On The Case

Admissions scandal class action is ‘fascinating’ but likely doomed - experts

(Reuters) - Two Stanford students filed a class action Wednesday in federal court in San Francisco, claiming that they and every other student who applied to eight universities implicated in a sweeping college admissions bribery scandal deserve to recoup the fees they paid to apply to those schools.

The students’ lawyers from Zimmerman Reed and the Medler Law Firm posit two theories. First, they allege that they are the victims of a racketeering conspiracy executed by the government’s lead cooperating witness in the admissions case, William “Rick” Singer, and his business and charity organization. The class’ civil RICO claims against Singer and his companies closely parallel the government’s criminal case, in which Singer was charged with racketeering, among other counts, for helping wealthy parents manipulate their children’s standardized test scores or bribe college coaches.

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The class action also asserts consumer claims against the universities whose coaches accepted bribes in exchange for admissions slots. The Stanford students allege that, in light of the admission of students who paid bribes to secure their slots, the universities are liable under California state law for false representations about the fairness and reliability of their admissions processes and for unfair business practices. The class action also alleges that the universities were negligent in failing to audit their admission process to detect the lurking bribery scandal.

These are intriguing theories, casting the universities – USC, Stanford, UCLA, University of San Diego, University of Texas, Wake Forest, Georgetown and Yale - not as victims of their officials’ allegedly criminal behavior but as enablers. (I’m focusing on the Stanford students’ class action because it presents more cogent theories than a second class action, also filed Wednesday, against defendants in the government’s criminal case.) Law professor Alexandra Lahav of the University of Connecticut summed up the prevailing sentiment of class action experts to whom I circulated the complaint when she called the new suit “fascinating.”

But she and two other law profs I talked to about the complaint – David Noll of Rutgers and Adam Zimmerman of Loyola – were skeptical that the class action will ultimately succeed, at least not as a nationwide case and not with lead plaintiffs whose alleged victimization culminated in admission to Stanford rather than Yale, where they applied and were rejected.

“It doesn’t pass the laugh test,” said Noll. “The plaintiffs are undergrads at Stanford complaining about being rejected at Yale. I just can’t take it seriously.”

Loyola’s Zimmerman agreed that the class action’s provocative consumer-law theories – which he compared to data breach class actions against companies attacked by hackers – are swamped by potential factual problems. “Once you get to the merits, you have to ask, ‘Really? You wouldn’t have applied to Yale?’” he said. “When you dig a step beneath the surface, it’s going to be hard for the plaintiffs to substantiate their claims.”

There’s no doubt, according to all three of the professors, that evidence from the government’s criminal case supports the existence of a civil RICO conspiracy. But Lahav and Noll said it’s unlikely a court will buy the idea that applicants like the Stanford students were the alleged conspiracy’s victims. The U.S. Supreme Court, Noll said, has set a tight standard of causation for civil RICO claims, so the class action plaintiffs would have to show the alleged conspiracy caused Yale to reject them. In the context of the thousands of rejections Yale and other competitive universities hand out every year, Noll said, it will be very tough for the plaintiffs to argue that the bribery-linked admission of a handful of students led directly to their rejection.

Also, as Lahav pointed out, a judge couldn’t certify a civil RICO class that contained both the universities, which are also victims of the conspiracy, and the rejected students because their interests conflict. “Civil RICO makes sense in light of the allegations in the criminal complaint,” she said in an email, “but I don’t see how you can have a class.”

Certifying a class on the consumer claims would also be a challenge, according to the law professors. To show that classwide issues predominate, plaintiffs’ lawyers would have to overcome arguments by the universities that admissions decisions are made on a case-by-case basis. Those arguments, Noll said, have helped colleges defeat rejected students’ claims in affirmative action cases so the defendants have reason to believe they’d be effective in this case as well.

Eventually, Lahav said, the class would have to disentangle the prejudice applicants experienced as a result of the bribery scheme from the ordinary considerations in college admissions, like whether applicants’ parents went to the school or whether parents donated a lot of money through legal means. “For ‘gray area’ applicants who might have gotten in, it is possible that the bribery scheme deprived them of a spot that they could have gotten,” Lahav said by email. “For them I can see the claim that they paid a fee for the ‘fair chance’ and did not receive it. But on the other hand, suppose that there are 100 slots for gray area candidates and one is given away in a bribery scheme. That means that you still had 99 slots. Is this really a loss of chance that is worth refunding the fee for?”

There might be ways to craft a class action, Lahav said, for star athletes whose slots were taken by students whose parents bribed coaches or for students who got into none of the universities implicated in the scandal. The Stanford students might even be able to make out a stripped-down case that, as they allege in the body of the complaint, their Stanford diplomas will be worth less as a result of the admissions bribery revelations.

But the case laid out in Wednesday’s complaint, the law profs said, probably won’t cut it.

I emailed questions based on the profs’ comments to David Cialkowski of Zimmerman Reed, who represents the Stanford students. I didn’t receive a response.

UPDATE: Late Thursday afternoon, plaintiffs’ lawyers filed an amended class action complaint, adding named plaintiffs who attend universities other than Stanford, including Tulane, Rutgers and an unspecified community college. Like the Stanford students named in the original complaint, the new plaintiffs allege that they applied to one or more of the eight schools implicated in the admissions bribery scheme and were denied admission. The addition of these new applicants will mitigate the potential “laugh test” obstacle for the original case.

In a statement accompanying the amended complaint, plaintiffs lawyers said, “The students who filed the complaint didn’t receive what they paid for — to participate in an application process free of fraud. According to the complaint, these schools represented that their admission process would be based on the applicants’ merits, considering their character and performance. Instead, the students allege that what they got was a process tainted by bribes and school officials who failed to assure an honest application process.”