FILED NOT FOR PUBLICATION MAY 10 2024 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
YADIRA CONTRERAS; ERICA No. 23-35340 KRONECK; KYLE OLSON; HENDRY “CODY” RODMAN, III, D.C. No. 1:22-cv-03034-TOR
Plaintiffs-Appellants, MEMORANDUM* v.
HERITAGE UNIVERSITY,
Defendant-Appellee.
Appeal from the United States District Court for the Eastern District of Washington Thomas O. Rice, District Judge, Presiding
Argued and Submitted March 29, 2024 Seattle, Washington
Before: W. FLETCHER, PARKER,** and MILLER, Circuit Judges.
Appellants are four former students of the physician assistant (“PA”)
program at Heritage University, located in Toppenish, Washington. They were
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Barrington D. Parker, Jr., United States Circuit Judge for the U.S. Court of Appeals for the Second Circuit, sitting by designation. members of “Cohort 6,” the students admitted during the sixth year of the program.
Heritage’s PA program lost accreditation five months into appellants’ two-year
program. As a result, appellants were forced to relocate to PA programs at other
schools, incurring expenses associated with moving and career delays. Appellants
allege that they enrolled in Heritage’s PA program in reliance on false statements
by Heritage that a loss of accreditation would not adversely affect their education.
Appellants brought federal and state law claims against Heritage, and the district
court granted summary judgment for Heritage.
We have jurisdiction under 28 U.S.C. § 1291, and our review is de novo.
Oswalt v. Resolute Indus., Inc., 642 F.3d 856, 859 (9th Cir. 2011). We view the
evidence in the light most favorable to the appellants, and affirm only if there are
no genuine issues of material fact. Wallis v. Princess Cruises, Inc., 306 F.3d 827,
835 (9th Cir. 2002). We reverse and remand for further proceedings.
1. Washington Consumer Protection Act Claims
Washington’s Consumer Protection Act (“CPA”) is a consumer protection
statute, but it applies only to acts that are “injurious to the public interest.” Wash.
Rev. Code § 19.86.920. When a CPA claim is based on an individual private
contract instead of a common commercial transaction, “it may be more difficult to
2 show that the public has an interest in the subject matter.” Hangman Ridge
Training Stables, Inc. v. Safeco Title Ins. Co., 719 P.2d 531, 538 (1986).
“[I]t is the likelihood that additional plaintiffs have been or will be injured in
exactly the same fashion that changes a factual pattern from a private dispute to
one that affects the public interest.” Id. at 538. Relevant factors include:
“(1) Were the alleged acts committed in the course of defendant’s business? (2)
Did defendant advertise to the public in general? (3) Did defendant actively solicit
this particular plaintiff, indicating potential solicitation of others? (4) Did plaintiff
and defendant occupy unequal bargaining positions?” Id. These factors need not
all be present, but they are useful “indicia of an effect on public interest from
which a trier of fact could reasonably find public interest impact.” Id.
Here, the district court found that Heritage’s allegedly deceptive statements
were communications to individual appellants that did not adversely affect the
public within the meaning of the CPA. The court found that appellants had failed
to provide evidence that “all of Cohort 6 experienced the same alleged harm or that
future cohorts are substantially likely to face the same alleged harm.” We disagree.
The gravamen of appellants’ claim is that Heritage consistently stated to
prospective members of Cohort 6 that a loss of accreditation, if it occurred, would
not adversely affect them. All four appellants provide evidence that they relied on
3 these statements when deciding to enroll in Heritage’s PA program. Before
enrolling, appellant Olson sent an email to Heritage asking how a loss of
accreditation would affect him. University administrators responded, “Our
probationary status will not have an impact on our students in any way[.] [T]hey
will still be allowed to graduate and take the boards.” Appellant Rodman also
corresponded with Heritage before enrolling. He received multiple assurances that
a loss of accreditation would not jeopardize his ability to complete the program.
Appellants Contreras and Kronek were similarly assured during their in-person
interviews.
Appellants provide sworn statements from six other members of Cohort 6.
All six of them state that they asked about the consequences of a loss of
accreditation, and that Heritage assured them in the same manner it assured the
four appellants. Further, appellants provided evidence that Heritage gave
misleading statements about its accreditation, and the consequences of a possible
loss of accreditation, in a publicly available brochure and website. The record does
not contain a single example of Heritage telling applicants that a loss of
accreditation would adversely affect them by interrupting their education and
forcing them to transfer to a different school.
4 An impact of this breadth is injurious to the public interest under the CPA.
Compare Burns v. McClinton, 135 Wash.App. 285 (2006) (no public interest
impact where attorney deceived just one client out of 200 and no indication
deception would repeat) with Bishop v. Jefferson Title Co., 28 P.3d 802, 812
(Wash. Ct. App. 2001) (public interest impact where company engaged in
unauthorized practice of law misled two clients “by creating an appearance of
competent use of appropriate legal forms,” and where there was a threat to
similarly situated members of the public).
Viewing the record in the light most favorable to the appellants, we hold that
appellants have shown that Heritage’s conduct affected the public interest within
the meaning of the CPA.
2. Breach of Contract
The district court found “no genuine dispute that [appellants] agreed to the
terms of the Student Handbook, and those terms included the risk of attending a
program that could lose accreditation.” This is true but not dispositive. Appellants
do not claim that Heritage misled them about the possibility of the loss of
accreditation. Rather, appellants’ claim is that Heritage misled them about the
consequences of such a loss. More specifically, appellants argue that, together
with the Student Handbook—which encouraged students and applicants to pose
5 their accreditation questions to program officials—Heritage administrators made
statements guaranteeing that students would suffer no negative consequences from
the loss of accreditation. The record shows a genuine dispute as to whether it was
reasonable for appellants to rely on Heritage’s assurances that Cohort 6 would be
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FILED NOT FOR PUBLICATION MAY 10 2024 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
YADIRA CONTRERAS; ERICA No. 23-35340 KRONECK; KYLE OLSON; HENDRY “CODY” RODMAN, III, D.C. No. 1:22-cv-03034-TOR
Plaintiffs-Appellants, MEMORANDUM* v.
HERITAGE UNIVERSITY,
Defendant-Appellee.
Appeal from the United States District Court for the Eastern District of Washington Thomas O. Rice, District Judge, Presiding
Argued and Submitted March 29, 2024 Seattle, Washington
Before: W. FLETCHER, PARKER,** and MILLER, Circuit Judges.
Appellants are four former students of the physician assistant (“PA”)
program at Heritage University, located in Toppenish, Washington. They were
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Barrington D. Parker, Jr., United States Circuit Judge for the U.S. Court of Appeals for the Second Circuit, sitting by designation. members of “Cohort 6,” the students admitted during the sixth year of the program.
Heritage’s PA program lost accreditation five months into appellants’ two-year
program. As a result, appellants were forced to relocate to PA programs at other
schools, incurring expenses associated with moving and career delays. Appellants
allege that they enrolled in Heritage’s PA program in reliance on false statements
by Heritage that a loss of accreditation would not adversely affect their education.
Appellants brought federal and state law claims against Heritage, and the district
court granted summary judgment for Heritage.
We have jurisdiction under 28 U.S.C. § 1291, and our review is de novo.
Oswalt v. Resolute Indus., Inc., 642 F.3d 856, 859 (9th Cir. 2011). We view the
evidence in the light most favorable to the appellants, and affirm only if there are
no genuine issues of material fact. Wallis v. Princess Cruises, Inc., 306 F.3d 827,
835 (9th Cir. 2002). We reverse and remand for further proceedings.
1. Washington Consumer Protection Act Claims
Washington’s Consumer Protection Act (“CPA”) is a consumer protection
statute, but it applies only to acts that are “injurious to the public interest.” Wash.
Rev. Code § 19.86.920. When a CPA claim is based on an individual private
contract instead of a common commercial transaction, “it may be more difficult to
2 show that the public has an interest in the subject matter.” Hangman Ridge
Training Stables, Inc. v. Safeco Title Ins. Co., 719 P.2d 531, 538 (1986).
“[I]t is the likelihood that additional plaintiffs have been or will be injured in
exactly the same fashion that changes a factual pattern from a private dispute to
one that affects the public interest.” Id. at 538. Relevant factors include:
“(1) Were the alleged acts committed in the course of defendant’s business? (2)
Did defendant advertise to the public in general? (3) Did defendant actively solicit
this particular plaintiff, indicating potential solicitation of others? (4) Did plaintiff
and defendant occupy unequal bargaining positions?” Id. These factors need not
all be present, but they are useful “indicia of an effect on public interest from
which a trier of fact could reasonably find public interest impact.” Id.
Here, the district court found that Heritage’s allegedly deceptive statements
were communications to individual appellants that did not adversely affect the
public within the meaning of the CPA. The court found that appellants had failed
to provide evidence that “all of Cohort 6 experienced the same alleged harm or that
future cohorts are substantially likely to face the same alleged harm.” We disagree.
The gravamen of appellants’ claim is that Heritage consistently stated to
prospective members of Cohort 6 that a loss of accreditation, if it occurred, would
not adversely affect them. All four appellants provide evidence that they relied on
3 these statements when deciding to enroll in Heritage’s PA program. Before
enrolling, appellant Olson sent an email to Heritage asking how a loss of
accreditation would affect him. University administrators responded, “Our
probationary status will not have an impact on our students in any way[.] [T]hey
will still be allowed to graduate and take the boards.” Appellant Rodman also
corresponded with Heritage before enrolling. He received multiple assurances that
a loss of accreditation would not jeopardize his ability to complete the program.
Appellants Contreras and Kronek were similarly assured during their in-person
interviews.
Appellants provide sworn statements from six other members of Cohort 6.
All six of them state that they asked about the consequences of a loss of
accreditation, and that Heritage assured them in the same manner it assured the
four appellants. Further, appellants provided evidence that Heritage gave
misleading statements about its accreditation, and the consequences of a possible
loss of accreditation, in a publicly available brochure and website. The record does
not contain a single example of Heritage telling applicants that a loss of
accreditation would adversely affect them by interrupting their education and
forcing them to transfer to a different school.
4 An impact of this breadth is injurious to the public interest under the CPA.
Compare Burns v. McClinton, 135 Wash.App. 285 (2006) (no public interest
impact where attorney deceived just one client out of 200 and no indication
deception would repeat) with Bishop v. Jefferson Title Co., 28 P.3d 802, 812
(Wash. Ct. App. 2001) (public interest impact where company engaged in
unauthorized practice of law misled two clients “by creating an appearance of
competent use of appropriate legal forms,” and where there was a threat to
similarly situated members of the public).
Viewing the record in the light most favorable to the appellants, we hold that
appellants have shown that Heritage’s conduct affected the public interest within
the meaning of the CPA.
2. Breach of Contract
The district court found “no genuine dispute that [appellants] agreed to the
terms of the Student Handbook, and those terms included the risk of attending a
program that could lose accreditation.” This is true but not dispositive. Appellants
do not claim that Heritage misled them about the possibility of the loss of
accreditation. Rather, appellants’ claim is that Heritage misled them about the
consequences of such a loss. More specifically, appellants argue that, together
with the Student Handbook—which encouraged students and applicants to pose
5 their accreditation questions to program officials—Heritage administrators made
statements guaranteeing that students would suffer no negative consequences from
the loss of accreditation. The record shows a genuine dispute as to whether it was
reasonable for appellants to rely on Heritage’s assurances that Cohort 6 would be
able to finish—to “teach out”—the PA program at Heritage and take the
appropriate board exams after a loss of accreditation.
Inter alia, on October 6, 2020, the day Heritage lost accreditation, Heritage’s
PA program director asked the accrediting agency whether it was possible to
“teach out” members of Cohort 6 to graduation, and for those students’ degrees to
be recognized. The executive director of the agency replied the same day and said
that this would not be allowed. Despite this response, the PA program director told
students, in an email on November 3, 2020, that Cohort 6 would be “taught out”
and would be eligible to take the national certification exam. A reasonable fact
finder could conclude that the program director’s email to students, in addition to
the evidence recounted above, support a conclusion that Heritage contractually
obligated itself to “teach out” members of Cohort 6 and later breached that
contract.
3. Breach of Covenant of Good Faith and Fair Dealing
6 The district court concluded that appellants failed to identify a “specific
contract obligation” that Heritage breached. However, as outlined above,
appellants did identify such an obligation. Appellants contend, and provide
evidence, that Heritage promised to provide a PA program that would allow them
to complete their two years of instruction, obtain a degree, and take the appropriate
boards even if the program lost accreditation. For the reasons explained above, the
evidence, viewed in the light most favorable to appellants’ claims, supports their
cause of action.
4. Fraudulent and Negligent Misrepresentation
The district court held that appellants’ claims of fraudulent and negligent
misrepresentation failed because “any assurance regarding the teach out provision
during [Appellants’] admission process was a promise of future performance and
cannot form the basis for [Appellants’s] claims.” However, appellants’ claims rest
on statements that were not merely predictive but involved a description of current
facts. Here, the relevant misrepresentation of an existing fact was that there was no
risk that appellants would be unable to obtain their degrees and take the
appropriate boards if Heritage lost accreditation. In this case, for purposes of
summary judgment, there is sufficient evidence that Heritage knowingly made
false statements and/or was negligent in communicating false information.
7 5. Unjust Enrichment and Promissory Estoppel
The district court concluded that appellants’ claims for unjust enrichment
and promissory estoppel were precluded by its grant of summary judgment to
Heritage on appellants’ other contract-based claims. Because we reverse on
appellants’ other claims, we vacate the district court’s judgment on these claims to
allow it to consider the merits in the first instance.
REVERSED and REMANDED.