united states district court for the district of new...

David S. Stone

Eric H. Jaso

Jason C. Spiro

Stone & Magnanini LLP 150 JFK Parkway

Short Hills, NJ 07078

Phone (973) 218-1111

Facsimile (973) 218-1106

Counsel for Plaintiffs, individually

and for all others similarly situated

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

JOHN HARNISH, JUSTIN SCHLUTH, : Civil Action No. 2:12-CV-00608 (WHW-MCA)

EDWARD GILSON, ROBERT :

KLEIN, ROBERT MACFADYEN, :

GREGORY EMOND, MEGAN :

SHAFRANSKI, CHRISTINA :

MARINAKIS, AND AYLA :

O’BRIEN KRAVITZ :

on behalf of themselves :

and all others similarly situated, : AMENDED CLASS ACTION

: COMPLAINT

Plaintiffs, :

:

v. :

: JURY TRIAL DEMANDED

WIDENER UNIVERSITY SCHOOL :

OF LAW, and DOES 1-20, :

:

Defendants. :

Case 2:12-cv-00608-WHW-CLW Document 8 Filed 04/27/12 of 36 PageID: 233

tel:973-218-1111

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Plaintiffs, on behalf of themselves and all other persons similarly situated, allege, based

on the investigation of counsel and their personal knowledge, as follows:

PRELIMINARY STATEMENT

1. This action asserts state and common law consumer fraud and related claims

against Widener University School of Law (“WLS”) based on its practice of publishing and

reporting misleading job placement and salary statistics in order to induce students to enroll

and/or stay enrolled in WLS at an artificially inflated tuition price. Plaintiffs are graduates of

WLS, all of whom enrolled at WLS between 2004 and the present, and whom paid tens of

thousands of dollars per year in tuition in reliance on WLS’s inflated job placement and salary

claims. Plaintiffs seek for WLS to disclose comprehensive job placement and salary statistics,

which exist now and at all relevant times existed in WLS’s possession, in order to provide them

with accurate information for valuing WLS’s legal educational services. In addition, Plaintiffs

seek payment, at the very least, to reimburse them for WLS’s artificial inflation of their tuition

costs due to its misleading claims and statistics.

2. With over 1,600 students, including over 500 part-time students, spread across

two campuses, WLS is one of the largest law schools in the country. Since 2006, WLS’s student

population and tuition have increased dramatically, increasing the revenues WLS derives from

its educational services. As of 2010-2011, WLS tuition was $34,890, excluding fees and living

expenses. Because of these high tuition costs, WLS graduates face hundreds of thousands of

dollars in non-dischargeable debt that will take decades to pay off.

3. There is no question that students enroll at WLS and pay these extraordinary

tuition fees for the purpose of getting a job that requires, or at least makes use of, a law degree.

Students, at the very least, expect their investment in a WLS law degree to be a good investment,


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and are aware of the information reported by WLS that holders of a WLS law have earnings and

employment that are enhanced by a WLS law degree. Indeed, WLS encourages this perception

by claiming on its website: “As a graduate of Widener Law, you’ll join a network of more than

12,000 alumni in 50 states, the District of Columbia, and 15 countries and territories who are

using their Widener Law degrees to pursue successful, rewarding careers.”

4. Students who attend WLS, such as the plaintiffs in this case, evaluate the

information available to them from WLS, perform a cost benefit analysis, and determine whether

the expense is worth the value, as they reasonably would in making any economic decision.

While WLS provides students with academic services, WLS recognizes and advertises itself as a

professional institution that trains students for a career in law that will have a certain value to its

students. WLS’s track record in placing its graduates in valuable jobs that require, or at least

use, a law degree, and WLS’s salary statistics are, therefore, significant factors in a student’s

decision to enroll in WLS.

5. The importance of these statistics is clear because WLS takes painstaking efforts

to collect detailed job placement and salary statistics. Graduates provide WLS with survey

responses detailing legal versus non-legal, full-time versus part-time, and permanent versus

temporary placements. Instead of publishing those disaggregated numbers, between 2005 and

2011, WLS consistently and misleadingly boasted aggregate job placement rates, on its website

and in other marketing materials, well over 90%, when WLS’s true, disaggregated job placement

rates indicated that well below 60% of the employment acquired by WLS graduates required or

preferred a law degree, as it recently revealed in supplemental job placement statistics posted on

its website.


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6. WLS also reported job placement rates and salary statistics to third parties such as

U.S. News & World Report (“US News”) and the American Bar Association (“ABA”) when it

knew those third parties were publishing misleading statistics based upon WLS’s reports.

WLS’s misleading placement statistics were further disseminated over the Internet, by word of

mouth, and through career placement offices at undergraduate institutions across the country.

Thus, while WLS’s aggregate placement statistics were widely available to WLS students, they

did not have access to an alternative source for disaggregated statistics. Those numbers existed

solely in WLS’s possession.

7. WLS’s misleading job placement and salary statistics certainly influenced its

tuition pricing. Evaluating the price of such legal education services is no different than other

prices in an efficient marketplace. Price is determined by supply and demand. When students

agreed to pay WLS over $30,000 per year in tuition – an enormously high price that often

required students to incur substantial debt -- they reasonably believed that WLS was reporting

90%-plus placement rates for graduates who were “using” their WLS degrees to pursue

successful and rewarding careers and obtaining enhanced employment and earnings as a result of

obtaining, and paying for, a WLS degree. It would surprise any enrolled student to learn that

many of those placements were for non-legal (e.g., a Starbucks barista or bartender), part-time,

or temporary positions because WLS’s legal education services add little or no value to such

placements.

8. By publishing and reporting inflated job placement statistics, WLS also inflated

the demand for its services in the marketplace, and thus the price. Tellingly, this price inflation

occurred at the same time WLS increased the size of its class, thus adding supply, which should

have placed significant downward pressure on price absent manipulation.


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9. Thus, while WLS compiled detailed information from its graduates that could

provide students with robust and accurate placement information, it intentionally chose to

provide students with misleading information that inflated the value of WLS’s job placement

services. WLS knew that if students had access to the true numbers, WLS could not charge the

increased tuition it charged students. As a result, the class members in this lawsuit paid

substantially more than they should have for WLS’s legal education services.

10. This situation is not unique to WLS and has caused considerable concern to

political and legal bodies responsible for overseeing law school behavior generally. However,

these issues have only become publicly known since 2010, long after each of the Plaintiffs in this

matter made their decision to enroll and continue to enroll in WLS. For example, in 2011,

Senator Barbara Boxer of California and Senator Charles Grassley of Iowa made multiple public

statements raising concerns with law schools’ use of misleading placement statistics. In response

to this public outcry, many law schools, including WLS, changed their reporting practices to give

law students more information about their job placement track records. Indeed, WLS recently

revised the statistics it reports on its website to provide “comprehensive” placement statistics.

11. These comprehensive placement statistics demonstrate that the prior employment

reports, which each Plaintiff used to determine whether to attend and continue to enroll in WLS,

were materially misleading. WLS’s aggregated statistics were misleading in that they show that

WLS’s 93% -plus placement rate reported in 2010 included any type of post-WLS employment,

including jobs that have absolutely no connection to the legal industry, do not require a law

degree, and/or are temporary or part-time in nature. If WLS had disclosed the more pertinent

employment statistics of which they were aware -- i.e., those graduates who have secured full-

time, paying, permanent positions for which a law degree is required or preferred -- the numbers


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drop dramatically below 60% in 2010. Recent studies of job placement statistics by Professor

Campos of University of Colorado Law, estimates that the true job placement rate, is likely much

lower than even 45% when taking into account permanent versus temporary employment,

particularly for lower tier law schools.

12. Thus, even WLS’s supplemental statistics do not provide law students with a

complete picture of job placement at WLS. Accordingly, Plaintiffs seek an Order requiring WLS

to report disaggregated, audited statistics for the relevant time period and a partial tuition refund

consisting of the inflation of the costs of that WLS caused by the misleading placement statistics.

JURISDICTION AND VENUE

13. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1332 and

1367, because the Plaintiffs reside in various states, including Pennsylvania and New Jersey, and

are therefore diverse from Defendant WLS which is based in Delaware, and the amount in

controversy exceeds the sum or value of $75,000.

14. This Court has original jurisdiction over this action under the Class Action

Fairness Act of 2005, 28 U.S.C. § 1332(d)(2) (“CAFA”), as to the named Plaintiffs and every

member of the Class, because the proposed Class contains more than 100 members, the

aggregate amount of controversy exceeds $5 million, and members reside across the U.S. and are

therefore diverse from the Defendants. For the class of 2010, only 16 percent of graduates

practiced in Delaware, while 57 percent practiced in Pennsylvania and 16 percent practiced in

New Jersey.

15. The Court has personal jurisdiction over Defendant WLS, because they have

purposefully availed themselves of the privilege of conducting activities in the forum, such as a

deliberate targeting of the forum through advertisements, and therefore have significant


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minimum contacts with this state. Indeed, they have availed themselves to the laws and markets

of New Jersey through the promotion, marketing and advertising of WLS in this State and on the

Internet to consumers in New Jersey.

16. Venue is proper within this district pursuant to 28 U.S.C. § 1391(a)(2), because a

substantial part of the events or omissions giving rise to Plaintiffs’ claims occurred in this

District.

PARTIES

I. Plaintiffs

17. John Harnish currently works as a bartender in Philadelphia, Pennsylvania and

lives in Delaware County, Pennsylvania. Mr. Harnish graduated from WLS’s Delaware Campus

in 2009. In applying, enrolling, and deciding to remain enrolled at WLS, Mr. Harnish relied

upon salary data and employment information posted on WLS’s website, other WLS marketing

materials, and/or information that WLS disseminated to third parties such as the ABA and US

News. Both prior to and during his enrollment at WLS, Mr. Harnish specifically relied on

WLS’s representations that over 90% of WLS graduates were employed within nine months of

graduation. At all times prior to and during his enrollment at WLS, Mr. Harnish believed that

WLS’s placement rates included only full time employment for which a law degree was required

or at least preferred. In total he paid tens of thousands of dollars in tuition and fees to WLS and

incurred substantial debt. Had Mr. Harnish been aware of WLS’s true job placement rate and

salary statistics, he would not have paid the amount in tuition he paid to WLS. Mr. Harnish

never achieved full-time legal employment.

18. Justin Schluth is currently unemployed. He lives in New Jersey and is a member

in good standing of the Pennsylvania Bar. Mr. Schluth graduated from WLS’s Delaware campus


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in 2010. In applying, enrolling, and deciding to remain enrolled at WLS, Mr. Schluth relied

upon salary data and employment information posted on WLS’s website, other WLS marketing

materials, and/or information that WLS disseminated to third parties such as the ABA and US

News. Both prior to and during his enrollment at WLS, Mr. Schluth specifically relied on WLS’s

representations that over 90% of WLS graduates were employed within nine months of

graduation. At all times prior to and during his enrollment at WLS, Mr. Schluth believed that



incurred substantial debt. Had Mr. Schluth been aware of WLS’s true job placement rate and

salary statistics, he would not have paid the amount in tuition he paid to WLS. Following his

graduation from law school, Mr. Schluth continued his education at WLS, where he completed

an L.L.M. in 2010. Although Mr. Schluth is admitted to the Pennsylvania Bar, and has two WLS

degrees, he never achieved full-time legal employment.

19. Edward Gilson currently lives and works in Philadelphia and is a member in good

standing of the Pennsylvania Bar. Mr. Gilson graduated from WLS’s Delaware campus in 2009.

In applying, enrolling, and deciding to remain enrolled at WLS, Mr. Gilson relied upon salary

data and employment information posted on WLS’s website, other WLS marketing materials,

and/or information that WLS disseminated to third parties such as the ABA and US News. Both

prior to and during his enrollment at WLS, Mr. Gilson specifically relied on WLS’s


graduation. At all times prior to and during his enrollment at WLS, Mr. Gilson believed that




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incurred substantial debt. Had Mr. Gilson been aware of WLS’s true job placement rate and

salary statistics, he would not have paid the amount in tuition he paid to WLS. Following his

graduation from law school, Mr. Gilson could not find a permanent position in the legal industry,

despite sending out hundreds of resumes. He currently owns and operates his own law firm.

20. Robert Klein currently works in a non-legal position with the Federal Government

in Philadelphia. He is licensed to practice in Pennsylvania and New Jersey and is a member in

good standing of both state bars. He currently lives in New Jersey and works in Philadelphia.

Mr. Klein graduated from WLS’s Delaware campus in 2009. In applying, enrolling, and

deciding to remain enrolled at WLS, Mr. Klein relied upon salary data and employment

information posted on WLS’s website, other WLS marketing materials, and/or information that

WLS disseminated to third parties such as the ABA and US News. Both prior to and during his

enrollment at WLS, Mr. Klein specifically relied on WLS’s representations that over 90% of

WLS graduates were employed within nine months of graduation. At all times prior to and

during his enrollment at WLS, Mr. Klein believed that WLS’s placement rates included only full

time employment for which a law degree was required or at least preferred. In total he paid tens

of thousands of dollars in tuition and fees to WLS and incurred substantial debt. Had Mr. Klein

been aware of WLS’s true job placement rate and salary statistics, he would not have paid the

amount in tuition he paid to WLS. Following his graduation from law school, Mr. Klein could

not find a permanent position in the legal industry, despite sending out hundreds of resumes.

21. Robert MacFadyen lives in Bergen County, New Jersey and currently works for a

management company in a non-legal capacity. Mr. MacFadyen graduated from WLS’s

Harrisburg campus in 2008. In applying, enrolling, and deciding to remain enrolled at WLS, Mr.

MacFadyen relied upon salary data and employment information posted on WLS’s website,


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other WLS marketing materials, and/or information that WLS disseminated to third parties such

as the ABA and US News. Both prior to and during his enrollment at WLS, Mr. MacFadyen

specifically relied on WLS’s representations that over 90% of WLS graduates were employed

within nine months of graduation. At all times prior to and during his enrollment at WLS, Mr.

MacFadyen believed that WLS’s placement rates included only full time employment for which

a law degree was required or at least preferred. In total he paid tens of thousands of dollars in

tuition and fees to WLS and incurred substantial debt. Had Mr. MacFadyen been aware of

WLS’s true job placement rate and salary statistics, he would not have paid the amount in tuition

he paid to WLS. Following his graduation from law school, Mr. MacFadyen could not find a

position in the legal industry, despite sending out hundreds of resumes.

22. Gregory Emond resides and practices as an attorney in New Jersey. He graduated

from WLS’s Pennsylvania campus in 2011. When applying to enroll in WLS, Mr. Emond

worked and resided in New Jersey. In applying, enrolling, and deciding to remain enrolled at

WLS, Mr. Emond relied upon salary data and employment information posted on WLS’s

website, other WLS marketing materials, and/or information that WLS disseminated to third

parties such as the ABA and US News. Both prior to and during his enrollment at WLS, Mr.

Emond specifically relied on WLS’s representations that over 90% of WLS graduates were

employed within nine months of graduation. At all times prior to and during his enrollment at

WLS, Mr. Emond believed that WLS’s placement rates included only full time employment for

which a law degree was required or at least preferred. In total he paid tens of thousands of

dollars in tuition and fees to WLS and incurred substantial debt. Had Mr. Emond been aware of

WLS’s true job placement rate and salary statistics, he would not have paid the amount in tuition

he paid to WLS. Following his graduation from law school, Mr. Emond had difficulty finding a


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job, but he eventually found employment as a practicing attorney. His salary prior to enrolling at

WLS was greater than his current salary, which is not adequate to cover his debt obligations.

23. Megan E. Shafranski lives and practice as an attorney in New Jersey. She

graduated from WLS’s Delaware campus in 2008. When applying to enroll in WLS, Ms.

Shafranski attended school and resided in New Jersey. In applying, enrolling, and deciding to

remain enrolled at WLS, Ms. Shafranski relied upon salary data and employment information

posted on WLS’s website, other WLS marketing materials, and/or information that WLS

disseminated to third parties such as the ABA and US News. Both prior to and during her

enrollment at WLS, Ms. Shafranski specifically relied on WLS’s representations that over 90%

of WLS graduates were employed within nine months of graduation. At all times prior to and

during her enrollment at WLS, Ms. Shafranski believed that WLS’s placement rates included

only full time employment for which a law degree was required or at least preferred. In total she

paid tens of thousands of dollars in tuition and fees to WLS and incurred substantial debt. Had

Ms. Shafranski been aware of WLS’s true job placement rate and salary statistics, she would not

have paid the amount in tuition she paid to WLS. Following her graduation from law school,

Ms. Shafranski clerked for a Chancery Judge. She had difficulty finding full-time legal

employment after her clerkship, but eventually found a job and is now practicing as an attorney

for a salary that is not adequate to cover her debt obligations.

24. Ayla O’Brien Kravitz current resides and works as a practicing attorney in

Pennsylvania. She graduated from WLS’s Delaware campus in 2008. In applying, enrolling,

and deciding to remain enrolled at WLS, Ms. O’Brien Kravitz relied upon salary data and

employment information posted on WLS’s website, other WLS marketing materials, and/or

information that WLS disseminated to third parties such as the ABA and US News. Both prior to


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and during her enrollment at WLS, Ms. O’Brien Kravitz specifically relied on WLS’s


graduation. At all times prior to and during her enrollment at WLS, Ms. O’Brien Kravitz

believed that WLS’s placement rates included only full time employment for which a law degree

was required or at least preferred. In total she paid tens of thousands of dollars in tuition and

fees to WLS and incurred substantial debt. Had Ms. O’Brien Kravitz been aware of WLS’s true

job placement rate and salary statistics, she would not have paid the amount in tuition she paid to

WLS. Following her graduation from law school, Ms. O’Brien Kravitz had difficulty finding

full-time legal employment, but eventually found a job as a practicing attorney. Her salary prior

to enrolling at WLS was equivalent to her current salary, which is not adequate to cover her debt

obligations.

25. Christina Marinakis resides and is currently working as a non-practicing lawyer in

California. She graduated first in her class from WLS’s Delaware campus in 2010. In applying,

enrolling, and deciding to remain enrolled at WLS, Dr. Marinakis relied upon salary data and

employment information posted on WLS’s website, other WLS marketing materials, and/or

information that WLS disseminated to third parties such as the ABA and US News. Both prior to

and during her enrollment at WLS, Dr. Marinakis specifically relied on WLS’s representations

that over 90% of WLS graduates were employed within nine months of graduation. At all times

prior to and during her enrollment at WLS, Dr. Marinakis believed that WLS’s placement rates

included only full time employment for which a law degree was required or at least preferred. In

total she paid tens of thousands of dollars in tuition and fees to WLS. Had Dr. Marinakis been

aware of WLS’s true job placement rate and salary statistics, she would not have paid the amount

in tuition she paid to WLS. Following her graduation from law school, despite passing the bar


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exam for Pennsylvania and applying for numerous legal positions, Dr. Marinakis was unable to

find a job as a practicing attorney, so she worked as a bartender. After extensive efforts, she

eventually obtained a job at a consulting firm in California.

26. All of the Plaintiffs learned about WLS’s misleading reporting of job placement

statistics no earlier than 2011 when this issue began to gain national attention.

II. Defendants

27. Defendant WLS is an ABA accredited law school based in Wilmington, Delaware

with a satellite campus in Harrisburg, Pennsylvania. WLS currently enrolls approximately 1,600

students with about 1,100 students at the Wilmington campus and 500 students at the Harrisburg

campus. WLS issues all policies and procedures, including its marketing materials, from its

Wilmington, Delaware campus.

28. WLS is part of the Widener University, a private, multi-campus university whose

main campus is in Chester, Pennsylvania with additional campuses in Harrisburg, PA, Exton,

PA, and Wilmington, DE. The university enrolls 6,630 students per year, divided roughly evenly

between undergraduates and graduates.

29. The true names and capacities (whether individual, corporate, associate or

otherwise) of Defendants Does 1 though 20, inclusive, are unknown to Plaintiffs. Plaintiffs sue

these Defendants by fictitious names and will seek leave to amend this Complaint after their

identities are learned. Each fictitious Defendant contributed to the acts and practices alleged

herein. Plaintiffs are informed and believe that the fictitiously named Defendants proximately

caused Plaintiffs’ damages.


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FACTUAL ALLEGATIONS

30. WLS is in the business of providing students with professional legal education

services, including the opportunity for graduate placement in valuable legal careers. As evidence

of that purpose, WLS boasts to prospective students that “[a]s a graduate of Widener Law, you’ll

join a network of more than 12,000 alumni in 50 states, the District of Columbia, and 15

countries and territories who are using their WLS degrees to pursue successful, rewarding

careers.”

31. WLS has been very successful in attracting students by promoting its professional

education and placement services. WLS currently enrolls one of the largest student bodies in the

country. Moreover, in recent years, WLS accepted students at an alarmingly high rate.

According to US News, in 2010, WLS accepted approximately 59 percent of all applicants, one

of the highest acceptance rates of any law school. Many of these enrolled students never

graduate. In 2008, for example, approximately 23 percent of the roughly 1,500 students who

enrolled in WLS failed to matriculate for their second year, while second-year students continued

to drop out at a rate of 2.3 percent.

32. As WLS increased its student body size, it simultaneously, substantially increased

its tuition. Between 2006 and 2011, WLS tuition increased by approximately 20%. By 2010-

2011, WLS’s tuition was $34,890 for full-time students, while room and board was at least

$20,000, bringing the total annual cost for attending WLS to approximately $55,000, or

$165,000 over three years of law school.

33. In order to support these tuition increases and attract even more students, WLS

promoted itself by touting its ability to place graduates in positions “using” the WLS degree to

pursue successful and rewarding careers. WLS collected job placement and salary statistics from


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its graduates by sending out “Graduate Employment Surveys.” The Surveys asked students for

at least the following information:

“Employed (legal or non-legal) – Please include employer name, city, state and

job title.”

If employed, check off: “Full time,” “Part time,” “Temporary,” “Permanent”

If employed, details about nature of the employment.

If employed, “current or starting salary,” noting “we collect salary information to

provide current and prospective students and alumni with realistic information

about attorney salaries.”

(WLS 2011 Graduate Employment Survey, accessible at http://survey monkey.com/s/2011

cdogradsurvey, is annexed hereto as Exhibit A).

34. After collecting information through such surveys, WLS – and WLS alone – had

in its possession the information required to provide students with complete and accurate

information about its job placement track record. Indeed, it told graduates the information would

be used to provide current and prospective students with “realistic information.” Instead of

providing realistic information to students, WLS aggregated the information in order to inflate its

claims and supporting statistics regarding its job placement success and, thereby, inflate the

prices it could charge students for tuition.

35. For instance, from at least 2005 through 2011, WLS published statistics on its

website that led students to believe that WLS successfully placed over 90% of its graduates in

positions that required or at least used a law degree within nine months of graduation:

a. “Graduates of the Class of 2004 had a 90% employment rate within nine months

of graduation.” (posted in or about 2005)

b. “Graduates of the Class of 2005 had a 90% employment rate within nine months

of graduation.” (posted in or about 2006)


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c. “Graduates of the Class of 2007 had a 96% employment advanced degree rate

within nine months of graduation.” (posted in or about 2008)

d. Employment within nine months of graduation of over 91% for Class of 2008.

(posted in 09/10 Dean’s Annual Report)

e. Employment within nine months of graduation of over 92% for Class of 2009.

(posted in 09/10 Dean’s Annual Report)

f. “Graduates of the Class of 2010 had a 93% employment/advanced degree rate

within nine months of graduation.” (posted in or about 2011)

(WLS employment statistics for years 2005-2001 are annexed hereto as Exhibit B).

36. These claims and statistics were misleading to students for at least the following

material reasons:

a. WLS did not disclose that its placement rate included full and part time legal,

law-related and non-legal positions. Thus, if a WLS graduate were to obtain post-

graduate employment as a bartender, farm hand, or Starbucks barista, WLS

included the student’s placement amongst its graduates who were using their

WLS degrees to pursue successful, rewarding careers.

b. WLS did not disclose that when a graduate responded, “not seeking work,” WLS

simply did not count the graduate.

c. WLS would count as “employed” a graduate who was only employed for a short

period of time before the survey, but was likely unemployed as of the official

reporting date.

d. WLS would count as “employed” graduates who, out of desperation, had started

their own solo law practice without first confirming whether the graduate had

obtained licensure in the jurisdiction.

e. WLS did not disclose that a sizeable percentage of WLS graduates did not

respond to the survey, when, presumably, a high percentage of those graduates

were not placed successfully.

37. Based on WLS’s aggregate statistics, a graduate could be working in any capacity

in any kind of job, no matter how unrelated to law -- and would be deemed employed and

working in a career “using” the WLS law degree. Similarly, a contract attorney who has yet to


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secure permanent employment and is forced to toil away in transitory document review projects

would be deemed “employed” under WLS’s broad and misleading definition of “employed.”

38. WLS further misled students about its job placement track record by reporting its

misleading placement rates and salary statistics to third parties such as U.S. News and the ABA.

Using the data provided by WLS, U.S. News and the ABA published “employed” job placement

rates that include graduates who secured employment in any capacity in any kind of job, no

matter how unrelated to the legal field. For instance, based on data supplied by WLS, the ABA

reported the following job placement rates for WLS graduates (within nine months of

graduation): 86 percent for 2005, 82 percent for 2006, 84 percent for 2007, 90 percent for 2008,

and 90 percent for 2009.

39. Similarly, U.S. News reported that 83 percent of 2006 WLS graduates, 88.5

percent of 2007 WLS graduates, 91 percent of 2008 WLS graduates and 78 percent of 2009

WLS graduates secured employment within nine months of graduation. These statistics also

helped to artificially boost WLS’s U.S. News ranking because this data constitutes 18 percent

(four percent for the employment rate upon graduation and 14 percent for the rate nine months

after graduation) of a law school’s ranking (i.e., the second most important factor after a law

school’s peer assessment).

40. As WLS was aware, prospective law students rely upon U.S. News rankings in

analyzing their application and enrollment options, and even a small boost in ranking can

increase the demand for a WLS law degree. Because WLS was the only source of detailed,

disaggregated information (through its own survey process) about job placement rates and salary

statistics, students did not have access to the data they would need to analyze WLS’s true

placement track record.


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41. WLS knew that disaggregated job placement statistics are a material factor in

analyzing a law school’s job placement track record. For instance, while NALP publishes job

placement and salary information across all law schools, NALP specifically requires all

respondents to the NALP questionnaire, including WLS, to break down the exact type of

employment their graduates have obtained, differentiating between part-time and full-time jobs,

temporary and permanent, and legal and non-legal positions. In other words, WLS breaks down

its employment data into various disaggregated categories for at least one third party, NALP, but

only because NALP does not publish law school specific data. WLS intentionally opted not to

disclose this specific data on its website and other marketing materials available to public.

42. WLS’s reporting practices are particularly troubling because it primarily markets

its services to recent college graduates, many of whom are making their first “big-ticket”

purchase based on asymmetrical information. WLS is aware that prospective students apply to

law school to attain the kind of job that provides compensation and a lifestyle that is

commensurate with and worthy of the enormous time, money and personal sacrifice invested in a

legal education.

43. Relying upon WLS’s published job placement track record, WLS students take on

hundreds of thousands of dollars in non-dischargeable debt. According to US News, 91 percent

of WLS students take out loans to attend law school, with WLS students averaging a staggering

$111,909 in debt upon graduation, placing WLS within the top 30th

percentile of indebtedness

among all law school graduates. If WLS were to disclose accurate employment data, no rational

consumer would take on so much debt.1

1According to FinAid.org, a graduate needs to make at least $138,000 annually to repay

$100,000 without enduring financial hardship, or $92,000 annually to repay the debt with

financial difficultly. See http://www.finaid.org.calculators/loanpayments/phtml. According to a


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44. These issues concerning job placement and salary reporting are gaining national

attention but were not available to Plaintiffs when they made the decision to enroll or continue to

enroll in WLS. Throughout 2011, Senator Barbara Boxer of California made public statements

concerning the accuracy of employment data and salary information. In an Oct. 2011 letter to

the ABA, she referenced “the deafening public outcry for greater scrutiny in the way law schools

disclose placement rates.” Further, Senator Boxer reached across the aisle with her colleague

Senator Tom Coburn of Oklahoma to ask the Department of Education to step in and investigate

law schools for failing to properly disclose employment prospects to prospective and current

students.

45. Also in 2011, Bill Hebert, President of the California Bar Association, published

an article in the California Bar Journal connecting the price and value of a law degree to a law

school’s reporting of placement statistics. Mr. Hebert exhorted law school deans to adopt

rigorous reporting standards by disclosing the type of detailed employment and salary data that

would allow students to get a realistic picture of their post-graduate financial situation. (Bill

Hebert, “What is the Value of the Law Degree?” California Bar Journal, February 2011, is

annexed hereto as Exhibit C). Further, Mr. Hebert chided schools for “hiding employment

outcomes in aggregate statistical forms,” and impressed upon them the need to reveal the exact

percentage of their graduates who have actually obtained full-time, permanent employment.

recently published paper by Jim Chen, the Dean of the University of Louisville Louis D.

Brandeis School of Law, a student would have to earn three times a law school’s annual tuition

to make the investment of attending law school economically worthwhile. Karen Sloan, “Law

School, a Ticket to Economic Security? Better Run the Numbers,” The National Law Journal,

December 12, 2011; see also Jim Chen, “A Degree of Practical Wisdom: The Rate of

Educational Debt to Income as a Basic Measurement of Law School Graduates’ Economic

Viability,” William Mitchell Law Review, Vol. 38, 2012. For example, for a student who

attends a law school with an annual tuition of $40,000 -- i.e., the tuition at most private schools --

that would mean he would need to earn at least $120,000 to make the investment worthwhile.


20

46. Howard B. Miller, the previous President of the California Bar, recently

challenged the methods used by law schools to tabulate and report employment information to

third party data clearinghouses like the ABA and U.S. News. Specifically, he wrote in the

California Bar Journal: “There is notoriously unreliable self-reporting by law schools and their

graduates of employment statistics. They are unreliable in only one direction, since the self

reporting by law schools of ‘employment’ of graduates at graduation and then nine months after

graduation are, together, a significant factor in the U.S. News rankings -- which are obsessed

over, despite denials, by law schools and their constituencies. The anecdotes are as telling as the

statistics: prestigious lawyers in the state are hiring their own children to work in their firms

because even with their connections they were unable to find employment elsewhere.”

47. In response to this public outcry, in or about early 2012, long after each of the

Plaintiffs had graduated, WLS took certain remedial measures which, although not wholly

adequate, acknowledge the misleading nature of its previous practice of reporting aggregate job

placement and salary statistics. For instance, WLS refreshed its website in order to supplement

and disaggregate its job placement statistics and claims. Prior to this lawsuit, WLS’s website

claimed: “Graduates of the Class of 2010 had a 93 % employment advanced degree rate within

nine months of graduation.” In stark contrast, WLS’s website now clarifies:

Graduates of the Class of 2010 had a 93% employment / advanced degree program

participation rate. This rate includes full and part time legal, law-related and non-legal

positions as well as advanced degree program participation within nine months of

graduation. For more information, please download a comprehensive summary of

employment statistics (PDF).

This comprehensive summary shows that for the Class of 2010, 192 of 344 survey respondents

were employed in full-time legal work, or in other words merely 56%. This supplemental figure

is far lower than WLS’s claims of a 93% placement rate. (WLS Employment Statistics and


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Trends for Class of 2010, accessible at http://law.widener.edu/CampusLife/CareerDevelopment/

EmploymentStatisticsandTrends.aspx, are annexed hereto as Exhibit D).

48. According to Paul Campos, Professor of Law at Colorado Law, in a 2011 report, a

56% placement rate is likely still too high for schools such as WLS. Professor Campos

concluded that “Full-time Legal Employed” statistics overstate job placement rates because they

include temporary positions, such as being paid $20 an hour to proofread financial documents in

a warehouse. To account for temporary employment, he used employment data drawn from 183

individual NALP forms from a top-50 school and excluded responses reflecting temporary

employment. As a result, Professor Campos determined that approximately 45% of 2010

graduates for that top-50 law school had real legal jobs nine months after graduation. At lower

tier schools, such as WLS, Professor Campos believed the placement rate could be much lower.

(Paul Campos, “How Law Schools Completely Misrepresent Their Job Numbers,” The New

Republic, April 25, 2011, is annexed hereto as Exhibit E).

49. Thus, even WLS’s recently published “comprehensive” job placement statistics

provide incomplete and misleading information for students. Although WLS’s “Employment

Surveys” track permanent versus temporary employment, its published statistics aggregate all

such responses as full-time legal employment. As another example, it has recently been widely

reported that many law schools employ programs to increase their employment numbers, by,

among other means, hiring unemployed graduates as “research assistants” or other “make work”

positions for a specified period of time. WLS’s placement statistics aggregate those types of jobs

as full-time legal employment. WLS does not disclose how many of its own graduates it

employs in short term positions.


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50. In any event, given the severity of the issues raised by WLS’s reporting practices,

these job placement statistics will continue to be subject to manipulation unless and until WLS

publishes statistics reflecting verified, audited data.

CLASS ACTION ALLEGATIONS

51. This action is brought and may properly be maintained as a class action pursuant

to Rules 23(a), (b)(2) and (b)(3) of the Federal Rules of Civil Procedure. Plaintiffs bring this

action, on behalf of themselves and all other similarly situated, as representative members of the

following proposed class:

All persons who are either presently enrolled or graduated from the Widener University

School of Law within the statutory period for the six-year period prior to the date the

Complaint in this action was filed through the date that this Class is certified.

52. The Class may be modified pending discovery. Excluded from the Class are

Defendants, WLS, its employees, officers and directors, the Judge(s) assigned to this case, and

the attorneys of record in this case. Plaintiffs reserve the right to amend the Class definition if

discovery and further investigation reveal that the Class should be expanded or otherwise

modified.

53. For the foregoing reasons, this action fulfills the standards and requirements as

outlined in Rules 23(a), (b)(2) and (b)(3) of the Federal Rules of Civil Procedure.

A. The Parties are Numerous and Easily Ascertainable

54. The proposed Class is so numerous that it is manifestly impracticable to bring

them all before the court. Though the exact number and identities of the Class members is

unknown at this time, they likely number hundreds of people, because around 500 students

graduate from WLS each year. The number and identities of the Class members may be


23

ascertained from Defendants’ records and files, and may easily be notified about the pendency of

this action through individually mailed notice and/or notice by publication.

B. Common Questions of Law and Facts Predominate

55. This action presents questions of law and facts common to the Class, including,

but not limited to, the following:

a. Whether Defendants represented that approximately 90-95 percent of their

graduates secure employment within nine months of graduation;

b. Whether Defendants represented salary information without disclosing the

percentage of students reporting salary information;

c. Whether Defendants engaged in deceptive, misleading, unfair, fraudulent and/or

otherwise unlawful practices through its non-disclosure of material facts and

affirmative misleading statements regarding post-graduate employment data and

salary information;

d. Whether Defendants’ conduct violated State consumer fraud and common laws as

alleged herein;

e. Whether Plaintiffs and Class members are entitled to recover actual damages as a

result of the actions alleged herein;

f. Whether Plaintiffs and members of the Class are entitled to recover restitution of

tuition monies remitted to Defendants as a result of the actions alleged herein;

g. Whether Plaintiffs and Class members of the Class are entitled to recover punitive

damages as a result of the actions alleged herein;

h. Whether Plaintiff and Class members are entitled to an award of reasonable

attorneys’ fees, pre-judgment interest and costs of this suit;

i. Whether Defendants should be forced to retain independent, non-related third-

parties to audit and verify their post-graduate employment data and salary

information;

j. Whether Defendants should be enjoined from continuing to make false and

misleading representations and omissions regarding their post-graduate

employment data and salary information; and


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k. Whether Plaintiffs and Class members paid inflated tuition based on material

misleading statements, representations and omissions.

C. Plaintiffs’ Claims Are Typical of the Class

56. Plaintiffs’ claims are typical of the claims and of the members of the Class

because they have all been damaged in the same manner and way as a result of Defendants’

failure to disclose material facts and policies of misrepresentation and omissions. Accordingly,

the interests of the representative Plaintiffs are co-extensive with the interests of each Class

member, and all have a common right of recovery based upon the same facts.

D. The Class Representatives Can Adequately Represent the Class

57. Plaintiffs will fairly and adequately represent and protect the interests of the

Class, in that they have no interests that are antagonistic to or that irreconcilably conflict with

those of other Class members, Plaintiffs have retained counsel competent and experienced in the

prosecution of class action litigation, including substantial experience in the types of claims

alleged herein.

E. A Class Action Is Superior To All Other Available Methods For The Fair

And Efficient Adjudication Of Plaintiffs’ and Class Members’ Claims

58. A class action is superior to all other available methods for the fair and efficient

adjudication of Plaintiffs’ and Class Members’ claims. A class action is superior to preserve

Class Members’ claims who would otherwise forego litigation given the burden and expense of

individual prosecution of their claims, in comparison to the amount of damages suffered by each

individual Class Member. Individualized litigation would burden the courts, would increase the

delay and expense to all parties and the Court, and would produce the potential for inconsistent

or contradictory judgments and would establish incompatible standards of conduct for

Defendants. The individual prosecution of separate actions would create a risk of adjudications


25

which may be dispositive of the interests of other Class Members not parties to the adjudications,

or substantially impair or impede their ability to protect their interests.

59. Furthermore, final injunctive relief is appropriate against Defendants with respect

to members of a Class as a whole, as opposed to individual injunctions. Certification of a class

action to resolve these disputes will reduce the possibility of repetitious litigation involving

hundreds of thousands of Class members, and allow supervision by a single court.

WHEREFORE, Plaintiffs, on behalf of themselves and the Class, pray for an order

certifying the Class and appointing Plaintiffs and their counsel of record to represent the Class.

FIRST CAUSE OF ACTION

(Violations of Delaware’s Deceptive Trade Practices Act,

6 Del. C. §§ 2531-36 et seq.)

60. Plaintiffs incorporate by reference each and every allegation set forth above as if

fully stated herein.

61. Defendants’ actions constitute unlawful, unfair, deceptive and fraudulent practices

as defined by Delaware’s Deceptive Trade Practices Act, 6 Del. C. §§ 2531-36 et seq.

62. As part of its fraudulent marketing practices and recruitment program, WLS

engaged in a pattern and practice of knowingly and intentionally making numerous false

representations and omissions of material facts, with the intent to deceive and fraudulently

induce reliance by Plaintiffs and the members of the Class. These false representations and

omissions were uniform and identical in nature, and include, without limitation, the following:

a. Stating false placement rates during the recruitment and retention process,

including that approximately 90-95 percent of WLS graduates secured

employment within nine months of graduation;


26

b. Manipulating post-graduate employment data, so as to give the appearance that

the overwhelming majority of recent graduates secure full-time, permanent

employment for which a J.D. is required or preferred;

c. Disseminating false post-graduate employment data and salary information to

various third-party data clearinghouses and publications, such as the ABA and US

News;

d. Making deceptive and misleading statements, representations and omissions

concerning WLS’s reputation with potential employers;

e. Making deceptive and misleading statements, representations and omissions

concerning the value of a WLS degree;

f. Making deceptive and misleading statements, representations and omissions

concerning the rate at which recent graduates can obtain gainful employment in

their chosen field; and

g. Causing students to pay inflated tuition based on materially misleading

statements, representations and omissions, including, specifically that

approximately 90-95 percent of WLS graduates secure gainful employment.

63. In general, Plaintiffs and members of the Class enrolled at WLS for the purpose

of securing upon graduation full-time, permanent employment for which a J.D. is required or

preferred. Defendants’ acts, practices and omissions, therefore, were material to Plaintiffs’

decision to enroll and attend WLS, and further proximately caused Plaintiffs and other members

of the Class to pay inflated tuition.


27

64. Plaintiffs were unaware of the deception and, therefore, were reasonable in

incorporating the deceptive information when making their decisions to enroll and remain

enrolled at WLS.

65. The Defendants’ above-alleged actions constitute unfair business practices since

the actions were deceptive, immoral, unethical, oppressive, unscrupulous, substantially injurious,

and operate to the competitive disadvantage of other law schools. They are also likely to deceive

the public. Moreover, the injury to the Plaintiffs was substantial and outweighs the utility of the

Defendants’ practices.

66. The unfair and deceptive trade acts and practices have directly, foreseeably and

proximately caused damage to Plaintiffs and other members of the Class.

67. The Defendants’ practices, in addition, are unfair and deceptive because they have

caused Plaintiffs and the Class substantial harm, which is not outweighed by any countervailing

benefits to consumers or competition, and is not an injury consumers themselves could have

reasonably avoided.

68. The Defendants’ acts and practices have misled and deceived the general public in

the past, and will continue to mislead and deceive the general public into the future, by, among

other things, causing them to apply to and enroll at WLS under false pretenses.

69. Plaintiffs are entitled to permanent injunctive relief ordering the Defendants to

immediately cease these unfair business practices, as well as disgorgement and restitution to

Plaintiffs of all revenue associated with their unfair practices, or such revenues as the Court may

find equitable and just.


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SECOND CAUSE OF ACTION

(Violations of Delaware’s Consumer Fraud Act,

6 Del. C. §§ 2511-27, 2580-84)



71. Each Defendant is a “person” as defined by 6 Del. C. § 2511(7).

72. The law school education is “merchandise” within the definition of 6 Del. C. §

2511(6).

73. The law school education is, and has been, the subject of “advertisement” and

“sale” within the definition of 6 Del. C. § 2511(1) & (8).

74. Defendants are violating and have been violating the Delaware Consumer Fraud

Act’s prohibition against “deception, fraud, false pretense, false promise, misrepresentation, or

the concealment, suppression, or omission of any material fact with intent that others rely upon

such concealment, suppression or omission, in connection with the sale, lease or advertisement

of any merchandise. . . .” 6 Del. C. § 2513.

75. Specifically, as part of the fraudulent marketing practices and recruitment

program, WLS engaged in a pattern and practice of knowingly and intentionally making

numerous false representations and omissions of material facts, with the intent to deceive and

fraudulently induce reliance by Plaintiffs and the members of the Class. These false

representations and omissions were uniform and identical in nature, and include, without

limitation, the following:





29






News;






concerning the pace at which recent graduates can obtain gainful employment in











30



enrolled at WLS.

78. The Defendants’ above-alleged actions constitute deceptive and fraudulent

material acts and practices in connection with the advertisement and sale of merchandise, namely

a law school education. WLS’s advertising and sale of its law school education is occurring and

has occurred “in the conduct of any trade or commerce in part or wholly within” the State of

Delaware under the Delaware Consumer Fraud Act as, at least some of the deceptive and

fraudulent conduct that violates 6 Del. C. § 2513 originated, arose, was directed, and emanated

from Delaware, and/or the presence of WLS in Delaware is sufficient grounds for the Delaware

Consumer Fraud Act to apply.

79. The deceptive and fraudulent acts and practices have directly, foreseeably and

proximately caused damage to Plaintiffs and other members of the Class.

80. The Defendants’ practices, in addition, are fraudulent and deceptive because they

have caused Plaintiffs and the Class substantial harm, which is not outweighed by any

countervailing benefits to consumers, and is not an injury consumers themselves could have

reasonably avoided.





immediately cease these fraudulent and deceptive business practices, as well as disgorgement


31

and restitution to Plaintiffs of all revenue associated with their fraudulent and deceptive

practices, or such revenues as the Court may find equitable and just.

83. In addition to compensatory and injunctive relief, Plaintiffs and members of the

Class are entitled to punitive damages because Defendants’ conducts was gross, oppressive,

aggravated, or involved a breach of trust or confidence.

84. Elderly or disabled members of the Class are entitled to a civil penalty of $10,000,

court costs, attorneys’ fees, and treble damages for each violation of the Delaware Consumer

Fraud Act, 6 Del. C. §§ 2580 et seq.

THIRD CAUSE OF ACTION

(Violations of New Jersey’s Consumer Fraud Act,

N.J. Stat. Ann. § 56:8-1 et seq.)



86. Each Defendant is a “person” as defined by N.J. Stat. Ann. § 56:8-1(d).

87. The law school education is “merchandise” within the definition of N.J. Stat. Ann.

§ 56:8-1(c).

88. The law school education is and has been the subject of “advertisement” and

“sale” within the definition of N.J. Stat. Ann. § 56:8-1(a) & (e).

89. Defendants are violating and have been violating the New Jersey Consumer Fraud

Act’s prohibition against “any unconscionable commercial practice, deception, fraud, false

pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or

omission of any material fact with intent that others rely upon such concealment, suppression or

omission, in connection with the sale or advertisement of any merchandise or real estate,. . . .”

N.J. Stat. Ann. § 56:8-2.


32

90. Specifically, as part of the fraudulent marketing practices and recruitment

program, Defendants engaged in a pattern and practice of knowingly and intentionally making

numerous false representations and omissions of material facts, with the intent to deceive and

fraudulently induce reliance by Plaintiffs and the members of the Class. These false

representations and omissions were uniform and identical in nature, and include, without

limitation, the following:









News;






concerning the pace at which recent graduates can obtain gainful employment in



33











enrolled at WLS.

93. The Defendants’ above-alleged actions constitute deceptive and fraudulent

material acts and practices in connection with the advertisement and sale of merchandise, namely

a law school education.

94. The deceptive and fraudulent acts and practices have directly, foreseeably and

proximately caused ascertainable losses to Plaintiffs and other members of the Class.

95. The Defendants’ practices, in addition, are fraudulent and deceptive because they

have caused Plaintiffs and the Class substantial harm, which is not outweighed by any

countervailing benefits to consumers, and is not an injury consumers themselves could have

reasonably avoided.





34


immediately cease these fraudulent and deceptive business practices, as well as disgorgement

and restitution to Plaintiffs of all revenue associated with their fraudulent and deceptive

practices, or such revenues as the Court may find equitable and just.

98. In addition to compensatory and injunctive relief, Plaintiffs and members of the

Class are entitled to treble damages, reasonable attorneys’ fees, filing fees and reasonable costs

of suit, N.J. Stat. Ann. § 56:8-19.

99. Elderly or disabled members of the Class are entitled to a civil penalty of $10,000

for each violation of the New Jersey Consumer Fraud Act, N. J. Stat. Ann. § 56:8-14.3.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs, on behalf of themselves and members of the Class, pray for

relief and judgment against Defendants WLS and Does 1 though 20 as follows:

1. For injunctive relief enjoining Defendants, their agents, servants, employees and all

persons acting in concert with them from continuing to engage in their unlawful

recruitment program and manipulation of post-graduate employment data and salary

information, and all other unfair, unlawful and /or fraudulent business practices

alleged above and that may yet be discovered in the prosecution of this action;

2. For certification of the Class;

3. For the partial restitution and disgorgement of tuition monies remitted to WLS,

totaling $75 million, which is the difference between the inflated tuition paid by Class

members based on the material misrepresentations that approximately 90-95 percent

of graduates are employed within nine months of graduation and the true value of a

WLS degree;


35

4. For damages;

5. For punitive damages;

6. For an accounting by Defendants for any and all profits derived by them from the

herein-alleged unlawful, unfair, and/or fraudulent conduct and/or business practices;

7. For injunctive relief ordering that WLS retains unrelated, independent third-parties to

audit and verify post-graduate employment data and salary information;

8. For attorneys’ fees and expenses pursuant to all applicable laws;

9. For prejudgment interest; and

10. For such other and further relief as the Court may deem just and proper.

DEMAND FOR JURY TRIAL

Plaintiffs hereby demand a jury trial on all causes of action so triable.

DATED: April 27, 2012 Respectfully Submitted,

STONE & MAGNANINI LLP

By: s/ David S. Stone

David S. Stone

Eric H. Jaso

Jason C. Spiro

Stone & Magnanini LLP 150 JFK Parkway

Short Hills, NJ 07078

Phone (973) 218-1111

Facsimile (973) 218-1106

David Anziska

The Law Offices of David Anziska

305 Broadway, 9th

Fl.

New York, NY 10007

Phone (212) 822-1496

Facsimile (212) 822-1437


tel:973-218-1111

36

Jesse Strauss

Strauss Law, PLLC 305 Broadway, 9

th Fl.

New York, NY 10007

Phone (212) 822-1496

Facsimile (212) 822-1437

Frank Raimond

The Law Offices of Frank Raimond

305 Broadway, 9th

Fl.

New York, NY 10007

Counsel for Plaintiffs, individually

and for all others similarly situated


united states district court for the district of new...

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