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Robinson v. Devry Education Group, Inc.

United States District Court, N.D. Illinois, Eastern Division

February 12, 2018

T'LANI ROBINSON, ROBBY BROWN, DENNIS MAGANA, AND NICOLE VERSETTO, Plaintiffs,
v.
DEVRY EDUCATION GROUP, INC., AND DEVRY UNIVERSITY, INC., Defendants.

          MEMORANDUM OPINION AND ORDER

          Manish S. Shah United States District Judge

         Defendants ran a for-profit university whose Enrollment Agreement promised accurate information on its website, in catalogs, advertisements, and other materials. The university claimed that 90% of its students actively seeking employment got jobs in their fields of study within six months of graduation. But the true percentage was actually much lower. Defendants also misrepresented graduates' median income levels. Plaintiffs enrolled at the university (and obtained student loans) in reliance on those representations. The complaint alleges that, had plaintiffs known that the represented employment and income statistics were inaccurate, they never would have enrolled, or would have paid less money. They brought claims under various unfair competition, consumer fraud, and false advertising statutes, claims based on contract and tort theories of relief, and a claim for declaratory relief. Defendants move to dismiss under Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the motion is granted.

         I. Legal Standard

         A complaint must contain factual allegations that plausibly suggest a right to relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The court must accept all factual allegations as true and draw all reasonable inferences in the plaintiffs' favor, but need not accept legal conclusions or conclusory allegations. Id. at 678-79. With a 12(b)(6) motion, a court may consider only allegations in the complaint, documents attached to the complaint, and documents that are both referred to in the complaint and central to its claims. Levenstein v. Salafsky, 164 F.3d 345, 347 (7th Cir. 1998).

         II. Background

         Defendants DeVry Education Group, Inc., and DeVry University, Inc., own and operate the for-profit school DeVry University. [35] ¶ 1.[1] Plaintiffs T'Lani Robinson, Robby Brown, Dennis Magana, and Nicole Versetto are citizens of Georgia, Missouri, California, and Illinois, respectively, and former students of DeVry. [35] ¶¶ 10-13, 65, 70, 76, 81. During the recruitment and enrollment process, plaintiffs saw and heard variations of statements by DeVry or its representatives related to the success of its graduates.

         One staple of DeVry's recruiting and marketing efforts was the claim that 90% of their students who were actively seeking employment had obtained jobs in their fields of study within six months of graduation. [35] ¶ 24. DeVry also issued many statements touting similarly high figures for specific degree programs and specific class years. [35] ¶¶ 25-27. But DeVry had been manipulating its data to substantiate these claims, and the true percentages were much lower. [35] ¶¶ 25- 28. DeVry routinely included in its statistics graduates who were employed when they enrolled and who never actively participated in a job search, or those who found jobs outside of their fields of study. [35] ¶ 29. It also improperly excluded from its calculations many graduates who had been actively seeking employment. [35] ¶ 33.

         DeVry claimed that its graduates earned more money than graduates from other colleges and universities. [35] ¶ 35. But it based those statistics on data that DeVry knew to be inaccurate. [35] ¶ 36. DeVry manipulated that data to inflate its income statistics, even though the results conflicted with other internal reports. [35] ¶ 37.

         DeVry made those claims to prospective students through online advertisements, catalogues, conversations with recruiters, public statements, and regulatory filings. [35] ¶ 39. DeVry promised the accuracy of those claims in its Enrollment Agreement, which stated:

DeVry publishes accurate information about its programs, policies, services, and graduate outcomes. Complete, accurate information is provided on our website, [in] our catalogs, and in advertisements and other materials published by DeVry.

[35] ¶ 23. Each plaintiff saw the claims and enrolled in DeVry as a result, taking out loans to cover their costs.

         Robinson, a Georgia resident, saw online and television advertisements containing representations of high post-graduate employment rates and salaries, starting in 2010, and she ultimately enrolled in the Decatur, Georgia campus. [35] ¶¶ 61-65. Brown, a Missouri resident, saw and heard the post-graduate representations in television and radio ads, in telephone calls with DeVry representatives, on DeVry's website, in brochures, and in in-person meetings, starting in 2010. [35] ¶ 66-69. He entered into an enrollment agreement online and in June 2010, started attending classes at two locations in Kansas City, Missouri. [35] ¶ 70. Magana, a California resident, saw and heard ads on television and radio, starting in 2009, each of which repeated the claims; he also heard the claims in in-person meetings and telephone calls. [35] ¶¶ 71-73. Magana had been considering community college and other education programs, but relying on DeVry's representations, he entered into DeVry's enrollment agreement, took out loans, and attended classes at the Palmdale, California campus. [35] ¶¶ 72, 75, 76.

         Versetto, an Illinois resident, saw and heard the misrepresentations about job placement and income in advertisements, in phone calls, and on the website, starting in 2013. [35] ¶ 77. She was considering different education programs at the time, but on July 10, 2013, in reliance on the misrepresentations she saw and heard, she entered into the online enrollment agreement as a full-time student. [35] ¶¶ 78-79. She took out loans to cover tuition and paid over $20, 000 in tuition and fees. [35] ¶ 80. She attended classes online and completed her degree in 2015. [35] ¶ 81.

         Had plaintiffs known that the employment statistics were inaccurate, they either never would have enrolled or would have paid less for DeVry's services. [35] ¶ 192. DeVry initiated this litigation by filing a complaint against Robinson and Brown seeking declaratory and injunctive relief. [1] ¶ 1. Robinson and Brown filed counterclaims, and DeVry voluntarily dismissed its complaint. [20]. After the parties were realigned, DeVry filed a motion to dismiss, [27], and plaintiffs filed an amended complaint in response. [35]. The complaint alleges claims under three Illinois statutes (Counts I-III) and theories of misrepresentation (Count VII), concealment (Count VIII), negligence (Count IX), breach of fiduciary duty (Count X), conversion (Count XI), and unjust ...


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