UC loses $40 million lawsuit
By Audrey Kuo
Jan. 23, 2008 10:30 p.m.
The University of California now owes former professional students at least $40 million after the state Supreme Court on Wednesday denied to review a lower court’s ruling that the UC had violated contracts not to raise fees.
The case, Kashmiri v. Regents of the University of California, is a class-action lawsuit centered on fee increases during the 2002-2003 university year.
Ricardo Vazquez, a spokesman for the university, said the UC is “disappointed,” but the court’s decision is final.
“At this point, the ruling just came down, so what will happen now is a process of the university considering options of how to deal with the financial impact,” he said.
Vazquez said it was too early to say whether current students would face fee increases to offset the judgment.
In March 2006, a San Francisco County court ruled in favor of students. The First District Court of Appeals ruled on Nov. 2 to uphold that ruling, writing in the decision that implied contracts had been formed in UC literature, both in published catalogs and online.
The appellate court ruled that the fee increases, some of which were levied after the semester had begun, violated stated promises from the UC not to raise fees for students.
The decision also said that additional fees had been levied after students had received bills stating exactly how much they owed.
“I think that the main effect of the case is to reaffirm that basic contract law applies to students in agreement with the university,” said Andrew Freeman, one of the lawyers representing the professional students.
Mohammad Kashmiri, the lead plaintiff, told the Daily Bruin in November that some students were forced to withdraw because they could not meet the additional financial burdens.
As the UC appealed the first decision, interest on the amount owed has been assessed at a rate of 10 percent each year. The original $33,825,712, owed as of March 2006, increased to more than $39 million by the November decision and is now at about $40 million, according to Freeman.
Vazquez said that general counsel for the university felt that the UC had “very good grounds” for its latest appeal.
“The policy that fees could go up without notice had been or was in many areas and publications. The fees were subject to change,” Vazquez said.
Freeman is also representing a second group of UC students in Luquetta v. Regents of the University of California on similar breach of contract charges during the 2003-2004 academic year. He referred to the decisions in favor of the students in the Kashmiri case as “a precedent that is helpful in the next case.”
Vazquez said it would be only speculation at this point to consider whether the state Supreme Court’s decision not to review the Kashmiri case would have an effect on the Luquetta case.
A concrete effect of the lawsuits, however, is that the UC has stopped making written promises not to increase fees.
“Those policies were rescinded and all those references that happened to be in certain publications were removed,” Vazquez said.
