Breaking Class Action Suit Filed Against Thomas Jefferson School Of Law

At least one graduate has chosen to seek judicial relief from her alma mater in a class action that could include over 2,300 graduates of Thomas Jefferson School of Law in San Diego, California. Sara Randazzo broke the news (subscription required) at midnight PDT in the Daily Journal. The story will be available in print Friday morning.

The complaint (see the case summary below) alleges that Thomas Jefferson School of Law (TJSL) has engaged in "fraudulent and deceptive business practices," including "a practice of misrepresenting its post-graduation employment statistics," and that "the disservice TJSL is doing to its students and society generally is readily apparent." The complaint cites a number of news articles over the last few years, and quotes from law school faculty and administrators to demonstrate the widespread consensus that schools are engaged in unfair and misleading practices. You can check out the complaint for yourself here. The complaint was filed by lead plaintiff Anna Alaburda, a 2008 honors graduate of TJSL. Additional court documents are attached to this post.

This lawsuit is of historical significance. It is the latest example of the breaking trust relationship between law schools and their students, their graduates, and the profession. Law schools have a duty to be honest and ethical in their reporting and presentation of employment data. This lawsuit shows that at least some members of the profession believe these duties are legal requirements, in addition to being merely professional or educational in nature. Perhaps importantly for some critics, Ms. Alaburda decided to attend law school before the legal market collapsed and before stories of misleading information were widespread.

Current Employment Information

As of today, TJSL is still providing misleading employment information (the "TJSL Report") on its website for the Class of 2009. Compounding the problem, TJSL has thus far declined to report any Class of 2010 information on its website, despite already collecting sufficient employment data about the class when they reported to NALP back in March of this year. Almost every law school could do a much better job educating prospective students about the nature of the jobs obtained by their graduates; TJSL is no different. The most serious fault we find with the TJSL Report is how the school misrepresents starting salaries.

The underlying data match for the TJSL Report and U.S. News-provided information

The TJSL Report claims that the school collected at least some data from 86% of graduates (respectable, though still putting them in the bottom 5% of all law schools), and that of those graduates 84.7% were employed. This means that 72.8% of Class of 2009 graduates were known to be employed, which is the same as what the career services office reported to U.S. News. Likewise, both sources indicate that 80% of the graduates known to be employed were employed in the private sector, i.e. working for law firms or in business & industry in some (any) capacity. This data match makes it possible for us to examine TJSL's advertised placement success with the more detailed reporting rates submitted to U.S. News.

TJSL Salaries

Based on our calculations from the data submitted to U.S. News, only 17% of those working full time in the private sector reported a salary. This means that at most 22 graduates reported salary data for full-time, private-sector jobs to TJSL. (This puts TJSL in the bottom 10% of law schools by percentage reporting.)

We say "at most" because the U.S. News salary figures only include full-time jobs. Only about half of TJSL graduates had full-time jobs for the Class of 2009. Some of these were likely with law firms and in business, but probably not all of them. The only thing we gain from the information provided on the TJSL Report is that at least five salaries underly the average salary figures for law firm practice ($62,443) and for Business jobs ($90,267). Based on the other data, the average figures probably each only use data for a few more graduates than the minimum five. As such, the $90,267 and $62,443 average salaries are each based on data for between 2-8% of the entire class (for a total not to exceed 10%).

The substance of these salary averages is not apparent from TJSL's Report or website. In fact, the picture which the published averages present is of a magnitude far more appealing than reality. The business salary average is significantly higher than the California mean salary, $83,977, for the business category according to NALP.

For law firm jobs, the problem is a little different. While the national mean salary for law firms is $115,254, that average is misleading on its face because 40% of the salaries used to calculate the average were $160,000 and 5% were $145,000. If we factor these salaries – the salaries most likely to be reported – out of the average, the average reduces to $80,007.

Although this average still likely skews high, the effect of large firm salaries on the adapted average is apparent. Those with higher salaries are far more likely to report. These salaries are also usually publicly known, thus the graduates do not need to report their salary to be included in these averages since schools can report any salaries they have reason to believe are accurate. This adjustment is not only common at law schools, but encouraged by NALP. As the TJSL Report states, "Our annual employment statistics are compiled in accordance with the [sic] NALP's Employment Report and Salary Survey."

The main point here is that the average salary reported in the TJSL Report skews high without context: no salary ranges, percentiles, or observational data besides the five-graduate floor has been provided. TJSL could, if it wanted, provide the following chart as specific context. This information, specific to graduates from all NALP-reporting graduates working in California, comes from NALP's Class of 2009 Jobs & JDs. TJSL receives a copy of this report, since it is an active participant in NALP's research. Our example uses all California salary information because 83% of TJSL's graduates known to be employed were employed in California.

The total number of TJSL graduates in each category indicates that the salaries TJSL used to calulate its published average firm salary skews even higher than normal. If between 5 and 17 graduates reported a law firm salary, at least some were from jobs paying six figures. But it's difficult to know how many of those were six-figure jobs because the employer category includes non-attorneys making significantly less than attorneys with the same employer. Of course, prospective law students could know all of this if the school had decided to tell them.

Overall, it is easy to see why a prospective TJSL student today would be misled into thinking that a $200,000 investment in the TJSL degree is worth it. It remains to be seen whether our analysis holds for previous years, as well as whether what we consider misleading is sufficiently fraudulent, misrepresentative, or unfair according to a Cali state court.

TJSL is not alone

Countless other law schools across the country engage in similarly misleading practices, making them equally at risk of facing a class action. Every law school has the opportunity to provide better information and better context for that information. Some schools are proactively reforming how they present employment data, but many more have not yet felt compelled to change their behavior. Lawsuits like this will make law schools quickly rethink how they promote their programs.

Complaint Summary

Anna Alaburda is suing Thomas Jefferson School of Law (TJSL) of San Diego, California. She alleges five causes of action in the Superior Court or the State of California for the County of San Diego. This class action suit was filed on May 26, 2011 by the class attorneys, Brian Procel and Vinay Kohli from Miller Barondess, LLP. TJSL has 30 calendar days to respond. The case number is 37-2011-00091898-CU-FR-CTL.

Notable Quotes

• "For more than 15 years, TJSL has churned out law school graduates, many of whom have little or no hope of working as attorneys at any point in their careers."
• "TJSL's average student indebtedness, more than $135,000, is among the highest in the nation. And its bar passage is consistently lower than 50 percent, well below the average in California."
• "[D]uring a deep economic recession affecting the legal industry on a widespread basis, TJSL reports that the median salary of its graduates has remained constant between 2006 and 2011 (even though the average salary of attorneys nationwide has seen a dramatic decline in recent years)."
• "Prospective students are led to believe that they will be hired as full time attorneys when they graduate, even though that is frequently not the case."
• "Plaintiff has been unable to secure a full time job as an attorney that pays more than non-legal jobs that are available to her, even though she graduated with honors from TJSL. Plaintiff would not have attended TJSL and incurred more than $150,000 in school loans if she knew the truth about her job prospects upon graduation."
• "At the end of the day, TJSL is more concerned with raking in millions of dollars in tuition and fees than educating and training its students. The disservice TJSL is doing to its students and society generally is readily apparent. Many TJSL graduates will never be offered work as attorneys or otherwise be in a position to profit from their law school education. And they will be forced to repay hundreds of thousands of dollars in school loans that are nearly impossible to discharge, even in bankruptcy."
• "Richard Matasar, Dean of New York Law School, assailed law schools for ‘exploiting' students by taking their money knowing that the odds of obtaining a high-paying job in the legal field is a ‘lottery shot.'"
• "Notwithstanding the economic recession that has crippled the job market for lawyers in the past years, TJSL has embarked on a campaign to expand its student body. Within the last three years (in the middle of the recession), TJSL increased its enrollment by 17 percent, with more than 680 students enrolled in 2011 (up from 580 students in 2008)."

COA #1: Unfair Business Practices

Business & Professions Code § 17200 et seq.

The Unfair Competition Law ("UCL") prohibits "unfair competition," which is defined by Business and Professions Code section 17200 as including "any unlawful, unfair or fraudulent business act or practice. . . ." . . .

The material misrepresentations and acts of concealment by TJSL are unlawful, unfair and fraudulent business practices prohibited by the UCL.

The harm to Plaintiff and the Class outweighs the utility of TJSL's practices.

TJSL's deceptive conduct has misled the public in the past and will continue to mislead the public in the future. TJSL's practices constitute a fraudulent business practice within the meaning of the UCL.

COA #2: Violation of the False Advertising Act

Business & Professions Code § 17500 et seq.

The False Advertising Act makes it is unlawful to "make or disseminate or cause to be made or disseminated before the public [a statement] which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading" with the intent to "induce the public to enter into any obligation relating thereto." Such statements include statements made through "any advertising device," including "over the Internet."

. . .

TJSL violated Business & Professions Code section 17500 et seq. by making or disseminating or causing to be made or disseminated false and misleading statements in U.S. News & World Report's "Best Graduate Schools" publication, on its website, and in its marketing brochures. These misleading statements concerned post-graduation employment statistics, among others. These false and misleading statements were made with the intent to induce the general public, including Plaintiff and the Class, to enroll at TJSL.

COA #3: Intentional Fraud

As part of its fraudulent marketing program, TJSL engaged in a pattern and practice of knowingly and intentionally making numerous false representations of material fact, and material omissions, with the intent to deceive and/or induce reliance by Plaintiff and the Class.

Plaintiff and the Class did in fact justifiably rely on these misrepresentations and omissions, resulting in substantial damage to Plaintiff and the Class. Specifically, Plaintiff reviewed and relied on the post-graduation employment statistics reflected in the 2003 U.S. News & World Report "Best Graduate Schools" edition, among others, before deciding to enroll at TJSL. Plaintiff relied on subsequent editions of U.S. News & World Report "Best Graduate Schools" in deciding to continue with her studies at TJSL.

TJSL induced Plaintiff and the Class to enroll at TJSL by making one or more, or in many cases all, of the following false and fraudulent misrepresentations of fact to Plaintiff and the Class:

 (a) that between 72 and 92 percent of TJSL graduates would find work as full time attorneys; and
 (b) that between 72 and 92 percent of TJSL graduates would find work in the legal industry.

TJSL also induced Plaintiff and the Class to enroll by making the following uniform false and fraudulent misrepresentations regarding its employment statistics to U.S. World News & Report, knowing that U.S. World News & Report would repeat the false and misleading information and that Plaintiff and the Class would rely on and act on it:

 (a) in the 2003 edition of U.S. World News & Report, 80.1 percent of TJSL students were also employed within nine months of graduation;
 (b) in the 2004 edition of U.S. World News & Report, 80.1 percent of TJSL students were employed within nine months of graduation;
 (c) in the 2005 edition of U.S. World News & Report, 56.4 percent of TJSL students were employed within nine months of graduation;
 (d) in the 2006 edition of U.S. World News & Report, 77.0 percent of TJSL students were employed within nine months of graduation;
 (e) in the 2007 edition of U.S. World News & Report, 82.9 percent of TJSL students were employed within nine months of graduation;
 (f) in the 2008 edition of U.S. World News & Report, 64.7 percent of TJSL students were employed within nine months of graduation; and
 (g) in the 2009 edition of U.S. World News & Report, 80.0 percent of TJSL students were employed within nine months of graduation;
 (h) in the 2010 edition of U.S. World News & Report, 86.7 percent of TJSL students were employed within nine months of graduation;
 (i) in the 2011 edition of U.S. World News & Report, 92.1 percent of TJSL students were employed within nine months of graduation; and
 (j) in the 2012 edition of U.S. World News & Report, 72.7 percent of TJSL students were employed within nine months of graduation.

Plaintiff reasonably relied on the 2003 edition of U.S. World News & World Report "Best Graduates Schools," among others, in deciding whether to enroll at TJSL.

In addition, Plaintiff and the Class have reasonably relied on consumer information located on TJSL's school website, including, but not limited to the following representation made by TJSL:

 (a) 86.4 percent of law students from TJSL's Class of 2008 are employed;
 (b) 84.7 percent of law students from TJSL's Class of 2009 are employed; and
 (c) Although TJSL's website currently contains information for 2008 and 2009 exclusively, the website contained similarly false and inaccurate information in previous years as well.

Plaintiff continued to rely on subsequent editions of U.S. News & World Report "Best Graduate Schools" in deciding to continue with her studies at TJSL, including those specified in [the] Paragraph [], above.

The foregoing statistics were false, misleading, and intentionally designed to deceive all who read them.

The representations set forth above were part of a common scheme or plan and pattern or practice conceived and executed by TJSL over the course of the entire statutory period.

TJSL knew that these misrepresentations were false when made, and made them with the intent to induce Plaintiffs and the Class to rely upon them.

In addition, TJSL occupied a fiduciary position as educators, and owed a heightened duty to Plaintiffs and the Class to act in good faith and with full candor and honesty. Plaintiff is also informed and believes that many of the staff and faculty members of TJSL are attorneys and/or members of the California State Bar and therefore have ethical responsibilities as to students at TJSL. TJSL breached these fiduciary duties and duties of good faith, candor, and disclosure by omitting to disclose material facts alleged above to Plaintiff and the Class.

Plaintiff and the Class were, at all relevant times, ignorant of the true facts. Plaintiff and the Class only discovered that TJSL had a policy and practice of misrepresenting its post-graduation employment statistics on or after January 2011 when the New York Times published an article disclosing TJSL's fraudulent practices.

COA #4: Violation of the Consumer Legal Remedies Act

California Civil Code § 1750 et seq.,

Plaintiff is entitled to enjoin TJSL's wrongful practices by reason of TJSL's unlawful, unfair, and/or deceptive acts and practices.

The Consumer Legal Remedies Act prohibits unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale of goods and services.

TJSL violated the Consumer Legal Remedies Act by misrepresenting to Plaintiff and members of the Class TJSL's post-graduation employment rates.

COA #5: Negligent Misrepresentation

TJSL made uniform and identical material written representations regarding students' post-graduation employment rates. TJSL also omitted to disclose the material facts alleged herein. When TJSL made these representations and omissions, TJSL had no reasonable grounds for believing them to be true.

Relief Sought

• Compensatory damages believed to be in excess of $50,000,000.
• Restitution believed to be in excess of $50,000,000.
• Disgorgement of all profits obtained by TJSL as a result of its unfair and fraudulant practices.
• Punitive damages.
• Injunctive relief to enjoin TJSL from continuing its unlawful practices.
• Attorneys' fees.
• Prejudgment interest.