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finding that statements advertising campus life and stating the locations where courses would be held were "general promises or expectations, which do not create contractual obligations"
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Case No. 20-CV-04045-LHK
2021-03-29
ilas ABUELHAWA, et al., Plaintiffs, v. SANTA CLARA UNIVERSITY, Defendant.
L. Timothy Fisher, Joel Dashiell Smith, Bursor & Fisher, P.A., Walnut Creek, CA, Sarah N. Westcot, Bursor & Fisher PA, Miami, FL, for Plaintiffs. Karen G. Johnson-McKewan, Randall Scott Luskey, Sarah Kate Mullins, Orrick Herrington & Sutcliffe LLP, San Francisco, CA, for Defendant.
L. Timothy Fisher, Joel Dashiell Smith, Bursor & Fisher, P.A., Walnut Creek, CA, Sarah N. Westcot, Bursor & Fisher PA, Miami, FL, for Plaintiffs.
Karen G. Johnson-McKewan, Randall Scott Luskey, Sarah Kate Mullins, Orrick Herrington & Sutcliffe LLP, San Francisco, CA, for Defendant.
ORDER GRANTING MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT
Re: Dkt. No. 32
LUCY H. KOH, United States District Judge
Plaintiffs, on behalf of themselves and others similarly situated, allege that Defendant Santa Clara University ("SCU") violated California law by halting in-person education in response to the COVID-19 pandemic. Plaintiffs specifically claim that SCU (1) breached an alleged implied-in-fact contract; (2) violated the "unfair" prong of California's Unfair Competition Law, Cal. Bus. & Profs. Code §§ 17200 et seq. ; and (3) unjustly enriched itself. ECF No. 25. Before the Court is SCU's motion to dismiss Plaintiffs’ first amended complaint. ECF No. 32. Having considered the parties’ submissions, the relevant law, and the record in this case, the Court GRANTS SCU's motion to dismiss.
I. BACKGROUND
A. Factual Background
On February 7, 2020, a woman in Santa Clara County died of COVID-19, becoming the first known COVID-19 death in the United States. Tandon v. Newsom , No. 20-CV-07108-LHK, ––– F.Supp.3d ––––, ––––, 2021 WL 411375, at *1 (N.D. Cal. Feb. 5, 2021). On March 4, 2020, Governor Gavin declared a state of emergency in California. RJN No. 19, ECF No. 30. Thus, on March 10, 2020, SCU temporarily suspended in-person classes and moved to online instruction. See First Am. Compl. ("FAC") ¶ 4, ECF No. 25.
SCU requests judicial notice of materials from SCU's website, government orders on the COVID-19 pandemic, and court filings. ECF No. 30 ("RJN"). Plaintiffs request judicial notice of court filings. ECF No. 34 ("Ps’ RJN"). Both requests for judicial notice are unopposed. The Court may take judicial notice of matters that are either "generally known within the trial court's territorial jurisdiction" or "can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). Moreover, courts may consider materials referenced in the complaint under the incorporation by reference doctrine, even if a plaintiff failed to attach those materials to the complaint. Knievel v. ESPN , 393 F.3d 1068, 1076 (9th Cir. 2005). Documents on "publicly available websites" and public records are proper subjects of judicial notice. See, e.g. , Calhoun v. Google LLC , No. 20-CV-05146-LHK, ––– F.Supp.3d ––––, ––––, 2021 WL 1056532, at *5 (N.D. Cal. Mar. 17, 2021) (collecting cases). Accordingly, the Court GRANTS the parties’ unopposed requests for judicial notice.
Days later, on March 16, 2020, the Santa Clara County Health Officer issued a shelter-in-place order. RJN No. 20. Under the order, schools such as SCU could open only "for purposes of facilitating distance learning or performing essential functions," not in-person instruction. Id. at § 10(f)(xi). To follow the order, SCU announced on March 16, 2020 that its educational experience would remain online for the Spring 2020 term. FAC ¶ 4. SCU's announcement preceded the March 30, 2020 start of SCU's Spring 2020 Quarter for all SCU schools except the Jesuit School of Theology and Law School. Those two schools operate on the semester system rather than the quarter system. Thus, except for students at the Jesuit School of Theology and Law School, SCU students had over two-weeks’ notice that the Spring 2020 Quarter would be held remotely.
Plaintiffs are three SCU law students who bring a putative class action against SCU's temporary suspension of in-person instruction. Specifically, Plaintiffs Lilas Abuelhawa, Kelly Wynne, and Leonardo Kim seek to represent the following class and subclass of students:
• The Class: "all people who paid SCU Spring 2020 Semester tuition and/or fees for in-person educational services that SCU failed to provide, and whose tuition and fees have not been refunded."
• The Law Student Subclass: "SCU law students who paid SCU Spring 2020 Semester tuition and/or fees for in-person educational services that SCU failed to provide, and whose tuition and fees have not been refunded."
"Specifically excluded from the Class are Defendant, Defendant's officers, directors, agents, trustees, parents, children, corporations, trusts, representatives, employees, principals, servants, partners, joint ventures, or entities controlled by Defendant, and their heirs, successors, assigns, or other persons or entities related to or affiliated with Defendant and/or Defendant's officers and/or directors, the judge assigned to this action, and any member of the judge's immediate family." FAC ¶ 46.
FAC ¶ 45. At first, Plaintiffs sought to represent all SCU students, not just those on the semester system. See id. ¶ 3 (defining "semester" to include "quarter" and "any academic period"). After SCU moved to dismiss the First Amended Complaint, however, Plaintiffs abandoned their claims on behalf of all SCU students. The putative classes now comprise only "those students on the semester system"—that is, students at the Law School and the Jesuit School of Theology. Opp'n at 11 n.3.
Plaintiffs do not challenge the allegedly "inferior learning experience" of online classes. FAC ¶ 44; accord Opp'n at 5 ("Plaintiffs are not suing because they claim they received a lower quality education ...."). The "gravamen of this action" is instead that Plaintiffs "paid SCU for in-person classes and the availability of on-campus facilities and experiences, and did not receive what they paid for." FAC ¶ 44. Under this theory of the case, Plaintiffs assert three claims: (1) breach of an alleged implied-in-fact contract; (2) violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Profs. Code §§ 17200 et seq. , as the result of SCU's alleged "unfair" practices; and (3) unjust enrichment. Id. ¶¶ 54–71, 79–86. All three claims are based on SCU breaking its alleged promises to provide in-person instruction. See id. ¶¶ 57 (contract claim), 66 (UCL claim), 82 (unjust enrichment claim).
The FAC also pleads a claim for conversion (Count 3) and a UCL claim under the "unlawful" prong. However, Plaintiffs withdraw these claims in their Opposition to the instant motion to dismiss. Opp'n at 2. Thus, the Court DISMISSES with prejudice Plaintiffs’ conversion claim and UCL "unlawful" prong claim.
Plaintiffs allege that SCU promised in-person instruction in its course materials, student bulletins, and website. See id. at ¶¶ 16, 21–33. Course materials allegedly promised in-person instruction by distinguishing between in-person and online instruction. If SCU offered a course in person, SCU allegedly identified the on-campus location of the course and sometimes required a "mandatory in-person class session" to confirm a student's enrollment in the class. Id. ¶¶ 19, 28.
Student bulletins allegedly "refer to the in-person nature of the Spring 2020 semester." Id. ¶ 21. Plaintiffs specifically cite certain statements in the law student bulletin. That bulletin notifies students that they must complete 64 credit hours "at the law school" and that teachers "may utilize class attendance" in grading. FAC ¶ 21. The law student bulletin also mentions certain on-campus facilities. Id.
Lastly, SCU's website advertises SCU's on-campus experience. Id. ¶ 22. Specifically, the website praises SCU's faculty, libraries, and campus life. As for faculty, the website touts SCU's "connected & engaged faculty." Id. ¶ 22. As for libraries, SCU's website describes libraries as "much more than book repositories; they're inspiring spaces for research, collaboration, and reflection." Id. ¶ 23. As to campus life, the website advertises "special places on campus" and "organization[s] on campus." Id. ¶¶ 24–27.
In sum, Plaintiffs’ claims rely on these statements in course materials, student bulletins, and SCU's website. Plaintiffs allege that these statements constitute SCU's promises to either (1) hold in-person instruction despite the COVID-19 pandemic; or (2) to refund Plaintiffs’ tuition. FAC ¶¶ 33–44.
Yet Plaintiffs fail to mention other statements in SCU's course materials or student bulletins. As for course materials, the "online course portal" that Plaintiffs allege viewing contains financial terms and conditions. FAC ¶ 17. "Students are required to accept the financial terms and conditions outlined by the University in order to continue their enrollment at SCU." RJN No. 13. These terms and conditions specifically provide that SCU's hyperlinked "tuition refund schedule" governs refunds:
I accept full responsibility to pay all tuition, room and board, fees, and other associated costs as a result of enrollment at Santa Clara University .... I have reviewed the published tuition refund schedule at www.scu.edu/bursar/refund and understand that if I drop or withdraw from some or all of the classes for which I enroll, I will be responsible for paying all or a portion of tuition and fees in accordance with the University's tuition refund schedule .... I have read the above and agree to assume all financial responsibility associated with my enrollment at Santa Clara University.
RJN No. 10 (emphasis added). As for student bulletins, all bulletins except the Jesuit School of Theology's state that "[n]o tuition refunds are made because of curtailed services resulting from strikes, acts of God , civil insurrection, riots or threats thereof, or other causes beyond the control of the University. " RJN No. 14 (emphasis added).
B. Procedural History
Plaintiffs filed their initial complaint on June 17, 2020. ECF No. 1. On September 28, 2020, SCU moved to dismiss that complaint. ECF No. 21. On October 12, 2020, Plaintiffs filed their operative First Amended Complaint. The parties then stipulated to SCU filing a new motion to dismiss the FAC, and on October 23, 2020, the Court granted that stipulation. ECF No. 27.
On November 9, 2020, SCU filed the instant motion to dismiss and an unopposed request for judicial notice. ECF Nos. 32 ("Mot."), 30–31 ("RJN"). On December 14, 2020, Plaintiffs filed (1) their opposition to the instant motion to dismiss, ECF No. 33 ("Opp'n"); and (2) their own request for judicial notice, ECF No. 34 ("Ps’ RJN"). SCU filed its reply supporting the instant motion on January 8, 2021. ECF No. 35. Since then, the parties have altogether filed seven statements of recent decision. ECF Nos. 36 (Plaintiffs’ statement), 40, 42–44, 47–48 (SCU's statements).
II. LEGAL STANDARD
A. Motion to Dismiss Under Rule 12(b)(6)
Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include "a short and plain statement of the claim showing that the pleader is entitled to relief." A complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). The United States Supreme Court has held that Rule 8(a) requires a plaintiff to plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (internal quotation marks omitted). For purposes of ruling on a Rule 12(b)(6) motion, the Court "accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co. , 519 F.3d 1025, 1031 (9th Cir. 2008). The Court, however, need not "assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Fayer v. Vaughn , 649 F.3d 1061, 1064 (9th Cir. 2011) (per curiam) (internal quotation marks omitted). Additionally, mere "conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Adams v. Johnson , 355 F.3d 1179, 1183 (9th Cir. 2004).
B. Leave to Amend
If a court determines that a complaint should be dismissed, it must then decide whether to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend "shall be freely given when justice so requires," bearing in mind "the underlying purpose of Rule 15 to facilitate decisions on the merits, rather than on the pleadings or technicalities." Lopez v. Smith , 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations and internal quotation marks omitted). When dismissing a complaint for failure to state a claim, "a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Id. at 1130 (internal quotation marks omitted).
Accordingly, leave to amend generally shall be denied only if allowing amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the moving party has acted in bad faith. Leadsinger, Inc. v. BMG Music Publ'g , 512 F.3d 522, 532 (9th Cir. 2008). At the same time, a court is justified in denying leave to amend when a plaintiff "repeated[ly] fail[s] to cure deficiencies by amendments previously allowed." See Carvalho v. Equifax Info. Servs., LLC , 629 F.3d 876, 892 (9th Cir. 2010). Indeed, a "district court's discretion to deny leave to amend is particularly broad where plaintiff has previously amended the complaint." Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc. , 637 F.3d 1047, 1058 (9th Cir. 2011) (quotation marks omitted).
III. DISCUSSION
Plaintiffs bring three claims against Santa Clara University ("SCU"): (1) breach of an alleged implied-in-fact contract; (2) violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Profs. Code §§ 17200 et seq. , as the result of SCU's alleged "unfair" practices; and (3) unjust enrichment. SCU moves to dismiss all three claims. The Court addresses each claim in turn. Ultimately, the Court dismisses the first two claims with leave to amend and the unjust enrichment claim with prejudice.
A. Plaintiffs have inadequately plead a specific promise.
SCU moves to dismiss Plaintiffs’ breach of implied-in-fact contract claim on two grounds. SCU first argues that Plaintiffs have inadequately pled a specific promise. SCU then argues that even if Plaintiffs pled a specific promise, Plaintiffs’ implied contract claim is barred by financial disclaimers in SCU's tuition refund schedule and student bulletins. The Court agrees with the first ground for dismissal, and so need not reach the second. The Court analyzes that first ground below.
The parties agree that Plaintiffs’ implied contract claim must identify a specific promise that SCU breached. See Opp'n at 5–7 (alleging "specific enforceable promise"); Reply at 2 (noting Plaintiffs’ lack of dispute). This specificity requirement stems from Kashmiri v. Regents of Univ. of California , a leading California Court of Appeal decision on contracts between students and universities. 156 Cal. App. 4th 809, 67 Cal.Rptr.3d 635 (2007), as modified (Nov. 15, 2007), as modified (Nov. 28, 2007). There, the Court of Appeal held that "general and vague declarations or promises in university publications" fail to create contractual obligations. Id. at 832, 67 Cal.Rptr.3d 635. "Universities frequently publish numerous catalogues and bulletins, but not all statements in these publications amount to contractual obligations." Id. at 829, 67 Cal.Rptr.3d 635. Contractual obligations arise only "when the educational institution makes a specific promise to provide an educational service." Id. at 826, 67 Cal.Rptr.3d 635 ; accord id. ("specific promises" (emphasis in original)).
Reinforcing this limitation on university-student contracts is the "widely accepted rule of judicial nonintervention into the academic affairs of schools." Paulsen v. Golden Gate Univ. , 25 Cal. 3d 803, 808, 159 Cal.Rptr. 858, 602 P.2d 778 (1979) (collecting cases). As the California Supreme Court has explained, "[t]he attempt to use catalogues or similar published material to freeze the academic relationship into a rigid mold would lead to a stifling of both individual attention and equitable arrangements in the student's behalf." Id. at 812, 159 Cal.Rptr. 858, 602 P.2d 778. Here, Plaintiffs allege that statements in SCU's course catalog and "other publications" constitute specific promises of "in-person educational services, experiences, opportunities, and other related services." Opp'n at 7 (quoting FAC ¶ 16). Plaintiffs specifically cite three statements. First, the course catalog stated the on-campus locations where courses would be held. Id. Second, SCU's website advertised "campus life." Id. (quoting FAC ¶ 24). Lastly, the course catalog asked students to consider "whether your learning style is a good fit for online." Id. (quoting FAC ¶ 31).
None of these statements constitutes a "definite[ ], specific[ ], or explicit" promise that SCU would continue on-campus instruction despite a global pandemic. Kashmiri , 156 Cal. App. 4th at 832, 67 Cal.Rptr.3d 635. At most, these statements are "general promises or expectations," which do not create contractual obligations. Id. at 826, 67 Cal.Rptr.3d 635. In other words, Plaintiffs’ attempt to rely on these statements is what the California Supreme Court cautioned against—an "attempt to use catalogues or similar published material to freeze the academic relationship into a rigid mold." Paulsen , 25 Cal. 3d at 812, 159 Cal.Rptr. 858, 602 P.2d 778.
Three cases illustrate how the statements Plaintiffs cite are too general to impose contractual duties on SCU. The first case, Kashmiri , underscores how unequivocally specific a statement must be to create an implied-in-fact contract. There, as here, plaintiffs alleged that a university defendant had violated an implied contract with students. Specifically, the Kashmiri plaintiffs alleged that the University of California system had promised not to impose increases in a certain fee on continuing students. Kashmiri , 156 Cal. App. 4th at 815, 67 Cal.Rptr.3d 635. Rather, fee increases would apply "to new students only." Id. at 816, 67 Cal.Rptr.3d 635.
The Kashmiri plaintiffs found this promise in three formal and "unequivocal" publications. Id. at 833, 67 Cal.Rptr.3d 635. The first was a declaration by the Regents of the University of California made contemporaneously with the Regents’ approval of the fee policy. The Regents "declared that ‘the level of the [challenged fee] remain the same for each student for the duration of his or her enrollment in the professional degree program, with increases in the fee applicable to new students only. " Id. at 816, 67 Cal.Rptr.3d 635 (emphasis added). The second publication was the Office of the President of the University's "official guide for all University departments in the area of general University fees." Id. That official presidential guide repeated the same declaration: "Increases in the Fee apply to new students only. The Fee will remain the same for each student for the duration of his or her enrollment in the professional degree program." Id. (emphasis added). The last publication comprised several years of "the University's annual budget documents." Id. Those budget documents also announced that "the level of the [challenged fee] remains the same for each student for the duration of his or her enrollment in the professional degree program, with increases in the fee applicable to new students only. " Id. (emphasis added). Given these repeated "unequivocal" statements, the Kashmiri Court held that the University of California had made "a specific promise," not merely "a general statement or declaration." Id. at 833, 67 Cal.Rptr.3d 635.
Here, by contrast, Plaintiffs fail to identify any similarly specific and repeated promises. Plaintiffs instead point to various statements about SCU's general expectation that in-person classes are the norm. Specifically, as discussed above, Plaintiffs point to (1) the on-campus classroom locations listed in SCU's course catalog; (2) SCU's website advertisements about "campus life," and (3) a questionnaire in the course catalog that tried to help students understand "whether [their] learning style is a good fit for online." Opp'n at 7 (quoting FAC ¶¶ 16, 24, 31). To ascribe contractual duties to these "catalogues or similar published material" would "freeze the academic relationship into a rigid mold." Paulsen , 25 Cal. 3d at 808, 159 Cal.Rptr. 858, 602 P.2d 778. For instance, under Plaintiffs’ contractual theory, "students would have a contractual claim if their course was later reassigned to a different classroom or building" than the one listed in the course catalog. Mot. at 16. Allowing Plaintiffs to assert an implied contractual right to in-person instruction during a pandemic would be even less sound.
In fact, another federal court applying California contract law has rejected an implied contract claim based on statements closely analogous to those here. In Lindner v. Occidental College , plaintiffs also brought a putative class action against a school's "transition from in-person to virtual instruction during the Spring 2020 semester in response to the Covid-19 global pandemic." No. 20-CV-08481-JFW, 2020 WL 7350212, at *1 (C.D. Cal. Dec. 11, 2020). Similarly, the Lindner plaintiffs argued that "they are entitled to a partial refund of tuition and fees for the Spring 2020 semester because [the school] promised students in-person instruction." Id. Like Plaintiffs here, the Lindner plaintiffs also cited statements in their school's course catalog as purported promises of in-person education. Id. at *2. The Lindner course catalog "states the days of the week, the times, and the locations (building and room number) of each class." Id. Furthermore, a class attendance policy stated that "regular class attendance is expected of all students." Id. (original alteration omitted).
The Lindner Court rightly dismissed plaintiffs’ implied contract claim—and dismissed it with prejudice as futile. See id. at *7–9 (contract analysis), *10 n.5 (dismissing with prejudice). The Lindner Court reasoned that the Lindner plaintiffs "failed to identify any specific language in the 2019–2020 Catalog or any other publication from [the school] that promises in-person instruction." Id. at *8. Although the course catalog mentioned the locations of each class, the course catalog "d[id] not promise in-person instruction or that the courses will always meet in the specific rooms stated." Id. Similarly, a policy of "regular class attendance" is "possible during both in-person and virtual instruction." Id.
Here too, Plaintiffs rely on on-campus class locations in a course catalog—and a policy of "regular and punctual class attendance," FAC ¶ 21—to plead breach of implied contract. Opp'n at 7. Likewise, the course catalog and policy fail to promise in-person instruction. See FAC ¶¶ 29, 21 (quoting catalog and policy). Thus, just as in Lindner , the breach of implied contract claim here fails. Accord Hassan v. Fordham Univ. , No. 20-CV-03265-KMW, ––– F.Supp.3d ––––, ––––, 2021 WL 293255, at *6 (S.D.N.Y. Jan. 28, 2021) (adopting Lindner and dismissing implied contract claim based on similar statements).
The last case that underscores the inadequacy of Plaintiffs’ implied contract claim is Regents of University of California v. Superior Court, ––– Cal.App.4th ––––, 193 Cal. Rptr. 3d 447, 471 (2015), rev'd on other grounds , 4 Cal. 5th 607, 634 n.8, 230 Cal.Rptr.3d 415, 413 P.3d 656 (2018). There, a California Court of Appeal rejected a student's implied-in-fact contract claim against the University of California, Los Angeles ("UCLA")’s failure to protect her from another, mentally ill student who UCLA knew had "ideations of harming others." Id. at 452 (background), 471–72 (analyzing implied contract claim). The Regents plaintiff was "violently attacked and almost murdered." Id. at 455. She thus alleged that UCLA had breached an implied contract to protect her.
Despite reversing the Court of Appeal's ruling on another issue, the California Supreme Court expressly "d[id] not address [plaintiff]’s alternate theories of duty based on an implied-in-fact contract." Regents of Univ. of California v. Superior Ct. , 4 Cal. 5th 607, 634, 230 Cal.Rptr.3d 415, 413 P.3d 656 (2018).
As sources of implied contractual duties, the Regents plaintiff specifically cited statements in two UCLA publications and UCLA's imposition of "an individual surcharge to pay for student mental health services." Id. at 471–72. The first publication, titled " ‘Preventing and Responding to Violence in the UCLA Community’ stat[ed] that the school is ‘committed to providing a safe work environment for all faculty, staff and students—one that is free from violence or threats of harm.’ " Id. at 471. The other publication was the Student Conduct Code. It provided that "any individual who ‘commits an act of violence or has threatened to commit such an act’ may be suspended from the university and barred from its property." Id. at 472 n.12. As for the surcharge, it presumably would have paid for the very mental health services that had failed to prevent the mentally ill student from attacking the Regents plaintiff.
The Regents Court, applying Kashmiri , rejected plaintiff's implied contract claim. The Regents Court analyzed each purported contractual promise in turn. First, the statements in "Preventing and Responding to Violence in the UCLA Community" were "not a ‘specific promise’ that the university would undertake a legal duty to protect its students from third party misconduct." Id. at 471. Rather, these statements were "in the nature of a general declaration expressing the importance the university places on the issue of campus safety." Id. (citing Kashmiri , 156 Cal. App. 4th. At 833). Second, the Student Conduct Code's penalties for violence "merely permits the university to take certain conduct in response to violent behavior; it does not qualify as a specific promise to undertake a legal duty." Id. at 472 n.12. Lastly, the mental health services surcharge also failed to "qualif[y] as a contractual obligation to protect students from third party misconduct." Id.
The purported promises that Plaintiffs cite here are vaguer than those found inadequate in Regents . In Regents , UCLA had (1) published a brochure titled "Preventing and Responding to Violence" that "committed" UCLA to providing a safe environment for "all" students; and (2) set penalties for violence or threatened violence. Id. at 471–72 & n.12. Still, the California Court of Appeal held that UCLA's statements were not specific enough to create an implied contract. Id. Here, Plaintiffs cite (1) classroom locations in a course catalog; (2) website advertisements about "campus life"; and (3) a questionnaire asking students "whether [their] learning style is a good fit for online." Opp'n at 7. None of these statements are as specific as UCLA's. None "commit" SCU to in-person education; nor appear in a dedicated brochure such as "Preventing and Responding to [Disruptions to In-Person Education]"; nor penalize disruptions to in-person education. At most, SCU's statements are merely "a general declaration expressing the importance the university places on [in-person education]." Regents , 193 Cal. Rptr. 3d at 471.
In sum, the case law shows that Plaintiffs inadequately plead a specific promise. Plaintiffs’ unpersuasive response relies on two inapposite district court cases. Opp'n at 6–8. In the first case, a Florida district court applying Florida contract law found plaintiff's allegations sufficient "especially because Florida law recognizes that the college/student contract is typically implied in the [school]’s publications." Salerno v. Florida Southern College , 488 F.Supp.3d 1211, 1218 (M.D. Fla. 2020) (emphasis added) (citing Florida law cases). By contrast, California contract law is not so expansive. An implied-in-fact contract in California requires "specific promises," not "general and vague declarations or promises in university publications." Kashmiri , 156 Cal. App. 4th at 832, 67 Cal.Rptr.3d 635 (emphasis in original).
Because Salerno is inapposite, so is Verlanga v. University of San Francisco , a San Francisco Superior Court case cited in Plaintiffs’ briefing on educational malpractice. Pls. RJN No. 1 (No. CGC-20-584829), 2020 WL 7229855 (Nov. 12, 2020). The Verlanga Superior Court relied on Salerno and Florida law to deny the University of San Francisco's motion to dismiss plaintiffs’ implied contract claim. Id. at 5. As explained above, Salerno is inapposite because California law, unlike Florida law, requires "specific promises" for implied contracts. Kashmiri , 156 Cal. App. 4th at 832, 67 Cal.Rptr.3d 635 (emphasis in original).
The other case on which Plaintiffs rely is Saroya v. University of the Pacific , No. 5:20-CV-03196-EJD, ––– F.Supp.3d ––––, 2020 WL 7013598 (N.D. Cal. Nov. 27, 2020). There, the district court did not dismiss an implied contract claim similar to the one here. See id. at ––––, 2020 WL 7013598 at *5 (citing course catalogue). Yet two reasons counsel against extending Saroya to the instant case.
First, in Saroya , the parties failed to brief—and thus the court's order did not address— Regents , which held insufficient statements that "committed" UCLA to student safety and expressly penalized violence. Regents , 193 Cal. Rptr. 3d at 471 ; see Saroya , No. 5:20-CV-03196-EJD, ––– F.Supp.3d ––––, ECF No. 31 (motion to dismiss). Moreover, Saroya could not have addressed Lindner because Lindner was decided after Saroya . See Lindner , 2020 WL 7350212, at *7–9 (dismissing claim). The Saroya parties’ briefing thus failed to highlight that "specific promises" must underlie implied contracts. Kashmiri , 156 Cal. App. 4th at 832, 67 Cal.Rptr.3d 635 (emphasis in original). This failure may have shaped Saroya ’s disposition because "[i]n our adversarial system of adjudication, we follow the principle of party presentation." United States v. Sineneng-Smith , ––– U.S. ––––, 140 S. Ct. 1575, 1579, 206 L.Ed.2d 866 (2020). By contrast, the briefing here highlights Regents ’ and Lindner ’s applications of Kashmiri ’s "specific promises" requirement.
Second, in analyzing the Saroya plaintiff's implied contract claim, the Saroya Court found that "[p]laintiff does not identify any express or specific promise that was breached." Saroya, ––– F.Supp3d at ––––, 2020 WL 7013598, at *5. That lack of a "specific promise" is fatal to implied contract claims under Kashmiri and its progeny. Kashmiri , 156 Cal. App. 4th at 832, 67 Cal.Rptr.3d 635 (emphasis in original); accord Regents , 193 Cal. Rptr. 3d at 471 (holding same). However, Saroya did not dismiss plaintiff's implied contract claim. Nor did Saroya explain why it did not follow Kashmiri ’s "specific promise" requirement.
Here, the Court respectfully disagrees. California contract law provides that the lack of a "specific promise" defeats Plaintiffs’ implied contract claim. Kashmiri , 156 Cal. App. 4th at 832, 67 Cal.Rptr.3d 635. Thus, the Court follows California contract law and finds that Plaintiffs have not stated an implied contract claim. E.g. , Compania Engraw Com'l E. Ind. v. Schenley Dist. Corp. , 181 F.2d 876, 878 (9th Cir. 1950) (holding, in a contract case under diversity jurisdiction, that "the rights of the parties are measured according to the standards of applicable California law").
Accordingly, the Court GRANTS SCU's motion to dismiss Plaintiffs’ breach of implied-in-fact contract claim. However, the Court allows Plaintiffs leave to amend because amendment would not unduly prejudice the opposing party, cause undue delay, or be futile, and Plaintiffs have not acted in bad faith. See Leadsinger , 512 F.3d at 532.
B. Plaintiffs’ UCL claim fails for the same reasons as their breach of implied-in-fact contract claim.
Plaintiffs’ second claim is that SCU violated the "unfair" prong of California's Unfair Competition Law ("UCL"). See generally Doe v. CVS Pharmacy, Inc. , 982 F.3d 1204, 1214–15 (9th Cir. 2020) (describing "unfair" prong). Specifically, Plaintiffs’ UCL claim is based on the same facts as Plaintiffs’ breach of implied-in-fact contract claim. See FAC ¶ 67 ("SCU violated the ‘unfair’ prong of the UCL by charging students full tuition and fees without providing the on-campus services and facilities SCU was required to provide."). SCU thus argues—and Plaintiffs do not dispute—that if Plaintiffs’ contract claim fails for lack of a specific promise, so does Plaintiffs’ UCL claim. See Opp'n at 12 (responding to SCU's argument); Reply at 10 (noting lack of dispute).
As discussed in the prior Section, Plaintiffs’ contract claim fails because Plaintiffs inadequately plead a specific promise. See Section III-A, supra (analyzing breach of implied-in-fact contract). Thus, on the briefs and record here, Plaintiffs’ UCL claim fails too.
Accordingly, the Court GRANTS SCU's motion to dismiss Plaintiffs’ UCL claim. However, the Court allows Plaintiffs leave to amend because amendment would not unduly prejudice the opposing party, cause undue delay, or be futile, and Plaintiffs have not acted in bad faith. See Leadsinger , 512 F.3d at 532.
C. Because unjust enrichment is not a cause of action under California law, the Court dismisses Plaintiffs’ unjust enrichment claim with prejudice.
Plaintiffs’ last claim is for unjust enrichment. FAC ¶¶ 79–86. Yet as Defendant correctly argue and this Court has repeatedly held, "California does not recognize a separate cause of action for unjust enrichment." Brodsky v. Apple Inc. , 445 F. Supp. 3d 110, 132–33 (N.D. Cal. 2020) (collecting California and federal cases). California law is clear: "Unjust enrichment is not a cause of action." De Havilland v. FX Networks, LLC , 21 Cal. App. 5th 845, 870, 230 Cal.Rptr.3d 625 (2018) (quoting Hill v. Roll Int'l Corp. , 195 Cal. App. 4th 1295, 1307, 128 Cal.Rptr.3d 109 (2011) ); accord Bank of New York Mellon v. Citibank, N.A. , 8 Cal. App. 5th 935, 955, 214 Cal.Rptr.3d 504 (2017), as modified (Mar. 1, 2017) (same). Thus, "courts have consistently dismissed stand-alone claims for unjust enrichment." Brodsky , 445 F. Supp. 3d at 132.
In response, Plaintiffs rely unpersuasively on an unpublished Ninth Circuit opinion, Bruton v. Gerber Products Company , 703 F. App'x 468 (9th Cir. 2017). There, the Ninth Circuit held that courts should allow an "independent claim for unjust enrichment to proceed in an insurance dispute." Id. at 470. The Ninth Circuit then applied that insurance dispute holding to a case challenging the labeling of baby food in alleged violation of Food and Drug Administration ("FDA") regulations. Id.
To reach its holding, the Ninth Circuit relied on a 2015 California Supreme Court decision, Hartford Casualty Insurance Co. v. J.R. Marketing, LLC , 61 Cal. 4th 988, 1000, 190 Cal.Rptr.3d 599, 353 P.3d 319 (2015). Hartford "raised a narrow question" limited to "the facts of th[at] case." Id. at 996–97, 190 Cal.Rptr.3d 599, 353 P.3d 319. The question in Hartford was whether an insurer could seek reimbursement from counsel if counsel had (1) violated a court order (2) which counsel itself had drafted (3) that expressly preserved the insurer's right to reimbursement. Id. at 994, 996–97, 190 Cal.Rptr.3d 599, 353 P.3d 319. Specifically, Hartford asked:
May an insurer seek reimbursement directly from counsel when, in satisfaction of its duty to fund its insureds’ defense in a third party action against them, the insurer paid bills submitted by the insureds’ independent counsel for the fees and costs of mounting this defense, and has done so in compliance with a court order expressly preserving the insurer's post-litigation right to recover "unreasonable and unnecessary" amounts billed by counsel?
Id. The California Supreme Court held that "[u]nder the circumstances ," the insurer could "pursue a narrow claim for reimbursement against [counsel] under the terms of the [court] order." Id. at 1007–08, 190 Cal.Rptr.3d 599, 353 P.3d 319 (emphasis added). The California Supreme Court "emphasize[d] that this conclusion is a limited one, and a particularly apposite one given the history of this litigation." Id. at 1007, 190 Cal.Rptr.3d 599, 353 P.3d 319.
Bruton and Hartford are inapposite in two respects. First, subsequent California Court of Appeal decisions have recognized Hartford ’s narrow scope. In 2019, for instance, a California Court of Appeal distinguished Hartford and held that plaintiff's claims for restitution were not "cognizable." A.J. Fistes Corp. v. GDL Best Contractors, Inc. , 38 Cal. App. 5th 677, 697, 251 Cal.Rptr.3d 423 (2019), as modified (Aug. 13, 2019), review denied (Nov. 13, 2019). The A.J. Fistes Court recognized that Hartford ’s unusual facts cabined its holding. Specifically, the A.J. Fistes Court held that " Hartford is inapposite. There, the [California] Supreme Court held a commercial general liability insurer could seek reimbursement directly from counsel retained to represent the insured under a court order expressly preserving the insurer's postlitigation right to recover ‘unreasonable and unnecessary’ fees billed by the insured's counsel." Id. (quoting Hartford , 61 Cal. 4th at 996–97, 190 Cal.Rptr.3d 599, 353 P.3d 319 ).
Second, published post- Hartford decisions by California Courts of Appeal have confirmed that "[u]njust enrichment is not a cause of action." De Havilland , 21 Cal. App. 5th at 870, 230 Cal.Rptr.3d 625 (quoting Hill , 195 Cal. App. 4th at 1307, 128 Cal.Rptr.3d 109 ). Hartford was decided in 2015. As recently as May 2020, a California Court of Appeal flatly held—without objection from the California Supreme Court despite two petitions for review—that "summary adjudication of [an unjust enrichment] claim was proper because California does not recognize a cause of action for unjust enrichment." Hooked Media Grp., Inc. v. Apple Inc. , 55 Cal. App. 5th 323, 336, 269 Cal.Rptr.3d 406, reh'g denied (June 19, 2020), transferred without decision on review (Sept. 23, 2020), publication ordered (Sept. 30, 2020), review denied (Dec. 31, 2020). Likewise, in 2018 and 2017, years after the Hartford decision in 2015, other California Courts of Appeal held that "unjust enrichment is not a cause of action." De Havilland , 21 Cal. App. 5th at 870, 230 Cal.Rptr.3d 625 (quoting Hill , 195 Cal. App. 4th at 1307, 128 Cal.Rptr.3d 109 ); Bank of New York Mellon , 8 Cal. App. 5th at 955, 214 Cal.Rptr.3d 504 (same).
As published Ninth Circuit precedents have long required, this Court sitting in diversity "must follow the decision of the intermediate appellate courts of the state unless there is convincing evidence that the highest court of the state would decide differently." Daniel v. Ford Motor Co. , 806 F.3d 1217, 1222 (9th Cir. 2015) (quoting In re Schwarzkopf , 626 F.3d 1032, 1038 (9th Cir. 2010) ); accord, e.g. , Cmty. Nat. Bank v. Fid. & Deposit Co. of Maryland , 563 F.2d 1319, 1321 n.1 (9th Cir. 1977) (same). Nothing suggests that the California Supreme Court would extend Hartford to the instant case. Thus, this Court must follow the repeated holdings of California Courts of Appeal. Because "[u]njust enrichment is not a cause of action," Plaintiffs’ unjust enrichment claim cannot proceed. De Havilland , 21 Cal. App. 5th at 870, 230 Cal.Rptr.3d 625 (quoting Hill , 195 Cal. App. 4th at 1307, 128 Cal.Rptr.3d 109 ).
Accordingly, the Court GRANTS SCU's motion to dismiss Plaintiffs’ unjust enrichment claim. Moreover, because amendment would be futile under California law, the Court dismisses Plaintiffs’ unjust enrichment claim with prejudice. See Leadsinger , 512 F.3d at 532.
IV. CONCLUSION
For the foregoing reasons, the Court GRANTS SCU's motion to dismiss Plaintiffs’ First Amended Complaint. Specifically, the Court dismisses with leave to amend Plaintiffs’ breach of implied-in-fact contract claim and UCL claim. The Court dismisses with prejudice Plaintiffs’ unjust enrichment claim.
Should Plaintiffs elect to file a second amended complaint curing the deficiencies identified herein, Plaintiffs shall do so within 30 days of the date of this order. Failure to meet the 30 day deadline to file a second amended complaint or failure to cure the deficiencies identified in this order or SCU's motion to dismiss will result in dismissal of the deficient claims with prejudice. Plaintiffs may not add new causes of action or parties without leave of the Court or stipulation of the parties pursuant to Federal Rule of Civil Procedure 15. Plaintiffs are directed to file a redlined complaint comparing the FAC to any second amended complaint as an attachment to Plaintiffs’ second amended complaint.