Professional Documents
Culture Documents
Compaint Against Le Cordon Bleu
Compaint Against Le Cordon Bleu
080303530
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NATHAN SURRETT, individually and on Case No. 0803-03530
11 behalf of all other similarly-situated
individuals, and on behalf of herself only, PLAINTIFF'S SEVENTH AMENDED
12 JENNIFER ADAMS fka JENNIFER COMPLAINT AND DEMAND FOR JURY
SCHUSTER, TRIAL
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Plaintiffs, CLASS ACTION- DAMAGES!
14 EQUITABLE RELIEF
vs.
15 (UNLAWFUL TRADE PRACTICES ACT (ORS
WESTERN CULINARY INSTITUTE, LTD; 646.608, and FRAUD),
16 LE CORDON BLEU NORTH AMERICA,
INC; and CAREER EDUCATION Claims Not Subject to Mandatory
17 CORPORATION, Arbitration
18 Defendants.
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Plaintiffs allege:
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PRELIMINARY STATEMENT
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1.
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This is an action for money damages and equitable relief brought by Jennifer Adams
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individually and by Nathan Surrett individually and on behalf of all similarly situated persons.
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Plaintiffs allege claims for violation of the Unlawful Trade Practices Act, ORS 646.608, el seq.
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Page I - PLAINTIFF'S SEVENTH AMENDED COMPLAINT AND DEMAND FOR
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3 Plaintiffs allege that defendants operated a trade school, Western Culinary Institute now
4 known as Le Cordon Bleu College of Culinary Arts in Portland ("WCI") and that defendants
5 induced plaintiffs and similarly-situated students to enroll at, attend, and incur financial
6 obligations, by making uniform misrepresentations common to plaintiffs and the class regarding
7 the value of the education, benefit of the degree, exclusivity of the degree, nature of ongoing
8 career placement, job placement rates, and by uniformly omitting to disclose to plaintiffs and the
9 class information about post-graduate salaries. Plaintiffs initially filed the case for equitable
10 relief, giving written notice of the intention to seek damages as required by ORCP 32H. More
11 than 30 days after giving notice, plaintiffs filed an amended complaint adding claims for
13 PARTIES
14 2.
15 Plaintiff Jennifer Adams attended WCI and paid tuition and incurred financial obligations
17 Adams attended WCI in 2006 and 2007, graduating in June, 2007. Plaintiff Nathan Surrett
18 enrolled and began attending WCI in May 2007 and graduated in September 2008. Plaintiff
19 Surrett paid tuition and incurred financial obligations as a result of misrepresentations and
21 3.
22 Defendant Western Culinary Institute, Ltd. is a foreign corporation that operated Western
23 Culinary Institute, now known as Le Cordon Bleu College of Culinary Arts in Portland, an
24 Oregon trade school, located in Multnomah County. Defendant Western Culinary Institute, Ltd is
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2 action, defendant Western Culinary Institute, Ltd. merged into Le Cordon Bleu North America,
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5 Defendant Career Education Corporation (CEC) is a foreign corporation that provides
6 support and oversight to defendant Western Culinary Institute, Ltd. and Le Cordon BIeu North
9 5.
10 WCI operates in Multnomah County. Some of the acts complained of in this action took
12 CLASS ALLEGATIONS
13 6.
The class consists of all current and former students who enrolled at Western Culinary Institue-
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15 now known as Le Cordon Bleu College of Culinary Arts in Portland-on or after March 5, 2006
16 (up to and including March 1,2010), who attended Western Culinay Institute/Le Cordon Bleu
17 College of Culinary Arts in Portland on or after March 5, 2006 (up to including March I, 20 I 0)
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and who made tuition payments or incurred financial obligations, excluding where applicable, all
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officers and directors of defendants, attorneys for the class, any judge orjllror who sits on the
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case, and any student who did not continue his or her studies due to academic ineligibility.
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22 7.
23 Based on information and belief, plaintiff estimates that the class consists of
24 approximately 2,000 people. Regardless of the exact number, the class is so numerous that
25 joinder is impracticable because of the large size and geographic dispersion of the class.
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2 There are questions offact and law common to the class in that each class member has
3 suffered an injury as a result of defendants' conduct. Common questions oflaw and fact
7 that WCI had characteristics, benefits, or qualities that it did not have. ORS 646.608( I )(e);
9 646.608(1 )(t) when, concurrent with delivery of services, defendants failed to disclose known
13 D. Whether plaintiff and members of the class may state a claim for equitable relief
18 1. OAR 583-030-0035(8)(d);
19 2. OAR 583-030-0035(9);
23 6. OAR 583-030-0035(20);
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4 education, benefit of the degree, exclusivity of the degree, nature of ongoing career placement,
7 K. Whether plaintiffs and members of the class had a right to rely on such statements
9 L. Whether plaintiff and members ofthe class may prove reliance on a class-wide
10 basis;
11 M. Whether the defendants knew, but failed to provide to the plaintiffs and the class,
14 the education, benefit of the degree, exclusivity of the degree, nature of ongoing career
16 o. Whether defendants fraudulently concealed from plaintiffs and the class that they
18 9.
19 The claims of the named plaintiff are typical of the claims of the class in that:
20 A. The fraud and UTPA claims involve identical conduct in making uniform
21 representations and misrepresentations and omissions about the characteristics and value of the
22 WCI program;
24 representations and omissions to prospective students, and defendants set policies for WCI and
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3 D. The named plaintiff's claims for relief are based upon the same legal theories as
5 10.
6 The named plaintiff will fairly and adequately protect and represent the interests of the
7 class in that:
9 S. He is represented by attorneys who are qualified and competent counsel who will
11 C. His interests are not antagonistic to or in conflict with the interests of the class
12 members.
13 II.
14 A class action is superior to other available methods for the fair and efficient adjudication
16 A. Common questions oflaw and fact predominate over factors affecting only
17 individual members;
18 B. As far as plaintiff knows, no class action that purports to include WCI students
20 C. Individual class members have little interest in controlling the litigation due to the
21 high cost of each individual action, the risk of fees and costs, and because plaintiff and his
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2 members who have suffered monetary damages as a result of the same type of conduct by
3 defendants; and
4 F. In the aggregate, class members have claims for relief that are significant in scope
6 12.
7 More than 30 days before seeking damages, plaintiff complied with the requirements of
8 ORCP 32H by delivering notice and demand on defendants in writing by service on their
9 registered agent and by certi tied or registered mail, return receipt requested.
10 ALLEGATIONS OF FACT
11 13.
12 Defendants' WCI purports to provide trade school education to plaintiffs and class
13 members that will prepare them for careers in the food service and hospitality industries.
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16 plaintiffs and the class regarding the value of the WCI education, benefit of the degree,
17 exclusivity of the degree, nature of ongoing career placement, job placement rates, post-graduate
18 salaries, and its operation under the regulations of Oregon's Office of Degree Authorization, in
20 A. Offering student admission without receipt of evidence that the applying student
21 could reasonably expect to benefit from the education obtained in violation of duties under OAR
24 B. Affirmatively representing in the WCI catalog that the Le Cordon Bleu curriculua
25 gives students greater opportunities to acquire the knowledge and skills necessary to excel in the
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4 C. Affirmatively representing in the WCI school catalog that the school trains
5 students for entry level jobs, but failing to disclose that those entry level jobs do not require that
8 D. Affirmatively representing in the WCI catalog that the school trains students for
9 entry level positions but failing to disclose that their training would not improve students'
10 qualifications for entry level positions in violation of OAR 583-030-0035(12); OAR 583-030-
11 0035(12)(a); OAR 583-030-0035(20) and ORS 646.608(1 )(e), 1(k), and (I )(t);
12 E. Knowing, but failing to disclose, that WCI training would qualify graduates for
13 mostly low paying, poverty-wage jobs in violation of OAR 583-030-0035( 12); OAR 583-030-
15 F. Knowing, but failing to disclose, that WCI students will incur debts that cannot be
16 repaid with low paying jobs for which their education qualifies them in violation of OAR 583-
19 G. Knowing, but failing to disclose, that most WCI graduates will not eam enough to
20 allow them to pay off school loans in violation of OAR 583-030-0035(12); OAR 583-030-
22 H. Knowing, but failing to disclose, that defendants were so concemed about loan
23 defaults given the imbalance between WCI tuition and expected wages that CEC paid to Sallie
24 Mae 25 percent or more of sub-prime loans that Sallie Mae made to WCI students in violation of
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3 1. Knowing, but failing to disclose, that students who attend WCI would not obtain
4 material benefit from the course of study in violation of OAR 583-030-oo35(8)(f), OAR 583-
7 J. Calculating job placement rates in a manner inconsistent with that required by the
8 State of Oregon's governing regulations in violation of the standards set forth in OAR 583-030-
Jl K. As part of the enrollment process, providing each student with graduate job
12 placement rates that affirmatively represented that it places over 90 percent of its students in
13 jobs, but failing to disclose that their placement rate calculations violated Oregon regulations and
14 the placement those rates were composed mostly of jobs that do not require culinary training like
15 prep cook and line cook in violation of OAR 583-030-0035(8)(d); OAR 583-030-0035(12); OAR
17 L. Defendants failed to disclose that their representations about the value of the
18 education, benefit of the degree, exclusivity of the degree, nature of ongoing career placement,
19 and job placement rates, were false and misleading in violation of OAR 583-030-0035(12); OAR
22 placement assistance, but by inflating job placement figures to include jobs for which a culinary
23 degree is unnecessary, they misrepresented the nature of career services that they would provide
24 in violation of OAR 583-030-0035(11)( e); OAR 583-030-0035( 12); OAR 583-030-0035( 12)(a);
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2 placement assistance, but failed to disclose that this assistance focused largely on compiling
3 posted job openings from publicly available sources like Craig's List and local help wanted ads
4 that were accessible to anyone, whether enrolled at the school or not in violation of OAR 583-
11 FRAUDULENT CONCEALMENT
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13 Defendants are estopped from relying on a statute of limitations defense because they
14 intentionally lulled plaintiffs and the class, by affirmative inducement and wrongful, active
15 concealment of material facts, into delaying the filing of a cause of action. Defendants had
16 continuing common law and regulatory duties to correct the alleged misrepresentations and
17 omissions and disclose the true character, quality, and nature of their programs, but they
18 intentionally failed to do so. As a result, neither plaintiffs nor any class member could have
19 discovered all elements of the alleged torts until, at the earliest, seeking employment after
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22 Defendants made the representations and failed to make disclosures knowingly and
23 intentionally in an effort to induce prospective students to enroll at, attend, and incur financial
24 obligations to pay WCI and in order to retain the tuition money of plaintiff and the class.
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4 17.
5 Defendants willfully violated ORS 646.608(1)(e), I(k), and I (t), and as a result of their
6 misrepresentations and failures to disclose, plaintiffs and members of the class suffered
8 18.
9 Plaintiffs seek certification of an issue class to address common issues of fact and law set
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12 Plaintiffs and members of the class are entitled to full refunds, together with prejudgment
13 interest and repayment of sufficient funds to satisfY the debts they incurred to attend WeI in
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16 Plaintiffs and members of the class are entitled to recover damages in the form of student
17 loan principal and/or tuition payments made, plus interest. In addition, plaintiffs and members of
18 the class are entitled to recover relocations expenses and lost wages incurred during their periods
19 of attendance at school in amounts to be proven at trial. Plaintiffs and the class are entitled to
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22 Plaintiffs and members of the class are entitled to an order certifying an issue class for
24 causation, and damages. Plaintiffs and members of the class are also entitled to equitable relief,
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3 22.
4 Defendants acted for their own financial benefit and with malice or have shown a
5 reckless and outrageous indifference to a highly unreasonable risk of harm and have acted with a
6 conscious indifference to the welfare of others. As a result, plaintiffs and the class are entitled to
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10 Plaintiff re-incorporates Til 1-17; 20-22.
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12 The education and training sold by defendants were worth less than the price charged on
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15 Defendants charged plaintiffs and the class varying amounts, but in no case more than
16 $47,000 per plaintiff and class member for these educational programs. Due to the previously-
17 described characteristics, the educational programs had an actual value of no more than $9, I 00.
18 Plaintiffs and members of the class are entitled to recover diminished value damages in amounts
19 to be proved at trial, and which will not exceed $61 million, plus interest. Plaintiffs and
20 members of the class are also entitled to equitable relief, including an accounting and production
21 of papers and information sufficient to calculate actual sums of money due to them.
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24 Plaintiff re-incorporates 'IMI1-16; 18-22; and 25.
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2 Defendants' representations were false and material, and their omissions were material,
3 to plaintiffs' and class members' decision to enroll, attend, and incur financial obligations to
4 WCI and others. Defendants made the representations with knowledge of their falsity. Plaintiffs
5 and members of the class had a right to rely on the defendants' misrepresentations and
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8 As a result, plaintiffs and members of the class suffered economic damages in the form of
9 student loan principal and/or tuition payments made, plus prejudgment interest, all to their
10 economic damages in amounts to be proved at trial. Plaintiffs and members of the class are
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13 In addition, plaintiffs and class members are entitled to recover lost wages incurred while
14 attcnding school and moving cxpenses incurred to attend school, in amounts to be proved at trial.
15 WHEREFORE, plaintiffs and the class seek relief from defendants, and each of them, as follows:
17 Count I: Plaintiffs and members of the class are entitled to an order certifying
18 this matter as an issue class, with a class trial on common questions of fact
19 and law and class member trials on causation and damages consisting of full
21 to satisry the debts they incurred to attend WCI; relocation expenses and lost
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5 attorneys fees and costs; and class-wide punitive damages in amount not to
8 Plaintiffs and members of the class are entitled to an order certifying this
9 matter as an issue class, with a class trial on common questions of fact and law
10 and class member trials on reliance and damages and damages consisting of full
12 satisfy the debts they incurred to attend WCI, plus prejUdgment interest, and
13 class-wide punitive damages in amount not to exceed $50 million. Plaintiffs are
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17 DATED this 16th day of May, 2017.
18 By:
r
D~a~
v~I ~.~u~g=e=
rm
~n~,~~~~~no-
19 DA VID F. SUGERI\tAN
520 S.W. Sixth Av St . 920
20 Portland, Oregon 972
Phone: (503) 228-6474
21 Fax: (503) 224-2764
E-Mail: david@davidsugerman.com
22
Amy Johnson, OBS No. 112044
23 5836 SE Madison St.
24 Portland, OR 97215
Phone: 503-939-2996
25 E-mail: amy@savagejohnson.com
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4 Respectfully submitted,
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By:
7 r;
D:- :l.\;;;;>";'F!"'.'fruAg~e--
av rm :-!.
an-,--rbS;;=B~:-.""8;r6"'
2 9"8''
DAVID F. SUGERM TIORNEY PC
8 520 S.W. Sixth Ave., Ste. 920
Portland, Oregon 97204
9 Phone: (503)228-6474
Fax: (503) 224-2764
10 E-Mail: david@davidsugerman.com
11 Of Attorneys for Plaintiff and the class
12 Tim Alan Quenelle, OS8 No. 93400
13 TIM QUENELLE, PC
415 North State Street, Suite 132
14 Lake Oswego, OR 97034
Telephone (503) 675-4330
15 Email: tim.guenelle@gmail.com.
16 Attorney for Plaintiff Adams
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Page 16 - PLAINTIFF'S SEVENTH AMENDED COMPLAINT AND DEMAND FOR
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3 COMPLAINT AND DEMAND FOR JURY TRIAL on the following person(s) on this same
4 day:
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Il9 by electronic mail and notice of filing using the CmlECF system
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7 Stephen English
Thomas R Johnson
8 Heidee Stoller
Perkins Coie
9 1120 NW Couch Street, Tenth Floor
Portland OR 97209-4128
10 SEnglish@perkinscoie.com
11 trjohnson@perkinscoie.com
HStoller@perkinscoie.com
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DATED this 161h day of May, 2017.
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BY: =~~~d~ ~:::....,.=,....
David F. ugerma No. 86298
17 DA VID F. SUGER A TIORNEY, PC
520 S.W. Sixth Ave. S .9 0
18 Portland, Oregon 972
Phone: (503) 228-6474
19 Fax: (503) 224-2764
E-Mail: david@davidsugerman.com
20 Attorneys for Plaintiff
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Page 1 - CERTIFICATE OF SERVICE