Jimenez v. New York Law School
103 A.D.3d 13, 956 N.Y.S.2d 54 (2012)
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Rule of Law:
Publishing technically accurate but incomplete data that may allow a consumer to draw incorrect conclusions does not constitute a deceptive act or common-law fraud. The relationship between a prospective student and a university is an arm's-length transaction that does not create a special or fiduciary duty to provide more complete disclosures.
Facts:
- New York Law School (NYLS) published postgraduate employment and salary data for prospective students.
- The employment data provided by NYLS included graduates in any position, including part-time and temporary roles, without differentiating them from full-time, permanent employment.
- NYLS allegedly hired some of its own unemployed graduates into short-term research assistant positions to classify them as 'employed' for statistical purposes.
- The salary statistics published by NYLS were calculated based on data from a small, self-reporting subset of graduates.
- In its publications, NYLS disclosed the small sample size upon which its salary data was based.
- A group of graduates enrolled at NYLS between 2004 and 2011, alleging they relied on this employment and salary data in their decision to attend and incur substantial tuition costs.
Procedural Posture:
- A group of graduates sued New York Law School in the Supreme Court of New York, New York County (a state trial court of first instance).
- The complaint alleged claims for deceptive acts under General Business Law § 349, common-law fraud, and negligent misrepresentation.
- The defendant, New York Law School, filed a motion to dismiss the complaint for failure to state a claim.
- The trial court granted the defendant's motion and dismissed the complaint in its entirety.
- The plaintiffs appealed the dismissal to the Supreme Court of New York, Appellate Division, First Department (an intermediate appellate court).
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Issue:
Does a law school's publication of technically accurate but incomplete postgraduate employment and salary statistics constitute a deceptive act under General Business Law § 349 or common-law fraud when that data may mislead prospective students?
Opinions:
Majority - Acosta, J.
No. The law school’s publication of technically accurate but incomplete statistics does not constitute a deceptive act or common-law fraud. The court reasoned that the data, while 'unquestionably incomplete' and 'less than candid,' was not actually false. Under General Business Law § 349, a party does not commit a deceptive act by publishing truthful information and allowing consumers to make their own assumptions. The common-law fraud claim fails because an essential element, a misrepresentation of a false fact, is missing; the data was not objectively false, merely incomplete. Furthermore, claims for fraudulent concealment and negligent misrepresentation fail because the relationship between a law school and a prospective student is an arm's-length business transaction, not a special or fiduciary relationship that would impose a duty of complete disclosure.
Analysis:
This decision sets a high bar for plaintiffs suing educational institutions for misleading marketing, establishing that technically accurate data is a strong defense against claims of fraud and deceptive practices. By characterizing the prospective student-university relationship as an 'arm's length business transaction,' the court limits an institution's duty to disclose, placing a significant burden of due diligence on applicants. This precedent makes it more difficult for students to seek legal recourse for marketing materials that, while not explicitly false, may paint an overly optimistic picture of post-graduation outcomes.
