Antitrust, Bar Exams, BARBRI, Ted Frank

BAR/BRI Class Actions: Open Thread

As we reported last month, it looks like Leeds Equity Partners will be acquiring BAR/BRI, the well-known bar exam preparation business, from West Publishing / Thomson Reuters. If you’ve taken a bar exam prep course, odds are that you took BAR/BRI — although there are alternatives, such as BarMax and Themis (disclosure: ATL advertisers, whom we thank for their support).

If the deal goes through, Leeds will get its hands on what would seem to be a very good business. BAR/BRI courses aren’t cheap, at a few thousand a pop (often paid by law firms, which aren’t very price-sensitive). And since BAR/BRI has had its bar-prep infrastructure in place for a long time — curricula, instructors, etc. — its marginal costs for each new teaching cycle aren’t that high. In short, BAR/BRI seems like a money-making machine.

(Note: This analysis about the economics of BAR/BRI is somewhat speculative. Please correct us, by email or in the comments, if we’re wrong.)

But Leeds will also inherit complaints about BAR/BRI. Some are of the consumer variety — e.g., the website going down when people were trying to pick their course locations, the date by which books must be returned in order to get deposits back being set too early, unfair late fees, etc.

And some complaints are of the legal variety, in the form of antitrust class actions alleging collusion between (1) West Publishing, the owner of BAR/BRI, and (2) Kaplan Inc., the test prep company owned by the Washington Post Company that is known in the legal community for its LSAT courses. One of the lawsuits alleges “that BAR/BRI agreed not to compete in the LSAT business and that Kaplan agreed not to compete in the bar review business, thereby allocating to BAR/BRI the market for full-service bar review courses in the United States.” (Now, of course, Kaplan has its own full-service bar review course.)

To the legal complaints we now turn. You should follow along, since there might be some money in it for you….

We’re presenting this post as an open thread — i.e., your comments are especially welcome (even more so than usual). We aren’t perfectly clear on everything that’s going on here, so we ask for your help in sorting out this mess.

We’re aware of at least two similar, yet distinct, class action lawsuits (click on the name of each lawsuit to visit the official website):

1. Rodriguez v. West Publishing Corp. Description:

BAR/BRI provides full-service bar review courses throughout the United States, which are aimed at assisting would-be attorneys in their preparation for taking one or more bar examinations required by each state and the District of Columbia prior to the issuance of a license to practice law. Plaintiffs allege that BAR/BRI violated the federal antitrust laws by agreeing with Kaplan, Inc., to prevent competition in the market for full-service bar review courses.

Class Membership:

Class Members are those that purchased a full-service bar review course from BAR/BRI anywhere in the United States anytime from August, 1997 through July 31, 2006.

Lawsuit Status:

On December 6, 2010, the District Court approved a partial distribution from the Settlement Fund of $30,000,000 to Authorized Claimants. This sum will be distributed according to the Plan of Allocation….

Partial Award checks will be mailed in early February [2011]. The balance of the Settlement Fund will be distributed when all outstanding appeals have been resolved and the matter has become final.

2. Stetson v. West Publishing Corp. Description:

Plaintiffs alleged that BAR/BRI agreed not to compete in the LSAT business and that Kaplan agreed not to compete in the bar review business, thereby allocating to BAR/BRI the market for full service bar review courses in the United States and preventing a competitive bar review course from being marketed and sold.

Plaintiffs also alleged that BAR/BRI unlawfully acquired and maintained a monopoly in the market for full service bar review courses in the United States and also conspired to monopolize that market, all through a variety of means. As a result, Plaintiffs alleged, competition in the relevant market was adversely affected.

Class Membership:

All persons and entities who paid for a BAR/BRI full-service bar-review course from August 1, 2006, through and including March 21, 2011, will be considered members of the class.

Lawsuit Status:

To receive a cash payment from the Settlement Fund, you must complete and submit a Claim form and mail it, postmarked no later than May 30, 2011. You may download the form [via this website]. If you would like a Notice and Claim Form mailed to you, you can call the Settlement Administrator at 888-293-3337….

A final fairness hearing will take place on June 20, 2011 at 11:00 a.m. in Courtroom 8 of the Unites States District Court, 312 North Spring Street, Los Angeles, CA 90012…. If you do not want to remain a Member of the Class settling with either West Publishing Corp. or Kaplan, Inc., which means you do not want to participate in any benefits from the Settlement, you must file a request for exclusion in writing to the Claims Administrator postmarked on or before May 30, 2011.

These are just summaries. You can obtain more details via the official class-action websites for Rodriguez and for Stetson.

UPDATE (11:50 PM): A reader alerted us to a third BAR/BRI class action, Park v. Thomson Corp., also based on antitrust claims. The class period was March 15, 2001, through January 4, 2008. The deadlines for objecting or submitting proofs of claim have passed, and the settlement has already been approved. You can read more about the Park case here.

Now, on to the questions. Please note that we aren’t going to answer these questions for you. Rather, we’re creating this open thread, so you can discuss and debate the questions for yourselves.

1. My firm covered the cost of my BAR/BRI course. Who is entitled to the settlement proceeds?

As one reader put it:

I would love to see a discussion about whether firms that pay their associates’ bar review fees are entitled to the Bar Bri class action settlement checks that many of us are starting to get. According to the published information about the class action, the payout amounts, which are surprisingly substantial (I got a check for $800), are related in some way to course fees paid by each recipient. Since most big law firms pay these fees for associates (either directly or by reimbursement), is it ethical for associate class members to keep the settlement payments?

Last month, I received a check for just under $260, for participating in the Rodriguez settlement. I contacted the recruiting coordinator at Wachtell Lipton and asked whether the firm would like me to remit this amount to them. She said she’d get back to me. (But I suspect that the firm, with profits per partner of $4.35 million in 2010, doesn’t need the $259.76 that I received in settlement money.)

Readers, what do you think? Does it matter whether the firm paid for the course directly or reimbursed you after the fact?

2. I’m a member of the Stetson class. Should I join the class action, or object?

You might want to start by reading the FAQs on the Stetson website.

Here’s the opinion of one ATL reader, who’s not impressed by the proposed settlement:

Many of us 2006-2011 grads got our claim submission forms for the Barbri/Kaplan class action suit [recently]. Along with a future cash settlement (which class members must submit a claim form for), they gave us each a discount coupon for a Kaplan class.

What am I going to do with that? I’m already a lawyer so I don’t need test prep, and I passed the bar, thanks to BarBri, so I don’t need it for bar study.

I suppose I’d use it if I was changing careers but, come ON! Lame lame settlement “perk” and people seem pretty annoyed/insulted by the “coupon.”

And a second tipster:

I don’t know how big this class is, but the settlement me strikes me as really small, especially considering the thousands of dollars that the course costs and the number of people who take it.

I don’t need no stinking Kaplan gift certificate, and I’m guessing transaction costs for selling the gift certificate would be high for the amount of the certificate. Plus, I’d prolly have to offer it at a discount from the face value. Give me cash money.

If they didn’t violate antitrust law, it’s a windfall for the plaintiff’s lawyers, which I object to on ethical/moral grounds.

I’m unemployed, so I have time to object. I prolly normally wouldn’t.

ALERT: If you don’t like the Stetson settlement but don’t want to go to the trouble of preparing your own objection, you should know that Ted Frank and the Center for Class Action Fairness are objecting:

Because the 170,000 class members are law students and lawyers, I’ve been getting a lot of inquiries about this case and its coupon settlement. Stay tuned: we will be objecting, and early enough that you can read the objection and choose to write in to the court to join it if you wish.

Why is Ted Frank, aka the Class Action Avenger, objecting to the proposed settlement in Stetson? Read some of his reasons over at Point of Law.

If you want to join in his objection, keep an eye on the Center’s blog, so you can read the objection when it’s posted and decide whether to participate.

3. I want to opt in to the Stetson suit, but I don’t know how much I paid for my course. How can I fill out this form?

From a reader:

Any chance ATL can help us fill out these BarBri class action lawsuit claim forms? Collectively we should be able to figure out how much barbri cost in 2010 pretty easily.

If you can help this reader, please do so, in the comments.

UPDATE (11:50 PM): Commenters point out that (a) you might be able to find out this information if you still have access to your account on the BAR/BRI website and (b) there’s a number you can call if you don’t know how much you paid (1-888-293-3337).

Here’s the mother of all open threads, for discussion of topics related to BAR/BRI class actions. Enjoy!

Stetson v. West Publishing Corp. – BarBri Class Action Settlement
[Center for Class Action Fairness]
Stetson v. West Publishing Corp. [Point of Law]
[official class action website]
Rodriguez v. West Publishing Corp. [official class action website]

Earlier: Leeds Private Equity To Acquire BAR/BRI

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