A threatened wave of class actions against American law schools became a reality last week after plaintiffs' lawyers sued a dozen more schools over their allegedly misleading use of salary and employment data. But this trend in "consumer protection" is potentially damaging, not only to U.S. law schools, but to higher education in general, said two attorneys for the national law firm LeClairRyan.

"If the goal of these suits is securing transparency on jobs data, then the plaintiffs and their counsel are going about this in entirely the wrong way," said veteran class action defense attorney  Michael Haratz, a Newark-based partner in LeClairRyan's Business Litigation team.  "While there is nothing wrong with working toward clear, consistent and coherent reporting standards, such matters are best addressed via the regulatory process—not by bending higher education to fit a consumerist paradigm more appropriate to a purchaser of traditional consumer goods."

The trend shows every sign of expanding to other institutions across the country, added Haratz. "According to a prominent legal journalist, for example, one of the plaintiffs' lawyers—someone who previously declared 2012 'the year of law school litigation'—hopes to sue up to 25 new schools every few months," he said.

The new complaints come in the wake of highly publicized class actions filed last year against Thomas M. Cooley Law School, New York Law School and Thomas Jefferson School of Law. The latest schools to be targeted reportedly are: Albany Law School, Brooklyn Law School, Hofstra Law School, Widener Law, Florida Coastal School of Law, Chicago-Kent College of Law, DePaul University College of Law, John Marshall Law School, California Western School of Law, Southwestern Law School, University of San Francisco School of Law, and Golden Gate University School of Law.

The complaints allege that U.S. law schools artificially boost enrollments by exaggerating or misrepresenting graduates' employment and salary statistics. "The problem with such litigation is that it runs contrary to the purpose and spirit underlying the class-action lawsuit as a vehicle for consumer redress," said Robert B. Smith a Boston-based LeClair Ryan partner and leader of the firm's Education Industry team. "Why? Because the consumerist paradigm does not fit higher education. Just as law degrees should not come with guarantees of 'gainful employment or your money back,' law students should not regard themselves as consumers entitled to same. After all, they are individuals with varying degrees of talent, motivation, discipline and intelligence. Their futures are their own responsibilities."  

About LeClairRyan

As a trusted advisor, LeClairRyan provides business counsel and client representation in corporate law and litigation. In this role, the firm applies its knowledge, insight and skill to help clients achieve their business objectives while managing and minimizing their legal risks, difficulties and expenses. With offices in California, Connecticut, Massachusetts, Michigan, New Jersey, New York, Pennsylvania, Virginia and Washington, D.C., the firm has approximately 350 attorneys representing a wide variety of clients throughout the nation. 

www.leclairryan.com.

Securities class action filings in Canada reached their highest level to date in 2011 with 15 new filings, according to NERA Economic Consulting’s annual report, Trends In Canadian Securities Class Actions: 2011 Update. The previous high was 12 filings in 2008.

Driving this increase in filings are so called “Bill 198” cases, which are those involving claims in respect of an issuer’s continuous disclosure obligations pursuant to PartXXIII.1 of the Ontario Securities Act (OSA) and analogous sections of the other provincial securities acts. Nine of the 15 cases filed in 2011 were Bill 198 cases, compared to the seven filed in 2010. A total of 35 Bill 198 cases have been filed since the new provisions came into force in 2005. Of these, 24 remain unresolved, 10 have settled, and one has been dismissed.

“The uptick in securities class actions filings observed since 2008 is clearly not a transient phenomenon,” said NERA Senior Vice President and Trends co-author Mark Berenblut. “This trend has been driven by filings of Bill 198 cases, which account for more than two-thirds of the cases filed between 2008 and 2011.”

“This upward trend seems likely to continue at least through 2012. Several factors may influence the number of filings and the size of settlements in the future, including future rulings in leave applications, certification motions, and any trial judgments, as well as the evolving landscape of US class actions involving foreign companies and investors following the US Supreme Court decision in Morrison,” added NERA Vice President and Trends co-author Brad Heys.

Filings against Chinese Companies

Three of the new filings during 2011 were made against Chinese companies whose shares trade on the TSX or TSX Venture Exchange. These filings are a reflection of one of the major trends driving class action filings in the United States last year. The filings in Canada include the case against Sino-Forest—one of the highest-profile suits brought against Chinese companies on either side of the border.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For nearly half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

The amulet and mask were a 13-year-old boy's virtual possessions in an online fantasy game. In the real world, he was beaten and threatened with a knife to give them up.

The Dutch Supreme Court on Tuesday upheld the theft conviction of a youth who stole another boy's possessions in the popular online fantasy game RuneScape. Judges ordered the offender to perform 144 hours of community service.

Only a handful of such cases have been heard in the world, and they have reached varying conclusions about the legal status of "virtual goods" — and whether stealing them is real-world theft.

The suspect's lawyer had argued the amulet and mask "were neither tangible nor material and, unlike for example electricity, had no economic value."

But the Netherlands' highest court said the virtual objects had an intrinsic value to the 13-year-old gamer because of "the time and energy he invested" in winning them while playing the game.

The court did not release the offender's name, only his year of birth — 1992. It said he and another youth beat and kicked the boy and threatened him with a knife until he logged into RuneScape and dropped the objects in 2007.

One of the thieves, who was also playing the game, was then able to pick up the items, making them his virtual property. Both were convicted by a lower court in 2009, but only one of them had appealed to the Supreme Court.