United States District Court, D. New Jersey
JOHN HARNISH, JUSTIN SCHLUTH, ROBERT KLEIN, ROBERT MACFADYEN, GREGORY EDMOND, AYLA O'BRIEN KRAVITZ, MEGAN SHAFRANSKI, CHRISTINA MARINAKIS, on behalf of themselves and all others similarly situated, Plaintiffs,
WIDENER UNIVERSITY SCHOOL OF LAW, and DOES 1-10., Defendants
For JOHN HARNISH, JUSTIN SCHLUTH, EDWARD GILSON, ROBERT KLEIN ROBERT MACFADYEN, on behalf of themselves and all others similarly situtated, GREGORY EMOND, AYLA O'BRIEN KRAVITZ, MEGAN SHAFRANSKI, CHRISTINA MARINAKIS, Plaintiffs: DAVID S. STONE, Stone & Magnanini LLP, SHORT HILLS, NJ.
For WIDENER UNIVERSITY SCHOOL OF LAW, Defendant: JAMES C. ORR, LEAD ATTORNEY, WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER, LLP, Florham Park, NJ; ERIC THOM EVANS, WILSON ELSER, FLORHAM PARK, NJ.
William H. Walls, Senior United States District Judge.
Defendant The Delaware Law School of Widener University, Inc. (" Widener" ) moves for dismissal of Plaintiffs' Amended Class Action Complaint (" Amended Complaint" ) pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiffs' Amended Complaint alleges Widener posted to its website, and disseminated to third-party law school evaluators, misleading and incomplete graduate employment rates in violation of New Jersey and Delaware Consumer Fraud Acts. The Court decides and denies this motion without oral argument under Federal Rule of Civil Procedure 78(b).
FACTUAL AND PROCEDURAL BACKGROUND
Widener Law School is an American Bar Association (" ABA" ) accredited law school
based in Wilmington, Delaware, with a satellite campus in Harrisburg, Pennsylvania. Am. Compl. ¶ 27. Widener's student admittance policies are among the least discriminating in the country and its acceptance rates are among the highest. Id. ¶ ¶ 27, 31. Its class sizes are large -- each year Widener enrolls approximately 1,600 students. Id. But not all enrolled students graduate. In 2008, 23 percent of the first year students failed to matriculate in their second year. Id. ¶ 31. Plaintiffs themselves describe Widener as a " lower tier" law school. Id. ¶ 48.
In the 2010-2011 academic year, Widener's tuition was $34,890 and room and board was approximately $20,000. Id. ¶ 32. The annual cost of attending Widener was approximately $55,000 per year, for a total of $165,000 over three years. Id. The average Widener law student graduates with $111,909 in debt. Id. ¶ 43.
Plaintiffs  are eight Widener Law School alumni who graduated between 2008 and 2011. Id. ¶ 1. To some degree or other, Plaintiffs claim completion of their Widener law degree did not result in satisfactory legal employment. As example, Plaintiff Justin Schluth is currently unemployed. Id. ¶ 18. Plaintiff Robert Klein works in a non-legal position with the federal government but " could not find a permanent position in the legal industry." Id. ¶ 20. Plaintiff Megan E. Shafranski found employment as a Chancery Judge Clerk, then " had difficulty finding full-time legal employment," but is now an attorney. She alleges her " salary . . . is not adequate to cover her debt obligations." Id. ¶ 23. Plaintiffs assert that " [a]ccording 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 difficulty." Id. ¶ 23 n. 1.
Under the Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d)(2), Plaintiffs filed an Amended Class Complaint, on behalf of themselves and those similarly situated, that generally alleges " common law fraud and related claims" against Widener. Id. ¶ ¶ 1, 14. The class consists of " [a]ll 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." Id. ¶ 5.
The crux of Plaintiffs' claims arises from Widener's marketing materials and reporting practices between 2005 and 2011. At an unspecified time, Widener's website stated " [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 Widener Law degrees to pursue successful, rewarding careers." Id. ¶ 3. And over the years, on its website page entitled " Employment Statistics and Trends," Id. Ex. B, Widener updated its employment information as follows:
a. " Graduates of the Class of 2004 had a 90% employment rate within nine months of graduation."
b. " Graduates of the Class of 2005 had a 90% employment rate within nine months of graduation."
c. " Graduates of the Class of 2007 had a 96% employment advanced degree
rate within nine months of graduation."
d. " Employment within nine months of graduation of over 91% for Class of 2008."
e. " Employment within nine months of graduation of over 92% for Class of 2009."
f. " Graduates of the Class of 2010 had a 93% employment/advanced degree rate within nine months of graduation."
Id. ¶ 35
To accumulate this employment data, Widener conducted surveys of its alumni. Id. ¶ 5. As example, in 2011, the survey inquired whether an alumnus was seeking work, his employment status, and if employed, whether the position was full-time or part-time, temporary or permanent, whether the job required a bar admission, or was J.D. preferred, and other questions regarding the specific type of law practiced. Id. Ex. A.
Plaintiffs claim that the employment statistics reported on Widener's website were misleading because Widener " did not disclose that its placement rate included full and part time legal, law-related and non-legal positions" and that " 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." Id. ¶ ¶ 36-37 (emphasis in original). Specifically, Plaintiffs allege the statistics were misleading because Widener " did not disclose that when a graduate responded, 'not seeking work,' WLS simply did not count the graduate" ; that Widener " would count as 'employed' a graduate who was only employed for a short period of time before the survey, but was likely unemployed" ; that Widener 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" ; and that Widener " did not disclose that a sizeable percentage of WLS graduates did not respond to the survey." Id. ¶ 36. In sum, Widener published and reported an aggregate employment rate but did not disclose the disaggregated data that it used to compile its rate.
In 2011, Widener modified its website to share more specific employment data. It now reads:
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).
Id. ¶ 47.
Plaintiffs additionally claim Widener misled students by " reporting its misleading placement rates and salary statistics to third parties such as U.S. News and the ABA." Id. ¶ 38. Plaintiffs allege Widener alone had " in its possession the information required to provide students with complete and accurate information about its job placement track record." Id. ¶ 34. The ABA reported employment rates for Widener as 86 percent for 2005, 82 percent for 2006, 84 percent for 2007, 90 percent for 2008 and 90 percent for 2009. Id.¶ 38. U.S. News reported employment rates for Widener as 83 percent for 2006, 88.5 percent for 2007, 91 percent for 2008, and 78 percent for 2009. Id. ¶ 39.
Plaintiffs deduce Widener's employment statistics " helped to artificially boost WLS's U.S. News ranking because this data constitutes 18 percent . . . of a law school's ranking." Id. ¶ 39. Plaintiffs explain this reporting was ...