U. of California Must Refund $38-Million in Fees to Students, Judge Rules

March 12, 2010

The University of California must pay a total of $38-million to thousands of former students who say the university illegally raised their fees after it had promised not to do so, a judge ruled on Wednesday.

The judge, John E. Munter of the Superior Court of San Francisco, ruled that the university had breached an implied contract when it raised fees for about 2,900 professional-school students who enrolled starting in 2003. The university had made a binding promise to those students that they would pay the same level of fees over the course of their studies, the judge wrote.

The decision is the second time the university has lost a class-action lawsuit over fee increases for professional-school students. In a similar case, Kashmiri v. U.C. Regents, the university was forced to pay $33-million to refund the fee increases of thousands of professional-school students who enrolled before December 2002.

This week's decision covers students who enrolled after those in the Kashmiri case, primarily in the 2003-4 academic year. University lawyers argued that those students should have known that their fees could go up because the university had already imposed a fee increase for other continuing students by the time they enrolled.

But in published documents, the university let its existing policy of not raising professional fees for continuing students stand until August 2003, Judge Munter wrote, creating a reasonable expectation that fees would remain constant for students who had accepted offers of admission before then.

Andrea Luquetta, a former law student at the University of California at Los Angeles and the lead plaintiff in the case, said in a written statement that the judge's decision was "a great victory for all my classmates who paid more in fees, and took on much higher debt, than what we originally thought we would have to pay to attend the University of California."

Christopher M. Patti, a lawyer for the university, said it was "looking very hard" at appealing the case but had not made a final decision. The California Court of Appeal rejected the university's appeal in the Kashmiri case in 2007.

Mr. Patti disputed the judge's conclusion that the later group of students had been promised consistent fees. "By the time these students enrolled, the university made it clear that it was no longer making the fee constant," he said. "So any reasonable person would have known that the policy that had been in effect previously no longer was."