14 Civ. 5006 (S.D.N.Y.)
In July 2014, NYLAG, together with co-counsel Emery Celli Brinckerhoff & Abady LLP, filed a Class Action Complaint in the United States District Court in Manhattan against ASA College and several of its officers, on behalf of eight Named Plaintiffs, seeking to represent a class of ASA’s past, current, and future students. The case alleged that ASA’s students have been victimized by a massive scheme to draw millions of dollars of federal and state financial aid to ASA at students’ expense and detriment, through systematic and fraudulent misrepresentations to accreditors, government entities, and the public. The suit alleged violations of the Racketeer Influenced and Corrupt Organizations Act and the New York Consumer Protection Act.
In October 2014, Defendants moved to dismiss Plaintiffs’ first amended complaint. On behalf of the United States of America, the United States Attorney for the Southern District of New York filed a statement opposing part of Defendants’ motion. On June 5, 2015, the Court dismissed the first amended complaint, without reaching the arguments made by the United States. The Court granted Plaintiffs leave to amend the complaint, and on July 31, 2015, Plaintiffs filed a second amended complaint.
In May 2016, the Court so-ordered a settlement agreement negotiated by the parties. The settlement only resolves the claims of the eight Named Plaintiffs. All the claims of the proposed class were dismissed without prejudice, leaving anyone other than the eight Named Plaintiffs free to pursue any timely claims against ASA. Under the settlement, ASA agreed to make a number of important changes to its business practices, including a commitment to: provide lifetime job placement assistance to all ASA graduates; provide accurate information about ASA’s programs and costs of attendance to all prospective students; and permit NYLAG and co-counsel to monitor ASA’s job placement rate calculations. The injunctive relief and monitoring provisions of the settlement last through at least May 2019.
NYLAG Attorneys: Jane Greengold Stevens, Jason Glick
Co-Counsel: Emery Celli Brinckerhoff & Abady LLP