Dunagan v. Illinois Institute of Art

On December 8 2018, Plaintiffs Emmanuel Dunagan, Jessica Muscari, Robert J. Infusino, and Stephanie Porreca filed a class action lawsuit in Illinois state court against the Dream Center Foundation, its wholly owned holding company Dream Center Education Holdings (DCEH), and their school, the Illinois Institute of Art. The students—represented by Student Defense and Edelman Combs Latturner & Goodwin, LLC—allege that the Defendants misrepresented and concealed the fact that the school lost accreditation, while encouraging students for more than half a year to continue paying for courses and even graduate with unaccredited degrees.

In 2019, the Defendants removed the case to federal court in the Northern District of Illinois, where it was originally before Judge Charles Norgle and, following his retirement, was reassigned to Judge Joan Lefkow. In 2021, Keishana Mahone and Lakesha Howard-Williams joined the case as new plaintiffs, and former top-level DCEH officers Brent Richardson, Chris Richardson, and Shelly Murphy were added as defendants in their personal capacity.

Early in 2019, DCEH and the many schools that it operated went into receivership in the Northern District of Ohio. As a result, this case was stayed against DCEH and the Illinois Institute of Art, but it continued against the Dream Center Foundation and individual defendants Brent Richardson, Chris Richardson and Shelly Murphy.

The Dream Center Foundation and the individual defendants have both lost motions to dismiss. On January 6, 2020, the Court rejected the Foundation’s attempt to dismiss the students’ “detailed and specific allegations.” On August 5, 2021, the Court denied the individual defendants’ motion, finding that “Plaintiffs provide significant, uncontroverted evidence sufficient to support a finding that the Individual Defendants were involved in the decision-making process concerning what representations to make to the Art Institute’s students concerning the school’s loss of accreditation.” The Court has explained that the Defendants actions constitute “conduct [that was] highly unforeseeable, highly unusual, and potentially criminal.”

In October of 2021, the Court stayed this case due to a bar order that was entered by Judge Dan Polster in the Northern District of Ohio as part of a purported settlement of the receivership proceeding. This case was then frozen for over a year as the students fought the bar order in Ohio. Ultimately, the students appealed the bar order to the Sixth Circuit Court of Appeals and, on February 7, 2023, they won and the bar order was struck down. This case has since resumed and discovery remains ongoing.

Related Cases:

Dream Center Receivership: Dream Center Education Holdings and the Illinois Institute of Art (among others) were placed into receivership in 2019. Student Defense is representing students' interests in those proceedings, including by successfully appealing the bar order that sought to eliminate this lawsuit in Illinois. More information on the Receivership is available here.

Infusino v. DeVos, No. 19-cv-3162 (D.D.C): On October 22, 2019, three of the Dunagan plaintiffs (RJ Infusino, Keishana Mahone and Emmanuel Dunagan) and two former Art Institute of Colorado students (Rachel Delibasich and Jessica Scheibe) filed a class action lawsuit against then-Secretary Betsy DeVos for illegally propping up their schools by continuing to provide federal funds after they lost accreditation and eligibility to participate in the Title IV loan program. The students, represented by Student Defense, alleged that the Department’s illegal actions caused them to incur debt to pay tuition for unaccredited credits and degrees. Weeks later, on November 8, 2019, the Department announced it would cancel approximately $11 million in debt incurred by Student Defense clients and members of the Infusino class action lawsuit.

Other Information:

On May 22, 2019, Plaintiff RJ Infusino testified before the House Oversight Committee's Subcommittee on Economic and Consumer Policy. The hearing, titled “Examining For-Profit College Oversight and Student Debt” examined RJ's experience at the Illinois Institute of Art, and how the school's deception derailed his education and career plans. You can watch RJ's opening statement here, and a video of the whole hearing here.

Case Background:

In 2017, the Dream Center Foundation announced it was purchasing the Illinois Institute of Art and other schools from the for-profit Education Management Corporation (EDMC) for $60 million. The sale of the IIA campuses was completed on January 20, 2018. IIA’s accreditor, the Higher Learning Commission (HLC), informed the school that it had lost its accreditation as of that date. Accreditation is the primary way that students, employers, and the public can have confidence in a college or university and is critical to students’ opportunity to transfer credits to another school or secure employment.

HLC explicitly instructed the Illinois Institute of Art to tell students that their “courses or degrees are not accredited . . . and may not be accepted in transfer to other colleges and universities or recognized by prospective employers.” IIA did not do that. Instead, it celebrated the change in ownership, telling students it was “very exciting news.” In February and April, the schools posted language in their online course catalogs, stating that “We remain accredited [emphasis added] as a candidate school seeking accreditation under new ownership and our new non-profit status.” This was false and remained uncorrected, despite HLC’s clear instruction.

For months after losing its accredited status, the schools continued to recruit new students and to accept tuition from its existing student body without disclosing the loss of accreditation. The annual cost of attendance at the Chicago and Schaumburg campuses was approximately $30,000.

The defendants did not acknowledge to students that IIA lost accreditation for a full six months and only did so after a June 19 article in the Pittsburgh Post-Gazette about the deception. A few weeks later, on July 2, the schools announced they would close at the end of 2018. Even then, the schools continued to make misleading assurances to students, who continued to spend time and money pursuing devalued degrees.

For any student who attended or graduated from the Illinois Institute of Art at any time after January 20, 2018, his or her official transcript will contain a statement that the coursework or degree is unaccredited. These students will spend the rest of their lives with credits and degrees that have severely diminished value, through no fault of their own.