Martinez v. University of San Diego

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8 UNITED STATES DISTRICT COURT

9 SOUTHERN DISTRICT OF CALIFORNIA

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11 In re University of San Diego Case No.: 20cv1946-LAB-WVG

Tuitiion and Fees COVID-19

12 ORDER GRANTING IN PART

Refund Litigation

13 AND DENYING IN PART

MOTION TO DISMISS

14 PLAINTIFFS’ CONSOLIDATED

15 CLASS ACTION COMPLAINT

[Dkt. 33]

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This document relates to:

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All actions

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22 In February and March 2020, COVID-19 began spreading rapidly

23 throughout the United States. Plaintiffs Edgar Chavarria, Catherine Holden, Haley

24 Martinez, and Matthew Sheridan were enrolled for the Spring 2020 semester at

25 the University of San Diego (“USD” or the “University”) when the ubiquitous and

26 deleterious effects of the COVID-19 pandemic forced the University to cancel in-

27 person classes. USD required that all classes be taught remotely for the rest of

1 29, 2020 – with the pandemic still raging, USD cancelled all in-person classes for

2 the Fall 2020 semester. By the Spring 2021 semester, USD planned to resurrect

3 some in-person classes, only to shut these plans down again on February 12,

4 2021, when the COVID pandemic again surged.

5 Plaintiffs allege that these changes drastically affected their educational

6 experience: no in-person classes; fewer informal interactions with faculty and

7 other students; no science laboratories; no computer labs; no in-person health

8 services and counseling; and no athletic and recreational facilities. But at the time

9 of each cancellation announcement, Plaintiffs had already paid their tuition and

10 fees and USD refused to offer tuition refunds, although the University agreed to

11 refund some fees. In response, Plaintiffs filed suit on behalf of themselves and a

12 putative class. The Court consolidated the various individual actions into this one,

13 and Plaintiffs filed a Consolidated Class Action Complaint, asserting claims for

14 breach of contract, unjust enrichment, conversion, violation of California’s

15 Consumer Legal Remedies Act (“CLRA”), and violation of California’s Unfair

16 Competition Law (“UCL”). (Dkt. 30, “CCAC”). USD then moved to dismiss the

17 CCAC. (Dkt. 33).

18 The motion to dismiss is GRANTED IN PART. The Court finds that Plaintiffs’

19 quasi-contract claim is barred by the existence of a contract covering the same

20 subject matter; the economic loss doctrine bars their claim for conversion; they

21 don’t allege any false representations to support their CLRA claim; and they don’t

22 identify any unlawful, unfair, or fraudulent practice violating the UCL. The quasi-

23 contract claim and the conversion claim are DISMISSED WITH PREJUDICE. The

24 CLRA and UCL claims are DISMISSED WITHOUT PREJUDICE. The CCAC

25 properly states a claim for breach of contract, so as to that claim the Motion is

26 DENIED IN PART.

27 //

1 BACKGROUND

2 USD is a private university in San Diego, California. (CCAC ¶ 18).1 USD

3 students pay tuition and fees in exchange for educational services, use of

4 University facilities, and other supporting services. (See, e.g., id. ¶¶ 14, 24). Like

5 many businesses, USD attracts students by advertising the quality of its product.

6 Its marketing materials discuss, among other things: “direct access to [its] award-

7 winning faculty” in an “inspiring and intimate setting,” (id. ¶ 33); use of physical

8 facilities, including “high-tech” fitness centers (¶¶ 35, 42–44); student housing,

9 which it describes as giving “easy access to . . . professors [and] close proximity

10 to . . . classmates for study group sessions,” (id. ¶ 36); “[s]tudent organizations

11 [that] offer opportunities for leadership, personal growth, and recreation” and

12 “hands-on, real-world . . . experience” in certain fields, (id. ¶¶ 38, 39); on-campus

13 physical and mental health services, (id. ¶¶ 42, 45–46); and a “Learning

14 Commons” with modern designs, equipment, and technology to “enchance[]

15 collaborative learning experiences,” (id. ¶¶ 47–49).

16 During USD’s Spring 2020 term, each Plaintiff had enrolled as a USD

17 student and had paid tuition and fees. But the COVID-19 pandemic interrupted

18 their studies. (Id. ¶¶ 14–17, 54). On March 12, 2020, USD cancelled all classes

19 from March 14 through March 22, and informed students that all courses would

20 resume via remote teaching on March 23, 2020, through the end of the semester.

21 (Id. ¶ 57). Students living in student housing were directed to “relocate from

22 campus” by March 22, 2020. (Id.). USD also closed other facilities on its campus.

23 (See id. ¶ 61).

24 USD didn’t re-open for in-person instruction during the Fall 2020 term,

25 instead announcing less than a month before the start of that term that all classes

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27 1 For the purposes of a motion to dismiss under Rule 12(b)(6), the Court accepts

as true the well-pleaded factual allegations of the CCAC. South Ferry LP, No. 2

1 would continue to be taught online. (Id. ¶ 62). Although the University informed

2 students that it planned to resume some in-person instruction during the Spring

3 2021 term, on February 12, 2021, it changed course, announcing that all in-

4 person, on-campus classes and activities would cease. (Id. ¶ 65).

5 USD charged full tuition and fees for Spring 2020, providing only limited

6 refunds for certain fees. (See id. ¶ 14). It continued to charge full tuition for the

7 Fall 2020 and Spring 2021 terms. (See id. ¶¶ 5–6, 66). Plaintiffs contend that USD

8 acknowledged that online-only education wasn’t as valuable as an in-person

9 education by: (1) emphasizing the value of USD’s facilities and in-person

10 experiences through its marketing materials; (2) refusing to accept pre-pandemic

11 online credits as equivalent to in-person instruction; and (3) charging a reduced

12 price for the few courses that the University itself offered online before the

13 pandemic. (Id. ¶¶ 4, 30–31, 33–38, 42–49, 74). Nevertheless, USD rejected

14 claims for any refund of tuition or many of its fees students had paid. (Id. ¶¶ 14,

15 66, 129).

16 Plaintiffs’ operative pleading, the CCAC, asserts claims for breach of

17 contract, unjust enrichment, conversion, and violations of the California CLRA and

18 UCL. USD seeks dismissal of each of those claims under Fed. R. Civ. P. 12(b)(6).

19 STANDARD OF REVIEW

20 A Rule 12(b)(6) motion to dismiss calls for a preliminary evaluation of a

21 party’s pleading and tests only whether the pleading provides “a short and plain

22 statement of the claim showing that the pleader is entitled to relief, in order to give

23 the defendant fair notice of what the claim is and the grounds upon which it rests.”

24 Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal marks and

25 citation omitted). The required short and plain statement “does not need detailed

26 factual allegations,” only “factual allegations . . . enough to raise a right to relief

27 above the speculative level . . . on the assumption that all the allegations in the

1 draw all reasonable inferences in the plaintiff’s favor. Dahlia v. Rodriguez, 735

2 F.3d 1060, 1066 (9th Cir. 2013). Reasonable inferences are those with “plausible

3 grounds”—the complaint’s factual allegations must “raise a reasonable

4 expectation that discovery will reveal evidence” supporting that inference.

5 Twombly, 550 U.S. at 556.

6 Where a plaintiff’s claims sound in fraud, the heightened standard of Rule

7 9(b) applies. Vess v. Ciba–Geigy Corp. USA, 317 F.3d 1097, 1102 (9th Cir. 2003).

8 Rule 9(b) requires that “[i]n alleging fraud or mistake, a party must state with

9 particularity the circumstances constituting fraud or mistake.” To meet these

10 requirements, a complaint alleging fraud must be “specific enough to give

11 defendants notice of the particular misconduct which is alleged to constitute the

12 fraud charged so that they can defend against the charge and not just deny that

13 they have done anything wrong.” Semegen v. Weidner, 780 F.2d 727, 731 (9th

14 Cir. 1985); Vess, 317 F.3d at 1106 (“Averments of fraud must be accompanied by

15 ‘the who, what, when, where, and how’ of the misconduct charged.”) (internal

16 citation omitted). Because the CCAC’s CLRA and UCL claims sound in fraud, the

17 Court applies the heightened pleading standard to those claims.

18 DISCUSSION

19 I. The Educational Malpractice Doctrine Doesn’t Apply to Plaintiffs’

20 Claims

21 USD first argues that California’s educational malpractice doctrine bars

22 each of Plaintiffs’ claims. The Court disagrees. Under that doctrine, courts decline

23 to intervene in “the academic affairs of schools” unless the challenged decision is

24 “arbitrary and capricious, not based upon academic criteria, and the result of

25 irrelevant or discriminatory factors.” Banks v. Dominican College, 35 Cal. App. 4th

26 1545, 1551 (1995). They do so “because of the lack of a satisfactory standard of

27 care by which to evaluate [academic and disciplinary] decisions” or where a

1 of University of California, 156 Cal. App. 4th 809, 826 (2007). But “not all decisions

2 made by a university are pedagogical in nature.” McCarthy v. Loyola Marymount

3 Univ., No. CV 20-04668-SB (JEMx), 2021 WL 268242, at *3 (C.D. Cal. Jan. 8,

4 2021). California courts “have . . . not been hesitant to apply contract law [despite

5 the educational malpractice doctrine] when the educational institution makes a

6 specific promise to provide an educational service, such as . . . a failure to deliver

7 a promised number of hours of instruction.” Kashmiri, 156 Cal. App. 4th at 826.

8 In support of this proposition, the Kashmiri court cited with approval CenCor,

9 Inc. v. Tolman, 868 P.2d 396 (Colo. 1994), describing that case as holding that

10 the educational malpractice doctrine did not bar a breach of contract action “where

11 there were allegations that [the] school had made specific promises, such as

12 promises to provide modern, functioning equipment, computer training, and

13 qualified instructors, and did not do so.” Kashmiri, 156 Cal. App. 4th at 826. This

14 is, in effect, what Plaintiffs allege here: USD promised in-person instruction along

15 with access to physical resources, libraries, laboratories, computer laboratories;

16 Plaintiffs agreed to pay tuition and fees in reliance on those promises; and USD

17 failed to refund any tuition or fees when it became clear that it wouldn’t be able to

18 fully perform.

19 Many decisions applying California’s educational malpractice doctrine have

20 held the doctrine does not bar claims that a university promised in-person

21 instruction and access to physical resources and facilities but didn’t provide them

22 as a result of the COVID-19 pandemic. See, e.g., McCarthy, 2021 WL 268242;

23 Saroya v. Univ. of the Pacific, Case No. 5:20-cv-03196-EJD, 2020 WL 7013598

24 (N.D. Cal. Nov. 27, 2020); Verlanga v. Univ. of San Francisco, Case No. CGC-

25 20-584829, 2020 WL 7229855 (Cal. Super. Nov. 12, 2020); Grant v. Chapman

26 Univ., Case No. 30-2020-01146699-CU-BC-CXC, 2021 WL 684581 (Cal. Super.

27 Jan. 22, 2021); In re Univ. of Southern California Tuition and Fees COVID-19

1 Aug. 6, 2021); but see Abuelhawa v. Santa Clara Univ., No. 20-cv-04045-LHK,

2 2021 WL 1176689 (N.D. Cal. March 29, 2021); Lindner v. Occidental College, No.

3 CV 20-8481-JFW(RAOx), 2020 WL 7350212 (C.D. Cal. Dec. 11, 2020). The Court

4 agrees with these holdings and determines that the educational malpractice

5 doctrine does not bar Plaintiffs’ claims.

6 II. Plaintiffs Allege a Concrete and Particularized Injury

7 USD argues next that Plaintiffs lack Article III standing because they allege

8 “uncertain and speculative” damages. At the pleading stage, a plaintiff “must

9 clearly allege facts demonstrating” that he: (1) suffered an injury in fact; (2) that is

10 fairly traceable to the challenged conduct; and (3) that is likely to be redressed by

11 a favorable judicial decision. Spokeo, Inc. v. Robins, 785 U.S. 330, 338 (2016).

12 USD attacks the first element, arguing that the alleged injury isn’t “concrete and

13 particularized,” but is instead “inherently speculative” because “the Court has no

14 method to calculate the difference in value of a class offered online versus a class

15 offered in person.” (Dkt. 33-1 at 8–9); Spokeo, 785 U.S. at 339.

16 This argument misreads the standing requirements. A “concrete” injury must

17 merely be “real” and need not be “tangible.” Spokeo, 785 U.S. at 340. And a

18 “particularized” injury “must affect the plaintiff in a personal and individual way.”

19 Id. at 339. At this stage of the litigation, Plaintiffs don’t need to provide a “just and

20 reasonable damages model”—that isn’t required until the class certification stage.

21 (Dkt. 33-1 at 10); Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1433 (2013).

22 A plaintiff may satisfy the concrete and particularized harm standard by

23 alleging that he overpaid in a transaction, then offering evidence of the difference

24 between his payment and some measure of the true value of the purchase. See

25 Maya v. Centex Corp., 658 F.3d 1060, 1070 (9th Cir. 2011) (plaintiffs properly

26 alleged injury-in-fact by alleging that they overpaid for their homes). Plaintiffs have

27 met that pleading hurdle here: they allege that they paid for one package of

1 under the “actual and concrete economic injury” standard and qualifies as an

2 injury-in-fact for standing purposes. Id.

3 III. The CCAC States a Claim for Breach of Contract

4 Turning to the individual claims, USD argues that Plaintiffs’ breach of

5 contract claim fails because: (1) the CCAC doesn’t identify any specific breached

6 promises; (2) USD’s policy restricting refunds bars the claims; and (3) Plaintiffs

7 don’t allege that USD caused any damages. The Court disagrees with all three

8 arguments.

9 First, the University contends that the CCAC doesn’t point to an “identifiable

10 contractual promise that [USD] failed to honor.” (Dkt. 33-1 at 12, quoting Ross v.

11 Creighton Univ., 957 F.2d 410, 416–17 (7th Cir. 1992)). Under California law, a

12 private university can be liable for breach of a contract with its students if the

13 university “ma[de] a specific promise to provide an educational service,” but failed

14 to follow through. Kashmiri, 156 Cal. App. 4th at 826. Those promises don’t need

15 to be part of a formal agreement, but instead may be part of an implied-in-fact

16 contract “manifested by [the parties’] conduct.” Id. at 827. The Court need only be

17 able to reasonably infer a promise from the alleged conduct. Youngman v. Nevada

18 Irr. Dist., 70 Cal. 2d 240, 246–47 (1969).

19 Drawing all reasonable inferences in Plaintiffs’ favor, the CCAC alleges

20 sufficient conduct to establish promises forming implied-in-fact terms of the

21 parties’ contract. USD allegedly provided meeting times and physical locations for

22 its courses in a catalogue that it encouraged students to rely on as the “official

23 record,” (CCAC ¶¶ 27–29); touted the benefits to students of its policy requiring

24 certain faculty to be physically present for office hours, (id. ¶ 30); and advertised

25 the “general availa[bility]” of “[a]ll University facilities,” including specifically

26 identified facilities, and “tutoring and support services . . . on campus.” (Id. ¶¶ 35,

27 44, 47–49). These aren’t “mere[] . . . invitations to bargain,” as USD insists. (Dkt.

1 Instead, USD offered these specific benefits in exchange for enrollment and

2 payment of tuition, which Plaintiffs accepted through performance, only to have

3 them terminated when the pandemic caused the University to shut-down in-

4 person services. This is enough to allege conduct establishing an enforceable

5 implied-in-fact contract. See Kashmiri, 156 Cal. App. 4th at 826.

6 Nevertheless, USD insists, it didn’t breach any promises to provide

7 “exclusively in-person instruction and access to facilities.” (Dkt. 33-1 at 13). But

8 the keystone of an implied-in-fact contract is the parties’ reasonable expectations

9 at the time of contracting. Kashmiri, 156 Cal. App. 4th at 831–32. Even looking

10 beyond the nonsensical implication that a reasonable prospective student might

11 understand USD’s promises to incorporate remote “access” to a fitness center,

12 science and computer laboratories, and study rooms, (see CCAC ¶¶ 44, 54), a

13 student would also reasonably understand USD’s promises of these benefits

14 would apply during the entire school term.

15 USD also fails to show that its refund policies bar Plaintiffs’ claims. Under

16 USD’s policies, “[f]ees and deposits are non-refundable,” and “[t]uition is fully or

17 partially refundable only when a student withdraws officially during the published

18 refund withdrawal schedule.” (Dkt. 33-2, Ex. A at 9). As to both policies, USD

19 doesn’t provide any California or Ninth Circuit authority for the proposition that a

20 refund policy can be used to excuse non-performance under contract law. Its

21 citation to Zwiker v. Lake Superior State Univ., Case No. 20-000070-MK, 2020

22 WL 8572097 (Mich. Ct. Cl. Oct. 20, 2021), a Michigan state court case applying

23 Michigan law, isn’t persuasive. In that case, the court rejected the plaintiff’s breach

24 of contract claims not because of a refund policy, but because the plaintiff failed

25 to allege any failure to perform. Id. at *4–5. Moreover, by its terms USD’s tuition

26 refund policy is inapposite because it applies “only when a student withdraws

27 officially during the published refund withdrawal schedule,” contemplating a

1 2021 WL 268242 at *4.

2 Finally, the CCAC successfully pleads that USD caused Plaintiffs’ injury.

3 The injury must be “proximately caused by” USD’s breach. Vu v. Cal. Comm. Club,

4 Inc., 58 Cal. App. 4th 229, 233–34 (1997). That is, the breach, “in the natural and

5 continuous sequence, unbroken by any efficient intervening cause,” must have

6 “produced the injury.” State of Cal. Superior Court, 150 Cal. App. 3d 848, 857

7 (1984). But an intervening cause must “come[] between the initial event in a

8 sequence and the end result.” Cause, Black’s Law Dictionary (9th Ed. 2009).

9 Here, Plaintiffs allege that the breach was USD’s decision to keep their tuition and

10 fee payments. COVID-19 and the related government orders preceded the

11 breach, so those events didn’t break the causal chain between the alleged breach

12 and injury.

13 The CCAC successfully states a claim for breach of contract, so the Motion

14 is DENIED as to that claim.

15 IV. Plaintiffs Fail to Allege a Quasi-Contract Claim for Restitution

16 Plaintiffs style their next claim as “unjust enrichment.” (CCAC ¶¶ 117–23).

17 Under California law, “‘unjust enrichment’ is synonymous with ‘restitution,’” which

18 is a remedy, not a claim. Astiana v. Hain Celestial Group, Inc., 783 F.3d 753, 762

19 (9th Cir. 2015). But this isn’t a substantive issue warranting dismissal: Courts

20 routinely construe claims pled as “unjust enrichment” to be actions in quasi-

21 contract for restitution. Id. Because the parties understand the nature of the claim,

22 the way it is titled amounts to only a semantic issue. The Court construes the claim

23 as seeking restitution in quasi-contract.

24 But the CCAC can’t state such a claim. Although a party “may state as many

25 separate claims . . . as it has, regardless of consistency,” Fed. R. Civ. P. 8(d)(3),

26 courts may dismiss quasi-contract claims where the parties agree that they had a

27 binding contract covering the benefit that the plaintiff seeks to have returned. See,

1 contract claim exists where, “for reasons of justice . . . the law implies an obligation

2 to pay.” Weitzenkorn v. Lesser, 40 Cal. 2d 778, 794 (1953). “[T]here is no

3 equitable basis [under California law] for an implied-in-law promise to pay

4 reasonable value when the parties have an actual agreement covering

5 compensation.” Id. (quoting Hedging Concepts, Inc. v. First Alliance Mortgage

6 Co., 41 Cal. App. 4th 1410, 1420 (1996)).

7 The parties agree that Plaintiffs paid their tuition and fees pursuant to an

8 agreement covering that compensation. If that agreement required USD to

9 perform in ways that it didn’t, Plaintiffs’ recourse is in contract. If the agreement

10 didn’t require USD to do those things, the Court can’t augment the contract by

11 finding that a second contract involving the same compensation was implied-in-

12 law. The CCAC’s claim for unjust enrichment is DISMISSED WITH PREJUDICE.

13 V. The CCAC Fails to State a Claim for Conversion

14 Plaintiffs likewise fail to state a claim for conversion. “Money cannot be the

15 subject of a cause of action for conversion unless there is a specific, identifiable

16 sum involved, such as where an agent accepts a sum of money to be paid to

17 another and fails to make the payment.” McKell v. Washington Mut., Inc., 142 Cal.

18 App. 4th 1457, 1491 (2006). “[T]he simple failure to pay money owed does not

19 constitute conversion.” Voris v. Lampert, 7 Cal. 5th 1141, 1152 (2019) (cleaned

20 up). Successful conversion claims “typically involve those who have

21 misappropriated, commingled, or misapplied specific funds held for the benefit of

22 others.” Id. (cleaned up).

23 That’s not what Plaintiffs allege here. They allege that they paid USD money

24 in exchange for services that were only partially rendered. (CCAC ¶¶ 125–27).

25 They don’t seek recovery of their tuition and fees in their entirety—which could

26 constitute a specific and identifiable sum—but only some unspecified proportion

27 of those amounts representing the difference in value between the services they

1 of the tuition, fees, and other related payments for . . . services . . . for which they

2 paid that USD did not provide”); id. ¶ 13 (“Plaintiffs seek . . . a return of a prorated

3 portion of [their payments] proportionate to the diminished value of online

4 classes.”); id. ¶ 132 (seeking return of “such monies had and received for which

5 the benefit was not provided”)).

6 Plaintiffs can’t point to a specific and identifiable sum that USD allegedly

7 converted because, as they concede, USD provided some services with non-

8 specific value in exchange for Plaintiffs’ tuition and fees. For this reason, the

9 CCAC can’t state a claim for conversion, so that claim is DISMISSED WITH

10 PREJUDICE.

11 VI. Plaintiffs Fail to State a Claim under CLRA

12 Plaintiffs’ fourth cause of action relies on the Consumer Legal Remedies

13 Act, Cal. Civ. Code §§ 1750–1785. A pleading seeking to state a claim under the

14 CLRA must meet the heightened standard of Rule 9(b) and allege violative

15 conduct causing damage to the claimant. Kearns v. Ford Motor Co., 567 F.3d

16 1120, 1127–28 (9th Cir. 2009); Cal. Civ. Code § 1780(a). As relevant here,

17 violative conduct includes “[r]epresenting that . . . services have . . .

18 characteristics . . . that they do not have,” Cal. Civ. Code § 1770(a)(5), and

19 “[r]epresenting that . . . services are of a particular standard, quality, or grade . . .

20 if they are another.” Cal. Civ. Code § 1770(a)(7). Plaintiffs must also allege that a

21 defendant was aware that its representations were false at the time of sale. See

22 Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1145 (9th Cir. 2012).

23 USD argues that the CCAC fails to allege any actionable

24 misrepresentations. Plaintiffs counter that two sets of alleged representations

25 match the descriptions of Cal. Civ. Code §§ 1770(a)(5) and (7). One consists of

26 the pre-pandemic representations that form the basis of Plaintiffs’ contract claim.

27 But Plaintiffs don’t allege that USD knew that COVID-19 would render those

1 the time they were made. See Wilson, 668 F.3d at 1145. It isn’t enough to allege

2 that USD made promises it believed it could keep, but proved unable to, so those

3 allegations can’t support Plaintiffs’ CLRA claim.

4 The second set of representations includes USD’s purported promises to

5 conduct classes in person for the Spring 2021 semester. While the specific

6 content of these statements isn’t alleged, Plaintiffs ask the Court to take judicial

7 notice of them to satisfy Rule 9(b)’s heightened pleading standard. (See Dkt. 37

8 at 18 n.13). USD doesn’t oppose this request, so the Court grants it but

9 nonetheless finds the statements insufficient to support the CLRA claim.

10 USD stated:

11 • On December 18, 2020, USD’s “current plan for the spring [2021]

12 semester,” was a “modest increase to [its] offerings for in-person

13 instruction” with “most classes [to] be delivered remotely . . . . [W]e

14 continue to follow federal, state, and county guidelines.” (Dec. 18,

15 2020 Announcement, https://blue.sandiego.edu/emails/departments/

16 provost/spring-semester21-update.php).

17 • On January 8, 2021, “San Diego County remains in . . . the most

18 restrictive level of California’s COVID-19 risk-ranking system. Among

19 other restrictions, the Purple Tier does not permit in-person lectures

20 or student gatherings at universities, yet some courses conducted in

21 certain indoor settings . . . may be open. . . . We will begin the spring

22 semester with remote instruction only. Our intent is to move to our

23 hybrid academic model when state recommendations and county

24 orders permit us to do so.” Jan. 8, 2021 Announcement,

25 https://blue.sandiego.edu/onward/2021/spring-semester-updates-

26 2021-01-08.html).

27 Importantly, Plaintiffs don’t allege that these statements were inaccurate.

1 “continue to follow federal, state, and county guidelines.” (Dec. 18, 2020

2 Announcement, https://blue.sandiego.edu/emails/departments/provost/spring-

3 semester21-update.php). Those guidelines had recently included orders directing

4 Californians to stay at home “except as needed to maintain continuity of . . . federal

5 critical infrastructure sectors.” (See Dkt. 33-2 Ex. E).2

6 The second statement likewise doesn’t amount to a representation that

7 USD’s classes would be held in-person. While it stated that “some courses

8 conducted in certain indoor settings . . . may be open” despite the current level of

9 restriction, it clarified that USD would “begin the spring semester with remote

10 instruction only.” The statement also made clear that holding any in-person

11 classes was subject to “state recommendations and county orders” beyond USD’s

12 control. (Jan. 8, 2021 Announcement, https://blue.sandiego.edu/onward/2021/

13 spring-semester-updates-2021-01-08.html). Again, these statements weren’t

14 false because they didn’t amount to a representation that classes would be held

15 in-person; rather, USD told Plaintiffs that it would begin the semester holding all

16 classes remotely and that it “may” open some classes to in-person instruction

17 when legally permitted.

18 Because the CCAC doesn’t allege any “[r]epresent[ations] that . . . [USD’s]

19 services [had]. . . characteristics . . . that they [did] not have [or] . . . [were] of a

20 particular, standard, quality, or grade . . . [but were] another,” Cal. Civ. Code

21 §§ 1770(a)(5), (a)(7), it doesn’t allege a violation of those sections of the CLRA.

22 That claim is DISMISSED WITHOUT PREJUDICE.

23 VII. The CCAC Fails to State a UCL Claim

24 USD last argues that Plaintiffs aren’t entitled to any relief under California’s

25 Unfair Competition Law because they have failed to allege that USD engaged in

26 an “unlawful, unfair, or fraudulent” act or practice. Cal. Bus. & Prof. Code § 17200.

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2 The Court takes judicial notice of this document at Defendants’ request and

1 The UCL’s “larger purpose” is “protecting the general public against unscrupulous

2 business practices,” and courts must construe it accordingly. In re Tobacco II

3 Cases, 46 Cal. 4th 298, 312 (2009). Following this construction, the Court holds

4 that the CCAC doesn’t allege any conduct that violates the UCL.

5 The parties agree that the “unlawful” prong is fulfilled only if the CCAC states

6 a claim under CLRA. (See Dkt. 37 at 24; CCAC ¶ 144; Dkt. 33-1 at 24 (citing

7 Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1143 (2003)).

8 Because it doesn’t, Plaintiffs haven’t stated a UCL claim under the “unlawful”

9 prong.

10 The CCAC bases its contention that USD’s conduct was “fraudulent” on

11 USD’s representations regarding the services it would offer. (CCAC ¶¶ 146, 148).

12 These statements weren’t fraudulent within the meaning of the UCL. Although

13 common law fraud requires allegations that a statement be “actually false, known

14 to be false by the perpetrator and reasonably relied upon by a victim who incurs

15 damages,” “[n]one of these elements are required to state a claim for injunctive

16 relief under the UCL.” In re Tobacco II Cases, 46 Cal. 4th at 312. Instead, “it is

17 necessary only to show that members of the public are likely to be deceived.” Day

18 v. AT&T Corp., 63 Cal. App. 4th 325, 332 (1998). Nevertheless, the statements

19 must amount to an “unscrupulous practice.” In re Tobacco II Cases, 46 Cal. 4th

20 at 312. Interpreting this requirement consistently with the statutory purpose of

21 protecting the public against unscrupulous practices, the Court finds that USD’s

22 alleged statements were not fraudulent. As discussed above, the CCAC doesn’t

23 allege that USD knew or had any way of knowing that the COVID-19 pandemic

24 would interfere with its ability to keep any pre-pandemic promises. And the

25 University’s December 2020 and January 2021 statements were sufficiently

26 qualified that they weren’t likely to deceive members of the public regarding the

27 University’s ability to provide in-person instruction and activities during the Spring

1 Finally, though Plaintiffs contend that the “unfair” prong is fulfilled both by

2 ||USD’s representations regarding its services and the University’s “systematic[]

3 ||breach[es]” of their contracts with Plaintiffs, these both effectively amount to a

4 single practice: USD’s alleged failure to follow through on its promises. (CCAC

5 ||145—46). But federal courts in the Ninth Circuit have held that, “where the unfair

6 || business practices alleged under the unfair prong of the UCL overlap entirely with

7 ||the business practices addressed in the fraudulent and unlawful prongs of the

8 UCL, the unfair prong of the UCL cannot survive if the claims under the other two

9 || prongs of the UCL do not survive.” NorthBay Healthcare Grp. - Hosp. Div. v. Blue

10 || Shield of California Life & Health Ins., 342 F. Supp. 3d 980, 988-89 (N.D. Cal.

11 ||2018); see also Hadley v. Kellogg Sales Company, 243 F. Supp. 3d 1074, 1104

12 ||(N.D. Cal. 2017). Because the Court already determined that USD’s statements,

13 ||as alleged, were neither unlawful nor fraudulent, the Court won't expand the

14 ||meaning of those two terms by deeming the statements unfair.

15 The CCAC doesn't allege any unlawful, unfair, or fraudulent acts or

16 || practices, so its UCL claim is DISMISSED WITHOUT PREJUDICE.

17 CONCLUSION

18 The Motion to Dismiss is GRANTED IN PART AND DENIED IN PART. The

19 ||facts alleged in the CCAC preclude recovery for unjust enrichment or conversion,

20 |/so those claims are DISMISSED WITH PREJUDICE. Plaintiffs don’t allege

21 ||sufficient facts to support their CLRA and UCL claims, which are DISMISSED

22 WITHOUT PREJUDICE.

23 IT IS SO ORDERED.

24

95, || Dated: March 30, 2022 bi uf A. ‘by WY

26 Hon. Larry Alan Burns

United States District Judge

28