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California Federal Court Allows Fraud Suit Against DeVry University by Former Students to Proceed As Trump Administration Dismantles Oversight of For-Profit Colleges
Austin, TX (December 18, 2019) —On Dec. 16, U.S. District Judge Jeffrey White of the Northern District of California issued his ruling on a motion to dismiss a lawsuit brought against DeVry University and its parent company, Adtalem Global Education. The for-profit college challenged the viability of a mass action filed in Oakland federal court by 102 graduates of DeVry.
In his ruling, Judge White allowed most of the claims asserted by the former students against DeVry and its parent company, Adtalem Global Education, Inc. to proceed.
The DeVry graduates allege that between 2008 and 2016, DeVry engaged in deceptive marketing practices to lure prospective students to enroll and incur significant student loan debt. According to the lawsuit, Devry’s advertising severely inflated the success rate of job placements and earnings of graduates through an aggressive marketing scheme grounded on deceptive data and flawed methodologies. For instance, DeVry’s deceptive marketing campaign falsely asserted that 90% of DeVry graduates found employment in their field of study within six months of graduation. The case alleges that internal DeVry documents reveal the employment rate of graduates is significantly lower.
In granting in part and denying in part the dismissal motion, Judge White upheld the former students’ claims that DeVry’s marketing practices constituted acts of fraud by misrepresentation and concealment, negligent misrepresentation, violations of the California Consumer Legal Remedies Act, violations of the Unfair Competition Law, False Advertising and may give rise to a claim for Exemplary Damages.
The group of DeVry California graduates are represented by John Fabry and Luis Muñoz of the Carlson Law Firm, P.C.
Titled the We Major In Careers campaign, the former students allege that DeVry’s deceptive ads were aggressively disseminated to induce prospective students to enroll at DeVry, through various media outlets, including television commercials, websites, YouTube videos, marketing brochures, print advertisements, radio ads and in person by DeVry recruiters and admissions counselors. The campaign specifically targeted students from low-income and minority communities.
In his ruling, Judge White made clear that the former DeVry students have successfully alleged that, “Defendants spent hundreds of millions of dollars to create a widespread multimedia advertising ad campaign designed to work in conjunction with in-person or telephone meetings with representatives at DeVry . . . [which] conveyed a consistent message regarding DeVry graduates’ ability to obtain employment in their chosen career field within six months of graduation.”
In fact, the court found that “Plaintiffs provide multiple factual sources to support their claim that the representations in the advertisement campaign and by individual DeVry employees were false” including a two-year investigation conducted by the Federal Trade Commission, which uncovered over 2 million documents supporting these fraud claims; and investigations by the Department of Education and the attorneys general of New York and Massachusetts, among others.
The case now proceeds in the wake of the Trump Administration’s active dismantling of regulations aimed at providing oversight of for-profit schools such as DeVry.
“Education is supposed to open doors and serve as the great social equalizer in America. Instead of improving their lives by earning a degree from DeVry, these students are now worse off, with massive student loan debts and a degree of little value,” said John Fabry, the lead attorney on the case. “Without any effective regulation of deceptive marketing by for-profit schools, we must turn to the courts for a remedy. We are pleased that the court, in this case, has rejected DeVry’s attempt to have the case thrown out and can now proceed on the merits of the case.”
The California case against DeVry University is Civil Action No. 19-cv-04079-JSW; Maria Alvarez, et al. v. Adtalem Global Education, Inc. and DeVry University, Inc.; In the United States District Court, Northern District of California, Oakland Division.
A Texas federal court has recently recommended that a similar case filed by a group of 108 DeVry Texas graduates also be allowed to proceed in San Antonio federal court. The case makes identical factual allegations underpinning fraud claims against DeVry and Adtalem for their deceptive marketing scheme. The Texas case is No. SA-18-CV-00082-JKP; Luis Rangel, et al. v. Adtalem Global Education, Inc. and DeVry University, Inc.; In the United States District Court, Western District of Texas, San Antonio Division.
About The Carlson Law Firm:
The Carlson Law Firm is a Texas-based national law firm committed to providing exceptional legal services in the areas of personal injury, medical malpractice, dangerous drugs and defective products, mass torts, bankruptcy, family law, criminal defense, military criminal defense, nursing home abuse and consumer protection. The Carlson Law Firm has been successfully representing clients nationwide for over 40 years with 12 offices all over Texas. We Care. We Can Help.
ATTORNEYS JOHN FABRY AND LUIS MUÑOZ ARE AVAILABLE FOR COMMENT:
To schedule an interview, contact Kazia Conway at 512-671-7277