Minnesota Supreme Court ruling: All former criminal justice students at defunct for-profit schools may seek refunds

The Minnesota Supreme Court sided with former criminal justice students at the now defunct for-profit Globe University and Minnesota School of Business (MSB) in ruling anyone who attended the programs can receive a tuition refund — not just the students who testified against the sister schools in a trial.

The state attorney general's office sued the schools five years ago, alleging they misled students by suggesting they would be able to work as police and probation officers. In 2017, after the campuses had closed amid the legal battle, a district court found Globe and MSB had misrepresented the program to students and ordered them to pay restitution. But the Minnesota Court of Appeals ruled only 15 students who had testified at the trial were eligible for such repayment.

The state Supreme Court said Wednesday that any of the roughly 1,330 students who attended the programs since 2009 can request reimbursement for tuition, fees and other education-related expenses, including interest. Attorney General Keith Ellison's office called the ruling "a big victory." It estimates former students are now eligible for refunds worth as much as $33.7 million.

"Today's ruling affirms my office's authority to get money back for Minnesotans when they're harmed by fraud — in this case, low-income students who were falsely told they could become Minnesota police or probation officers by enrolling in a program that cost upward of $70,000," Ellison said in a statement.

But in a comment provided through one of their attorneys, Globe and MSB suggested the court's 5-2 decision sets a problematic precedent.

"A party's obligation to present evidence is fundamental to our system of justice," the schools said. "The Schools are disappointed with the opinion and agree with the two dissenting justices who appear to suggest that the Court has substituted its own judgment for evidence in this case. That should be concerning for all litigants across the State of Minnesota."

The ruling is the second legal setback for the shuttered universities since June, when the state Appeals Court found they must repay both the principal and interest on millions of dollars in unlicensed loans they issued to former students.

Former Minnesota Attorney General Lori Swanson, who filed the suits against Globe, cheered the ruling. Swanson, who is now in private practice, said it has major implications for the state's ability to pursue consumer protection cases involving large groups of victims.

"If you had to call every single victim to trial, you often physically can't do it," she said.

The court battle has stretched on for years after the closure of Globe and MSB in 2016, when the U.S. Department of Education ended their access to federal financial aid programs.

According to court documents, the schools marketed the criminal justice associate's programs aggressively, clearly suggesting that they would help students launch careers as police and probation officers in Minnesota. Those statements were misleading: The programs were not approved by the Police Officer Standards and Training Board, and their credits did not transfer to any college that offered a certified professional peace officer education program.

The district court described the school's practices as "a trap for the unwary," setting up a process through which former students could seek tuition and other repayments.

But the Appeals Court later ruled the state had failed to show a causal link between deceptive advertising and admissions practices and harm to students who had not actually testified at the trial. The Supreme Court disagreed.

"The Schools would not have spent a total of $120 million in advertising and made law enforcement marketing materials available where they did if they did not believe that prospective students would rely on them," Justice Paul Thissen wrote for the court's 5-2 majority. He later added in siding with the plaintiffs, "The Schools should not profit from fraudulently providing a useless degree to their students."

Wendy Brown of Otsego, a firearms training instructor, enrolled in the criminal justice program on MSB's Elk River campus in 2014, hoping to become a police officer and eventually a police force firearms trainer. She says an admissions representative for the school steered her toward that program when she shared her career goals; later, she says officials at the school assured her the program would prepare her for the career change she wanted.

Brown, who was 49 at the time, learned only later that the program would not allow her to become an officer. She felt she had wasted a year of her life.

Brown was deposed by an attorney for Globe and MSB and took time off work to attend the trial, but she was not called to testify because of limited time to hear from numerous witnesses.

When she found out about the Appeals Court ruling, she said, "I was upset because I had been in on this from Day 1. I helped the AG's office as best as I could. I thought it was so unfair."

Brown said she welcomed the Supreme Court reversal but is apprehensive that the schools will not actually reimburse students.

Former Globe and MSB criminal justice students who believe they are eligible for restitution or have questions about the process can contact the attorney general's office at 651-296-3353 or 800-657-3787.

Mila Koumpilova • 612-673-4781