MacDonald v. Thomas M. Cooley Law Sch., s. 12–2066

• Decision Date: 30 July 2013
• Docket Number: Nos. 12–2066,12–2130.,s. 12–2066
• Citation: 724 F.3d 654
• Parties: John T. MacDONALD, Jr., Chelsea A. Pejic, Shawn Haff, Steven Baron, Dimple Kumar, Carrie Kalbfleisch, Anders Christensen, Danny Wakefield, Dan Guinn, Benjamin Forsgren, Shane Hobbs, and Kevin Prince, on behalf of themselves and all others similarly situated, Plaintiffs–Appellants/Cross–Appellees, v. THOMAS M. COOLEY LAW SCHOOL, Defendant–Appellee/Cross–Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

724 F.3d 654

John T. MacDONALD, Jr., Chelsea A. Pejic, Shawn Haff, Steven Baron, Dimple Kumar, Carrie Kalbfleisch, Anders Christensen, Danny Wakefield, Dan Guinn, Benjamin Forsgren, Shane Hobbs, and Kevin Prince, on behalf of themselves and all others similarly situated, Plaintiffs–Appellants/Cross–Appellees,

v.THOMAS M. COOLEY LAW SCHOOL, Defendant–Appellee/Cross–Appellant.

Nos. 12–2066, 12–2130.

United States Court of Appeals, Sixth Circuit.

Argued: June 12, 2013.

Decided and Filed: July 30, 2013.

ARGUED:Jesse Strauss, Strauss Law PLLC, New York, New York, for Appellant/Cross–Appellee. Michael P. Coakley, Miller Canfield, Paddock and Stone, P.L.C., Detroit, Michigan, for Appellee/Cross–Appellant ON BRIEF:Jesse Strauss, Strauss Law PLLC, New York, New York, for Appellant/Cross–Appellee. Michael P. Coakley, Brad H. Sysol, Paul D. Hudson, Miller Canfield, Paddock and Stone, P.L.C., Detroit, Michigan, for Appellee/Cross–Appellant.

Before: MARTIN and COOK, Circuit Judges; GRAHAM, District Judge. ^*

OPINION

BOYCE F. MARTIN, JR., Circuit Judge.

The plaintiffs, twelve graduates of the Thomas M. Cooley Law School, sued their alma mater in district court, alleging that the school disseminated false employment statistics which misled them into deciding to attend Cooley. The graduates relied on these statistics as assurances that they would obtain full-time attorney jobs after graduating. But the statistics portrayed their post-graduation employment prospects as far more sanguine than they turned out to be. After graduation, the Cooley graduates did not secure the kind of employment the statistics advertised—or in some cases any employment at all. They claimed that, had they known their true—dismal—employment prospects, they would not have attended Cooley—or would have paid less tuition. Because their Cooley degrees turned out not to be worth what Cooley advertised them to be, they have sought, among other relief, partial reimbursement of tuition, which they have estimated for the class would be $300,000,000. But because the Michigan Consumer Protection Act does not apply to this case's facts, because the graduates' complaint shows that one of the statistics on which they relied was objectively true, and because their reliance on the statistics was unreasonable, we AFFIRM the district court's judgment dismissing their complaint for failure to state any claim upon which it could grant relief.

From the prolix amended complaint (sixty-six pages with one-hundred and twenty-six paragraphs) we take the following facts, which we must regard as true. City of Columbus, Ohio v. Hotels.com, L.P., 693 F.3d 642, 648 (6th Cir.2012) (citing Courie v. Alcoa Wheel & Forged Prods., 577 F.3d 625, 629 (6th Cir.2009)). We also derive the facts from the exhibits attached to the complaint, because the complaint refers to them and they are “central to the claims” in it. Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir.2008) (citing Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir.2001)).

The Thomas M. Cooley Law School, a non-profit corporation accredited by the American Bar Association, has its main campus in Lansing, Michigan, with satellite campuses in the Michigan cities of Ann Arbor, Auburn Hills, and Grand Rapids. Cooley enrolls more law students than any other law school in the country: for the 2010–2011 academic year, the school enrolled approximately 4,000 students, eighty-two percent of whom attended part-time. On August 8, 2011, Cooley announced plans to open a satellite campus, in Riverview, Florida, near Tampa Bay, to accommodate another 700 law students.

Cooley charges full-time students tuition of $36,750 per year. With room, board, and living expenses, the total cost to attend Cooley Law is estimated to be $52,000 per year. For the fiscal year 2009, Cooley's total operating revenue was $117,577,686, which included $108,979,296 in tuition. Its total operating costs were $97,196,760, including $47,158,197 that Cooley paid its employees. Cooley paid its Dean, Don LeDuc, $548,047 in total compensation during fiscal year 2008, and it paid him $523,213 during fiscal year 2009, making LeDuc one of the highest paid law-school deans in the country. Cooley has also continued to pay its former Dean and founder, Thomas Brennan, $368,581 in 2008, and $370,245 in 2009. Cooley pays its other eleven highest-paid employees amounts ranging from between $200,225 to $249,999.

According to the amended complaint, U.S. News & World Report reported that Cooley has the lowest admissions standards of any accredited or provisionally accredited laws school in the country. In 2010, the school accepted eighty-three percent of all applicants, an acceptance rate nearly fifteen percentage points greater than the second least-selective law school, Phoenix School of Law. In 2010, the mean Law School Admissions Test score for incoming students at Cooley was 146, and the mean undergraduate grade-point average was 2.99—both lows for all accredited and provisionally accredited law schools. Cooley also has low retention rates. For example, in 2008, almost thirty-two percent of the roughly 1,500 students who enrolled at Cooley failed to enter their second year, and ten percent of second-year students failed to continue into their third year. Some third-year students do not complete their degrees. In 2008, twenty-two third-year students, about three percent of the class, either failed or dropped out during the academic year.

The twelve plaintiffs in this case fared better, having graduated from Cooley between 2006–2010. Each individual did so, however, burdened with an average of $105,798 in student-loan debt, according to U.S. News & World Report.

The graduates averred that they decided to enroll at Cooley, or to continue to study there, “to prospectively better themselves and their personal circumstances through the attainment of full-time employment in the legal sector.” In making their decisions, the graduates relied on the “Thomas M. Cooley Law School Employment Report and Salary Survey” that Cooley provided on its website and to prospective and current students. The plaintiffs attached to the complaint, as exhibits numbered two through six, an Employment Report and Salary Survey for each of the graduating classes in 2004, 2005, 2006, 2009, and 2010.

Each Employment Report and Salary Survey purported to show the employment outcomes of Cooley graduates in a given class year by showing: the percentage of graduates employed, the average starting salary of graduates, and the percentages of graduates employed in various sectors—private practice, government, public interest, academic, judicial clerkship, and business—and the average starting salary in each sector. Cooley produced these statistics by sending out surveys to graduates in a given class, some of whom would complete the surveys and return them. For example, the responses of about eighty-three percent of the 2010 graduates provided the basis for the 2010 Employment Report and Salary Survey. Cooley has never audited nor verified the responses.

Cooley, according to the graduates, makes “two uniform, written misrepresentations” in each Employment Report and Salary Survey. The first supposed misrepresentation in each Employment Report is the “percentage of graduates employed” statistic. For example, the 2010 Employment Report states, next to the phrase “percentage of graduates employed” that seventy-six percent of its graduates were employed (within nine months of graduation). According to the 2010 Employment Report, fifty percent were employed in “private practice,” fifteen percent in “government,” two percent in “public interest,” three percent in “academic,” three percent in “judicial clerkship,” and eighteen percent in “business.”

The second alleged misrepresentation in each Employment Report is the “average starting salary of all graduates” statistic. For example, in the 2010 Employment Report, Cooley stated that the “average starting salary for all graduates” was “$54,796.”

The plaintiffs relied on these two supposed misrepresentations—the “percentage of graduates employed” and the “average starting salary of all graduates”—in deciding either to apply to Cooley or to remain enrolled there. These statistics, however, did not correspond with their actual employment prospects upon graduation.

Most of the plaintiffs had difficulty finding full-time, paying jobs as lawyers after graduating. Anders Christensen graduated from Cooley Law in 2010, passed the Utah Bar, and worked as a law clerk for a Utah law firm, where he is currently an associate. Carrie Kalbfleisch, who graduated in 2010, passed the Kentucky Bar and started her own law firm in Kentucky. After graduating in 2010, John T. MacDonald, Jr. passed the Michigan Bar, but could not find full-time, permanent legal employment and so was forced to open up his own law firm which he still operates. Shawn Haff, who also graduated in 2010, could not find full-time, permanent legal employment, and so he took temporary, contract assignments reviewing documents to make ends meet. He now owns and operates his own law firm in Michigan, where he is licensed to practice law. Dimple Kumar, who graduated in 2009, passed the New York Bar, but tried unsuccessfully for over nine months to find full-time, permanent legal employment. He was forced to take temporary, contract assignments reviewing documents to make ends meet, until he found full-time employment practicing landlord-tenant law. He currently owns and operates his own law firm. Dan Guinn, who also graduated in 2009, passed the Ohio Bar, but was also forced to take temporary, contract assignments reviewing documents to make ends meet. He now owns and operates his own law firm. Similarly, Kevin Prince, after graduating in 2009, passed the Michigan Bar, but was forced to take temporary, contract assignments reviewing documents to make ends meet, until finding full-time,...