John MacDonald, Jr. v. Thomas M. Cooley Law School
724 F.3d 654
6th Cir.2013Background
- Twelve Cooley Law School graduates sued the school in district court claiming deceptive employment statistics misled them into attending Cooley.
- The Employment Reports and Salary Surveys allegedly misrepresented the percentage of graduates employed and the average starting salary.
- The district court dismissed on four grounds: Michigan CPA inapplicable to purchasing a legal education, and failure to state fraud or silent-fraud claims.
- Plaintiffs alleged two uniform misrepresentations in each report and relied on them to decide to enroll or stay in school.
- The court held the CPA applicable only to consumer purchases primarily for personal use; a business-purpose purchase falls outside the Act.
- The court also ruled the two statistics were either literally true or their reliance unreasonable, defeating fraud-based claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CPA applicability to purchasing legal education | Cooley's sale of education is covered by CPA | Purchase for business purposes falls outside CPA | CPA does not apply to purchase of a legal education |
| Fraud claim based on percentage employed | Employed statistic falsely implied full-time legal jobs | Statistic was literally true; reliance unreasonable | Fraud claim failure; reliance unreasonable or statistic true |
| Fraud claim based on average starting salary | Average salary misrepresented overall graduates | Reliance unreasonable; data limited to respondents | Fraud claim failure; reliance unreasonable |
| Silent fraud and negligent misrepresentation | Cooley concealed material facts | No duty to disclose; no justifiable reliance | Silent fraud/ negligent misrepresentation not stated; claims fail under Michigan law |
Key Cases Cited
- Slobin v. Henry Ford Health Care, 666 N.W.2d 632 (Mich. 2003) (business-purpose purchases excluded from CPA coverage)
- Hord v. Environmental Research Inst. of Mich., 617 N.W.2d 543 (Mich. 2000) (fraud elements; reasonableness of reliance standards)
- Novak v. Nationwide Mut. Ins. Co., 599 N.W.2d 546 (Mich. Ct. App. 1999) (reasonable reliance required in misrepresentation claims)
- Nieves v. Bell Indus., Inc., 517 N.W.2d 235 (Mich. Ct. App. 1994) (establishes reasonableness standard for reliance in misrepresentation)
- Webb v. First of Mich. Corp., 491 N.W.2d 851 (Mich. Ct. App. 1992) (supports reasonable-reliance principle in misrepresentation)