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Friday, July 27, 2012

Consumer Claim Against Law Schools Survives Motion to Dismiss

A state court in California has rejected demurrers by Golden Gate University and the University of San Francisco's law schools to consumer fraud actions filed against each of those schools, allowing the cases to move forward to the discovery phase. This is the first set of recent cases against the law schools that I'm aware of in which such claims were not dismissed prior to further factual development. Here is the order in the Golden Gate case; both orders are available at Paul Campos's blog, and I must also thank the folks at Law School Transparency for posting the orders. I'm afraid I've been occupied with other things and haven't had a chance to take a proper look at them, but I wanted to post about this before too much time passed. 

UPDATE: I stand corrected. From a reader email: "The Thomas Jefferson case is in discovery now, though these two suits against GG and USF are the first ones from the class action consortium to make it this far." Thanks for the correction.

Posted by Paul Horwitz on July 27, 2012 at 01:21 PM in Paul Horwitz | Permalink

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Comments

The three cases to make it this far are all from California. California's demurrer standards seem to be differrent than New York's motion to dismiss, as noted by Judge Kahn. This ruling seems to have been issued or written prior to or simultaneously with the Cooley decision. It seems there may be a California track to these cases which will be different than in other states.

Posted by: Analysy | Jul 29, 2012 8:55:41 AM

I used to do plaintiffs-side business torts in California and after reading the complaints filed here my intuition was that the the demurrers would be overruled. I can't compare our law to other states' law except to say that when I read the opinions from other states I was surprised at the degree to which the law and motion judges felt free to act as fact finder. In my experience, once you catch the defendant in statements that deviate from reality, the California courts are slow to find that the plaintiffs did not reasonably rely upon the statements.

My intuition also tells me that some people within the California schools subjectively felt that the statements published by the schools were false or misleading. It can be difficult to find the employees who feel that way and who will say so at deposition. But if even one does, the plaintiffs will be in the drivers seat. No defendant want to argue to a jury that, "it may have been misleading but you couldn't have believed us," or "it may have been misleading but so long as we followed the ABA/NALP rules, misleading is besides the point."

Posted by: John Steele | Jul 30, 2012 1:29:26 PM

To John Steele -- good analysis -- what does it mean for class action status? I would think if some people relied on a statement and others did not, it would be difficult to try this as a class. In the case of USF, they only have two named plaintiffs, and the complaint says one of them has had two real law firm jobs. So if they are left with the named plaintiffs only, you are really only talking about one guy.

Posted by: Analysy | Jul 30, 2012 3:22:13 PM

All of this is "from a distance," but my sense was that the consumer law and fraud statutes were the best vehicles rather than class actions, for the very reasons Analysy suggests.

Posted by: John Steele | Jul 30, 2012 3:46:44 PM

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Posted by: Consumer Market Research | Nov 30, 2012 1:41:39 AM

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