Sunday, August 21, 2016
An opinion from the United States Court of Appeals for the Third Circuit affirms the denial of class certification to students suing Widener Law
This is an interlocutory appeal of a denial of class certification in a suit alleging that Widener University School of Law defrauded a putative class of law students by publishing misleading statistics about its graduates’ employment, which caused the students to pay “inflated” tuition. The District Court found, among other things, that the plaintiffs failed to meet the requirement in Rule 23(b)(3) of the Federal Rules of Civil Procedure that common questions predominate over individual questions in order for a class to be certified. We conclude that, although the District Court labored under a few misconceptions about the plaintiffs’ theory of the case, the errors were harmless and the court ultimately reached the correct result. Even when properly characterized, the plaintiffs’ theory is insufficiently supported by class-wide evidence, and therefore the plaintiffs have not established that common questions will predominate. For that reason, we will affirm.
they allege the following. Between 2005 and 2011, Widener reported that 90-97% of its students were employed after graduation. These numbers were widely and deliberately advertised in print and online publications, along with oral presentations, targeting prospective students. But in reality, only 50-70% of Widener graduates ended up in fulltime legal positions, which Widener knew. The school was including non-legal and part-time positions in its published statistics without reporting the breakdown. When Widener did provide a breakdown in its materials, it was a breakdown by employer type (private firm, business and industry, etc.) within the category of full-time legal employment, further misleading prospective students into believing that the 90- 97% number represented full-time legal employment. Beginning in 2011, Widener improved its reporting somewhat, by including a breakdown that distinguished between full-time legal positions and other jobs. But, according to the plaintiffs, Widener continued to gather information about its graduates in a manner that distorted the statistics by, for example, crediting unreliable secondhand accounts of graduates’ employment and avoiding responses from unemployed graduates.
The plaintiffs claim that publishing misleading employment statistics enabled Widener to charge its students “inflated” tuition — that is, higher tuition than what Widener would have received if full and accurate statistics were published instead. Joint Appendix (“J.A.”) 90 (Amended Compl. ¶ 1). And they seek damages equal to the amount of tuition that students allegedly overpaid. Widener moved to dismiss the case, but the motion was denied on March 20, 2013. The parties then engaged in discovery related to class certification.
As to class action
The plaintiffs have...failed to propose a cognizable theory of damages that is sufficiently supported by class-wide evidence. And because the fact of damages (an “ascertainable loss” having a “causal relationship” with Widener’s conduct) is a crucial issue in the case, the inability to resolve it in class-wide fashion will cause individual questions to predominate over common ones, which precludes class certification.