No Job, No Refund

A law school graduate who ends up managing the delivery of telephone books instead of practicing law may be out of luck and in loads of debt, but his alma mater does not legally owe him tuition reimbursement.

That is what the U.S. Court of Appeals for the Sixth Circuit decided Tuesday when it affirmed a lower court’s dismissal of a lawsuit brought by 12 former Thomas M. Cooley Law School students. The plaintiffs alleged that the law school misrepresented the percentage of its graduates who obtain employment in legal fields after graduation as well as its graduates’ average starting salaries.

The students, who graduated between 2006 and 2010, did not end up securing the employment they said the statistics suggested they could expect. Instead, they ended up in low-paying fields. While one graduated in 2007 and passed the Utah Bar, he ended up working in the telephone book industry. One plaintiff is still unemployed, and another took temporary, contract assignments after graduation. Had the graduates known their true, dismal employment prospects, they said, they would not have attended Cooley -- which has the lowest admissions standards of any accredited law school in the country, according to the U.S. News & World Report.

The appeals court, like the district court, said that the suit's interpretations of employment statistics weren't proof that the figures were untrue. "The graduates cannot prove that Cooley committed fraudulent misrepresentation based on the ‘percentage of graduates employed’ because the graduates cannot prove that this statistic was false," said the appeals court ruling.

Jesse Strauss, the attorney who works for the New York City law firm that filed the plaintiffs’ case (as well as a number of similar suits), said he was disappointed but not surprised by the court’s decision. And while the primary goal of winning the case was not met, the second goal was to make law schools more transparent, he said.

“We wanted to alert potential law students that getting a degree from a place like Cooley is not a great idea,” Strauss said. He said the law firm is considering asking that the entire appeals court rehear the case.

The graduates claimed that they relied on the “Thomas M. Cooley Law School Employment Report and Salary Survey” in deciding to apply or remain enrolled at the institution. They argued that “the percentage of graduates employed” statistic on the survey was a misrepresentation, because the “percentage of graduates employed” meant, to a “reasonable consumer” that those graduates were employed in permanent positions “for which a law degree was required.” However, they argued, that percentage was false because it included “any type of employment, including jobs that had absolutely nothing to do with the legal industry,” said the appeal.

The district court, however, held that this statistic was “literally true,” and the graduates’ reliance on the statistic as including “only graduates who were employed in full-time legal positions” was unreasonable. The appeals court agreed, stating that the statistic in the survey does not say  “employment in full-time, permanent positions for which a law degree is required or preferred."

"The graduates might have thought that ‘employed’ meant employed in a permanent position for which a law degree was required or preferred — but, again ‘a plaintiff’s subjective misunderstanding of information that is not objectively false or misleading cannot mean that a defendant has committed the tort of fraudulent misrepresentation,’” the ruling says, quoting from the lower court's ruling.

The former Cooley law students also claimed that a statistic about the “average starting salary for all graduates” was misleading, because it actually meant the average salary of only the graduates who responded to the survey and not the average salary of all Cooley graduates in any given year. But again the appeals court agreed with the district court, writing that though the statistic may have been “objectively untrue,” the graduates' reliance upon it was “unreasonable," since “unreasonable reliance includes relying on an alleged misrepresentation that was expressly contradicted in a written contract that a plaintiff reviewed and signed,” the ruling says.

“The court recognized that it is fundamentally unreasonable to assume that when law schools report the percentage of graduates who are employed, they are only reporting those who are in full-time, legal jobs,” said James Thelen, associate dean for legal affairs and general counsel at Cooley.

He said none of the plaintiffs ever contacted the law school to clarify the statistic, nor did any of them allege that they “fully utilized” the career services and networks that were available to them at Cooley, Thelen said.

“It really does fall back on individual responsibility,” Thelen said. Another “frustrating element” of these types of lawsuits, Thelen said, is that law school graduates should not be judging the value of their degree when they have only just recently graduated from law school. Success in any field takes time, Thelen said.

“Nine months out they think they should be at the pinnacle of their career, and if they’re not, then someone is to blame,” he said.

But Strauss contends that Cooley is irresponsible for not providing a true portrayal of the job market for graduates. “They attracted many people to get these degrees on the theory that lawyers will always have work,” Strauss said. “They were very well aware that a primary driver of people who enroll in their school was the prospect of jobs.”

Strauss admitted that students who are applying to law schools in 2013 should “probably know better” than to apply to a school with the lowest admissions standards in the country and expect to find a high-paying career in the law profession. But three or five years ago, students were not aware of these realities, Strauss said.

This year the American Bar Association has imposed new, stricter standards for law schools' employment data reporting. These new standards require law schools to disaggregate the data of their graduates, Thelen said. For instance, law schools now have to break employment numbers down into categories of full- and part-time jobs. They also are required to report whether those jobs require a law degree.

Strauss said the responsible thing for law schools to do is to take “fewer applicants.” And hopefully, he said, with more transparency, students will not attend schools that do not produce applicants who find gainful employment.