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Law Grads Fail to Pin Fraud on Alma Mater

(CN) - New York Law School gave students an "unquestionably incomplete" picture about their job prospects, but it did not defraud them, a state appeals court ruled.

Alexandra Gomez-Jimenez, Scott Tiedke and Katherine Cooper filed $200 million a class action against the school in New York County Supreme Court in 2011. They had graduated from the school between 2004 and 2011.

Each claimed that to have paid New York Law School's exorbitant tuition rates because the school touted statistics that convinced them their degrees would lead to lucrative jobs.

"First, the school during the class period claims that the overwhelming majority of its graduates - roughly between 90 and 95 percent - secure employment within nine months of graduation," according to the complaint. "However, the reality of the situation is that these seemingly robust numbers include any type of employment, including jobs that have absolutely nothing to do with the legal industry, do not require a JD degree or are temporary or part-time in nature. Rather, if NYLS was to disclose the more pertinent employment statistic - i.e. those graduates who have secured full-time, permanent positions for which a JD degree is required or preferred - the numbers would drop dramatically, and could be well below 50 percent, if not even lower.

"Second, NYLS grossly inflates its graduates' reported mean salaries, by calculating them based on a small, mostly self-selected subset of graduates who actually submit their salary information. To that end, if the Defendants were to disclose salary data based on a broad, statistically meaningful representation of its graduates, by including more graduates who have failed to secure full-time, permanent employment, the reported mean salaries would decline precipitously."

To boost employment numbers the school even allegedly hired unemployed graduates as short-term research assistants, according to the complaint.

These practices helped the school to increase class sizes, charge high tuition rates, and reward its faculty and staff with perks and high salaries, the plaintiffs said.

New York Law School countered that it complied with American Bar Association reporting rules, disclosed the small sample size of the graduates and never said its employment numbers were based on full-time, permanent workers.

The trial court agreed with the law school and dismissed the complaint in March. The Appellate Division's Manhattan-based First Department affirmed.

"Although there is no question that the type of employment information published by defendant (and other law schools) during the relevant period likely left consumers with an incomplete, if not false, impression of the schools' job placement success, (the trial) court correctly held that this statistical gamesmanship, which the ABA has since repudiated in its revised disclosure guidelines, does not give rise to a cognizable claim," Justice Rolando Acosta wrote for a five-member panel.

"While we are troubled by the unquestionably less than candid and incomplete nature of defendant's disclosures, a party does not violate (state law) by simply publishing truthful information and allowing consumers to make their own assumptions about the nature of the information," he added.

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