The Florida Supreme Court recently let stand a ruling by a state appeals court that touches on many issues affecting colleges and their students in disciplinary matters: due process, implied contracts, legal remedies, and the proper role of the courts in academic judgments. The decision also reflects the judiciary’s growing tendency to view colleges as similar to commercial ventures -- a trend that could have frightening implications for higher education.
It all began when Keith M. Sharick, a former medical student at Nova Southeastern University, College of Osteopathic Medicine, in Fort Lauderdale, sued the college in 1993 after he was given a failing grade in the final course that he required to graduate.
A jury ruled that the institution had breached an implied contract with Sharick and that its decision to give him a failing grade was “arbitrary,” “capricious,” and “lacking any discernible rational basis.” Yet the court only permitted the jury to consider damages with respect to tuition expenses -- not, as Sharick was demanding, compensation for any future earnings he may have lost as a result of his expulsion.
The appeals court, however, overturned the latter decision, setting off a firestorm in the academic world. It concluded that the “fact of Sharick’s damage as the result of Southeastern’s breach of contract can be proved with certainty,” and that he should be allowed to seek damages “in the form of the loss of earning capacity that would reasonably have resulted” had he received his degree.
That court rejected the college’s argument that “recovery of anything beyond tuition reimbursement when a school dismisses a student from classes is precluded because any other damages would be too remote, contingent, conjectural and speculative and could not be established with a reasonable degree of certainty.” In a fearful passage, one judge, writing in support of Sharick, compared Sharick’s situation to “cases where new businesses assert lost profits as consequential damages for breach of contract.” A dissenting judge, however, found it “inconceivable” that Sharick sought “a lifetime’s worth of income for a potential career in an unknown field from a degree not yet obtained.”
The state Supreme Court accepted review, heard oral arguments, but dismissed the case on jurisdictional grounds. As a result, the lower appeals-court decision stands, and the case is back in the original trial court for a final decision on how much Sharick should receive in damages. A jury trial is set for later this month.
The appeals court’s broad language about implied contracts for the awarding of degrees, and its willingness not only to overrule an academic judgment but also to award the future value of a “lost degree,” are unprecedented and alarming. Although the court displayed little concern that its decision would open the floodgates for big jury awards to make up for “lost careers” based on academic misjudgments, the ruling could prompt similar suits by disgruntled students all across the country.
Granted, the appeals-court ruling was influenced, in part, because the jury found that the college’s decision to give Sharick a failing grade was “arbitrary,” “capricious,” and “lacking any discernible basis.” Yet while the jury viewed the college’s actions as egregious, the college was just as confident that its academic judgment was defensible.
Ultimately, colleges need to be on guard because, no matter how unassailable their decisions may appear from a scholastic viewpoint, jurors unaccustomed, or even indifferent, to academic deference may view those decisions differently. As higher-education institutions consider disciplining or dismissing students for misconduct or poor academic performance, they should be aware of the potential risks and have policies in place to limit them -- or, at least, to deal with the consequences.
For example, the appeals court found that Nova Southeastern had breached an implied-in-fact contract based, in part, on language contained in its student handbook at the time of Sharick’s enrollment. Specifically, it cited the statement, “The course of study is outlined as a four year curriculum leading to the DO degree,’” as evidence that the college had made an implied agreement with Sharick.
Thus, institutions should recognize that such handbooks, once believed to be simple expressions of institutional policies and expectations, can be interpreted by students and parents as describing legal rights. In an article on student handbooks as a legal tool, written for the Education Law Association, the legal commentators William Bradley Colwell and Brian D. Schwartz note, “Administrators and employees must take great care in following these policies, as any variation may lead to a costly and time-consuming lawsuit.”
The Sharick case offers other sobering lessons that colleges must contend with:
Commercialism is supplanting “in loco parentis” in relationships between colleges and their students. The ruling in the Sharick case makes clear that courts and juries increasingly view colleges as no different from commercial businesses. The judge who wrote in support of Sharick commented that although the “judiciary has traditionally deferred to colleges and universities concerning decisions to deny degrees, certificates or academic credit,” that view is now “disfavored because it no longer represents contemporary values.”
Referring to an article by Hazel Glenn Beh, an assistant professor of law at the University of Hawaii, the judge noted that “higher education has become increasingly commercial, using various marketing tools to entice students to their schools” such that, in Beh’s words, “the deeply rooted hostility toward student claims and judicial deference to university conduct toward students becomes increasingly less defensible as bottom-line, commercial concerns motivate university actions and students seek a more consumer friendly product.” The judge also invoked the language of Justice Oliver Wendell Holmes in Globe Ref. Co. v. Landa Cotton Oil Co., in 1903: “If a contract is broken the measure of damages generally is the same, whatever the cause of the breach.”
Courts may increasingly stop deferring to colleges in academic judgments. Although courts have traditionally given academic decisions substantial, if not overriding, consideration in student disputes, institutions should no longer rely on that judicial approach. An academic judgment was made at Nova Southeastern that Sharick did not deserve to receive the last few credits he needed to graduate, nor to obtain a degree and its benefits. But while the court recognized that it could not order the college to grant Sharick a degree, it gave him the right to seek the next best thing: future losses from a career yet to be established.
The ruling suggests that faculty members, student-affairs directors, and others should establish a clear, rational, and documented justification for any academic decision about a student when they make those decisions; they should not depend on protection in court if those decisions are contested later on. Educating administrators and professors is important -- and can be done by legal counsel in a pragmatic way that avoids legalese. It is also critical that staff and faculty members intervene early in cases of “problem” students.
Colleges should develop alternative ways to resolve student disputes over academic matters. Given the potential uncertainty of how judges and juries will respond if a case goes to court, institutions should establish other means of settling Sharick-like situations, such as mediation and arbitration. For example, student-affairs personnel, in consultation with legal counsel, could add mandatory alternative dispute resolution, or “ADR,” clauses to student handbooks and other documents by which colleges define their contractual relationships with their students. Those clauses would require students to settle grievances through such alternative measures, rather than by going to court.
Colleges should develop methods to limit their financial exposure in such breach-of-contract claims. If courts are increasingly viewing colleges as akin to commercial enterprises, why shouldn’t they follow the lead of businesses, which require consumers to agree to limitations on potential damages? Colleges could restrict student damages to only a refund of tuition, a credit for future courses, or otherwise limited compensation. As long as they are reasonable, such restrictions will probably stand up in court. Institutions should include such limitations on damages and remedies in student handbooks and other contract documents that students must acknowledge receiving and sign.
Both economically and legally, it makes sense to allow students to recover only what would be necessary to obtain a degree, rather than putting an institution at risk for the value of students’ “lost careers.” Imagine the worst-case scenario: a class-action suit seeking damages for the value of the entire student body’s future earnings.
It is bad enough that Sharick and the college were publicly cast in an unfavorable light as memorialized in the opinions of Florida appellate judges. When one adds to that all the other risks, it is clear that everyone involved in academic decisions concerning students should take steps to avoid a no-win result like that in the Sharick case.
Scott D. Makar is an assistant general counsel with the City of Jacksonville, Fla. He has taught education law and was a partner with the Holland & Knight law firm, where he handled education-law matters.
http://chronicle.com Section: The Chronicle Review Volume 49, Issue 11, Page B20