All News in Lawsuits

The Law Offices of David Anziska, together with Strauss Law PLLC and six other law firms, publicly announced moments ago that they have filed complaints against 12 more law schools. To date, 15 of the country’s 197 ABA-approved law schools are facing class action suits. (Thomas Jefferson, New York Law School, and Thomas Cooley have already been sued, with the first lawsuit already in discovery.)

These lawsuits should be of grave concern to the ABA, both as the only federally-recognized accrediting body and as the legal profession’s largest and most powerful trade organization. Nearly 8% of its member schools have been formally accused of fraud by 74 former students. While positive results for the plaintiffs would further confirm what LST has drawn attention to over the past two years, the underlying problem of poor ABA governance will remain unchanged by the results. Recent efforts to reform the accreditation standards are a start, but the ABA has yet to show that they will take any significant corrective action against schools. While these lawsuits will attempt to hold schools accountable for past misleading actions, it will be up to the ABA to ensure its member schools do not continue the fraud that is widespread throughout American legal education.

The new batch includes 11 schools from Anziska and Strauss’s October 2011 announcement. The twelfth is Golden Gate University School of Law, as Above the Law announced late last year.

All 12 Schools:

• Albany Law School
• Brooklyn Law School
• California Western School of Law
• Chicago-Kent College of Law
• DePaul University College of Law
• Florida Coastal School of Law
• Golden Gate University School of Law
• Hofstra Law School
• John Marshall School of Law (Chicago)
• Southwestern Law School
• University of San Francisco School of Law
• Widener University School of Law

As momentum for holding law schools accountable grows and people start to realize the courts are their only remedy, LST expects more class actions will be filed this year. These allegations concern a long history of consumer-disoriented behavior, which unfortunately continues today at a great number of schools. LST’s Winter 2012 Transparency Index shows just how poor the newly-sued schools are doing when it comes to being honest about what their graduates found for work. Just one of the twelve schools currently discloses the number of graduates who found full-time, permanent jobs for which bar passage was required.

Transparency Index Performance of Newly-Sued Schools

View the press release after the jump »»

We’ve been keeping tabs on the three pending lawsuits against ABA-approved law schools over fraudulent presentation of employment statistics. These cases set the stage for additional class actions against the other 194 ABA-approved law schools, given that the allegedly misleading actions have been the industry norm for quite some time.

The first of the three class actions, Alaburda v. TJSL, was filed last May in California Superior Court. In addition to alleging that Thomas Jefferson School of Law committed fraud, the plaintiff’s claims of unfair competition and false advertising have been allowed to move forward. While the plaintiff has yet to file for class certification (her attorney expects to do so in six to twelve months), the case has entered into the discovery phase. In the meantime, the lawyers have set up a class action registry for graduates of TJSL. (Link here.)

We inquired for a status update with the lead attorney on the case, Brian Procel of Miller Barondess LLP. Below is his full response.

Good to hear from you. I am very pleased with the progress of our case and recent developments with respect to the disclosure of employment data among law schools.

Thomas Jefferson answered Plaintiff’s complaint on September 23, 2011. We have now stated class action claims for fraud, unfair competition and false advertising. The parties are currently engaged in discovery, including the exchange of documents and other information. We intend to start taking the depositions of the administrators at Thomas Jefferson who were involved in compiling the employment data that was ultimately reported by U.S News & World Report. Thomas Jefferson will send out notice of the class action to all graduates in the near future.

We set up a website, thomasjeffersonclassaction.com. We invite all graduates to register on the website. This will allow us to communicate with the class members and to answer any question they may have directly. By signing up on the website, graduates can also input information that will help us to evaluate whether Thomas Jefferson has been reporting their employment data accurately.

I would like to thank you and your team at lawschooltransparency.com. You are doing great work and we are now starting to see some positive results.

Note to TJSL graduates: Please contact the firm directly using the instructions on the registry if you wish to join the class. LST is not affiliated with this or any lawsuit.

The ABA filed a brief today in U.S. District Court in the Eastern District of Tennessee in response to a complaint filed by Lincoln Memorial University Duncan School of Law.

The lawsuit claims that the ABA violated antitrust laws. “What it says is that in a nutshell, we were denied due process because we met the standards promulgated by the ABA and we didn’t receive accreditation, so what we’re seeking is fair hearing,” said Sydney A. Beckman, vice president and dean of LMU’s law school. “It also alleges antitrust violations because it appears when you deny a school that met accreditation standards, that you’re try to limit the number of law schools.”

The response states that Duncan School of Law was not in “substantial compliance” with all of the section’s Standards for Approval of Law Schools, including Standard 203 (Strategic Planning and Assessment), Standards 303(a) and (c) and Interpretation 303-3 (Academic Standards and Achievements), and Standard 501(b) and Interpretation 501-3 (Admissions and Student Services). The response also suggests that Duncan School of Law has not exhausted its right to appeal the decision by the Council of the Section of Legal Education to deny provisional accreditation.

• ABA Motion in Opposition of a Temporary Restraining Order
• ABA Motion Appendix
• Section Consultant Askew's Declaration

View Karen Sloan's original article here. Posted by LST on December 31, 2011.

Excerpt:

[Top 10 Legal Education Stories]

1. PANTS ON FIRE
… [U.S. News rankings] pressure got the better of some administrators at Villanova University School of Law, who admitted in February to goosing the numbers reported to the American Bar Association and U.S. News for years. … [LSAC] now is considering whether to audit the figures law schools report, and the ABA is mulling tougher penalties for schools that lie.

2. SUE YOUR SCHOOL
Instead of asking alumni for money, maybe law schools should ask graduates to pledge not to sue them. 2011 will go down as the year law students got litigious — at least against their alma maters. … This could be the first sign of a litigation wave. The lawyers involved in the New York Law School and Cooley cases are looking for plaintiffs for class actions against another 15 schools.

3. U.S. SENATORS GIVE THE ABA THE STINKEYE
… A number of U.S. senators this year zeroed in on the American Bar Association’s oversight of law schools — or what they apparently see as a lack thereof. For months, senators including Barbara Boxer (D-Calif.), Chuck Grassley (R-Iowa) and Tom Coburn (R-Okla.) fired off letters to the ABA expressing concern over the accuracy of the job information law schools release and requesting detailed information about student loan defaults, accreditation policies and more. The ABA insisted that it shares those concerns, but more often than not the senators were unsatisfied with its responses. Boxer and Coburn in October asked the U.S. Department of Education to compile a decade’s worth of law school data. Rumors have been swirling that the U.S. Senate Commerce, Science and Transportation Committee will hold hearings on law schools next year. Stay tuned.

4. ANYBODY WANT TO GO TO LAW SCHOOL?
It was bound to happen. Applications to American Bar Association-accredited law schools declined by 10 percent in 2011 after increasing during each of the previous two years as recent college graduates sought to ride out the dismal job market in law school. …

5. SHOW ME THE DATA!
The movement to improve law school consumer information started when the legal job market dried up several years ago, but really hit its stride during 2011. Law School Transparency — a nonprofit founded by two Vanderbilt University Law School graduates — lobbied individual schools and the American Bar Association to improve the reporting of job and salary data, and saw results. …

8. THE GRAY LADY HAS SOMETHING TO SAY
Law school is expensive and some law graduates struggle to repay their loans. Not all law students will retain their merit-based scholarships. Law school curricula center on theory rather than practical skills. None of this was news in the legal world, but a series of front-page articles by David Segal of The New York Times brought long-standing critiques of legal education to a wider audience. This, in turn, prompted handwringing by law professors and administrators, who alternately acknowledged problems identified by the Times and dismissed the coverage as overly simplistic and negative. Legal academics were particularly galled by a Nov. 19 piece that painted them as ivory tower-dwelling chin strokers who neglect to teach their students how to practice law.

9. NO TENURE, NO LSAT
Slowly but surely, the American Bar Association is changing its process for accrediting law schools. A review committee discussed proposals including elimination of what many see as a venerable requirement that law schools protect tenure — an idea that raised the ire of many a law professor but that would give schools more flexibility to offer low-cost education. …

View Georgiana Vines's original article here. Posted by LST on December 29, 2011.

Excerpt:

The man for whom Lincoln Memorial University’s law school was named said Friday he believes a national economy that has left young lawyers unable to repay taxpayer-backed student loans played a part in the school being denied partial accreditation by the American Bar Association.

U.S. Rep. John J. Duncan Jr., R-Knoxville, said as far as he knew, “the law school did everything right (and) got top ratings on just about everything. They’re really a victim of the recession.”

Duncan said a lot of young lawyers around the country were being laid off and unable to repay student loans for law schools they attended. Debts can amount to tens of thousands of dollars.

“Sen. (Chuck) Grassley and Sen. (Barbara) Boxer came down really hard on that, demanding that the Department of Education and the American Bar Association do something to remedy the situation. Because of the timing, if that had not happened, they would have flown through with flying colors,” the congressman said.

Grassley is an Iowa Republican and Boxer a California Democrat. Grassley’s communications director, Jill Kozeny, said Friday the senator’s office has talked extensively with the ABA over defaulted student loans.

“Substantively, the issue is whether students get an accurate sense of their job prospects when signing onto law school debt. Even in the best economy, the ABA or law schools shouldn’t misrepresent job prospects and post-graduate employment rates,” Kozeny said in an email.

Grassley and the ABA are in discussions about the quality of ABA-accredited schools based on a Department of Education advisory committee report, Kozeny said.

LMU filed a federal lawsuit Thursday against the ABA, claiming antitrust violations. The lawsuit said the accreditation was denied as a means of limiting the number of law schools and therefore the number of lawyers practicing across the country. …

“They (council members) had their minds made up. It’s very unfair to students who have been going there (to LMU) for two years. There are almost 200 students. The ABA should have a different procedure in my opinion,” he said.

Related Stories:

• Law School Transparency: Breaking: ABA sued by Duncan School of Law
• Knoxville News Sentinel: LMU suing American Bar Association over law school accreditation
• LMU v. ABA Complaint

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.

• MacDonald v. Cooley MTD Reply

The Knoxville News Sentinel is reporting that Lincoln Memorial University is suing the ABA in federal court. (View the complaint here.) Earlier this week, LMU’s law school, the John R. Duncan Jr. School of Law, was denied provisional accreditation by the ABA Section of Legal Education because it was not in substantial compliance with Standards 202, 303, and 501, including low admissions standards. The school has already received accreditation from the Southern Association of Colleges and Schools and the Tennessee Board of Law Examiners.

The lawsuit claims that the ABA violated antitrust laws. “What it says is that in a nutshell, we were denied due process because we met the standards promulgated by the ABA and we didn’t receive accreditation, so what we’re seeking is fair hearing,” said Sydney A. Beckman, vice president and dean of LMU’s law school. “It also alleges antitrust violations because it appears when you deny a school that met accreditation standards, that you’re try to limit the number of law schools.”

In the complaint, LMU observes that “”Defendant ABA’s actions also constitute an intentional misuse of its dominate market power as the gatekeeper for for accreditation of law schools and the benefits that accompany that status.” Blank Rome’s Michael Cioffi contributed to this complaint. He also worked on Cooley’s Sixth Circuit appeal for one of its branch campuses back in 2006.

Dean Beckman told the Knoxville NBC affiliate,”We regret having to take this action. We want to work with the ABA to improve legal education, not work against them or have them work against us.”

Whatever the result of this suit, it is clear that the pressure on the ABA will continue until the entire legal education system substantially changes.

Related:

• Above the Law: Duncan Law School Sues ABA for Antitrust Violation (December 22, 2011)
• Nat’l Law Journal: Spurned by the ABA, law school strikes back with antitrust suit (December 22, 2011)
• New York Times: New Law School Sues Bar Association (December 22, 2011)

• LMU v. ABA Complaint

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:

• New York Law School Files Motion to Dismiss Suit Over Employment Data, Above the Law
• New York Law School Files Motion to Dismiss Lawsuit, NYLS’s Press Release

• MacDonald v. Cooley Motion to Dismiss
• Gomez-Jimenez v. NYLS Motion to Dismiss
• MacDonald v. Cooley Amended Complaint

This op/ed is available in today’s NY Post. Read it online here.

Do law schools defraud students?

New York Law School and two other law schools are staring down the barrel of consumer-fraud class-action lawsuits. Attorneys representing recent graduates plan to soon add at least 15 more schools, including five in New York, to the list.

As the economy flounders and a jobs crisis looms for many employment sectors, law-school graduates are taking to the courts because they don’t have jobs.

It’s the economy, stupid? If only that were the whole story. The suits center on how law schools recruit students: Many encourage consumers to believe a law degree is their “magic ticket” to financial security.

The complaints accuse schools of misrepresenting job-placement statistics and violating state consumer-protection laws. They allege that schools provide information designed to mislead, deceive and prompt consumers into attending programs they’d otherwise have avoided.

In other words, these suits are about showing law schools that they don’t get more leeway than other industries in advertising the value of their services.
The shoddy-stats problem long predates the recession. Many laws schools have consistently advertised employment rates of 90 percent or more — numbers that count bar-tending jobs along with ones that actually require a law degree.

The American Bar Association accredits these schools, but doesn’t regulate how they advertise starting salaries. So schools can trumpet their graduates’ “median” starting salary of $160,000 on the basis of just 15 percent of the class.

And none of this is disclosed to the consumer.

Shouldn’t these graduates have known better than to rely on six-figure salaries and near-perfect employment rates as reason to apply to law school? Perhaps. But schools know from experience that applicants are optimistic — that consumers will believe inflated statistics that comport with those magic-ticket expectations. That a law school would be less than forthright simply does not register on people’s radars.

And despite general misgivings about lawyers, eager young college grads meet encouragement every step of the way. Ask an elementary-school child’s parents whether they want their kid to go to law school someday and you begin to understand what makes law school so compelling.

This doesn’t paint prospective law students or their families in an enviable light. They are a product of a prestige-obsessed culture caught in an unwise investment decision. But sympathy isn’t needed for legal redress. Schools have failed to follow very basic rules for advertising their services. And now they could find themselves on the hook for millions of dollars.

These problems affect more than just the legal profession. This year, ABA-approved law schools will get at least $4 billion in taxpayer support, thanks to the government’s decision in 2010 to directly lend to students. But when graduates can’t find jobs that allow full loan repayment, they either default or sign up for hardship programs. The taxpayers are on the hook for the lost interest income and unpaid loan principal.

These lawsuits and the fraudulent behavior they target are both symptomatic of greater structural problems with legal education. Tuition has far outpaced inflation, and it’s not clear whether law schools can figure out how to function if they must reduce the cost of obtaining a law degree.

Whether tuition drops because consumers finally receive the real employment statistics, or because the government stops lending essentially unlimited amounts of money to students, schools will need to either reimagine the kind of education they provide or close down.

In all of this mess, one thing is for sure: Continued pressure from lawsuits, Congress and other reform advocates will push law schools to honestly evaluate the American legal-education model. And reimagining a broken model will take a lot more than simply getting people their day in court.

Kyle McEntee is executive director of Law School Transparency (lawschooltransparency.com), a nonprofit dedicated to advocating for reform in legal education. Patrick J. Lynch is the group’s policy director and an environmental attorney in Santiago, Chile.

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.”

• Alaburda v. TJSL Third Amended Complaint

Documents are attached below. In addition read LST’s statement here.

• Exh 1 - Southwestern Law School Reported Employment Data 2007-2010
• Exh 2 - Pace Law School Reported Employment Data 2007-2010
• Exh 3 - Albany Law School Reported Employment Data
• Exh 4 - InfiLaw Systems & Sterling Partners Background Information
• Exh 5 - Dean Closius Resignation Letter

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.

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

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.

• Macdonald v. Cooley (Complaint)
• Gomez-Jimenez v. NYLS (Summons and Complaint)

Despite news of Alaburda v. Thomas Jefferson School of Law breaking the day before the holiday weekend, the legal community has been abuzz about what the first class action suit filed against a law school for misleading consumer information means for TJSL, prospective law students, and the legal profession. This post looks at some of the responses thus far.

Many commenters have been debating the merits of this suit and whether the class will be certified. Others are wondering whether more lawsuits will follow in other states against other schools. And many commenters suggest that the ABA and/or U.S. News should be joined as defendants. Social media traffic to our website alone was substantial, suggesting that members of the legal profession are very interested in the case and may continue watching it closely.

Comments from the Parties

Ms. Alaburda’s attorney, Brian Procel, had this to say to Sara Randazzo when she first broke the story at the Daily Journal (subscription required):

This lawsuit is about ensuring that law schools are held to the same standard as other businesses and that they are not permitted to misrepresent information.

Ms. Randazzo also reports that:

Beth Kransberger, associate dean of student affairs at Thomas Jefferson, said the school has always “reported honestly and with integrity” when providing data to various agencies, including the American Bar Association and the National Association for Law Placement.

Ms. Kransberger then added:

A law degree remains an amazingly versatile degree, and that continues to be what drives us.

Ms. Kransberger made additional comments to Karen Sloan in the National Law Journal:

The school has always followed the guidelines established by the ABA. We’ve always been accurate in what we report, and we’ve always followed the system given to us by the ABA.

This lawsuit is very much about a larger debate. This is part of the debate about whether it’s practical to pursue a graduate degree in these difficult economic times.

The Reality of TJSL’s Comments

Ms. Kransberger’s comments about the ABA Section of Legal Education are not surprising, as they will represent a crucial part of TJSL’s substantive legal argument. In particular, the law school hopes to show that it has acted properly by responding truthfully to the ABA questionnaire and NALP survey each year.

This conflates two separate acts by TJSL: reporting and presenting employment data. Although false reporting would be problematic for TJSL for each cause of action, as they focus on misrepresentations, acts of concealment, and misleading statements, TJSL could have reported true data to the ABA, NALP, and U.S. News and Ms. Alaburda would not be precluded from recovering under any of the actions.

As we have continuously emphasized, the issue is how law schools present consumer information to the public, not only what they report to the ABA, NALP, and U.S. News. (Although truthful reporting may be an issue at some schools, especially in light of the Villanova Law scandal, many, many more law schools mislead prospective students, intentionally or unintentionally, with how they choose to present consumer information.)

Law schools deserve the brunt of the blame for the current lack of quality employment information, including the provision of misleading information, even though the ABA Section of Legal Education has a responsibility to regulate under its accreditation authority. It is worth noting, however, that the Section only has to act because schools do not voluntarily release the information prospective students need to make an informed investment. The responsibilities of law schools to prospectives and the profession are not absolved or delayed because the Section regulates law schools; nor does it matter that the Section is considering more careful regulations. The failure of the Section to monitor whether schools are behaving legally is an argument against the Section, not in favor of a particular law school.

These responsibilities are confirmed by Standard 509, the ABA’s (minimum) consumer information standard. Standard 509 is just one of the Section’s standards that law schools must meet to obtain and retain ABA approval. Compliance with this standard in particular is at the core of Ms. Kransberger’s claim that “[TJSL] has always followed the guidelines established by the ABA.”

Standard 509: Basic Consumer Information
(a) A law school shall publish basic consumer information. The information shall be published in a fair and accurate manner reflective of actual practice.

Interpretation 509-4
Standard 509 requires a law school fairly and accurately to report basic consumer information whenever and wherever that information is reported or published. A law school’s participation in the Council-designated publication referred to in Interpretation 509-2 and its provision of fair and accurate information for that book does not excuse a school from the obligation to report fairly and accurately all basic consumer information published in other places or for other purposes.

In addition to the Interpretation above, Interpretation 509-1 provides a list of what information is considered “basic.” Concerning employment information, only the “any job at all” employment rate and bar passage statistics are included in the list, leaving it up to the interpreter to determine whether the list is exhaustive or whether other basic employment information must also be reported in a fair and accurate manner. We think it does. Under Standard 509, for example, it is not explicitly stated that a law school must fairly and accurately report the number of graduates employed in a fulltime legal job. However, it would be absurd to think a law school can unfairly and inaccurately report the number of graduates employed in legal jobs should the school volunteer that information. It is in part due to the inadequacy of this list that we have pushed for a revision of Standard 509.

Grounding a defense against misrepresentation by pointing out that a school complies with an ineffective standard should fail, particularly if the school is arguably not even in compliance. If a law school is aware that the information it shares does not adequately explain its post-graduation outcomes and is aware that the information misleads consumers, the law school is open to an investigation and potential sanctions by the Accreditation Committee. The fact that no sanctions have yet been issued is only a sign that the ABA hasn’t received any complaints, which hardly makes TJSL unique. In an email response to LST last month, Consultant Bucky Askew informed us that during his tenure as Consultant to the Accreditation Committee (since December 2005) there has not been a single complaint filed against any law school alleging violations of Standard 509. You can read more about the complaint process and how to file a complaint against your law school here

Perhaps most telling is that even the ABA doesn’t seem to think that TJSL’s tactics are in compliance. The Subcommittee on Standard 509, charged with improving Standard 509, also asserts that the kind of behavior that TJSL engages in is in fact misleading. According to the subcommittee, “a school that touts median salary information, without appropriate qualifiers, is misleading prospective students.”