Maxon Davis Obtained Dismissal on a Class-Action Suit Against University of Montana

January 25, 2024 12:59 PM
Maxon R. Davis

Maxon R. Davis, partner at Davis, Hatley, Haffeman, & Tighe, PC., obtained dismissal on a class-action suit against University of Montana (UM) over financial aid. 

A decision was made in a class-action lawsuit lodged against the University of Montana by former students after nearly a decade of legal back-and-forth. Plaintiffs challenged how the school distributed financial aid reimbursements to students between 2010 and 2015. Jury members, who braved frigid temperatures and spent eight days in the courtroom, determined the university committed no wrongdoing. “UM is pleased with the results of this trial," said Dave Kuntz, university spokesperson, in an email. "We especially appreciate the jurors, who play an important part of our judicial system. Their attentiveness and ability to distill the facts of this case should be applauded."

In question was the relationship between UM and Higher One, a third-party vendor to which the university outsourced the task of reimbursing students for financial aid and tuition overpayments. One of the ways Higher One doled out payments owed to students was creating accounts for them and issuing debit cards that allowed individuals to withdraw from the refund directly. Higher One was ordered by the Federal Reserve in 2015 to pay roughly $24 million in restitution to 570,000 students nationally for its “deceptive” financial aid practices. Such tactics were not known at the time of the contract term with UM, and the company no longer operates.

The five plaintiffs named in the case, representing about 39,000 in the legal class who received such debit cards, alleged they were charged excessive fees without their knowledge. They also said that UM gave their personal information to Higher One without consent, violating their rights to privacy. All told, these assertions undergirded the plaintiffs’ case that UM breached a fiduciary responsibility to students, violated their privacy rights and was “unjustly enriched” by savings accrued as a result of not paying university employees to do this work instead. “The claims made by the other side didn’t lend themselves to simple answers,” said Max Davis.

According to court documents, the jury concluded that plaintiffs, represented by Missoula-based law firm Siefert and Wagner, didn’t prove that UM “failed to act in the best interest” of former students who received loan refunds through Higher One. Though the university was said to have a fiduciary responsibility to students, the jury found that UM did not breach that duty.

Jury instructions — written by the judge and given to jurors to abide by during deliberation — dictated that personally identifiable information from an educational record could be given to a contractor so long as the vendor “performs an institutional service or function for which (the university) would otherwise use employees.” Prior to establishing a relationship with Higher One, UM performed this legally required function using staff. 

Therefore, the jury concluded that while UM must respect students’ enhanced right to privacy, it took reasonable safeguards to protect students from further disclosure. As such, UM didn’t violate privacy rights.

Davis said he was “gratified on behalf of the retired and current administrators at UM who work hard every day for those whom they serve.”

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