Professional Documents
Culture Documents
No. 13-2265
MELVIN MURPHY,
Plaintiff Appellant,
v.
CAPELLA EDUCATION COMPANY,
Defendant - Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria.
Claude M. Hilton, Senior
District Judge. (1:13-cv-00655-CMH-TRJ)
Argued:
Decided:
December 5, 2014
PER CURIAM:
Melvin
courts
dismissal
Murphy
of
(Appellant)
his
amended
appeals
complaint
the
district
(the
Amended
Amended
Complaint
alleges
that
Appellant
paid
anyone
at
Capella
assured
him
he
would
pass
such
He also alleges
pleading
standard
set
forth
in
the
Federal
Rules.
Because
resident
of
Fairfax
County,
Virginia,
Ph.D.
for
business
purposes
management
advertisements
for
of
his
professional
field.
Having
Capellas
management,
Appellant
interest.
Capella
doctoral
contacted
seen
and
responded
in
several
programs
Capella
aggressively
development
in
the
online
business
expressed
to
an
Appellant,
calling and emailing him and providing him with brochures and
other marketing materials in an effort to enroll him in its
doctoral program.
In
publications
J.A. 104.
response
to
to
Appellant:
his
inquiries,
the
2008
Capella
University
sent
Guide
two
(the
Ph.D.
program
in
Organization
3
and
Management
with
specialization
in
Leadership
(the
Leadership
Ph.D.).
The
One of these
masters
degree
and
was
enrolled
in
the
Organization
and
Id. at 164.
Brochure
is
four-page
following:
brochure
stating
the
The
Leadership
specialization
prepares
leaders for todays fast-paced and complex
global
enterprise
system
.
.
.
.
Executives, mid-level managers, and those in
the initial stages of their careers are
prepared to develop real-world answers to
the challenges of the twenty-first century
organization.
This specialization prepares
doctoral leaders to lead, consult, or teach
in the area of leadership from an informed,
strategic
viewpoint,
creating
practical
solutions to real-world problems.
J.A. 199.
graduates
of
the
Leadership
Ph.D.
program,
including
faculty
Id.
In addition to the Guide and the Brochure, Capella
enrollment
counselors
also
confirmed
to
Appellant
that
the
J.A. 108-09.
B.
Based on the representations made in the Guide, in the
Brochure,
and
by
enrollment
counselors,
Appellant
applied
to
He communicated with
residency
programs
or
colloquia,
where
He attended
he
met
other
Capella students.
was
in
J.A. 110.
course
regular
contact
selection,
and
with
his
difficulties
advisors
with
his
about
progress,
studies.
Id.
academic
offerings
with
new
and
potential
students.
Id.
After finishing his course work, in the fall of 2011,
Appellant took the comprehensive examinations, or Comps, which
is the last step before a Capella Ph.D. student begins to write
his or her dissertation.
essay
demonstrates
writing,
111.
questions
knowledge
research,
and
of
in
which
the
the
subject
critical
doctoral
matter,
thinking
as
candidate
well
proficiency.
as
J.A.
may try again, but on the second failed attempt, the student is
dis-enrolled.
approximately
$4,000
in
tuition
per
term.
Students
are
Id. at 112-13.
Appellants initial attempt at passing the Comps was
in
the
fall
of
2011.
As
the
author
of
several
books
and
J.A. 112.
He thus decided to
After being
subject
Appellants
to
technical
and
arbitrary
criticism,
J.A. 113.
The
essay was returned to him ungraded, and he was again given the
option of a rewrite.
After
Appellant
appealed
his
second
failed
third
time
if
he
re-enrolled
in
the
Comps
course
at
an
Id. at 114.
only
course.
masters
if
he
paid
an
additional
$4,000
toward
capstone
Appellant
never
received
degree
from
Capella.
C.
On
Capella
in
April
the
30,
Circuit
2013,
Appellant
Court
of
filed
Fairfax
suit
County,
against
Virginia,
25, 2013, explaining that the complaint did not state a VCPA
violation with sufficient particularity, but giving Appellant 14
days to amend his complaint.
Capella
because
of
the
false
advertising
and
false
J.A. 107.
He
students,
avers
that
he
contacted
over
8
50
other
Capella
[e]ach
person
stated
that
he
or
she
received
similar
high
GPA
without
any
indication
or
warning
of
subjective
reasons
unrelated
to
the
substance
of
the
more
tuition;
and
finally,
became
dis-enrolled
without
of
candidates)
Ph.D.
also
doctoral
and
program.
alleges
degrees
awards
J.A.
no
Capella
(less
degrees
115.
He
awards
than
at
10%
all
also
in
avers
miniscule
of
the
enrolled
Leadership
that
Capella
Comps
were
used
as
pretext
to
punitively
dis-enroll
at
107.
reiterated
by
These
Capella
of
statements
enrollment
satisfied
were
customers
allegedly
counselors.
repeated
Id.
and
(internal
the following:
(1)
[T]here
was
no
doctoral
degree
available in the [Leadership Ph.D. program]
and thus no graduates of that program;
(2) [S]tudents like Mr. Wynn . . . did not
actually exist and/or were not enrolled in
the represented programs and never made the
statements attributed to them;
(3) [A] doctoral candidate in any subject
must pass the [Comps] in order to be
eligible for the Ph.D. and most candidates
fail these exams; and
(4) [T]he overwhelming majority of doctoral
candidates (at least 90%) did not actually
obtain
their
desired
degree
and
NO
candidates in the Leadership Ph.D. program
actually
obtained
that
degree
in
that
field.
10
Id. at 108.
informed him that his progress was subpar, that he was unlikely
to pass the Comps, or that he would fail to complete the program
for any other reason.
D.
Capella
Complaint
on
filed
August
26,
motion
2013.
On
to
dismiss
September
the
20,
Amended
2013,
the
court
Capellas
entered
motion
a
on
three-page
October
4,
memorandum
2013.
The
opinion
granting
district
court
indefinite
statements
to
[Capellas]
various
promotional
Murphy
this appeal.
II.
We review a district courts dismissal of a complaint
pursuant to Rule 12(b)(6) de novo.
Oberg v. Pa. Higher Educ. Assistance Agency, 745 F.3d 131, 136
(4th Cir. 2014).
of both Rule 8(a) 2 and Rule 9(b) of the Federal Rules of Civil
Procedure.
sufficiently
plausible
on
its
face
pursuant
to
Rule
8(a),
662, 678 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S.
544,
555
(2007).
We
thus
proceed
to
discuss
the
Amended
ex rel. Ahumada v. NISH, 756 F.3d 268, 280 (4th Cir. 2014)
(Allegations
of
fraud
must
meet
the
more
stringent
in
addition
to
the
requirements
of
Rule
8). 3
III.
Rule 9(b) provides, In alleging fraud . . . , a party
must
state
with
fraud . . . .
particularity
the
circumstances
constituting
Fed. R. Civ. P.
Nathan v. Takeda Pharm. N. Am., Inc., 707 F.3d 451, 456 (4th
Cir. 2013) (internal quotation marks omitted).
In order to satisfy Rule 9(b), a plaintiff must at a
minimum, describe the time, place, and contents of the false
representations, as well as the identity of the person making
the misrepresentation and what he obtained thereby.
Nathan,
and
of
the
alleged
fraud
before
access
to
the
13
discovery
process
should
be
granted.
United
States
ex
rel.
Wilson v. Kellogg Brown & Root, 525 F.3d 370, 379 (4th Cir.
2008)
(internal
quotation
marks
omitted).
Against
this
In
Caperton v.
Complaint,
representation
element
Appellant
is
asserts
satisfied
by
that
the
the
alleged
In the
false
False
14
1.
False Statements
a.
The first alleged False Statement set forth in the
Amended
Complaint
is
that
Capella
represented
that
the
punctuation omitted).
the Brochure and the Guide consciously gave the impression that
a Capella student could enroll, take the requisite classes and
obtain a Ph.D. in the Leadership program.
Id. at 107.
This
examining
the
specific
Id.
allegations
underlying
Wilson,
525
F.3d
at
379
(internal
quotation
marks
this
claim
by
stating
that
of
the
5,018
students
J.A. 103.
15
Amended
Complaint
shows
that
Appellant
To the contrary,
himself
was
not
at
115
(Capella
awards
miniscule
of
doctoral
allege
in
that
students
enrolling
2008
and
2009
should
have
the
Leadership
Ph.D.
program
that
actually
obtained
Ph.D.).
Third, Appellant explains that the Comps evinced an
effort to weed out students after they have paid the maximum
possible tuition.
J.A. 115.
Id. at 116,
Appellant
does
not
provide
the
specific
criteria
used
to
not
himself
provide
being
any
specific
weed[ed]
out
Supp.
412,
420
(E.D.
instances
and/or
J.A. 115. 5
Va.
1978)
having
of
to
anyone
use
besides
a
second
has
merely
17
defendants
Although
students
he
generally
who
sufficient.
conduct
had
was
arbitrary
refers
to
similar
J.A. 114.
over
experience,
and
capricious.).
fifty
other
Capella
this
alone
is
not
& Contracting Co., 612 F.3d 724, 731 (4th Cir. 2010).
Finally, we cannot ignore Capellas citation to the
National
Center
for
Education
Statistics
(NCES)
Digest
of
Digest
Education
of
Educational
Statistics,
Statistics,
National
Center
for
http://nces.ed.gov/programs/digest/d10/
assertion
that
Capella
is
simply
diploma
mill
without
the
diplomas.
b.
The second alleged False Statement is based on the
following allegations:
brochures
with
people
falsely
portrayed
as
similar
doctoral
program,
id.
at
114-15.
These
under
Rule
actually
portrayed
9(b).
as
Except
Ph.D.
for
Wynn
graduate
(who
in
was
the
never
Guide),
close
review
of
the
Guide
and
the
Brochure
v. Pitt Cnty. Meml Hosp., 572 F.3d 176, 180 (4th Cir. 2009)
(In reviewing a Rule 12(b)(6) dismissal, we may properly take
judicial notice of matters of public record including publicly
available statistics. (internal quotation marks and alteration
omitted)).
19
that
certain
to
the
enrollment
students
[Leadership
third
and
Ph.D.]
alleged
False
counselors
and
graduates
program,
as
when
Statement,
the
Guide
portrayed
satisfied
in
fact,
with
such
Appellant
the
satisfied
On this point,
Appellant also alleges that when Capella sent the Guide to him,
Wynn was no longer a Capella student, much less pursuing the
Leadership Ph.D.
the
Guide
attributable
to
Wynn
was
fabricated,
deceptive,
Id. at 105-06.
Indeed,
Appellant
fails
to
describe
(internal
he
quotation
mentions
by
marks
name
is
omitted).
Wynn.
accurately
He
Again,
claims
the
only
that
Wynn
J.A. 105.
Appellant
of
particularity,
but
also
because
the
supporting
See
Cooksey
(In
v.
Futrell,
reviewing
the
consider
documents
721
dismissal
F.3d
of
226,
234
complaint,
incorporated
into
(4th
Cir.
[w]e
the
2013)
must
complaint
.
by
properly
subject
to
judicial
notice
or
by
exhibit.
2.
Material Omissions
a.
Based
on
the
above
analysis,
the
first
and
second
of
that
exist
program,
and/or
were
and
not
students
enrolled
like
in
Wynn
the
did
not
represented
not
rise
to
the
level
of
particularity
required
in
candidates
third
any
fail
alleged
subject
these
Material
must
exams
--
Omission
pass
is
the
also
--
Comps,
not
doctoral
and
most
pleaded
with
First,
competencies,
examination,
(emphasis
and
gain
focus
supplied));
id.
insight
on
at
into
advanced
192
the
research
(listing
tuition
comprehensive
methods[.]
costs
for
him
that
most
candidates
fail
the
Comps,
he
does
not
Id. at 112.
See Supervalu, Inc. v. Johnson, 666 S.E.2d 335, 342 (Va. 2008)
([F]raud
ordinarily
cannot
be
predicated
on
unfulfilled
the
contrary,
he
admits
that
as
an
author
of
J.A. 112.
Appellant alleges
he
fails
to
Material Omission.
link
these
facts
with
the
third
alleged
To the contrary,
23
J.A. 169.
c.
The
overwhelming
fourth
alleged
majority
of
Material
doctoral
Omission
candidates
--
i.e.,
(at
least
the
90
in
the
Leadership
Ph.D.
program
actually
obtained
One
of
the
Amended
Complaint
alleges
Va.
Code
Ann.
59.1-200(A)(5)
(Subsection
5)
(prohibiting
the
misrepresentation that goods or services
shave certain quantities, characteristics,
ingredients, uses, or benefits);
Va.
Code
Ann.
59.1-200(A)(8)
(Subsection
8)
(prohibiting
the
advertisement of goods or services with
intent not to sell them as advertised, or
with the intent not to sell at the price or
upon the terms advertised);
Va.
Code
Ann.
59.1-200(A)(13)
(Subsection
13)
(prohibiting
the
enforcement of a void or unenforceable
penalty clause); and
Va.
Code
Ann.
59.1-200(A)(14)
(Subsection 14) (prohibiting the use of
24
that
in
its
terms,
subsection
requires
supra,
Appellant
does
not
allege
with
specificity
This claim
fails.
As the basis for his subsection 8 claim, Appellant
alleges
Capella
advertised
purported
doctoral
program
in
to
allege
advertised
(e.g.,
with
a
J.A. 119.
particularity
program
that
what
should
sort
But Appellant
of
take
program
five
was
years,
Therefore, this
13
prohibits
the
use
of
void
or
to
collect
penalties
under
void
or
unenforceable
Appellant alleges no
25
he
attempts
in
vain
to
liken
the
remedial
coursework
to
an
subsection
deception,
or
14
false
prohibits
pretense
in
using
connection
note
several
discrepancies
and
mischaracterizations
Appellant
characterized
the
Leadership
Ph.D. program as a sham, J.A. 110,
called it fraudulent, id. at 115, and
stated that Capella falsely portrayed that
the program exist[ed] at all, id. at
116.
But Appellant admits that he
participated in the program for nearly
three years, earning high marks and even
encouraging others to enroll in Capella.
See id. at 110.
Appellant
claims
Capella
falsely
represented that Wynn was satisfied with
26
in
Appellant
has
not
pleaded
with
particularity
that
27
some
of
the
allegations
in
Plaintiffs
Amended
28