United States Court of Appeals For the First Circuit

No. 19-1624

TRISTAN SQUERI, individually and on behalf of all others similarly situated; MADELINE MCCLAIN, individually and on behalf of all others similarly situated; GEORGE O'DEA, individually and on behalf of all others similarly situated,

Plaintiffs, Appellants,

v.

MOUNT IDA COLLEGE; THE MOUNT IDA COLLEGE BOARD OF TRUSTEES; CARMIN C. REISS, individually and as a representative of Mount Ida College Board of Trustees; BARRY BROWN, individually and as a representative of Mount Ida College; JEFF CUTTING, individually and as a representative of Mount Ida College; RON AKIE, individually and as a representative of Mount Ida College; JASON POTTS, individually and as a representative of Mount Ida College,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Richard G. Stearns, U.S. District Judge]

Before

Lynch, Stahl, and Kayatta, Circuit Judges.

Joshua N. Garick, with whom Law Offices of Joshua N. Garick, P.C., Andra Hutchins, and Kerstein, Coren & Lichtenstein LLP were on brief, for Tristan Squeri, Madeline McClain, and George O'Dea. Alice W. Yao and Daniel A. Zibel on brief for the National Student Legal Defense Network, amicus curiae. Katherine D. Shea and Pyle Rome Ehrenberg PC on brief for SEIU Local 509 and SEIU Local 888, amici curiae. Thomas R. Murphy and Law Offices of Thomas R. Murphy, LLC on brief for the Hildreth Institute, amicus curiae. Jeremy Sternberg, with whom Paul G. Lannon, Jr., John Monaghan, Christopher M. Iaquinto, and Holland & Knight LLP were on brief, for Mount Ida College, the Mount Ida College Board of Trustees, Carmin C. Reiss, Jeff Cutting, and Ron Akie. Elizabeth E. Olien, with whom Howard M. Cooper and Todd & Weld LLP were on brief, for Barry Brown. Tamsin R. Kaplan, with whom Emily P. Crowley and Davis, Malm & D'Agostine, P.C. were on brief, for Jason Potts. Ben Robbins and Martin J. Newhouse on brief for the New England Legal Foundation, amicus curiae.

March 25, 2020 LYNCH, Circuit Judge. In May 2018, Mount Ida College,

a higher education institution with its principal place of business

in Foxborough, Massachusetts, and its campus in Newton,

Massachusetts, permanently closed after six weeks' notice to its

students that it was closing. Mount Ida students in good academic

standing were offered admission to UMass Dartmouth to continue

their studies. Some students faced obstacles transferring their

credits, finding comparable degree programs, completing their

degrees on time, and receiving adequate scholarships and financial

aid. By the time of the notice of closing, the transfer deadlines

for many other institutions were imminent or had already passed.

Students Tristan Squeri and George O'Dea, and expected

student Madeline McClain, brought a putative class action under

Massachusetts law against Mount Ida, its Board of Trustees, and

five Mount Ida administrators: President Barry Brown; Chairwoman

of the Board of Trustees Carmin Reiss; Vice President, CFO, and

Treasurer Jason Potts; Dean of Admissions and Vice President of

Enrollment Management Jeff Cutting; and Chief Academic Officer and

Provost Ron Akie.

Underlying all the claims were allegations that the

defendants knew that Mount Ida was on the brink of insolvency but

concealed this information, instead assuring current and

prospective students that Mount Ida was financially stable. The

suit brought seven Massachusetts state law claims: breach of

- 3 - fiduciary duty, violation of privacy, fraud, negligent

misrepresentation, fraud in the inducement, breach of contract,

and violation of Massachusetts General Laws ch. 93A. The district

court granted the defendants' motion to dismiss the complaint.

See Squeri v. Mount Ida Coll., No. 18-12438,

, at

*6 (D. Mass. May 24, 2019). We affirm.1

I.

A. Facts

We recite the facts as alleged in the plaintiffs'

complaint, accepting all well-pleaded facts as true and drawing

all reasonable inferences in favor of the non-moving party. Penate

v. Hanchett,

(1st Cir. 2019). On a motion to

dismiss, we may also consider "documents incorporated by reference

in [the complaint], matters of public record, and other matters

susceptible to judicial notice." Lydon v. Local 103, Int'l. Bhd.

of Elec. Workers,

(1st Cir. 2014) (alteration in

original) (quoting Giragosian v. Ryan,

(1st Cir.

2008)).

Mount Ida was established in 1899, enrolled in 2017 about

1300 students, and granted four-year bachelor's degrees as well as

1 We express appreciation for the amicus briefs from the Hildreth Institute, the National Student Legal Defense Network, SEIU Local 509 and SEIU Local 888, and the New England Legal Foundation.

- 4 - associate degrees and master's degrees. As early as 2014, Mount

Ida was in "financial distress" and "teetering on insolvency."

The defendants were aware of Mount Ida's financial position but

did not give direct notice of this to current or prospective

students.

Mount Ida filed annual audited financial statements with

the Massachusetts Attorney General's Office (AGO), as it was

required to do by Massachusetts law. See Mass. Gen. Laws ch. 12,

§ 8F. The financial statements filed with the AGO showed that

Mount Ida operated at a deficit of $543,511 in 2014, $6,024,258 in

2015, and $1,488,272 in 2016.2 Under Massachusetts law, these

filings must be publicly available. See id. § 8M ("[A]ll

registration statements, annual reports and all other information

required to be filed under [§§ 8 to 8M] . . . shall be public

records . . . and shall be open to the general public for

inspection at such time and under such conditions as the division

may prescribe."). These returns are available online from the

Massachusetts AGO. The audited return completed in 2017 for the

year 2016 was so filed and available online. Federal law also

requires nonprofits to file annual returns. See

.

Such information must be available for public inspection. See

§ 6104(b);

(d)-1.

2 The 2016 operating deficit was reduced due to an $8,114,300, one-time gift made to the school.

- 5 - In August 2017, Mount Ida submitted an Institutional

Self-Study to the New England Association of Schools and Colleges

(NEASC), its regional accreditation agency which is recognized by

the Department of Education under federal law. See 20 U.S.C.

§ 1099b. The Self-Study was not provided to students at Mount

Ida, but to NEASC. The report evaluated Mount Ida on NEASC's nine

standards for accreditation. In the Self-Study, the defendants

reported to NEASC that Mount Ida had experienced "significant

enrollment, program and aptitude growth," that pursuant to its

multi-year financial strategy Mount Ida would generate an

operating surplus in 2021, that Mount Ida was in full compliance

with its debt obligations, and that it was "confident that it will

raise sufficient funds to meet its liquidity needs."

The financial resources section of the document further

stated that "[f]rom June 30, 2012 through June 30, 2016, operating

revenues have increased from $35.8 million to $41.7 million while

operating expenses have increased from $35.3 million to $43.2

million." The report forecasted that Mount Ida would continue to

operate at a deficit until 2021, stating that "[b]ecause of many

years of deferral of physical maintenance, low enrollment and

failure of program expansion, the College's existing economic

model does not anticipate a surplus from core operations until FY

2021."

- 6 - On February 24, 2018, President Brown announced via

email a possible merger between Mount Ida and Lasell College to

the student body. The email stated that the purpose of the merger

"would be to create a more robust learning experience that would

take advantage of the distinctiveness of the programs, curricula

and experiences of each institution." The email did not mention

"that Mount Ida was in financial distress, that it was teetering

on insolvency, or that it was seriously contemplating bankruptcy."

On March 23, 2018, President Brown emailed the Mount Ida

student body announcing that Mount Ida and Lasell College had

"ended discussions on the previously announced exploration of

merger." The email further stated that "[o]ver the past six years,

Mount Ida has undergone extraordinary growth," and specifically

highlighted the increases in Mount Ida's enrollment, scholastic

aptitude, and programmatic offerings. The email then stated that

"[a]ll these gains have caused the national ratings of the

institution to rise to among the top 30 in the North Region as

reported in the US News and World Report Rankings." The email did

not mention Mount Ida's financial distress.

On April 6, 2018, President Brown again emailed the

Mount Ida student body and announced that "Mount Ida College has

reached an agreement with the University of Massachusetts . . .

under which UMass Amherst will acquire our Newton campus." The

email stated that "[w]hile this will mean that Mount Ida will end

- 7 - its role as an independent college, students in good academic

standing will be offered automatic acceptance into UMass

Dartmouth."

The announcement occurred without a closing plan having

been submitted earlier to the Massachusetts Department of Higher

Education (DHE). See 610 Mass. Code Regs. § 2.07(3)(f)(2)

(requiring an institution that "knows that it may close" to submit

a closing plan to DHE "as far as possible in advance of the closure"

and to "arrange . . . to safeguard the needs of students by

organizing educational transfer opportunities, and ensuring the

preservation of student records"). In the months leading up to

the April 6, 2018, announcement, Mount Ida "had been accepting new

students, offering substantial scholarships to new students, and

outwardly proceeding as usual to the beginning of a new fall term."

In the days following the announcement of closing,

students received individualized information packages about the

process for enrolling at UMass Dartmouth. The personalized

packages from UMass Dartmouth contained information about Mount

Ida students' majors, estimated credits, transcripts, and

financial aid packages. Mount Ida students had not given prior

consent to the defendants to release these records to UMass

Dartmouth.

- 8 - On April 27, 2018,3 Mount Ida provided written notice of

the sale to the AGO pursuant to Massachusetts General Laws ch. 180,

§ 8A(c), which requires a public charity intending to sell

substantially all of its property and assets to give thirty days'

notice to the AGO. Mount Ida told the AGO that the transaction

with UMass needed to close by May 16, 2018, or it would be unable

to meet its financial obligations and would file for bankruptcy.

The AGO responded by letter on May 15, 2018, agreeing to

waive the thirty-day prior notice requirement due to the exigency

of the circumstances. The AGO noted at the beginning of the letter

that the closing was "extremely unfair" to students as well as

"disorderly and harmful." The AGO letter then assessed and

approved the proposed sale and concluded that Mount Ida would be

receiving fair value in the transaction. As part of the

transaction, UMass Amherst would receive all of Mount Ida's real,

personal, and intellectual property in exchange for UMass Amherst

paying off Mount Ida's liabilities and providing Mount Ida with

funds to meet its obligations to faculty and staff. UMass Amherst

also agreed to continue Mount Ida's veterinary technology program

until its students completed the program and to provide other

schools with the necessary space and assets to continue the dental

3 It appears from the Massachusetts AGO's May 15, 2018, letter that the AGO became intensely involved with Mount Ida and its Board of Trustees following the April 6, 2018 announcement.

- 9 - hygiene, funeral services, interior architecture and design, and

fashion design programs.

UMass Dartmouth agreed to offer admission to all Mount

Ida students in good academic standing. All four UMass campuses

made commitments as part of the transaction: each campus agreed to

waive application and deposit fees for Mount Ida students, to

commit to ensuring that Mount Ida students understood how many

credits would transfer and count toward degree requirements, to

accept Mount Ida general education courses toward fulfilling UMass

general education requirements, to charge in-state tuition to all

Mount Ida students who were citizens or permanent U.S. residents,

and to ensure that the financial aid packages of Mount Ida students

would not be adversely affected by late applications or

enrollments. UMass Amherst agreed to become the "institution of

record" for Mount Ida's student records.

On May 16, 2018, Mount Ida and UMass Amherst finalized

the sale. Mount Ida officially closed the following day. About

250 Mount Ida students transferred to UMass Dartmouth out of 1389

total students. Other students faced obstacles transferring to

new institutions given the short period of notice of Mount Ida's

closing. As said, some students faced difficulties finding similar

programs, transferring their credits, completing their chosen

- 10 - degrees on time, and receiving comparable financial aid and

scholarships.4

B. Procedural History of the Litigation

The plaintiffs filed this lawsuit in federal district

court on November 26, 2018, asserting jurisdiction under the Class

Action Fairness Act,

(d), and amended their

complaint on January 5, 2019, to assert the seven theories

described earlier. After briefing and oral argument, on May 24,

2019, the district court in a sixteen-page written opinion

dismissed the complaint. See Squeri,

, at *6.

The amended complaint first alleged that the defendants

violated the plaintiffs' right to privacy under Massachusetts

General Laws ch. 214, § 1B by transferring the plaintiffs' private

financial and academic information to UMass Dartmouth without the

students' consent. The district court held that as a matter of

law the plaintiffs had failed to allege that the disclosure was

4 The AGO sent a letter to the Commissioner of the Massachusetts DHE, but showed no copy to Mount Ida, on March 13, 2019. The letter included findings from the AGO's investigation of Mount Ida and recommendations for the DHE on steps it could take to protect students in the future. The recommendations included "[i]nforming trustees and officers of nonprofit higher education institutions about their obligations," ensuring institutions prepare necessary contingency plans, ensuring notification to students when the risk of closing is sufficiently imminent, monitoring institutions relying on "nontraditional or extraordinary transactions" to address budget deficits, and increasing the awareness of higher education consultants of the factors placing educational institutions at risk.

- 11 - unreasonable because Mount Ida transferred the records to

facilitate the plaintiffs' enrollment at UMass Dartmouth, which

was a "legitimate purpose." Further, the transfer was in

accordance with both the AGO's May 15, 2018, letter and

Massachusetts regulations, 610 Mass. Code Regs. § 2.07(3)(f)(2).

As to the fraud, negligent misrepresentation, and fraud

in the inducement claims, asserted in counts two, three, and four,

the amended complaint alleged that the defendants had held Mount

Ida out as a "viable institution" despite the fact that they knew

or should have known that it was failing financially. The

complaint cited the facts that up until Mount Ida's closing, the

college accepted new students, sought enrollment deposits for the

fall 2018 entering class, advertised and awarded substantial

scholarships, scheduled admitted student days, omitted information

about the Lasell merger from the 2017 Self-Study report, and failed

to inform the DHE of its financial distress. The complaint also

stated that the statement in the March 23, 2018, email about the

rating of Mount Ida by US News and World Reports was a

misrepresentation. The plaintiffs alleged that they relied to

their detriment on these representations.

The district court concluded that these claims also

failed as a matter of law because the plaintiffs had not identified

"any statement that can be shown to have actually been false" and

failed to make out a claim of fraud by omission because Mount Ida's

- 12 - audited financial information was publicly available. Even

assuming the defendants had concealed material information, the

court held the plaintiffs failed to allege that the defendants had

an actionable duty to disclose such information as needed to

support these tort claims.

As for the claim of breach of fiduciary duty, the amended

complaint alleged that the defendants "held a unique position of

influence and trust with [the] students" and so owed the students

a fiduciary duty and were in breach of this duty by "[f]ailing to

apprise the [plaintiffs] in a timely manner of the financial

viability of Mount Ida, . . . [e]ngaging in the sale of the Newton

campus without first providing for the needs of the students,

. . . [d]ivulging, without authorization, [their] sensitive and

private financial and academic information, . . . [r]ejecting a

merger deal with Lasell College[,] . . . and [p]lacing Mount Ida’s

needs ahead of the needs of the [plaintiffs]."

The district court held that this claim failed as a

matter of law because "Massachusetts courts have consistently held

that no fiduciary relationship exists between a student and his or

her college." Any fiduciary duty owed by the defendants, the

district court reasoned, "was owed to Mount Ida as a corporate

entity."

On the breach of contract claim, the amended complaint

alleged that the plaintiffs had formed a contract with Mount Ida

- 13 - (without specifying how) and that the plaintiffs "fulfilled their

contractual obligations to Mount Ida by remitting tuition payments

. . . for the purpose of receiving a degree in their selected

field." The amended complaint asserted that the defendants

"breached their contractual duty by failing to provide the

education bargained for and paid for by the [p]laintiffs."

The district court concluded that these "bare

allegations [did] not suffice for a breach of contract claim"

because the complaint failed to identify the terms of the

"contract, when it was formed, and who negotiated it." Further,

the amended complaint failed to plausibly allege an implied

contract.

Finally, the amended complaint alleged that the

defendants violated Massachusetts General Laws ch. 93A, § 9,

alleging that the defendants were engaged in "trade [or] commerce"

as required for a ch. 93A claim because: (1) Mount Ida competed

with other schools for the enrollment of students by offering

scholarships, advertising the school, holding admitted student

days, and selling promotional merchandise; (2) it offered for sale

a unique product to students; and (3) it received a financial

benefit from students.

The district court concluded that this claim failed

because the defendants were not engaged in "trade or commerce."

Rather, the actions they took were in furtherance of, or at least

- 14 - incidental to, Mount Ida's core educational mission and so, under

state law, ch. 93A did not apply.

II.

"We review the grant of a motion to dismiss de novo."

See Starr Surplus Lines Ins. Co. v. Mountaire Farms Inc.,

(1st Cir. 2019). To overcome a motion to dismiss, the

plaintiffs' complaint "must contain sufficient factual

matter . . . to state a claim to relief that is plausible on its

face." Saldivar v. Racine,

(1st Cir. 2016)

(alteration in original) (quoting Ashcroft v. Iqbal,

(2009)) (internal quotation marks omitted). "If the factual

allegations in the complaint are too meager, vague, or conclusory

to remove the possibility of relief from the realm of mere

conjecture, the complaint is open to dismissal." Barchock v. CVS

Health Corp.,

(1st Cir. 2018) (quoting SEC v.

Tambone,

(1st Cir. 2010)). We apply

Massachusetts substantive law. Katz v. Pershing, LLC,

(1st Cir. 2012).

III.

We dispose of the preliminary issues first, before

turning to the merits of the state law claims.

The district court did not err in referring to public

records or documents referenced in the complaint, including the

Massachusetts AGO May 15, 2018, letter, Mount Ida's financial

- 15 - statements, and other NEASC reports.5 The court may consider

"official public records . . . [and] documents sufficiently

referred to in the complaint." Freeman v. Town of Hudson,

(1st Cir. 2013).

The amended complaint specifically referenced the August

2017 Self-Study report submitted to NEASC multiple times and cited

it in support of the fraud and misrepresentation claims. Further,

both the Massachusetts AGO's May 15 and March 13 letters, as well

as Mount Ida's publicly filed audited financial documents required

by state law, constitute public records.6 The two letters were

written by the AGO itself while the financial documents were

audited and submitted to the AGO pursuant to a statutory duty and

made available to the public.

Likewise, the plaintiffs argue that there are material

disputes of fact as to at least some claims which survive

dismissal. Not so. The district court correctly applied Iqbal's

plausibility standard and took the facts as pleaded by the

5 The plaintiffs are incorrect in contending that the district court applied the wrong rule. The district court expressly stated that "[d]espite plaintiffs' objection, the court may consider [the AGO] letter, along with Mount Ida's financial statements and the NEASC reports, because they are public records or are referenced in the Amended Complaint." 6 We need not decide if NEASC reports are "public records" because we reach the same conclusion without considering the NEASC reports that were not referenced in the complaint.

- 16 - plaintiffs and found no claims were stated as a matter of law. We

add that we see no disputes as to any material facts.

IV.

A. The Breach of Fiduciary Duty Claim Fails

The plaintiffs' primary argument on appeal is that both

the individual defendants and Mount Ida itself owed current and

prospective Mount Ida students a fiduciary duty. They argue the

district court erred by ending its duty analysis after concluding

that the relationship between student and college does not give

rise to a fiduciary duty to students as a matter of law. They

assert that since the "[s]tudents pled that the relationship

between the parties was founded on faith, trust and confidence,"

those allegations alone give rise to a fiduciary duty claim. The

argument is based on a misunderstanding of Massachusetts law. They

further argue that "this Court should hold as a matter of law that

colleges and universities owe a fiduciary duty to [their]

students."

Massachusetts law firmly establishes that there is no

such fiduciary duty between Mount Ida's officers or trustees and

Mount Ida students on the claims here. See Morris v. Brandeis

Univ.,

, 961 (Mass. App. Ct. 2004) (unpublished)

(tbl.) (concluding that "[t]here was no fiduciary relationship

between a student and a university administrator/advisor" in a

case involving suspension of a student for plagiarism). Indeed,

- 17 - the fiduciary duty on the individual defendants is imposed by

statute, Mass. Gen. Laws ch. 180, § 6C, and is owed to the college.

Common law courts are not free to impose additional and likely

conflicting fiduciary duties not imposed by statute. In ch. 180,

§ 6C, the Massachusetts legislature has imposed a fiduciary duty

on directors and officers, but that duty is owed to the

institution, here Mount Ida. That duty is to act "in good faith

and in a manner [the director or officer] reasonably believes to

be in the best interests of the corporation, and with such care as

an ordinarily prudent person in a like position . . . would use

under similar circumstances." Id.

The duty is not owed to students. See Estate of Moulton

v. Puopolo,

(Mass. 2014) ("Directors of a

corporation stand in a fiduciary relationship to that corporation

and have a duty to protect its interests 'above every other

obligation.'" (quoting Am. Disc. Corp. v. Kaitz,

(Mass. 1965))). The interests of the students alleged on the

facts here are in direct conflict with those of the institution.

Early disclosure of financial distress might well have endangered

the ability of the institution to recover and made the financial

distress even worse. The Massachusetts AGO recognized in its March

13, 2019, letter that "premature notice of financial instability

can result in a 'self-fulfilling prophecy.'" Indeed, even the

plaintiffs recognize that the trustees ran the risk of students

- 18 - deciding not to enroll if a gloomy picture of Mount Ida's

financials were painted.

Further, Mount Ida itself did not owe a fiduciary duty

to the students, and we reject the plaintiffs' assertion that this

court should "expand the law" and establish a fiduciary duty

between a college and its students. "Federal courts are not free

to extend the reach of state law," Doe v. Trs. of Bos. Coll.,

(1st Cir. 2019), at least not where there are

Massachusetts law and precedent suggesting the contrary, see Mu v.

Omni Hotels Mgmt. Corp.,

(1st Cir.), review denied,

(1st Cir. 2018).7

The Massachusetts legislature just after these events

occurred addressed the issue of how to improve the financial

stability of higher education institutions going forward. The

legislature decided yet again in the new legislation not to impose

the duty that the plaintiffs now advocate should be imposed on the

college itself. See An Act to Support Improved Financial Stability

in Higher Education, 2019 Mass. Acts ch. 113. Rather, the statute

7 We also deny the plaintiffs' motion to certify this question to the Supreme Judicial Court (SJC). The plaintiffs chose to be in federal court. They did not ask the district court to certify any question. Nor did they develop this request in their appellate briefs. The motion was first made after briefing and shortly before oral argument. In addition, we see no question to certify. Massachusetts law is clear that no fiduciary duty to plaintiffs exists in these circumstances.

- 19 - mandates that every higher education institution post financial

information on its website and "immediately notify the

[Massachusetts Board of Higher Education (BHE)8] of any known

financial liabilities or risks that are reasonably likely to result

in the imminent closure of the institution or otherwise negatively

affect the institution’s ability to fulfill its obligations to

current and admitted students." Id.

Massachusetts courts have repeatedly stated that the

relationship between an institution of higher education and its

students is generally not a fiduciary one. See Williamson v.

Bernstein, No. 951471,

, at *3 (Mass. Super. Ct.

Feb. 20, 1996) ("The relationship between students and

universities is generally contractual rather than fiduciary.");

see also Morris, 804 N.E.2d at 961 (stating that plaintiff had

failed "to assert any particular facts in this case that would

8 The old and new laws imposed new duties on the BHE. The new statute requires the BHE to annually assess the finances of such institutions and to determine if an institution "may be at risk of imminent closure." 2019 Mass. Acts ch. 113. Only such a determination by the BHE triggers the obligation of the institution to "prepare a contingency plan for closure, which shall include a process for the institution or the board, or both, as determined by the board, to provide appropriate notification to relevant stakeholders, as determined by the board, including, but not limited to, enrolled students, candidates who have submitted applications, recent graduates, faculty, staff and host communities." Id.

- 20 - warrant the imposition of a heightened duty upon [his

university]").9

There is another reason the plaintiff students fail to

state a breach of fiduciary duty claim. Whether viewed under the

rubric of standing or some related doctrine, Massachusetts law

restricts to the AGO the ability to pursue claims of mismanagement

of charitable organizations. See

("The

attorney general shall enforce the due application of funds given

or appropriated to public charities within the commonwealth and

prevent breaches of trust in the administration thereof."). The

SJC has said:

The law has provided a suitable officer to represent those entitled to the beneficial interests in a public charity. It has not left it to individuals to assume this duty, or even to the court to select a person for its performance. Nor can it be doubted that such a duty can be more satisfactorily performed by one acting under official responsibility than by individuals, however honorable their character and motives may be.

9 While the SJC has recently recognized duties in the context of particular individuals at colleges who fail to act reasonably to alleviate risk where they have knowledge of a student's high risk of suicide, no such facts are presented here. See Nguyen v. Mass. Inst. of Tech.,

(Mass. 2018). In Nguyen, the SJC recognized that a college has a special relationship with a student and a corresponding duty to take reasonable measures to prevent suicide in narrow circumstances.

Nguyen does not address the presence of a fiduciary duty between a college and its entire student body nor does it say anything about whether this special relationship could "give rise to a fiduciary duty," as the plaintiffs argue.

- 21 - Weaver v. Wood,

, 922 (Mass. 1997) (quoting Burbank

v. Burbank,

(Mass. 1890)). And there is no

plausible argument that the claims advanced here fall within any

special standing exception articulated by the Massachusetts

Appeals Court in Harvard Climate Justice Coalition v. President

and Fellows of Harvard College.

, 382-83 (Mass. App.

Ct. 2016) (concluding that student plaintiffs lacked standing to

pursue claims that charitable organization had been mismanaged

because they "fail[ed] to show that they [had] been accorded a

personal right in the management or administration of [the

school's] endowment that is individual to them or distinct from

the student body or public at large").10

B. No Claim of Violation of Privacy Was Stated

Next, the plaintiffs argue that the district court erred

in dismissing their violation of privacy claim under ch. 214, § 1B.

They argue that the issue of whether the records transfer was

"reasonable" because it had a "legitimate purpose" is a question

of fact that should have gone to a jury. They rely on a distinction

between UMass Amherst and UMass Dartmouth and argue that UMass

Dartmouth could not have received the records pursuant to a

"closing plan" or at the AGO's direction because it received the

10 We reject any argument that the plaintiffs lack Article III standing. It is clear that the plaintiffs have sufficiently alleged injury to have Article III standing.

- 22 - records before the AGO coordinated a plan for Mount Ida's closing.

Further, UMass Dartmouth was not the eventual successor

"institution of record" for Mount Ida; rather, UMass Amherst

fulfilled this role. Neither argument has merit.

"To sustain a claim for invasion of privacy [under

G.L. c. 214, § 1B], the invasion must be both unreasonable and

substantial or serious." Ortiz v. Examworks, Inc.,

(Mass. 2015) (alteration in original) (quoting Nelson v. Salem

State Coll.,

(Mass. 2006)). While

"[g]enerally, whether an intrusion qualifies as unreasonable, as

well as either substantial or serious, presents a question of

fact," Polay v. McMahon,

, 1126 (Mass. 2014), the

SJC has made clear that such claims may be dismissed if they fail

to allege an actionable interference with privacy, see Ortiz,

.

In Ortiz, the SJC affirmed the dismissal of the

plaintiff's § 1B claim against the defendant-physician because

another Massachusetts statute had authorized the defendant to

perform the medical examination that the plaintiff had claimed

violated his privacy. Id. at 173-74. The SJC cited Schlesinger

v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,

(Mass. 1991), for the proposition that an "action [is] not [a]

'serious' or 'substantial' interference with privacy if, among

other things, it had a legitimate business purpose." Ortiz, 26

- 23 - N.E.3d at 173-74. The SJC concluded that "[b]ecause the

examination was authorized under [the statute] the invasions of

privacy associated with its taking place were 'justified.'"

at 174 (quoting Schlesinger,

).

Here, the plaintiffs' own allegations establish there

was a legitimate business purpose. As in Ortiz, the transfer of

financial and academic information was "justified" because it was

authorized under Massachusetts law. See 610 Mass. Code Regs.

§ 2.07(3)(f)(2). Massachusetts regulations require a closing

institution "to safeguard the needs of students by organizing

educational transfer opportunities, and ensuring the preservation

of student records." Id. That purpose did not depend on there

being a final closing plan in place. The transfer's purpose was

to enable Mount Ida students to continue their educations at UMass

and to preserve their student records.

We also reject the plaintiffs' argument that only UMass

Amherst, not UMass Dartmouth, could receive their records. The

University of Massachusetts is a state system with five campuses,

and not a set of independent colleges. See

("There shall be a University of Massachusetts, consisting of

campuses to be maintained at Amherst, Boston, Dartmouth, Lowell,

and Worcester, which shall continue as a public institution of

higher learning . . . .").

- 24 - C. No Claims Were Stated for Fraud, Negligent Misrepresentation, or Fraud in the Inducement

The plaintiffs challenge the dismissal of their fraud

and misrepresentation claims, arguing that the defendants made

"false and misleading statements" and committed fraud by omission

by failing to disclose Mount Ida's financial distress.11

For a claim of fraud, a plaintiff, among other

requirements, "must establish that the defendant 'made a false

representation of a material fact with knowledge of its falsity.'"

Russell v. Cooley Dickinson Hosp., Inc.,

(Mass. 2002) (quoting Danca v. Taunton Sav. Bank,

(Mass. 1982)). Negligent misrepresentation does not require

that the defendant have "an intent to deceive or actual knowledge

that a statement is false;" instead, it only requires that the

defendant fail to exercise "reasonable care or competence in

obtaining or communicating the information." Cumis Ins. Soc'y,

Inc. v. BJ's Wholesale Club, Inc.,

, 47-48 (Mass.

2009) (quoting Nycal Corp. v. KPMG Peat Marwick LLP.,

(Mass. 1998)).

The plaintiffs have failed to plead any false statement

made by any of the defendants. They assert that the March 23,

2018, email announcing the end of the Lasell merger talks was false

11 Like the district court, we do not reach the issue of whether the plaintiffs' fraud claims were subject to and met the requirements of Federal Rule of Civil Procedure 9(b).

- 25 - because President Brown "announced that Mount Ida would remain a

top 30 regional school." But contrary to the plaintiffs'

characterization, President Brown's email actually stated that

Mount Ida's gains over the past six years in enrollment and

programmatic offerings had "caused the national ratings of the

institution to rise to among the top 30 in the North Region as

reported in the US News and World Report Rankings." This statement

was not false. The statement was about a past rating.

Additionally, none of the plaintiffs allege they relied on

statements made by Brown between the March 23, 2018, email and the

closing announcement two weeks later. Further, the plaintiffs

point to no other statements by any of the defendants that were

allegedly false.

The plaintiffs' argument that their negligent

misrepresentation claim does not fail lacks merit. Negligent

misrepresentation still requires a false statement by the

defendants. Id. at 48.

The plaintiffs have also failed to plausibly allege

fraud by omission. The plaintiffs allege that despite "facing

imminent failure, the defendants were variably touting the

college's viability to current and prospective students." "Fraud

by omission requires both concealment of material information and

a duty requiring disclosure." Sahin v. Sahin,

, 138

n.9 (Mass. 2001). Further, "[f]ragmentary information may be as

- 26 - misleading as active misrepresentation, and half-truths may be as

actionable as whole lies." Kannavos v. Annino,

(Mass. 1969).

But here there were no half-truths, nor was there a duty

to disclose. The plaintiffs have not identified any statements by

the defendants about Mount Ida's financial situation that could be

construed as half-truths. In Mount Ida's audited financial

information, the defendants accurately reported that Mount Ida had

operated at a deficit in 2014, 2015, and 2016. Further, President

Brown's statement about Mount Ida's ranking was not forward-

looking, and only reported a fact about Mount Ida's current

standing.12

Further, the plaintiffs have failed to plausibly allege

that any of the defendants had a duty to disclose this information.

They rely on Knapp v. Neptune Tower Associates,

(Mass. App. Ct. 2008), which stated that a duty to disclose arises

where "(i) there is a fiduciary or other similar relation of trust

and confidence, (ii) there are matters known to the speaker that

he knows to be necessary to prevent his partial or ambiguous

statement of the facts from being misleading, or (iii) the

nondisclosed fact is basic to, or goes to the essence of, the

12 Further, the 2017 Self-Study, which was directed at NEASC and was not a statement to students, stated that Mount Ida had been operating at a deficit and would continue to do so until 2021.

- 27 - transaction."

. As said, there was no fiduciary duty

here. Further, none of the defendants made a "partial or

ambiguous" statement about Mount Ida's finances. Finally, Mount

Ida's financial distress did not go to the essence of the

transaction. Here, the essence of the transaction with the

students was that the students would receive a semester of

education in exchange for a semester of tuition. Mount Ida's

financial distress did not impact this transaction, as the students

did receive a semester of education before the school closed.

D. No Breach of Contract Claim Was Pleaded

The plaintiffs assert that the district court erred

because they plausibly "pled a breach of either the implied or

express contractual agreements between the students and the

college."13

Under Massachusetts law, the elements of a breach of

contract claim are that "there was an agreement between the

parties; the agreement was supported by consideration; the

plaintiff was ready, willing, and able to perform his or her part

of the contract; the defendant committed a breach of the contract;

and the plaintiff suffered harm as a result." Bulwer v. Mount

13We reject the plaintiffs' assertion that the district court applied the wrong pleading standard by stating that the plaintiffs' contract claim failed for "lack of specificity." The district court correctly laid out the plausibility standard at the beginning of its decision and was simply stating that the amended complaint failed to allege any specific details about the claim.

- 28 - Auburn Hosp.,

(Mass. 2016). Further, "[i]n the

absence of an express agreement, a contract implied in fact may be

found to exist from the conduct and relations of the parties."

Sullivan v. O'Connor,

(Mass. App. Ct. 2012)

(quoting LiDonni, Inc. v. Hart,

(Mass. 1969)).

"[I]t is essential to state with 'substantial certainty' the facts

showing the existence of the contract and the legal effect

thereof." Tel. Answering Serv. of Bos., Inc. v. New Eng. Tel. &

Tel. Co.,

(Mass. 1971) (quoting Pollock v. New

Eng. Tel. & Tel. Co.,

, 136 (Mass. 1935)).

The plaintiffs' contract pleadings were that they

"applied for admission to Mount Ida," they were each accepted, and

that "a contract was formed." It does not allege the terms of any

such contract or that specific terms required earlier disclosure

of the closing. The amended complaint also makes passing reference

to enrollment deposits and the fact that students gave up the

chance to enroll at other schools by choosing Mount Ida but fails

to explain how these actions formed an express or implied contract

which obliged Mount Ida to provide earlier notice of its

difficulties to its students than it did. We agree that there was

insufficient specificity. And there is no dispute that Mount Ida

delivered a semester of education before it closed, if those were

the terms of any contract. These allegations do not plausibly

allege a breach of implied contract, let alone an express contract,

- 29 - that the college contracted to give earlier notice than it did or

that there was a contract for four years of education in exchange

for only one semester of tuition.14

E. The Chapter 93A Violation Claim Was Properly Dismissed

Finally, the plaintiffs argue that the district court

erred in concluding that the allegedly deceptive actions the

defendants took were in service of Mount Ida's core educational

mission and so were not in "trade or commerce," as required by

ch. 93A, § 2(a). They assert that a "factual inquiry" is required

to resolve such a claim and that the district court "cannot conduct

such a detailed factual inquiry during the . . . motion to dismiss

stage."

Chapter 93A makes unlawful "[u]nfair methods of

competition and unfair or deceptive acts or practices in the

conduct of any trade or commerce." Mass. Gen. Laws ch. 93A,

§ 2(a). It is well established law that while "[a]n entity's

'status as a charitable corporation is not . . . dispositive of

the issue whether ch. 93A applies[,]' . . . [i]n most

14 The plaintiffs also assert that the defendants breached the implied duty of good faith and fair dealing. The plaintiffs' conclusory allegations also fail to state such a claim. See A.L. Prime Energy Consultant, Inc. v. Mass. Bay Transp. Auth.,

(Mass. 2018) ("Simply put, 'the implied covenant of good faith and fair dealing cannot create rights and duties that are not already present in the contractual relationship.'" (quoting Eigerman v. Putnam Invs., Inc.,

(Mass. 2007))).

- 30 - circumstances, a charitable institution will not be engaged in

trade or commerce when it undertakes activities in furtherance of

its core mission." Linkage Corp. v. Trs. of Bos. Univ.,

(Mass. 1997) (quoting Planned Parenthood Fed'n of Am.

v. Problem Pregnancy of Worcester, Inc.,

(Mass. 1986)). Such claims may properly be dismissed for failing

plausibly to allege that the defendant is engaged in trade or

commerce. See Poznik v. Mass. Med. Prof. Ins. Ass'n,

(Mass. 1994).

Indeed, the Linkage court stressed the broad meaning of

the term education, as distinguished from "trade or commerce" in

footnote thirty-six:

We have given broad meaning to the term "education" in order to implement legislative goals and to allow education reasonable freedom to develop, and we have held that vocational and technical teaching and courses constitute education. See, e.g., Assessors of Bos. v. Garland Sch. of Home Making,

(Mass. 1937) (instruction in homemaking skills is educational); Mount Hermon Boys' Sch. v. Gill,

(Mass. 1887) (for purposes of statute exempting educational property from taxation, education includes teaching practical skills). As Justice Knowlton phrased the concept of education, "according to one of Webster's definitions," in the Mount Hermon decision, "[t]o educate . . . is to prepare and fit for any calling or business, or for activity and usefulness in life."

.

Linkage,

n.36 (alterations in original) (internal

quotation marks omitted).

- 31 - This case does not fall within the exception to the

normal rule recognized in Linkage. Linkage was a suit not brought

by students at BU complaining about their education, and that fact

alone makes Linkage distinguishable.

. Rather the suit

was brought by a private commercial company that had a contract to

run an offsite training program at a conference center with BU,

which was alleged to have been wrongfully terminated by BU.

. The SJC held the jury had adequate evidence to find a

breach of contract and that BU had benefitted from transactions

done on its behalf by Linkage and could not therefore repudiate

the contract.

. It also upheld the trial judge's

conclusion that ch. 93A, § 11 applied because the two parties'

transaction was "of a commercial nature" and the parties were

acting in a business context and BU was engaged in "trade or

commerce" in its operation of the conference center. Id. at 207-

08.

The SJC was careful to distinguish the BU facts from

situations in which the defendant is, as here, a "statutorily

mandated nonprofit" whose actions were "motivated by legislative

mandate [and] not [for] business or personal reasons." Id. at 208

(quoting Poznik,

). The factors considered by the

SJC as to business context are as follows:

The question whether a transaction occurs in a business context must be determined by the facts of each case. Begelfer v. Najarian, 409

- 32 - N.E.2d 167, 176 (Mass. 1980). The factors we consider include "the nature of the transaction, the character of the parties and their activities, and whether the transaction was motivated by business or personal reasons." All Seasons Servs., Inc. v. Comm'r of Health & Hosps. of Bos.,

(Mass. 1993).

Poznik,

. None of these factors permit a finding

of business context here.

Certainly, the words "trade" and "commerce" in ch. 93A,

§ 1(b) do not traditionally mean the provision of education to

students at a not-for-profit college. See Planned Parenthood,

.

The plaintiffs argue that the defendants violated

ch. 93A by failing to follow through on the Lasell merger, failing

to disclose Mount Ida's financial distress, and by transferring

their financial and academic information to UMass Dartmouth. But

what the plaintiffs allege to be actionable were all activities

taken in furtherance of Mount Ida's charitable mission of

education.15 Unlike in Linkage where BU possessed a "business

motivation[]" to create a new revenue stream with a business

partner,

, Mount Ida's allegedly actionable

activities involved directly encouraging students to attend Mount

15The fact that Mount Ida may sell a small amount of merchandise with the school's name is distinct from the question here of whether statements directly related to attracting students are actionable under ch. 93A.

- 33 - Ida so that they could receive an education and ensuring that Mount

Ida students could continue their educations after Mount Ida's

closing.

The plaintiffs' argument that the phrase "advertising

. . . of any services" in the text of ch. 93A, § 1(b) means that

they state a ch. 93A claim as to services provided by a not-for-

profit has been squarely rejected by the SJC. See Planned

Parenthood,

(determining that a charitable

corporation, which had engaged in advertising of its services, was

not engaged in trade or commerce).

It is true that the BHE regulations, 610 Mass. Code Regs.

§ 2.07(3)(g)(2), state that "[t]he educational institution shall

not engage in untrue and misleading advertisements which are

otherwise prohibited by [ch. 93A]." But the plaintiffs do not and

could not argue this regulation adds to the requirements of ch. 93A

as set forth by the legislature and the courts.

And there is even stronger reason to conclude that

Massachusetts has not authorized a private right of action under

ch. 93A for these types of actions by a nonprofit school.

Regulation of not-for-profit colleges as to such matters as timing

of notice of closing has been assigned to the Massachusetts BHE.

See Mass. Gen. Laws ch. 69, § 30A; see also 610 Mass. Code Regs.

§§ 2.01-2.14.

- 34 - V.

Since our decision disposes of the claims against all of

the defendants, including the individual defendants and the Board of

Trustees, we do not reach the other defenses that they have raised.16

We also reject the plaintiffs' request for leave to amend.

The "plaintiffs were put on notice of the deficiencies in the

complaint by the motion to dismiss. If they had something relevant

to add, they should have moved to add it then." Fire & Police Pension

Ass'n of Colo. v. Abiomed, Inc.,

(1st Cir. 2015).

They failed to do so. Instead, they stated only that they requested

leave to amend if the court found their complaint lacking. This was

insufficient. See Gray v. Evercore Restructuring L.L.C.,

(1st Cir. 2008) (concluding that a similar statement "[did]

not constitute a motion to amend a complaint" and "the district court

cannot be faulted for failing to grant such leave sua sponte").17

Affirmed.

16 To the extent that certain defendants argue that they are volunteers serving a not-for-profit organization entitled to the protections of the Volunteer Protection Act,

(a), we note the recent holding by the SJC that the Volunteer Protection Act provides immunity from suit, not merely immunity from liability. Lynch v. Crawford,

, 1041 (Mass. 2019). 17 The defendants' request for sanctions against the plaintiffs is denied.

- 35 -