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From Antitrust Law Daily, July 30, 2013

Allegations that law school misrepresented graduates’ employment statistics did not state consumer protection law claims

By Jody Coultas, J.D.

Graduates of Thomas M. Cooley Law School could not state Michigan Consumer Protection Act (CPA) claims against the law school for allegedly disseminating false employment statistics that misled students into deciding to attend Cooley, the U.S. Court of Appeals in Cincinnati has held (MacDonald v. Thomas M. Cooley Law School, July 30, 2013, Martin, B.).

The graduates alleged that they enrolled at Cooley in order to obtain full-time employment in the legal sector, and relied on employment reports and salary survey data provided on the Cooley website and to prospective and current students. The data allegedly misrepresented the percentage of graduates employed and the average starting salary of all graduates.

The federal district court in Grand Rapids, Michigan held that the CPA did not apply to the purchase of a legal education to attain employment because the graduates attended law school for a business purpose—“to prospectively better themselves and their personal circumstances through the attainment of full-time employment in the legal sector.” The graduates appealed and argued that the district court impermissibly created an exception to the CPA for any purchase whose object is to make money or find or maintain employment.

The CPA prohibits unfair, unconscionable, or deceptive acts in the conduct of trade or commerce. Trade or commerce is the conduct of a business providing goods, property, or service primarily for personal, family, or household purposes.

Because the graduates bought their legal education for a business purpose, the court held that the CPA did not apply to the claims. The graduates did not obtain a legal education from Cooley to merely better themselves personally, but to obtain a lucrative job. Had the graduates alleged that they attended Cooley to get a legal education with no intention of using it to make money, then the district court might have erred.

The court also held that one of the statistics on which the graduates relied was objectively true and that their reliance on the statistics was unreasonable. Reliance on the percentage of graduates employed to mean “percentage of graduates employed in full-time legal positions” was not reasonable because basic reasoning would inform a reasonable person that the employment statistic includes all employed graduates, not just those who obtained or started full-time legal positions. It was also unreasonable for the graduates to rely on the statistic for average starting salary for all graduates because the statistics expressly contradicted other statements in report, showing that the report itself was based on data from those who completed the surveys.

The cases are Nos. 12-2066/2130.

Attorneys: Jesse Strauss (Strauss Law PLLC) for John T. MacDonald. Michael P. Coakley (Miller Canfield, Paddock and Stone, P.L.C.) for Thomas M. Cooley Law School.

Companies: Thomas M. Cooley Law School

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