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Saturday, July 21, 2012

Court Dismisses Fraud Lawsuit Against Second Law School: ABA Placement Data Are 'So Vague and Incomplete as to be Meaningless and Could Not Reasonably be Relied Upon'

Thomas Cooley LogoThe U.S. District Court for the Western District of Michigan yesterday dismissed a a class action lawsuit brought by former students of Thomas M. Cooley Law School alleging misrepresenting of placement data. MacDonald v. Thomas M. Cooley law School, No. 1:11-CV-831 (W.D. Mich. July 20, 2012) (citations omitted):

Plaintiffs are 12 graduates of Defendant, Thomas M. Cooley Law School. They allege that Cooley deceived, defrauded, and misled them regarding Cooley graduates’ employment prospects, which caused Plaintiffs to pay more to attend law school than they would have paid if Plaintiffs had known the true prospects of their employment. The three-count amended complaint charges Cooley with violating Michigan’s Consumer Protection Act (Count I); fraud (Count II); and negligent misrepresentation (Count III). Plaintiffs seek, among other things, $300,000,000 in damages. ...

Cooley, a for-profit law school, enrolls more law students than any other law school in the country -- approximately 4,000. It is ranked in the bottom tier by every major law school ranking. Cooley has the lowest admission standards of any accredited or provisionally-accredited law school in the country. In 2010, the incoming students’ mean LSAT score was 146,3 and the mean Undergraduate Grade Point Average was 2.99. Cooley enrolls roughly 1,500 new students each year. Approximately one-third of those students fail to graduate. Don LeDuc, the Dean of Cooley, was paid more than $500,000 in 2008 and 2009.

Cooley publishes its own law-school rankings, which have been met with “great skepticism, if not outright ridicule, and no reputable academic or legal commentator takes it serious.” Dean LeDuc and former Dean Brennan publish these rankings. “Incredulous[ly],” these rankings place Cooley as the second best law school in the country. Apparently, Dean LeDuc and former Dean Brennan think that the overall size of the student body, library total square footage, and library seating capacity are some of the factors that make a law school better than others. Cooley still publishes these rankings, which are still available on Cooley’s website...

The crux of Plaintiffs’ complaint . . . comes from an “Employment Report and Salary Survey” (“Employment Report”) that Cooley provides to prospective and current students. Plaintiffs allege that Cooley “blatantly misrepresent[s] and manipulat[es] its employment statistics” in these Employment Reports. . . .

Without question, the Employment Reports are inconsistent, confusing, and inherently untrustworthy. For example, whether Plaintiffs are referring to the median or mean average, there is an ambiguity in the descriptor of salary because the average salary stated in Cooley’s dissemination assumes the existence of a salary in the first place. In other words, a question arises, as it arose in oral argument, does the statistic consider the “salaries” of those Cooley graduates who were not employed or who were sole practitioners who listed a salary of zero? Plaintiffs argued, as stated above, that to have failed to consider a “zero” salary would be misleading. But maybe not. This is the kind of question that a person serious about considering this statistic would ask. Plaintiffs and prospective students should have approached their decision to enter into law school with extreme caution given the size of the investment. Thus, even though Plaintiffs did not know the truth of how many graduates were used to calculate the average salary, at the very least, it is clear that the Employment Report has competing representations of truth. With red flags waiving and cautionary bells ringing, an ordinary prudent person would not have relied on the statistics to decide to spend $100,000 or more. . . .

This Court does not necessarily agree that college graduates are particularly sophisticated in making career or business decisions. Sometimes hope and dreams triumph over experience and common sense. Nevertheless, it would be unreasonable for Plaintiffs to rely on two bare-bones statistics in deciding to attend a bottom-tier law school with the lowest admission standards in the country. ...

The bottom line is that the statistics provided by Cooley and other law schools in a format required by the ABA were so vague and incomplete as to be meaningless and could not reasonably be relied upon. But, as put in the phrase we lawyers learn early in law school -- caveat emptor.

Thomas Cooley issued this press release in response to the district court's decision:

"We’re obviously pleased with this decision," said Don LeDuc, Cooley’s president and dean. "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. We have always been in compliance with ABA and NALP employment reporting standards."

Four months ago, a state court dismissed a similar lawsuit filed by graduates of New York Law School. Gomez-Jimenez v. New York Law School, No. 65226/11 (NY Sup. Ct. Mar. 21, 2012):

The court does not view these post-graduate employment statistics to be misleading in a material way for a reasonable consumer acting reasonably. By anyone’s definition, reasonable consumers — college graduates — seriously considering law schools are a sophisticated subset of education consumers, capable of sifting through data and weighing alternatives before making a decision regarding their post-college options, such as applying for professional school. ...

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…in drudgery or have less than hugely successful careers. NYLS applicants, as reasonable consumers of a legal education, would have to be wearing blinders not to be aware of these well-established facts of life in the world of legal employment.

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Comments

Thanks ABA. It is now officially on record that this organization failed to do its job so completely that it would be "against common sense" to pretend otherwise.

As someone who really cares about the profession, I hope things change soon. Everyone involved in the legal education system should be very embarrassed.

Posted by: Liz | Jul 21, 2012 6:12:44 PM

Mere Puffery!

Posted by: Eric Rasmusen | Jul 21, 2012 8:46:05 PM

Everyone? Every single person? There isnt ONE person deserving of respect? Who works hard and keeps the best interests of their students in mind?

Posted by: Anon | Jul 21, 2012 9:12:51 PM

Just think of Cooley as all the nation's affirmative action programs rolled into one and their performance becomes acceptable. You're welcome.

Posted by: Willis | Jul 22, 2012 1:24:46 PM

As has already been noted, the ABA has failed *utterly* in its mission.

It now operates as an engine for fraud.

It is difficult to agree with the judge here - to say that "reasonable" applicants should have been on notice to somehow magically force disclosure on an *ABA accredited* *law school* in order to find out the incredibly less than obvious fact that an *ABA approved* school wholly omitted the unemployed from its determination of median salary figures is, in itself, unreasonable.

Using this judge's reasoning, the ABA primarily operates as a facilitator of fraud, providing (previously) respectable cover for any conceivable financial abuse.

Future applicants, be on notice - the courts have ruled that you should "assume rapists" when dealing with the core institutions of the legal profession.

Disgusting beyond words.

"Inherently untrustworthy" indeed.

Posted by: cas127 | Jul 22, 2012 4:08:52 PM