Geoffrey Rapp (Toledo), Fraud on the Rankings, 74 Baylor L. Rev. 583 (2022):
The professional school Dean did not take the stand in his own defense, but character witnesses testified that he was a person of integrity. One witness said of the Dean, “I would trust him with my life, my children, my anything.” The Dean was “a ‘magnet, our inspiration,’” a “loyal friend” of “noble character,” and a beloved companion for “long walks on the water” involving “deep conversations . . . on books, movies and other topics.”
The prosecution’s witnesses painted a different view. The Dean “managed through fear and intimidation,” making staff members “tremble” and leaving them “downright scared.” The Dean directed staff members to take questionable positions in reporting data requested in external rankings by ordering staff members to submit inaccurate information about the program. In one case, when a staff member wrote to the Dean to express discomfort with a proposed rankings input submission, the Dean called the staff member in and told her not to send him emails “like this.”
The Dean felt pressure to improve and maintain rankings, as the University’s internal investigation concluded, and this contributed to the reporting of inaccurate information. The professional school viewed rankings as a “key priority” and embraced a “concerted, rankings-focused strategy.” Faculty had been alarmed even before the fraud was revealed that the school had “fostered the culture of pursuing higher rankings at all costs.”
The jury found the less flattering view of the Dean more persuasive. He was found guilty of wire fraud and conspiracy to commit wire fraud for his role in “a scheme that falsely boosted the school’s position on the much-revered lists published in U.S. News and World Report.” The Dean faces up to twenty-five years in prison.
While the case described in the preceding paragraphs arose in the context of a business school (Temple), the pressures on law school deans—feeding obsession with rankings—constitute one component of the classic “fraud triangle.” … Law schools, to date, have avoided the obligation to make large-scale settlements for fraud-related lawsuits, though they certainly faced their share of lawsuits from aggrieved graduates. …
The combination of pressure faced by deans to achieve rankings improvements and this insider and outsider criticism of law schools—some justified and some hysterical—laid the groundwork for a series of lawsuits against law schools accusing the schools of having engaged in outright fraud and deception to potential students. The thrust of most of these suits involved inflated or misleading employment statistics reported to the authors of external rankings and published by law schools.
Mostly, the lawsuits suffered a quick demise through the rejection of a request for class certification, dismissal of the lawsuits on the pleadings before discovery, and other such results. Only one went to trial, and judicial opinions have provided relatively limited guidance on the merits of the cases beyond that required to find a lack of sufficiency to proceed. …
This paper takes up a question not tested in depth in the litigation against law schools, but which could have become an issue had these cases had more merit—and may become an issue in regard to law schools or other ranked entities in the future. Does a plaintiff who has identified an actual misstatement by a higher education institution have to establish individual reliance in order to bring a claim? If so, that would effectively doom class action lawsuits based on fraud against educational providers.
Or, might the courts choose, as they once did to make private securities class actions a component of the public-private enforcement of the federal securities laws, to embrace a presumption of reliance for plaintiffs who relied not on individual deceptive disclosures but instead on the “integrity” of external rankings?
That is, should courts recognize a “fraud on the rankings” theory of reliance to support class action litigation against deceptive educational providers?
While scholars paid some attention to the law school litigation between 2011 and 2015, there has been relatively little analysis of the suits after their final resolution became clear. Perhaps scholars wanted to move on from the “crisis” in legal education (particularly as enrollment at most schools began to rocket up again in 2016–2021).50 Or perhaps scholars wanted to avoid having their own home law schools come to the attention of plaintiffs’ counsel who were “investigating” other potential defendants. That the lawsuits were unsuccessful doesn’t mean that they have nothing to teach us—about tort law, deception, rankings, and the responsibilities of those in higher education to those whose debt-financed tuition payments keep them in business.
