In a March 21, 2012 decision by Justice Schweitzer, the court dismissed a complaint brought by graduates of New York Law School (the “School”), all of whom attended and graduated immediately before or during the global economic crisis, who claimed that they could not find full time employment because their degree from the School was less valuable, because they relied on the School’s purportedly false and misleading marketing information regarding the employment and salaries of its graduates. In dismissing the cause of action for violation of NY General Business Law (“GBL”) § 349, the court rejected the School’s “complete defense” under GBL § 349(d), that its marketing employment information complied with the regulations approved by the American Bar Association, on the grounds that the specific regulations with which the School complied have not been interpreted by any governmental agency, but rather, only by a private, self-regulatory organization which does not fall within GBL § 349(d).
However, the court dismissed the GBL § 349, fraud, and negligent misrepresentation claims upon finding that: (i) the School’s employment and salary statistics were not misleading in a material way because the School’s marketing materials clearly identified the percentage of graduates on which the data was based and did not represent that it was based on all graduates, as the plaintiffs’ alleged, and (ii) by definition, college graduates are “a sophisticated subset of education consumers” who were able to sift through data and weigh alternatives before deciding where to attend law school. The court specifically identified many other sources of information, which the plaintiffs could have considered before opting to attend the School. The court further noted that it should have been no surprise to these particular consumers that the most lucrative jobs were frequently associated with having attended a high ranking law school, and the plaintiffs specifically characterized the School as having a “lackluster ranking and reputation.” The court concluded that the School’s marketing statistics and statements could not have been misleading to reasonable consumers given the impact the global economic crisis had on the legal industry, financial resources, and the other purposes for obtaining a law degree. Nor, the court found, was it reasonable for the plaintiffs to rely solely on two sentences in the School’s marketing materials, specifically because the plaintiffs had the ability to consult those other information sources.
The court also found that the plaintiffs failed to allege any actual injury they sustained as a result of the purportedly misleading information, noting that the plaintiffs did no more than ask the court to accept as true, their allegation that a law degree from the School is worth less than what the School represented it to be. Turning to the First Department’s decision in Mihalakis v Cabrini Medical Center, which presented a similar claim by a medical student, the court adhered the general rule, that it would not speculate on the “true value” of the education received, The court again noting that the economic crisis could not be ignored, as the resulting layoffs and decreased salaries for starting associates showed the speculative nature of the damages.
Gomez-Jimenez v New York Law School, Sup Ct NY County, March 21, 20012, Schweitzer, J, Index No. 652226/11