On March 16, 2023, MBG, along with co-counsel National Student Legal Defense Network and Cotchett, Pitre & McCarthy, filed a class action lawsuit against Bloom Institute of Technology, formerly known as Lambda School, and its CEO Austen Allred, on behalf of students who enrolled at the school.
The students allege that Lambda—a for-profit, unaccredited computer coding bootcamp started in 2017—misrepresented post-graduation job placement rates, operated without necessary state approval, and engaged in illegal lending practices under California law. The lawsuit asks for student’ income sharing agreements (ISAs) to be canceled and all payments made under these agreements refunded as restitution.
Lambda has long been under scrutiny for its marketing tactics, including advertising inflated job placement rates. In 2019, Lambda touted an 86% job placement rate, but an internal report from the same year obtained by co-counsel Student Defense revealed the actual rate was “50% placement for cohorts that are 6 months graduated.” Additional internal documents later revealed that the rate had plummeted to just 30% in the first six months of 2020.
The California state court case is Fuller, et al. v. Bloom Institute of Technology, et al., CGC-23-605179 (Sup. Ct. Cal.), and is being litigated, for MBG, by David Baltmanis and Ryan Miller, along with the two co-counsel firms.