Legal News

Law School Students Band Together, Oust Owners

By Dan Slater

In December we posted on the phenomenon of law students suing their schools. One of the five suits mentioned pitted the students of the American Justice School of Law — a non-ABA-accredited, for-profit law school in Paducah, Kentucky — against its three owners.

The lawsuit — which alleged tax fraud, false representation to the ABA, racketeering, scheming to defraud students and obstruction of justice — was reportedly settled on Tuesday. The owners of the school, two deans and an accountant, agreed to transfer ownership to an investor group headed by a local physician, and to play no role in the future administration of the school. (Here’s a report from the Courier-Journal.) No money was exchanged in the transfer, but the new owners agreed to take on the school’s roughly $2.8 million in debt.

So what were the students of American Justice so upset about? According to reports, they alleged that one of the deans, Paul Hendrick, who was the school’s majority stockholder, acted with others to withhold student loan money; apply for student loans in students’ names without their knowledge; lower grades to punish students they perceived as disloyal and keep them from transferring; and delay telling students last fall that the school had been denied ABA accreditation until it was too late for them to leave. (According to reports, graduates of non-accredited schools can’t take the Kentucky bar.)

In court papers, the two deans, Hendrick and Jarrod Turner, denied the allegations and noted that students were never guaranteed the school would win accreditation.

According to the Courier-Journal, there are about a dozen for-profit law schools nationwide, but only five have been accredited. Critics say the schools admit students who aren’t capable of passing the bar exam in order to maintain revenue to keep the school running. Proponents of such schools counter that, regardless, there’s an incentive to get graduates through the bar because if they don’t enrollment will go down.

LB’ers, we’re curious about this. Are there any readers out there attending non-accredited schools? What are the pros and cons?

Full post as published by Law Blog - WSJ.com on February 21, 2008 (boomark / email).