DOUGHERTY et al v. DREW UNIVERSITY

Filing 31

OPINION. Signed by Judge Kevin McNulty on 6/7/21. (jc, )

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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CRISTA and ANGEL DOUGHERTY,
individually and on behalf of all
others similarly situated,
Plaintiffs,
v.

Civ. No. 21-00249 (KM) (ESK)
OPINION

DREW UNIVERSITY,
Defendant.
KEVIN MCNULTY, U.S.D.J.:
Angel Dougherty, previously an undergraduate at Drew University, and
her mother, Crista Dougherty, sued the University based on its conversion
from in-person to virtual education in response to COVID-19. I dismissed the
Doughertys’ claims seeking to recover tuition, predicting that New Jersey
courts would apply a deferential standard, under which the Doughertys had
not stated a claim. (DE 17, 18.)1 See also Dougherty v. Drew Univ., Civ. No. 21249, 2021 WL 1422935 (D.N.J. Apr. 14, 2021). I do not repeat the reasoning of
that Opinion, which is incorporated by reference. The Doughertys move for
reconsideration. (DE 21.) For the following reasons, the motion is DENIED.
The plaintiff’s disappointment is completely understandable. Still, though
the matter is not free from doubt, my prior decision remains my best prediction
of what the New Jersey Supreme Court would do if confronted by the issues
here.

1

Certain citations to the record are abbreviated as follows:
DE = docket entry
Compl. = Complaint (DE 1-2)
Mot. = Doughertys’ Brief in Support of Motion for Reconsideration (DE 21-1)

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I.

BACKGROUND
Angel2 was an undergraduate student in Spring 2020 at Drew University,

a private institution. (Compl. ¶¶ 13–14.) Her course of study, art, relies on inperson instruction. (Id. ¶ 13.) Crista financed Angel’s semester, including
tuition and certain fees. (Id. ¶¶ 14, 21.)
In response to the COVID-19 pandemic, and in March 2020, the
University transitioned courses to a virtual-instruction format. (Id. ¶¶ 33–34.)
This instruction allegedly was not “equivalent” to in-person instruction. (Id.
¶¶ 37–38.) Further, the Academic Catalog stated that many courses would
encompass in-person activities, which virtual instruction has not provided. (Id.
¶¶ 25–32, 34.) The Catalog contains a “reservation of rights” that allows the
University to make changes to academic programs.
The Doughertys sued the University in New Jersey Superior Court,
seeking to represent a class of similarly situated plaintiffs. (Id. ¶ 40.) The
Complaint asserts claims for (1) breach of contract, (2) unjust enrichment,
(3) conversion, and (4) money had and received. (Id. ¶¶ 53–88.) The University
removed the case to this Court and moved to dismiss. (DE 1, 6.)
As relevant here, I dismissed the breach of contract claim seeking
tuition.3 Dougherty, 2021 WL 1422935, at *3–8. For that ruling I gave two
reasons.
First, after surveying New Jersey case law, I predicted that the
appropriate standard for the claim would be that outlined in Beukas v. Board
of Trustees of Fairleigh Dickinson University (Beukas I), 605 A.2d 776 (N.J.
Super. Ct. L. Div. 1991). Id. at *4–5. Under that standard, “I review ‘the bona
fides of the [University’s] decisionmaking and the fairness of its
implementation.’ In doing so, I pay close attention to whether that decision was

Because the plaintiffs share the same last name, I refer to them by their first
names, intending no disrespect.
2

The Doughertys do not move for reconsideration of the any other aspect of the
Court’s decision. (Mot. at 2 n.1.)
3

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arbitrary, made in bad faith, or lacking in fair notice.” Id. at *6 (quoting Beukas
I, 605 A.2d at 785). I concluded that the Complaint failed to allege facts that
could plausibly overcome this standard because (1) the campus closure was
due to a pandemic and governmental mandates, and (2) the Complaint failed to
identify reasonable alternatives. Id. at *6–7.
Second, and in the alternative, I ruled that “even if the Doughertys could
pursue a contract claim based on the Academic Catalog, it would fail because
the Catalog contained a reservation of rights that authorized the University’s
response to the pandemic.” Id. at *7. Here, I relied on the Appellate Division’s
affirmance of Beukas I, which relied on a nearly identical provision. Id. (citing
Beukas v. Bd. of Trs. of Fairleigh Dickinson Univ. (Beukas II), 605 A.2d 708,
708–09 (N.J. Super. Ct. App. Div. 1992) (per curiam)).
The Doughertys now move for reconsideration. (Mot.)
II.

STANDARD OF REVIEW
In the District of New Jersey, motions for reconsideration are governed by

Local Civil Rule 7.1(i). Reconsideration is an “extraordinary remedy” granted
“sparingly.” NL Indus. Inc. v. Com. Union Ins. Co., 935 F. Supp. 513, 516 (D.N.J.
1996). Generally, reconsideration is granted in three scenarios: (1) when there
has been an intervening change in the law; (2) when new evidence has become
available; or (3) when necessary to correct a clear error of law or to prevent
manifest injustice. See N. River Ins. Co. v. CIGNA Reins. Co., 52 F.3d 1194,
1218 (3d Cir. 1995); Max’s Seafood Café ex rel. Lou-Ann, Inc. v. Quinteros, 176
F.3d 669, 677 (3d Cir. 1999). “The Court will grant a motion for reconsideration
only where its prior decision has overlooked a factual or legal issue that may
alter the disposition of the matter.” Andreyko v. Sunrise Sr. Living, Inc., 993 F.
Supp. 2d 475, 478 (D.N.J. 2014).
III.

DISCUSSION
The Doughertys advance two reasons for reconsideration: (1) Beukas is

inapposite, and (2) a subsequent New Jersey trial court opinion supports their
claims. Neither reason is persuasive. I also discuss two relevant decisions from

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judges in this District, both issued after I filed my Opinion. Neither, I find, is
sufficient to require reconsideration.
A. Beukas
The Doughertys argue that my reliance on Beukas was misplaced
because that case is distinguishable. But “arguments that were available at the
time of the original decision will not support a motion for reconsideration.”
Santiago v. Cavalry Portfolio Servs., LLC, Civ. No. 15-8332, 2018 WL 6831112,
at *1 (D.N.J. Dec. 21, 2018). Beukas was decided nearly three decades ago, so
any arguments regarding its applicability belonged in their opposition to the
University’s motion to dismiss. I nevertheless address the Doughertys’
arguments.
Beukas and its progeny, “though far from a perfect fit, represent the
most analogous New Jersey case law.” Dougherty, 2021 WL 1422935, at *5. My
task was to identify how the New Jersey Supreme Court would rule, and
Beukas provided the best data point for that prediction. Id. at *5 n.4. They cite
certain factual differences between that case and this, but they do not
undermine the holding of Beukas. See Alexander v. Sandoval, 532 U.S. 275,
282 (2001) (“[T]his Court is bound by holdings, not language.”).
First, the Doughertys acknowledge that Beukas held that a course
catalog could not be construed as a traditional contract, but theyargue that it
did so because the documents construed in that case spoke in broad language.
By contrast, they say, the Academic Catalog here contained specific promises,
so Beukas’s reluctance to apply traditional contract principles should not
apply. (Mot. at 3–4.) The holding of Beukas, however, did not rest on the level of
specificity of the university’s written representations. Beukas, relying on
principles of justice and public policy, held that the contract between student
and university was not a traditional written contract, but one of general
application, implied in law: “The true university-student contract is one of
mutual obligations implied, not in fact, but by law . . . without regard to
expressions of assent by either words or acts.” Beukas I, 605 A.2d at 783–84

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(emphasis added) (quotation marks and citation omitted). Further, that court
specifically eschewed traditional contract law and gave its reasons, which did
not have to do with specificity: its approach, said Beukas, “will produce a more
legally cohesive body of law than will application of classic contract doctrine.”
Id. at 784. Thus, the court’s rejection of traditional contract principles was well
considered as a matter of legal doctrine and is entitled to deference as a
statement of New Jersey law.4
Next, the Doughertys argue that I overlooked their allegations of bad
faith. (Mot. at 5–8.) To start, they say that keeping tuition for “services [the
University] failed to provide” is bad faith. (Mot. at 5 (quoting Compl. ¶ 11).) This
is little more than a restatement of the claim itself, and I addressed it in my
earlier opinion: “[I]t is not as if the University simply defaulted on its
educational obligations. Rather, the University tried its best to provide students
with an education, albeit in a different format. The Doughertys may contend
that such a format was not worth the same tuition money, but Beukas affords
the University some leeway.” Dougherty, 2021 WL 1422935, at *7.
As another example of bad faith, the Doughertys cite the University’s
failure to provide advance notice of the transition to virtual education, which,
they say, distinguishes this case from Beukas. (Mot. at 6–7.) They fault the
University for failing to notify them ahead of time of how it would respond to a
once-in-a-century global pandemic. Suffice it to say that businesses,
educational institutions, and government offices, worldwide, shut down inperson operations on an emergent basis. Few prophesied such a situation, and
the University’s failure to do so does not evince bad faith.
And, of course, if the Catalog were treated as a traditional contract, then it
would be construed as a whole, including the reservation of rights.
4

Regardless, the Doughertys’ argument from Beukas is questionable. The
plaintiffs there wanted to enforce a contract “as reflected in the annual bulletins
issued by the University . . . , as well as other publications of the university which
they assert are ‘the controlling documents in their contractual relationship.’” Beukas I,
605 A.2d at 779. It is hard to say that the “contract” the Doughertys point to, which is
based on similar materials, is significantly more specific.

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As a final example of bad faith, the Doughertys argue that, unlike the
institutions in Beukas or its progeny, Drew University did not provide
alternatives to a virtual education, such as a transfer to another university.
But the Complaint never alleges that such alternatives were reasonably
available. See Pa. ex. rel Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 181 (3d Cir.
1988) (“It is one thing to set forth theories in a brief; it is quite another to make
proper allegations in a complaint.”). Even indulging the Doughertys now, their
proposed alternatives are not plausible. They have not identified, nor am I
aware of, any nearby or comparable university to which a student could have
transferred that was not likewise closed for in-person operations.
A second such alternative, plaintiffs argue, would be a grant of a tuition
rebate. As to the reasonableness of rebates, the Beukas standard allows only
the most deferential inquiry. Placing a dollar amount on the difference in value
between an in-person and virtual education is precisely the type of probing
inquiry New Jersey courts are admonished to avoid. Dougherty, 2021 WL
1422935, at *6–7; see also Gourdine v. Felician Coll., No. A-5248-04T3, 2006
WL 2346278, at *5 (N.J. Super. Ct. App. Div. Aug. 15, 2006) (per curiam)
(rejecting claims for a tuition rebate). I cannot say that these allegations
establish a case, overlooked in my prior Opinion, that the University’s course of
action was pursued arbitrarily or in bad faith.
Finally, the Doughertys argue that the Academic Catalog’s reservation of
rights is unenforceable because it does not specifically notify students that inperson classes might move online halfway into the semester. (Mot. at 8–9.) As
discussed in my earlier opinion, this reservation of rights is nearly identical to
the one in Beukas, which the New Jersey courts held was enforceable. Beukas
II, 605 A.2d at 708–09. Here, the Doughertys would graft a specificity
requirement onto the reservation of rights, one which Beukas itself never

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imposed.5 Any reasonable reading of the reservation of rights covers the events
here. Dougherty, 2021 WL 1422935, at *7.
***
In sum, the Doughertys provide no persuasive argument that this Court
misapplied Beukas, and certainly no reason that is newly available to them.
B. Quiroz v. Rider University
As a second basis for reconsideration, the Doughertys argue that a
subsequent state trial court decision in Quiroz v. Rider University, No. 1982-20
(N.J. Sup. Ct. L. Div.), supports them. (Mot. at 10.) There, the New Jersey
Superior Court, Law Division, denied a motion to dismiss similar claims,
explaining in an oral decision that (1) Beukas supplied the correct standard,
and (2) factual development was needed. (DE 30-1.)
Quiroz does not help the Doughertys, for two reasons. First, as a state
trial-court opinion, Quiroz is not controlling. Ryu v. Bank of Hope, Civ. No. 1918998, 2021 WL 50255, at *5 n.7 (D.N.J. Jan. 6, 2021) (citations omitted).
Second, Quiroz’s reasoning is inapplicable. Quiroz, while starting from the same
Beukas-based legal premises, applied the liberal New Jersey motion-to-dismiss
standard. The standard I must apply is different and more demanding. Ocean
City Exp. Co. v. Atlas Van Lines, Inc., Civ. No. 13-1467, 2013 WL 3873235, at
As support for their specificity requirement, the Doughertys cite a footnote in
Behne v. Union County College, Civ. No. 14-6929, 2018 WL 566207, at *1 n.2 (D.N.J.
Jan. 26, 2018). There, however, the defendant college was claiming that that a
handbook’s provision that it was “subject to change” constituted a broad “disclaimer”
that rendered the handbook nonbinding. That language, Judge Vazquez wrote, did not
“constitute a sufficient disclaimer as to the applicability of the handbooks,” “instead it
merely indicates that [the college] may change the contents of the handbooks in the
future.” Id. (emphases added).
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The language from Drew’s Catalog is different. As noted in my earlier Opinion, it
grants the University not merely the right to amend a handbook in the future, but the
right to adapt its courses of instruction to circumstances: It reserves “the right in its
sole judgment to make changes of any nature in the University’s academic program,”
including the “elimination” of “programs” and “the modification of [course] content.”
Moreover, “the University may require or afford alternatives for scheduled
classes . . . as is reasonably practical under the circumstances.”

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*4 n.3 (D.N.J. July 25, 2013); Crozier v. Johnson & Johnson Consumer Cos.,
901 F. Supp. 2d 494, 500 (D.N.J. 2012). In New Jersey court, the complaint
“must be searched thoroughly ‘and with liberality to ascertain whether the
fundament of a cause of action may be gleaned even from an obscure
statement of claim.” Baskin v. P.C. Richard & Son, LLC, --- A.3d ----, ----, No.
084257, 2021 WL 1773704, at *7 (N.J. May 5, 2021) (quoting Printing MartMorristown v. Sharp Elecs. Corp., 563 A.2d 31, 34 (N.J. 1989)). Courts only
dismiss claims in “the rarest of instances” when no allegations would support
relief. Printing Mart, 563 A.2d at 48. In federal court, however, a pleading must
set forth allegations that make a right to relief plausible. Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). New
Jersey courts continue apply a standard which resembles the “any set of
circumstances” standard overruled by Twombly and Iqbal.
As a result, Quiroz’s conclusion that the plaintiffs were entitled to go
forward on the issue of bad faith is not applicable here. In federal court, a
pleading cannot “unlock the doors of discovery” without plausible, factual
allegations of bad faith. Iqbal, 556 U.S. at 678. This Complaint does not
provide any. Accordingly, Quiroz does not require reconsideration of my
Opinion.
C. Subsequent Opinions
I round out the discussion with recent cases in this District Court that
have addressed similar claims. Although not binding, decisions from federal
courts interpreting state law are appropriate for a court sitting in diversity to
consider. See Lupu v. Loan City, LLC, 903 F.3d 382, 389 (3d Cir. 2018). I will
therefore assume that such decisions could represent an intervening change in
law sufficient to require reconsideration if a persuasive consensus had emerged
that ran counter to my own view.
In the first opinion, Mitelburg v. Stevens Institute of Technology, Judge
Wigenton agreed with my Opinion in full, rejected similar arguments for the
same reasons I gave, and dismissed tuition claims while keeping fee claims, as

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I did. Civ. No. 21-1043, 2021 WL 2103265, at *3–5 (D.N.J. May 25, 2021).
Mitelburg thus provides no basis for reconsideration.
In the second opinion, Fittipaldi v. Monmouth University, Judge Shipp
agreed that Beukas provided the right standard: essentially, whether the facts
as alleged rose to the level of bad faith or unfair dealing by Monmouth
University. Civ. No. 20-5526, 2021 WL 2210740, at *9 (D.N.J. June 1, 2021).
Judge Shipp held, however, that those plaintiffs had alleged enough facts to
state such a claim of bad faith and arbitrariness. There, the plaintiffs alleged
that, to reflect the transition to remote instruction, the university reduced the
cost per credit for summer courses by 15%. Id. That fact raised an inference
that the university “itself recognizes that remote learning options are not the
equivalent to an in-person experience” yet declined to provide an equivalent
refund for the spring semester. Id. (quoting complaint). In other words, and in
the words of Beukas, the university acted arbitrarily by reducing costs for
remote courses for one semester but not for another. The Doughertys allege no
such facts here, so Fittipaldi does not help them.
As for this Court’s alternative basis for decision—i.e., the Catalog’s
reservation of rights—Judge Shipp noted potential distinctions between the
Monmouth and Drew provisions, but declined to reach the issue:
The Court notes that Monmouth’s reservation of rights provision
differs from Drew’s. Monmouth’s provision states, “Monmouth
University has provided the following information to the public.
The information provided herein does not provide an irrevocable
contract between Monmouth University and the student. The
University reserves the right to alter any policy, procedure.,
curricular information, facts, and/or fees without any prior notice
or liability.” (ECF No. 24-3 at *8.) Drew’s provision states:
The University reserves the right in its sole judgment to
make changes of any nature in the University's academic
program, courses, schedule, or calendar whenever in its sole
judgment it is deemed desirable to do so. The foregoing
changes may include, without limitation, the elimination of
colleges, schools, institutes, programs, departments, or
courses, the modification of the content of any of the
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foregoing, the rescheduling of classes, with or without
extending the enhanced academic term, the cancellation of
scheduled classes, or other academic activities. If such
changes are deemed desirable, the University may require or
afford alternatives for scheduled classes or other academic
activities. If such changes are deemed desirable, the
University may require or afford alternatives for scheduled
classes or other academic notification of any such change as
is reasonably practical under the circumstances.
(21-249 (KM), ECF No. 6, Ex. H.) Drew’s provision is substantially
more comprehensive than Monmouth’s provision. Here, the Court
is not inclined to analyze Monmouth’s provision on a motion to
dismiss.
Fittipaldi, 2021 WL 2210740, at *9.
In the end, then, neither Mitelburg nor Fittipaldi persuasively supports
reconsideration of this Court’s prior decision.
IV.

CONCLUSION
For the reasons set forth above, the motion for reconsideration is denied.
A separate order will issue.

Dated: June 7, 2021
/s/ Kevin McNulty
___________________________________
Hon. Kevin McNulty
United States District Judge

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