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A proposed class action accusing Rutgers University of manipulating its MBA rankings was dealt a heavy blow Wednesday, as the Third Circuit ruled the lead plaintiff lacked standing because he was never part of the full-time MBA program at the heart of the case. The split decision affirms a New Jersey federal court’s dismissal, though the appellate panel modified it to be without prejudice — leaving the door open for future claims.

Plaintiff Lorenzo Budet, who had enrolled in Rutgers’ supply-chain management master’s program and a nondegree MBA certificate, alleged the school fudged job placement data by counting internal hires in violation of ranking rules. He argued that this inflated prestige trickled down to all Rutgers Business School programs.

But Judge Stephanos Bibas, writing for the majority, wasn’t convinced. He called Budet’s claims a “hodgepodge of theories” and likened his pleadings to “throwing spaghetti at the wall.”

Alleged Scheme to Inflate Rankings

Budet’s 2022 complaint accused Rutgers of secretly hiring six postgraduates through a temp agency in 2018 to boost career-placement data submitted to the MBA Career Services & Employer Alliance, which explicitly bars such tactics. He claimed this inflated data ultimately fed into U.S. News & World Report rankings.

Yet, the panel pointed out that nothing in the record showed Rutgers’ ranking actually dropped after the alleged scheme. At best, Budet’s counsel argued during oral hearings that rankings fell in 2024 — years after the alleged misconduct and two years after the lawsuit was filed.

“Budet does not plausibly plead that the alleged fraud changed the rankings, so he cannot trace any injury to Rutgers’s conduct,” the majority wrote.

Prestige Argument Rejected

The majority dismissed Budet’s claim that Rutgers’ overall prestige unfairly bolstered his program, saying the theory was speculative at best. Judge Bibas drew a sharp analogy: while a Harvard degree might confer prestige even on its extension school, that “halo effect” could not be stretched to Rutgers’ certificate programs.

His skepticism mirrored remarks made during oral arguments, when Bibas pressed Budet’s counsel on what, exactly, was wrong with the bargain Budet claimed he didn’t receive.

A Dissenting View: Prestige Does Matter

In a dissent, Judge Peter J. Phipps sided with Budet, arguing the majority misapplied standards under the New Jersey Consumer Fraud Act. Phipps contended that Budet plausibly alleged he overpaid for his program based on Rutgers’ purportedly inflated prestige, and that this amounted to a real injury traceable to the university’s conduct.

Phipps argued that, had the majority properly applied the test, Budet’s statutory fraud claims — and potentially his others — would have survived.

Next Steps for Plaintiffs

Budet’s attorney, Charles J. Kocher of McOmber McOmber & Luber PC, said the plaintiffs welcomed the modification to a dismissal without prejudice and are weighing their options. He noted they agreed with Judge Phipps’ stance that “prestige does matter” and compared the case to Favell v. University of Southern California, where a class of students alleged USC artificially inflated rankings by submitting incomplete data to U.S. News & World Report.

Rutgers University declined to comment on the ruling.