Class Action Updates: Plaintiffs’ Reply to Cooley’s Motion to Dismiss

In response to Thomas M. Cooley Law School’s motion to dismiss, the plaintiffs, represented by David Anziska and Jesse Strauss, have filed a reply brief.

The plaintiffs are asking the court to allow their case to proceed. They allege that Cooley “has been systematically defrauding thousands of prospective and enrolled students by reporting deceptive and misleading job placement data and salary information in a misguided attempt to inflate the value of a Cooley degree and thereby draw millions of undeserved tuition dollars.”

Cooley previously raised a number of defenses as to why it should not be subject to consumer protection claims. The reply addresses each defense in turn. Of note is the response to Cooley’s unreasonable reliance claim:

Cooley next alleges that to the extent that Plaintiffs relied upon the deceptive and misleading employment data, that reliance was unreasonable because Plaintiffs should have known that far fewer than the reported amount of Cooley graduates actually obtained full-time, permanent employment that required a Cooley degree. Def.’s Memorandum of Law, p. 39. In other words, Cooley has the audacity to argue that its own graduates unreasonably relied on Cooley’s marketing materials because they should have realized that Cooley’s reported employment statistics were inaccurate and that most Cooley graduates do not obtain full-time, permanent employment for which a JD degree is required or preferred. Aside from making a cynical and unprincipled argument, Cooley misstates the law.

The reply is attached.

Op/Ed on The Careerist: The Cooley Strategy Exposed

This op/ed is available on The Careerist.

The Cooley Strategy

Last week, Nelson Miller, associate dean of Thomas M. Cooley Law School’s Grand Rapids campus, wrote an editorial, “Lawyer Employment Remains Strong,” that appeared in The Careerist. Using employment data from the Bureau of Labor Statistics, he argues that lawyer job prospects are strong, that the legal profession has less risk than others, and that any noise questioning the value of obtaining a J.D. is as erroneous as it is inflammatory.

We will not spend much time discrediting Dean Miller’s “data-based” arguments, including Cooley’s Cooley’s Report One, which is the basis of this latest editorial. (That report has been thoroughly and thoughtfully discredited in an article by Matt Leichter.) To make a long story short, the underlying data upon which Report One depends excludes at least one broad segment of law school graduates: People who never became lawyers in the first place because they couldn’t find legal jobs.

So what is Miller’s editorial really about? Is it just an honest attempt by a law school administrator to educate students and allay unfounded fears propagated through the media? We don’t think so.

Law schools like Cooley are facing significant hardship because prospective students are increasingly more informed about the risk of taking on six-figure debt for the chance of entering the legal profession. In addition to numerous anecdotes, we are seeing this play out through fewer LSAT-takers and law school applicants. Unfortunately for these schools, this will translate into fewer people willing to pay $30,000, $40,000, or even $50,000 per year in tuition.

Miller has every incentive to distract consumers and conceal what Cooley graduates face after graduation. The 2009 Cooley graduates had an average law school debt in excess of $106,000, but only 42.2 percent obtained full-time legal work by February 2010. This statistic does not even account for Cooley’s unparalleled attrition rate, and we do not know how 2010 and 2011 graduates fared on these postgraduation metrics because Cooley does not share this information with its applicants.

The truth is that unless Miller and the rest of the Cooley administration can convince almost 2,000 people next year that a Cooley investment is worthwhile, they will be forced to make a series of hard business decisions in the coming years. This includes whether to keep the Michigan-based school’s new Florida campus and other satellite campuses open.

Commissioning reports,in-house rankings, and aggressive public relations are all part of a very smart strategy. The Cooley administration understands how these efforts affect prospective students. If Cooley can confirm to prospective students that law school is a magic ticket to financial security, it can continue to operate without introspection about what’s really wrong with legal education today.

As prospective students become more informed and the ABA exerts greater oversight to protect consumers of legal education, some enterprising deans will find ways to reduce tuition and class sizes, adapting their schools’ models to stay in business. Others will close up shop for lack of demand. And in the interim period, representatives like Miller will attempt to convince anyone who will listen that there is nothing wrong with taking on $106,000 in nondischargeable debt for their Cooley law degree. This continued, shameless promotion is part of the reason his law school has been hauled into court by former graduates amidst allegations of fraud and misrepresentation.

Miller’s advocacy for his law school at others’ expense belies his ethical responsibilities as both a lawyer and an educator. This country needs law school administrators who are capable of ethically recruiting and training the next generation of lawyers, judges, advocates, and educators. We do not need people running law schools who engage in Miller’s level of deception.

Class Action Updates: Motions to Dismiss; Cooley Adds 8

MacDonald v. Cooley

Thomas M. Cooley Law School filed a motion to dismiss the class action lawsuit filed by The Law Offices of David Anziska and Strauss Law PLLC on behalf of graduates who have allegedly been misled by Cooley’s advertising tactics. In this motion, Cooley most heavily relies on a regulatory estoppel defense, claiming that the school did just what the ABA Section of Legal Education prescribed. In light of the motion, the class lawyers have amended some of the factual allegations in the complaint, as well as added eight new, named plaintiffs.

For coverage of Cooley’s motion to dismiss, check out:

  • Thomas M. Cooley Law School Adopts the ‘Blame the ABA’ Theory For Defending Its Employment Stats, Above the Law
  • Cooley Dismissal Motion Says Misleading Stats Suit Reads ‘Like a Free-Form Rant’, ABA Journal
  • Cooley Files Motion to Dismiss Jobs Reporting Lawsuit, Cooley’s Press Release

Gomez-Jimenez v. NYLS

Additionally, NYLS has filed their own motion to dismiss a suit filed by the same firms on behalf of former NYLS students. Its arguments are substantially similar to Cooley’s.

For coverage of NYLS’s motion to dismiss, check out:

Case Update: Amended Alaburda Complaint Includes New Allegation

With the recent joint announcement by Law Offices of Dave Anziska and Strauss Law PLLC that the firms have drafted complaints against 15 ABA-approved law schools and intend to file them as class actions, we thought it would be a good idea to revisit the first class action against a law school for misleading employment information. We reached out to the lead attorney handling Alaburda v. TJSL, Brian Procel of Miller Barondess, LLP, for an update on where things stand.

The most recent Amended Complaint (available below), filed September 15th, 2011, contains a new allegation (our emphasis):

5. Furthermore, TJSL also misleads students by concealing the fact that these post-graduate employment figures are based on a small sample of graduating students rather than the entire class of graduates. Specifically, TJSL conceals the fact that its statistics are based on surveys and questionnaires that are sent to only a fraction of its graduates. Not all graduates receive surveys or questionnaires.

If discovery reveals the bolded to be true, the school may have more to worry about than the Alaburda complaint.

Risk of ABA Sanctions?

Many schools have defended the gaps in their employment information by stating that graduates simply don’t respond to their requests, and that nothing the school does can get graduates to voluntarily report more and better data. This conclusion is suspect, given that graduates are less likely to report when they feel let down by the school. A high non-response rate should raise eyebrows about the quality of a school’s services. But purposely not contacting certain graduates, if substantiated, may constitute a violation of the ABA’s Accreditation Standards. This would make TJSL subject to probation or even a loss of accreditation.

Such sanctioning could happen irrespective of whether Alaburda’s attorneys are successful in recovering under one or more claims. As weak as the ABA’s current accreditation standards are, law schools must publish “basic consumer information . . . in a fair and accurate manner reflective of actual practice.” What constitutes “basic consumer information” has in the past been restricted only, in practice, to the overall employment rate and bar passage data. (This means that schools could technically present any other employment information, e.g. salary statistics, in an inaccurate manner without risking its accreditation.)

But a pattern of failing to survey some graduates looks like it would constitute a violation of the standards, particularly if the behavior was motivated by a belief that the unsurveyed graduates are likely to report undesirable outcomes. Schools are all over the ethical map in terms of how to creatively count or massage the data graduates report to them, but an outright failure to even contact some graduates should not be ignored by the ABA.

Current Students Suing?

Otherwise, Alaburda’s lead attorney is “optimistic the class will be certified” given that “the alleged misrepresentations are uniform.” Keep in mind, the class includes not only recent graduates but also current law students. Much of the attention in the media has focused on how graduates are bringing claims against their alma maters, but both the TJSL complaint and the complaints against Cooley and New York Law School contemplate including current students. At least one of the draft complaints to be filed against the 15 additional law schools also lists current law students as eventual members of the class. This could make for an interesting development if any of the classes are certified. Current students would continue to pay tuition while simultaneously waiting to see if they can recover for the initial fraudulent acts that got them into the school.

Note: as with the two other firms handling claims against law schools, Mr. Procel reports that they “have received dozens of inquiries from graduates of other law schools who are interested in filing suit.”

Breaking: 15 more ABA-approved law schools to be sued

Two law firms, Law Offices of David Anziska and Strauss Law PLLC, have announced their intention to jointly file class action lawsuits against 15 more U.S. law schools (full press release below). The law schools are located in seven states:

  • California: California Western School of Law, Southwestern Law School, and University of San Francisco School of Law (3)
  • Florida: Florida Coastal School of Law (1)
  • Illinois: Chicago-Kent College of Law, DePaul University College of Law, and John Marshall School of Law (3)
  • Maryland: University of Baltimore School of Law (1)
  • New York: Albany Law School, Brooklyn Law School, Hofstra Law School, Pace University School of Law, and St. John’s University School of Law (5)
  • Pennsylvania: Villanova University School of Law and Widener University School of Law (also has a campus in Delaware) (2)

These complaints will follow previous complaints filed against New York Law School, Thomas M. Cooley Law School in Michigan, and Thomas Jefferson School of Law in California.

With these lawsuits, nearly 10% of all ABA-approved law schools across eight states will be accused of tortiously misrepresenting job placement statistics and violating state consumer protection laws. As with the previous complaints, the relief sought will include tuition reimbursement, punitive damages, and injunctive relief such as mandatory auditing of employment data and cessation of false advertising tactics.

LST is a forward-looking organization focused on improving legal education through policy efforts, thus our interests do not adequately align with plaintiffs seeking to be made whole. As such, we will not be directly involved in filing and prosecuting these lawsuits. Nevertheless, we will join these law firms on a media call this afternoon because of the role that class action lawsuits can play in incentivizing change through highly visible impact litigation. We will help put these lawsuits in context for journalists unfamiliar with law school consumer information issues.

These cases will create more awareness among prospective law students that the employment statistics advertised by these law schools do not mean what prospectives tend to think they mean. It is our hope that these complaints, along with future claims made against other law schools, will help bring about broad social change by altering how law schools operate and by pressuring the ABA Section of Legal Education to fulfill its regulatory duties. In the meantime, LST will continue seeking ways to expand the debate about legal education reform and to help usher in a new approach to the recruitment and training of attorneys and judges.

Press Release

Post-Graduation Employment Rates at Fifteen Law Schools Questioned

October 5, 2011
New York, NY
FOR IMMEDIATE RELEASE

Law Offices of David Anziska and Strauss Law PLLC announced today that they are seeking to file class action complaints challenging the post-graduate employment rates reported by the following 15 schools:

1) Albany Law School, which reports rates of between 91% and 97%;
2) Brooklyn Law School, which reports rates of between 91% and 98%;
3) Hofstra Law School, which reports rates of between 94% and 97%;
4) Pace University School of Law, which reports rates of between 90% and 95%;
5) St. John’s University School of Law, which reports rates of between 88% and 96%;
6) Villanova University School of Law, which reports rates of between 93% and 98%;
7) Widener University School of Law, which reports rates of between 90% and 96%;
8) University of Baltimore School of Law, which reports rates of between 93% and 95%;
9) Florida Coastal School of Law, which reports rates of between 80% and 95%;
10) Chicago-Kent College of Law, which reports rates of between 90% and 97%
11) DePaul University School of Law, which reports rates of between 93% and 98%
12) John Marshall School of Law (Chicago), which reports rates of between 90% and 100%
13) California Western School of Law, which reports rates of between 90% and 93%;
14) Southwestern Law School, which reports rates of between 97% and 98%;
15) University of San Francisco School of Law, which reports rates of between 90% and 95% percent

The average debt load for 2009 graduates of these fifteen schools is $108,829.4. “The lawsuits against New York Law School and Thomas M. Cooley Law School are prompting many recent law school graduates with high debt loads and disappointing job prospects to question the employment rates reported by their schools” stated David Anziska. “The numbers reported by the schools just don’t comport with the reality of the legal job market. We hope that litigation, combined with pressure from regulators, applicants, students and alumni changes the way legal education is marketed and provides compensation to those who may have been mislead in the past.” he added.

Law Offices of David Anziska and Strauss Law PLLC are advising graduates of the above schools that they may have certain legal rights and should contact David Anziska at david@anziskalaw.com or visit www.anziskalaw.com to learn more.

Law Offices of David Anziska and Strauss Law PLLC will be hosting a media call to explain the current status of litigation regarding law schools’ post-graduate employment data and to address the nation-wide problem of high debt burden and low employment rates among recent graduates. Joining the firms on the call will be Kyle P. McEntee and Patrick J. Lynch from Law School Transparency, a Tennessee-based non-profit whose mission is to improve the quality and presentation of post-graduate employment data.

Class Actions as a Tool of Social Change

Attorneys from Kurzon Strauss, who are representing the plaintiffs in the class action lawsuits filed today against New York Law School and Cooley, hosted a conference call this afternoon to discuss the suits. Although they could only say so much, the Kurzon Strauss attorneys were able to share their thoughts on the law school transparency debate and where these two lawsuits (and Alaburda v. Thomas Jefferson School of Law) fit into the broader landscape of reforming legal education.

It is clear that these attorneys view class actions as tools of social change. They are looking for systematic change to how law schools advertise their services to prospective students. The team noted that clearer, disaggregated information will not only hold schools accountable, but reward the separation in post-graduation outcomes that exists for some schools but isn’t apparent because of the reporting standards. To them, this is a matter of “trying to restore rationality to the market.”

They emphasized that this was not a matter of the quality of educations received by students at either Cooley or NYLS;and they were especially proud to be using a Cooley alumnus in the suit against Cooley. Rather, this is “more like false advertising than products liability.” The attorneys are ultimately after helping prospective law students understand what the real placement rates are at law schools, and what salaries graduates really make. “Law schools need to be held accountable,” said one of the Kurzon Strauss attorneys. He added that it is not just one or two schools that need to be held accountable, but that many schools need to be and that the time is now for change.

The decision to pick NYLS and Cooley was influenced by the schools being “JD factories.” As the complaints (Cooley, NYLS) pointed out, Cooley and NYLS enroll the largest incoming classes of any law school in the country. However, one attorney implied that there are likely more lawsuits on the way because misleading statistics are a “dirty industry secret,” though he did not imply either way whether Kurzon Strauss would be counsel.

Earlier: Breaking: Class Action Suits Filed Against Cooley and NYLS

Breaking: Class action suits filed against Cooley and NYLS

We have just been informed that Kurzon Strauss, the law firm recently sued by Thomas M. Cooley Law School for defamation, will represent plaintiffs in two class action lawsuits against Cooley and New York Law School. The press release, complaints, and summons are attached below.

Both Cooley and NYLS have been in the news lately. Recently, the ABA Section of Legal Education Council acquiesced to Cooley opening a Florida campus. David Segal, writer for the New York Times, targeted NYLS in his latest piece on law schools. (For NYLS’s response, see here.) We also wrote a piece, which is cited in the NYLS complaint, on NYLS’s deceptive practices in April.

We will update this article throughout the day as we learn more.

Updates:

Commentary

Of note, the plaintiffs in the Cooley suit are represented by a 2006 Cooley graduate, Steven Hyder of The Hyder Law Firm, in addition to Kurzon Strauss. This is particularly interesting because Cooley received some pointed criticism for not using its own graduates when filing its defamation suit against Kurzon Strauss.

Readers may also remember that a Cooley graduate, Zenovia Evans, went on a hunger strike for law school transparency.

Both suits are motivated by a goal of transparency:

This action seeks to remedy a systemic, ongoing fraud that is ubiquitous in the legal education industry and threatens to leave a generation of law students in dire financial straits. Essentially, Plaintiffs want to bring an element of “sunlight” or transparency to the way law schools report post-graduate employment data and salary information, by requiring that they make critical, material disclosures that will give both prospective and current students a more accurate picture of their post-graduate financial situation, as opposed to the status quo where law schools are incentivized to engage in all sorts of legerdemain when tabulating employment statistics.

Gomez-Jimenez v. NYLS

  • Points out Dean Matasar’s public recognition that law schools at times exploit students and that law schools and the academy have a “moral responsibilty” to either shut schools down or fix poor outcomes.
  • Alleges two basic, written uniform representations
    • Reporting misleading Nine-month Employment Rates
    • Reporting inflated mean salaries
  • Calls NYLS a “JD-factory”
  • States that there is no place for prospective students to find NYLS’s real employment numbers.
  • “By playing fast and loose with its employment data, NYLS creates an impression of bountiful employment opportunity that in reality does not exist.”
  • “[NYLS] continues to make the fantastical claim that the overwhelming majority of its graduates are gainfully employed.”
  • “NYLS students graduate on average with a whopping $119,437 in loans, placing them in the top 17th percentile of indebtedness among all law school graduates.”
  • “[T]he law school industry today is much like a game of three-card monte, with law schools flipping ace after ace, while a phalanx of non-suspecting players wager mostly borrowed money based on asymmetrical information on a game few of them can win.”
  • Claims: a) New York’s Deceptive Acts and Practices Law, NY General Business Law §349, et seq.; b) Fraud; and c) Negligent Misrepresentation.
  • NYLS increased its first-year class by over 30 percent in 2009, up to 736 students (its largest class ever). This is the second largest incoming class in the country.
  • NYLS Law Professor, Randolph N. Jonakait: “At a school like New York Law, which is toward the bottom of the pecking order, it’s long been difficult for our students to find high-paying jobs…Adding more than 100 students to an incoming class harms their employments prospects. It’s always been tough for our graduates. Now it’s tougher.”
  • “NYLS, by virtue of its participation in NALP’s annual employment survey, clearly has the means to and actually does distinguish between various degrees of employment, and breaks down the exact percentage of its recent graduates who have secured part-time employment.”
  • “NYLS, as with any law school, has every incentive to perpetuate this mass deception, because they are not required by the ABA, Department of Education or any other governing body to independently audit or verify their employment data.”
  • “However, if NYLS was to disclose accurate employment data and the steep odds its graduates face in securing gainful employment, it would become abundantly clear to any rational purchaser how poor of an investment attending NYLS is.”

Plaintiffs

  • Alexandra Gomez-Jimenez: 2007 NYLS graduate; practicing attorney who is a member in good standing of the New York Bar; secured full-time, permanant employment about one year after graduation; she now has her own law firm.
  • Scott Tiedke: 2009 NYLS graduate; practicing attorney who is a member in good standing of the New York Bar; since graduating law school, he has worked as a legal and compliance officer in an investment management firm.
  • Katherine Cooper: 2010 NYLS graduate; unemployed member in good standing of the New York Bar.

Relief Sought

  • Preliminary and injunctive relief enjoining Defendants, their agents, servants, employees and all persons acting in concert with them from continuing to engage in their unlawful recruitment program and manipulation of post-graduate employment data and salary information, and all other unfair, unlawful and/or fraudulent business practices alleged in the complaint and and that may yet be discovered in the prosecution of this action.
  • Injunctive relief ordering that NYLS retains unrelated, independent third-parties to audit and verify post-graduate employment data and salary information
  • Restitution and disgorgement of all tuition monies remitted to NYLS, totaling $200 million.
  • Damages
  • Punitive damages
  • Attorneys’ fees and expenses pursuant to all applicable laws
  • Prejudgment interest

MacDonald v. Cooley

  • Claims: Michigan’s Consumer Protection Act, MCLS §445.901, et seq.; Fraud; Negligent Misrepresentation.
  • Points out how Cooley is the largest law school in the country, “Churning out nearly 1,000 newly-minted JD graduates each year.”
  • Alleges the school has employed “Enron-style” accounting methods, a phrase coined by Professor Bill Henderson in David Segal’s January New York Times article.
  • Claims that despite the school’s advertised employment rate of 80% or higher, if the school were to disclose the percentage of only those “graduates who have secured full-time, permanent positions for which a JD degree is required or preferred,” the percentage could be “30% or lower.”
  • Alleges the school “grossly inflates its graduates’ reported mean salaries” and that the reported medians are not statistically meaningful.
  • Refers to prospective law students as “naïve, relatively unsophiscicated consumers” who are basing their decision to “purchase” a law degree from Cooley “based on asymmetrical information.”
  • “According to US News, Thomas Cooley has the lowest admissions standards of any accredited and provisionally accredited law school in the country. For 2010, it accepted approximately 83 percent of all applicants, an acceptance rate that is nearly 15 percentage points more than the second least selective law school, Phoenix School of Law. The mean LSAT score for incoming students is 146 and the mean undergraduate GPA is 2.99, both lows for all accredited and provisionary accredited law schools.”
  • “In marketing itself to students, Thomas Cooley makes a number of bold, if not incredulous statements that are incommensurate to its low academic and reputational standings in the legal marketplace.”

Plaintiffs

  • John T. MacDonald Jr.: 2010 Cooley graduate; former Naval Officer who served four years and received an honorable discharge prior to attending law school; practicing attorney in good standing with the Michigan Bar; could not find full-time, permanent legal employment and currently operates his own law firm.
  • Chelsea A. Pejic: 2006 Cooley graduate; practicing attorney in good standing with the Illinois Bar; could not obtain gainful legal employment and was unemployed for a long period of time despite circulating hundreds of resumes; has worked as a volunteer staff attorney and temporary contract attorney and has briefly operated her own firm.
  • Shawn Haff: 2010 Cooley graduate; practicing attorney in good standing of the Michigan Bar; could not find full-time, permanent legal employment and was forced to take temporary, contract assignments reviewing documents; currently has his own law firm.
  • Steven Baron: 2008 Cooley graduate; currently unemployed, despite having circulated hundreds of resumes since graduation.

Relief Sought

Seeks refunding or reimbursement to current and former students, an injunction against Cooley’s marketing practices, auditing by an independent third party, and attorneys’ fees.

Press Release

Lawsuits Seek to Reform Reporting of Post-Graduate Employment Data

Two class action lawsuits alleging fraud, negligent misrepresentation and deceptive business practices were filed today against New York Law School (“NYLS”) and Thomas M. Cooley Law School (“Thomas Cooley”). The suits allege that the schools knowingly inflate reported rates of post-graduate employment and salary statistics to recruit and retain students. The putative class actions were filed by three NYLS graduates and four Thomas Cooley graduates, respectively.

“These suits are not just about NYLS and Thomas Cooley – we believe the practice of inflating employment statistics and salary information is endemic among law schools” stated David Anziska an attorney at Kurzon Strauss LLP (“Kurzon Strauss”). “We hope these suits bring systematic change in the way legal education is marketed by making transparency and accuracy the rule, not the exception. Our efforts to bring about that change begin today.”

In addition to seeking monetary relief for current and former students, the suits seek to ensure that law schools report accurate post-graduate employment data that allows prospective students to make an informed decision regarding whether to invest in a law degree. The suits allege that to recruit students for their programs – which cost tens-of-thousands of dollars per-year – law schools, including NYLS and Thomas Cooley, misrepresent their graduates’ employment prospects by misclassifying graduates who have only secured temporary or part-time employment as being “fully” employed, excluding graduates who do not supply information from employment surveys, and creating post-graduate “jobs programs” into which they hire their own graduates.

“We are bringing these suits because thousands of young lawyers, like the plaintiffs, struggle to purchase a home, raise a family and make investments because they leveraged their future to a law school based on inaccurate information,” stated Jesse Strauss, a Kurzon Strauss partner. “It is time for the legal academy to own up to this problem.”

To help prosecute the Thomas Cooley lawsuit, Kurzon Strauss has retained as local counsel Steven Hyder of The Hyder Law Firm, PC, who is a 2006 graduate of Thomas Cooley.

The cases are Gomez-Jimenez et al. v. New York Law School, Index No. Unassigned (electronically filed), (Supreme Court, New York County) and MacDonald et al. v. Thomas M. Cooley Law School, 11-CV-00831 (W.D.MI).

Kurzon Strauss LLP is one of the premier New York based commercial litigation and corporate transactional law firms. For more information, log on to www.KurzonStrauss.com.