North Carolina Lawyers Weekly
The plaintiff-students have stated claims for breach of contract, based on the defendant-university system’s transition to online-only learning during the spring semester of 2020 in response to the COVID-19 pandemic. However, defendant is entitled to immunity under G.S. § 116-311, and plaintiffs have failed to show the statute is unconstitutional as applied to them.
We affirm the trial court’s grant of defendant’s motion to dismiss.
Plaintiffs were university students (one plaintiff is a student’s mother) when defendant closed its campuses in response to the pandemic.
Defendant’s practice is to charge different rates for online and in-person learning. Plaintiffs adequately pled that they accepted defendant’s offer for in-person learning by paying the required tuition, fees, room and board. This was sufficient to allege an implied-in-fact contract and a waiver of sovereign immunity.
However, G.S. § 116-311 provides immunity to claims for COVID-19 related university closures in the spring of 2020. Since the alleged acts or omissions at issue were “reasonably related to protecting the public health, safety, or welfare in response to . . . COVID-19 . . . .” § 116-311(a) applies to plaintiffs’ claims.
Constitutionality
We reject defendant’s argument that plaintiffs’ claims assert a facial challenge to the constitutionality of § 116-311 and that plaintiffs waived their constitutional challenge by0 failing to follow the correct procedure for making a facial challenge. Plaintiffs have made an as-applied challenge. Plaintiffs seek to recover money they paid for tuition, fees, on-campus housing, and meals. They do not seek a declaratory judgment that the statute is unconstitutional or injunctive relief barring its enforcement. Moreover, plaintiffs’ separation of powers argument relies on the timing of plaintiff’s lawsuit, i.e., that it was filed before the General Assembly passed the immunity statute. Plaintiffs have not waived their constitutional challenge.
Contract Clause
Under the Contract Clause of the United States Constitution, “no State shall pass any Law impairing the Obligation of Contracts.” To determine whether a Contract Clause violation exists, our courts use a three-factor test: (1) whether a contractual obligation is present, (2) whether the state’s actions impaired that contract, and (3) whether the impairment was reasonable and necessary to serve an important public purpose. Here, plaintiffs fail at the third prong.
The legislature explained the purpose of the immunity statute: “It is a matter of vital State concern affecting the public health, safety, and welfare that institutions of higher education continue to be able to fulfill their educational missions during the COVID-19 pandemic without civil liability for any acts or omissions for which immunity is provided in this Article.” G.S. § 116-313.
The quality of post-secondary education is an important purpose for the state, and the immunity statute was a reasonable means of ensuring the quality of education because it allowed universities to focus on how to best deliver education online rather than trying to continue in person and expending resources on all the public health measures necessary to try to achieve that prospect safely.
Furthermore, the immunity statute was a reasonable response to the COVID-19 pandemic at the time it was adopted, in the context of the Governor’s Emergency Directives. It is unclear what else the General Assembly could have done to achieve the same goal of ensuring the focus was on continuing the universities’ educational mission in light of the uncertainty caused by the early days of the COVID-19 pandemic. Because we find the immunity statute to be reasonable and necessary, we reject plaintiffs’ argument that the statute violates the federal Constitution’s Contract Clause.
Equal Protection
Plaintiffs also argue § 116-311 violates the equal protection clauses of the federal and state constitutions because it “aimed at protecting only one group of specific entities[,]” defendant and its universities “against the claims of another specific group” and did not extend to other industries that also “suffered financially from the pandemic” such as “[g]yms, restaurants, and countless other businesses . . . forced to close their physical locations.”
Not only are the educational missions of institutions of higher learning a legitimate government interest, but the importance of education is also enshrined in our state’s constitution. And the immunity law helped further that purpose by allowing defendant’s universities to focus on educational quality rather than worry about lawsuits or what public health measures would be needed to allow schools to continue in person during the early stages of the pandemic. Since there is a rational basis for treating institutions of higher learning different than gyms or restaurants, the immunity statute survives equal protection analysis.
Due Process
States are free to create substantive defenses or immunities for use in adjudication. Logan v. Zimmerman Brush Co., 455 U.S. 422 (1982). In such a case, “the legislative determination provides all the process that is due.”
There is a rational relationship between the grant of immunity and the state’s educational goals because immunity freed up the Universities to focus on how to best deliver education online rather than trying to continue in person and take all the public health measures necessary to do that, which would have necessarily taken resources away from efforts to ensure educational quality. Therefore, we reject plaintiffs’ contention that § 116-311 violates the Fourteenth Amendment’s Due Process Clause or our constitution’s corresponding Law of the Land Clause.
Takings
Plaintiffs present no caselaw showing a chose in action, or a right to sue in general, can be the basis of a Takings Clause violation under the United States Constitution. Therefore, we reject plaintiffs’ argument that § 116-313 violates the Takings Clause.
Separation of Powers
Finally, even if passing a law in response to specific litigation already pending would violate separation of powers, plaintiffs have failed to provide any evidence this law was passed in such a manner. Therefore, we reject plaintiffs’ separation of powers argument.
Plaintiffs’ claims are barred by statutory immunity.
Affirmed.
Dieckhaus v. Board of Governors (Lawyers Weekly No. 011-001-23, 50 pp.) (Donna Stroud, C.J.) Appealed from Orange County Superior Court (Edwin Wilson, J.) Blake Abbott for plaintiffs; Jim Phillips, Jennifer Van Zant, Laura McHenry and Kari Johnson for defendant. 2023-NCCOA-1
