Ball State student may proceed in COVID breach-of-contract class action against university

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A student’s class-action lawsuit filed against Ball State University for COVID-related closures can proceed, the Court of Appeals of Indiana has ruled. The appellate court determined that a statute prohibiting such lawsuits impermissibly conflicts with the Indiana Trial Rules.

In May 2020, college student Keller Mellowitz filed a putative class action complaint against Ball State and its board of trustees in response to closures and remote instruction prompted by the COVID-19 pandemic. Specifically, Mellowitz asserted claims for breach of contract and unjust enrichment based on Ball State’s retention of tuition and fees after it canceled in-person classes and closed campus facilities.

After the complaint was filed, however, the Indiana General Assembly enacted Public Law 166-2021, part of which was later codified as Indiana Code Chapter 34-12-5. Among the changes was Indiana Code § 34-12-5-7, known as Section 7, which bars class actions against postsecondary educational institutions for claims of breach of contract and unjust enrichment arising from COVID-19.

When Ball State filed a motion for relief based on Section 7, the Marion Superior Court ordered Mellowitz to file an amended complaint eliminating his class allegations.

Mellowitz appealed, arguing that Section 7 is a procedural statute that impermissibly conflicts with Indiana Trial Rule 23, which governs class-action procedures. As such, he argued that Section 7 is a nullity.

The Court of Appeals agreed, reversing the trial court’s decision in the interlocutory appeal of Keller J. Mellowitz, on behalf of himself and all others similarly situated v. Ball State University and Board of Trustees of Ball State University and State of Indiana, 22A-PL-337.

In its decision, the COA noted that Trial Rule 23 is a “purely procedural rule,” and that the right to bring a class action is a “purely procedural right.”

“Section 7 is a purely procedural statute, in that it does not affect a plaintiff’s existing substantive right to sue a postsecondary educational institution for breach of contract or unjust enrichment,” Judge Terry Crone wrote. “Instead of furthering judicial administrative objectives, however, it frustrates them by encouraging a multiplicity of lawsuits from similarly situated plaintiffs.”

The appellate panel further dismissed Ball State’s suggestion that mandating judicial inefficiency predominantly furthers public policy objectives by protecting Indiana’s postsecondary educational institutions “from widespread legal liability arising out of their efforts to combat and mitigate the spread of COVID-19.”

“We find this reasoning unpersuasive because, as already mentioned, Section 7 does not abrogate the existing substantive right to sue those institutions for breach of contract or unjust enrichment, so it does not reduce the institutions’ potential legal liability in the slightest,” Crone wrote.

Finally, the COA concluded that the conflict between the rule and the statute “could not be more stark,” in that Trial Rule 23 says a claimant “may” bring a class action, while Section 7 says a claimant “may not.”

“Ball State and the State attempt to harmonize the two by noting that Trial Rule 23(D)(4) allows a court to require that pleadings be amended to eliminate class allegations. But Section 7’s blanket prohibition of class actions effectively dictates that a pleading with class allegations may not be filed in the first place,” Crone wrote.

“In sum, both Trial Rule 23 and Section 7 ‘could not apply in a given situation,’” he concluded. “Accordingly, we conclude that Section 7 is a nullity, and therefore we reverse and remand for further proceedings consistent with this decision.”

The Ball State decision comes after the COA in March affirmed the denial of motions to dismiss COVID breach-of-contract lawsuits brought by students against Indiana University and Purdue University in the case of The Trustees of Indiana University v. Justin Spiegel; The Trustees of Purdue University v. Elijah Seslar, Zachary Church, Jordan Klebenow, and Luke McNally21A-CT-175.

There, students similarly alleged breaches of contract when their respective schools moved to online learning because of the COVID-19 pandemic.

Indiana Supreme Court justices were recently divided in declining to grant transfer to that consolidated case.

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