Byte of Prevention Blog

by Jay Reeves |

Charlotte Law Students Sue For $5 Million

gold cap and diplomaTroubles continue to mount for the embattled Charlotte School of Law.

The ABA has placed the school on probation. The U.S. Department of Education (DOE) has slammed it for “dishonest” practices and cut off student financial aid. And students have been left angry, confused and anxious about their future.

Meanwhile, two students have filed a $5 million class action lawsuit against CSL and its parent company, Infilaw.

The complaint, which was filed in U.S. District Court for the Western District of North Carolina, alleges the school has engaged in misrepresentation, unjust enrichment, breach of fiduciary duty and constructive fraud.

“Defendants maintained a relationship of trust and confidence with plaintiffs and the plaintiff class. Defendants took advantage of their position of trust, and made substantial misrepresentations to current and prospective students, in order to realize financial benefit from the tuition and fees paid by current and prospective students,” according to the complaint.

The putative class action was brought soon after the DOE dropped the law school from its federal student loan plan in December 2016.

ABA Probation is the Spark

Warning clouds had been gathering for some time. The school’s high student drop-out rate and low bar-passage numbers have come under increasing fire. Then in February 2016 – and again in July 2016 – the ABA dropped the hammer by telling the school it was out of compliance with accreditation standards and being placed on probation.

The standards in question include 301(a) – which requires law schools to maintain a legal education program that prepares students to be lawyers, and 501(a) and (b) - which cover admissions policies and practices. CSL appealed the ABA finding, which was upheld in October.

“The ABA repeatedly found that the Charlotte School of Law does not prepare students for participation in the legal profession,” says this DOE press release. “Yet CSL continuously misrepresented itself to current and prospective students as hitting the mark. CSL’s actions were misleading and dishonest. We can no longer allow them continued access to federal student aid.”

The DOE findings are found here.

Students Left in Limbo

One of the plaintiffs says she would not have returned to school in 2016 if she had known about the accreditation problems. The other plaintiff says he considered applying to other schools last summer but decided against it, in part because of CSL’s “continued representations” regarding accreditation and compliance.

They are seeking compensatory and punitive damages for themselves and other CSL students similarly situated.

Nearly 100 of their fellow students have signed an online petition directed at CSL administrators that makes four specific demands, according to the Charlotte Business Journal:

  • Grades for students be submitted before or on January 1 so that students who wish to transfer will be able to do so.
  • All students on track to graduate in May 2017 be allowed to finish without private or non-governmental loans.
  • All normal expenses incurred by continuing students for the Spring 2017 semester be provided for jointly/separately by Charlotte School of Law, Infilaw, and/or Sterling Capital.
  • Restructuring of leadership within for-profit’s administration, beginning with individuals who have “consistently had the final word regarding matters that have in recent years fell under the microscope of the ABA and the Department of Education.”

“We keep being told that the administration was so surprised,” said one student. “Then you read what the government released. How can you possibly have been surprised?”

Sources:

 

About the Author

Jay Reeves

jay.reeves@ymail.com | 919-619-2441

Jay Reeves practiced law in North Carolina and South Carolina. Over the course of his 35-year career he was a solo practitioner, corporate lawyer, legal editor, Legal Aid staff attorney and insurance risk manager. Today he helps lawyers and firms put more mojo in their practice through marketing, work-life balance and reclaiming passion for what they do. He is available for consultations, retreats and presentations.

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