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Stanford Student Dropped From College Bribery Case (5)

March 14, 2019, 12:55 PMUpdated: March 14, 2019, 8:55 PM

A Stanford University student who was named as a lead plaintiff in a lawsuit against a number of universities involved in the admissions-bribery scandal has been dropped from the case.

The original March 13 complaint was the first to be filed over a college cheating scandal in which parents, coaches, and college administrators at highly-selective universities allegedly conspired to gain admission of students through the payment of bribes and other inducements.

Lawyers for the students amended the complaint March 14 to add students who were denied admission to the highly-selective schools and instead attended less selective universities.

The students say in their complaint filed in the U.S. District Court for the Northern District of California that they were denied a fair opportunity to apply for admission at USC, Stanford University, the University of Texas at Austin, and other colleges.

A complaint originally filed in the case claimed that two Stanford students--Erica Olsen and Kalea Woods--were denied admission at Yale and USC. The amendment removing Olsen came less than 24 hours after the lawsuit was filed and may reflect a legal weakness noted by a class action attorney.

“It seems premature to say a Stanford degree was devalued and that you could prove devaluation on a class wide basis,” Steve Berman, managing partner of Hagens Berman Sobol Shapiro, a prominent national class action law firm, told Bloomberg Law.

“Is a Stanford student who gets a Rhodes suffering from devaluation?” Berman asked. “(Does) a Stanford student who goofs off have a devaluation from his or her efforts or by the scandal?”

They Didn’t Get What They Paid For

But attorneys who filed the lawsuit say they have a case. “The students who filed the complaint didn’t receive what they paid for—to participate in an application process free of fraud. According to the complaint, these schools represented that their admission process would be based on the applicants’ merits, considering their character and performance. Instead, the students allege that what they got was a process tainted by bribes and school officials who failed to assure an honest application process,” a spokeswoman for Zimmerman Reed LLP said.

“It’s a straightforward claim and a simple remedy. The students want their money back. They request that anyone who paid an application fee to any of the eight named universities but was denied admission gets their application fee returned,” she said.

Many of the universities named in the suit didn’t reply to March 14 requests for comment, but the University of Texas at Austin denounced the scheme in a statement sent to Bloomberg Law.

“Like many students and families across the country, we are also outraged that parents, outside actors and university employees may have committed fraud surrounding admissions at universities,” spokesman JB Bird said.

“The University of Texas has a thorough, holistic admissions process,” he said. “The actions alleged by federal prosecutors against one UT employee were not in line with that policy and may have been criminal. They do not reflect our admissions process.”

A spokeswoman for the University of San Diego said the university was looking into the complaint, but didn’t comment further. A spokesman for Stanford said the suit is “under review.”

The Scheme

USC, UCLA, and Stanford are among the universities enmeshed in the criminal case filed by the U.S. Attorney’s Office in Boston.

Prosecutors say some wealthy parents in the scheme were able to claim tax deductions of purported donations funneled through Key Worldwide Foundation, a Newport Beach, Calif.-based nonprofit.

William Singer, a college admissions consultant at the center of the scheme who pleaded guilty to racketeering and other charges March 12, is also named as a defendant in the complaint.

Singer facilitated cheating on college entrance examinations at a rate of $15,000 to $75,000 per test, with payments structured as donations to KWF, the class complaint states.

As a result of the alleged fraudulent bribery schemes, “unqualified students found their way into the admissions rolls of highly selective universities, while those students who played by the rules and did not have college-bribing parents were denied admission,” the complaint states.

They also allege their degrees are diminished because of Stanford’s involvement in the alleged scandal.

Olsen, for example, claims that “her degree is now not worth as much as it was before, because prospective employers may now question whether she was admitted to the university on her own merits, versus having rich parents who were willing to bribe school officials.”

The complaint names as defendants USC, Stanford, and Yale, as well as the University of California Los Angeles, the University of San Diego, the University of Texas at Austin, Wake Forest University, and Georgetown University.

Causes of Action: Civil Racketeering, 18 U.S.C. §1962(c); Cal. Consumers Legal Remedies Act, Civil Code §§1750-1784; California Unfair Competition Act, Cal. Bus. and Prof. Code §§17200-17209; negligence

Relief: Compensatory damages with interest; punitive damages; recoupment of admissions fees; claw-back of illegal payments; attorneys’ fees; and court costs

Potential Class Size: The complaint proposes a class comprising all individuals who, between 2012 and 2018, “paid an admission fee to one or more of these universities, with respect to an admission application that was rejected by the university.”

Attorneys: The Medler Law Firm APC and Zimmerman Reed LLP represent the plaintiffs.

The case is Olsen v. Singer, N.D. Cal., No. 19-cv-01351, amended complaint 3/14/19.

To contact the reporter on this story: Steven M. Sellers in Washington at ssellers@bloomberglaw.com; Sam Skolnik at sskolnik@bloomberglaw.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; C. Reilly Larson at rlarson@bloomberglaw.com