Gomez–Jimenez v. New York Law Sch.

• Court: New York Supreme Court
• Writing for the Court: MELVIN L. SCHWEITZER
• Citation: Gomez–Jimenez v. New York Law Sch., 279 Ed. Law Rep. 354, 943 N.Y.S.2d 834, 2012 N.Y. Slip Op. 22071 (N.Y. Sup. Ct. 2012)
• Decision Date: 21 March 2012
• Parties: Alexandra GOMEZ–JIMENEZ, Scott Tiedke, Katherine Cooper, Matthew Crawford, Geoffrey Corisdeo, Soline McLain, Renee Rivas, Gergana Miteva, and Chloe Giligan on behalf of themselves and all others similarly situated, Plaintiffs, v. NEW YORK LAW SCHOOL, and does 1–20, Defendants.

2012 N.Y. Slip Op. 22071

279 Ed. Law Rep. 354

943 N.Y.S.2d 834

Alexandra GOMEZ–JIMENEZ, Scott Tiedke, Katherine Cooper, Matthew Crawford, Geoffrey Corisdeo, Soline McLain, Renee Rivas, Gergana Miteva, and Chloe Giligan on behalf of themselves and all others similarly situated, Plaintiffs,

v.NEW YORK LAW SCHOOL, and does 1–20, Defendants.

Supreme Court, New York County, New York.

March 21, 2012.

David Anziska, Esq., Jesse Strauss, Esq., Frank Raimond, Esq., New York, for Plaintiff.

Michael J. Volpe, Esq., Venable LLP, New York, for Defendant.

MELVIN L. SCHWEITZER, J.

This is a motion to dismiss a complaint brought by nine graduates of New York Law School (NYLS) who allege that data published by their school pertaining to the school's graduates' employment and salaries is misleading and, in fact, fraudulent.¹ They assert that in having relied on this misleading information to make their decision to attend NYLS, they now find themselves in disadvantaged employment positions and, consequently, they seek damages equal to the difference between the alleged inflated tuition they paid because of the allegedly misleading statements and what they characterize as the “true value” of a NYLS degree, together with certain expenses they incurred.

Background

NYLS enrolls approximately 1,500 students. Tuition is $47,800 per annum. Amended Complaint, ¶ 10. According to plaintiffs, NYLS has been able to attract a large number of applicants and charge an expensive price for its educational services because the school has disseminated this misleading information about its graduates' employment profiles. Allegedly, the misleading information has caused prospective students to misjudge post-graduate employment prospects and commit to earning a NYLS degree which has less marketplace currency than they reasonably had expected. Plaintiffs allege that many of the school's working graduates in the legal sector hold part-time or temporary employment, paying barely enough to service the debt incurred to finance their law school tuition and expenses. Id., ¶¶ 3–5.

Plaintiff Alexandra Gomez–Jimenez attended NYLS between 2004–2007 and is currently a member in good standing of the New York Bar. After graduating in 2007, Ms. Gomez–Jimenez secured full-time, permanent employment in April 2008. However, in 2009 she decided to open her own firm and now “enjoys a thriving practice as an immigration attorney.” Id., ¶ 17.

Plaintiff Chloe Giligan attended NYLS between 2005–2008. Ms. Giligan used to be a member in good standing of the New York Bar “until she voluntarily assumed inactive status due to the fact that she was unable to obtain gainful employment in the legal industry[,]” despite being in the top 15 percent of her class. Since graduating from law school, Ms. Giligan first worked as a saleswoman in a department store and then as a legal secretary in a small law firm. Currently, she lives in England and does not practice law. Id., ¶ 25.

Plaintiffs Scott Tiedke and Gergana Miteva attended NYLS between 2006–2009 and are both currently members in good standing of the New York Bar. Since graduating from law school, Mr. Tiedke has worked as a legal compliance officer at an investment management firm, and Ms. Miteva worked as a contract attorney and has recently found permanent employment. Id., ¶¶ 18, 24.

Plaintiffs Katherine Cooper, Mathew Crawford, Geoffrey Corisdeo and Soline McLain attended NYLS between 2007–2010. Mrs. Cooper is currently a member in good standing of the New York Bar. Since graduating from law school, she was unable to find any type of legal position until August 2011 when she found temporary, contract work. Mr. Corisdeo is currently a member in good standing of both the New York and New Jersey Bars. He currently works as an associate at a New Jersey law firm. Both Mr. Crawford and Ms. McLain are currently waiting to be admitted to the New York Bar. Since graduating from law school, Mr. Crawford has been “unable to find a permanent position in the legal industry.” Ms. McLain was unable to find “steady employment” for seven months after graduation, despite being on NYLS Law Review, a Dean's Scholar and a John Marshall Harlan Scholar, and a member in good standing of the Louisiana Bar. Id., ¶¶ 19–22.

Plaintiff Renee Rivas attended NYLS between 2008–2011. Ms. Rivas took the New York Bar Exam in July 2011, and is currently working as a paralegal at a small Manhattan law firm. She is the only graduate of the nine plaintiffs to have chosen to enter NYLS in 2008, the year the Great Recession began, which according to the complaint, “decimated the legal industry.” Id., ¶¶ 23, 50. With the exception of Ms. Gomez–Jimenez who graduated before the Great Recession hit and is now in a “thriving” practice, the remaining seven plaintiffs all entered NYLS before the Great Recession and graduated right into it.

The allegedly misleading information was disseminated for the entering classes 2005–2010. Id., ¶¶ 17–25. According to the complaint, the NYLS data allegedly omitted facts which, in plaintiffs' view, would have given prospective students a more accurate picture of NYLS's post- graduation employment prospects. For example, plaintiffs allege the data consistently reported that approximately 90–92 percent of NYLS graduates secured employment within nine months of graduation, but did not report the percentage of graduates employed in part-time or temporary positions. According to plaintiffs, a graduate could be working part-time as a barista in Starbucks—or toiling away in any job—and be deemed employed in business,' although such employment is temporary and does not require a law degree. A contract attorney, without permanent employment, working in document review projects in a law firm, would be deemed employed in private law practice under the NYLS profile. Id., ¶¶ 4, 42.

The data allegedly inflated graduate mean salaries by reporting them based on a small, deliberately selected, intensely solicited, subset of graduates. The subset of graduates ranged from 22 to 26 percent, and the circumstances relating to its composition were not disclosed by NYLS. In two years, 2005 and 2006, NYLS did not report the percentage of graduates on which the compensation statistic was based at all. Id., ¶ 43.

Plaintiffs also recite, without any factual reference, a litany of additional allegedly false representations and omissions of material facts, including false employment rates, employment data which falsely gave the appearance that most graduates had secured full-time permanent employment for which a law degree was required, grossly inflated salaries, and false statements regarding the value of a NYLS degree. Plaintiffs claim the employment and salary data reported by NYLS were at odds with national legal employment statistics reported and made available to the public by the National Association for Law Placement (NALP) and with the reality of NYLS's ranking by the U.S. News & World Report ( US News ). Id., ¶¶ 4, 5.

According to plaintiffs, the data for the graduating classes 2005–2009 differed in critical respects from the class of 2010 data in that data for the former years reported the percentage of graduates employed after nine months but did not report the percentage of graduates who held positions which required or preferred a law degree, or were funded by a NYLS Fellowship Program. Also, in some cases the data for 2005–2009 gave the average salary for graduates working for law firms, thus allegedly implying that most of the employed graduates were, in fact, working for law firms.² The data pertaining to the NYLS class of 2010, on the other hand, was more detailed and was obtained from employment surveys responded to by its graduates. Id., ¶ 41. Plaintiffs allege NYLS reported that, based on a response rate of 95 percent of its 2010 class, approximately 92 percent of class members were employed nine months after graduation, 42 percent were working in private law practice, 27 percent in business, 17 percent in government, three percent in public interest, and three percent in both judicial clerkships and academia. Five percent were reported seeking employment and three percent were unemployed and not seeking employment. Five and one-half percent of employed graduates were reported as holding positions funded by a NYLS Fellowship Program, and approximately 80 percent of graduates were reported as holding positions that either required or preferred a law degree. Based on a response rate of 26 percent of its 2010 employed graduates, NYLS reported respective average salaries of $107,343 for those in private law practice, $86,667 for those in business and $56,910 for those in government. Id., ¶ 35.

Plaintiffs assert three causes of action. They allege that NYLS's actions (i) constitute unlawful, unfair, deceptive and fraudulent practices under N.Y. General Business Law (GBL) 349, (ii) are fraudulent in that NYLS disseminated information which contained numerous false representations and omissions of material facts, and (iii) constitute negligent misrepresentation. Id., ¶¶ 107–30.

Discussion

Standard of Review

NYLS's motion to dismiss is under CPLR 3211(a)(1) and (7). A CPLR 3211(a)(7) motion “must be denied if the factual allegations contained in the complaint constitute a cause of action cognizable at law.” Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 401 N.Y.S.2d 182, 372 N.E.2d 17 (1977). In considering a CPLR 3211(a)(7) motion, the court must accept plaintiffs' allegations as true and the complaint must be accorded “the benefit of every possible favorable inference.” CMMF, LLC v. J.P. Morgan Inv. Mgt. Inc., 78 A.D.3d 562, 565, 915 N.Y.S.2d 2 (1st Dept 2010) ( quoting Leon v. Martinez, 84 N.Y.2d 83, 87, 614 N.Y.S.2d 972, 638 N.E.2d 511 [1994] ). The CPLR 3211(a)(7) test is not whether the complaint states a cause of action, but whether plaintiffs have one. See Rovello v. Orofino Realty Co., 40 N.Y.2d 633, 634, 389 N.Y.S.2d 314, 357...