View Mitch Smith's original article here. Posted by LST on March 22, 2012.

Excerpt:

A lawsuit alleging misleading recruitment by New York Law School was dismissed Wednesday …

A state judge, Melvin L. Schweitzer, rejected the plaintiffs’ argument that misleading statistics led them to overvalue their legal education, ruling that New York Law School framed its data accurately and that prospective law students are “sophisticated consumers” capable of analyzing that information. …

Among the issues in the New York case was whether employment and salary information for positions which don’t require a law degree should be included in statistics presented to students. The plaintiffs said they assumed the employment rates referred only to graduates working full-time in law, while the court ruled nothing in New York Law’s admissions materials said that was the case. The plaintiffs also suggested that the law school misled them by publishing statistics based on relatively small samples, never more than 30 percent. The court disagreed.

“The court does not view these post-graduate employment statistics to be misleading in a material way for a reasonable consumer acting reasonably,” the judge wrote. “As to the salary data being misleading because it allegedly was based on a ‘deliberately selected’ small sample of graduates, the relatively small percentage of responding students was disclosed whenever the salary data included the average salary statistic.” …

In its dismissal ruling, Schweitzer was critical of the plaintiffs, suggesting they should have known employment was not assured and that students at higher-ranked law schools tended to receive the best jobs. …

“In researching law school options, it also should have come as no surprise to these law school consumers that the most lucrative jobs often are associated with having attended a high ranking law school,” Schweitzer wrote. “It is also difficult for the court to conceive that somehow lost on these plaintiffs is the fact that a goodly number of law school graduates toil (perhaps part-time) in drudgery or have less than hugely successful careers.” …

Kyle McEntee, executive director of Law School Transparency, a policy organization working to reduce the cost of legal education, worries the court “missed the point.” While prospective law schools students are usually smart, McEntee said they don’t fit the court’s definition of a sophisticated consumer. That’s because the prevailing belief in this country is that a law degree prepares one for a lucrative career. Law School Transparency is not involved in the New York Law case or any other suits filed against law schools.

“This is not a sophisticated group, and though they tend to be very intelligent, for a long time [there's] been this culturally embedded view that law school is a ticket to financial security,” McEntee said. “It’s with this belief that prospective students read and interpret these employment statistics.”

Students at other law schools have made similar claims, and suits are pending at Thomas Jefferson School of Law and Thomas M. Cooley Law School. McEntee said the New York findings could be “instructive” in cases elsewhere, but that it shouldn’t determine the outcome of those suits because they are filed in different states with different laws.

If nothing else, he said, the attention given to the cases in New York and elsewhere have helped further the idea that students and their parents need to be more savvy consumers of legal education.

“They’ve brought the idea that schools aren’t being forthright to the front of discussion,” McEntee said. …

Schweitzer acknowledged problems in the current structure of the legal profession and stressed the need to provide students with “the most transparent data of the state of our profession that we can possibly assemble so that they can make the most informed decisions that affect their livelihoods.” He added that suits like the one they dismissed might stress the need for that frank assessment of future lawyers’ career prospects.

“If lawsuits such as this have done nothing else, they have served to focus the attention of all constituents on this current problem facing the legal profession,” Schweitzer wrote. “To the extent law schools are turning out too many graduates for the positions available, market forces will begin to correct themselves, hopefully in short order. But that does not itself excuse our collective responsibility to those who have been unfortunate enough to have been caught in the midst of the maelstrom.”

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Related Stories:

• Above the Law: Breaking: Class Action Lawsuit Against NYLS Dismissed (March 21, 2012) (Original Story)
• NY Supreme Court: Dismissal Order

View Larry Abramson's original article here. Posted by LST on January 16, 2012.

Excerpt:

Listen to the mp3

It’s often assumed that even in tough times, lawyers can find good jobs. But that proposition is being overturned by a tight legal market, and by a glut of graduates.

The nation’s law schools are facing growing pressure to be more upfront about their graduates’ job prospects. Many students say they were lured in by juicy job numbers, but when they got out, all they ended up with is massive debt.

Chloe Gilgan enrolled at New York Law School in 2005, with one thing in mind: getting a good paying job. She says the school gave her every assurance that she was in the right place …

Three years after graduation, Gilgan says, the only [six]-figure number she’s staring at is her student debt. The only job she found was doing work that did not require a law degree. Gilgan is convinced New York Law twisted its job numbers.

“Nobody can guarantee you’ll have a job for sure,” she says, “but what they can do is give you honest prospects.”

So Gilgan has joined a proposed class action suit against New York Law School, charging that it has deceived students. Attorney David Anziska is lining up plaintiffs who attended primarily lower-tier law schools, paid more than $40,000 a year and feel they got little in return.

New York Law School says it provides all the information required by the American Bar Association and more. Interim Dean Carol Buckler says the school tries hard to counsel students about their employment prospects. …

[Kyle McEntee, who founded Law School Transparency,] says he was outraged to find that the employment data supplied by many lower-tier schools is really part of a recruiting strategy.

“A school might advertise a median salary of $160,000,” McEntee notes, “and not disclose that only 10 percent of a class actually responded to the salary survey.”

Or, McEntee says, schools don’t disclose that some jobs are in fact funded by the law school. …

Activists say more schools need to follow that path. They blame the American Bar Association, which accredits law schools, for letting institutions define what is accurate.

The ABA’s John O’Brian admits that up until now, the schools have chosen which information to provide. So recently, the ABA changed the rules. Starting next year, schools will have to report whether graduates are employed full time and whether the positions graduates get required a law degree. That will help applicants in the future decide if they are picking a school that is turning out employable lawyers.

But O’Brian says it’s still up to students to scrutinize that data, because the ABA can only demand transparency. “These schools are simply required to report. We do not have minimum standards for employment,” he says.

Kyle McEntee says the ABA changes are a good first step, but that they won’t help students already in school. And these measures don’t address larger issues: Why is law school enrollment continuing to rise, when the job market is shrinking in many areas? The legal sector shed 1,800 jobs in December, according to the Labor Department.

McEntee says the biggest challenge is battling a perception of invulnerability. “There’s a culturally embedded view about law school, that it’s this magic ticket to financial security,” he says. “As it turns out, this isn’t the case, and it hasn’t been the case for quite some time.”

When critics attacked for-profit colleges for similar problems, the Department of Education tightened regulations on those schools. But the Department says it has no authority to do the same to the vast majority of law programs.

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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

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)