IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS JONATHAN PHILLIPS, BRIAN LOKER, ADAM

SMESTAD, XAVIER HAILEY, BRENT DAVIDSON, SHELLYE TAYLOR, ALLISON LEARY, JAIME WASH, MADISON MULLADY, on behalf of themselves and all others similarly situated, Plaintiffs, v. De PAUL UNIVERSITY, a/k/a as De PAUL UNIVERSITY COLLEGE OF LAW, and DOES 1-20 Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Case No. 12 cv 01791

Hon. Milton Shadur

JURY TRIAL DEMANDED

FIRST AMENDED CLASS ACTION COMPLAINT Plaintiffs, Jonathan Phillips, Brian Loker, Adam Smestad, Xavier Hailey, Brent Davidson, Shellye Taylor, Allison Leary, Jaime Walsh, Madison Mullady, on behalf of

themselves and all others similarly situated (collectively Plaintiffs), by and through their attorneys allege and complain against Defendant De Paul University College Of Law (De Paul) and individual DOE Defendants (collectively Defendants) as follows: I. 1. INTRODUCTION

Plaintiffs bring this action to seek redress for actions, fraudulently or negligently,

committed by Defendants against them. 2. Plaintiffs assert claims: (i) For violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505 et seq.;

(ii) (iii)

For common law fraud, and For negligent misrepresentations. II. JURISDICTION AND VENUE

3.

The Illinois Court has jurisdiction over this action pursuant to 75 ILCS 5/2-

209(a)(1) because Defendants are headquartered in Illinois, transacted business and committed the alleged acts in Illinois. 4. Venue in Cook County, Illinois, is appropriate, because the circumstances giving

rise to this action occurred in whole or in part in Cook County, Illinois and because Defendants are doing, and at all relevant times have done, business in Cook County, Illinois. 5. This matter is currently in the United States District Court, because on March 12,

2012, Defendants filed a petition to remove this case from the Circuit Court of Cook County to this Court. 6. On April 4, 2012, Plaintiffs filed their objections to such removal on the grounds

that (a) the Notice of Removal is defective; and (b) there are additional grounds for remand. 7. Pending the resolution of the removal issue, Plaintiffs are filing this First

Amended Class Action Complaint (hereinafter, the Amended Complaint) pursuant to this Courts Order entered on March 14, 2012. III. A. 8. Plaintiffs Plaintiffs (hereinafter, Plaintiffs) are individuals who enrolled at De Paul PARTIES.

between 2003 and 2008 to obtain a Juris Doctorate (JD) degree, which is a prerequisite for the practice of law.

9.

Plaintiffs all paid thousands of dollars to De Paul in tuition and ancillary

expenses, and incurred other costs and expenses in attending De Paul. 10. As to Plaintiff Jonathan Phillips: (a) Jonathan Phillips (Phillips) enrolled at De Paul in August 2007 and

graduated with a JD degree in May 2010. He was admitted to the Illinois bar on November 4, 2010. (b) After graduation Phillips was unable to obtain full-time employment as a

lawyer. Phillips worked as a solo practitioner until, in 2012, Phillips joined the Shay Law Group as an associate. Phillips salary is far too low to service his student loan debt. (c) In choosing to enroll and continue to be enrolled at De Paul, rather than in

some other law school, a major factor for Phillips was the extent to which a JD degree from one law school or another would make it easier for him to find full-time employment as a lawyer after graduation. (d) In deciding to apply to, enroll and continue to be enrolled at De Paul,

Phillips relied on the Employment Information, hereinafter defined. (e) Had Phillips known that the Employment Information was incomplete,

false and materially misleading, Phillips would not have enrolled or continued to be enrolled at De Paul. (f) $150,000. 11. As to Plaintiff Brent Davidson: The current balance on Phillips law school student loans is approximately

(a)

Brent Davidson (Davidson) enrolled at De Paul in August 2006 and He was admitted to the Illinois bar in

graduated with a JD degree in May 2009. November 2009. (b)

After graduation Davidson was unable to obtain full-time or part-time

employment as a lawyer. (c) Instead, from May 2009 to December 2011, Davidson obtained a non-

lawyer position with the International Security and Biopolicy Institute. This position involved a salary sharing relationship with De Paul under which De Paul made financial contributions towards his salary. From January 2012 to the present, Mr. Davidson has worked as a non-lawyer contractor for the U.S. Health and Human Services Department. Davidsons salary is far too low to service his student loan debt. (d) In deciding to apply to, enroll and continue to be enrolled at De Paul,

Davidson relied on the Employment Information, hereinafter defined. (e) Had Davidson known that the Employment Information was incomplete,

false and materially misleading, Davidson would not have enrolled or continued to be enrolled at De Paul. (f) Davidson took out student loans of $160,000 to finance his law school

education. The current balance of those loans is $170,000. 12. (a) As to Plaintiff Xavier Hailey: Xavier Hailey (Hailey) enrolled at De Paul in August 2007 and

graduated with a JD degree in May 2010. He was admitted to the Illinois bar on November 4, 2010.

(b)

After graduation Hailey was unable to find full-time employment as a

lawyer. As a result, in December 2010 Hailey joined Special Counsel, Inc., a legal contract services firm providing temporary short-term positions to licensed attorneys. Since then and continuing to the present, Hailey has worked as a contract attorney on temporary short-term assignments. Haileys salary is far too low to service his student loan debt. (c) In choosing to enroll and continue to be enrolled at De Paul, rather than in

some other law school, a major factor for Hailey was the extent to which a JD degree from one law school or another would make it easier for him to find full-time employment as a lawyer after graduation. (d) In deciding to apply to, enroll and continue to be enrolled at De Paul,

Hailey relied on the Employment Information, hereinafter defined. (e) Had Hailey known that the Employment Information was incomplete,

false and materially misleading, Hailey would not have enrolled or continue to be enrolled at De Paul. (f) Hailey took out loans in the amount of $168,444 to pay his tuition at De

Paul. Due to his lack of steady employment, the balance on the loans has now grown to $202,564.24. 13. (a) As to Plaintiff Shellye Taylor: Shellye Taylor (Taylor) enrolled at De Paul in August 2006 and

graduated with a JD degree in May 2010. She was admitted to the Illinois bar on November 4, 2010.

(b)

After graduation Taylor was unable to find full-time employment as a

lawyer. Since graduation Taylor had worked as a contract attorney for several legal staffing agencies doing document review projects. She has also opened her own solo law practice. Taylors salary is far too low to service her student loan debt. (c) In choosing to enroll and continue to stay enrolled at De Paul, rather than

in some other law school, a major factor for Taylor was the extent to which a JD degree from one law school or another would make it easier for her to find full-time employment as a lawyer after graduation. (d) In deciding to apply to, enroll and continue to be enrolled at De Paul,

Taylor relied on the Employment Information, hereinafter defined. (e) Had Taylor known that the Employment Information was incomplete,

false and materially misleading, Taylor would not have enrolled or continued her enrollment at De Paul. (f) Taylor has in excess of $300,000 of debt from her law education and has

no reasonable prospect of paying that debt off in her lifetime. 14. (a) As to Plaintiff Allison Leary: Alison Leary (Leary) enrolled in De Paul in August 2007 and graduated

with a JD degree in May 2011. She was admitted to the Illinois bar on November 4, 2011. (b) After graduation Leary was unable to find full-time employment as a

lawyer. As a result, in December 2011 Leary joined Electric Cowboy, a company that runs country music themed nightclubs. She currently works as a waitress at Electric Cowboy, despite many attempts to find work as a lawyer. Leary earns exceedingly

modest wages in that position. Learys salary is far too low to service her student loan debt. (c) In choosing to enroll and stay enrolled in De Paul, rather than in some

other law school, a major factor for Leary was the extent to which a JD degree from one law school or another would make it easier for her to find full-time employment as a lawyer after graduation. (d) In deciding to apply to, enroll and continue to be enrolled at De Paul,

Leary relied on the Employment Information, hereinafter defined. (e) Had Leary known that the Employment Information was incomplete, false

and materially misleading, Leary would not have enrolled or continued her enrollment at De Paul. (f) 15. (a) Leary currently owes $77,000 on her law school loans. As to Plaintiff Adam Smestad: Adam Smestad (Smestad) enrolled in De Paul in August 2007 and

graduated with a JD degree in December 2009. He was admitted to the Illinois bar on November 4, 2010. (b) lawyer. After graduation Smestad was unable to find full-time employment as a

After he graduated from De Paul, Smestad worked in various temporary

assignments until March 2011 when he joined the Law Office of Daniel Goodman. Smestads current position is not full time and he remains under employed. Smestads salary is far too low to service his student loan debt. (c) In choosing to enroll and stay enrolled in De Paul, rather than in some

other law school, a major factor for Smestad was the extent to which a JD degree from

one law school or another would make it easier for him to find full-time employment as a lawyer after graduation. (d) In deciding to apply to, enroll and continue to be enrolled in De Paul,

Smestad relied on the Employment Information, hereinafter defined. (e) Had Smestad known that the Employment Information was incomplete,

false and materially misleading, Smestad would not have enrolled or continued his enrollment at De Paul. (f) The balance on Smestads law school loans is currently $150,000.

Smestad has no reasonable prospect of paying the principal due on his loans in his lifetime. 16. (a) As to Plaintiff Jaime Walsh: Jaime Walsh (Walsh) enrolled in De Paul in September 2003 and

graduated with a JD degree in May 2007. She was admitted to the Illinois bar in November 2007. (b) From February 2008 to October 2008, Walsh obtained an associate

position with Potestivo & Associates at a salary of $28,000 per year. She also worked part-time as a server at the Counter (a hamburger restaurant) from September 2008 to October 2009. From February 2009 to the present, she has worked at the North

American Derivatives Exchange at an annual salary of $40,000 per year. She has also earned income as a plasma donor at $20 per donation. Walshs salary is far too low to service his student loan debt. (c) In choosing to enroll and stay enrolled in De Paul, rather than in some

other law school, a major factor for Walsh was the extent to which a JD degree from one

law school or another would make it easier for her to find full-time employment as a lawyer after graduation. (d) In deciding to apply to, enroll and continue to be enrolled in De Paul,

Walsh relied on the Employment Information, hereinafter defined. (e) Had Walsh known that the Employment Information was incomplete, false

and materially misleading, Walsh would not have enrolled or continued her enrollment at De Paul. (f) Walsh borrowed $167,000 to finance her law school education. The

current balance on the loans is $159,000. 17. (a) As to Plaintiff Madison Mullady; Madison Mullady (Mullady) enrolled in De Paul in August 2008 and

graduated with a JD degree in May 2011. She was admitted to the Illinois bar in November 2011. (b) After graduation Mullady was unable to find work and was forced to take

work as a nanny. She also worked part-time at PetSmart and for New Concepts in Marketing where she assisted that company part-time in marketing dog food. None of these jobs required a JD. In January 2012, she obtained an associate position at the Brainard Law Office. Mulladys salary is far too low to service her student loan debt. (c) In choosing to enroll and stay enrolled in De Paul, rather than in some

other law school, a major factor for Mullady was the extent to which a JD degree from one law school or another would make it easier for him to find full-time employment as a lawyer after graduation.

(d)

In deciding to apply to, enroll and continue to be enrolled in De Paul,

Mullady relied on the Employment Information, hereinafter defined. (e) Had Mullady known that the Employment Information was incomplete,

false and materially misleading, Mullady would not have enrolled or continued her enrollment at De Paul. (f) Mullady incurred $200,000 in debt to finance her law school education.

Her parents, who co-signed a portion of the loans, paid $55,000 on one loan. The current balance on the loans exceeds $150,000. Mullady, who earns a modest salary, has no reasonable prospect of ever fully paying the principal of her student loan. 18. (a) As to Plaintiff Brian Loker: Brian Loker (Loker) enrolled in De Paul in August 2007 and graduated

with a JD degree in December 2009. He was admitted to the California bar in June 2010. (b) After graduation Loker obtained employment as an associate at the law

firm of Patterson & Sheridan, LLP. (c) In choosing to enroll and stay enrolled in De Paul, rather than in some

other law school, a major factor for Loker was the extent to which a JD degree from one law school or another would make it easier for him to find full-time employment as a lawyer after graduation. (d) In deciding to apply to, enroll and continue to be enrolled in De Paul,

Loker relied on the Employment Information, hereinafter defined. (e) Had Loker known that the Employment Information was incomplete, false

and materially misleading, Loker would not have enrolled or continued his enrollment at De Paul.

10

(f) 19.

Loker currently owes in excess of $150,000 on his law school loans. Plaintiffs salaries and anticipated future salaries are insufficient to fully repay

their student loans. B. 20. Defendants Defendant De Paul is an Illinois not-for-profit corporation with its principal place

of business in Chicago, Illinois, and is part of De Paul University. 21. The true names and capacities (whether individual, corporate, associate or

otherwise) of Defendants Does 1 through 20, inclusive, are unknown to Plaintiffs. Plaintiffs sue these Defendants by fictitious names and will seek leave to amend this Complaint after their identities are learned. Each fictitious Defendant either personally made or disseminated the false and misleading representations contained herein or contributed to the acts and practices alleged herein. 22. Plaintiffs are informed and believe that the fictitiously named Defendants

proximately caused Plaintiffs damages. 23. Plaintiffs are informed and believe that many of the Doe Defendants are lawyers

licensed to practice law in Illinois. These Doe Defendants are sometimes collectively referred to herein as the Lawyer Defendants. IV. A. 24. FACTUAL ALLEGATIONS

Background Information De Paul is a part of De Paul University, which is the largest Roman Catholic and

one of the ten largest private universities in the country with over 25,000 students, including approximately 16,000 undergraduate and 9,000 graduate students. In the fiscal 2009 year, the

11

university generated nearly $643 million in total operating revenue, with operating expenses of about $584 million, resulting in an operating profit of around $60 million. 25. For the 2010-2011 academic year, De Paul enrolled 1,056 students, including 853

full-time students and 203 part-time students. Currently, the Law School enrolls 992 students, including 807 full-time students and 185 part-time students. 26. lawyers. 27. At all times relevant hereto, De Pauls tuition for each year of law school ranged De Paul is in the business of educating students to qualify them to work as

between approximately $30,000 in 2003 to $41,240 in 2011-2012. 28. As part of its business De Paul seeks, and at all relevant times sought, to prepare

all its students to take the Bar exams of the various states. 29. As part of its business De Paul maintains, and at all relevant times maintained, a

Career Services Office (or the equivalent), that promises its students and prospective students, and even its former students, access to and help from the Career Services Office in order to find post-graduate employment for them. 30. De Paul currently, and for an unknown number of years previously, publishes its

graduates employment statistics on its website under a Prospective Students tab and in its Viewbook. This data is accompanied by the following boast: When you graduate from De Paul, youll have more than a superior education. Youll be connected -- a member of a worldwide network of De Paul alumni that includes outstanding leaders and experts in all areas of the legal profession. The connection between De Paul and Chicago is legendary. Our reputation in Chicago gives you a built-in edge, but it never limits the scope of your career. 31. On information and belief, De Paul publications all used similar language at the

times the various Plaintiffs were applying to De Paul.

12

32.

De Paul is a law school accredited by the Section of Legal Education and

Admission to the Bar of the American Bar Association (ABA). As mandated by Section 509(a) of the ABAs 2011-2012 Standards for Approval of Law Schools (Section 509(a)), an accredited law school must publish basic consumer information in a fair and accurate manner reflective of actual practice. 33. On information and belief, equivalent ABA guidelines were in effect at the times

the various Plaintiffs were applying to De Paul. 34. De Paul affirmatively and actively sought to market itself to prospective and

current students by emphasizing the success its graduates had found in obtaining desirable jobs after graduation. B. 35. Defendants Misrepresentations To that end, De Paul prepared information purporting to set forth the employment

history of its graduates within the first nine months after graduation (the Employment Information). The Employment Information was based upon surveys sent to then recent De Paul graduates. 36. (a) The Employment Information included, inter alia, representations that: Between 88 and 98 percent of its graduates had secured employment within nine

months of graduation. (b) The median salary being earned by graduates within nine months of graduation

was between $57,127 and $74,267. (c) For the class of 2005, De Pauls 2005 Student Profile published in the De Paul

Student Report (2006) stated that 98 percent of the graduates were employed, with 57 percent working in private practice, 21 percent in business, 12 percent in government, 4 percent in

13

public interest, 3 percent in judicial clerkships and 2 percent in academia. The mean starting salary was stated to be $82,890 for those in private practice and $72,637 for those in business. (d) For the class of 2007, De Pauls 2007 Student Profile published in the De Paul

Student Report (2008) stated that 95 percent of the graduates were employed, with 62 percent working in private practice, 19 percent in business, 12 percent in government, 4 percent in public interest, 1 percent in judicial clerkships and 2 percent in academia. The mean starting salary was stated to be $82,890 for those in private practice and $72,637 for those in business. (e) For the class of 2009, De Pauls 2009 Student Profile published in the De Paul

Student Report (2010) stated that 93 percent of the graduates were employed within nine months of graduation, including 50 percent allegedly working in private practice, 26 percent in business, 12 percent in government, 4.4 percent in public interest, 1.5 percent in judicial clerkships, and 4.4 percent in academia. The mean starting salary was stated to be $97,056 for those in private practice and $74,267 for those in business. 37. The context of the Employment Information made it reasonably appear to the

public, and especially to Plaintiffs and other prospective law students, that the jobs reported represented full-time permanent employment in positions for which a J.D. degree was required or preferred. 38. The Defendants intended that the Employment Information would be so

interpreted by those receiving it. 39. At all relevant times, the Employment Information was incomplete as used in

this Amended Complaint incomplete means incomplete on account of the omission or concealment of material additional information -- false and materially misleading in the following respects:

14

(a)

The job totals were substantially overstated, because (i) the jobs reported included any type of employment, including jobs that did

not require or even prefer a J.D. degree. Such jobs could even have included working part-time as a barista at Starbucks. (ii) the jobs reported included jobs that were part-time or were full-time but

temporary short-term positions. (iii) the jobs reported included such as research assistant or intern or other

make-work positions including some which De Paul provided to its own graduates while they were studying for the Bar exams and/or to tide them over until they found real jobs requiring a JD degree. For example, one of the Plaintiffs was employed in a non-lawyer position partially funded De Paul. (b) The salaries reported were substantially overstated, because De Paul, on one hand, (including

reported as employment numbers the numbers from any kind of employment

temporary and part-time), but, on the other hand, reported salary information based only on fulltime employment. Given that full-time employment generally pays significantly higher salaries than part-time or temporary employment, the published salary numbers were significantly distorted to show higher salaries than statistically warranted and, therefore, were inherently misleading. (c) The Employment Information omitted and concealed material information that

was necessary for recipients to properly evaluate the data contained, particularly: (i) that the term business jobs did not mean jobs working as lawyers

working in an entity other than a law firm, but included jobs that any college graduate (or even non-graduate) could obtain, such as waiter, delivery person, barista or store clerk.

15

(ii) (iii)

that the data were obtained only through surveys voluntarily returned. the percentage of surveys returned and that only a small percentage had

been returned. This information was important because such surveys are most often returned by those who have done comparatively well, and it would have been informative to know how many graduates did not feel like returning their surveys. (iv) the respective numbers or percentages of graduates reporting employment

who were employed (A) in the legal profession in a position requiring a J.D. degree, or (B) in a non-legal profession in a position preferring a J.D. degree, or (C) in a related profession, or (D) in a position not requiring a J.D. degree. (v) the respective numbers or percentages of graduates in each category of

employment employed in a full time or part time or temporary positions. (vi) that the data in the Employment Information had not been audited or

otherwise verified. 40. As a result, the data reported in the Employment Information implied a much

stronger statistical basis than was the fact and failed to show the material distinctions between graduates with full-time permanent positions as lawyers and other graduates. D. 41. Other Allegations At all relevant times, De Paul reported the Employment Information in its print

and electronic marketing materials and to third parties, such as the ABA, the National Association for Law Placement (NALP), and U.S. News & World Report (U.S. News). These organizations reported portions of the Employment Information to other persons and/or the public.

16

42.

Defendants knew that U.S. News would publish data from the Employment

Information it provided and that students gave particular importance to law school information published by U.S. News. 43. Defendants knew that Plaintiffs and prospective and current law school students

made their decisions as to which law school to enroll in, or to remain enrolled in, based in significant part on the perceived advantage a degree from that particular school would give them in finding full-time permanent employment as a lawyer. 44. Defendants knew that the ability to find a job as a lawyer was important to

Plaintiffs notwithstanding that some students believed that a J.D. degree could be useful even if THEY chose not to practice law (as distinguished from believing that they might HAVE TO find a non-law position on account of law positions not being as available as represented). 45. The cumulative effect of Defendants touting its post-graduate employment

placement record whether in its own publications or in its reports to other organizations was to imply to prospective students, and to induce prospective students to infer, that De Pauls employment statistics accurately reflected their likelihood of finding a permanent full-time job as a lawyer within nine months after graduation. 46. Knowing that Plaintiffs and other students would refer to and rely on those

statistics, Defendants nonetheless, intentionally and/or negligently, assembled, published and circulated the Employment Information, even though it was incomplete, false and materially misleading, and omitted the true facts which would have enabled Plaintiffs to make a reasoned and informed decision as to whether or not to enroll in De Paul. 47. De Paul had an obligation to report certain data to the ABA and NALP. That

obligation included a responsibility to provide more than the minimum data required by those

17

organizations, in order to insure that what it did provide was not incomplete, false or materially misleading. In the case of the ABA, DePaul as mandated by Section 509(a) of the ABAs 20112012 Standards for Approval of Law Schools (Section 509(a)) (which was identical to prior years version of Section 509), an accredited law school must publish basic consumer information in a fair and accurate manner reflective of actual practice. De Pauls

employment statistics, for the reasons stated above, were not fair and accurate and did not reflect actual practice because many of the graduates were not employed in full-time positions that required a JD. 48. Moreover and nevertheless, however limited its obligation to the ABA and NALP

might have been, De Paul had a separate obligation to the public to insure that any Employment Information it chose to publish in other places, such as its website and own publications, was not incomplete, false and materially misleading. 49. De Paul had no obligation to report its graduate employment information to U.S.

News, but De Paul did so anyway, knowing full well that whatever information it disclosed would be disseminated to the public and especially to prospective students. Accordingly, it had a duty to make sure that the information it provided was not incomplete, false or materially misleading. 50. Even if De Paul did not initially have any obligation to disclose the Employment

Information to the public, by its voluntarily providing that information, it assumed and incurred a special duty to make sure that the Employment Information was not incomplete, false or materially misleading. 51. The Employment Information provided directly from De Paul and indirectly

through the data clearinghouses is the only school-specific information available to Plaintiffs and

18

prospective students. Plaintiffs and prospective students have no choice but to rely upon the information. 52. De Paul, like other law schools, is an integral part of our legal system, and the

first place in which incipient lawyers are inculcated not only with legal principles but legal ethics. As such, it is almost inconceivable that a prospective student would even contemplate that a bulwark of the legal profession would ever publish information that was false, incomplete and materially misleading. A student would expect to be able to rely on the accuracy of such information, unlike promotional material from, e.g., a department store. It would not be

reasonable for a student to think there was a need to make an effort to verify such information provided. Thus, Plaintiffs reliance on the Employment Information was reasonable. 53. Further, once Plaintiffs had enrolled in De Paul, they became part of what De Paul

called, in so many words, the De Paul Family. As they were choosing to continue their enrollment each year thereafter Plaintiffs were entitled to transparency and honesty from the school, and De Paul was specially obligated to them not to continue providing them with employment information that was incomplete, false and materially misleading. 54. The Lawyer Defendants who are lawyers licensed in Illinois (the Lawyer

Defendants) have a duty to follow the Illinois Supreme Courts Rules of Professional Conduct. 55. Those Rules read in part:

Rule 4.1: Truthfulness in Statements to Others In the course of representing a client a lawyer shall not knowingly: (a) (b) make a false statement of material fact or law to a third person; or fail to disclose a material fact when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6.

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*** Rule 8.1: Bar Admission and Disciplinary Matters An applicant for admission to the bar, or a lawyer in connection with a bar admission application or in connection with a disciplinary matter, shall not: (a) (b) knowingly make a false statement of material fact; or fail to disclose a fact necessary to correct a misapprehension known by the person to have arisen in the matter, or knowingly fail to respond to a lawful demand for information from an admissions or disciplinary authority, except that this Rule does not require disclosure of information otherwise protected by these Rules or by law. *** Rule 8:4: Misconduct It is professional misconduct for a lawyer to: (a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or to do so through the acts of another. *** (c) engage in conduct misrepresentation. involving *** 56. The conduct of the Lawyer Defendants in participating in the preparation and dishonesty, fraud, deceit or

dissemination of the Employment Information, or failing to prevent such dissemination, violated the foregoing Rules 4.1 and 8.4, as well as the spirit of the more limited 8.1. 57. Plaintiffs are members of the public whom the Rules were intended to protect and

to whom the Lawyer Defendants owed a duty pursuant to those Rules. 58. It was reasonable for Plaintiffs to rely on Employment Information approved and

disseminated by Lawyer Defendants.

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59.

The Lawyer Defendants failed in their duty, and are responsible to redress any

injuries suffered by Plaintiffs thereby. 60. In summary, Defendants knew and intended that Plaintiffs and other students

would refer to and rely on the Employment Information. 61. 62. 63. Such reliance was reasonable. Plaintiffs did rely on the Employment Information. Plaintiffs investigated the Employment Information they received to the extent

reasonably necessary. 64. As a consequence of such reliance, Plaintiffs enrolled in De Pauls JD program

and paid tens of thousands of dollars for the required tuition, and in some cases took out tuition loans that will burden them for years. 65. As a consequence of such reliance, Plaintiffs graduated with a J.D. degree from

De Paul with near-term and lifetime job prospects that are, statistically, less than they would have been had they obtained a degree from a De Paul with the employment numbers DePaul claimed to have. 66. De Paul inflated its employment statistics by a percentage to be determined in this

litigation. Call it X percent. 67. Those inflated statistics purported to be a reasonable projection by De Paul of

Plaintiffs post-graduate employment prospects if he or she enrolled in De Paul rather than elsewhere. 68. To the extent the statistics were inflated by X percent, the advantage to Plaintiffs

and the value of the tuition and fees they paid to De Paul was reduced by X percent. Accordingly, De Paul charged for X, but the Plaintiffs did not receive X.

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69. (a) (b)

Therefore, plaintiffs were damaged at least in the amounts of: X percent of the amount they paid to De Paul, and a statistically determinable amount of the lifetime income they would have been

expected to earn after graduating from De Paul if De Pauls post-graduation employment statistics had been those that De Paul had represented in the Employment Information, less the statistically determinable amount of the lifetime income they would now be expected to earn, having graduated from De Paul, based upon De Pauls true post-graduation employment statistics. E. 70. Iqbal/Twombly Allegations Since January 2011, it has become commonly known that the law school industry

has misrepresented employment statistics of its graduates at least since 2000. 71. There have been a series of articles by respected journalists and law professors

who have concluded that the vast majority of law schools in the United States have misrepresented or distorted the employment data they report to (a) prospective students and (b) U.S News. There is an incentive to manufacture or distort employment data because that data, in turn, is a significant factor in the computation of a schools U.S. News ranking, which is a significant fact in an applicants choice of a law school. 72. The reported misrepresentations by law schools include falsely implying (a) that

graduates employed outside the legal industry in non-lawyer capacities were "employed" as lawyers and (b) falsely claiming that graduates who have temporary work or contract work are "employed full time." One such article is "Served: how law schools completely misrepresent their job numbers," The New Republic, April 25, 2011, by Paul Campos, a Professor at the University of Colorado Law School. Professor Campos reviewed the published data of a top 50

22

law school. He concluded, When we take temporary employment into account, it appears that approximately 45 percent of 2010 graduates of this particular top-50 law school had real legal jobs nine months after graduation. 73. Campos also noted that while NALP collects information from graduates about

whether their jobs are full-time or part-time, it does not reveal this information in its published figures. Nor does NALP provide employment information for graduates of specific schools. 74. Other well-respected professors have similarly criticized law school practices.

See William D. Henderson and Andrew P. Morriss, What Law School Rankings Dont Say About Costly Choices, Natl L. J. (April 16, 2008). Henderson is a Professor of Law at the University of Indiana Law School. Morriss is a Professor of Law at the University of Alabama Law School. Likewise, two professors at Emory University Law School published a law review article investigating whether law school deans and administrators committed criminal acts by disseminating what is widely acknowledged to be false employment data. See, Cloud, Morgan and Shepherd, George B. Law Deans in Jail (February 24, 2012) (concluding that law schools have published false and misleading employment information for many years). Available at SSRN:http:ssrn.com/a sgract+1990746 or http://dx.doi.org/10.2139/ssrn.1990746. 75. Experts on the legal industry have concluded that law schools distort their

employment information to (a) induce students to enroll and (b) to move up in the U.S. News rankings. See e.g., A Way Forward: Transparency at American Law Schools, forthcoming Pace Law Review, by Kyle P. McEntee and Patrick J. Lynch. 76. The possible fact that other law schools may also have been equally

unforthcoming in the submission and presentation of employment information about their own

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graduates in no way justifies or exonerates De Paul from its own deliberate or negligent actions in disseminating its own incomplete, false and materially misleading information. V. 77. CLASS ACTION ALLEGATIONS

This action is brought and may properly be maintained as a class action pursuant

to 735 ILCS 5/2-801. Plaintiffs bring this action, on behalf of themselves and all other similarly situated, as representative members of the following proposed class (the Class): All persons who are either presently enrolled in De Paul University College of Law to obtain a JD degree, or obtained such a degree, during the period from 2006 to the present. 78. For the following reasons, this action fulfills the standards and requirements as

outlined by 735 ILCS 5/2-801. A. 79. The Parties are Numerous and Easily Ascertainable The proposed Class is so numerous that it is manifestly impracticable to bring

them all before the court. Though the exact number and identities of the Class is unknown at this time, they can be ascertained through appropriate discovery, and likely contain thousands of people, as approximately 300 students graduate from De Paul each year. The number and identities of other Class members may be determined from Defendants records and files, and potential Class members may easily be notified about the pendency of this action. B. 80. Common Questions of Law and Facts Predominate This action presents questions of law and facts common to the Class, including,

but not limited to, the following: (a) Whether the Employment Information provided by Defendants was incomplete,

false and materially misleading;

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(b)

Whether Defendants conduct violated the Illinois Consumer Fraud and Deceptive

Business Practices Act; (c) Whether Defendants conduct constituted fraud and/ or negligent

misrepresentation; (d) Whether the Lawyer Defendants have a separate or additional liability on account

of violations of the Illinois Supreme Courts Rules of Professional responsibility; (e) Whether Plaintiffs and members of the Class are entitled to recover restitution of

a portion of tuition monies and expenses paid to De Paul as a result of Defendants conduct; (f) Whether Plaintiffs and members of the Class are entitled to recover the difference

between (i) the lifetime amounts they statistically were likely to have earned after graduation had the erroneous Employment Information been correct, and (ii) the lifetime amounts they statistically are likely to earn based on De Pauls actual employment statistics. (g) Whether Plaintiffs and members of the Class are entitled to recover additional

damages as a result of Defendants conduct; (h) Whether Plaintiff and Class members are entitled to an award of reasonable

attorneys fees, pre-judgment interest and costs of this suit; (i) Whether Defendants should be required to retain independent, non-related third-

parties to audit and verify their post-graduate employment data and salary information; and (j) Whether Defendants should be enjoined from continuing to make incomplete,

false and materially misleading representations regarding De Pauls post-graduate employment data and salary information. C. Plaintiffs Claims Are Typical of the Class

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81.

Plaintiffs claims are typical of the claims and of the members of the Class

because all members were damaged in the same manner as a result of the incomplete, false and materially misleading Employment Information provided by Defendants. Accordingly, the

interests of the representative Plaintiffs are co-extensive with the interests of each Class member, and all have a common right of recovery based upon the same facts. D. 82. The Class Representatives Can Adequately Represent the Class Plaintiffs are adequate representatives of the Class because Plaintiffs are

members of the Class and their interests do not conflict with the interests of the Class. The interests of the Class will be fairly and adequately protected by Plaintiffs and their undersigned counsel, who are competent and experienced in the prosecution of class action litigation. E. 83. A Class Action Provides a Substantial Benefit to the Courts and Litigants If Class members are required to bring separate actions, courts throughout Illinois

would be confronted by a multiplicity of lawsuits, burdening the court system while creating the risk of inconsistent rulings and contradictory judgments. In contrast to proceeding on a case-bycase basis, in which inconsistent results would magnify the delay and expense to all parties and the court system, this class action will present far fewer management difficulties while providing unitary adjudication, economies of scale and comprehensive supervision by a single court. 84. Members of the Class almost invariably lack the means to pay attorneys to Given the complexity of the issues presented here,

prosecute their claims individually.

individual claims are not sufficiently sizeable to attract the interests of highly able and dedicated attorneys who will prosecute them on a contingency basis. Only by aggregating claims can Plaintiffs gain the leverage necessary to pursue a just and global resolution of the issues raised in this Amended Complaint.

26

85.

Plaintiffs and putative class member demand a jury trial for all issues so triable.

WHEREFORE, Plaintiffs, on behalf of themselves and the Class, pray for an Order certifying the Class and appointing Plaintiffs and their counsel of record to represent the Class. FIRST CAUSE OF ACTION VIOLATION OF THE ILLINOIS CONSUMER FRAUD AND DECEPTIVE BUSINESS PRACTICES ACT AGAINST ALL DEFENDANTS 86. Plaintiffs incorporate by reference each and every allegation set forth above as if

fully stated herein. 87. Defendants actions constitute unlawful, unfair, deceptive and fraudulent acts and

practices as defined by Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505, et seq. 88. Plaintiffs and each member of the Class are consumers within the meaning of the

Consumer Fraud and Deceptive Business Practices Act (the Act). 89. De Pauls offer and sale of its JD course program is conduct involving trade or

commerce as defined by the Act and De Pauls offer and sale of its JD course program constituted the sale of merchandise within the meaning of the Act. 90. Defendants knowingly and intentionally made false representations and omissions

of material facts, with the intent to deceive and fraudulently induce reliance by Plaintiffs and the members of the Class. These false representations and omissions were uniform and identical in nature, and include, without limitation, the following: Providing the incomplete, false and materially misleading Employment Information to the Plaintiffs and the members of the Class and to various third-party data clearinghouses and publications, such as the ABA, NALP and U.S. News.

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91.

Plaintiffs enrolled in De Paul for the purpose of securing upon graduation fullDefendants misrepresentations and

time, permanent employment in the legal profession.

omissions in the Employment Information were material to the decisions of Plaintiffs and the members of the Class to enroll and attend De Paul. 92. Defendants made and disseminated those material misrepresentations and material

omissions in the Employment Information with the intent that the Plaintiffs and other members of the putative Class rely upon them. 93. As a result of Defendants wrongful actions, Plaintiffs and other members of the

Class were damaged in that they enrolled and remained enrolled in De Pauls JD program and paid tens of thousands of dollars in tuition and other expenses, which they would not have otherwise paid. 94. Plaintiffs were, at all relevant times, ignorant of the true facts and did not know

that that the Employment Information was incomplete, false and materially misleading. 95. Plaintiff had no reasonable way to ascertain that the Employment Information was

incomplete, false and materially misleading. 96. 97. Had Plaintiffs known, they would never have enrolled in De Paul. The Defendants actions constitute unfair business practices occurrfing in he

course of conduct involving trade since the actions were deceptive, unethical, oppressive, unscrupulous, substantially injurious, and operated to the competitive disadvantage of other law schools, deceived the public, and were not outweighed by any countervailing benefits to consumers or competition.

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98.

The Defendants actions were unfair and deceptive because they have caused

Plaintiffs and the Class substantial harm, which was not harm that consumers themselves could have reasonably avoided. 99. The unlawful, unfair, deceptive and fraudulent acts and practices have directly,

foreseeably and proximately caused damage to Plaintiffs and other members of the Class. 100. The Defendants acts and practices have misled and deceived the general public in

the past, and will continue to mislead and deceive the general public into the future, by, among other things, causing them to apply to and enroll at De Paul under false pretenses. WHEREFORE, Plaintiffs, on behalf of themselves and members of the Class, pray for relief and judgment against Defendants De Paul and Does 1 through 20 as follows: A. For preliminary and permanent relief enjoining Defendants, their agents, servants,

employees and all persons acting in concert with them from continuing to engage in their unlawful recruitment program and manipulation of post-graduate employment data and salary information, and all other unfair, unlawful and /or fraudulent business practices alleged above and that may yet be discovered in the prosecution of this action; B. C. D. E. F. For certification of the Class; For compensatory damages in an amount to be determined after discovery; For punitive damages; For statutory damages and attorneys fees as provided in the Act; For injunctive relief ordering that De Paul retain unrelated, independent third-

parties to audit and verify post-graduate employment data and salary information; G. H. For attorneys fees and expenses pursuant to all applicable laws; For prejudgment interest; and

29

I.

For such other and further relief as the Court may deem just and proper. SECOND CAUSE OF ACTION FRAUD AGAINST ALL DEFENDANTS

101.

Plaintiffs incorporate by reference each and every allegation set forth in

Paragraphs 1 through 100 above as if fully stated herein. 102. Defendants published and disseminated to the Plaintiffs, the other members of the

Class, and the public the Employment Information. 103. 104. The statements in the Employment Information were statements of fact. Defendants had a duty to insure that the Employment Information was true and

not misleading. 105. 106. The Employment Information was incomplete, false and materially misleading. Defendants knew that the Employment Information was incomplete, false and

materially misleading, or willfully ignored that the Employment Information might be incomplete, false and materially misleading and intentionally chose not to verify it. 107. Defendants intended that the recipients of the Employment Information believe

that it was true and rely on it in making decisions as to whether or not to enroll in De Paul and for other purposes. 108. Plaintiffs and other recipients had no reasonable way to determine that the

Employment Information was incomplete, false and materially misleading. 109. Plaintiffs did reasonably rely and act on the Employment Information and

enrolled in De Paul.

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110.

The incomplete, false and materially misleading Employment Information

directly, foreseeably and proximately caused damage to Plaintiffs and other members of the Class. 111. The Defendants acts and practices have misled and deceived the general public in

the past, and will continue to mislead and deceive the general public into the future, by, among other things, causing students to apply to and enroll at De Paul under false pretenses. WHEREFORE, Plaintiffs, on behalf of themselves and members of the Class, pray for relief and judgment against Defendants De Paul and Does 1 through 20 as follows: A. For preliminary and permanent relief enjoining Defendants, their agents, servants,

employees and all persons acting in concert with them from continuing to engage in their unlawful recruitment program and manipulation of post-graduate employment data and salary information, and all other unfair, unlawful and /or fraudulent business practices alleged above and that may yet be discovered in the prosecution of this action; B. C. D. E. For certification of the Class; For compensatory damages in an amount to be determined after discovery; For punitive damages; For injunctive relief ordering that De Paul retain unrelated, independent third-

parties to audit and verify post-graduate employment data and salary information; F. G. H. For attorneys fees and expenses pursuant to all applicable laws; For prejudgment interest; and For such other and further relief as the Court may deem just and proper. THIRD CAUSE OF ACTION NEGLIGENT MISREPRESENTATION AGAINST ALL DEFENDANTS 31

112.

Plaintiffs incorporate by reference each and every allegation set forth in this

Complaint, with the exception of paragraphs 38, 60, and 86-111. 113. Defendants published and disseminated to the Plaintiffs, the other members of the

Class, and the public the Employment Information. 114. 115. 116. not misleading 117. In addition, Defendants owed Plaintiffs a duty, arising out of the ABA Rules, The statements in the Employment Information were statements of fact. The Employment Information was incomplete, false and materially misleading. Defendants had a duty to insure that the Employment Information was true and

arising from Defendants position of superior knowledge and sole access to information, and arising from De Pauls special nature as a highly respected law school, to provide complete and accurate employment statistics. 118. In addition, the Defendants occupy a fiduciary position as educators, and owe a

heightened duty of care to Plaintiffs and members of the Class to act in good faith and engage in fair dealings. 119. Likewise, by virtue of the fact that many of De Pauls staff and faculty are

attorneys and members of the Illinois Bar, they have certain ethical obligations and responsibilities to Plaintiffs and members of the Class. Defendants breached these heightened duties of care by publishing and disseminating the incomplete, false and materially misleading Employment Information. 120. Plaintiffs and other recipients had no reasonable way to determine that the

Employment Information was incomplete, false and materially misleading.

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121. Paul. 122.

Plaintiffs did rely and act on the Employment Information and enrolled in De

The incomplete, false and materially misleading Employment Information

directly, foreseeably and proximately caused damage to Plaintiffs and other members of the Class. 123. The Defendants acts and practices have misled and deceived the general public in

the past, and will continue to mislead and deceive the general public into the future, by, among other things, causing students to apply to and enroll at De Paul under false pretenses. WHEREFORE, Plaintiffs, on behalf of themselves and members of the Class, pray for relief and judgment against Defendants De Paul and Does 1 through 20 as follows: A. For preliminary and permanent relief enjoining Defendants, their agents, servants,

employees and all persons acting in concert with them from continuing to engage in their unlawful recruitment program and manipulation of post-graduate employment data and salary information, and all other unfair, unlawful and/or fraudulent business practices alleged above and that may yet be discovered in the prosecution of this action; B. C. D. For certification of the Class; For compensatory damages in an amount to be determined after discovery; For injunctive relief ordering that De Paul retain unrelated, independent third-

parties to audit and verify post-graduate employment data and salary information; E. F. G. For attorneys fees and expenses pursuant to all applicable laws; For prejudgment interest; and For such other and further relief as the Court may deem just and proper.

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FOURTH CAUSE OF ACTION FRAUD AGAINST THE LAWYER DEFENDANTS 124. Plaintiffs incorporate by reference each and every allegation set forth in

Paragraphs 1 through 99 and Paragraphs 100 through 123 above as if fully stated herein. 125. The Lawyer Defendants, pursuant to common law and especially pursuant to the

Illinois Supreme Court Rules of Professional Conduct (Rules) 4.1, 8.1 and 8.4, owed a special duty to the Plaintiffs. 126. This duty was not to Plaintiffs as clients of the Lawyer Defendants, but as third

persons within the meaning of the Rules. 127. Plaintiffs relied on the Employment Information published by lawyers

representing a reputable law school. 128. In intentionally and willfully committing the actions alleged, the Lawyer

Defendants violated that duty and those Rules. 129. The incomplete, false and materially misleading Employment Information

directly, foreseeably and proximately caused damage to Plaintiffs and other members of the Class. 130. The Lawyer Defendants acts and practices have misled and deceived the general

public in the past, and will continue to mislead and deceive the general public into the future, by, among other things, causing students to apply to and enroll at De Paul under false pretenses. WHEREFORE, Plaintiffs, on behalf of themselves and members of the Class, pray for relief and judgment against the Lawyer Defendants as follows:

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A.

For preliminary and permanent relief enjoining the Lawyer Defendants from

continuing to engage in De Pauls unlawful recruitment program and manipulation of postgraduate employment data and salary information, and all other unfair, unlawful and /or fraudulent business practices alleged above and that may yet be discovered in the prosecution of this action; B. C. D. E. F. For certification of the Class; For compensatory damages in an amount to be determined after discovery; For attorneys fees and expenses pursuant to all applicable laws; For prejudgment interest; and For such other and further relief as the Court may deem just and proper. FIFTH CAUSE OF ACTION NEGLIGENT MISREPRESENTATION AGAINST THE LAWYER DEFENDANTS 131. Plaintiffs incorporate by reference each and every allegation set forth in this

Complaint, with the exception of paragraphs 38, 60, 86-111, and 124-130. 132. The Lawyer Defendants, pursuant to common law and especially pursuant to the

Illinois Supreme Court Rules of Professional Conduct (Rules) 4.1, 8.1 and 8.4, owed a special duty to the Plaintiffs. 133. This duty was not to Plaintiffs as clients of the Lawyer Defendants, but as third

persons within the meaning of the Rules. 134. Plaintiffs could reasonably rely on the Employment Information published by

lawyers representing a reputable law school. 135. In negligently committing the actions alleged, the Lawyer Defendants violated

that duty and those Rules. 35

136.

The incomplete, false and materially misleading Employment Information

directly, foreseeably and proximately caused damage to Plaintiffs and other members of the Class. 137. The Lawyer Defendants acts and practices have misled and deceived the general

public in the past, and will continue to mislead and deceive the general public into the future, by, among other things, causing Plaintiffs and prospective students to apply to and enroll at De Paul under false pretenses. WHEREFORE, Plaintiffs, on behalf of themselves and members of the Class, pray for relief and judgment against the Lawyer Defendants as follows: A. For preliminary and permanent relief enjoining the Lawyer Defendants from

continuing to engage in De Pauls unlawful recruitment program and manipulation of postgraduate employment data and salary information, and all other unfair, unlawful and /or fraudulent business practices alleged above and that may yet be discovered in the prosecution of this action; B. C. D. E. F. For certification of the Class; For compensatory damages in an amount to be determined after discovery; For attorneys fees and expenses pursuant to all applicable laws; For prejudgment interest; and For such other and further relief as the Court may deem just and proper. Respectfully submitted,

DATED: April 6, 2012

By:

/s/ Edward X. Clinton, Jr. One of Plaintiffs Attorneys

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Edward X. Clinton Sr., ARDC No. 0462578 Edward X. Clinton Jr., ARDC No. 6206773 The Clinton Law Firm 111 West Washington St. Suite 1437 Chicago, Ill. 60602 Phone: 312/357-1515 David Anziska The Law Offices of David Anziska 305 Broadway, 9th Fl. New York, NY 10007 Phone (212) 822-1496 Facsimile (212) 822-1437 Jesse Strauss Strauss Law, PLLC 305 Broadway, 9th Fl. New York, NY 10007 Phone (212) 822-1496 Facsimile (212) 822-1437 Counsel for Plaintiffs, individually and for all others similarly situated

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DEMAND FOR JURY TRIAL Plaintiffs hereby demand a jury trial on all causes of action so triable. Dated: April 6, 2012 Respectfully submitted, THE CLINTON LAW FIRM By: /s/Edward X. Clinton, Jr. Edward X. Clinton Sr. Edward X. Clinton Jr. The Clinton Law Firm 111 West Washington St. Suite 1437 Chicago, Ill. 60602 Phone: (312) 462-0405 David Anziska The Law Offices of David Anziska 305 Broadway, 9th Fl. New York, NY 10007 Phone (212) 822-1496 (212) 822-1437 Jesse Strauss Strauss Law PLLC 305 Broadway, 9th Fl. New York, NY 10007 Phone (212) 822-1496 Facsimile (212) 822-1437 Counsel for Plaintiffs, individually and for all others similarly situated

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