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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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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PACIFIC COAST HORSESHOEING
SCHOOL, INC.; BOB SMITH; and
ESTEBAN NAREZ,

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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

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owner, Bob Smith (“Smith”), seek to enroll a potential student,

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Esteban Narez (“Narez”).

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Postsecondary Education Act of 2009 (the “Act”), CAL. EDUC. CODE

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§§ 94800 et seq., the School may not enroll students unless they

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meet ability-to-benefit requirements.

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those requirements, the Act required the School to deny his

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application.

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filing a Complaint in this Court which alleges that the Act

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abridges the School’s and Smith’s First Amendment right to teach

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horseshoeing and Narez’s First Amendment right to learn

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horseshoeing.

Under California’s Private

Because Narez did not meet

Plaintiffs elected to legally challenge the Act by

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Defendants have moved to dismiss.

Mot., ECF No. 15.

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Plaintiffs oppose dismissal.

Opp’n, ECF No. 18.

For reasons

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explained below, the Court grants Defendants’ motion. 1

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I.

BACKGROUND

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A.

The Private Postsecondary Education Act of 2009

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In the Act, the California legislature expressed concern

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about the value of degrees issued by private postsecondary

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schools and the lack of protection for the schools’ students and

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consumers of their services.

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promulgating the Act, the legislature sought to ensure:

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CAL. EDUC. CODE § 94801(b).

In

(1) Minimum educational quality standards and
opportunities for success for California students
attending private postsecondary schools in California.

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(2) Meaningful student protections through essential
avenues of recourse for students.

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(3) A regulatory structure that provides for an
appropriate level of oversight.

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(4) A regulatory governance structure that ensures
that all stakeholders have a voice and are heard in
policymaking by the bureau.

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(5) A regulatory governance structure that provides
for accountability and oversight by the Legislature
through program monitoring and periodic reports.

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(6) Prevention of the harm to students and the
deception of the public that results from fraudulent
or substandard educational programs and degrees.

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CAL. EDUC. CODE § 94801(d).
The Bureau for Private Postsecondary Education (the

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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.
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“Bureau”) regulates private postsecondary educational

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institutions.

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regulated institutions that meet minimum operating standards.

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CAL. EDUC. CODE § 94887.

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Chief of the Bureau, which is located within California’s

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Department of Consumer Affairs.

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Defendant Dean Grafilo is the appointed Director of California’s

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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.

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Before a regulated institution can execute an enrollment

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agreement with a student who did not graduate high school or pass

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an equivalency examination, such as the General Educational

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Development (GED) test, that student must pass “an independently

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administered examination from the list of examinations prescribed

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by the United States Department of Education” or a Bureau-

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approved examination relevant to the intended occupational

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training.

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REGS. § 71770(a)(1).

CAL. EDUC. CODE §§ 94811, 94904(a–b); 5 CAL. CODE

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B.

Pacific Coast Horseshoeing School, Smith, and Narez

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Horseshoeing is the practice of shaping metal to be fitted

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and nailed into a horse’s hoof.

Compl. at 2 ¶ 16.

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shoes horses is called a farrier.

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farriering does not require a license.

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Smith founded the School in 1991.

Id. ¶ 17.

A person who

In California,

Id. ¶ 21.
Id. at 3 ¶¶ 26–27.

Five

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times each year, the School offers a full-time eight-week

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curriculum to about 12 to 14 students.

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curriculum includes classroom session and practice removing,

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shaping, and applying horseshoes to horses.

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sessions focus on horseshoeing theory; horse anatomy, movement,
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Id. ¶¶ 28, 32.

Id. ¶ 28.

That

Classroom

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and lameness; and business advice on client management, self-

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employment, and interaction with barns, trainers, and

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veterinarians.

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written or oral examinations.

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School’s tuition costs $6,000.

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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

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Act because it (1) is a private entity located in California that

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(2) offers a curriculum to the public for a vocational purpose

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and (3) charges tuition.

Id. at 4 ¶¶ 34–36; see also CAL. EDUC.

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CODE §§ 94857, 94858.

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enroll students who have high school diplomas or recognized

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equivalents, or have passed ability-to-benefit examinations.

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CAL. EDUC. CODE § 94904.

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The Act thus requires the School only

Plaintiffs assert that earning a passing score on an

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ability-to-benefit examination is unnecessary for horseshoeing.

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Compl. at 5 ¶ 46.

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educational prerequisites to admission, does not accept state or

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federal student loans.

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students who are unable to benefit from the School’s curriculum

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because he refunds all but $250 of tuition paid if continuing the

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course is not in the student’s best interest after the first

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week.

The School, which previously did not impose

Id. at 6 ¶¶ 52–53.

Smith does not charge

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Id. ¶ 54.
The School was first inspected by the Bureau in 2016.

Id.

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¶ 55.

The Bureau determined that the School’s admissions

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requirements did not comply with the Act because it lacked

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admission prerequisites.

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Bureau would recognize his practice of partially refunding

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tuition after the first week to non-benefiting students as an

Id. ¶ 56.

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Smith inquired whether the

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alternative to having students pass an ability-to-benefit

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examination.

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proposal as an alternative to the Act’s requirements.

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Accordingly, in 2017, Smith modified the School’s admissions

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standards to call for a high school diploma, its equivalent, or

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passage of an ability-to-benefit examination, as required for

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Bureau approval.

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School has since rejected otherwise qualified students who did

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not meet these academic qualifications.

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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

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changes is Plaintiff Esteban Narez.

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school and has not subsequently earned his high school diploma or

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GED.

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sparked Narez’s passion for horses.

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alongside a farrier, Narez sought to become a farrier himself.

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Id. at 8 ¶¶ 70–73.

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GED or an ability-to-benefit examination would conflict with his

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work schedule and would not substantially advance his career.

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Id. at 8–9 ¶¶ 78–79.

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it rejected his application because he did not meet the Act’s

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ability-to-benefit requirements for enrollment at a private

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postsecondary educational institution.

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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

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ability-to-benefit requirement is unconstitutional and injunctive

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relief to this effect.

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Prayer for Relief ¶¶ A, C.

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II.

OPINION

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Plaintiffs argue that California’s ability-to-benefit

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requirement as applied violates their First Amendment rights by

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restricting Smith and the School from teaching their

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horseshoeing curriculum and preventing the enrollment of Narez,

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who has not proven his ability to benefit under the Act.

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at 9–11 ¶¶ 89–101.

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assert the Act regulates non-expressive conduct and survives

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rational basis review.

Compl.

Defendants move to dismiss because they

Mot. at 3–7.

Alternatively, Defendants

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argue that the Act is content-neutral and satisfies the test set

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forth in United States v. O’Brien, 391 U.S. 367, 377 (1968).

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Id. at 8–11.

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Plaintiffs counter that the Court should not resolve First

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Amendment claims at the motion to dismiss stage.

Opp’n at 10.

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Nevertheless, where a court accepts all of the plaintiffs’

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allegations as true and construes all facts in their favor, the

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Ninth Circuit has not found early resolution of First Amendment

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claims to be problematic.

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Ass’n v. City & Cty. of San Francisco, 881 F.3d 1169 (9th Cir.

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2018) (affirming grant of judgment on the pleadings to

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government on First Amendment claim); Taub v. City & Cty. of San

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Francisco, 696 F. App’x 181, 184 (9th Cir. 2017) (affirming

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dismissal of the plaintiffs’ First Amendment claim on a 12(b)(6)

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motion).

See, e.g., San Francisco Apartment

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A.

The Extent to Which Speech Is Implicated

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“The First Amendment applies to state laws and regulations

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through the Due Process Clause of the Fourteenth Amendment.”

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Nat’l Ass’n for Advancement of Psychoanalysis v. Cal. Bd. of
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Psychology, 228 F.3d 1043, 1053 (9th Cir. 2000) (“NAAP”).

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the Fourteenth Amendment, “a statute is required to bear only a

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rational relationship to a legitimate state interest, unless it

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makes a suspect classification or implicates a fundamental

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right.”

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purveyors, and aspiring farriers are not members of suspect

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classes entitled to heightened scrutiny, the Court must examine

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whether the ability-to-benefit requirement implicates the

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fundamental right of free speech.

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Id. at 1049.

Under

Because horseshoeing schools, their

The Court must first determine whether the Act regulates

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speech or conduct.

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Cir. 2014).

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protected expression are distinct from restrictions on economic

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activity or, more generally, on nonexpressive conduct.”

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v. IMS Health Inc., 564 U.S. 552, 567 (2011).

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the latter, “the First Amendment does not prevent restrictions

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directed at commerce or conduct from imposing incidental burdens

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on speech.”

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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

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support of their argument that the ability-to-benefit

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requirement regulates conduct, not speech.

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Forum for Acad. & Institutional Rights, Inc., 547 U.S. 47, 62

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(2006) (“FAIR”) (holding that a law compelling publicly funded

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law schools to offer the military equivalent access to campus as

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other employers regulated conduct); Pickup, 740 F.3d at 1229

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(holding that a law prohibiting mental health providers from

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providing sexual orientation change efforts therapy to minors

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regulated conduct).

See Rumsfeld v.

In FAIR, the Supreme Court found that the
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Solomon Amendment regulated “conduct, not speech” because “[i]t

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affects what law schools must do—afford equal access to military

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recruiters—not what they may or may not say.”

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Similarly, in Pickup, the Ninth Circuit concluded that a state

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law that allowed licensed therapists to discuss the pros and

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cons of sexual reorientation therapy with their patients, but

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prohibited that therapy as a treatment for minors, regulated

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conduct.

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547 U.S. at 60.

740 F.3d at 1229.

Plaintiffs counter that this issue is controlled by the

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Supreme Court’s decision in Holder v. Humanitarian Law Project,

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561 U.S. 1 (2010).

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law, which prohibited the provision of “material support or

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resources” to certain foreign organizations that engage in

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terrorist activity, regulated speech and required a more

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demanding standard of First Amendment review.

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Although the law was directed at conduct, “the conduct

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triggering coverage under the statute consist[ed] of

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communicating a message,” meaning the law regulated speech.

In Holder, the Supreme Court held that a

Id. at 28.

Id.

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Plaintiffs argue that the regulation here is triggered by

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the fact that their speech is vocational in content, rendering

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the Act a content-based speech restriction.

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the text of the Act belies this interpretation.

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above, the Act’s requirements apply to schools that qualify

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under California Education Code Sections 94857 and 94858.

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mere fact that a school teaches vocational skills is

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insufficient to bring an institution under the Act’s umbrella

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unless the school is also private, operating in California, and

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charging tuition.

See id.

Opp’n at 5.

But

As mentioned

Further, the ability-to-benefit

The

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requirement is not triggered by vocational teaching, but rather

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by executing an enrollment agreement.

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§ 94904(a).

CAL. EDUC. CODE

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Additionally, as the Ninth Circuit noted in Pickup, the law

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at issue in Holder was extremely broad: it completely barred all

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“communicat[ion of] information about international law and

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advocacy to a designated terrorist organization.”

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1230.

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nearly as far-reaching.

740 F.3d at

The reach of the ability-to-benefit requirement is not

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Much like Pickup, the Act does not restrain Smith and the

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School from “imparting information,” “disseminating opinions,”

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or “communicating a message.”

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Plaintiffs argue their speech is being restricted, the only

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thing that the School cannot do is execute an enrollment

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agreement with a student who has not demonstrated an ability to

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benefit under the Act.

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ability may be shown by passing an examination prescribed by the

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United States Department of Education, id. at § 94904(a), or by

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passing a Bureau-approved examination that is relevant to the

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intended occupational training, id. at § 94904(b). 2

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740 F.3d at 1230.

While

CAL. EDUC. CODE § 94904(a).

That

Nothing in the Act prohibits Smith and the School from

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sharing information and communicating about horseshoeing

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generally.

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horseshoeing outside of enrollment at a private postsecondary

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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.
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educational institution prior to passing an ability-to-benefit

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examination.

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As Defendants highlight, under Plaintiffs’ conception of

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speech, nearly every regulation of postsecondary education would

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require First Amendment scrutiny because teaching involves

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speech.

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activity, such as private education, will always be speech-

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adjacent because commerce relies on the communication of ideas.

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Courts have not held, however, that these incidental burdens on

Reply, ECF No. 19, p. 2.

Regulations on economic

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speech caused by the regulation of commerce infringe on

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fundamental rights under the First Amendment.

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552, 566–67 (2011).

Sorrell, 564 U.S.

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B.

Rational Basis Review

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If a law regulates non-expressive conduct, rather than

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speech, the law “must be upheld if it bears a rational

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relationship to a legitimate state interest.”

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at 1231.

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stated purposes,” so long as “the government could have had a

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legitimate reason for acting as it did.”

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Advancement of Psychoanalysis v. California Bd. of Psychology,

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228 F.3d 1043, 1050–51 (9th Cir. 2000) (quoting Dittman v.

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California, 191 F.3d 1020, 1031 (9th Cir. 1999)).

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“need only determine whether the [law] has a ‘conceivable basis’

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on which it might survive rational basis scrutiny.”

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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

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under the First Amendment.

Regents of Univ. of California v.

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Bakke, 438 U.S. 265, 312 (1978).

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not mean that an educational institution may use the First
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Yet that academic freedom does

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Amendment to shield itself from government regulation and

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oversight rationally related to a valid government purpose.

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Illinois Bible Colleges Ass’n v. Anderson, 870 F.3d 631, 642

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(7th Cir. 2017), as amended (Oct. 5, 2017), cert. denied sub

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nom. Illinois Bible Colleges Ass’n v. Cross, No. 17-960, 2018 WL

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325305 (U.S. Feb. 20, 2018) (holding that the state did not

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infringe on the schools’ “right to free speech by regulating

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degree-issuing post-secondary education”); Nova Univ. v. Educ.

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Inst. Licensure Comm’n, 483 A.2d 1172, 1181 (D.C. 1984)

See

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(“Schools are not shielded by the First Amendment from

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governmental regulation of business conduct deemed detrimental

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to the public merely because they are engaged in First Amendment

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activities.”)

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The Act’s legislative findings detail that “[n]umerous

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reports and studies have concluded that California’s previous

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attempts at regulatory oversight of private postsecondary

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schools under the Department of Consumer Affairs ha[d]

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consistently failed to ensure student protections or provide

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effective oversight of private postsecondary schools.”

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EDUC. CODE § 94801(c).

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requirements for private postsecondary educational institutions,

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the Act aimed to ensure that these schools would have “[m]inimum

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educational quality standards and opportunities for success” and

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an “appropriate level of oversight.”

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§ 94801(d)(1,3).

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“[p]revention of the harm to students and the deception of the

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public that results from fraudulent or substandard educational

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programs and degrees.”

CAL.

In adding additional operational

CAL. EDUC. CODE

The Act further sought to ensure the

CAL. EDUC. CODE § 94801(d)(6).
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California has a legitimate state interest in preventing

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private postsecondary schools operating in the state from

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harming students and deceiving the public.

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prevent harm and deception is rationally related to the

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requirement that students at private postsecondary educational

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institutions show sufficient competency to benefit from that

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education.

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plausible that the legislature thought requiring students to

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prove their ability to benefit through examinations or diplomas

That desire to

See CAL. EDUC. CODE §§ 94904, 94811.

It is

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would improve the students’ opportunities for success at

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postsecondary institutions, and that is enough to sustain the

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Act.

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2013).

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See Romero–Ochoa v. Holder, 712 F.3d 1328, 1331 (9th Cir.

While Plaintiffs believe that speech-adjacent paternalism

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“has no place in the American legal landscape,” Opp’n at 1,

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precedent does not support using the courts as a tool to

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substitute Plaintiffs’ preferences for those of the state’s

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elected representatives.

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Co., 449 U.S. 456, 464 (1981) (“States are not required to

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convince the courts of the correctness of their legislative

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judgments.”); Ferguson v. Skrupa, 372 U.S. 726, 729 (1963)

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(“[I]t is up to legislatures, not courts, to decide on the

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wisdom and utility of legislation.”).

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does not give courts the authority to invalidate a state

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regulation every time an individual finds it to be unnecessary

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or inconvenient.

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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
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government interest of protecting students and the public from

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harm and deception.

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C.

Leave to Amend

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The Court need not grant leave to amend where amendment

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would be futile.

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F.3d 1043, 1049 (9th Cir. 2006).

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Plaintiffs’ Complaint does not state a claim as a matter of law.

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Plaintiffs have pointed to no facts suggesting amendment could

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Deveraturda v. Globe Aviation Sec. Servs., 454
As explained above,

rectify this issue, making dismissal with prejudice appropriate.

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III.

ORDER

For the reasons above, the Court GRANTS Defendants’ motion
to dismiss with prejudice.
IT IS SO ORDERED.
Dated: April 11, 2018

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