pandemic education shutdowns allow unjust enrichment, not contract or false advertising claims

Yodice v. Touro College & Univ. Sys., 2025 WL 579957, No. 21cv2026 (DLC) (S.D.N.Y. Feb. 21, 2025)

Yodice sued Touro for reimbursement of tuition and fees he paid during the Spring 2020 semester, when Touro’s campuses were closed due to the COVID-19 pandemic. On remand, the court dismisses some of the claims. Touro has nearly 20,000 students across the United States and three other countries. The Touro system includes an online institution named Touro University Worldwide (TUW), which offers undergraduate and graduate degree programs.

Yodice alleged that TCDM markets various aspects of the on-campus student experience to the public. For example, its dental website says that students begin in the “dental simulation laboratory” and then “treat patients in our modern clinic.” The website also emphasizes the setting of TCDM’s Hudson Valley campus, which “attracts talented students who prefer a suburban lifestyle with easy access to the New York metropolitan area.” The campus’s location, the website explains, “provides students with numerous career, residency, clinical, and internship opportunities.” And various opportunities to work with local institutions “offer a chance for students to put their learning into practice, conduct research, or interact with patients and professionals in preparation for their future careers.”

Obviously, that didn’t happen through 2020. “Yodice left campus sometime in March. He did not have access to any of Touro’s facilities for the rest of the semester, and he was unable to experience the in-person academic, social, and professional interactions he would have had if not for the pandemic. Touro did not refund the tuition or fees paid by Yodice and other students who were unable to participate in in-person instruction or campus life for much of the Spring 2020 semester.”

Yodice alleged breach of contract, unjust enrichment, and consumer protection false advertising claims. The Second Circuit affirmed dismissal of his contract/unjust enrichment claims based on fees he paid, but reversed on tuition, concluding that the plaintiff “plausibly stated a claim for breach of an implied contract to recover tuition.” It likewise remanded for further consideration of the GBL false advertising claims.

The court here dismissed the contract and GBL claims, but allowed unjust enrichment to proceed as to those who paid tuition for the Spring 2020 semester at Yodice’s dental college.

Limiting the claim to that group: Yodice didn’t sufficiently allege that the other Touro schools were similar: “The FAC itself emphasizes the representations by specific Touro schools as to the quality of the on-campus experiences they offered. The only characteristic that the dozens of Touro schools around the world share is affiliation with the same corporate entity. And Yodice provides no reason to think he has anything in common with most of the class he seeks to represent except that they were, like him, students during the pandemic.”

Yodice argued that Touro’s class standing arguments would be properly handled in assessing the adequacy and commonality of the class representative and class pursuant to Rule 23(a), but “the independent requirement of class standing requires a connection between his claims and those of the class he seeks to represent even at the motion to dismiss stage.”

Breach of contract: dismissed because performance was impossible. “There is no dispute that holding in-person classes and other functions, as Yodice alleges was promised, would have been illegal.”

But that did mean that Yodice could proceed with his unjust enrichment claim seeking a prorated refund of the tuition he paid at the beginning of the semester. “To recover under a theory of unjust enrichment under New York law, a litigant must show that (1) the other party was enriched, (2) at that party’s expense, and (3) that it is against equity and good conscience to permit the other party to retain what is sought to be recovered.” He stated a claim by alleging Touro

retained his tuition even after providing a less valuable and less costly service than was expected when the parties entered their relationship. The FAC alleges essentially that the tuition was conferred under a mistake of fact -- that is, that in-person instruction would be possible. It plausibly alleges that Touro spent less money operating TCDM remotely than it would have on a normal, open physical campus. Whether equity and good conscience require a partial refund cannot be decided at this stage, but Yodice has sufficiently alleged that they do.

Unjust enrichment may be available where one party’s duty to perform is unenforceable due to impossibility. In Goldberg v. Pace Univ., 88 F.4th 204 (2d Cir. 2023), a similar unjust enrichment claim failed because an enforceable force majeure provision in the contract limited the defendant’s duties to provide in-person instruction. There, the plaintiff was attempting to circumvent the terms of the parties’ contract by alleging unjust enrichment. But here, the plaintiff has pled that Touro had a contractual duty to provide in-person instruction, but its performance was excused by the doctrine of impossibility. Fault is not necessary for “circumstances [to] create an equitable obligation running from the defendant to the plaintiff.”

GBL: Usually, the GBL is broader than contract law. But there was no false advertising here because no reasonable person would think that Touro had promised to provide in-person instruction regardless of what happened. “Yodice has not plausibly alleged that Touro’s representation of an on-campus experience was deceptive, or that a reasonable consumer would have understood it to mean that in-person instruction would continue even in a pandemic.” In summary, “Sections 34 9 and 350 are far-reaching, but they do not require businesses to append ‘unless impossible’ to the end of every advertisement.” Nor could this be characterized as a materially deceptive omission; there was no allegation that “Touro possessed some piece of material information at the beginning of the Spring 2020 semester unknown to its students that would have affected prospective students’ decision to attend the university.”