Pacific Coast Horseshoeing School, Inc. et al v. Grafilo, et al

Filing 21

ORDER signed by District Judge John A. Mendez on 4/11/18 ORDERING for the reasons above, the Court GRANTS Defendants' motion to dismiss with prejudice.(Becknal, R)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 12 PACIFIC COAST HORSESHOEING SCHOOL, INC.; BOB SMITH; and ESTEBAN NAREZ, 13 14 15 16 17 Plaintiffs, No. 2:17-cv-02217-JAM-GGH ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS v. DEAN GRAFILO, et al., Defendants. Pacific Coast Horseshoeing School (the “School”) and its 18 owner, Bob Smith (“Smith”), seek to enroll a potential student, 19 Esteban Narez (“Narez”). 20 Postsecondary Education Act of 2009 (the “Act”), CAL. EDUC. CODE 21 §§ 94800 et seq., the School may not enroll students unless they 22 meet ability-to-benefit requirements. 23 those requirements, the Act required the School to deny his 24 application. 25 filing a Complaint in this Court which alleges that the Act 26 abridges the School’s and Smith’s First Amendment right to teach 27 horseshoeing and Narez’s First Amendment right to learn 28 horseshoeing. Under California’s Private Because Narez did not meet Plaintiffs elected to legally challenge the Act by 1 1 Defendants have moved to dismiss. Mot., ECF No. 15. 2 Plaintiffs oppose dismissal. Opp’n, ECF No. 18. For reasons 3 explained below, the Court grants Defendants’ motion. 1 4 5 I. BACKGROUND 6 A. The Private Postsecondary Education Act of 2009 7 In the Act, the California legislature expressed concern 8 about the value of degrees issued by private postsecondary 9 schools and the lack of protection for the schools’ students and 10 consumers of their services. 11 promulgating the Act, the legislature sought to ensure: 12 CAL. EDUC. CODE § 94801(b). In (1) Minimum educational quality standards and opportunities for success for California students attending private postsecondary schools in California. 13 14 (2) Meaningful student protections through essential avenues of recourse for students. 15 (3) A regulatory structure that provides for an appropriate level of oversight. 16 17 (4) A regulatory governance structure that ensures that all stakeholders have a voice and are heard in policymaking by the bureau. 18 19 (5) A regulatory governance structure that provides for accountability and oversight by the Legislature through program monitoring and periodic reports. 20 21 (6) Prevention of the harm to students and the deception of the public that results from fraudulent or substandard educational programs and degrees. 22 23 24 CAL. EDUC. CODE § 94801(d). The Bureau for Private Postsecondary Education (the 25 26 27 28 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled for February 27, 2018. In deciding this motion, the Court takes as true all well-pleaded facts in the complaint. 2 1 “Bureau”) regulates private postsecondary educational 2 institutions. 3 regulated institutions that meet minimum operating standards. 4 CAL. EDUC. CODE § 94887. 5 Chief of the Bureau, which is located within California’s 6 Department of Consumer Affairs. 7 Defendant Dean Grafilo is the appointed Director of California’s 8 Department of Consumer Affairs. CAL. EDUC. CODE § 94875. The Bureau approves Defendant Michael Marion serves as Compl., ECF No. 1, p. 2 ¶ 11. Id. ¶ 12. 9 Before a regulated institution can execute an enrollment 10 agreement with a student who did not graduate high school or pass 11 an equivalency examination, such as the General Educational 12 Development (GED) test, that student must pass “an independently 13 administered examination from the list of examinations prescribed 14 by the United States Department of Education” or a Bureau- 15 approved examination relevant to the intended occupational 16 training. 17 REGS. § 71770(a)(1). CAL. EDUC. CODE §§ 94811, 94904(a–b); 5 CAL. CODE 18 B. Pacific Coast Horseshoeing School, Smith, and Narez 19 Horseshoeing is the practice of shaping metal to be fitted 20 and nailed into a horse’s hoof. Compl. at 2 ¶ 16. 21 shoes horses is called a farrier. 22 farriering does not require a license. 23 Smith founded the School in 1991. Id. ¶ 17. A person who In California, Id. ¶ 21. Id. at 3 ¶¶ 26–27. Five 24 times each year, the School offers a full-time eight-week 25 curriculum to about 12 to 14 students. 26 curriculum includes classroom session and practice removing, 27 shaping, and applying horseshoes to horses. 28 sessions focus on horseshoeing theory; horse anatomy, movement, 3 Id. ¶¶ 28, 32. Id. ¶ 28. That Classroom 1 and lameness; and business advice on client management, self- 2 employment, and interaction with barns, trainers, and 3 veterinarians. 4 written or oral examinations. 5 School’s tuition costs $6,000. 6 Id. ¶ 30. The School evaluates students by Id. ¶ 31. As of this year, the Id. ¶ 33. The School qualifies as a regulated institution under the 7 Act because it (1) is a private entity located in California that 8 (2) offers a curriculum to the public for a vocational purpose 9 and (3) charges tuition. Id. at 4 ¶¶ 34–36; see also CAL. EDUC. 10 CODE §§ 94857, 94858. 11 enroll students who have high school diplomas or recognized 12 equivalents, or have passed ability-to-benefit examinations. 13 CAL. EDUC. CODE § 94904. 14 The Act thus requires the School only Plaintiffs assert that earning a passing score on an 15 ability-to-benefit examination is unnecessary for horseshoeing. 16 Compl. at 5 ¶ 46. 17 educational prerequisites to admission, does not accept state or 18 federal student loans. 19 students who are unable to benefit from the School’s curriculum 20 because he refunds all but $250 of tuition paid if continuing the 21 course is not in the student’s best interest after the first 22 week. The School, which previously did not impose Id. at 6 ¶¶ 52–53. Smith does not charge 23 Id. ¶ 54. The School was first inspected by the Bureau in 2016. Id. 24 ¶ 55. The Bureau determined that the School’s admissions 25 requirements did not comply with the Act because it lacked 26 admission prerequisites. 27 Bureau would recognize his practice of partially refunding 28 tuition after the first week to non-benefiting students as an Id. ¶ 56. 4 Smith inquired whether the 1 alternative to having students pass an ability-to-benefit 2 examination. 3 proposal as an alternative to the Act’s requirements. 4 Accordingly, in 2017, Smith modified the School’s admissions 5 standards to call for a high school diploma, its equivalent, or 6 passage of an ability-to-benefit examination, as required for 7 Bureau approval. 8 School has since rejected otherwise qualified students who did 9 not meet these academic qualifications. 10 Id. at 6–7 ¶ 57. The Bureau did not accept Smith’s Id. at 7 ¶¶ 58–59. Id. Because of this change, the Id. ¶ 60. One such student turned away due to admissions standards 11 changes is Plaintiff Esteban Narez. 12 school and has not subsequently earned his high school diploma or 13 GED. 14 sparked Narez’s passion for horses. 15 alongside a farrier, Narez sought to become a farrier himself. 16 Id. at 8 ¶¶ 70–73. 17 GED or an ability-to-benefit examination would conflict with his 18 work schedule and would not substantially advance his career. 19 Id. at 8–9 ¶¶ 78–79. 20 it rejected his application because he did not meet the Act’s 21 ability-to-benefit requirements for enrollment at a private 22 postsecondary educational institution. 23 Compl. at 7–8 ¶¶ 63–64, 75. Narez dropped out of high Jobs in the equine field Id. ¶¶ 67–68. After working Narez believes studying for and taking the Although the School wanted to admit Narez, Id. ¶¶ 76–77, 81. Plaintiffs’ Complaint seeks a judicial declaration that the 24 ability-to-benefit requirement is unconstitutional and injunctive 25 relief to this effect. 26 /// 27 /// 28 /// Prayer for Relief ¶¶ A, C. 5 1 II. OPINION 2 Plaintiffs argue that California’s ability-to-benefit 3 requirement as applied violates their First Amendment rights by 4 restricting Smith and the School from teaching their 5 horseshoeing curriculum and preventing the enrollment of Narez, 6 who has not proven his ability to benefit under the Act. 7 at 9–11 ¶¶ 89–101. 8 assert the Act regulates non-expressive conduct and survives 9 rational basis review. Compl. Defendants move to dismiss because they Mot. at 3–7. Alternatively, Defendants 10 argue that the Act is content-neutral and satisfies the test set 11 forth in United States v. O’Brien, 391 U.S. 367, 377 (1968). 12 Id. at 8–11. 13 Plaintiffs counter that the Court should not resolve First 14 Amendment claims at the motion to dismiss stage. Opp’n at 10. 15 Nevertheless, where a court accepts all of the plaintiffs’ 16 allegations as true and construes all facts in their favor, the 17 Ninth Circuit has not found early resolution of First Amendment 18 claims to be problematic. 19 Ass’n v. City & Cty. of San Francisco, 881 F.3d 1169 (9th Cir. 20 2018) (affirming grant of judgment on the pleadings to 21 government on First Amendment claim); Taub v. City & Cty. of San 22 Francisco, 696 F. App’x 181, 184 (9th Cir. 2017) (affirming 23 dismissal of the plaintiffs’ First Amendment claim on a 12(b)(6) 24 motion). See, e.g., San Francisco Apartment 25 A. The Extent to Which Speech Is Implicated 26 “The First Amendment applies to state laws and regulations 27 through the Due Process Clause of the Fourteenth Amendment.” 28 Nat’l Ass’n for Advancement of Psychoanalysis v. Cal. Bd. of 6 1 Psychology, 228 F.3d 1043, 1053 (9th Cir. 2000) (“NAAP”). 2 the Fourteenth Amendment, “a statute is required to bear only a 3 rational relationship to a legitimate state interest, unless it 4 makes a suspect classification or implicates a fundamental 5 right.” 6 purveyors, and aspiring farriers are not members of suspect 7 classes entitled to heightened scrutiny, the Court must examine 8 whether the ability-to-benefit requirement implicates the 9 fundamental right of free speech. 10 Id. at 1049. Under Because horseshoeing schools, their The Court must first determine whether the Act regulates 11 speech or conduct. 12 Cir. 2014). 13 protected expression are distinct from restrictions on economic 14 activity or, more generally, on nonexpressive conduct.” 15 v. IMS Health Inc., 564 U.S. 552, 567 (2011). 16 the latter, “the First Amendment does not prevent restrictions 17 directed at commerce or conduct from imposing incidental burdens 18 on speech.” 19 Pickup v. Brown, 740 F.3d 1208, 1225 (9th The Supreme Court instructs that “restrictions on Sorrell In the case of Id. Defendants provide several sources of binding authority in 20 support of their argument that the ability-to-benefit 21 requirement regulates conduct, not speech. 22 Forum for Acad. & Institutional Rights, Inc., 547 U.S. 47, 62 23 (2006) (“FAIR”) (holding that a law compelling publicly funded 24 law schools to offer the military equivalent access to campus as 25 other employers regulated conduct); Pickup, 740 F.3d at 1229 26 (holding that a law prohibiting mental health providers from 27 providing sexual orientation change efforts therapy to minors 28 regulated conduct). See Rumsfeld v. In FAIR, the Supreme Court found that the 7 1 Solomon Amendment regulated “conduct, not speech” because “[i]t 2 affects what law schools must do—afford equal access to military 3 recruiters—not what they may or may not say.” 4 Similarly, in Pickup, the Ninth Circuit concluded that a state 5 law that allowed licensed therapists to discuss the pros and 6 cons of sexual reorientation therapy with their patients, but 7 prohibited that therapy as a treatment for minors, regulated 8 conduct. 9 547 U.S. at 60. 740 F.3d at 1229. Plaintiffs counter that this issue is controlled by the 10 Supreme Court’s decision in Holder v. Humanitarian Law Project, 11 561 U.S. 1 (2010). 12 law, which prohibited the provision of “material support or 13 resources” to certain foreign organizations that engage in 14 terrorist activity, regulated speech and required a more 15 demanding standard of First Amendment review. 16 Although the law was directed at conduct, “the conduct 17 triggering coverage under the statute consist[ed] of 18 communicating a message,” meaning the law regulated speech. In Holder, the Supreme Court held that a Id. at 28. Id. 19 Plaintiffs argue that the regulation here is triggered by 20 the fact that their speech is vocational in content, rendering 21 the Act a content-based speech restriction. 22 the text of the Act belies this interpretation. 23 above, the Act’s requirements apply to schools that qualify 24 under California Education Code Sections 94857 and 94858. 25 mere fact that a school teaches vocational skills is 26 insufficient to bring an institution under the Act’s umbrella 27 unless the school is also private, operating in California, and 28 charging tuition. See id. Opp’n at 5. But As mentioned Further, the ability-to-benefit The 8 1 requirement is not triggered by vocational teaching, but rather 2 by executing an enrollment agreement. 3 § 94904(a). CAL. EDUC. CODE 4 Additionally, as the Ninth Circuit noted in Pickup, the law 5 at issue in Holder was extremely broad: it completely barred all 6 “communicat[ion of] information about international law and 7 advocacy to a designated terrorist organization.” 8 1230. 9 nearly as far-reaching. 740 F.3d at The reach of the ability-to-benefit requirement is not 10 Much like Pickup, the Act does not restrain Smith and the 11 School from “imparting information,” “disseminating opinions,” 12 or “communicating a message.” 13 Plaintiffs argue their speech is being restricted, the only 14 thing that the School cannot do is execute an enrollment 15 agreement with a student who has not demonstrated an ability to 16 benefit under the Act. 17 ability may be shown by passing an examination prescribed by the 18 United States Department of Education, id. at § 94904(a), or by 19 passing a Bureau-approved examination that is relevant to the 20 intended occupational training, id. at § 94904(b). 2 21 740 F.3d at 1230. While CAL. EDUC. CODE § 94904(a). That Nothing in the Act prohibits Smith and the School from 22 sharing information and communicating about horseshoeing 23 generally. 24 horseshoeing outside of enrollment at a private postsecondary 25 2 26 27 28 Nothing prohibits Narez from learning about Accepting all allegations in the Complaint as true, the School has not availed itself of the option to propose a different examination, under subsection (b),that would be more relevant to its course material. Similarly, Narez has not attempted to take any ability-to-benefit examination, much less alleged that he lacks the competence to pass such an examination. 9 1 educational institution prior to passing an ability-to-benefit 2 examination. 3 As Defendants highlight, under Plaintiffs’ conception of 4 speech, nearly every regulation of postsecondary education would 5 require First Amendment scrutiny because teaching involves 6 speech. 7 activity, such as private education, will always be speech- 8 adjacent because commerce relies on the communication of ideas. 9 Courts have not held, however, that these incidental burdens on Reply, ECF No. 19, p. 2. Regulations on economic 10 speech caused by the regulation of commerce infringe on 11 fundamental rights under the First Amendment. 12 552, 566–67 (2011). Sorrell, 564 U.S. 13 B. Rational Basis Review 14 If a law regulates non-expressive conduct, rather than 15 speech, the law “must be upheld if it bears a rational 16 relationship to a legitimate state interest.” 17 at 1231. 18 stated purposes,” so long as “the government could have had a 19 legitimate reason for acting as it did.” 20 Advancement of Psychoanalysis v. California Bd. of Psychology, 21 228 F.3d 1043, 1050–51 (9th Cir. 2000) (quoting Dittman v. 22 California, 191 F.3d 1020, 1031 (9th Cir. 1999)). 23 “need only determine whether the [law] has a ‘conceivable basis’ 24 on which it might survive rational basis scrutiny.” 25 Pickup, 740 F.3d The government’s action need not “actually advance its Nat’l Ass’n for The Court Id. Educational institutions have a right to academic freedom 26 under the First Amendment. Regents of Univ. of California v. 27 Bakke, 438 U.S. 265, 312 (1978). 28 not mean that an educational institution may use the First 10 Yet that academic freedom does 1 Amendment to shield itself from government regulation and 2 oversight rationally related to a valid government purpose. 3 Illinois Bible Colleges Ass’n v. Anderson, 870 F.3d 631, 642 4 (7th Cir. 2017), as amended (Oct. 5, 2017), cert. denied sub 5 nom. Illinois Bible Colleges Ass’n v. Cross, No. 17-960, 2018 WL 6 325305 (U.S. Feb. 20, 2018) (holding that the state did not 7 infringe on the schools’ “right to free speech by regulating 8 degree-issuing post-secondary education”); Nova Univ. v. Educ. 9 Inst. Licensure Comm’n, 483 A.2d 1172, 1181 (D.C. 1984) See 10 (“Schools are not shielded by the First Amendment from 11 governmental regulation of business conduct deemed detrimental 12 to the public merely because they are engaged in First Amendment 13 activities.”) 14 The Act’s legislative findings detail that “[n]umerous 15 reports and studies have concluded that California’s previous 16 attempts at regulatory oversight of private postsecondary 17 schools under the Department of Consumer Affairs ha[d] 18 consistently failed to ensure student protections or provide 19 effective oversight of private postsecondary schools.” 20 EDUC. CODE § 94801(c). 21 requirements for private postsecondary educational institutions, 22 the Act aimed to ensure that these schools would have “[m]inimum 23 educational quality standards and opportunities for success” and 24 an “appropriate level of oversight.” 25 § 94801(d)(1,3). 26 “[p]revention of the harm to students and the deception of the 27 public that results from fraudulent or substandard educational 28 programs and degrees.” CAL. In adding additional operational CAL. EDUC. CODE The Act further sought to ensure the CAL. EDUC. CODE § 94801(d)(6). 11 1 California has a legitimate state interest in preventing 2 private postsecondary schools operating in the state from 3 harming students and deceiving the public. 4 prevent harm and deception is rationally related to the 5 requirement that students at private postsecondary educational 6 institutions show sufficient competency to benefit from that 7 education. 8 plausible that the legislature thought requiring students to 9 prove their ability to benefit through examinations or diplomas That desire to See CAL. EDUC. CODE §§ 94904, 94811. It is 10 would improve the students’ opportunities for success at 11 postsecondary institutions, and that is enough to sustain the 12 Act. 13 2013). 14 See Romero–Ochoa v. Holder, 712 F.3d 1328, 1331 (9th Cir. While Plaintiffs believe that speech-adjacent paternalism 15 “has no place in the American legal landscape,” Opp’n at 1, 16 precedent does not support using the courts as a tool to 17 substitute Plaintiffs’ preferences for those of the state’s 18 elected representatives. 19 Co., 449 U.S. 456, 464 (1981) (“States are not required to 20 convince the courts of the correctness of their legislative 21 judgments.”); Ferguson v. Skrupa, 372 U.S. 726, 729 (1963) 22 (“[I]t is up to legislatures, not courts, to decide on the 23 wisdom and utility of legislation.”). 24 does not give courts the authority to invalidate a state 25 regulation every time an individual finds it to be unnecessary 26 or inconvenient. 27 28 Cf. Minnesota v. Clover Leaf Creamery The Fourteenth Amendment Therefore, the Court finds that the Act and its ability-tobenefit requirement are rationally related to the legitimate 12 1 government interest of protecting students and the public from 2 harm and deception. 3 4 C. Leave to Amend 5 The Court need not grant leave to amend where amendment 6 would be futile. 7 F.3d 1043, 1049 (9th Cir. 2006). 8 Plaintiffs’ Complaint does not state a claim as a matter of law. 9 Plaintiffs have pointed to no facts suggesting amendment could 10 Deveraturda v. Globe Aviation Sec. Servs., 454 As explained above, rectify this issue, making dismissal with prejudice appropriate. 11 12 13 14 15 16 III. ORDER For the reasons above, the Court GRANTS Defendants’ motion to dismiss with prejudice. IT IS SO ORDERED. Dated: April 11, 2018 17 18 19 20 21 22 23 24 25 26 27 28 13

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