PHILADELPHIA – The U.S. Court of Appeals for the Third Circuit recently backed the rejection of class
certification in a lawsuit filed over allegations that Widener University School of Law purposely overstated
its graduates’ employments status.
The plaintiffs’ tried to make a case that
the alleged misrepresentation resulted in them paying an inflated tuition rate,
which would be in violation of New Jersey and Delaware consumer fraud statutes.
The denial mainly centered on damages as the plaintiffs
claimed they could show, on a class-wide basis, an estimate of the amount of tuition that was inflated as a result of false statistics provided by the
The district court still denied class certification because it found
the plaintiffs could not show the damages with standard
evidence in light of the fact students' employment outcomes varied.
“Even where plaintiffs are not required to prove that all
class members relied on a defendant's alleged misrepresentations, the case
highlights the difficulty plaintiffs may face proving ascertainable loss on a
class-wide basis in the consumer fraud context,” Carlton
associate Christine Stoddard told Legal Newsline.
the Third Circuit’s rejection of plaintiffs’ argument that the district court
effectively turned a class certification decision into a ruling on the merits
by closely scrutinizing their proof of damages affirms that seriousness with
which courts take the Supreme Court’s mandate to conduct a rigorous analysis of
Rule 23’s requirements before certifying a class, even when this analysis
overlaps with the merits.”
It turns out cases like this one aren’t that uncommon.
According to Stoddard, a wave of similar cases began emerging in 2011. At least 15 cases have reached a resolution.
lawsuits that have been brought nationwide occurred in states like Michigan,
Illinois, New York and Florida. Stoddard said plaintiffs in these cases rely on
allegations like the ones brought up in Widener's case.
Schools are alleged to have published fraudulent statistics that misled students about
their future employment prospects. None of these cases found much success - some were dropped after
class certification was denied while others continued on individually and
resulted in dismissal.
“Although plaintiffs have not found success in the courts,
the cases have had some impact,” Stoddard said. “The American Bar Association
has revised its requirements to provide greater transparency in such
In the Widener case, once the plaintiffs
couldn’t show proof of a loss based on Widener’s alleged misrepresentation, the Third
Circuit panel had no choice to affirm the court’s holding that individual
issues would predominate and that class could not be certified.
From here, Widener law students can try an individual
lawsuit, but their chances for success won’t be much greater, according to
Stoddard. The same goes for an appeal to the U.S. Supreme Court.
“Of the tuition lawsuits that continued individually after
courts refused to certify the class, nearly all were dismissed before reaching
trial, courts finding the plaintiffs were sophisticated consumers who had not been misled,” she said.
“It seems unlikely the Supreme Court would grant a petition
to hear the case — particularly given the lack of a circuit split of authority on