Paul L. Caron
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Wednesday, November 2, 2016

Faculty, Students To Sue Indiana Tech For Fraud In Law School's Closure

Indiana Tech (2016)Following up on Monday's post, Indiana Tech Law School To Close June 2017 Following $20 Million In Losses:  Indiana Lawyer, Indiana Tech Law School Faculty Considering Lawsuit After Closure Announcement:

One law school faculty member is describing Indiana Tech’s decision to close its law school as sudden, abrupt and shocking, and indicated that legal action may be coming.

The faculty member, who did not want to be identified for fear of retaliation, said the university administration had indicated to the law school faculty and administration as well as to the students and American Bar Association that it had set aside a $20.3 million operating reserve to cover all losses that the law school would incur through the 2019-2020 academic year.

Now the faculty feels it has been defrauded and is preparing to take appropriate action through the legal system. "The university cares about one thing and one thing only – money,” the faculty member said. Comparing the university to a corporation, the faculty member said Indiana Tech did not care about quality of education or quality of students. It only cares about profit.

The faculty member noted since the law school had received provisional accreditation earlier this year, applications and enrollment had increased. Also, faculty has been published in law journals and the school’s curriculum was receiving some national recognition. “There was a sense of excitement,” the faculty member said. ...

This is possibly the first time that a law school decided to close without transferring its assets. University of Puget Sound sold its law school to Seattle University in 2003 and Hamline School of Law and William Mitchell College of Law announced their merger in 2015. Also, Western Michigan University Thomas Cooley Law School closed its Ann Arbor operation in 2014 and allowed its students to transfer to one of its other campuses in Michigan.

Above the Law, Faculty, Students To File Suit Against Law School For Fraud:

Law schools are typically viewed as cash cows for their affiliated undergraduate universities, and that seems to be exactly what happened at Indiana Tech, an undergraduate school which our source describes as “a diploma mill at best.” We were told that first-year attrition at the university is 57 percent, and only 19 percent of the school’s students graduate after four years. “The school is a scam,” he said, “but none of the law school faculty knew that when they joined in 2013.”

“The truth of the matter is that one of the problems was Dr. Arthur Snyder, the President of Indiana Tech,” he claimed. Above the Law has learned that Indiana Tech’s original dean, Peter Alexander, did not resign, but instead was allegedly fired by Snyder for trying to enforce admissions standards. Next in line for the deanship was andré douglas pond cummings, followed by Charles Cercone. Under Cercone, the law school was granted provisional accreditation by the American Bar Association.

Here’s more information on Indiana Tech’s accreditation, from our source:

As part of the accreditation process, the American Bar Association required the university to agree to provide a $20.3 million operating fund that would fund all losses through 2020. The university readily agreed to fund all losses of $20.3 million through 2020. The board unanimously voted to say if we get accredited through 2020 we will support the law school for the anticipated $20.3 of our operating losses. In addition, at the ABA accreditation hearing, President Snyder pledged that the university would fund millions of dollars more in losses if they exceeded that $20.3 million. All of it was a lie. ...

Admissions professionals were pressured us to admit anybody with a pulse to the law school. They were frequently asked to admit people with LSAT scores of 132, 135, 138, 140. The law school felt that its dedication to quality over numbers was compromised.

It almost seemed like getting butts in seats was more important than complying with ABA standards, along the lines of, “Fuck the ABA, fuck the students, we want revenue.” We said, “You know, we’re going to become another Cooley and we’re going to lose accreditation,” but they didn’t care. ...

Several faculty members and many students have retained counsel, and they plan to sue Indiana Tech and other individuals involved, like Dr. Arthur Snyder, in a collective action alleging fraud, civil RICO, and misrepresentation, among other causes of action, in the Northern District of Indiana. “Indiana Tech is a corrupt diploma mill that should be investigated by the Department of Education and the Higher Learning Commission. What they’ve done to these students is not right, and it’s not fair,” said our source.

https://taxprof.typepad.com/taxprof_blog/2016/11/faculty-students-to-sue-indiana-tech-for-fraud-in-law-schools-closure.html

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Comments

I talked to Indiana Tech years ago about filling a void in FinTech which is one of the hottest sectors in the USA. I just returned from money20/20 where over 11,000 FinTech venture capitalist and companies were in attendance..it is hot. However, I was told the students wanted to be Perry Mason. They wanted to join the oversubscribed areas of law. Needless to say I was not hired...just lucky in this case not to get the job. But if I did I would push for FinTech law.

Posted by: Nick Paleveda MBA JD LL.M | Nov 3, 2016 1:57:15 PM

Legally, can the ABA consider supply and demand in an accreditation decision, or would that open them up to antitrust concerns?

Posted by: Criticas | Nov 2, 2016 11:54:53 AM

Steve White,
That is THE most relevant question as to the future of our profession. I have been asking it for years. I am exhausted at the onslaught of CLE courses, and Bar magazine articles preaching to us to be nice to one another (i.e. professionalism). Every time Prof. Caron posts the latest declines in the size of incoming 1L classes, I cheer. Protect the profession, by protecting our ability to make a living, and it will be so much easier to be collegial. Otherwise, we are just the rats in the bottom of the barrel, fighting over the last piece of cheese.

I raised these thoughts during a discussion period at an Ethics CLE a few years ago, in a room full of Big-Law partners. No one would touch my comments with a 10 foot pole. Why not? Afterwards, someone explained to me that the diversity police rule Big-Law, and the only reason that I could possibly have to suggest pro-actively cutting enrollments, is to keep women and minorities out go the profession. I must be a bigot and sexist. [Sigh]

maybe the good news is that the market is finally taking care of the issue for us, in spite of the intentions of the ABA and the well heeled university administrators to the contrary.

I am a Solo Practitioner, just trying to make a modest living for my family.

Posted by: Scott | Nov 2, 2016 9:58:02 AM

For some bizarre reason this source seems to assume that rejecting the student with a 132 LSAT score would've meant admitting a student with a 150+ LSAT score instead. The real alternative was a class full of empty seats.
I find it appalling that this faculty seems to think they have a valid cause of action for fraud. These are the same types of people who were hollering "caveat emptor!" when law students tried to sue their fourth-tier schools.

Posted by: Urso | Nov 2, 2016 8:59:31 AM

Given that law schools have for the past decade struggled with declining LSAT scores, dwindling funding, and less demand for lawyers in society, why did the ABA think that accrediting another law school was a good idea? Even if a corrupt administration at Indiana Tech (I'm not endorsing the view, I'm just posing a hypothetical) viewed having a cash-cow law school as a good idea, why is it a good idea to open more law schools?

Posted by: Steve White | Nov 2, 2016 7:14:42 AM

It's sounds like the bigger fraud was in operating the law school, not closing it.

Posted by: Boris P. | Nov 2, 2016 4:09:13 AM