Dismissal In DePaul Employment Statistics Fraud Case

The case filed against the DePaul University College of Law based on the lack of legal jobs available was dismissed on Tuesday.  Before I continue, the masthead on the left of the LLB indicates that I am an employee of DePaul University’s Law School.  Yes, I am.  Anything I say here is my own and not an official, or any kind of statement from DePaul. 

The order was issued by Judge Neil H. Cohen.  He considered three claims against DePaul:  a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (Count I), a claim for common law fraud (Count II), and a claim for negligent misrepresentation.  DePaul filed a motion to dismiss under two provisions of the Illinois Civil Procedure Act.  The relevant standards under these provisions are that the motion would not be granted “unless it is clearly apparent that no set of facts that can be proved that would entitle the plaintiff to recovery” or where “the claim asserted against the defendant is barred by other affirmative matter avoiding the legal effect of or defeating the claim.”

The Court disposed of the fraudulent misrepresentation claim noting that none of the employment data provided by DePaul was alleged to be false, not did DePaul make any statements which predicted the odds of getting employment as a full-time lawyer, or any associated salary range.  Fraudulent concealment was not a possibility as that required a fiduciary or confidential relationship or one where the plaintiff placed trust in the defendant where the defendant was in a position of influence and superiority.  The law school – law student relationship is contractual.  Students pay tuition for law training and a degree, and the law school provides that training.  Plaintiffs did not cite cases to the contrary.

The Court stated that the plaintiffs alleged no facts showing reasonable reliance on employment statistics or any authority that supported the contention that they need not make any independent investigation beyond the statistics.  In any event, one of the statistics showing salary range indicated employment at $20,000.  The Court said:

Common sense alone should have allowed Plaintiffs to determine that a graduate making $20,000 a year is not employed as a full-time lawyer.

Judge Cohen stated further that Plaintiffs did not allege facts that showed their reliance on the employment statistics was the proximate cause of their damages.  The claim was that the plaintiffs spent tens of thousands of dollars with the result that their law degrees were worth less as a consequence of their reliance on the statistics.  Illinois law requires the reliance to be proximate to the damages.  In this complaint, the allegations were conclusory.

The damages are speculative, in that there are so many subjective factors that affect employment prospects and salary, such as work experience, grades, whether employment is in the public or private sector, geographic area, quality of the interview, and a host of others.  From the opinion:

Plaintiff’s theory of damages assumes that the value of their DePaul degree is somehow related to the outcomes experienced by prior graduates.  But the employment and salary obtained by these prior graduates is relevant only to the value of a DePaul degree to those graduates.  They bear no correlation to the value of Plaintiffs’ degrees, which are based on an incalculable number of variables, most of which are beyond DePaul’s control.

The consumer fraud claim fell because of, again, a failure to allege enough facts under the statute to sustain the claim, and because the Illinois Consumer Fraud Act exempts conduct authorized by any regulatory body acting under authority of Illinois or the United States.  The Court ruled that the ABA is that regulatory authority and that the statistics are supplied to the ABA under Standard 509.  The ABA derives its authority from the Department of Education.

The negligent misrepresentation claim failed because Plaintiffs could not allege facts that showed that DePaul was in the business of providing information for the guidance of others in their business transactions.  The employment information was incidental to providing a legal education.  Cases cited by Plaintiffs to this point and all the others mentioned are not on point.  The entire complaint was dismissed with prejudice.

No doubt the plaintiffs will appeal, but Judge Cohen’s opinion was pretty clear there wasn’t any precedent that supported the allegations.  Illinois is a fact pleading state.  Judge Cohen found many of the allegations conclusory.  I can only refer to the cases cited as authority in the opinion as I haven’t seen the plaintiffs’ memorandum in opposition to the motion to dismiss.  Nonetheless, the Illinois Appellate Court will probably offer the same result if that is the best authority plaintiffs have on their side.  Judge Cohen didn’t cite any of the other out-of-state cases dismissing or questioning similar complaints.  Then again, he didn’t need to.  Oh, and he's a graduate of the University of Miami School of Law.  

With that, ladies and gentlemen, I present the lovely Miss Lynn Anderson.

Download 20120912 Phillips v. DePaul Memorandum and Order  [MG]