Kashmiri v. Regents of the University of California

The Regents of the University of California (defendant) set the fees for all students attending the university. In 1994, the Regents initiated an educational fee to be charged to all students and a professional degree fee (PDF) to be charged to some graduate students. When adopting the fee, the Regents specifically stated that any periodic increases in the PDF would apply to new students only, and that the PDF would remain the same for continuing students for the duration of their enrollment in their professional program. This statement was included on the university website, budget documents, and in various academic catalogues. The Regents increased the PDF three times between 1994 and 2002, and each time only applied the increase to new students. In 2002, due to a budget crisis, the Regents increased the Spring 2003 PDF for all professional students, both new and continuing. The Regents again increased the PDF for the next three academic years for all students. Also in late 2002, the Regents voted to increase the educational fee for the Spring 2003 semester. This was after student billing statements had been mailed to all students listing the previous fee amount. The Regents voted in May 2003 to increase the educational fee for the Summer 2003 semester, but students had been billed for that semester months earlier, with billing statements listing the previous fee amount. In the summer of 2003, three subclasses of university students (plaintiffs) filed a lawsuit against the Regents for breach of contract. The first subclass consisted of continuing professional students who were charged an increased PDF for the spring of 2003. The second subclass consisted of continuing students who were charged an increased educational fee or PDF for the spring of 2003 prior to receiving individualized notice of the increase. The third subclass consisted of continuing students who were charged an increased educational or PDF fee for the summer of 2003 prior to receiving individualized notice of the increase. The trial court granted summary judgment for the students, and the Regents appealed.