The BLS Advocate

The Litigating Classes: Taking Their Schools to Court

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Ten or twenty years ago, it would have been difficult to imagine a law school facing a lawsuit from its own students. Law school has long occupied a hallowed (if bizarre) place in the national imagination. Many think of it as a place where students work too much and sleep too little, lug around overly large books with overly boring titles, and have their egos shattered by sharp-tongued professors… all to get a good job in the end. For all the bizarreness of law school though, it has never before been thought of as a place where students go to be defrauded.

But times have changed. On October 5, lawyers pursuing litigation against New York Law School and Thomas Cooley Law School announced their intent to file new class action lawsuits against fifteen more law schools, alleging fraudulent misrepresentation and violations of consumer protection law. Listed among their intended targets is Brooklyn Law School, as well as other New York area schools such as St. John’s University School of Law, Pace University School of Law, and Hofstra Law School.

The announcement marked the most recent shots in an escalating battle between law schools and their recent graduates. Finding the job market less accommodating than they expected, many law school graduates have turned their frustrations on the legal academy itself, alleging that the employment statistics and salary information that they relied on when enrolling were inaccurate and misleading, even rising to the level of consumer fraud.

Jesse Strauss, formerly of the firm Kurzon Strauss and a BLS graduate, already represents plaintiffs in the actions filed over the summer against NYLS and Thomas Cooley. He is also one of the attorneys who announced the intent to file the fifteen new class action suits. In an interview conducted before that announcement, he spoke candidly about the results he hoped to attain in the lawsuits:

“In terms of what we hope to accomplish, we obviously want to try to get some damages back to the folks who we allege were defrauded. But more importantly, for the legal education community as a whole, we want to restore rationality to the way legal education is marketed.”

In a recent article in Above the Law, Strauss said that he fully expected some lawsuit to be brought against almost every law school in the country by the time 2012 came to a close. And in his September interview with the Advocate, Strauss provided a hint that he fully expected the scale of lawsuits to expand:

“There’s no shortage of plaintiffs—I’ll put it that way,” Strauss said. “There’s certainly a lot of folks who we believe were mislead into taking on 150,000 dollars of debt, only to end up with the same job prospects they would have had with a BA.”

Yet the legal academy has staunchly defended its marketing practices. James Thelen, Associate Dean and General Counsel at Cooley, told the Advocate that his school complies with all ABA standards and government regulation. Moreover, he questions the motives and rationale behind the attorneys and graduates attempting to change that system through litigation.

“I will happily say that there’s room for debate on the future of legal education, the cost, the role of the federal government in the student loan industry,” Thelen said in a September interview with the Advocate. “All of those things are the proper subjects of debate. But the idea that you can twist it all into a lawsuit that doesn’t have any merit is just not a good use of time.”

Perhaps more importantly, he noted that it would be impossible for any school to guarantee that all of its students will find work in their chosen field.

“Nobody, I think, looking at this institution reasonably, would believe that any institution of higher education, or any graduate school, sends its graduates out with a promise of employment,” he said. “Just on that simple idea alone, I don’t believe that these cases have any merit.”

Background

As the economic recession has lingered over the years, the contracting legal job market has led more and more out-of-work law school graduates to question the value of their legal education. Because many of these students have taken out substantial student loans, non-dischargeable even in bankruptcy, they find themselves with few options to pay down that debt and a growing struggle to find full-time legal employment.

As early as 2009, a number of websites and blogs sprouted up to provide forums for a sense of outrage from recent grads unable to find work. Online commentators frequently argue that law schools are perpetrating a scam on their students, relying on disingenuous methods to inflate job numbers and average salary rates. They pointed to statistics reporting 90%+ employment rates and six figure salaries for first year graduates as evidence of an ongoing fraud. Sources such as Above the Law and Law School Transparency have provided some of the harshest criticism, while mainstream media publications including the New York Times have also started to report on the issue.

On May 26, Thomas Jefferson School of Law became the first law school to face a class action lawsuit. In the complaint (pdf), plaintiff Anna Alaburda, a 2008 honors graduate of TJSL, stated that she was unable to find full-time legal employment even after passing the bar and sending out some 150 resumes to various firms. The filing noted that TJSL’s U.S. News and World Report statistics claimed that 80.1% of graduating students were employed 9 months after graduation, and alleged common law fraud, negligent misrepresentation, and violations of various state consumer protection statutes. Some commentators praised the suit as a first step towards increasing transparency in the legal academy.

The Thomas Cooley and New York Law School Suits

After the Thomas Jefferson suit was filed, it seemed like only a matter of time until more lawsuits would follow. When Above the Law reported that advertisements had appeared online claiming to investigate whether Thomas Cooley Law School had been manipulating its statistics, it seemed clear that Cooley would be a potential target down the line.

Cooley had long been a bulls’ eye for law school critics. In addition to being the largest law school in the U.S., with five different campuses across the country, the school has been particularly vocal in promoting the value of a law degree. The school also attracted controversy by promulgating an alternative ranking system, which this year ranked Cooley as the #2 law school in the country (Cooley is unranked in the 2011 U.S. News and World Report rankings). These kinds of actions had provoked suggestions that the school was ripe to be targeted in the next lawsuit.

This time, however, it was the school that sued first, filing a defamation suit on July 14 against the firm of Kurzon Strauss, as well as four anonymous bloggers. Among the misstatements that Thelen pointed to as grounds for the suit against the firm were grossly inaccurate reports about the rate of Cooley graduates’ student loan defaults.

“They also stated in the post that we were under investigation by the Department of Education,” Thelen said. “That was false. They stated in the post that we were falsifying our reporting numbers on defaults to the department of Education, and that was false. Then they made the general claim that we were defrauding our students and would continue to do so if we weren’t stopped. All of those statements are just blatantly false.”

On August 10, Kurzon Strauss filed its own suits against both Cooley and New York Law School, alleging claims similar to those voiced in the Thomas Jefferson suit. The suits are rooted in the same concept that has motivated debate for the past several years: that these schools have been misrepresenting their employment figures to potential students to sway them towards an investment they otherwise might not.

“Thomas Cooley has many, many, many critics, from people who’ve gone through that program, and have just not gotten jobs,” Strauss said. “It’s currently the largest law school in the country. And from my perspective, unlike some other schools, they’re what I call incorrigible. They keep putting out these reports that demonstrate that if you get a law degree, you’ve got a better chance of getting a job. It’s really disingenuous of them in the current market to keep doing that.”

Unsurprisingly, Thelen took issue with Strauss’ statements:

“If anything, maybe one report which Jesse Strauss is referring to, which we released a few weeks ago and is available on our website, analyzed the nature of employment of a lawyer as a professional occupation,” he said. “And what the federal government’s own statistics show is that a lawyer as a professional has one of the lowest unemployment rates of any profession out there, except for just a couple in the healthcare field…

“So is a law degree valuable? Certainly, if you’re looking for a professional job, lawyers as a profession have one of the lowest unemployment rates out there. Does that mean it hasn’t become harder to get a job out there as a lawyer? Well, of course not. In the recession, it has become harder.”

Another issue in the complaints is the less highlighted practice of inflating reporting numbers by offering recent graduates jobs or fellowships. While Strauss argues that this kind of employment is not what anyone goes to law school to do, such jobs frequently enable schools to claim that their students are employed after graduation.

“Look, there’s no doubt that it has been reported in the national media that there have been some bad actors who fudge their employment reporting by hiring a number of their graduates right at the nine month mark when they are supposed to be reported,” Thelen said. “Cooley does not engage in that practice, and I would challenge Mr. Strauss to show any facts that we do.”

The Broader Picture—ABA and Public Policy

While some have applauded the plaintiffs’ efforts in these actions, others question whether they have any reasonable chance of success, or even whether the courthouse is the proper place to effect regulation of the legal academy.

In thinking about the merits of the case in an interview given before the October 5th announcement, Professor Robin Effron said that it seemed unlikely that the suits would actually succeed in the long-term.

“The position of the courts generally has been to give a wide degree of deference to educational institutions in their own decision making,” she said. “Whether or not that will carry over to fraud allegations, I don’t know, because it’s focused less on institutional choices and more on disclosure of certain materials. But even here, the issue has really been, ‘has Congress or a state legislature been requiring more? And should the ABA or U.S. News have stricter standards?’

“My guess is, courts will look at this and say, if we were writing ABA regulations maybe we’d want more stringent data too, but we weren’t. And short of a finding that New York Law School was actually manipulating data… It seems unlikely.”

This suggests one complaint with the strategy of filing individual lawsuits against the many law schools within the United States—that the proper method for effecting change should not be litigation against individual schools but rectifying lax supervision by the ABA or other regulatory bodies.

Recently, the ABA has faced some federal criticism, with Senators Chuck Grassley (R-IA) and Barbara Boxer (D-CA) writing letters urging that the Association take greater steps to regulate the statements of law schools. In response, the ABA stated that it is committed to ensuring transparency so that future law students can make informed decisions.

“What we’re doing is similar to what law schools all around the country do,” Thelen said, “so if we’re doing it wrong every law school in the country is doing it wrong.”

Strauss might not disagree, given his statements in October. He also noted that “everybody tells us to sue the ABA.” But he still believes that the proper target at this point is the individual schools.

“What we think is that the law schools know better and shouldn’t be putting misleading information into the market in the first place, and that to go after the ABA is not in anyone’s interest when we can go right to the perpetrator—which is the law school.”

Looking Forward

Both Cooley and NYLS recently filed motions to dismiss the lawsuits. Each heavily highlights the ABA’s responsibility in the matter.

Recently, Jesse Strauss announced that he would break off from Kurzon Strauss to form a new firm, Strauss Law PLLC. He will continue to work with attorney David Anziska on the litigation, and intends to file suit against each of the other fifteen schools once he has at least three plaintiffs who graduated from each school. According to Above the Law, the fifteen schools appear to have been targeted because they reported employed graduates at around the 90% mark in markets that already boast high levels of lawyers.

With respect to filing suit against his old law school, Strauss released the following statement by email:

“As a Brooklyn alum it’s not an easy thing to do but I can’t ask alum of other schools to step up and sue their school if I don’t have the courage to run a suit against my own. It’s a matter of principle. But I had a great experience at Brooklyn and have almost universal praise for the professors there (even the ones that serve as deans). I think it’s a great school and will be an even better one after we clean up this employment data mess.”

Strauss says that there was nothing inappropriate about the manner in which his firm investigated its claims before filing against Cooley, and fully expects the school’s defamation suit to be dismissed.

By contrast, Dean Thelen expects none of these class action lawsuits to hold up in court, and told the Advocate that he didn’t foresee any point at which a law school should consider outward factors such as the economy and scale back admissions. If someone interested in law school were to come to him today and voice concern about the job market, he says, he would tell them that a law degree is still a good investment.

Nonetheless, there are signs that the negative publicity is taking a toll on people’s desire to attend law school. In late September, the Wall Street Journal reported that law school application numbers for 2011 had fallen by almost 10%, the largest such decline in the past decade. Even still, the total number of applicants to ABA-approved law schools totaled 78,900 potential new law students.

Notes:

As the Advocate reported on October 5, Brooklyn Law School has chosen not to comment on the possibility of any future litigation, with a spokesperson saying, “It would premature to comment at this time because we haven’t received any papers in the litigation.”

Dean Richard A. Matasar of New York Law School released a single sentence to the media regarding the pending suit, stating “These claims are without merit and we will vigorously defend against them in court.” NYLS officials politely declined to give further comment to the Advocate.

Selected Sources:

http://abovethelaw.com/

http://abovethelaw.com/2011/05/lawsuit-of-the-day-class-action-filed-against-thomas-jefferson-school-of-law/

http://abovethelaw.com/2011/10/fifteen-more-law-schools-to-be-hit-with-class-action-lawsuits-over-post-grad-employment-rates/

http://abovethelaw.com/2011/07/suing-law-schools-potpourri-tidings-from-law-schools-named-after-a-thomas/

http://abovethelaw.com/2011/06/could-thomas-jefferson-school-of-law-actually-lose/

http://abovethelaw.com/2011/10/thomas-m-cooley-law-school-adopts-the-blame-the-aba-theory-for-defending-its-employment-stats/

http://blsadvocate.org/2011/10/bls-among-schools-targeted-by-alumni-lawsuits/

http://blogs.wsj.com/law/2011/09/28/bloom-remains-off-law-school-rose/

http://www.cooley.edu/rankings/

http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202512833896&slreturn=1

http://www.lawschooltransparency.com/

http://www.lsac.org/LSACResources/Data/LSAC-volume-summary.asp

http://www.nytimes.com/

http://www.nytimes.com/2011/01/09/business/09law.html?pagewanted=all

Complaints:

http://lawschooltransparency.com/lawsuits/Alaburda_v_TJSL-Complaint.pdf

http://www.cooley.edu/newsevents/_docs/2011_07_14_Summons_and_Complaint_startpage.pdf

http://cache.abovethelaw.com/uploads/2011/08/Thomas-M.-Cooley-Complaint-11-cv-00831.pdf

http://cache.abovethelaw.com/uploads/2011/08/Filed-NYLS-Summons-and-Complaint.pdf

Briefs in Support of Motions to Dismiss:

http://www.cooley.edu/newsevents/_docs/18-Mtn+Brief_to_Dismiss.pdf

http://www.nyls.edu/user_files/1/3/4/97/Memorandum%20(NYLS).pdf

Tags: alumni lawsuits