United States District Court, M.D. North Carolina
MEMORANDUM OPINION AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
JOI ELIZABETH PEAKE, Magistrate Judge.
This matter comes before the Court on Defendant's Motion to Dismiss Counts Three and Four of Plaintiff's Complaint [Doc. #11]. For the reasons that follow, the instant Motion should be denied.
I. FACTS, CLAIMS, AND PROCEDURAL HISTORY
Plaintiff Bradley Elmendorf ("Plaintiff" or "Mr. Elmendorf") alleges that he has been diagnosed with "the learning disabilities of Reading Disorder, also known as Dyslexia, and Mathematics Disorder." (Compl. [Doc. #1] ¶ 11.) According to the Complaint, Plaintiff "reads visually at a second grade reading level, does not read efficiently, and must exert great effort to keep his place while reading." (Id. ¶ 13.) However, Plaintiff "is able to raise his actual level of reading performance up to his expected level of achievement by listening to his reading assignments." (Id. ¶ 17.)
According to the Complaint, Plaintiff applied to, and was accepted at, the Master of Divinity programs at both Defendant Duke University ("Duke" or "Defendant") and Princeton Theological Seminary ("Princeton"). (Id. ¶ 19.) The Complaint alleges that Princeton offered Plaintiff a scholarship that would pay his full tuition costs and an additional stipend, and private loans that would be fully forgiven after he served in the pastorate for five years. (Id. ¶¶ 20-21.) In contrast, Duke allegedly offered Plaintiff a less comprehensive scholarship package that would only partially cover his tuition. (Id.) However, when inquiring with both about their ability to accommodate his learning disabilities, the Complaint alleges that, at Duke, he met with staff in the Student Disability Access Office and with Divinity School staff, and "staff assured [Plaintiff] that Duke had experience accommodating individuals with Dyslexia and was fully prepared to provide him with accessible formats of all of his reading assignments, including those assignments distributed directly to students by professors, " whereas, at Princeton, Plaintiff "was told that the Princeton Theological Seminary had not had prior experience accommodating an individual with Dyslexia, but would try to meet his needs." (Id. ¶¶ 23-24.) Accordingly, Plaintiff allegedly "chose to attend Duke and to incur additional out-of-pocket costs for his education based on Duke's assurances that it was able to fulfill his disability-related needs." (Id. ¶ 25.)
The Complaint alleges, however, that despite those representations, Duke failed to accommodate Plaintiff's learning disabilities after his enrollment. According to the Complaint, Plaintiff met with various representatives of Duke on multiple occasions in order to address deficiencies in his accommodations, yet Duke repeatedly failed to provide Plaintiff's reading assignments in a format accessible to him. As a result, by the end of his first semester at Duke, Plaintiff was forced to take "incompletes" in three of his courses. (Id. ¶ 52.) The Complaint further alleges that, during his second semester at Duke, in order to avoid dropping out or taking a leave of absence, Plaintiff ultimately transferred to a shorter, one-year Master of Arts in Christian Studies ("MACS") program. (Id. ¶ 59.) Plaintiff alleges that he "remained at Duke out of necessity to mitigate the harm caused by the lack of accessible course material." (Id. ¶ 62.) That is, "[h]e could not transfer to another university while his transcript consisted primarily of incompletes, he could not pursue a Master of Divinity degree because he was no longer eligible for financial aid to complete that program, and he had to salvage his academic situation at Duke if he wished to pursue a marketable degree." (Id.) The Complaint further alleges that the MACS degree that Plaintiff was "limited to" pursuing "has negligible value in the job market." (Id. ¶ 91.)
As a result of these events, Plaintiff brings the following four claims for relief: (1) "Section 504 of the Rehabilitation Act" (id. ¶¶ 94-101); (2) "Title III of the Americans with Disabilities Act" (id. ¶¶ 102-09); (3) "Unfair or Deceptive Trade Practices" (id. ¶¶ 110-15); and (4) "Negligent Misrepresentation" (id. ¶¶ 116-22). Defendant now moves to dismiss claims three and four pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted.
A plaintiff fails to state a claim upon which relief may be granted under Federal Rule of Civil Procedure 12(b)(6) when the complaint does not "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.... The plausibility standard is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678. Thus, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. at 679.
B. Unfair or Deceptive Trade Practices
To establish an unfair or deceptive trade practice in violation of Section 75-1.1, a plaintiff must show: (1) the defendant committed an unfair or deceptive act or practice (2) in or affecting commerce (3) which proximately caused injury to the plaintiff. Dalton v. Camp, 353 N.C. 647, 656 (2001). A practice is considered unfair if it is unethical or unscrupulous, and it is deceptive if it has a tendency to deceive. Id.
Defendant contends that Plaintiff's unfair or deceptive trade practice act ("UDTPA") claim fails for two separate reasons. First, according to Defendant this claim "attempts to shoe-horn alleged discussions concerning federal legal obligations regarding accommodations into a trade practice' within the meaning of North Carolina's UDTPA." (Def.'s Br. [Doc. #12] at 2.) Second, Defendant contends that, regardless, the Complaint fails to establish the essential elements of the claim because the conduct alleged was not "in or affecting commerce" and was not "unfair or deceptive."
With respect to the first contention, Defendant argues that North Carolina's UDTPA does not apply to "student support services." In support of this contention, Defendant notes that the UDTPA is not applicable to matters of internal corporate governance or internal employee-employer interactions. See, e.g., Wilson v. Blue Ridge Elec. Membership Corp., 157 N.C.App. 355, 357-58 (2003); Buie v. Daniel Int'l Corp., 56 N.C.App. 445, 448 (1982). Defendant also notes that other jurisdictions have recognized that internal support functions related to a university's educational mission, such as the administration of financial aid, would not fall under "trade or commerce." See Thornton v. Harvard Univ., 2 F.Supp.2d 89 (1998). This Court likewise notes that for similar reasons, other courts have declined to recognize a claim for "educational malpractice" and have resisted "inquiry into the nuances of educational processes and theories." Ryan v. University of N.C. Hosps., 128 N.C.App. 300, 302 (1998); Ross v. Creighton Univ., 957 F.2d 410, 416 (7th Cir. 1992). However, those courts have also recognized potential state law claims against educational institutions related to specific promises that the educational institution allegedly failed to honor. Ryan, 128 N.C.App. at 302-03; Ross, 957 F.2d at 417. In the present case, Plaintiff's UDTPA claim is not based on his internal interactions with faculty or support services staff while he was a student, or the content or nuances of the educational process. Instead, Plaintiff's UDTPA claim is based on Duke's alleged conduct and specific allegedly false statements made in attempting to induce him to enroll at Duke rather than Princeton. Cf. Mayes v. Moore, 419 F.Supp.2d 775 (M.D. N.C. 2006) (noting that even though employer-employee relationships do not fall within the scope of the UDTPA, the employee could assert a UDTPA claim for conduct that occurred before the employment relationship's existence, specifically with respect to claims that the employer misled the prospective employee to induce him to take the employment). Defendant has not cited any cases that would preclude recognition of a potential UDTPA claim based on conduct by a university to attract students or based on specific allegedly false statements made to induce students to enroll. A recent decision of the North Carolina Court of Appeals, while not addressing the issue directly, assumed that such a claim could be raised with respect to representations and conduct in the admissions process, but found that the plaintiff in that case had failed to present sufficient evidence that the educational staff had knowingly made false representations or engaged in conduct that amounted to an inequitable assertion of power. Supplee v. Miller-Motte Bus. Coll., Inc., 768 S.E.2d 582 (N.C. Ct. App. 2015); see also, e.g., Suhail v. University of the Cumberlands, ___ F.Supp. 3d ___, 2015 WL 3441111 (E.D. Ky. 2015) (noting that plaintiffs "directly challenge the University's tactics in recruiting students, a practice that is most certainly commercial or entrepreneurial"); Ramthun v. Bryan-Career College-Inc., ___ F.Supp. 3d ___, ...