Rodi v. Southern New England School of Law

Brief Fact Summary.

Rodi sued Southern New England School of Law (SNESL) for recruiting students to attend SNESL knowing that the American Bar Association (ABA) was highly critical of SNESL and was unlikely to be granted accreditation.

Synopsis of Rule of Law.

A statement that is framed as an opinion can be considered to be an assertion of fact for a fraudulent misrepresentation claim if the statement is understood to imply the existence of facts that support the statement.

Facts.

Rodi received a letter from Southern New England School of Law (SNESL) that the school was confident they would receive accreditation from the American Bar Association (ABA). Rodi subsequently enrolled and received a catalogue saying that SNESL would not be accredited prior to any current student graduating. When Rodi sought to transfer after the ABA denied SNESL’s application for accreditation during his first year of law school, the dean of the school encouraged Rodi to stay. During Rodi’s third year of law school, SNESL was denied accreditation again and was not permitted to take the bar exam in New Jersey. Rodi sued SNESL for recruiting students to attend SNESL knowing that the ABA was highly critical of SNESL and was unlikely to be granted accreditation. SNESL moved to dismiss the lawsuit and the district court granted the motion to dismiss.

Issue.

Whether a statement that is framed as an opinion can be considered to be an assertion of fact for a fraudulent misrepresentation claim?

Held.

Yes. The judgment of the district court is reversed. Rodi has made a sufficient claim for fraudulent misrepresentation because the opinions relied on by Rodi were statements regarding SNESL’s ability to gain accreditation in the future.

Discussion.

A corporation may not inform investors that a project is moving forward smoothly. An opinion may not imply that no facts exist to the contrary of that opinion.