Although a plaintiff asserting a fraud claim in federal court may allege malice, intent, knowledge, and other conditions of a person’s mind in general terms, he must plead the circumstances constituting the fraud with particularity, identifying the time, place, content, and maker of each alleged fraudulent circumstance. Failure to plead fraud with sufficient particularity will result in dismissal under Federal Rule of Civil Procedure 12(b)(6), as demonstrated by the recent failed case against Capella University.
Melvin Murphy had a Bachelor of Arts degree and was pursuing an M.B.A. when he received online advertisements for Capella University’s doctoral programs in business management. Capella’s “enrollment counselors” responded aggressively to Murphy’s initial inquiries with calls, emails and marketing materials. Murphy contends that Capella’s promotional materials contained misstatements and misrepresentations upon which he relied when he enrolled in the school’s Ph.D. program in Organization and Management with a specialization in Leadership. For example, one brochure featured testimonials from supposed Capella doctoral students accompanied by photographs and quotes. Murphy asserts that at least one person pictured and quoted was not a graduate of Capella, was not a current student in the Ph.D. program and did not give permission for Capella to use his image. According to Murphy, the promotional materials were false and misleading as Capella did not award doctoral degrees in the field of Organization and Management and had no plans to do so. Capella agents allegedly reemphasized these misrepresentations when speaking with Murphy.
Murphy complains that Capella also failed to tell him that a doctoral candidate in any subject must pass Comprehensive Exams in order to be eligible for a Ph.D. and that most candidates fail these exams. According to Murphy, only 10% of Capella’s degree candidates obtained their desired degree. He asserts that these material omissions happened despite frequent contact with “representatives of Capella, including the Capella ‘enrollment counselors.'”