American University will pay $5.439 million into a settlement fund as a class action lawsuit against the University seeking partial tuition refunds for the spring 2020 semester has reached a preliminary class action settlement.
The lawsuit, filed in May 2020, alleges the University broke an implied contract to provide its students in-person instruction in exchange for tuition when the University moved classes online in March 2020 due to the COVID-19 pandemic.
The U.S. District Court for D.C. granted preliminary approval Jan. 10 to a $5.439 million class-action settlement between the University and a group of approximately 7,000 eligible students. Under the terms of the preliminary agreement, the three named plaintiffs will receive service awards up to $7,500 each and the remainder of the settlement fund will be distributed among the remaining students. The terms of the preliminary settlement ensure that no more than 33 percent of the settlement fund will go towards attorney fees and costs, equaling a maximum of $1,812,818.70.
“In response to a class action lawsuit brought against AU related to the transition to remote learning, AU agreed to a settlement which has received preliminary approval from the U.S. District Court for the District of Columbia. Settlement of the lawsuit is not an admission of wrongdoing or liability by AU. AU denies all the allegations raised in the lawsuit,” said Elizabeth Deal, the University’s assistant vice president for community and internal communication.
Eligible recipients include AU undergraduate students enrolled in the University during the spring 2020 semester who paid tuition and other included fees. The proposed settlement estimates students will receive between $400 to $475, according to a notice of the preliminary settlement sent to eligible students.
While the lawsuit was initially dismissed by a lower court, the U.S. Court of Appeals for the D.C. Circuit reversed the dismissal in March 2022. The AU lawsuit was brought up alongside a lawsuit filed against George Washington University, which argued GW had similarly breached its contract with students to provide in-person instruction in exchange for tuition. The Court affirmed the plaintiff’s argument that the University “breached implied-in-fact contracts for in-person education” when it transitioned to virtual instruction.
The lawsuit appeared in front of Judge Christopher R. Cooper in April 2023 in the U.S. District Court for D.C., who upheld the plaintiff’s claims against AU.
Under the terms of the preliminary settlement, the University “denies each and every allegation of wrongdoing, liability, and damages asserted via the claims in the lawsuit, and AU denies that the claims in the lawsuit would be appropriate for class treatment if the litigation proceeded through trial.” Additionally, the members of the settlement class will forfeit the right to pursue any lawsuit against AU claiming a breach of contract relating to AU tuition or fees during the spring 2020 semester if they receive a settlement payment.
Eligible students can object to the terms of the preliminary settlement or opt to exclude themselves from the settlement, meaning they would not receive a cash award but would retain their right to sue AU about the issues of the case until April 1, 2024.
The Court will hold a final approval hearing on May 7, in which the Court will hear any objections or arguments before deciding whether to grant approval to the proposed settlement terms.
According to Deal, Eqip Class Actions and Claim Solutions will oversee the administration of the settlement fund and additional information regarding the settlement and claims process can be found on the class action website.
This article was edited by Tyler Davis, Abigail Turner and Abigail Pritchard. Copy editing done by Luna Jinks and Isabelle Kravis.