07:37] Speaker 02:
As I noted earlier, there are other schools that said if there is a pandemic, if there is a public health emergency,

[02:07:43] Speaker 02:
we will not perform under our in-person on-campus promise.

[02:07:47] Speaker 02:
That would be, they could do that, and the parties would have contracted for that, but they didn't.

[02:07:53] Speaker 06:
They'd have to say it at that level of detail.

[02:07:54] Speaker 06:
They couldn't say if it's necessary for us to change our programs.

[02:07:57] Speaker 02:
Yes, and back to my day of the week example, you can't say we are free to not perform under the contract on any day of the week we choose.

[02:08:06] Speaker 02:
If you aren't going to perform on Sundays because that's your holy day, then you're required to say in the contract, we will not perform on Sundays.

[02:08:15] Speaker 02:
If it simply says we will not perform on any day of the week of our choosing, we don't have a contract at all.

[02:08:21] Speaker 02:
We have an illusory agreement.

[02:08:25] Speaker 05:
Thank you.

[02:08:26] Speaker 05:
My colleagues have more questions for Mr. Wiley.

[02:08:29] Speaker 05:
Willie, sorry, is it Willie?

[02:08:31] Speaker 05:
Yes, that's quite right.

[02:08:33] Speaker 05:
No.

[02:08:34] Speaker 05:
All right.

[02:08:34] Speaker 01:
Thank you.

[02:08:35] Speaker 01:
I've enjoyed it here.

[02:08:36] Speaker 05:
Mr. Krosky, you started and now we'll let you finish your two minutes of rebuttal.

[02:08:42] Speaker 00:
Thank you, your honor.

[02:08:42] Speaker 00:
And I don't have too much to say above and beyond what Mr. Willie said, which, you know, by and large, we agree with him, co-counsel with Mr. Willie in multiple cases where we've passed the motion to dismiss stage on very similar allegations that we've presented here.

[02:08:57] Speaker 00:
But I think ultimately,

[02:08:58] Speaker 00:
You know, rule eight can be met even if it strikes a savvy judge that actual proof of the facts is unlikely.

[02:09:03] Speaker 00:
And we ultimately put all of the elements necessary to assert breach of contract claims.

[02:09:08] Speaker 00:
Issues associated with illegality, we maintain the position that that's issues of affirmative defense that ultimately involve fact issues that are appropriate for resolution on another day, not on whether we stated a basic claim for a breach of contract.

[02:09:22] Speaker 00:
We know we can because we have.

[02:09:24] Speaker 00:
in other cases as well on the same facts.

[02:09:28] Speaker 00:
And so we respectfully request that the court reverse the district courts with prejudice, dismissal of our contract and unjust enrichment claims and remand for further proceedings.

[02:09:38] Speaker 05:
Thank you and thanks.

[02:09:40] Speaker 05:
Do my colleagues have more questions?

[02:09:43] Speaker 05:
Thanks to everybody for thoughtful presentations and for the amount of time you devoted to this this morning.

[02:09:49] Speaker 05:
It's been helpful and the case is submitted.