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Sunday, October 09, 2011

Taking Attendance: Class Actions against Law Schools Expand Enrollment

Last week that Kurzon LLP expanded its class action lawsuits to include 15 more law schools alleged to have tortiosly misrepresented job placement statistics. Above the Law reported that in an organized "media call," the plaintiffs' attorneys stated they believed "almost every law school in the country will be sued by the end of 2012." Setting aside for a moment the ongoing debates about law schools' alleged manipulation of employment statistics, applicants and students' reasonable reliance on such statistics, and the potential/wishful attorneys fees resulting from the settlement of such a class action, is anyone wondering how these attorneys intend to certify the class in the first place?

Posted by DBorman on October 9, 2011 at 12:53 PM | Permalink


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The essence of a class action is that deciding the named plaintiff's claim should decide the claims of every other class member. So if the named plaintiff wins, everyone wins, if the named plaintiff loses, everyone loses.

The questions raised above about whether a JD is preferred or required for a certain position and whether one or another of the named plaintiffs eventually made money as lawyers or used their degrees could be relevant both to damages and liability in this type of case. One significant question will be whether the alleged misrepresentation caused any harm to each class member or plaintiff. If this question can only be answered by individually analyzing the facts of each class member's claim, there is a strong argument that a class action is inappropriate. The arguments made above about the amount of tuition/loans -- $200,000 and up -- also could actually be used to argue against a class action. Class actions traditionally are meant to provide a way for persons who suffered low damages to recover because otherwise it would not be worth filing suit. For instance, it would not be worth one person filing suit over a $1.50 fee on a utility bill, but it is worth it for a class action plaintiff's lawyer (and named plaintiff) to file that suit on behalf of every customer of that utility in the country, or even in a single state. Potential damages of $200,000 could mean plenty of incentive to file individual suits, and less need for a class action.

Posted by: Lisa Lilly | Oct 19, 2011 3:06:12 PM

That's true, more could be taught. But I personally know of instances where SarBOX was taught in an LP Course. As you know, law schools mainly familiarize students with areas of law. In the old days when people apprenticed, there was great frustration because each person reading law was hostage to the knowledge (or lack thereof) of the person or people to whom he (and it was a he) was apprenticed. People thought it more efficient to create a program that gave exposure to a wide range of topics to make sure that students had, at least, heard of a given area before they graduated, and have the chance to see the commonalities and continuing themes in law. They are there. I think Prof. Groshoff's answer speaks to how a set of courses, rather than one, can provide the general tools people need to do lots of different types of work.

Posted by: EH | Oct 11, 2011 12:41:30 AM

I've never seen SarBox covered in enough depth to be practically useful for monitoring day to day operations. Also, I actually know a bit about that, and please keep in mind that Sarbox provides general guidelines that accounting firms and other compliance departments convert into literally a 500 page binder of "controls" (rules) that the compliance department must check off one by one.

It's really amazing to think of all the laws and rules that could be taught, but that are not taught by law school.

Posted by: anon | Oct 11, 2011 12:00:50 AM

What about a Legal Profession course that covers Sarbanes-Oxley?

Posted by: EH | Oct 10, 2011 9:54:44 PM

Because compliance officers generally focus on very narrow areas of day to day operations. Most of the regulations they follow are internal ones, written by the company's attorneys in order to guide the staff in complying with the main rules. A compliance officer's work is very much in the weeds. A securities regulation course might help some compliance officers, although these courses mainly focus on the IPO process as opposed the precise rules for day to day trading. A general course on adminstrative law would not be helpful at all though.

I'm not an expert on compliance positions by the way, but I have a small amount of exposure.

Posted by: anon | Oct 10, 2011 9:17:06 PM

Why wouldn't Sec-Reg and Ad-Law be useful to compliance officers?

Posted by: EH | Oct 10, 2011 8:24:10 PM

Mr. Groshoff, respectfully, I just checked your school's entire courseload and I don't see anything teaching financial regulations. Actually, I think Fordham teaches some courses covering precise financial regulations such as AML but it's very rare to find a law school course that teaches the laws that a compliance officer needs to follow on the job. But if you have any courses please feel free to link them (however, a general course on adminstrative law will not suffice).

Posted by: anon | Oct 10, 2011 8:12:59 PM

My goodness. Police officers should not get JD's! Or, we don't "want police officers" to get JDs. No. NO. No! It is a good thing when officers get JDs. They often make great students. Some departments encourage it.

Posted by: EH | Oct 10, 2011 7:13:59 PM

ROTFLMf'nAO. I have to enjoy the assertion that "the laws that you need to know for a bank compliance position aren't taught in *any* law school course" (emphasis added). Prior to responding to a response post couched in anecdotal evidence in which I never purported to be an "insider" and demonstrated that I was an academic who formerly held such positions, I'll wait for anon | Oct 10, 2011 5:55:41 PM's survey of law school syllabi, transcripts, teaching goals, curricula calendars, student evaluations, videos and the corresponding pie chart demonstrating the poster's broad and absolute assertion. Child, please.

Posted by: David Groshoff | Oct 10, 2011 6:26:11 PM

Mr. Groshoff,

As a purported insider, do you have a survey of employees in compliance positions along with a pie chart showing the percentage with JDs? That's what we need to resolve the debate and as a purported insider I imagine you would know where to find such a chart. Based on my experience the percentage of compliance officers with JDs would be very low.

I can't even find a link to a compliance job requiring a JD, although I'm sure there's one out there. Can you?

And yes, compliance officers work with the law, but your erros is that literally every person with a job in this country works with the law. Everyone is following legal rules and regulations as they conduct their role in their enterprise's economic activity. However, the laws that you need to know for a bank compliance position aren't taught in any law school course. That's why a JD is useless in attaining such a position.

The biggest problem with having lawyer compliance officers, though, is that the officer should not be thinking deeply so much as they should be thinking quickly and processing information like a computer. You don't want your compliance officer making a federal case out of every issue because then nothing would get done. They're supposed to follow instructions in a more or less black and white manner. To draw an analogy, you wouldn't want police officers with JDs for the same reason.

Finally, I would like to report that on another blog, a graduate said he would cut off two of his fingers, or get stabbed, if he could return his JD and have his student loan debt erased. However, he said he would not get raped for that privilege.

Posted by: anon | Oct 10, 2011 5:55:41 PM

I strongly disagree with Anon Oct 9, 2011 8:38:14 PM's assertion that "If you read the link above you will see that a JD is not an attractive credential for the highly mathematical job of compliance officer. Compliance officers aren't interpreting the law. They are applying formulas. The banks that hire such positions prefer economic and accounting degrees and not a JD who will philosophize when he should be calculating. The skills taught in law school are actually so useless that a JD is a black mark on your resume."

As a former Chief Legal and Chief Compliance Officer for multiple entities within a large well-known asset management firm/bank prior to entering the academy, a J.D. was *indeed* an attractive credential for a compliance officer. In fact, my J.D. was the sole reason that I essentially had two full-time jobs post-Sarbanes-Oxley (compliance officer on top of my existing asset manager duties).

In contrast to Anon's assertion, compliance officers often work with the law, and in particular, Administrative Law and Securities Law, anticipating, understanding, and bracing for regulatory schemes coming down the road, as well as interfacing with SEC attorneys. The skills taught in law school were, at least in this former CCO's experience, far superior to quantitative business skills alone.

And, yes, I often have my students consider regulatory compliance jobs from day-one, if they're interested, as these positions require an acute understanding of, and ability to synthesize, administrative, business, and securities law, along with basic knowledge of accounting and finance. At many firms, the legal and compliance personnel work in the same department. Based on my experience, these jobs are as "legal" and J.D.-worthy as many other in-house jobs.

Posted by: David Groshoff | Oct 10, 2011 3:35:38 PM

JLM - I believe that'd be a case of class cert for both damages and liability, actually. I'll admit I'm outside my comfortable field of knowledge, but in those cases the court still has to find that there's enough commonality in damages issue to allow for a relatively straightforward, provable damages calculation, right? And the class is certified for both the liability and damages portions of the trial.

I'm talking about a situation where the trial is divided into liability and damages phases, with class cert granted for liability, and some other method (perhaps sub-classes, perhaps individual litigation) used to pursue damages after liability is found.

Here's a case along the lines of what I'm talking about:

"In mass tort accidents, the factual and legal issues of a defendant's liability do not differ dramatically from one plaintiff to the next. No matter how individualized the issue of damages may be, these issues may be reserved for individual treatment with the question of liability tried as a class action. Consequently, the mere fact that questions peculiar to each individual member of the class remain after the common questions of the defendant's liability have been resolved does not dictate the conclusion that a class action is impermissible."

Sterling v. Velsicol Chem. Corp., 855 F.2d 1188, 1197 (6th Cir. 1988)

Posted by: Andrew MacKie-Mason | Oct 10, 2011 3:07:53 PM

"But (and please correct me if I'm wrong) isn't it possible to get a class certified for liability only?"

Yes. I worked on a class action in which each of the 40,000 plaintiffs received a different amount of damages. The court's job was to determine liability and to determine the method used to calculate damages. The actual damages calculation was then done by a third party administrative firm.

Posted by: JLM | Oct 10, 2011 1:50:45 PM

As a matter of strategy, I think Anziska and his associates will accede to almost any reasonable restriction of the size of the class or subclasses that will get them past dismissal.

I could be mistaken, but I doubt the point is to win a by-the-book class action for consumer fraud. The point is to get a law school to the point where it has to admit in discovery the difference between what it knew and what it allowed to be published, regarding its graduates' employment. If that should happen, I would think that these schools will usually be desperate to settle, assuming they can get the record of their cases sealed.

Posted by: John | Oct 10, 2011 12:43:27 PM

There'd be significant problems in commonality for any damages case, I would think, for the reasons already mentioned above. But (and please correct me if I'm wrong) isn't it possible to get a class certified for liability only? If that's the case, then I could maybe see some classes being certified for that purpose -- perhaps sub-classes that consist of all attendees of the law school between certain years where similar fraud is alleged?

What are the elements of the tort, by the way? Does it require an actual harm to the plaintiff for liability, or is the mere act of deception enough? And is the reliance question one of the plaintiff's actual actions, or is it a reasonable person standard?

Posted by: Andrew MacKie-Mason | Oct 10, 2011 1:39:45 AM

P.S. I'm going to end my comments here and allow the court to decide the issue when it comes before them. However, I'm not even sure it matters because in my limited experience in one jurisdiction, you can conduct discovery before certification of the class.

Posted by: anon | Oct 9, 2011 8:39:35 PM


Regarding your comment that being scammed by a law school is not as bad as getting raped or stabbed, can I ask that we please ask former students which they would consider worse? In fact many would have preferred to get raped or stabbed. That's how heinous the law school scam is. Regardless it’s not our place to tell victims which crimes are better for them, and which are worse.

But your analysis is flawed for two reasons:

1. Timing - The issue is - what was the employment situation of the student body on the date published in the statistics (9 months after graduation). If their situations did not match the published statistics, then that statistic is fraudulent. The fact that they later found employment is irrelevant to this question. Thus your comment about the woman starting an immigration practice two years after graduating is completely irrelevant.

2. Legal vs. non-legal employment - You want to distinguish a plaintiff who attained a non-legal job – one that he could have gotten without law school - from a plaintiff who attained no job. Why is one any less defrauded than the other? The only element of fraud that this fact impacts is damages, and varying damages do not prevent certification of a class.

You also attempt to slide in the law school contrived term “JD preferred” into the analysis, but I hope you are not claiming that the JD helped attain the compliance officer position. If you read the link above you will see that a JD is not an attractive credential for the highly mathematical job of compliance officer. Compliance officers aren't interpreting the law. They are applying formulas. The banks that hire such positions prefer economic and accounting degrees and not a JD who will philosophize when he should be calculating. The skills taught in law school are actually so useless that a JD is a black mark on your resume.

On this point, the ABA committee in charge of determining which career placement statistics are collected recently decided to no longer distinguish between full and part time jobs, and to no longer distinguish between legal and non-legal jobs. Thus your approach has support in that ABA committee, however that’s because the committee’s action was an overt act in the conspiracy to publish misleading statistics, and not because your position has any merit.

The most important reason why your arguments should be dismissed, as I described earlier, is justice. Our courts system is there to correct injustices, and not for the benefit of Holmesian bad men.

Posted by: anon | Oct 9, 2011 8:38:14 PM

Anon, my point was not to suggest that Debbie is looking for a way to help OR hurt the plaintiffs' case. It is perfectly understandable that one might raise these questions independently of a point of view on the merits, and again not, u think, immoral. She is asking a very obvious question, to anyone with any knowledge of or interest in class action law, the answers to which ought to be of value to anyone, including you, who has an interest in how the litigation fares. I'm afraid I see nothing blameworthy about that.

Posted by: Paul Horwitz | Oct 9, 2011 7:49:18 PM

"If my lawyer didnt use their skill to try to get a warranted dismissal, I'd find a new lawyer. And so would you."

Anon you are correct, and we have now established that the professors commenting on this issue are not providing objective legal analysis. They are acting as their institution's attorneys.

Thank you.

Posted by: anon | Oct 9, 2011 7:46:20 PM


My comment did not opine on the merits of the various suits. But if you believe that these suits should proceed, then you should be very concerned that these purported class actions mix and match the claims of individuals who have been able to find legal employment, individuals who have found employment in positions that might prefer a JD but do not strictly require one, individuals who have found only part-time legal employment, and lastly individuals who have not found any employment whatsoever.

This was questionable legal strategy on the part of a small and relatively unknown law firm (why not simply focus on students who could not find legal employment at all?). If you disagree, please explain your position, preferably without comparing disgruntled law graduates to rape and murder victims.

Posted by: MM | Oct 9, 2011 7:45:19 PM

Anon - I dont intend to snark, but isnt the defense strategy of trying to have the case dismissed on procedural grounds exactly what everyone would expect them to do? What are they supposed to do? Fall on the ground and beg for forgiveness? I suspect that would somehow dissatisfy as well.

One person's "looking for a technicality" is another's "advocacy within the limits of the law." If my lawyer didnt use their skill to try to get a warranted dismissal, I'd find a new lawyer. And so would you.

Posted by: Anon | Oct 9, 2011 7:43:16 PM

"I don't understand physicians to be evil if they talk about mortality rates from cancer or the relative efficacy of different kinds of treatment. It may sound bloodless, but not evil -- and certainly not because it's somehow wrong of them to not just sitting around talking about how terrible cancer is and urging courses of treatment that might be wholly fruitless, lest they seem insufficiently caring."

I would if said doctors were accused of conspiring to publish false medical studies, so they could prescribe the less effective but more profitable treatment.

Posted by: anon | Oct 9, 2011 7:38:11 PM

Yes, Paul and MM, you are correct. I question the adequacy of the commonalities for certification, based on MM's recon. For example, Michigan Rule of Court 3.501 requires in pertinent part: "(a) the class is so numerous that joinder of all members is impracticable; (b) there are questions of law or fact common to the members of the class that predominate over questions affecting only individual members; and (c) the claims or defenses of the representative parties are typical of the claims or defenses of the class."

Posted by: Debbie Borman | Oct 9, 2011 7:13:48 PM

All three are similarly situated because they entered NYLS expecting to get a legal job commensurate with the statistics published by NYLS, but they did not.

You do not need a law degree to work in finance compliance so the "compliance officer" wasted three years and a fortune. He got that job based on his undergraduate education.
See e.g. http://diplomaguide.com/articles/Bank_Compliance_Officer_Career_Overview.html

The woman who started an immigration practice did so after years of miserable temporary work. But congratulations MM, you found a way to use the fact that two of the people moved on from the scam as a weapon against them. I'm sure you hope that the court will follow your doctrine, thus effectively implementing a policy dissuading people from moving on after being scammed. Let's just extend it to all crimes. That woman who got raped? She seems fine to me. That guy who got stabbled? He healed. So what's the problem?

The fact that these two had the courage to put themselves out there is something for which we should commend them. Lots of other unemployed graduates are too ashamed to come forward.

And regarding Prof. Horwitz spinning of Ms. Borman's post into a "we're just trying to help the plaintiffs develop their legal strategy." I think that's not the case. I think Ms. Borman and numerous other law professors and legal academics are desperately searching for whatever argument they can find to dismiss the lawsuits on procedural grounds, so that the matter does not get to discovery, at which point we'll be able to scrutinize the precise survey documents and information that went into the "99% employed with a median salary of $90,000" number. I look forward to Kurzon attaining these documents and publishing them, so we can audit them, graduate by graduate. (Although something tells me the schools will desperately demand a protective order).

Posted by: anon | Oct 9, 2011 7:04:38 PM

To support Debbie's point, I note that the three named plaintiffs in the case against NYLS are hardly similarly situated. Plaintiff 1 attended between 2004-2007 and currently has a "thriving practice" as an immigration attorney; plaintiff 2 attended between 2006-2009 and works as a compliance officer at an investment firm; plaintiff 3 attended between 2007 and 2010 and has been apparently unable to find any type of legal employment.

Posted by: MM | Oct 9, 2011 5:38:34 PM

Whether we put it in terms of being "essentially destroyed" or not, I certainly think it can be argued that it is hardly a non-trivial matter and may be devastating within individual lives, just as debt and joblessness in general can be devastating to individual lives. Of course, as I wrote above, that's all the more reason to ask whether the classes in these lawsuits are certifiable or not.

Posted by: Paul Horwitz | Oct 9, 2011 4:57:29 PM

The notion that one's life can be essentially destroyed by going to law school and not getting a job actually seems like an easy one to argue.

What's life like for someone who goes into significant (150k - 200k) debt, only to not have a job that can reasonably support such a debt. Also, the debt is not dischargeable in bankruptcy. You're essentially stuck with that albatross around your neck.

Plus, any effort to get a non-legal degree is stymied by the fact that you have a J.D. May employers will be reluctant to hire you, because they figure you will jump at the next "legal" job that arises. It also makes you overqualified for a number of positions you might take given the terrible economy and job market.

Posted by: Matt | Oct 9, 2011 3:55:47 PM

That should be I, not U.

Posted by: Paul Horwitz | Oct 9, 2011 3:31:02 PM

U didn't and don't understand Debbie to have been "looking for technicalities" by which the suits could be dismissed. Perhaps I missed a quote that you think indicates otherwise, or perhaps Debbie can clarify. I read her as asking how class certification is possible under current law. Which seems like a perfectly reasonable question to me. I don't understand physicians to be evil if they talk about mortality rates from cancer or the relative efficacy of different kinds of treatment. It may sound bloodless, but not evil -- and certainly not because it's somehow wrong of them to not just sitting around talking about how terrible cancer is and urging courses of treatment that might be wholly fruitless, lest they seem insufficiently caring. The former reaction may be clinical but has actual value; the latter can sometimes be productive but is often pointless magical thinking. I should have thought that if we agreed with every other factual premise the anonymous poster above asserts, then the most moral response would be to be more concerned with the legal (and tactical, in fairness) prospects of these suits, not less. Right?

Posted by: Paul Horwitz | Oct 9, 2011 3:20:00 PM

Allow me to explain Mr. Cross. In this country the government generously gives every citizen $250,000 in student loan money to get whatever education they want. However, you only get one shot. You can't keep going back to school for numerous degrees. Well, you can if your parents will pay for it, but most students need the government to pay for it, so they only get one shot.

If they squander that shot, if they squander three years and $200,000 learning skills that have no value to the economy - skills that no one will pay for (see e.g. all the unpaid internships, each of which get 500 law student resumes) then those three years were wasted.

Having learned the truth about the law school scam, can they go and get another degree learning skills that the economy will pay for? No, because they're not getting more federal loan money. So already three years of youth has been stolen.

On top of that, there is the psychic harm of having been taken advantage of. There is the feeling of anger and injustice that pervades the soul when you see your former professors earning $200,000 to work two days a week because they swindled you (oh but I'm sure you "work" so much harder. It's great when you get to decide what activities you call "work.")

The scam destroyes lives. Not in the literal sense, in that no one dies (although sadly some students did commit suicide) but it causes so much monetary and emotional damage that it can be fairly characterized as utter devasation of a life.

It's easily the most evil thing I have ever encountered in my life and that the fact that you people are looking for technicalities by which you can have the lawsuits dismissed only confirms this characterization.

Posted by: anon | Oct 9, 2011 2:09:01 PM

I'm intrigued by the notion that one's life is "essentially destroyed" by going to law school and not getting a law job.

Posted by: frankcross | Oct 9, 2011 2:00:36 PM

The answer to your question, Ms. Borman, is justice.

The law is not there to provide criminals some technicality by which they can cause harm to others. Right now law schools publish fraudulent career placement statistics to lure student loan money away from more deserving programs, and into their program. This is a crime with very serious damages to

(a) The student, whose life is essentially destroyed because he/she squandered their one shot at an education.

(b) The taxpayers who will have to pick up the tab, once the government writes the loans off. The majority of graduates will not earn anywhere near the incomes required to pay back $200,000 in student loan debt.

(c) The competitor programs whose lose out on tuition revenue, because their honest job placement statistics can't compete with law schools' fraudulent statistics.

(d) The nation's economy, who loses precious intelligent and responsible young adults to the black hole of legal education which, by virtue of the fact that there are no legal jobs, is worthless to the economy.

But sure Ms. Gorman, you can look for technicalities and procedural abuses with which to dismiss these lawsuits. As Holmes said the criminal's concern is not one of right and wrong, but rather one of "what can I get away with." However, hopefully the jurists and jurors who will decide these cases have the ounce of integrity required to do what's right.

Posted by: anon | Oct 9, 2011 1:51:26 PM

many (all?) of these cases are state cases with different class certification rules depending on the jurisdiction

Posted by: note | Oct 9, 2011 1:02:28 PM

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