Interesting list from posts by JE Brunton Even better than Oregan's list Under suit by State of Hawaii Friends International Christian Univ Golden Pacific University American Nat'l Univ International East-West Univ Atlantic International Univ Trinity Coll of Sci & Mgmt National Univ of America Brighton Univ Pickering Univ Pacific Southern Univ Cambridge State Univ Determined Operating in Violation of Legislation by State of Hawaii South Pacific University U of Northern Washington Hawaii American Univ AIUMT Stanton Univ Lincoln Park University Wilson State University Frederick Taylor Int U Prescott College Questionable while claiming Hawaii Approval Atlantic International University Clermont/Senior/SCUPS??? Questionable Cornerstone University in Honolulu
Better, and certainly less questionable. It's tough for even the most diehard shill to rationalize their school being sued for fraud by a state AG's office. Bruce
At the risk of being overly technical, when our office files suit, generally we assert two types of causes of actions or claims. First, we assert violations of Chapter 446E of the Hawaii Revised Statutes. This chapter contains five sections and is commonly known as Hawaii's Unaccredited Degree Granting Institutions law. Second, in selected cases we assert claims based on deceptive representations which violate the unfair and/or deceptive trade practice (or "mini-FTC Act") statute. We do not, as a technical matter, assert claims based on fraud. "Fraud" is a legal concept which carries several connotations--it may be either criminal or civil (our office only has civil jurisdiction). It requires proof of intent to defraud, something not needed in prosecuting a claim for deceptive trade practices. It also requires a showing that the victims relied on the fraud, something that is not required for 446E or deceptive trade practice claims. There are other ramifications of "fraud" claims, especially in bankruptcy. Suffice it to say that we usually do not need to investigate or assert fraud claims in the typical case filed. You may view Chapter 446E in its entirety at < http://www.state.hi.us/dcca/ocp/statutes&rules/chapter446e.htm> and the trade practice statute can be viewed at <http://www.state.hi.us/dcca/ocp/statutes&rules/480.html>, particularly sections 480-2(a) and 480-3.1. Individual students/graduates have the legal ability to pursue their own cases. In certain situations they may take advantage of the decisions, rulings and/or settlements of the cases brought by our office. Private plaintiffs, if they prevail, are entitled to $1,000 or treble their damages in addition to attorneys' fees. Jeffrey E. Brunton Staff Attorney Office of Consumer Protection State of Hawai
I sincerely appreciate the more detailed explanation. As a general aside I find it interesting that it is sometimes so difficult to tell how well a law is really going to work. It has to do with many factors and a traditionally weak link in many states in the area of degree mills is that the law must be enforced. It is pleasing to me that the new Hawaii laws seem to be working very well so far.
I didn't read it that way. "Fraud" is one of those words that has a common use in everyday language but a more strictly defined use by a lawyer. I had assumed that you were referring to the common everyday language use of the word?
I was, but I should know better. I deal with lawyers frequently, so I know the difference. My bad. Bruce
Mr. Brunton: It would appear that damages awarded as "treble" would in fact indicate that a "consumer fraud" was perpetrated, i.e., the willful and deliberate violation of some state rule or regulation, would it not? As most solicitations to prospective students are in print, what about "affirmative misrepresentation"... would this not also be considered fraud in the eyes of the State? I know that in most jurisdicitons these would be considered civil actions. Do you pursue this course of action to basically fine and/or sanction them into bankruptcy? Or is this done to get the "carpet baggers" to move on to another state? Just curious?
Actually our lawsuits brought on behalf of the state do not seek treble damages and rarely assert claims based on fraud. Instead we simply assert violations of the statutes. There are three primary remedies we seek. (1) Injunctive relief (various types of orders) preventing further violations (2) consumer restitution and (3) civil penalties. The statutes provide that a minimum of $500 up to a maximum $10,000 is assessable by the court for each violation. Of course if the violations appear to be intentional, then the fine goes up. There are several ways to calculate the number of violations in a case. First there is the "per victim" test; i.e. each student that is victimized is considered a separate violation. The problem with this test is that most of the schools do not respond and produce records which would sdhow how many students they have enrolled. We are now using enrolment figures obtained from their applications to WAUC and other accrediting agencies as well as their own promotional materials. Another test is the "per day" test; i.e. the number of days the violations continued. If a website is continuously viewable and it violates the statute, each day is a separate violation. You are correct that we have only civil jurisdiction. Restitution is a concept that typically means returning the monies actually paid out of pocket to the student. It does not include redress for tort damages, emotional distress and the like. Individual students/graduates have a right to pursue their own lawsuits based on the violations against the university. In those private actions, they can assert fraud claims and they are entitled to $1,000 or treble damages, whichever is greater. They may also recover their attorneys' fees. In our experience to date, a handful of the schools we have sued have chosen to cease doing business in Hawaii (some have apparently decided to operate under the authority of other jurisdictions), have paid an agreed fine rather than litigate. A few have chosen to get into compliance, paid a fine and cointinue to operate under Hawaii law and jurisdiction. The great bulk have chosen simply to not respond and default judgments are taken against them. Those judgments terminate their corporate existences, shut down the mail-forwarders and others who assist in their operations and serve as public notice that these schools are definitely not authorized to operate under our laws. in addition they allow us to take down websites--Hawaii American University and Pacific Southern Universities websites were taken down last week. The judgments also contain usually six-figure penalty provisions against the defendants. Usually we will sue any corporations involved, its president and any other individual that appears to be an active or passive participant in the violations. These judgments are then registered in the state where the defendant actually resides and sometimes serve as liens on property. They may also affect the defendants' credit reports. We are exploring opportunities that will allow us to pursue collection of these judgments out-of-state. In many cases, however, the operations are run from foreign countries or are beyond our reach as a practical matter.
