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November 02, 2017

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Anonny Prof

These schools need to be stripped of their accreditation NOW.

William Patton

David, You focus on the fiduciary duty of disclosure to Law Students who attend lower rated law schools. However, your solution of mandatory disclosure of all ABA findings of a school's non-compliance will bring more equality among all ABA law schools. For decades top-ranked law schools have avoided public pressure and student unrest by receiving "private censure" under ABA Rule of Procedure, Rule 16 (b)(4). Many of those private censure sanctions have involved issues regarding the quality of legal education and, therefore, involve important issues regarding students' quality of education. For instance, private censure has sometimes involved violations regarding the quality of clinical and experiential course offerings and the types of faculty appointments provided to such professors. During the decades in which CLEA and others published statistics demonstrating that many schools violated ABA standards, how many times have you read about the ABA's determination that schools were out of compliance with such standards? Are you recommending that the "private censure" rule be abrogated for all findings of ABA standards violations? Or is your argument that a "private censure" does not limit the fiduciary responsibility to notify students regarding deficiencies in a school's educational program?

anon

William Patton

I didn't read David's post as restrictive in the way that you suggest. I find myself in agreement with both of you: disclosure is essential, required and non-negotiable.

I am concerned about selective enforcement, however, and the possible reasons therefor. Shouldn't schools with nearly identical non compliance records be treated the same?

This isn't like a freeway, where, one one driver gets stopped for speeding, everyone else gets a pass.

John Steele

It's worth noting that Thomas Jefferson is consistently listed as the law school where student have the most incurred debt.

David Frakt

Willliam Patton -

A private censure is one possible sanction for non-compliance with standards under Rule 16 of the ABA Standards and Rules for the Approval of Law Schools. The determination of an appropriate sanction is separate and apart from the original determination of non-compliance under Rule 12 and notice under rule 14. What I am arguing is that a determination of non-compliance should be public. If the ABA later decides that a private censure is the most appropriate sanction from the list of available sanctions (see below), based on all the aggravating and mitigating factors, then that may be appropriate.

Rule 16(b) Sanctions may include any or all of the following:
(1) A monetarypayment;
(2) A requirement that the law school refund all or part of tuition or fees paid by students;
(3) Public censure;
(4) Private censure;
(5) Publication or distribution of an apology or corrective statement by the law school; (6) A prohibition against initiating new programs for a specific period;
(7) Probation for a specific period or until specific conditions are fulfilled; or
(8) Withdrawal of provisional or full approval.

Since I don't have any personal knowledge of when the ABA has issued a private censure and under what circumstances, I can't comment on whether I agree or disagree with any such actions. Generally speaking, I support the maximum amount of transparency in how the ABA carries out its accreditation function, so I would have a strong preference for a public censure if a censure is deemed to be an appropriate sanction.

David Frakt

An astute reader noted that the letters to Appalachian and Thomas Jefferson refer to a decision made by the AccreditationCommittee at its January 12-13, 2017 meeting, but the letters were not sent until May 19, 2017, over five months later. If anyone has any insight into why there would be such a long delay in the ABA sending out the letter of non-compliance, please share it.

Deep State Special Legal Counsel

In the face of Trump bigotry, Trump meanness, Trump stupidity, Trump ignorance, Trump mendacity, Trump lawlessness, and Congressional fecklessness as a check, ANY law school is a great public good for our Republic ("if we can keep it"). Us lawyers, no matter where we matriculated from conduct the everyday business of our democracy. We run the country from the traffic courts, drug courts, civil courts, administrative agencies and on down the line. Lawyers and judges provide another pillar of democratic fragmentation. I am proud of those lawyers who hang out at our major airports to help immigrants, no matte what law school they came from...

anon

DSSLC is a perfect foil here: a clever provocateur, posing as an ignoramus. As he lifts his leg and sprinkles compulsively on nearly every thread - always leaving his stench and hoping someone will smell and react to it -- he never fails to disgust. Sy, Carswell, DSSLC whatever. Maybe he'll move on and piss all over some other blog at some point.

Deep State Special Legal Counsel

anon at 3:08 p.m.

That is the nicest thing anybody has told me all day, save for Mrs. Legal Counsel. She has an obligation to say something nice to me. "CLEVER" Gosh, you shouldn't have...

William Patton

David, I have not taken a position on whether or not the ABA should have a "private censure" option. I was asking a different question: Is a law school's obligation to inform students under a fiduciary duty theory that the ABA has found a violation of standards regarding the educational program any different depending on whether or not the censure is "public" or "private". In other words, does the nature/form of the ABA censure of the law school modify the fiduciary duty to notify law student consumers about the violations regarding the educational program? The answer to this question does not require specific knowledge of past "private" sanctions issued by the ABA.

David Frakt

Bill -

Here is the process as I understand it. First, the ABA finds that a school is in non-compliance. Then the ABA sends a letter to the school informing them of this and gives the school an opportunity to respond. Then, in light of the response, the ABA decides whether to impose any sanctions. What I am advocating is that the ABA's initial finding of non-compliance with standards (i.e. the contents of the letter sent to the school) should be made public. What is important to the students is to know, as early as possible, that there is a serious problem at the law school they are attending or considering attending. If the initial non-compliance is not made public, and the ABA later decides on a private censure, then the students may never know there was a problem at all. But if the initial non-compliance is made known, and the ABA later decides that the appropriate sanction is a private censure, I don't have a problem with that.

In terms of the school's fiduciary duty, I believe the school should notify students of any material finding of non-compliance, that is any finding which could potentially impact the accreditation of the school or seriously undermine the reputation of the school, which could impact the ability of students graduating from the school to find jobs. I can envision a minor technical violation of standards which would not rise to this level of materiality. For example, SUNY-Buffalo also received a letter from the ABA sent on May 19, 2017. They were found to be in non-compliance with Standard 502(d) regarding the requirement to have a student's official transcripts on file. They were also found to be in non-compliance with Standard 202 with respect to the requirement to have sufficient financial resources to keep the school operating. I would consider the first violation to be non-material, and the second to be material, requiring disclosure to the students.

I hope that clarifies my position.

anon

Is there authority (i.e., judicial, regulatory, statutory, custom and practice) that holds, squarely, that a law school is a fiduciary to its students on matters of decisions to enroll?

I don't ask as a hostile question. I am all in favor of the disclosures that David advocates (and more, please). But, I'm just wondering if a law school is required to disregard its own interests, vis a vis potential applicants, in the way a fiduciary should?

As for those already enrolled, it would seem to me to be a question of materiality. If the "stock" of the law school may be adversely affected, must the law school tell those already "invested"? Knowing that the adverse opinion of the ABA may never become public seems to affect that materiality analysis, no?

David Frakt

anon-
If you look at the Denial of Recertification of the federal student loan program from the Department of Education to Charlotte School of Law, there is a good explanation of the school's fiduciary obligation as a participant in the federal student loan program. This responsibility includes a duty not to make substantial misrepresentations. Substantial misrepresentations include advertising oneself as being fully accredited, and therefore presumably in compliance with ABA Standards, when the school has been found to be out of compliance with core standards, including 301 and 501, which the DOE letter described as being "foundational to the educational enterprise."

DOE noted that Charlotte asked the ABA to keep its findings secret because public release of its noncompliance with ABA standards would discourage students from enrolling and encourage high-performing students to transfer. This proved that Charlotte considered the information to be material. In light of this recent precedent, it is particularly troubling that Thomas Jefferson and Appalachian chose not to disclose.

David Frakt

The Denial of Recertification Letter can be found here: https://studentaid.ed.gov/sa/sites/default/files/csl-recert-denial.pdf

anon

David

No doubt the info is material, and should be disclosed.
I do question, however, use the term "Fiduciary" for the reasons suggested above.

I think sometimes this term gets used to simply suggest a duty to disclose. There are lots of situations where there is a duty to disclose, but that doesn't mean necessarily that the legal basis is a fiduciary duty.

For example, does a law school have a "fiduciary duty" to the public, including possible applicants?

Again, I'm all in favor of shutting down the violators asap (and ALL of them, not just selecting a few heads to roll and allowing the others to slide). But, the standards should be fair, consistent, well founded, evenly applied and not based on arbitrary misuses of legal buzz words.

CBR

David, thanks for another great post! I think the issues of higher education finance and ethics are very tightly connected, and I wish more people were willing to ask the hard questions. Re: fiduciary duty, this is an area where nonprofit status really does matter. There is no question that the directors of a nonprofit institution have a fiduciary duty to serve the public benefit through the institution's mission. There's also no question that this duty is being breached in numerous instances. It's less clear that the institution has a fiduciary duty to the students themselves, though I would argue that such a duty should be implied. But regardless of how it is characterized, I believe that certain actions harmful to students (admitting students with no realistic chance of success, failing to disclose relevant information in order to protect cashflow to institutional leadership, adopting strategies to maximize loan payments to the school) would also be found to violate the board's fiduciary duty. It's a common argument these days that there's really "no difference" between for-profit and non-profit institutions, but I think this is an effect of problematic behavior by the non-profits, rather than a characterization of the law that governs them.

anon

CBR

Perhaps then, however, you are putting too much on the non profit and too little on the for profits?

My point is this: think of a trustee as the model of a fiduciary. How far do you need to bend and stretch the rules to get to the conclusion that a law school owes a "fiduciary duty" to the public at large (or, e.g., applicants)?

The duty to disclose is a completely different legal concept.

Are legal concepts important when litigating legal issues? I think so. If anyone wants to WIN this debate in court and shut down the offenders, use of the proper legal concepts is important. Saying that a law school owes a "fiduciary duty" to the public, sadly, sounds like a dorm room discussion point, and won't win in court.

Of course, please cite the authority to the contrary, and I'll stand corrected.

anon

Reading the letter David cited above, one finds:

"an institution and its officers must act with the highest standard of care and diligence in administering the Title IV programs and in accounting to the Secretary for the funds received. 34 C.F.R. §§ 668.82(a),(b).

From this broad and clearly correct point, the letter appears to then equate this duty with essentially a duty with respect to nearly every aspect of the law school's core conduct, especially with respect to suitability of the program to the job market, lest the law school violate its "fiduciary duty" to administer Title IV programs with the care and diligence of a fiduciary.

Is this letter authority that a law school violates a "fiduciary duty" every time it misrepresents a material fact to an applicant or student about the prospects for employment (perhaps, as the letter suggests or could be misread to suggest)?

If so, should the legal community revisit some of the statements that were posted on this site a few years ago, concerning the job market for new graduates that were to materialize this and next year? I seem to recall some very firm statements. Does anyone remember?

Should someone go back and take a closer look, David?

Michael C. Duff

In any event, the letter interpreting ss. 668.82(a), (b) would likely be afforded Auer deference. Not much point struggling against an agency's interpretation of its own rule.

twbb

I agree with anon above; the focus on whether a law school is a fiduciary or not seems to be the wrong question, and there are plenty of situations where disclosure is obligated outside a fiduciary relationship.

E.g., ABA Standard 509a clearly states that "All information that a law school reports, publicizes, or distributes shall be complete, accurate and not misleading to a reasonable law school student or applicant. A law school shall use due diligence in obtaining and verifying such information."

It is hard to imagine a school fulfilling that standard while not disclosing the ABA letter. Certainly, any reference to a school's ABA accreditation in materials provided to students, or published on a website, will not be "complete."

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