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The Carlson Law Firm: Today Texas Federal Court Rules Mass Action against DeVry University for Fraud Survives Motion to Dismiss and Proceeds on the Merits

AUSTIN, Texas, March 13, 2020 /PRNewswire/ -- Today, U.S. District Judge Jason K. Pulliam of the Western District of Texas issued his ruling adopting the Report and Recommendations of U.S. Magistrate Judge Elizabeth Chestney, denying in its entirety the 12(b)(6) Motion to Dismiss filed by DeVry University and its parent company, Adtalem Global Education, Inc. in a mass action brought by 108 DeVry graduates—alleging the for-profit school engaged in an aggressive and deceptive marketing campaign designed to lure students to enroll and incur large student loan debt, with the false promise of near-perfect job placement rates and high starting salaries for graduates.

(PRNewsfoto/The Carlson Law Firm)

With today's ruling all claims in Plaintiffs' Second Amended Complaint will now proceed on the merits, including claims for violations of the Texas Deceptive Trade Practices Act (DTPA), fraud, negligent misrepresentation and restitution for unjust enrichment.

The case alleges that between 2008 and 2016, DeVry engaged in deceptive marketing practices by severely inflating the success rate of job placements and earnings of graduates through an aggressive marketing scheme grounded on deceptive data and flawed methodologies. For instance, DeVry's deceptive marketing campaign falsely asserted that 90% of DeVry graduates found employment in their field of study within six months of graduation. The case alleges that internal DeVry documents reveal the employment rate of graduates is significantly lower.

The group of DeVry Texas graduates are represented by John Fabry and Luis Muñoz of the Carlson Law Firm, P.C.

Titled the We Major In Careers campaign, DeVry's deceptive ads were aggressively disseminated to persuade prospective students to enroll at DeVry, through various media outlets, including television commercials, websites, YouTube videos, marketing brochures, print advertisements, radio ads and in-person by DeVry recruiters and admissions counselors. The 8-year campaign specifically targeted students from low-income and minority communities, who are now saddled with massive student loan debt and grim career prospects.

In the Report and Recommendations adopted today, the Court made clear the case successfully alleges that, "Defendants made material misrepresentations regarding DeVry's post-graduation employment and income rates with the intent that prospective students and current students would rely on the given statistics, purchase their educational services, and continue with their studies through graduation."

Also the Court found that even though "Plaintiffs do not yet have access to the documents in Defendants' possession that could substantiate their belief that the representations were fraudulent" they have properly relied on the Civil Investigative Demand filed by the Federal Trade Commission in its investigation of DeVry's deceptive marketing, which uncovered some 2 million documents supporting fraud allegations; statements from confidential witnesses and other documents produced by the Department of Education in connection with its own investigation; and investigations conducted by the attorneys general of New York and Massachusetts, the Higher Learning Commission, Veterans Administration and the U.S. Senate.

Notably, the Court concluded that "Plaintiffs' Second Amended Complaint contains ample allegations connecting Adtalem's executives to the misrepresentations at issue and alleging that Adtalem controlled, approved, ratified and benefitted from DeVry's misrepresentations" sufficiently alleging that Adtalem's "high-level corporate officers and executives knew the 90% Representation was false or acted with reckless disregard for the truth and nonetheless were directly involved in drafting, reviewing, publishing, and disseminating the false and misleading statements at issue in this case."

"Education is supposed to open doors and serve as the great social equalizer in America. Instead of improving their lives by earning a degree from DeVry, these students are now worse off, with massive student loan debt and a degree of little value," said John Fabry, the lead attorney on the case. "Without any effective regulation of deceptive marketing by for-profit schools, we must turn to the courts for a remedy. We are pleased that the Court has rejected DeVry's attempt to have the case thrown out."

The Texas case against DeVry University is Civil Action No. SA-18-CV-00082-JKP; Luis Rangel, et al. v. Adtalem Global Education, Inc. and DeVry University, Inc.; In the United States District Court, Western District of Texas, San Antonio Division.

A similar case by a group of 112 DeVry California graduates recently also survived 12(b)(6) Motion to Dismiss and been allowed to proceed in Oakland federal Court. The case makes identical allegations underpinning fraud claims against DeVry and Adtalem for their deceptive marketing scheme. The California case is Civil Action No. 19-cv-04079-JSW; Maria Alvarez, et al. v. Adtalem Global Education, Inc. and DeVry University, Inc.; In the United States District Court, Northern District of California, Oakland Division.

About The Carlson Law Firm:
The Carlson Law Firm is a Texas-based national law firm committed to providing exceptional legal services in the areas of personal injury, medical malpractice, dangerous drugs and defective products, mass torts, bankruptcy, family law, criminal defense, military criminal defense, nursing home abuse and consumer protection. The Carlson Law Firm has been successfully representing clients nationwide for over 40 years with 12 offices all over Texas. We Care. We Can Help. www.carlsonattorneys.com 


Contact Kazia Conway at 512-671-7277


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SOURCE The Carlson Law Firm