The attorneys behind a spate of class actions accusing law schools across the country of fraud are 0 for 2.
A federal judge in Michigan on July 20 dismissed a suit against the Thomas M. Cooley Law School the attorneys brought on behalf of 12 graduates who claimed that the school misrepresented its employment statistics to lure students.
In March, a New York trial judge tossed a similar lawsuit against New York Law School. That ruling is under appeal, and fraud class action against 12 additional law schools are pending.
“Obviously, we’re disappointed, but we’re very proud of the work we’ve done,” said Jesse Strauss, who along with attorneys David Anziska and Frank Raimond are coordinating the law school lawsuits around the country. “There’s been a sea change in the quality of employment information. I don’t think we’re the only reason that happened, but I think we’ve been a factor. Still, I hope we’re going to be able to move some money to the people who have mortgaged their future on these degrees.”
Cooley president and dean Don LeDuc said in a prepared statement that the school was pleased with U.S. District Judge Gordon Quist’s decision.
“We are committed to graduating law students who are ready to practice law, and their success in a tough job market is our success too,” he said. “We have always been in compliance with American Bar Association and National Association for Law Placement employment reporting standards.”
The plaintiffs in the Cooley litigation alleged that the school violated the Michigan Consumer Protection Act (MCPA) and committed fraud by offering incomplete and misleading job and salary figures. In its motion to dismiss, Cooley’s lawyers argued that the school complied with ABA and NALP guidelines, and that the MCPA does not apply to educational purchases. Cooley defeated a charge of violating the MCPA in 2009 by arguing that educational activities were exempt.
But the plaintiffs had reason for hope after a June 5 hearing in U.S. District Court for the Western District of Michigan on Cooley’s motion to dismiss. Quist said in a partial ruling that the ABA and NALP’s reporting requirements “are a floor, not a ceiling,” and that Cooley could go beyond those requirements, although he later struck that comment from the ruling.
In his final ruling, Quist found that the MCPA does not protect education purchases because they are not “goods, property, or service primarily for personal, family, or household purposes.” A law degree is used to establish a career in law, which falls under the definition of a purchase made for business or commercial purposes, said Cooley general counsel James Thelen.
Strauss said he is contemplating an appeal, most likely on the MCPA issue.
Quist also rejected the plaintiffs’ fraud claims, ruling that the figures Cooley provided for the percentage of graduates employed and average starting salary were “inconsistent, confusing and inherently untrustworthy,” but not fraudulent.
“Plaintiffs and prospective students should have approached their decision to enter law school with extreme caution given the size of the investment,” Quist wrote, citing a similar finding by New York County, N.Y., Supreme Court Judge Melvin Schweitzer.
Thelen said it seemed disingenuous for the plaintiffs to claim that they chose to attend Cooley solely on the basis of two job statistics for a class of students who graduated a year before the plaintiffs would enroll.
Strauss disagreed. “It seems to me that these judges are imposing an extra layer of diligence on people going to law school,” he said. “I don’t think that’s fair.”
Kyle McEntee, executive director of the nonprofit Law School Transparency, called Quist’s decision on the fraud counts a “dangerously narrow reading of what it means to mislead somebody.”
“What makes employment information tend to mislead is that the school knows it will be understood differently than its literal meaning,” McEntee said. “Understanding whether somebody was actually misled requires understanding the context of the statement, which includes the person’s knowledge and beliefs.”
It remains to be seen how Quist’s ruling would affect the dozen pending fraud cases. Nearly all of the defendant law schools have filed motions to dismiss. Strauss said he always assumed that the cases would be resolved by appellate courts.
“We’re in this for the long term,” he said. “We didn’t think these cases would wrap up in a year.”
Contact Karen Sloan at email@example.com.