Eight former Richmond School of Health and Technology (RSHT), now known as Chester Career College, filed a class complaint alleging that RSHT induced enrollment by making material misrepresentations about the educational quality, failed to satisfy its contractual obligations, and discriminated on the basis of targeting black students for enrollment.
The plaintiffs brought claims for fraudulent inducement, breach of contract, and violation of several acts including the Virginal Consumer Protection Act, the Equal Credit Opportunity Act, and Title VI of the Civil Rights Act of 1964.
Per RSHT's request, the case was transferred to the U.S. District Court for the Eastern District of Virginia. Defendants also moved to dismiss the federal claims but the motion was moot in light of the pending settlement.
In June 2012, the District Court ordered mediation before the deadline for filing for plaintiff's class certification motion. An agreement, in principle, was reached, providing payment of $5 million dollars by Nationwide Mutual Insurance Company, RSHT's insurer. The agreement also provided non-monetary injunctive relief including requirements that RSHT make information about the school and the success of their graduates available and to adhere to the cancellation and refund policies promulgated by the Council on Occupational Education.
On July 25, final approval was granted. The judge stipulated how the $5 million should be divided.
The case is styled Mary Morgan, et al v. Richmond School of Health & Tech., Inc., 3:12-cv-00373 filed in the U.S. District Court for the District of Columbia.