Chain College Plays Tough With Illinois

     CHICAGO (CN) – Corinthian Colleges sued the Illinois attorney general, claiming it “desires to cooperate” with the state’s investigation of the profit-seeking chain college, but that the state’s “intrusive investigation” could expose valuable confidential and proprietary information … to third parties and competitors.”



     Corinthian Colleges is one of more than a dozen chain colleges to be sued repeatedly by students, and scorched by a congressional investigation.
     The for-profit schools, many of them with a strong presence on the Internet, were accused, essentially, of luring students to enroll with false promises, so the colleges could bank state and federally provided student aid. Many of the chain schools blistered in the Government Accountability Office’s report get a large proportion of their money from student aid programs.
     Although the original GAO report, from August 2010, did not name Corinthian specifically, descriptions in the report, and subsequent reports from major newspapers, including The Washington Post, indicate that Corinthian was one of the 15 chains that Congress investigated. According to the GAO report, “all 15 made deceptive or otherwise questionable statements to GAO’s undercover applicants.”
     Corinthian Colleges has been sued more than 80 times since 2010, according to the Courthouse News database. Thirteen of those were class actions: 10 from students who made similar allegations to those in the GAO report, and one from shareholders, who claimed the company’s stock price took a beating after the report was released.
     In its complaint against Attorney General Lisa Madigan, in Cook County Chancery Court, Corinthian claims: “The school is one of the largest post-secondary education companies in North America. It currently operates 6 campuses in Illinois and has served thousands of Illinois students. The school is proud of its educational programs and the opportunities it provides to its students and graduates. Defendant has commenced a number of investigations of private colleges under the Illinois consumer Fraud and Deceptive Business practices Act, including an investigation of the school. Without identifying a single student complaint or other justification for the intrusive investigation, defendant issued to the school an extensive demand for documents and information that includes the school’s proprietary and confidential information.
     “The school desires to cooperate with defendant and at the same time protect its valuable confidential and proprietary information from disclosure to third parties and competitors. The school has already produced substantial amounts of non-confidential information responsive to defendant’s demands. It also has advised defendant that it desires to produce, and is ready to produce, the requested proprietary and confidential information upon the entry of a reasonable confidentiality agreement to protect such information from disclosure to the public and other third parties. Defendant, however, has refused to agree to any protections of the school’s proprietary and confidential information with respect to certain disclosures that defendant expects to make. The school seeks the court’s intervention to facilitate a prompt resolution of the investigation which, while pending, hurts the very students the defendant purports to protect.
     “Defendant’s refusal to agree to a reasonable confidentiality agreement is based upon its established policy and procedure relating to defendant’s handling of proprietary and confidential information obtained in the course of its investigation under the consumer Fraud Act. Defendant’s policy and procedure purport to authorize defendant to disclose the school’s proprietary and confidential information to third parties without even notifying the school of such disclosures in some circumstances. The policy and procedure violate the provisions of the Illinois Trade Secrets Act.
     “The school made numerous attempts over a six-month period to negotiate a fair and compliant confidentiality agreement with defendant to no avail. Defendant continues to insist that it has authority to disclose the school’s proprietary and confidential information to third parties without notice to the school and without providing the school with the opportunity to protect such information through judicial relief.”
     Corinthian seeks a protective injunction under the Illinois Trade Secrets Act.
     It is represented by Daniel Lawler with K&L Gates.

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