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Saturday, November 5, 2011

Court Affirms Prof's $350k Award Against Law School for Fraud in Tenure Buyout

RoseNational Law Journal, Professor's Fraud Judgment Against Whittier College Upheld:

Whittier College committed fraud against a longtime law professor when it persuaded him to accept a buyout in 2006, a California appeals court ruled in affirming a lower court's judgment against the school. [Rose v. Whittier College, No. B226983 (Ca. Ct. App. Nov. 3, 2011)]

The 2d District Court of Appeal on Nov. 3 upheld an award of $350,000 in compensatory damages for emotional distress suffered by the professor, Nelson Rose. But the court threw out $500,000 in punitive damages, explaining in an unpublished opinion that his attorneys neglected to provide evidence regarding Whittier College's overall financial condition.

Rose filed suit against Whittier in 2008 for fraud and negligent misrepresentation. The case stemmed from a 2005 decision by the ABA to place Whittier Law School on accreditation probation because of low bar passage rates. Administrators, worried that the ABA's decision would hurt the school's ability to draw students, warned that it needed reduce the size of its faculty, according to the decision. The school offered 20 full-time faculty members a tenure buyout equal to one year's salary. Without the buyouts, professors would see their teaching loads doubled and salaries frozen indefinitely, they said.

Rose, who had taught at Whittier for 23 years, accepted the buyout. Several weeks later, the results of the California bar exam were released and the school's pass rate had shot up by 20%. Shortly after Rose's departure in July 2007, the tenured professors who did not accept the buyout received a 3% raise and have not been forced to take on more courses.

Update: Inside Higher Ed, Bad Information and Faculty Buyouts

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So you have liars and perjurers running law schools (and universities). Must be part of the ethics courses.

Posted by: PTL | Nov 5, 2011 8:56:04 AM

Wait, I'm not seeing the fraud here. Did the school know that the pass rate had shot up 20%? If the rate had NOT shot up, would they have done what they said they were going to do? If not, what's the proof that they would not have followed through on their claims?

How is it "fraud" to make a statement that's true, given what they knew at the time?

Posted by: Greg Q | Nov 5, 2011 1:33:29 PM

There was some lying going on:

"Whittier's administrators imposed a deadline of November 1, 2006, for tenured professors to accept the buyout offer. The administrators told faculty members that the deadline was solely for budgetary reasons. In fact, the November 1 deadline was chosen in part so that the tenured professors' decision to accept the buyout offer would have to be made before the summer bar examination results were known. Whittier's administrators knew that if a higher percentage of the Law School's recent graduates passed the bar exam, fewer tenured professors would accept the buyout offer."

Posted by: lemmy caution | Nov 5, 2011 5:00:07 PM

Ethics question on the bar exam:

Client comes in to pay an outstanding invoice of $100. He gives you a $100 bill. You flip it over and notice a $1,000 bill stuck to the back. Question, do you tell your partner about the $1,000?

Posted by: willis | Nov 5, 2011 6:06:25 PM