[00:00:00] Speaker 03:
Good morning, everyone.

[00:00:01] Speaker 03:
I'm delighted to be sitting here in Portland with my wonderful colleagues, judges Forrest and Sung.

[00:00:08] Speaker 03:
The cases will be called in the order listed on the docket.

[00:00:13] Speaker 03:
The first case on calendar for argument is Pranger v. Oregon State University.

[00:00:18] Speaker 03:
Counsel for appellants, please approach and proceed.

[00:00:25] Speaker 01:
Good morning, Your Honors.

[00:00:26] Speaker 01:
My name is Jay Kim from the law firm of Lynch Carpenter.

[00:00:29] Speaker 01:
I'm here to represent plaintiff's appellants, Daniel Pranger and Garrett Harris.

[00:00:36] Speaker 01:
I'd like to reserve three minutes for a rebuttal.

[00:00:39] Speaker 03:
All right, counsel, please be reminded that the time shown on your clock is your total time remaining.

[00:00:44] Speaker 01:
Thank you, Your Honor.

[00:00:45] Speaker 03:
All right.

[00:00:46] Speaker 01:
This is a class action brought by students of Oregon State University seeking partial refund of tuition and fees for the winter and spring terms of 2020 based on the university's breach of the implied contract to provide in-person instruction and full access to the campus during the

[00:01:05] Speaker 01:
during the student's tenure at the universities.

[00:01:08] Speaker 01:
Instead, the university transitioned these terms to fully remote instruction and closure of the campus as a result of the COVID pandemic and Oregon Governor Brown's stay at home executive orders relating to the pandemic.

[00:01:21] Speaker 01:
As an initial matter, we're here today because OSU has finally succeeded in its third bite at the apple to try to get this case dismissed before any discovery has been permitted.

[00:01:32] Speaker 01:
Specifically the district court denied the initial motion to dismiss and then it denied the subsequent, excuse me, denied the motion to dismiss as to the breach of contract claim.

[00:01:41] Speaker 01:
and then denied the motion for reconsideration, this time specifically rejecting its impossibility defense holding that required analysis of the facts and evidence.

[00:01:54] Speaker 04:
Council, at this point in the case, the only issues remaining relate to Oregon law.

[00:01:58] Speaker 04:
And I'm aware that there is another case raising very similar issues proceeding in the Oregon courts.

[00:02:03] Speaker 04:
I believe it's at the Oregon Court of Appeals at this point.

[00:02:06] Speaker 04:
Should we hold off in deciding this case and wait and see what the Oregon courts have to say about these issues?

[00:02:12] Speaker 01:
The Oregon case, the opening brief is actually due today in the state appellate court.

[00:02:20] Speaker 01:
I think that case is so far behind in the docket, at least from our perspective, we believe this court is fully in position to rule on these issues.

[00:02:31] Speaker 01:
So we're here today because the OSU finally succeeded on the at-issue motion for summary judgment with the court denying plaintiffs any opportunity to conduct any discovery.

[00:02:42] Speaker 01:
And it granted the summary judgment based on the defenses of impossibility.

[00:02:48] Speaker 03:
So it didn't grant the motion to dismiss.

[00:02:50] Speaker 03:
It ruled on summary judgment.

[00:02:52] Speaker 01:
Yes, it granted summary judgment.

[00:02:54] Speaker 01:
Excuse me.

[00:02:54] Speaker 01:
It granted summary judgment based on the defenses of impossibility and contract modification.

[00:03:01] Speaker 01:
While this court has to review this appeal on the de novo standard, I think it's worth noting that in order for it to rule as a matter of law, the district court did assume for purpose of the MSJ that OSU had a valid contract with its students to provide in-person instruction and full access to the campus facilities throughout their entire enrollment at OSU in exchange for a full tuition payment.

[00:03:27] Speaker 03:
Council, in your view, what was the material

[00:03:30] Speaker 03:
disputed issue of fact that precluded summary judgment.

[00:03:34] Speaker 01:
Sure, so regarding the defense of impossibility, I think the first thing to note is that numerous courts in Oregon have stated that determining whether impossibility is a defense is a question of fact, and specifically as to the issue of who bore the risk, the issue of reasonable foreseeability.

[00:03:59] Speaker 03:
But in this record,

[00:04:01] Speaker 03:
what was the disputed material issue of fact in this record right so i i think

[00:04:08] Speaker 01:
That raises two points.

[00:04:09] Speaker 01:
The first one is that their first argument in their OSU's responsive brief is that we didn't state specific facts or we didn't identify specific genuine issues of fact.

[00:04:20] Speaker 03:
So that's why I'm asking you.

[00:04:21] Speaker 01:
It begs a question.

[00:04:23] Speaker 01:
We were not even given an opportunity to do any discovery on these issues.

[00:04:27] Speaker 03:
But on summary judgment, you're allowed to put in affidavits.

[00:04:33] Speaker 03:
Any other material issues, materials that you have to raise a material issue of fact?

[00:04:39] Speaker 01:
Sure.

[00:04:39] Speaker 03:
So I'm asking you in this record, what material issue of dispute of fact was raised by your clients?

[00:04:48] Speaker 01:
Sure.

[00:04:50] Speaker 01:
All we had access to was publicly available, and so that includes OSUs had a long-developed infectious disease response protocol that specifically identified the imminent threat of coronaviruses.

[00:05:03] Speaker 01:
The state of Oregon has issued orders to close schools during the H1N1 pandemic.

[00:05:10] Speaker 01:
And I would just state the general fact that every major research institution, every major public entity, especially in the West Coast, has been familiar with the threat of coronaviruses coming over here.

[00:05:22] Speaker 01:
We had SARS and MERS.

[00:05:23] Speaker 01:
Those were just in Asia.

[00:05:25] Speaker 01:
The governments of Korea, Japan, and China had shut down orders and stay-at-home orders.

[00:05:33] Speaker 01:
And we've discovered

[00:05:35] Speaker 01:
But it's obvious that there are thousands of flights coming from those countries to the West Coast every single day.

[00:05:40] Speaker 01:
And so those are just the tip of the iceberg that I would just point to for both the argument that we should have been provided an opportunity to do discovery, additional discovery, but that even with what is publicly available, it's clear that OSU, at the very least, there's a question of fact whether they foresaw this pandemic as well as the government order.

[00:06:03] Speaker 03:
So it's your position that the public materials would inform them of the extensive pandemic, the extensive worldwide pandemic that was

[00:06:19] Speaker 03:
hadn't been seen in over 100 years.

[00:06:21] Speaker 03:
So you think that was a disputed issue of fact?

[00:06:24] Speaker 01:
Yes, I think those things are included in the dispute of facts.

[00:06:27] Speaker 01:
On top of the fact, again, OSU had a long-standing protocol and committee that was monitoring these things.

[00:06:36] Speaker 01:
And so OSU is a major institution.

[00:06:40] Speaker 01:
It's a major research institution.

[00:06:42] Speaker 01:
It excels in science, in all the sciences.

[00:06:45] Speaker 01:
And this was no mystery to them.

[00:06:46] Speaker 03:
So what was the university supposed to do in view of the governor's shutdown order?

[00:06:53] Speaker 01:
Sure.

[00:06:54] Speaker 01:
And I think that's a distinction that OSU tries to make in this case, that there is an important distinction between the actual pandemic, whether you foresaw the pandemic versus whether they foresaw the governor's orders.

[00:07:07] Speaker 01:
And I think Oregon cases have been clear that that distinction is only a matter of degree.

[00:07:13] Speaker 01:
It's not a dispositive fact that renders forcibly not existing.

[00:07:18] Speaker 03:
But as a factual matter, what could the university have done

[00:07:23] Speaker 03:
in view of the governor shutdown order?

[00:07:26] Speaker 01:
The university, I would think, should have done what it did.

[00:07:32] Speaker 01:
But that's a different fact from in doing what it did, whether it has damaged students based on pre-existing contracts that it had with the students.

[00:07:42] Speaker 03:
But doesn't that render it impossible to provide in-person services if the governor required a shutdown?

[00:07:52] Speaker 01:
Again,

[00:07:54] Speaker 01:
a complete rebuttal of the defense of impossibility is foreseeability.

[00:08:01] Speaker 01:
And so that was my first argument that I've been trying to make is that because they're the ones that foresaw the risk, we even foresaw the risk, they bore the responsibility in the event and therefore they have to pay the damages for it.

[00:08:18] Speaker 03:
Is it your position, I'm sorry, is it your position that the university should have foreseen the governor's order?

[00:08:27] Speaker 01:
A, yes, and B, I would point to the case that we cited, both parties cited Savage versus Peter Kiewit Son's company, where it held that a sandblasting company

[00:08:43] Speaker 01:
Assume the risk of both the damages that might come out of their sandblasting performance as well as the risk of of a court order and joining the sandblasting performance even though the sandblasting company had never even heard of what an injunction is and so that's the the appellate court in Oregon specifically stated that it doesn't

[00:09:09] Speaker 01:
Even if they didn't foresee a specific change in the law, that if there's sufficient notice of the underlying events, then that's sufficient for foreseeability.

[00:09:20] Speaker 01:
But again, that's aside from the point that every time there has been a pandemic, every government that's involved has always done these shutdown orders.

[00:09:27] Speaker 01:
That's always foreseeable, I would argue.

[00:09:29] Speaker 04:
I have a couple of questions related to the contract.

[00:09:34] Speaker 04:
The summary judgment briefing that you, your clients, submitted argued that the contract was yearly.

[00:09:42] Speaker 04:
And then also- Excuse me, I missed the- Argued that the contract was yearly, and then a few pages later argues that the contract is for the duration of enrollment.

[00:09:51] Speaker 04:
And I'm trying to figure out what to do with the fact that we have two contrary statements.

[00:09:54] Speaker 04:
So what is, your position is period of enrollment?

[00:09:58] Speaker 01:
So thank you for the question, Your Honor.

[00:10:00] Speaker 01:
So what we were going by with in the MSJ, at least in this appeal, is what I mentioned at the outset is what the district court assumed to be the contract, the existing contract, and the district court specifically said,

[00:10:16] Speaker 04:
So that's an interesting, so I understand that the district court made that assumption.

[00:10:20] Speaker 04:
It seems to be for efficiency purposes, but does your, I guess what I'm getting at is, do your clients agree with that assumption?

[00:10:26] Speaker 01:
Yeah, absolutely.

[00:10:27] Speaker 01:
I think our first- It's a duration of enrollment.

[00:10:32] Speaker 01:
Yeah, Oregon State University is a prestigious university, public university.

[00:10:35] Speaker 01:
It's typically for undergrads, for instance, it's a four-year university.

[00:10:39] Speaker 01:
And when students go off to college,

[00:10:43] Speaker 01:
They're going to Oregon State University, they're enrolling in an on-campus program that's been provided historically for 100 years, and they're expecting on-campus instruction and access to the campus for the duration of their tenure.

[00:10:57] Speaker 01:
And so when we're talking about, this is an implied and in fact contract case.

[00:11:01] Speaker 01:
And so what are all the different representations and course of conduct that come into the mix in determining the scope of that contract?

[00:11:11] Speaker 01:
And so we would argue that the history of it, what consumers expect, what students and families expect when they're sending their students, their children off to these universities.

[00:11:20] Speaker 04:
Aren't those questions a fact?

[00:11:22] Speaker 01:
They're all absolutely questions of fact.

[00:11:24] Speaker 01:
And that's what we're here to just point out is that there's questions of fact all over the place here.

[00:11:29] Speaker 01:
And this is before we were even able to do any discovery.

[00:11:33] Speaker 04:
I have another question that I want to be clear about.

[00:11:36] Speaker 04:
It's not clear to me which term your clients are arguing was breached.

[00:11:42] Speaker 04:
Is it just spring 2020 term was breached or is it every term that they decided to stay on campus or stay enrolled while remote instruction was being provided?

[00:11:52] Speaker 01:
Sure, the complaint specifically lists winter and the spring term of 2020, because those are the terms where the announcements were made.

[00:12:00] Speaker 01:
Why winter?

[00:12:00] Speaker 04:
Because winter was in person except for exams.

[00:12:03] Speaker 04:
So winter, you want breach there, too?

[00:12:05] Speaker 01:
Admittedly, spring is our primary claim, Your Honor.

[00:12:10] Speaker 04:
OK, but it's not fall of 2020 and so on.

[00:12:13] Speaker 04:
No, Your Honor.

[00:12:14] Speaker ?:
OK.

[00:12:15] Speaker 00:
And the duration of the contract issue,

[00:12:19] Speaker 00:
If I understand correctly, you're saying we have to assume a contract for the duration of their college education.

[00:12:27] Speaker 00:
It's a bilateral contract, so are you saying that the plaintiffs would

[00:12:32] Speaker 00:
were committing to pay tuition to OSU for the duration of their employment.

[00:12:38] Speaker 00:
Sorry, for the duration of their college education.

[00:12:41] Speaker 01:
Yes.

[00:12:42] Speaker 01:
So that's precisely what the district court assumed for purposes of the MSJ.

[00:12:47] Speaker 01:
And we would agree with that.

[00:12:50] Speaker 01:
Again, we haven't done any discovery into the full scope of the contract.

[00:12:55] Speaker 00:
There are policies that were fully, you know, that your clients had notice of.

[00:13:01] Speaker 00:
I mean, the contract itself, they can't not know what the contract, they have to know about the basis of the contract, right?

[00:13:08] Speaker 00:
So, but under your interpretation of the contract, no student could ever withdraw.

[00:13:13] Speaker 01:
And that's where I think the distinction between a case that involves an express feature contract and a case involving an implied and fact contract differ a little bit is it's not like there was a specific

[00:13:32] Speaker 01:
you know, language of a term that's specific to this case.

[00:13:35] Speaker 01:
It's the entire representations that are made.

[00:13:37] Speaker 01:
It's the course of conduct by the university.

[00:13:40] Speaker 01:
And so in that sense, students, there's an argument to be made that students are obligated to pay this because they've enrolled in a four-year university.

[00:13:50] Speaker 01:
that in order to be able to complete the program and get their degree, they've always have to pay timely for each of the terms.

[00:13:57] Speaker 01:
There's another way to look at it that the academic calendar and the course catalog are published for each academic year, and so when they're represented exactly which courses and all these on-campus courses

[00:14:11] Speaker 01:
overwhelming majority of these are on-campus courses that are available to them as they commit to each annual year, that perhaps it's by the year that they're obligated to pay.

[00:14:23] Speaker 01:
But again, those are things that can be fleshed out through discovery, and we just haven't had an opportunity to do that.

[00:14:29] Speaker 00:
And that's one thing I don't understand, because your argument is that all these university policies and communications with the students created in an implied contract

[00:14:43] Speaker 00:
I think for that to happen, they had to be conveyed, communicated to the students.

[00:14:49] Speaker 00:
So why do you need discovery to determine what the basis of the contract is?

[00:14:56] Speaker 00:
course of conduct, you know, like, you know, it's interesting that- How can things that the students don't actually already know about form the basis of the, why do you need discovery to show what the terms and the basis of the contract are?

[00:15:11] Speaker 00:
Aren't those, wouldn't those have to be in communications or policies that were known to the students?

[00:15:16] Speaker 01:
Right.

[00:15:16] Speaker 01:
So what we don't have access to is we don't have access to everything that the university sent out to their students.

[00:15:23] Speaker 01:
We don't have access to all of their marketing materials.

[00:15:25] Speaker 01:
We don't have access to all of their acceptance letters.

[00:15:27] Speaker 01:
We don't have access to what their website have said for students that were seniors.

[00:15:34] Speaker 01:
We're talking about

[00:15:35] Speaker 01:
you know, materials going back four years at least to when they were first enrolling into the program.

[00:15:39] Speaker 01:
And so we don't have Oregon State sitting on all that stuff.

[00:15:43] Speaker 01:
We can try to dig up what's public available.

[00:15:45] Speaker 00:
Wouldn't the plaintiffs have to allege as to at least make specific allegations as to what they recall being stated in those things to form the basis of the contract?

[00:15:53] Speaker 01:
Sure, and we've done that here.

[00:15:56] Speaker 01:
The complaint lists numerous things.

[00:15:58] Speaker 01:
They talk about their campus all the time.

[00:16:00] Speaker 01:
They talk about all the facilities that are available, the hundreds of student clubs that are available, the importance of in-person labs and having access to professors and all those things.

[00:16:10] Speaker 01:
They talk about all that stuff.

[00:16:12] Speaker 01:
And our understanding is that they've been doing that for a very long time.

[00:16:17] Speaker 01:
And so for us to be able to get a chance to do discovery, flesh out exactly what they've been systematically sending out to all their students and getting access to what they've been representing, we just want an opportunity to do that.

[00:16:28] Speaker 01:
And I think that those same facts and those same discovery tie into

[00:16:33] Speaker 01:
the actual underlying facts that are in dispute regarding the defenses of impossibility and modification of the contract.

[00:16:45] Speaker 01:
And I would also mention a four-year college at Oregon State University is not just some fungible product.

[00:16:56] Speaker 01:
It's not like buying a watch and deciding that there was something wrong with it and you get your money back.

[00:17:01] Speaker 01:
We're talking about

[00:17:03] Speaker 01:
the largest purchase that most families will ever make in their life.

[00:17:07] Speaker 01:
The biggest commitment, the thing that affects students for the rest of their careers, this is an important decision.

[00:17:15] Speaker 01:
It's a decision that has long duration to it and it's not something that, on a whim, that if something changes, even for the best of the reasons,

[00:17:25] Speaker 01:
If you're still transitioning to something that on a market-based level is priced less than what they contracted for.

[00:17:32] Speaker 03:
Council, is it your position that a degree from Oregon State University that was obtained during the pandemic is worth less than a degree?

[00:17:42] Speaker 03:
that was obtained with full in-person instruction?

[00:17:46] Speaker 01:
Is that your position?

[00:17:48] Speaker 01:
No, no, no.

[00:17:48] Speaker 01:
It is not our position.

[00:17:51] Speaker 01:
And I want to focus on the word worth, because we're not talking about worth.

[00:17:56] Speaker 01:
We don't want to get into the whole educational malpractice issue.

[00:18:00] Speaker 01:
You know one I one judge I have to show damages.

[00:18:03] Speaker 01:
Yeah one judge I was in front of throughout the example of if you buy a Corvette versus a Corvette with a convertible They both get you to the same place, but you're not buying the same thing You're not priced the same way and you're not experiencing the same thing.

[00:18:19] Speaker 00:
So the dress and the issue of the modification because students were

[00:18:25] Speaker 00:
I mean, I think it's undisputed at this point that students, the OSU told the students were going online, you were extending the time which you can withdraw for the term, get a full refund with no, you don't need to apply.

[00:18:41] Speaker 00:
It's not going to be discretionary.

[00:18:45] Speaker 00:
it's not going to be a discretionary matter.

[00:18:48] Speaker 00:
Right.

[00:18:48] Speaker 00:
So why, you know, why couldn't, why isn't that an acceptance when students went past that date and continued to go courses online?

[00:18:58] Speaker 00:
Why wasn't that an acceptance of that modification?

[00:19:00] Speaker 01:
Sure.

[00:19:01] Speaker 01:
The first thing I'll point out too is I think the eloquent statement made by the district court in Florida in the Rosada versus Berry University case that

[00:19:12] Speaker 01:
that the university hasn't provided sufficient support for its position that the student was required to threaten the barrier university, risk financial loss, and disrupt her academic career in order to preserve her contractual remedies.

[00:19:27] Speaker 01:
Again, this goes again to the fact that this isn't just some simple, fungible product.

[00:19:31] Speaker 00:
What financial loss were they risking when the university said you would get a full refund?

[00:19:37] Speaker 01:
What happens is then you don't get the education.

[00:19:40] Speaker 01:
And so what opportunities did students really have to accept or reject and find a transfer opportunity within such a short period of time?

[00:19:52] Speaker 00:
They could take a term off.

[00:19:54] Speaker 01:
And then they would be set back an entire term, their entire career would be set back, their time to be employed gets set back.

[00:20:02] Speaker 01:
Again, we're not arguing that they didn't receive a degree with value.

[00:20:07] Speaker 01:
What we're saying is that they didn't get the experience that was promised them that they paid for.

[00:20:12] Speaker 01:
And in doing that, in order to preserve their rights, they shouldn't have to, as the district court in Florida said, they shouldn't have to put their entire career in jeopardy at significant personal costs just to be able to preserve that.

[00:20:26] Speaker 01:
The idea of modification is really an after-the-fact justification.

[00:20:31] Speaker 01:
What the record shows actually happened is that the students continue to stay in the four-year program that they initially enrolled in

[00:20:40] Speaker 01:
because they had to mitigate their own damages, they had to mitigate their own harm because there were no other opportunities that were feasible.

[00:20:49] Speaker 01:
And OSU was doing the exact same thing, mitigating the amount of damage they were causing to the students.

[00:20:56] Speaker 01:
If, for example,

[00:20:57] Speaker 01:
after the governor issued its order, if OSU stopped providing any educational services at all, then the students, I don't think there'd be any question to be entitled to the full refund of tuition and fees for that term.

[00:21:08] Speaker 01:
What they did instead was provide a lesser priced service and something less than what the students had paid for for the rest of the term.

[00:21:19] Speaker 01:
That's what happened here.

[00:21:21] Speaker 01:
And that way, the students, by not dropping out, by not threatening

[00:21:26] Speaker 01:
you know, significant harm to themselves that they are mitigating the amount of damages that are being done to them and OSU is mitigating the amount of damages they are doing to the students.

[00:21:38] Speaker 01:
And so we believe that's what the facts show.

[00:21:44] Speaker 03:
Counsel, you've exceeded your time.

[00:21:46] Speaker 03:
We'll give you a couple of minutes for rebuttal, but we're here from the university now.

[00:21:50] Speaker 03:
Thank you.

[00:22:00] Speaker 02:
May it please the court, Soap and Shaw for Oregon State University.

[00:22:05] Speaker 02:
There are four independently sufficient grounds to affirm the district court's ruling here, and plaintiffs have no legal basis for the partial refund they are seeking.

[00:22:16] Speaker 02:
I'll briefly go through the four, substitution, modification, waiver, and impossibility.

[00:22:25] Speaker 04:
Can I jump right in to the question that I'm trying to sort out?

[00:22:31] Speaker 04:
Originally, I believe your client argued that this contract is a semester or term contract.

[00:22:38] Speaker 04:
And then for purposes of summary judgment, you went along with the district court's assumption that this is a contract for the duration of enrollment, correct?

[00:22:44] Speaker 02:
That's right.

[00:22:45] Speaker 04:
Why did you do that?

[00:22:48] Speaker 02:
in order to facilitate disposition of the case.

[00:22:53] Speaker 04:
So how does it facilitate disposition of the case to make that assumption about the contract?

[00:22:58] Speaker 02:
I think it's sort of accepting plaintiff's allegations about

[00:23:05] Speaker 02:
the characteristics of the contract.

[00:23:07] Speaker 02:
So even accepting plaintiffs' allegations, best case for them, characterization of the contract, Oregon State was still entitled to prevail under the four issues I just mentioned.

[00:23:21] Speaker 02:
So the parties agreed to a substitute contract for remote education when, after the governor's orders and Oregon State announced the transition to remote education,

[00:23:35] Speaker 02:
Both plaintiffs paid tuition, they did not withdraw, they attended classes, and they received academic credit.

[00:23:44] Speaker 02:
And plaintiffs have no real response to this argument.

[00:23:49] Speaker 02:
The second ground is modification.

[00:23:52] Speaker 02:
So by that same conduct, plaintiffs agreed to Oregon State's modified term for remote education.

[00:24:00] Speaker 02:
And the district court found multiple items of consideration that the provision of a safe education during the COVID-19 pandemic and the extension of the deadline to withdraw and receive a full refund without academic penalty.

[00:24:18] Speaker 04:
So with regard to modification, Oregon follows the more traditional view of consideration, the bargain for exchange.

[00:24:26] Speaker 04:
There has to be something on each side.

[00:24:28] Speaker 04:
So if the contract, if we accept the district court's assumption that the contract was for the duration of enrollment, that means that the university already had an obligation to provide a safe learning environment, already had an obligation.

[00:24:40] Speaker 04:
And the students already had an obligation to pay for the education that they received.

[00:24:45] Speaker 04:
So I'm wondering.

[00:24:48] Speaker 04:
What is the exchange on both sides of this?

[00:24:51] Speaker 04:
Yes, the students get a little bit more time to make some financial decisions and whether to pursue their education under a new format.

[00:25:00] Speaker 04:
But what is the university getting?

[00:25:03] Speaker 02:
So a few things, Your Honor.

[00:25:05] Speaker 02:
So the question of consideration is relevant to only modification.

[00:25:11] Speaker 02:
The substitution question, consideration is sort of self-contained within the substitution.

[00:25:17] Speaker 02:
And waiver does not require consideration.

[00:25:21] Speaker 02:
And I suppose the consideration doesn't come into play for the impossibility issue as well.

[00:25:27] Speaker 02:
But on consideration,

[00:25:31] Speaker 02:
even an acorn is sufficient consideration for a contract under Oregon State law.

[00:25:38] Speaker 02:
And so as you mentioned, the plaintiffs received the extension of the deadline and the provision of a safe remote education during the COVID-19 pandemic.

[00:25:49] Speaker 02:
And Oregon State received the continued payment of tuition.

[00:25:56] Speaker 04:
But that's the problem.

[00:25:57] Speaker 04:
If the contract is for the duration of enrollment,

[00:25:59] Speaker 04:
Oregon State was already entitled to that.

[00:26:01] Speaker 04:
That's not anything new.

[00:26:02] Speaker 00:
Wouldn't the consideration be that the university gets to change from in-person instruction to

[00:26:14] Speaker 02:
Yes, the discharge of that original obligation.

[00:26:17] Speaker 00:
Promise if the plaintiff's allegation is the contract is for in-person instruction and the university is saying we want to modify to be allowed to comply with the governor's orders and do online instruction.

[00:26:29] Speaker 00:
And then that's our consideration.

[00:26:32] Speaker 00:
In exchange, we're offering you extension of your time to withdraw with a refund and no academic penalty.

[00:26:40] Speaker 00:
That's my understanding of the bargain for the modification.

[00:26:43] Speaker 02:
That's right, yes, and the chance to continue your education without an increase.

[00:26:48] Speaker 04:
I guess I'm having difficulty with that with the assumption that this contract was for the duration because it almost suggests that

[00:26:58] Speaker 04:
We're in a situation where the university can say, I'm breaching because if I accept the assumption that I'm supposed to, as the university, provide in-person education for the duration of enrollment, and I'm not going to do that, and because I'm not going to do that, here's your option.

[00:27:14] Speaker 04:
You can continue on with this new format, the remote education, and keep paying, and I'll give you a little bit more time.

[00:27:19] Speaker 04:
But how is that a bargain for exchange as opposed to just accept my breach and keep going forward or not?

[00:27:26] Speaker 02:
Well, I think Your Honor is getting at this idea of waiver as well, that plaintiffs, by their conduct, can waive a term of a contract.

[00:27:35] Speaker 02:
And that's exactly what they did.

[00:27:36] Speaker 02:
And there's no consideration necessary for the waiver.

[00:27:40] Speaker 02:
And under Oregon law, a party can waive even a material term of a contract.

[00:27:46] Speaker 02:
So I understand the difficulty with sort of the district courts

[00:27:53] Speaker 02:
assumption that the contract existed in this format.

[00:27:56] Speaker 02:
But even under that fiction, there are these four grounds, including impossibility.

[00:28:02] Speaker 02:
And once the governor's orders prevented Oregon State from providing in-person instruction, their performance was excused.

[00:28:12] Speaker 02:
And plaintiffs are not entitled to damages.

[00:28:17] Speaker 02:
As an initial matter, Oregon courts do not generally award damages after a party's performance is excused due to impossibility.

[00:28:27] Speaker 02:
And that's the Perla Development case.

[00:28:29] Speaker 02:
It's also the Dorsey versus Oregon Motor Stages case.

[00:28:34] Speaker 02:
The plaintiffs in those cases sought damages after a party breached.

[00:28:39] Speaker 02:
Well, a party's performance was excused due to impossibility.

[00:28:43] Speaker 02:
And the Oregon courts did not award any damages.

[00:28:46] Speaker 04:
Do you agree?

[00:28:47] Speaker 04:
I think that's correct that the governor's order made it impossible for them to provide in person.

[00:28:54] Speaker 04:
I don't know how we conclude otherwise on these facts.

[00:28:58] Speaker 04:
But my thinking about this is that if we get to impossibility, then we have to deal with the contracts clause argument.

[00:29:04] Speaker 04:
Do you agree with that?

[00:29:05] Speaker 02:
I don't think so, Your Honor, because there is an exception under the contracts clause argument for orders related to public safety and health.

[00:29:13] Speaker 02:
And I believe plaintiffs.

[00:29:15] Speaker 04:
So my reading of Oregon law is, and admittedly, I think Oregon law, it's the Oregon constitutional contracts clause is muddled.

[00:29:24] Speaker 04:
But my reading of it is that federal law has a public purpose exception to the contract clause.

[00:29:29] Speaker 04:
And Oregon courts have talked about that, but have expressly not adopted it.

[00:29:34] Speaker 04:
And that is what the district court relied on.

[00:29:36] Speaker 04:
And as far as I can tell, that's a misstatement of Oregon law under the Strunk case, which specifically says Oregon has not adopted the public purpose exception.

[00:29:44] Speaker 04:
So are you referring to a different exception?

[00:29:47] Speaker 02:
I think, Your Honor, no, I'm referring to that same public health exception.

[00:29:51] Speaker 02:
However, even assuming that that exception does not exist, plaintiffs cannot bring a constitutional challenge to the governor's orders.

[00:30:03] Speaker 02:
I believe the Oregon Supreme Court already upheld those orders in the Alcorn Baptist case.

[00:30:12] Speaker 02:
the contract clause claim is just not available to them in this particular matter.

[00:30:19] Speaker 02:
The other thing I would say about entitlement to damages is that it would be an end run around the district courts ruling on sovereign immunity.

[00:30:29] Speaker 02:
So Oregon

[00:30:31] Speaker 02:
law does not allow for unjust enrichment claims against the state.

[00:30:37] Speaker 02:
And so what plaintiffs are seeking in terms of damages is basically unjust enrichment.

[00:30:43] Speaker 02:
And there's Oregon case law characterizing that remedy as quasi-contractual, a quasi-contractual obligation saying that

[00:30:53] Speaker 02:
the party will be unjustly enriched and that's the Vale Dean Canyon homeowners case.

[00:30:59] Speaker 02:
And I think a third reason plaintiffs are not entitled to damages is that their own conduct operates as a waiver of condition or modification or substitution as I mentioned earlier.

[00:31:12] Speaker 02:
So Oregon State's impossibility was excused or performance was excused due to impossibility and there are many reasons why plaintiffs are not entitled to damages.

[00:31:26] Speaker 02:
The district court also did not abuse its discretion when it denied plaintiffs request for discovery.

[00:31:33] Speaker 02:
Plaintiffs asked for discovery on three issues and the district court correctly determined that given the construction of the contract, accepting plaintiffs allegations of the construction of the contract, these facts were not relevant to its disposition.

[00:31:58] Speaker 00:
If the plaintiffs were

[00:32:02] Speaker 00:
rejecting the substitution or modification or did they have to give any notice to the university that I think there's a mitigation of damages argument that plaintiffs are making.

[00:32:13] Speaker 00:
The only reason why we didn't withdraw, ask for a refund for the term was because we wanted to mitigate damages.

[00:32:20] Speaker 00:
Is there any case law indicating one way or the other whether they had to tell the university that that's what they were doing, that they were rejecting the contract and what they were saying only to mitigate damages?

[00:32:30] Speaker 02:
I think Oregon case law suggests that their conduct of paying tuition was noticed that they were accepting the modified substituted contract or waiving that provision.

[00:32:47] Speaker 02:
And there are examples of students that did exactly that.

[00:32:52] Speaker 02:
And they withdrew from spring 2020 semester and received full refunds.

[00:32:59] Speaker 02:
And plaintiffs are not.

[00:33:00] Speaker 00:
among those students.

[00:33:15] Speaker 00:
the contract as modified or substituted by the university.

[00:33:19] Speaker 00:
I'm asking since there seems to be no dispute, at least at the plaintiffs in this case, did that, but they're still saying now that the only reason why we did that was to mitigate our damages.

[00:33:32] Speaker 00:
Is there any case law indicating whether if that was the reason why they were

[00:33:37] Speaker 00:
Essentially continuing to perform their end of the bargain that they had to at least tell the university We don't accept this modification, but we're going to mitigate damages by paying tuition and remaining enrolled I think perhaps that could have been one step but if they had still paid tuition I'm not sure that they would be able to

[00:34:03] Speaker 00:
So you're arguing, even if they had said that, you don't think that would have been good enough.

[00:34:07] Speaker 00:
But I'm just asking, is their case law saying, is their case law rejecting plaintiff's argument because there wasn't communicated?

[00:34:18] Speaker 02:
I can't think of a case, Your Honor, but I'm not sure that I've looked with specifically that issue in mind.

[00:34:24] Speaker 02:
I would say about plaintiffs' argument about transfer, their ability to transfer is irrelevant.

[00:34:31] Speaker 02:
They could have taken a semester off.

[00:34:33] Speaker 02:
They could have found employment.

[00:34:35] Speaker 02:
They could have written a book.

[00:34:37] Speaker 02:
There are any number of

[00:34:39] Speaker 02:
activities they could have performed during that time.

[00:34:41] Speaker 02:
And also, still to this day, plaintiffs do not name a single other comparable university to which they would have transferred, a university that was offering perhaps in-person education during this time.

[00:34:56] Speaker 02:
And as I mentioned earlier, many students rejected

[00:35:00] Speaker 02:
Oregon State's modified substituted offer did not waive this provision of the contract, and that's at ER 114.

[00:35:09] Speaker 02:
The pandemic was challenging for everyone, including Oregon State.

[00:35:15] Speaker 02:
Oregon State shifted quickly to remote education at great expense.

[00:35:21] Speaker 02:
to allow its students to make progress in their educations.

[00:35:25] Speaker 02:
The district court correctly applied Oregon law, and this court should affirm on any of the four grounds mentioned earlier.

[00:35:31] Speaker 02:
Thank you.

[00:35:32] Speaker 03:
Thank you, counsel.

[00:35:34] Speaker 03:
Let's have two minutes for rebuttal.

[00:35:39] Speaker 01:
Your Honor, I just want to make two points.

[00:35:44] Speaker 01:
With regards to Judge Rawlinson's comment about the contract clause, one point I want to make is... Did I make about the contract?

[00:35:55] Speaker 01:
Oh, excuse me.

[00:35:56] Speaker 01:
Judge Forrest.

[00:35:59] Speaker 01:
To the extent that Oregon State is arguing that the executive orders didn't impair the contract or that it's sort of exempted from impairing the contract that has with private parties,

[00:36:14] Speaker 01:
I point out the case that we had cited, Hughes versus State, which held that in that case, there was a reversal of a tax exemption.

[00:36:29] Speaker 01:
And what that court held was that the section three of that amendment, what that is is that the reversal of that

[00:36:39] Speaker 01:
prior provision is simply the government causing itself to breach the pre-existing contract with the private party.

[00:36:49] Speaker 01:
And, again, the Oregon Supreme Court's en banc decision in Houston State said, quote, the state may not do with impunity, and it further stated that the private parties are entitled to contract damages.

[00:37:01] Speaker 01:
My second point will be this idea again of students can transfer or they can go to take a year off, write a book.

[00:37:15] Speaker 01:
You know, frankly, that's utter nonsense.

[00:37:17] Speaker 01:
I mean, these students are the largest purchase of their lives, the biggest commitments that their families are making.

[00:37:23] Speaker 01:
And a lot of these kids, they need to graduate in order to help support their families.

[00:37:28] Speaker 01:
I mean, this whole idea that everyone has so much luxury.

[00:37:32] Speaker 03:
Counsel, are you suggesting that Judge Song's statement was nonsense?

[00:37:37] Speaker 01:
That what?

[00:37:38] Speaker 03:
That Judge Song's statement was nonsense?

[00:37:41] Speaker 01:
that that anyone that someone could take the time off that that's utter nonsense that students aren't harmed for for and and i and i apologize for for for over speaking on this but uh... my only point is that uh... it's it's uh... uh... it

[00:37:56] Speaker 01:
This is a really important decision for families.

[00:37:59] Speaker 01:
It takes a great amount of commitment for families and their children and the students who go into this.

[00:38:05] Speaker 04:
Again, I just want to be very clear.

[00:38:09] Speaker 04:
The relief you're seeking here on behalf of a class, if you were to get that far, would be

[00:38:13] Speaker 04:
The difference in value between in-person versus remote instruction for spring 2020.

[00:38:20] Speaker 01:
Right, prorated for that amount of time.

[00:38:22] Speaker 01:
Correct.

[00:38:22] Speaker 04:
All right.

[00:38:22] Speaker 04:
Thank you, counselor.

[00:38:23] Speaker 03:
Thank you to both counsel for your arguments.

[00:38:25] Speaker 03:
The case just argued is submitted for decision by the court.