Monday, June 25, 2012

Higher Ed: Handbook for Student Law

Castagnera, James Ottavio
New York, Bern, Berlin, Bruxelles, Frankfurt am Main, Oxford, Wien, 2010. X, 255 pp.Education Management: Contexts, Constituents, and Communities. Vol. 6 General Editor:M. Christopher Brown II
Print: ISBN 978-1-4331-0742-9 hardback SFR 120.00 / €* 107.00 / €** 110.00 / € 100.00 / £ 80.00 / US$ 129.95
Order online:
The Handbook for Student Law for Higher Education Administrators is a practical tool, intended for administrators dealing with students in higher education, focusing principally on four-year institutions. Addressing the ever-developing relationship between higher education and the law, the book will provide the academic administrator with the means to knowledgably and confidently navigate the many legal threats and challenges facing colleges today. Using examples from real cases and scenarios from different institutions, the handbook provides sample policies, checklists, and advice that administrators can apply to a wide variety of situations, both preventatively and proactively. Also included are relevant 2008-09 amendments to the Americans with Disabilities Act and the Federal Educational Rights and Privacy Act, and each chapter includes a section on the impact of the Higher Education Opportunities Act of 2008. The Handbook for Student Law for Higher Education Administrators is a compendium of practical knowledge and guidance, useful for any administrator dealing with the legal minefield that is higher education.

The Author: James Ottavio Castagnera, J.D., Ph.D., has spent more than twenty-five years practicing, writing about, and teaching law. He is an expert in employment law and policy, and is well versed in many areas of higher education law. He has been a labor lawyer and litigator with a major Philadelphia firm and the general counsel/corporate secretary for the then-largest convenience store chain in New Jersey and for the nation's number one econometric forecasting organization. He has published seventeen books, as well as some fifty professional/scholarly articles and book chapters. A frequent commentator in newspapers, magazines, and on the Internet, Castagnera's teaching has taken him to the University of Texas-Austin, the Wharton School of the University of Pennsylvania, and the Widener University School of Law. Currently he is legal counsel to a New Jersey university and president of a freelance writing firm. In 2007 he was an Academic Fellow on Terrorism in Israel under the auspices of the Foundation for Defense of Democracy. His seventeenth book, Al Qaeda Goes to College, was published in April 2009.

By Jim Castagnera

Part 2 of 2 
Now, enter the lawyers
What motivated the Washington Post Company’s confessions?

One reason might be a flurry of security class-action suits filed against other for-profit corporations in mid-August. Suits were filed in federal district courts against Education Management Corporation on August 11; American Public Education on August 12; Lincoln Educational Services on August 13; Apollo Group (University of Phoenix) on August 16, and Corinthian Colleges on September 1.

Kevin LaCroix of OakBridge Insurance Services in Beachwood, Ohio is author of the blog "The D&o Diary" [www.dandodiary. com]. LaCroix says the security class actions business "is big business." An avalanche of class actions occurs "where in one sector everybody has the same problem." He also notes that "the same law firms are driving all these litigations."

Indeed, the complaints in four of the five actions—against Education Management Corp, American Public Ed, Lincoln, and Apollo—are all signed by Attorney Kim Miller of Kahn Swick & Foti of New York City and Attorney Lewis Kahn of that firm’s Madisonville, Louisiana office. Each of the complaints filed in federal courts in Pittsburgh, West Virginia, New Jersey, and Phoenix, respectively are also signed by local counsel. The Corinthian suit was filed by the firm of Pomerantz Haudek Grossman & Gross in the federal court for central California.

The lead firm’s homepage asserts, "Kahn Swick & Foti represents victims of corporate wrongdoing. Consistent with our goal to lend a helping hand is our mission to only accept payment at the end of a case, only if we win. And win we do. We have recovered millions of dollars for victims of corporate greed." 

As LaCroix notes, the allegations in the complaints are all much the same. The plaintiffs assert that each of the defendants made "a series of false and misleading statements" in registration and proxy statements, other SEC filings, press releases, and the like. The statements induced investors to buy their stock, which subsequently declined in value.

While emphasizing that he has "no idea of the merits" of the claims, LaCroix observes it’s "not a pretty picture."

LaCroix identifies a sixth suit, "a separate class action lawsuit against Alta College, Inc. (parent of Westwood College)… on August 11, 2010 in Colorado alleging violations of the Colorado Consumer Protection Act." observing that "it seems safe to predict that other publicly-traded for-profit education companies could also be hit with such a suit," LaCroix singles out Apollo Group for special attention.

LaCroix recounts a series of events involving a previous Apollo class action suit that is still being worked within the federal courts. It has gained a certain "notoriety because it is one of the few securities cases that has actually gone to trial. The trial resulted in a plaintiffs’ verdict, although the presiding judge later set the verdict aside in a response to a post-trial motion. More recently, the Ninth Circuit (Court of Appeals) reversed the trial court’s ruling and remanded the case to the district court for further proceedings, a development that has sparked significant interest and discussion."

When I interviewed him recently, LaCroix added that Apollo’s "management disclosure practice has drawn a lot of attention." In fact, my own interest, as reflected in a previous issue of Today’s Campusmagazine, has long been drawn to the case of Hendow v. University of Phoenix.  Hendow and another former Phoenix employee claimed that the company illegally rewarded admissions officers on the basis of the number of students each enrolled.

The Hendow case was initially dismissed by the federal trial court, only to be reinstated by the Ninth Circuit, which said, "This case involves allegations under the False Claims Act that the University of Phoenix… knowingly made false promises ... in order to become eligible to receive Title IV funds." [U.S. ex rel Hendow v. University of Phoenix, 461 F3d 1166 (9th Cir. 2006).]

After the Ninth Circuit reinstated the case, the trial was set for March of this year. Before the trial date, Apollo Group settled with the federal government for $67.5 million, while also paying the opposing lawyers $11 million in attorney fees.

The publicity is widely noticed
How widely noticed? Comedy Central’s Daily Show has a blog, where one blogger ranted as follows on August 6th. (http://forums. "It is crazy how the matchbook schools now market themselves as ‘universities.’ Many are basically predators on Title IV and GI Bill funds—basically taking taxpayer money and delivering content and certificates of dubious value…. The problem ones seduce low-income and freshly discharged military with unsupportable fantasies just to get their one precious opportunity to use public funding to better themselves. Instead they get crap."

The come-uppance may take place in a courtroom with big checks attached. or it may occur in the blogosphere and the television networks. Nonetheless there are negative outcomes for for-profit schools in particular—and U.S. higher education, in general.

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