Wave of Class Actions Against Law Schools Over Grad Work Stats


     CHICAGO (CN) – Three Chicago law schools published “Enron-style” post-graduate employment statistics that misrepresent their chances of getting a job, say students in three class actions.



     The separate, but nearly identical complaints against DePaul University College of Law, John Marshall Law School, and the Illinois Institute of Technology aka Chicago-Kent College of Law, in Cook County Chancery Court, are part of a wave of such lawsuits filed this week all over the country.
     Similar class actions were filed this week against Golden Gate University School of Law and the University of San Francisco School of Law (both in San Francisco Superior Court), Southwestern Law School (in Los Angeles Superior Court), the Maurice A. Deane School of Law at Hofstra University (in Nassau County Court, Mineola, N.Y.), and Widener University School of Law (in Newark Federal Court).
     “Unless you really, really want to be a lawyer, just don’t go to law school,” said David Anziska, a New York attorney who is coordinating similar lawsuits across the country.
     “It’s just so hard to secure any type of gainful employment that I tell people you almost have to be clinically insane to go law school,” Anziska told Courthouse News in an interview.
     Anziska said 14 lawsuits against 15 law schools have been filed, in a nationwide effort to close the gap between “the discrepancy between what law schools report and the reality of the situation.”
     “This is one of these lawsuits that should’ve been brought for a long time,” Anziska said. “Finally, people are saying, ‘This is enough.’
     “This has been a very longtime industry dirty secret, and finally they’re going to be held accountable. This has been going on better part of two decades, and it starts with rankings. Placement rates constitute 18 percent of the national rankings, so law schools have an incentive to goose the numbers.”
     Edward Clinton Jr., lead attorney for the Chicago plaintiffs, told Courthouse News that the Chicago complaints targeted “those three schools in particular because the employment data was simply mind-bogglingly inconsistent with the anecdotal evidence in the investigations we’ve conducted, which show that for the recent classes the vast majority of people are not employed.”
     “The placement rate is below 50 percent,” Clinton said. “We tried to gather as many plaintiffs as we could who had the guts to fight the system.”
     Citing Justice Louis Brandeis, who said, “Sunlight is the best disinfectant,” the law student-plaintiffs say they “want to bring an element of ‘sunlight’ or transparency to the way law schools report post-graduate employment data and salary information, by requiring that they make material disclosures that will give both prospective and current students a more accurate picture of their post-graduate financial situation, as opposed to the status quo where law schools engage in all sorts of deception when tabulating employment statistics.”
     The students from DePaul say in their complaint that “far from giving their graduate ‘a competitive edge,’ and placing them in good, secure, well-paying jobs, DePaul consigns the majority of them to years of indentured servitude, saddling them with tens of thousands of dollars in crushing, non-dischargeable debt that will take literally decades to pay off. The school has done this while blatantly misrepresenting and manipulating its employment statistics to prospective students, by employing ‘Enron-style’ accounting techniques. These deceptions are perpetuated so as to prevent prospective students from realizing the obvious – that attending DePaul and spending well over $120,000 in tuition payments is a terrible investment which makes little economic sense and, most likely, will never pay off.”
     Those students add: “DePaul reported with ‘Madoff’-like consistency that, depending on the year, roughly between 88 and 98 percent of its graduates secured employment within nine months of graduation. The context of these representations make it appear to the reasonable consumer, such as plaintiffs, that the jobs reported are full-time, permanent positions for which a law degree is required or preferred. These numbers are false and materially misleading because DePaul’s reported employment numbers include any type of employment, including jobs that have absolutely nothing to do with the legal profession, do not require a JD degree or are temporary or part-time in nature. If De Paul were to disclose the number of 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, DePaul grossly inflates its graduates’ reported mean salaries, by calculating them based on a small, deliberately selected subset of graduates who actually submit their salary information. If the defendants were to disclose salary data based on a broad, statistically meaningful representation of its graduates, including those graduates who have failed to secure full-time, permanent employment, the reported mean salaries would decline precipitously.
     “There is no place where prospective students can find De Paul’s ‘real’ employment numbers. The school supplies the same dubious statistics to the U.S. News & World
     Report (‘US News’) and the American Bar Association (‘ABA’), the two primary sources of information for law school employment data. These sources also count as ’employed’ those who have secured employment in any capacity in any kind of job, no matter how unrelated to the legal profession.”
     The other Chicago plaintiffs make similar assertions, and say their schools report even higher percentages of employed alumni.
     At Chicago-Kent, the plaintiffs say, “the salary information for the class of 2010, which was just recently posted, is based on a response rate of 38.6 percent.”
     In a statement echoed in the other complaints, DePaul students claim: “DePaul’s reported placement rates and salary information remained eerily steady following the aftermath of the ‘Great Recession,’ as the placement rate for the class of 2009 was a robust 93 percent and 88 percent for 2010. Currently, the legal employment market is highly oversaturated, with law schools churning out 43,000 JD degrees each year, even though roughly half as many legal positions are available (26,000). Yet, with legal positions becoming increasingly scarce, DePaul, instead of telling the sobering truth to prospective and current students, continued to make the false claim that the overwhelming majority of its graduates are gainfully employed. The false data was material to plaintiffs and as members of the class.”
     In the San Francisco class actions, the graduates say the University of San Francisco and Golden Gate University law schools misrepresented their job prospects and saddled them with as much as $130,000 in student loan debts apiece.
     They say the University of San Francisco School of Law claimed that “the overwhelming majority of its graduates … secure employment within nine months of graduation,” but, as in the Chicago cases, those jobs do not reflect jobs as lawyers.
     The students claim USF manipulated its employment data so that its job placement rate remained steady at 95 percent in 2008 and 96 percent in 2009, despite the Great Recession, which wreaked havoc on the legal market as well as the general economy.
     The Golden Gate University graduates say their school’s boasted employment rate of 80 to 95 percent “could be well below 30 percent, if not lower,” if it included only full-time legal jobs.
     “By misrepresenting its employment data, GGL created an impression of bountiful employment opportunity that in reality does not exist, and caused plaintiffs to take on substantial debt to finance their GGL education,” the complaint states.
     All the complaints say the law schools provided U.S. News and World Report with false and misleading employment and salary data for the magazine’s popular law school rankings. The same numbers allegedly went to the American Bar Association too.
     All the student-classes seek punitive damages for violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, fraud, and negligent misrepresentation. They all seek restitution of tuition, disgorgement of unearned profits, and injunctive relief, including an independent, third-party audit of post-graduation employment and salary data.
     Clinton said: “The resolution were looking for is a system where people who want to go to law school can read this real data and make a rational decision on whether it’s rational to take that debt. Truthful disclosure is what we want to see. Like anyone seeking reforms of a major industry, we’ll have a major fight ahead of us. We want to reform the system, and make it so a young person who is going to acquire a $150,000 debt can have the data to make rational decisions.
     “If we come out of it with the system being more fair and transparent, I’ll take it.”
     The Golden Gate University plaintiffs are represented by Rosemary Rivas, with Finkelstein Thompson.
     The University of San Francisco plaintiffs are represented by John Parker Jr., with Kershaw, Cutter & Ratinoff, of Sacramento.

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