Alan Gallagher v. Capella Education Company

• Court: Court of Appeals for the Ninth Circuit
• Decided: December 20, 2021
• Docket: 21-35188
• Status: Unpublished

Opinion

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS FILED FOR THE NINTH CIRCUIT DEC 20 2021 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS ALAN L. GALLAGHER, Attorney, No. 21-35188

Plaintiff-Appellant, D.C. No. 3:19-cv-01342-JR

v. MEMORANDUM* CAPELLA EDUCATION COMPANY; CAPELLA UNIVERSITY,

Defendants-Appellees.

Appeal from the United States District Court for the District of Oregon Marco A. Hernandez, Chief District Judge, Presiding

Submitted December 9, 2021** Seattle, Washington

Before: McKEOWN and BADE, Circuit Judges, and FITZWATER,*** District Judge.

Plaintiff Alan L. Gallagher (“Gallagher”), proceeding pro se, appeals the district

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Sidney A. Fitzwater, United States District Judge for the Northern District of Texas, sitting by designation. court’s judgment dismissing his action against defendants Capella Education

Company and Capella University, Inc. (collectively, “Capella”) under Rule 12(b)(6)

of the Federal Rules of Civil Procedure for failure to state a claim on which relief can

be granted. We have jurisdiction, 28 U.S.C. § 1291, and affirm.

We review the district court’s dismissal for failure to state a claim de novo.

Curtis v. Irwin Indus., Inc., 913 F.3d 1146, 1151 (9th Cir. 2019). To survive Capella’s

motion to dismiss under Rule 12(b)(6), Gallagher needed to plead “enough facts to

state a claim to relief that [was] plausible on its face.” 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.” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009). “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.” Id.

(quoting Twombly, 550 U.S. at 556); see also Twombly, 550 U.S. at 555 (“Factual

allegations must be enough to raise a right to relief above the speculative level . . . .”).

“[W]here the well-pleaded facts do not permit the court to infer more than the mere

possibility of misconduct, the complaint has alleged—but it has not ‘shown’—‘that

the pleader is entitled to relief.’” Iqbal, 556 U.S. at 679 (alteration omitted) (quoting

-2- Fed. R. Civ. P. 8(a)(2)). “Threadbare recitals of the elements of a cause of action,

supported by mere conclusory statements, do not suffice.” Id. at 678.

Gallagher’s breach of contract claim in part requires the court to review

academic decisions made by Capella, including the decision not to approve

Gallagher’s dissertation due to lack of citations and plagiarism. Under Oregon law,

a court can review a university’s academic decision only if it was made arbitrarily or

in bad faith. Tate v. N. Pac. Coll., 140 P. 743, 746 (Or. 1914) (“The faculties of

colleges . . . exercise quasi judicial functions, and their decisions are conclusive, if

they act within their jurisdiction, and in good faith, and not arbitrarily.”).1

Gallagher’s amended complaint does not plausibly plead that Capella made

arbitrary or bad-faith decisions. Gallagher makes the conclusory assertion that

Capella’s conduct involved “bad faith, misconduct, and arbitrary action.” Am.

Compl. at 8. But the allegedly “arbitrary” decisions he challenges—Capella’s

requiring more citations for his dissertation, rejecting his dissertation for plagiarism,

and requiring a specific method in his dissertation—are valid academic decisions, not

1 Oregon has not termed this rule the “educational malpractice” doctrine, but courts that apply similar deference to universities refer to it as such. See, e.g., Gillis v. Principia Corp., 832 F.3d 865, 872 (8th Cir. 2016) (holding that a “breach-of- contract claim that raises questions concerning the reasonableness of the educator’s conduct in providing educational services . . . is one of educational malpractice” and is not cognizable under Missouri law (alteration in original) (internal quotation marks omitted)).

-3- arbitrary ones. See Tate, 140 P. at 744 (“[College faculties have] power to make rules

and regulations for the government of [their] students, in the manner and methods of

study . . . .” (emphasis added)). Dismissal of Gallagher’s breach of contract claim

predicated on academic decisions made by Capella was therefore warranted.

To the extent Gallagher alleges a breach of contract claim that is not based on

an unreviewable academic decision, he has failed to plausibly plead that Capella

breached a specific promise. See Iqbal, 556 U.S. at 678; Slover v. Or. State Bd. of

Clinical Soc. Workers, 927 P.2d 1098, 1101 (Or. App. 1996) (reciting the elements

of a breach of contract claim under Oregon law). We find from our reading of the

amended complaint few specific promises that Gallagher alleges Capella broke. The

promise on which the amended complaint and opening brief primarily focus—“to

provide the academic degree of Ph.D. when [Gallagher] completed the requirements

set forth in the Capella catalog and other materials,” Am. Compl. at 2—fails because

Gallagher plainly had not completed those requirements. See Slover, 927 P.2d at 1101

(explaining that a plaintiff asserting a breach of contract claim must allege that it fully

performed the contract); Am Compl. at 5 (“This approval, Milestone 11, was not

granted.”). And Capella’s rejection of his dissertation (the decision that led to his

failure to complete the requirements) is an academic decision that is unreviewable

unless made arbitrarily or in bad faith, which Gallagher has not plausibly pleaded.

-4- Other “personal and explicit promises” that Gallagher mentions appear to refer

to Capella’s promises that it “could and would uniquely provide services and a

method to assure he would obtain the degree.” Am. Compl. at 2. But Gallagher does

not plausibly plead how Capella broke this promise. In fact, the amended complaint

acknowledges that Capella provided its unique mentor program and milestone

program to help Gallagher obtain a degree.2 See Slover, 927 P.2d at 1101 (explaining

that a plaintiff must allege, among other things, a defendant’s breach to state a

plausible breach of contract claim).

We do not consider the district court’s dismissal of Gallagher’s unjust

enrichment claim because he makes no argument pertaining to this cause of action on

appeal. See Smith v. Marsh, 194 F.3d 1045, 1052 (9th Cir. 1999) (“[O]n appeal,

arguments not raised by a party in its opening brief are deemed waived.”).

2 And even assuming arguendo that Capella’s promises in the catalog, manual, and handbook apply, Gallagher has not plausibly pleaded an explicit promise that Capella made and broke.

-5- We therefore affirm the judgment of the district court.3

AFFIRMED.

3 On December 8, 2021, without leave of this court, Gallagher filed a document captioned “Plaintiff’s Oral Argument.” [Dkt. No. 26] Because we have concluded that this appeal can be decided on the briefs and record on appeal, without oral argument, we decline to consider this document.

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