On March 12, 2019, the United States Department of Justice charged 50 individuals, including celebrities and well-known professionals, with participating in an elaborate multi-million-dollar college recruitment scheme. Under the scheme, administrators and coaches at numerous prestigious educational institutions, as well as ACT and SAT administrators, were bribed in exchange for admitting children with lackluster credentials into such institutions. In light of these charges, current students have “piggybacked” on the government’s case and filed a civil class action complaint alleging punitive and compensatory damages of at least $5 million, which includes the recoupment of the plaintiffs’ admission fees paid to the defendant universities between 2012 and 2018. See Fidelak v. Singer, No. 3:19-cv-01351 (N.D. Cal. Mar. 14, 2019).
The complaint alleges that “as a direct and proximate result of the deceptive practices of the university Defendants, each of the Plaintiffs, and all of the Class Members were damaged, in that they paid admission application fees based upon the representations of these Defendant Universities that the application process was fair, neutral, and based upon the applicant’s merit.” However, under the basic principles of agency law, this claim will not likely survive on the merits. The university defendants did not participate nor were they aware of the scheme at an institutional level. Arguably, these institutions are equally as affected by the scheme as prospective students. Further, although the university administrators and coaches are implicated in the federal complaint, they were not acting under the scope of their authority by virtue of their employment with the respective universities.
Additionally, one can argue that the deceptive practices of those engaged in the scheme was not a direct and proximate result of the monetary damage resulting from the payment of application fees and the students’ denial of admission. The university defendants receive thousands of applications from a number of qualified applicants each year. The plaintiffs’ receipt of rejection letters to incredibly competitive institutions cannot possibly be directly correlated to the scheme alleged in the claim.
Further, it is unlikely that the plaintiffs will be able to satisfy the elements of class certification under the Federal Rules. Specifically, there is a strong argument that the plaintiffs are not so similarly situated for purposes of “commonality” and “typicality.”
Certain plaintiffs include college students that were denied admission to the defendant universities. However, each applicant currently attends different institutions ranging from community college to those “prestigious” institutions named as defendants in the complaint. Additionally, each plaintiff had differing credentials at the time of their college applications. Some plaintiffs had stellar test scores, while others were distinguished athletes on their high schools’ sports teams. These plaintiffs presumably attended different high schools, focused in different coursework, and submitted different application materials. Further, these institutions have a number of staff members reviewing applications due to the sheer amount of those received each year. Thus, it cannot be concluded that the plaintiffs would have been accepted to these institutions albeit the scheme, and they did not provide evidence to the contrary.
Other plaintiffs include parents of the affected students who paid the admission fees to the defendant universities. One can argue that these parents may be financially harmed if they paid for their children to apply; however, the children were not allegedly harmed in the same manner as though they did not supply the money to such institutions. Thus, the plaintiffs’ questions of law and fact are not common to the class and the claims are not uniform throughout the class.
Furthermore, a previous version of the complaint was limited to two Stanford students as plaintiffs. This original complaint included a claim that employers might view their Stanford degrees as less valuable “because prospective employers may now question whether she was admitted to the university on her own merits, versus having parents who were willing to bribe school officials.” A proximate cause argument on these grounds would have likely failed due to the highly speculative nature of hiring practices.
Although this case may be fun to watch, it is unlikely that it will evolve into one that has meaningful effect on the state of class action law.