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A price-fixing lawsuit against a group of 568 top-ranked universities could continue, judging by the rules

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Dive Brief:

  • A federal judge said Monday that 17 wealthy universities can continue to sue over alleged price-fixing, ruling against efforts by top-tier institutions to dismiss the case.
  • The universities criticized the evidence submitted by the plaintiffs – who are mostly students who have attended or are attending an institution. But the institutions did not show that the allegations were credible, Written by US District Judge Matthew Kennelly In court records.
  • “Taken together, all of Plaintiffs’ allegations are more than sufficient for a plausible allegation that the various enrollment management techniques described in the Amended Complaint violate the requirements of the 568 exemption,” Kennelly wrote, referring to the anti-exemption for colleges. The heart of the matter.

Dive Insights:

17 universities filed multiple appeals for dismissal The lawsuit was filed in January The students alleged that the firms violated antitrust law by participating in a group of 568 presidents without practicing actual need-blind admissions.

The 568 group is made up of colleges that coordinate their financial aid practices. It is named after the antitrust exemption that allows it to exist, Section 568 of the Improving America’s Schools Act of 1994. The exemption protects universities from using need-blind admissions, meaning they do not consider students’ financial need when deciding whether to accept or reject applicants.

Plaintiffs alleged that the universities conspired to use a common financial aid method, cutting off competition in the marketplace. He argued that students would pay less in a market with more competition for students.

Universities have argued that they actually practice need-blind admissions and comply with antitrust law.

The lawsuit has sparked interest in the competitive world of college admissions, which has come under fire Increasing antitrust scrutiny In recent years. Last month, the US Department of Justice weighed in, He suggested that the case should be continued.

All the universities signed a motion to dismiss the case. They argued that their activity was covered under Section 568, that plaintiffs had not plausibly alleged violations of the antitrust law, that plaintiffs’ claims were speculative, and that the claims were outside the four-year statute of limitations.

In a separate motion to dismiss, Brown, Emory, Chicago and Johns Hopkins University argued that the claims against them should be dismissed because they were not members of the 568 group during the relevant period. Brown, Emory and Chicago said they withdrew from the group between 2012 and 2014, while Johns Hopkins said it would join in 2021.

Yale University filed a motion to dismiss, arguing that it does not use the consensus financial aid method used to determine an applicant’s ability to pay and did not participate in Group 568 from 2008 to 2018.

But with the persuasion of the judge, the case was allowed to proceed. He wrote that he did not need to pass judgment on many of the arguments made at this point.

Kennelly left open the possibility that many universities’ arguments would hold water in later proceedings.

The judge’s 26-page ruling contains several other notable passages. Kennelly rejected the argument that students on the waiting list for the 568 exemption are not required to be admitted on a need-blind basis. That interpretation is inconsistent with the language of the statute and inconsistent with the legislative history, he wrote.

He wrote that if an organization does not plausibly meet the need-blind requirements of the 568 exemption, it is plausible that none of them did.

“The exception applies only when all schools in the agreement admit all students on a need-blind basis,” Kennelly wrote.

Kennelly ordered the universities to respond to the lawsuit by Sept. 9.

The plaintiffs are seeking refunds for nearly 200,000 students, as well as changes to the universities’ practices, one of their attorneys, Robert Gilbert, said in a statement.

“In this next phase of the case, we look forward to swearing in the decision makers at each university who participated in this anti-trust conspiracy that has harmed so many middle-class and working-class families,” Gilbert said. , who is the Managing Partner at Gilbert Litigators and Counsellors.

The full list of institutions named in the lawsuit: Brown University, California Institute of Technology, University of Chicago, Columbia University, Cornell University, Dartmouth College, Duke University, Emory University, Georgetown University, Johns Hopkins University, Massachusetts Institute of Technology, Northwestern University, University of Notre Dame, University of Pennsylvania, Rice University, Vanderbilt University and Yale University.

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