Pension Trust Fund For Operating Engineers v. DeVry Education Group, Inc. et al

Northern District of Illinois, ilnd-1:2016-cv-05198

Exhibit D

Interested in this case?

Current View

Full Text

Case: 1:16-cv-05198 Document #: 93-4 Filed: 03/30/18 Page 1 of 29 PageID #:1597 EXHIBIT D Case: Case1:16-cv-05198 2:16-cv-00579 Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page12of of28 29 PageID Page ID#:1598 #:1 1 JONATHAN E. NUECHTERLEIN General Counsel 2 CHRISTINA V. TUSAN Cal Bar. No. 192203; ctusan@ftc.gov 3 JOHN D. JACOBS Cal. Bar No. 134154; jjacobs@ftc.gov 4 THOMAS J. SYTA Cal. Bar No.116286; tsyta@ftc.gov 5 BARBARA CHUN 6 Cal. Bar No. 186907; bchun@ftc.gov FAYE CHEN BARNOUW 7 Cal. Bar No. 168631; fbarnouw@ftc.gov FEDERAL TRADE COMMISSION 8 10877 Wilshire Blvd., Suite 700 Los Angeles, CA 90024 9 Tel: (310) 824-4343; Fax: (310) 824-4380 10 YAN FANG Cal Bar No. 279737; yfang@ftc.gov 11 SARAH E. SCHROEDER Cal Bar No. 221528; sschroeder@ftc.gov 12 FEDERAL TRADE COMMISSION 901 Market St., Suite 570 13 San Francisco, CA 94103 14 Attorneys for Plaintiff FEDERAL TRADE COMMISSION 15 16 UNITED STATES DISTRICT COURT 17 CENTRAL DISTRICT OF CALIFORNIA 18 FEDERAL TRADE COMMISSION,) Case No. 16-CV-579) 19 Plaintiff,) 20) COMPLAINT FOR PERMANENT v.) INJUNCTION AND OTHER 21) EQUITABLE RELIEF 22 DEVRY EDUCATION GROUP) 23 INC., formerly known as DeVry Inc.,) a corporation;) 24) DEVRY UNIVERSITY, INC., a) 25 corporation; and) 26) 27 DEVRY/NEW YORK INC., a) corporation;) 28 Defendants.) 1 Case: Case1:16-cv-05198 2:16-cv-00579 Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page23of of28 29 PageID Page ID#:1599 #:2 1 Plaintiff, the Federal Trade Commission ("FTC"), for its Complaint alleges: 2 1. The FTC brings this action under Section 13(b) of the Federal Trade 3 Commission Act ("FTC Act"), 15 U.S.C. § 53(b), to obtain permanent injunctive 4 relief, rescission or reformation of contracts, restitution, the refund of monies paid, 5 disgorgement of ill-gotten monies, and other equitable relief for Defendants' acts 6 or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 7 JURISDICTION AND VENUE 8 2. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 9 1331, 1337(a), and 1345, and 15 U.S.C. §§ 45(a) and 53(b). 10 3. Venue is proper in this district under 28 U.S.C. § 1391 (b)(2) and 11 (c)(2), and 15 U.S.C. § 53(b). 12 PLAINTIFF 13 4. The FTC is an independent agency of the United States Government 14 created by statute. 15 U.S.C. §§ 41-58. The FTC enforces Section 5(a) of the FTC 15 Act, 15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or 16 affecting commerce. 17 5. The FTC is authorized to initiate federal district court proceedings, by 18 its own attorneys, to enjoin violations of the FTC Act, and to secure such equitable 19 relief as may be appropriate in each case, including rescission or reformation of 20 contracts, restitution, the refund of monies paid, and the disgorgement of ill-gotten 21 monies. 15 U.S.C. § 53(b). 22 DEFENDANTS 23 6. Defendant DeVry Education Group Inc. (DEG) is a publicly traded 24 Delaware corporation with its principal place of business at 3005 Highland 25 Parkway, Downers Grove, Illinois. DEG was formerly known as DeVry Inc. DEG 26 transacts or has transacted business in this district and throughout the United 27 States. At all times material to this Complaint, with respect to the acts and 28 practices of DeVry University, Inc. and DeVry/New York Inc. that are described 2 Case: Case1:16-cv-05198 2:16-cv-00579 Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page34of of28 29 PageID Page ID#:1600 #:3 1 below, DEG dominated or controlled those acts and practices, knew of or approved 2 those acts and practices, and/or benefitted from those acts and practices. DEG, 3 DeVry University, Inc., and DeVry/New York Inc. are collectively referred to in 4 this Complaint as "DeVry" or "Defendants." 5 7. Defendant DeVry University, Inc. (DVU), a Delaware corporation, is 6 a subsidiary of DEG with its principal place of business at 3005 Highland 7 Parkway, Downers Grove, Illinois. DVU transacts or has transacted business in 8 this district and throughout the United States. At all times material to this 9 Complaint, acting alone or in concert with others, DVU has advertised, marketed, 10 distributed, or sold educational products and services to consumers throughout the 11 United States. 12 8. Defendant DeVry/New York Inc. (DeVry New York), a Delaware 13 corporation sometimes doing business as DeVry College of New York, is a 14 subsidiary of DEG, with its principal place of business at 3005 Highland Parkway, 15 Downers Grove, Illinois. At all times material to this Complaint, acting alone or in 16 concert with others, DeVry New York has advertised, marketed, distributed, or 17 sold educational products and services to consumers. 18 COMMERCE 19 9. At all times material to this Complaint, Defendants have maintained a 20 substantial course of trade in or affecting commerce, as "commerce" is defined in 21 Section 4 of the FTC Act, 15 U.S.C. § 44. 22 BUSINESS ACTIVITIES 23 Background 24 10. DeVry operates DVU, a private, for-profit postsecondary educational 25 institution, which currently has more than 50 campuses throughout the United 26 States, and at times has had as many as 96 campuses. DVU also offers online 27 classes and degree programs. DVU's predecessor, DeVry Institute of Technology, 28 began offering bachelor's degrees in 1970. DVU comprises five colleges, as well 3 Case: Case1:16-cv-05198 2:16-cv-00579 Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page45of of28 29 PageID Page ID#:1601 #:4 1 as a graduate school of business. More than ten majors and 40 specializations are 2 available. Annual new-student enrollment between 2008 and 2014 ranged from 3 approximately 29,000 to 49,000. Since 1975, more than 870,000 students have 4 enrolled at DVU, and approximately 278,000 undergraduate students have 5 obtained degrees from DVU. 6 11. DVU tuition is $609 for each credit hour for new students and $365 7 for each credit hour in excess of seven credit hours for continuing students. 8 According to DEG's 2015 10-K filing with the Securities and Exchange 9 Commission, based upon current tuition rates, a full-time student enrolled in the 10 five-term undergraduate network systems administration associate degree program 11 will pay total tuition of $39,585 and a full-time student enrolled in the eight-term 12 undergraduate business administration program will pay total tuition of $75,516. 13 Most DVU students do not attend full-time, and the total cost for a part-time 14 student is higher than the cost for a full-time student. 15 12. DEG's total gross revenues between 2008 and mid-2015 exceeded 16 $14.5 billion. DVU's gross revenues between 2008 and mid-2015 exceeded $8.6 17 billion. 18 13. In each fiscal year between and including 2011 and 2014, DVU spent 19 over $135 million on the advertising, marketing, or other promotion of DVU's 20 educational products and services. 21 Overview 22 14. Through the use of English and Spanish-language advertisements and 23 other marketing materials, and during sales pitches with prospective students, 24 Defendants have made deceptive representations about the benefits of obtaining a 25 degree from DVU. 26 15. Defendants have advertised and promoted DVU's degree programs 27 through television commercials, DVU's website, YouTube advertisements, radio 28 spots, brochures, print advertisements, Facebook, Twitter, sales pitches with 4 Case: Case1:16-cv-05198 2:16-cv-00579 Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page56of of28 29 PageID Page ID#:1602 #:5 1 prospective students, and other advertising and promotional materials. DeVry's 2 target audience includes, but is not limited to, high-school students and current and 3 former members of the military. 4 16. One of the messages of Defendants' advertisements and recruitment 5 efforts is that obtaining a degree from DVU is highly likely to result in obtaining a 6 desirable job soon after graduating––a well-paying, career-oriented job in the 7 student's chosen field of study. 8 17. Among other methods, Defendants convey this message by 9 representing that, as a result of obtaining a DVU degree, 90% of DVU graduates 10 who were actively seeking employment landed or obtained new jobs in their field 11 of study within six months of graduation. In some instances when Defendants 12 make this representation, they claim this statistic applies to DVU graduates from a 13 recent year, while in other instances, Defendants claim this statistic applies to all 14 graduates since 1975, or "for more than 30 years." In its advertising and in its 15 presentations to prospective students, Defendants present this 90% "employment 16 rate" as evidence of the likelihood that obtaining a DeVry degree leads to finding a 17 job. While Defendants' advertisements and sales pitches most commonly express 18 DVU's employment rate for recent graduates as exactly 90%, in some instances, 19 during certain limited time periods, Defendants have stated a percentage that is 20 slightly less or more than 90% (e.g., 87% or 92%). As explained below, these 21 representations (Defendants' "90% claims") are false and unsubstantiated. 22 18. Defendants also have conveyed the message that DVU graduates 23 obtain desirable jobs by representing that DVU graduates obtain jobs that pay 24 significantly more than jobs that graduates of other colleges and universities obtain 25 (Defendants' "higher income claim"). For example, Defendants have represented 26 that, one year after graduation, DVU graduates with bachelor's degrees earned 27 15% more than graduates with bachelor's degrees from all other colleges and 28 universities. As explained below, this representation is false and unsubstantiated. 5 Case: Case1:16-cv-05198 2:16-cv-00579 Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page67of of28 29 PageID Page ID#:1603 #:6 1 19. When settling disputes with DVU students or graduates, Defendants 2 have frequently required the settlement agreement to include a "non-disparagement 3 clause," which prohibits the student or graduate from, e.g., indirectly or directly 4 saying, writing, or doing anything that would disparage, reflect negatively upon, or 5 otherwise call into question Defendants' business operations, products, services, 6 integrity, reputation, or business relations, except as may be required by law. 7 Defendants' Advertisements 8 20. To induce prospective students to purchase DVU's educational 9 products and services, Defendants have disseminated, or caused to be 10 disseminated, advertisements for these products and services. Such advertisements 11 include, but are not limited to, the attached Exhibits A through C (television 12 advertisements), Exhibits D through I (websites), Exhibit J (YouTube video), 13 Exhibit K (DVU brochure), and Exhibit L (print advertisements). Since at least 14 2008, Defendants' advertisements have been widely disseminated throughout the 15 United States. Defendants have widely disseminated other advertisements 16 containing the same or substantially similar statements and depictions to induce 17 prospective students to purchase DVU's products and services. 18 Television Advertisements 19 21. Since at least 2010, Defendants have disseminated, or caused to be 20 disseminated, numerous television advertisements that make Defendants' 90% 21 claims, in both English and Spanish. These advertisements have run on national 22 broadcast, satellite, and cable channels and stations. Examples of such 23 advertisements include, but are not limited to, the advertisements described below. 24 Defendants have disseminated at least some of these advertisements on DVU's 25 YouTube channel. 26 22. A copy of an advertisement that Defendants have disseminated, or 27 caused to be disseminated, in 2013 on numerous national cable and satellite TV 28 channels, which is titled "Graduation Present," is attached as Exhibit A. (A 6 Case: Case1:16-cv-05198 2:16-cv-00579 Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page78of of28 29 PageID Page ID#:1604 #:7 1 transcript of this advertisement is attached as Exhibit A.1.) Defendants also made 2 this advertisement, including a shortened version, available on the Internet on 3 DeVry's YouTube channel. This advertisement contains the following statements 4 and depictions: 5 a. A DVU student narrates the advertisement. She concludes by stating: 6 "And when I finish my degree in business, a new job at a great 7 company––that's the graduation present I want." 8 b. Immediately after the student refers to wanting a new job at a great 9 company, an announcer states: "In 2012, 90% of DeVry University 10 grads actively seeking employment had careers in their field in six 11 months." 12 c. While the announcer is speaking, the following screen appears, with 13 people walking in the background, for approximately five seconds: 14 15 16 17 18 19 20 21 22 23 24 The text in the middle of the screen reads: 25 90% of our grads actively seeking 26 employment had careers in 6 months 27 d. The screen with the text then disappears, and the announcer then 28 states: "Join the 90%. Learn how at devry.edu." 7 Case: Case1:16-cv-05198 2:16-cv-00579 Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page89of of28 29 PageID Page ID#:1605 #:8 1 23. A copy of another advertisement that Defendants ran on various 2 national cable and satellite television channels, in approximately 2010, which is 3 titled "Offer Letter," is attached as Exhibit B. (A transcript of this advertisement is 4 attached as Exhibit B.1.) Defendants also ran this advertisement starting in 2009, 5 and continuing for an undetermined time, on YouTube. Defendants included a link 6 to this YouTube video on DVU's Facebook page. This advertisement contains the 7 following statements and depictions: 8 a. The advertisement depicts people in business attire taping letters 9 extending offers of employment to a large clear wall. The following 10 two images are screen shots taken from this advertisement as the wall 11 is filling up: 12 13 14 15 16 17 18 19 b. An announcer states: 20 The offer letter. If you're going to college, or back to 21 college, that's your bull's-eye. It is for DeVry University 22 students. In fact, for more than thirty years, 90% of all 23 graduates in the active job market had careers in their 24 fields within six months. 90%. And all those offer 25 letters up there, that's just for last year. DeVry 26 University: Discover education working at devry.edu. 27 24. A copy of an advertisement that Defendants have disseminated, or 28 caused to be disseminated, at various times between October 2013 and April 2014 8 Case: Case1:16-cv-05198 2:16-cv-00579 Document Document #: 93-4 1 Filed Filed:01/27/16 03/30/18 Page 9 10ofof28 29 Page PageID ID#:1606 #:9 1 on numerous national cable and satellite TV channels, which Defendants titled 2 "Roommates," is attached as Exhibit C. (An English-language translation of this 3 advertisement is attached as Exhibit C.1.) This advertisement contains the 4 following statements and depictions: 5 a. During this advertisement, the announcer states: 6 En el 2012, el 90% de los graduados de DeVry University que 7 buscaron empleo de forma activa ejercían su carrera en menos de 6 8 meses. (Translation: "In 2012, 90% of graduates from DeVry 9 University actively seeking employment had careers in less than 6 10 months.") 11 b. While the announcer is speaking, the following screen appears, for 12 approximately five seconds: 13 14 15 16 17 18 19 20 21 22 23 The text in the middle of the screen reads: 24 el 90% de nuestros graduados que buscaron empleo de 25 forma activa ejercían su carrera en 6 meses. 26 (This translates to mean: "90% of our grads actively 27 seeking employment had careers in 6 months.") 28 DVU's Website 9 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page10 11ofof28 29 Page PageID ID#:1607 #:10 1 25. Since at least 2008, Defendants have made their 90% claims and 2 higher income claim on various webpages on the DVU website, at www.devry.edu. 3 Examples of such webpages include, but are not limited to, the webpages described 4 below. 5 26. A copy of a printout of webpages, which were available starting in 6 2013 by clicking a link on DVU's homepage (www.devry.edu) titled "Why 7 DeVry," is attached as Exhibit D. This page contains the following statements and 8 depictions: 9 a. At the top of the page it states the following: 10 Excellent employment results. 11 Nobody wants to go to college and just be a number. . . unless 12 they're numbers like these. Each year, thousands of our grads 13 find themselves right where they want to be – employed in their 14 fields of study. 15 b. Immediately below this statement, the following graphic appears: 16 17 18 19 20 21 22 23 24 (1) The text that accompanies this graphic reads: 25 In 2012, 90% of DeVry University GRADS actively 26 seeking employment HAD CAREERS1 in their field 27 within six months of graduation. 28 10 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page11 12ofof28 29 Page PageID ID#:1608 #:11 1 (2) The corresponding footnote, which is printed in a small font 2 size at the end of the webpage attached as Exhibit D, reads: 1 3 Figure based on 2012 graduates self-reporting 4 data to DeVry University Career Services who 5 were employed at graduation or actively seeking 6 employment in their field after graduation. Does 7 not include graduates who were not actively 8 seeking employment, as determined by DeVry 9 University Career Services, or who did not report 10 data on employment status to DeVry University 11 Career Services. 12 c. Another heading on the same webpage reads, "An education that 13 pays," which is followed by the statement that "Not only can a degree 14 from DeVry University prepare you for a lifetime of career success, it 15 can also increase your earning potential right from the start." 16 (1) The following graphic appears immediately below this 17 statement, on page 2 of Exhibit D: 18 19 20 21 22 23 24 25 (2) The text that accompanies this graphic reads: 26 One year after graduation, DeVry University grads 27 report earning 15% more than the median earnings 28 reported by all other bachelor's degree candidates.3 11 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page12 13ofof28 29 Page PageID ID#:1609 #:12 1 (3) The corresponding footnote, which appears at the end of the 2 page in a small font size reads: 3 3 Based on PayScale.com study commissioned by 4 DeVry University. Data for the study was collected in 5 2012 and compared reported earnings for 2010 6 graduates. 73,309 bachelor's degree graduates 7 reported earnings including 620 DeVry graduates. 8 Self-reported information may not reflect actual 9 earnings and may not be representative of earnings of 10 individuals that do not supply information. Results 11 may not be statistically significant. Comparative data 12 includes private not-for-profit schools, private for- 13 profit schools, and public schools. 14 27. A copy of a printout of one version of DVU's homepage at 15 www.devry.edu, which appeared beginning in 2014 and continued into 2015, is 16 attached as Exhibit E. This page contains the following statements and depictions: 17 a. In large bold font, on the first screen, Defendants assure visitors to 18 DVU's website that they can "Count on DeVry for Career Success." 19 b. Immediately below this line, the figure "90%" is printed in bold, 20 extra-large font, on the left half of the screen. On the right half of the 21 screen, the following text appears: 22 DeVry University helps prepare you to advance in your 23 chosen career. In 2013, 90% of DeVry University 24 graduates actively seeking employment obtained careers in 25 their field within six months of graduation, or were already 26 employed in their field when they graduated.* 27 c. Below this statement, the following text appears: 28 12 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page13 14ofof28 29 Page PageID ID#:1610 #:13 1 *Based on self-reported data from bachelor's and associate 2 degree graduates. Does not include graduates not actively 3 seeking employment, as determined by DeVry University 4 Career Services or graduates who did not report data on 5 employment status to DeVry University Career Services. 6 28. DVU's website has included webpages directed at high-school 7 students, including webpages at http://www.high-school.devry.edu. A copy of one 8 such webpage, which includes "Frequently Asked Questions" for parents of high- 9 school students, is attached as Exhibit F. This webpage appeared in at least 2014 10 and 2015. The following question and answer are included on this webpage: 11 Do DeVry University graduates get good jobs? 12 Employers want DeVry University graduates. More than 13 90% of our new graduates quickly land jobs in their fields of 14 study within six months of graduation (learn more). This is a 15 true testament to the fact that DeVry University teaches what 16 companies are looking for. . . . DeVry University graduates 17 leave school well-prepared to enter the workforce and begin 18 contributing immediately. 19 29. Clicking on the "learn more" link on Exhibit F leads or did lead to a 20 landing page for the "Career Services" section of DVU's website. A copy of 21 one version of this Career Services webpage that appeared in at least 2015, 22 attached as Exhibit G, includes the same "90%" statements that Defendants 23 made on DVU's homepage as described in Paragraph 26. 24 30. DVU's website also has included webpages that appeared in at least 25 2015 that were directed at current and former members of the armed services. An 26 example of one of these pages, attached as Exhibit H, contains the following 27 statements and depictions: 28 13 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page14 15ofof28 29 Page PageID ID#:1611 #:14 1 90% DeVry University helps prepare you to advance in your 2 chosen career. In 2013, 90% of DeVry University graduates 3 actively seeking employment obtained careers in their field within 4 six months of graduation, or were already employed in their field 5 when they graduated.* 6 *Based on self-reported data from bachelor's and associate degree 7 graduates. Does not include graduates not actively seeking 8 employment, as determined by DeVry University Career Services 9 or graduates who did not report data on employment status to 10 DeVry University Career Services. 11 31. Another webpage, which has appeared on DVU's website since at 12 least 2013 and is attached as Exhibit I, contains the following statement: 13 Outstanding Career Services 14 In addition to a relevant education and a highly respected degree, 15 DeVry University offers invaluable career services that have 16 helped thousands of students begin rewarding careers in their 17 fields. The proof is the numbers. Since 1975, 265,869 18 undergraduate students have graduated from DeVry and 90% of 19 those in the active job market were employed in career related 20 positions within six months of graduation. 21 YouTube Advertisements 22 32. At various times since at least 2009, Defendants have disseminated or 23 caused to be disseminated video advertisements to YouTube, including videos that 24 Defendants has uploaded to DVU's publicly available YouTube channel at 25 https://www.youtube.com/user/TheDevryUniversity/videos. Examples of such 26 videos include, but are not limited to, the video described below, as well as the 27 "Graduation Present" and "Offer Letter" videos described above. 28 14 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page15 16ofof28 29 Page PageID ID#:1612 #:15 1 33. A copy of an advertisement that Defendants published on DVU's 2 YouTube channel beginning in August 2012, which Defendants titled "Career 3 Coaching for a Career in Technology," is attached as Exhibit J. (A transcript of 4 this advertisement is attached as Exhibit J.1.) This advertisement contains the 5 following statements and depictions: 6 a. The advertisement shows a DVU student, standing in front of a 7 mirror, who states, "This is the guy ready for a great career in 8 technology." A screen then appears with text identical to that 9 depicted in Paragraph 22 of this Complaint. Bold text in the middle of 10 the screen reads, "90% of our grads actively seeking employment had 11 careers in 6 months." 12 b. While this text appears on the screen, the announcer states: "In 2012, 13 90% of DeVry University grads actively seeking employment had 14 careers in their field in six months. Learn how at devry.edu." 15 Brochures 16 34. Defendants have disseminated or caused to be disseminated one or 17 more brochures promoting DVU. 18 35. A copy of a brochure that Defendants disseminated or caused to be 19 disseminated to high-school students, and which Defendants made available on 20 DVU's website since at least 2010 and continuing through early 2015, is attached 21 as Exhibit K. This advertisement contains the following statements: 22 a. The first page inside the brochure begins with the statement 23 Begin with the end in mind – 24 your career 25 b. Prospective students are then advised: 26 Begin your journey with the ultimate goal in mind. Not just 27 graduating, but landing a successful career. . . . 28 15 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page16 17ofof28 29 Page PageID ID#:1613 #:16 1 DeVry University has been helping students do just that since 2 1931. Everything we offer. . . is focused on your career 3 success. Read on to learn how you can thrive at DeVry 4 University – and beyond. 5 c. The statistic "90%" immediately follows this statement, in a bold, 6 extra-large font, followed by the statement that: 7 For over 30 years, 90% of all DeVry graduates in the active 8 job market have been employed in their field of study 9 within six months of graduation*. 10 d. At the bottom of the page, the following sentence appears, in fine 11 print: "*Active job market includes those already employed prior to 12 graduation." 13 36. Another brochure, entitled, "Why Should I Invest in an Education," 14 which Defendants disseminated or caused to be disseminated to high-school 15 students, and which Defendants made available on DVU's website beginning in 16 2015, contains the following statements and depictions: 17 a. The following statements appear at the top of page 5 of the brochure: 18 It pays to earn a degree at DeVry University 19 Not only can a bachelor's degree make it possible to earn more 20 money when you first enter the workforce, but a bachelor's 21 degree from DeVry University can also help you earn more 22 over the life of your career. 23 b. The following graphic appears immediately below this text: 24 25 26 27 28 16 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page17 18ofof28 29 Page PageID ID#:1614 #:17 1 2 3 4 5 6 7 8 9 10 (1) The text above this bar graph reads: 11 DeVry bachelor's degree graduates report 12 earning more than other bachelor's degree 13 holders. 14 (2) The key beneath the graph explains that the gray 15 bar on the left side of each pair of bars depicts the 16 "average earnings, all bachelor's degree 17 graduates," and that the blue bar on the right side 18 of each pair depicts the "average earnings, DeVry 19 bachelor's degree graduates." 20 (3) The fine print under the graph reads: 21 Source: Based on PayScale study commissioned by 22 DeVry. Data collected in 2012 and compared median 23 self-reported earnings for graduates at different stages in 24 their careers. Self-reported information may not reflect 25 actual earnings and may not be representative of earnings 26 of individuals who don't supply information. Results 27 may not be statistically significant. For information on 28 study methodology, visit devry.edu/sourceinfo. 17 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page18 19ofof28 29 Page PageID ID#:1615 #:18 1 Print Advertisements 2 37. Copies of two different print advertisements that Defendants 3 disseminated or caused to be disseminated are attached as Exhibit L. These 4 advertisements contain the following statements and depictions: 5 a. "Everything we do is focused on preparing our students for today's 6 careers. Our quality, real-word degrees and lifetime of career 7 assistance can lead to exceptional employment results." 8 b. Below this statement, the following graphic appears: 9 10 11 12 13 14 The text of this graphic reads: 15 In 2012, 90% of DeVry University GRADS actively 16 seeking employment HAD CAREERS in their field within 17 six months of graduation* 18 c. The phrase "Join the 90%" immediately follows this graphic. 19 d. The following statement appears at the bottom of the page, in fine 20 print: 21 *Figure based on 2012 graduates self-reporting data to 22 DeVry University Career Services who were employed at 23 graduation or actively seeking employment in their field 24 after graduation. Does not include master's degree 25 graduates or graduates who were not actively seeking 26 employment, as determined by DeVry, or who did not 27 report data on employment status to DeVry. 28 18 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page19 20ofof28 29 Page PageID ID#:1616 #:19 1 Twitter 2 38. Defendants have disseminated, or caused to be disseminated, 3 representations on DVU's public Twitter page at https://twitter.com/DeVryUniv. 4 For example, on July 29, 2013, Defendants, using "@DeVryGroup," tweeted the 5 following: 6 "90% of #DeVry grads active in the job market find employment in 7 their field of study within 6 months." @DeVryUniv president Dave 8 Pauldine. 9 Sales pitches 10 39. Prospective DVU students often have two different conversations 11 with DVU representatives––an initial call with "an appointment setter," and then a 12 more extensive "interview" with one of DVU's "Admissions Advisors." During 13 the course of these interactions, Defendants make statements and representations 14 described below to induce prospective students to enroll in DVU. 15 40. Since at least 2013, appointment setters, using an outline provided by 16 Defendants, have told prospective students: "The DeVry University difference 17 includes outstanding career outcomes––In 2012, 90% of DeVry University grads 18 actively seeking employment had careers in their field within six months of 19 graduation." 20 41. If an appointment is made, prospective students then speak to a DVU 21 Admissions Advisor. Defendants' policy is that students go through an 22 "interview" with an Admissions Advisor before enrolling in DVU. The 23 "interview" typically takes place in person on a DVU campus, although sometimes 24 the discussion takes place by telephone. Defendants have provided DVU's 25 Admissions Advisors with a PowerPoint slide presentation that they use during this 26 "interview." Defendants also have provided guidelines, including a training guide, 27 that instructs the Admissions Advisors how to use the presentation. When the 28 "interview" takes place by telephone, the prospective student is directed to a 19 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page20 21ofof28 29 Page PageID ID#:1617 #:20 1 website that allows the student to walk through the slide presentation with the 2 Admissions Advisor. 3 42. DVU's Admissions Advisors represent during the "interviews" with 4 prospective students that one of the benefits of obtaining a DVU degree is that, as a 5 result of attaining that degree, 90% of DVU graduates obtain jobs in their field 6 soon after graduating. 7 a. For example, the training guide instructs the Admissions Advisor, 8 after showing a prospective student a slide touting DVU's Career 9 Services department, to tell him or her that, "[a]s a result of these 10 types of career assistance our graduates have shown excellent career 11 results, let's take a look at those." The prospective student is then 12 immediately shown a slide entitled "Excellent Employment Results." 13 (1) The following is a screen shot of a version of this slide that was 14 used in 2013: 15 16 17 18 19 20 21 22 23 24 (2) This screen includes, but is not limited to, the following text: 25 In 2012, 90% of DeVry University graduates from all 26 programs who actively sought employment had careers in 27 their field of study within six months of graduation. 28 20 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page21 22ofof28 29 Page PageID ID#:1618 #:21 1 Within that same population: •83% of associate degree 2 graduates had careers in their field •92% of bachelor's 3 degree grads had careers in their field. 4 c. The guidelines that accompany the slide presentation advise the 5 Admissions Advisor to "[r]ead the career statistics on the screen 6 verbatim." They then instruct the Admissions Advisor to access an 7 "employment statistics" sheet by clicking on a link. In addition, if the 8 "interview" is conducted face-to-face, the Admissions Advisor 9 provides a paper copy of the employment statistics sheet to the 10 prospective student. A copy of the "Employment Statistics" sheet that 11 was used in 2014 is attached as Exhibit M. 12 d. During the "interview," if a prospective student asks the Admissions 13 Advisor, "Will DeVry help me find a job when I graduate?", the 14 Admissions Advisor tells the prospective student that: 15 DeVry offers career services that include assistance with 16 job searches, resume preparation, practice interviews, career 17 fairs, etc. These services are very successful, as 18 evidenced by our employment statistics. (Emphasis 19 added.) 20 43. Defendants' Admissions Advisors also make representations during 21 the "interview" concerning the earnings of DVU graduates. 22 a. The following is a screen shot of a version of a slide that was used in 23 2013: 24 25 26 27 28 21 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page22 23ofof28 29 Page PageID ID#:1619 #:22 1 2 3 4 5 6 7 8 9 10 11 12 b. This screen includes, but is not limited, to the following text: 13 One year after graduation, DeVry University grads report 14 earning 15% more than the median earning reported by all other 15 bachelor's degree graduates. 16 c. While viewing this slide, Admissions Advisors also are instructed to 17 ask prospects, "How do you think having a 15% higher median 18 earning helped those students?" 19 Defendants' Substantiation for 90% Claims 20 44. To substantiate their 90% claims, Defendants have relied upon files 21 maintained by DVU's Career Services department, which consists of information 22 DVU obtained from students and graduates, information its Career Services 23 department maintained concerning communications with students and graduates, 24 related information obtained by Career Service department personnel, and analysis 25 that DVU's staff conducted of those files. These records contain information about 26 the students' majors, graduation dates, their employment, and DVU's 27 classifications of their employment status. Defendants used these records to 28 calculate the 90% figure that they use in their advertisements and sales pitches. 22 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page23 24ofof28 29 Page PageID ID#:1620 #:23 1 45. These student records, however, do not provide a reasonable basis that 2 substantiates Defendants' 90% claims. Among other reasons, when calculating the 3 90% claims, Defendants count a substantial number of DVU graduates who should 4 not be counted and similarly exclude a substantial number of DVU graduates who 5 should not be excluded. For example, Defendants count graduates who did not 6 obtain a job as a result of obtaining a degree from DVU. In fact, Defendants 7 include the substantial percentage of DVU graduates who, after graduation, 8 continued with the same job they had when they enrolled in DVU. Defendants 9 also count graduates who did not obtain jobs in their field of study. A significant 10 percentage of the jobs that Defendants count as being in the graduate's field of 11 study include jobs that employers, industry experts, graduates, and consumers 12 would not reasonably consider to be in the graduate's field of study. Several 13 examples of graduates from DVU's class of 2012 who did not believe they were 14 employed in their field of study but whom Defendants nonetheless classified as "in 15 field" include (but are not limited to): 16 a. graduates with degrees in technical management who were working 17 as: a rural mail carrier (human resources specialization); a yard 18 salesman at a nursery (business information systems specialization); a 19 sales associate at Macy's (general technical specialization); a driver 20 delivering rain gutters for a construction services company; a data 21 entry specialist for a radio station (human resources specialization); 22 and unpaid volunteers at medical centers (human resources 23 management and health services management specializations); 24 b. a graduate with a degree in business administration (health services 25 management specialization) working as a server at the Cheesecake 26 Factory; 27 c. a graduate with a degree in business administration (health care 28 management specialization) working as a car salesman; 23 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page24 25ofof28 29 Page PageID ID#:1621 #:24 1 d. a graduate with a degree in business administration (accounting 2 specialization) working as a secretary at a prison; 3 e. graduates with various degrees working as customer service 4 representatives. 5 46. Defendants also exclude certain students from the calculation who in 6 fact were actively seeking employment. For example, in June 2013, Defendants 7 excluded one 2012 graduate who, prior to being classified as inactive: viewed 177 8 jobs leads in DVU's jobs database; had at least six job interviews in the previous 9 two months (including two interviews eleven days before DVU classified him as 10 inactive); sent an email to DVU's Career Services department, two weeks before 11 being classified as inactive, in which he stated that he "wanted to let you know I've 12 been getting more response now that I am much more actively applying to 13 positions," and that he "had two face to face interviews a while back and now 2 14 Skype interviews"; attended a DVU "Career Fair" the following day; and then sent 15 the Career Services department an email informing them that, after attending the 16 career fair, he sent three thank you notes to companies whose representatives he 17 had spoken to at the fair. 18 47. The actual percentage of DVU graduates who, at or near the time they 19 graduated, found jobs that could be reasonably considered "in their field" is 20 significantly smaller than 90%. 21 Defendants' Substantiation for Higher-Income Claim 22 48. To substantiate Defendants' higher-income claim, Defendants have 23 relied upon a report and summary information ("income report") that Defendants 24 received from a third-party company in 2012. This income report, relating to 25 income data the company had received from people who had graduated from DVU 26 and other schools in 2010, does not provide a reasonable basis to substantiate 27 Defendants' higher-income claim. Among other reasons, the income report is 28 24 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page25 26ofof28 29 Page PageID ID#:1622 #:25 1 insufficient because DVU had good cause to question, and did question, the 2 reliability of the conclusions and information contained in the income report. 3 49. The sampling methods and methodology of the survey that underlay 4 the income report all gave or should have given Defendants reason to question the 5 reliability of the conclusions and information contained in the report. In fact, DVU 6 personnel expressed concerns over whether the data sufficiently supported the 7 higher-income claim. Among other problems, the comparison of the incomes of 8 DVU graduates with incomes of graduates from other schools did not account or 9 adjust for significant salary drivers such as age, experience, and degree field. In 10 addition, statistics that DVU had directly collected from thousands of its graduates 11 each year about their incomes differed significantly from the third party's statistics, 12 which consisted of information from only several hundred individuals per 13 graduation year. 14 50. Defendants not only had extensive information in their own files 15 about the income of DVU graduates, but they also had ready access to publicly 16 available data reflecting the incomes of graduates of schools throughout the United 17 States, by school and by field. Comparing the information in Defendants' own 18 files with publicly available income data shows that DVU graduates a year after 19 graduating do not in fact earn significantly more than graduates from all other 20 schools combined, casting doubt on Defendants' higher-income claim. 21 Defendants' reliance on the third-party data for its higher-income claim was 22 therefore unreasonable. 23 VIOLATIONS OF THE FTC ACT 24 51. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits "unfair or 25 deceptive acts or practices in or affecting commerce." 26 52. Misrepresentations or deceptive omissions of material fact constitute 27 deceptive acts or practices prohibited by Section 5(a) of the FTC Act. 28 25 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page26 27ofof28 29 Page PageID ID#:1623 #:26 1 Count I 2 53. Through the means described in Paragraphs 14 through 42, 3 Defendants have represented, expressly or by implication, that: 4 a. As a result of obtaining a DVU degree, 90% of DVU graduates from a 5 specific year (e.g., graduates from 2012) who were actively seeking 6 employment landed or obtained new jobs in their field of study within 7 six months of graduation. 8 b. As a result of obtaining a DVU degree, for at least the last 30 years, 9 90% of DVU graduates who were actively seeking employment 10 landed or obtained new jobs in their field of study within six months 11 of graduation. 12 54. Each representation set forth in Paragraph 53 is false or misleading or 13 was not substantiated at the time the representation was made. 14 55. Therefore, the making of each representation as set forth in Paragraph 15 53 of this Complaint constitutes a deceptive act or practice, in or affecting 16 commerce in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 17 Count II 18 56. Through the means described in Paragraphs 14 through 18, 25 through 19 26, 36, 39, 41 and 43, Defendants have represented, expressly or by implication, 20 that: 21 a. one year after graduation, the average or median earnings of DVU 22 graduates with bachelor's degrees were 15% higher than the average 23 or median earnings of graduates with bachelor's degrees from all 24 other colleges and universities; and 25 b. DVU bachelor's degree graduates earn 15% more than graduates from 26 other colleges and universities, as described in part "a" above, as a 27 result of obtaining a bachelor's degree from DVU. 28 26 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page27 28ofof28 29 Page PageID ID#:1624 #:27 1 57. Each representation set forth in Paragraph 56 is false or misleading or 2 was not substantiated at the time the representation was made. 3 58. Therefore, the making of each representation as set forth in Paragraph 4 56 of this Complaint constitutes a deceptive act or practice, in or affecting 5 commerce in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 6 7 CONSUMER INJURY 8 59. Consumers have suffered and will continue to suffer substantial injury 9 as a result of Defendants' violations of the FTC Act. In addition, Defendants have 10 been unjustly enriched as a result of their unlawful acts or practices. Absent 11 injunctive relief by this Court, Defendants are likely to continue to injure 12 consumers, reap unjust enrichment, and harm the public interest. 13 14 THIS COURT'S POWER TO GRANT RELIEF 15 60. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court 16 to grant injunctive and such other relief as the Court may deem appropriate to halt 17 and redress violations of any provision of law enforced by the FTC. The Court, in 18 the exercise of its equitable jurisdiction, may award ancillary relief, including 19 rescission or reformation of contracts, restitution, the refund of monies paid, and 20 the disgorgement of ill-gotten monies, to prevent and remedy any violation of any 21 provision of law enforced by the FTC. 22 23 PRAYER FOR RELIEF 24 Wherefore, Plaintiff FTC, pursuant to Section 13(b) of the FTC Act, 15 25 U.S.C. § 53(b), and the Court's own equitable powers, requests that the Court: 26 A. Enter a permanent injunction to prevent future violations of the FTC 27 Act by Defendants; 28 27 Case: Case1:16-cv-05198 2:16-cv-00579Document Document #: 93-4 1 Filed Filed: 01/27/16 03/30/18Page Page28 29ofof28 29 Page PageID ID#:1625 #:28 B. Award such relief as the Court finds necessary to redress injury to 2 consumers resulting from Defendants' violations of the FTC Act, including but not 3 limited to, rescission or reformation of contracts, restitution, the refund of monies 4 paid, and the disgorgement of ill-gotten monies; and 5 c. Award Plaintiff the costs of bringing this action, as well as such other 6 and additional relief as the Court may determine to be just and proper. 7 8 Respectfully submitted, 9 10 Jonathan E. Nuechterlein General Counsel 11 12 13 14 Dated: l - 2 1 - {k C~U. L Christina V. Tusan 15 John D. Jacobs Thomas J. Syta 16 Barbara Chun 17 Faye Chen Bamouw Yan Fang 18 Sarah E. Schroeder 19 Attorneys for Plaintiff FEDERAL TRADE COMMISSION 20 21 22 23 24 25 26 27 28 28