pacific coast horseshoeing school, inc.; bob smith

18-15840

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

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

Plaintiffs-Appellants, v.

DEAN GRAFILO, in his Official Capacity as Director of Consumer Affairs; MICHAEL MARION, in his Official Capacity as Chief of the Bureau for Private and Postsecondary Education,

Defendants-Appellees.

On Appeal from the United States District Court for the Eastern District of California

No. 2:17-cv-02217-JAM-GGH The Honorable John A. Mendez, Judge

ANSWERING BRIEF OF DEFENDANTS-APPELLEES

XAVIER BECERRA Attorney General of California THOMAS S. PATTERSON Senior Assistant Attorney General PAUL STEIN Supervising Deputy Attorney General P. PATTY LI Deputy Attorney General State Bar No. 266937

455 Golden Gate Avenue, Suite 11000 San Francisco, CA 94102-7004 Telephone: (415) 510-3817 Fax: (415) 703-1234 Email: [email protected]

Attorneys for Defendants-Appellees Dean Grafilo and Michael Marion

Case: 18-15840, 10/09/2018, ID: 11039764, DktEntry: 19, of 109

TABLE OF CONTENTS

Page

i

Introduction .................................................................................................... 1 Jurisdictional Statement ................................................................................. 3 Statement of the Issues Presented for Review ............................................... 3 Statement Regarding Addendum ................................................................... 3 Statement of the Case .................................................................................... 4

I. The Ability-to-Benefit Requirement ......................................... 4 II. Procedural History .................................................................... 8

A. The Allegations in the Complaint ................................... 8 B. Proceedings in the District Court .................................. 11

Standard of Review ...................................................................................... 12 Summary of Argument ................................................................................ 13 Argument ..................................................................................................... 14

I. The Ability-to-Benefit Requirement Regulates Non-Expressive Conduct and Survives Rational Basis Review ..... 14 A. The Ability-to-Benefit Requirement Regulates the

Execution of an Enrollment Agreement. ...................... 14 B. Regulations Imposing Incidental Burdens on

Speech Do Not Violate the First Amendment. ............. 20 C. A Law Does Not Regulate Speech Simply Because

It Applies to Educational Institutions. .......................... 23 D. The Cases Regarding Laws that Limit Disclosure

or Control Content and Its Distribution Are Distinguishable. ............................................................ 27 1. The Ability-to-Benefit Requirement Does

Not Regulate the Disclosure of Information. ..... 28 2. The Ability-to-Benefit Requirement Does

Not Regulate the Content of or Impose Conditions on Expressive Activity. .................... 30


TABLE OF CONTENTS (continued)

Page

ii

E. The Ability-to-Benefit Requirement Regulates Conduct that Is Not Inherently Expressive. .................. 31

F. The Ability-to-Benefit Requirement Survives Rational Basis Review. ................................................. 33

II. The Ability-to-Benefit Requirement Is Content Neutral ........ 35 III. The Ability-to-Benefit Requirement Survives

Intermediate Scrutiny As A Matter of Law ............................ 41 A. Courts Regularly Uphold Laws After Applying

Intermediate Scrutiny on the Pleadings. ....................... 42 B. The Ability-to-Benefit Requirement Satisfies

Intermediate Scrutiny. ................................................... 47 1. The ability-to-benefit requirement furthers

the important and substantial government interest of protecting students. ............................ 48

2. The ability-to-benefit requirement is not related to the suppression of free expression. .... 51

3. Any incidental restriction on alleged First Amendment freedoms is no greater than necessary, and the requirement serves the important government interest more effectively than its absence. ................................ 52

Conclusion ................................................................................................... 54 Statement of Related Cases.......................................................................... 56 Addendum to Appellees’ Answering Brief ................................................. 58


TABLE OF AUTHORITIES

Page

iii

CASES

Anderson v. City of Hermosa Beach 621 F.3d 1051 (9th Cir. 2010) ................................................................. 30

Ashcroft v. Iqbal 556 U.S. 662 (2009)..................................................................... 12, 43, 51

Associacion de Educacion Privada de Puerto Rico, Inc. v. Garcia-Padilla 490 F.3d 1 (1st Cir. 2007) ........................................................................ 26

Bauer v. DeVos No. CV 17-1330 (RDM), --- F.Supp.3d ---- (D.D.C. Sept. 12, 2018) .................................................................................................. 16

Boos v. Barry 485 U.S. 312 (1988)................................................................................. 41

Carey v. Brown 447 U.S. 455 (1980)................................................................................. 41

Circle Schools v. Pappert 381 F.3d 172 (3d Cir. 2004) .................................................................... 26

City of Lakewood v. Plain Dealer Pub. Co. 486 U.S. 750 (1988)................................................................................. 30

Contest Promotions, LLC v. City and County of San Francisco 704 Fed.Appx. 665 (9th Cir. 2017) ......................................................... 45

Cuesnongle v. Ramos 713 F.2d 881 (1st Cir. 1983).............................................................. 26, 27

Cuesnongle v. Ramos 835 F.2d 1486 (1st Cir. 1987) ............................................................ 24, 27


TABLE OF AUTHORITIES (continued)

Page

iv

Davis v. HSBC Bank Nevada, N.A. 691 F.3d 1152 (9th Cir. 2012) ................................................................. 12

Doe v. Harris 772 F.3d 563 (9th Cir. 2014) ................................................................... 47

Edenfield v. Fane 507 U.S. 761 (1993)................................................................................. 47

Erotic Serv. Provider Legal Educ. & Research Project v. Gascon 880 F.3d 450 (9th Cir. 2018) ............................................................. 45, 46

Expressions Hair Design v. Schneiderman 137 S. Ct. 1144 (2017) ............................................................................. 29

Giboney v. Empire Storage & Ice Co. 336 U.S. 490 (1949)................................................................................. 21

Goulart v. Meadows 345 F.3d 239 (4th Cir. 2003) ................................................................... 27

Greenwood v. FAA 28 F.3d 971 (9th Cir. 1994) ............................................................... 35, 42

Holder v. Humanitarian Law Project 561 U.S. 1 (2010) ................................................................... 28, 29, 40, 41

Illinois Bible Colleges Ass’n v. Cross No. 17-960, 2018 WL 325305 (U.S. Feb. 20, 2018) ......................... 23, 24

Illinois Bible Colleges Ass’n v. Anderson 870 F.3d 631 (7th Cir. 2017) ................................................................... 23

Int’l Franchise Ass’n, Inc. v. City of Seattle 803 F.3d 389 (9th Cir. 2015) ................................................................... 32



Page

v

Interpipe Contracting, Inc. v. Becerra 898 F.3d 879 (9th Cir. 2018) ................................................. 22, 23, 33, 44

Italian Colors Rest. v. Becerra 878 F.3d 1165 (9th Cir. 2018) ................................................................. 47

Kagan v. City of New Orleans, La. 753 F.3d 560 (5th Cir. 2014) ................................................................... 29

Manzarek v. St. Paul Fire & Marine Ins. Co. 519 F.3d 1025 (9th Cir. 2008) ................................................................. 12

McCullen v. Coakley 134 S. Ct. 2518 (2014) ........................................................... 38, 39, 40, 54

Meyer v. Grant 486 U.S. 414 (1988)................................................................................. 31

Nat’l Ass’n for Advancement of Psychoanalysis v. California Bd. of Psychology 228 F.3d 1043 (9th Cir. 2000) ................................................................. 33

Nat’l Inst. of Family & Life Advocates v. Becerra 138 S. Ct. 2361 (2018) ................................................................. 21, 22, 29

O’Brien v. Welty 818 F.3d 920 (9th Cir. 2016) ................................................................... 47

Ohio Ass’n of Indep. Sch. v. Goff 92 F.3d 419 (6th Cir. 1996) ............................................................... 24, 50

People of the State of California v. Ashford University, LLC No. RC17883963, 2017 WL 5903538 (Cal. Super. Ct. Alameda County, Nov. 29, 2017) ............................................................ 17



Page

vi

The People of the State of California v. Heald College, LLC No. CGC13534793, 2016 WL 1130744 (Cal. Super. Ct. San Francisco County, Mar. 23, 2016) ........................................................... 17

Pickup v. Brown 740 F.3d 1208 (9th Cir. 2014) ..................................................... 21, 22, 45

Police Dept. of City of Chicago v. Mosley 408 U.S. 92 (1972)................................................................................... 41

R.A.V. v. St. Paul 505 U.S. 377 (1992)................................................................................. 21

Reed v. Town of Gilbert, Ariz. 135 S. Ct. 2218 (2015) ........................................................... 35, 36, 37, 38

Retail Digital Network, LLC v. Prieto 861 F.3d 839 (9th Cir. 2017) ................................................................... 33

Riley v. Nat’l Fed’n of the Blind of N. Carolina, Inc. 487 U.S. 781 (1988)................................................................................. 30

Romero–Ochoa v. Holder 712 F.3d 1328 (9th Cir. 2013) ................................................................. 34

Rumsfeld v. Forum for Academic & Institutional Rights, Inc. 547 U.S. 47 (2006)............................................................................ passim

Runyon v. McCrary 427 U.S. 160 (1976)................................................................................. 50

San Francisco Apartment Ass’n v. City & Cty. of San Francisco 881 F.3d 1169 (9th Cir. 2018) ........................................................... 44, 46

Simon & Schuster, Inc. v. Members of New York State Crime Victims Bd. 502 U.S. 105 (1991)................................................................................. 30



Page

vii

Sorrell v. IMS Health Inc. 564 U.S. 552 (2011)........................................................................... 21, 28

Spence v. State of Wash. 418 U.S. 405 (1974)................................................................................. 32

Taub v. City and County of San Francisco 696 Fed.Appx. 181 (9th Cir. 2017) ................................................... 45, 46

Thompson v. Paul 547 F.3d 1055 (9th Cir. 2008) ................................................................. 12

Turner Broad. Sys., Inc. v. F.C.C. 512 U.S. 622 (1994)................................................................................. 47

U.S. ex rel. Meyer v. Horizon Health Corp. 565 F.3d 1195 (9th Cir. 2009) ........................................................... 35, 42

United States v. Albertini 472 U.S. 675 (1985)................................................................................. 43

United States v. Dahlstrom 713 F.2d 1423 (9th Cir. 1983) ................................................................. 31

United States v. Nat’l Treasury Employees Union 513 U.S. 454 (1995)................................................................................. 30

United States v. O’Brien 391 U.S. 367 (1968).......................................................................... passim

United States v. Ramirez-Lopez 251 F. Appx. 390 (9th Cir. 2007) ............................................................ 42

United States v. Stephens Inst. No. 17-15111, 2018 WL 4038194 (9th Cir. Aug. 24, 2018) ................... 16



Page

viii

Watison v. Carter 668 F.3d 1108 (9th Cir. 2012) ................................................................. 12

Waugh v. Nevada State Bd. of Cosmetology 36 F. Supp. 3d 991, 1010 (D. Nev. 2014) ............................................... 32

Waugh v. Nevada State Bd. of Cosmetology No. 14-16674, 2016 WL 8844242 (9th Cir. Jan. 27, 2016) .................... 32

White v. City of Sparks 500 F.3d 953 (9th Cir. 2007) ................................................................... 30

STATUTES

20 U.S.C. § 1070a et seq .............................................................................................7 § 1091 .........................................................................................................4 § 1091(d)(1)(A) ................................................................................... 7, 16

California Code of Regulations, Title 5 § 71770 .......................................................................................................3 § 71770(a)(1) ................................................................................. 7, 10, 15

California Education Code (1990) § 94316 ...................................................................................... 3, 4, 48, 49 § 94319.2 ............................................................................................... 3, 4



Page

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California Education Code § 94800 .................................................................................................. 3, 5 § 94801 .......................................................................................................3 § 94801(b) ............................................................................................ 6, 49 § 94801(d) ...................................................................................................6 § 94811 ............................................................................................. passim § 94818 .................................................................................................. 3, 5 § 94857 ............................................................................................. passim § 94858 .................................................................................................. 3, 5 § 94874 .................................................................................................. 3, 5 § 94874(b)(1) ..............................................................................................5 § 94874(c) ...................................................................................................5 § 94875 .................................................................................................. 3, 5 § 94902 .......................................................................................................3 § 94902(a) ................................................................................................ 25 § 94902(b) ................................................................................................ 25 § 94904 ........................................................................................ 3, 5, 7, 34 § 94904(a) ......................................................................................... passim § 94904(b) ......................................................................................... passim

Cal. Stats. 2011, c. 167 (A.B. 1013) ......................................................... 4, 15

CONSTITUTIONAL PROVISIONS

United States Constitution First Amendment .............................................................................. passim Fourteenth Amendment ........................................................................... 32



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COURT RULES

Ninth Circuit Rules Rule 28-2.7 .................................................................................................3

Federal Rules of Civil Procedure Rule 12(b)(6) ........................................................................................... 43

OTHER AUTHORITIES

ATB Examination, Department of Consumer Affairs, Bureau for Private Postsecondary Education, http://www.bppe.ca.gov/schools/ability_exam.shtml ................................8


1

INTRODUCTION

California law requires that postsecondary educational institutions

offering academic, vocational, or continuing professional education courses

verify that a prospective student has the ability to benefit from a proposed

course of instruction. This verification must take place before the institution

and the student execute an enrollment agreement, through which the student

commits to spending thousands of dollars for a course of instruction that

may not be suitable or lead to gainful employment. The requirement only

applies to students who do not have a high school diploma or an equivalent,

and was enacted in light of widespread concern about deceptive marketing

and other unfair practices that have left thousands of vocational school

students deeply in debt for what are perceived as essentially useless or only

marginally valuable degrees and certifications. The Legislature determined

that the promise of vocational school training—the prospect of being able to

earn a living and pursue a career—provides a powerful incentive for students

to spend large amounts of money on such courses, and renders them

vulnerable to enrollment scams. The ability-to-benefit requirement

addresses that concern, and is a legitimate exercise of the state’s police

power to protect public health and welfare.


2

Appellants contend this requirement violates their free speech rights,

arguing that because “teaching is speech,” the requirement is actually a

content-based regulation of speech, subject to strict scrutiny. But this

approach conflicts with the fundamental principle of First Amendment

jurisprudence that a regulation of conduct (here, the solicitation and

enrollment of vocational school students) is not a regulation of speech,

simply because that regulation may have a secondary or incidental effect on

speech. And courts have rejected Appellants’ notion that every law that

applies to educational institutions is subject to heightened First Amendment

scrutiny. Nor is it correct that a requirement that applies to a particular

subject matter (i.e., academic, vocational, or continuing professional

instruction) is a content-based regulation that receives strict scrutiny.

The requirement to verify a student’s ability to benefit from a proposed

course of instruction before enrollment plays a crucial role in protecting

students from committing significant financial resources to a program that

will not serve them well. It regulates the solicitation and execution of an

enrollment agreement, not the content of instruction. This Court should

affirm the district court’s dismissal of the First Amendment challenge, with

prejudice.


3

JURISDICTIONAL STATEMENT

Defendants-Appellees agree with the jurisdictional statement

contained in Plaintiffs-Appellants’ Opening Brief at pages 1-2.

STATEMENT OF THE ISSUES PRESENTED FOR REVIEW

(1) Is it a regulation of speech or expressive conduct to require that

private postsecondary educational institutions verify—before a student

executes an enrollment agreement and commits to spending thousands of

dollars on a course of instruction—that the student has the ability to benefit

from the course? If not, does the regulation satisfy rational basis review?

(2) If such a requirement is properly characterized as a regulation of

speech or expressive conduct, is it a content-based regulation merely

because it only applies to schools offering certain types of instruction?

(3) If such a requirement is a content-neutral regulation of expressive

conduct, does it survive intermediate scrutiny under United States v.

O’Brien, 391 U.S. 367 (1968)?

STATEMENT REGARDING ADDENDUM

In accordance with Ninth Circuit Rule 28-2.7, the addendum to this

brief comprises sections 94316 and 94319.2 of the 1990 California

Education Code; sections 94800, 94801, 94811, 94818, 94857, 94858,

94874, 94875, 94902, and 94904 of the California Education Code; Cal.


4

Code Regs. tit. 5, § 71770; Cal. Stats. 2011, c. 167 (A.B. 1013); and 20

U.S.C. § 1091.

STATEMENT OF THE CASE

I. THE ABILITY-TO-BENEFIT REQUIREMENT

In enacting the Maxine Waters School Reform and Student Protection

Act of 1989, the California Legislature found that “students have been

substantially harmed and the public perception of reputable institutions has

been damaged because of the fraudulent, deceptive, and unfair conduct of

some institutions that offer courses of instruction for a term of two years or

less that are supposed to prepare students for employment in various

occupations.” Cal. Educ. Code § 94316(b) (1990). Of particular relevance

here, the Legislature found that “[s]ome students have been enrolled who do

not have the ability to benefit from the instruction.” Id. The Legislature

thus instituted a new requirement that a private postsecondary educational

institution “shall not enter into an agreement for a course of instruction with

a student unless the institution first administers to the student and the student

passes a test that establishes the student’s ability to benefit from the course

of instruction.” Id. § 94319.2(a) (1990).

The Legislature revised this ability-to-benefit requirement in 2009, as

part of the California Private Postsecondary Education Act of 2009 (the


5

“Act”). Cal. Educ. Code §§ 94800, 94904. As defined by the Act, a private

postsecondary educational institution is a private entity with a physical

California presence that “offers postsecondary education to the public for an

institutional charge.” Id. § 94858. “Postsecondary education” is “a formal

institutional educational program whose curriculum is designed primarily for

students who have completed or terminated their secondary education or are

beyond the compulsory age of secondary education, including programs

whose purpose is academic, vocational, or continuing professional

education.” Id. § 94857. Institutions that offer “solely avocational or

recreational educational programs” are exempt from the Act.1 Id. § 94874.

The Act also established the Bureau for Private and Postsecondary

Education (“Bureau”) within the Department of Consumer Affairs, as the

entity charged with regulating private postsecondary educational institutions

in California. Id. § 94875.

1 “‘Avocational education’ means education offered for the purpose of

personal entertainment, pleasure, or enjoyment.” Cal. Educ. Code § 94818. Other institutions exempt from the Act include institutions “offering educational programs sponsored by a bona fide trade, business, professional, or fraternal organization, solely for that organization’s membership,” id., § 94874(b)(1), and “postsecondary educational institution[s] established, operated, and governed by the federal government or by [California] or its political subdivisions,” id., § 94874(c).


6

In passing the Act, the Legislature expressly found that “concerns about

the value of degrees and diplomas issued by private postsecondary schools,

and the lack of protections for private postsecondary school students and

consumers of those schools’ services, have highlighted the need for strong

state-level oversight of private postsecondary schools.” Cal. Educ. Code

§ 94801(b). To that end, the Act was designed to ensure:

(1) Minimum educational quality standards and opportunities for success for California students attending private postsecondary schools in California. (2) Meaningful student protections through essential avenues of recourse for students. (3) A regulatory structure that provides for an appropriate level of oversight. (4) A regulatory governance structure that ensures that all stakeholders have a voice and are heard in policymaking by the bureau. (5) A regulatory governance structure that provides for accountability and oversight by the Legislature through program monitoring and periodic reports. (6) Prevention of the harm to students and the deception of the public that results from fraudulent or substandard educational programs and degrees.

Id. § 94801(d).

Under the Act, the ability-to-benefit requirement applies to students

lacking “a certificate of graduation from a school providing secondary


7

education, or a recognized equivalent of that certificate.” Cal. Educ. Code

§ 94811. Before such a student may “execute an enrollment agreement”

with a private postsecondary educational institution, the institution “shall

have the student take an independently administered examination from the

list of examinations prescribed by the United States Department of

Education pursuant to Section 484(d) of the federal Higher Education Act of

1965 (20 U.S.C. Sec. 1070a et seq.).”2 Id. § 94904(a). Such a student “shall

not enroll unless the student achieves a score, as specified by the United

States Department of Education, demonstrating that the student may benefit

from the education and training being offered.” Id. An implementing

regulation further requires that private postsecondary educational

institutions’ written admissions standards specify that “[e]ach student

admitted to an undergraduate degree program, or a diploma program, shall

possess a high school diploma or its equivalent, or otherwise successfully

take and pass the relevant examination as required by section 94904 of the

Code.” Cal. Code Regs. tit. 5, § 71770(a)(1).

2 The federal ability-to-benefit requirement is found at 20 U.S.C.

§ 1091(d)(1)(A). It also applies to students without a high school diploma or recognized equivalent, but it is a condition of eligibility for federal student loans, not a prerequisite for execution of an enrollment agreement.


8

In 2011, the Legislature amended the Act to provide for an alternative

ability-to-benefit examination: “If the United States Department of

Education does not have a list of relevant examinations that pertain to the

intended occupational training, the [Bureau] may publish its own list of

acceptable examinations and required passing scores.” Cal. Educ. Code

§ 94904(b). The Bureau’s website contains the following instructions for

seeking approval of an alternative examination: “An institution seeking

Bureau approval of an alternative to the [ability-to-benefit] test should

submit, in writing, the proposed alternative test, evidence that the [United

Stated Department of Education]-approved examinations are not relative to

the intended occupational training, and evidence of the relation of the

proposed test to the occupational training program.”3

II. PROCEDURAL HISTORY

A. The Allegations in the Complaint

As alleged in the Complaint, Plaintiff-Appellant Pacific Coast

Horseshoeing School, Inc. (“PCHS”) teaches horseshoeing, i.e., the practice

of shaping metal to be fitted and nailed into a horse’s hoof, as a vocational

3 Ability-to-Benefit (ATB) Examination, Alternative to the ATB

Examination, Department of Consumer Affairs, Bureau for Private Postsecondary Education, http://www.bppe.ca.gov/schools/ability_exam.shtml (last visited October 9, 2018).


http://www.bppe.ca.gov/schools/ability_exam.shtml

http://www.bppe.ca.gov/schools/ability_exam.shtml

9

skill. ER 18, 19, ¶¶ 5, 16. A person who shoes horses is called a farrier. Id.

19, ¶ 17. In California, farriering does not require a license. Id., ¶ 21.

PCHS offers a full-time eight-week curriculum to about 12 to 14

students, five times a year. ER 20, ¶¶ 28, 32. The curriculum includes

classroom sessions and practice removing, shaping, and applying horseshoes

to horses. Id., ¶ 28. Classroom sessions focus on “horseshoeing theory,

horse anatomy, movement and lameness,” and “business advice on client

management, self-employment, and how to interact with barns, trainers, and

veterinarians.” Id., ¶ 30. PCHS evaluates students by written or oral

examinations. Id., ¶ 31. The typical class has “a mix of hobbyists and

aspiring professional farriers.” Id., ¶ 32.

As of 2018, PCHS’s tuition costs $6,000. ER 20, ¶ 33. PCHS “teaches

horseshoeing for a vocational purpose,” is subject to the Act as a private

postsecondary educational institution, and does not qualify for the

“avocational or recreational” exemption from regulation under the Act. Id.

18, 21, ¶¶ 5, 8, 34-38. PCHS does not accept state or federal student loans.

Id. 23, ¶ 53. PCHS refunds all but $250 of tuition paid if continuing the

course is not in the student’s best interest after the first week. Id., ¶ 54.

The Bureau first contacted PCHS for inspection in 2016. ER 23, ¶ 55.

The Bureau determined PCHS’s lack of admission prerequisites did not


10

comply with the Act. Id., ¶ 56. In 2017, PCHS modified its admissions

standards to require a high school diploma, its equivalent, or passage of an

ability-to-benefit examination, as required for Bureau approval. Id. 24,

¶¶ 58–59. Because of this change, PCHS has since rejected otherwise

qualified students who did not meet these academic qualifications. Id., ¶ 60.

Plaintiffs-Appellants are: (1) PCHS; (2) Bob Smith, the founder and

owner of PCHS, ER 18, ¶ 6; and (3) Esteban Narez , a prospective student of

PCHS who does not have a high school diploma or its equivalent, and has

not taken an ability-to-benefit examination, id., ¶¶ 7, 9. They allege that the

ability-to-benefit requirement is a content-based restriction on First

Amendment free speech rights. ER 26-28, ¶¶ 89-99. They seek a judicial

declaration that the statutory ability-to-benefit requirement (Cal. Educ. Code

§ 94904(a)) and the implementing regulation (Cal. Code Regs. tit. 5,

§ 71770(a)(1)) (collectively, “ability-to-benefit requirement”) are

“unconstitutional to the extent that those provisions prohibit PCHS and

[Smith] from teaching its horseshoeing curriculum to students . . . who

neither have a high-school diploma, nor who have obtained a high-school

equivalent, nor who have taken and passed an ability-to-benefit

examination.” ER 28, Prayer for Relief ¶ A. The Complaint also seeks

injunctive relief to this effect. Id., Prayer for Relief ¶ C. Defendants-


11

Appellees are Dean Grafilo, in his official capacity as Director of Consumer

Affairs, and Michael Marion, in his official capacity as Chief of the Bureau.

B. Proceedings in the District Court

The district court granted Defendants-Appellees’ motion to dismiss the

Complaint for failure to state a claim, finding that the ability-to-benefit

requirement regulates conduct: the execution of an enrollment agreement.

ER 12. The district court rejected the argument that the requirement is a

content-based speech restriction, because “[t]he mere fact that a school

teaches vocational skills is insufficient to bring an institution under the Act’s

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

charging tuition.” ER 11. The district court also found that nothing in the

Act prohibits Plaintiffs from “sharing information and communicating about

horseshoeing generally,” or “learning about horseshoeing outside of

enrollment at a private postsecondary” school. ER 12-13. The district court

concluded that the ability-to-benefit requirement satisfies rational basis

review because “California has a legitimate state interest in preventing

private postsecondary schools operating in the state from harming students

and deceiving the public,” which is “rationally related to the requirement

that students at private postsecondary educational institutions show

sufficient competency to benefit from that education.” ER 15.


12

Plaintiffs timely filed a notice of appeal. ER 1.

STANDARD OF REVIEW

This Court reviews a district court’s grant of a motion to dismiss de

novo. Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152, 1159 (9th Cir.

2012). “To survive a motion to dismiss, a complaint must contain sufficient

factual matter, accepted as true, to state a claim to relief that is plausible on

its face. A claim has facial plausibility when the plaintiff pleads factual

content that allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S.

662, 678 (2009) (citations and internal quotation marks omitted). This Court

views the facts presented in the pleadings and the inferences to be drawn

from them in the light most favorable to the nonmoving party, Manzarek v.

St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008), and

can affirm on any basis fairly supported by the record, Thompson v. Paul,

547 F.3d 1055, 1058-59 (9th Cir. 2008).

Dismissal without leave to amend is appropriate when the court

“determines that the pleading could not possibly be cured by the allegation

of other facts.” Watison v. Carter, 668 F.3d 1108, 1117 (9th Cir. 2012)

(internal quotation marks and citation omitted).


13

SUMMARY OF ARGUMENT

The requirement that private postsecondary schools verify a student’s

ability to benefit from a proposed course of instruction regulates conduct—

the execution of an enrollment agreement—not speech. Courts have long

recognized that content-neutral laws having an incidental effect on speech

are not regulations of speech. Courts have also held that educational

institutions are not immune from regulation, even though they may engage

in activities protected by the First Amendment. The ability-to-benefit

requirement is therefore subject to, and easily survives, rational basis review.

Even assuming that the ability-to-benefit requirement is a restriction on

expressive activity protected by the First Amendment, the mere fact that it

applies to schools offering a particular type of instruction (i.e., vocational

skills) does not make it a content-based regulation. Rather, it is a content-

neutral regulation based on subject matter, of the kind well established as

within the government’s power. It would therefore be subject to

intermediate scrutiny, which it satisfies because it directly supports the

important government interest of protecting students from misleading

enrollment practices, and does so effectively and in the least restrictive

manner possible.


14

ARGUMENT

I. THE ABILITY-TO-BENEFIT REQUIREMENT REGULATES NON-EXPRESSIVE CONDUCT AND SURVIVES RATIONAL BASIS REVIEW

Because it regulates the solicitation and execution of an enrollment

agreement, the ability-to-benefit requirement is a regulation of conduct, not

speech. It does not regulate speech merely because it might have an effect

on speech, or because it applies to educational institutions. And unlike the

cases that Appellants and their amici rely upon, the requirement does not

regulate the disclosure of information. Not does it regulate the content of, or

impose conditions on, expressive activity. It is thus subject to, and satisfies,

rational basis review.

A. The Ability-to-Benefit Requirement Regulates the Execution of an Enrollment Agreement.

The ability-to-benefit requirement regulates the conditions under which

a private postsecondary educational institution can enter into an enrollment

agreement with a student, if the student does not have “a certificate of

graduation from a school providing secondary education, or a recognized

equivalent of that certificate.” Cal. Educ. Code § 94811. Before entering

into an enrollment agreement with the student, the institution must verify the

student’s “ability to benefit” from the proposed course of instruction, by

requiring that the student receive a qualifying score on either (1) an


15

examination prescribed by the United States Department of Education, id.

§ 94904(a), or (2) an examination on a list published by the Bureau, if “the

United States Department of Education does not have a list of relevant

examinations that pertain to the intended occupational training,” id.

§ 94904(b). See also Cal. Code Regs. tit. 5, § 71770(a)(1). The ability-to-

benefit requirement was designed by the Legislature to “ensure minimum

standards of instructional quality and institutional stability.” Cal. Stats.

2011, c. 167 (A.B. 1013). It applies to institutions offering a “curriculum . .

. designed primarily for students who have completed or terminated their

secondary education or are beyond the compulsory age of secondary

education, including programs whose purpose is academic, vocational, or

continuing professional education.” Id. § 94857. It does not apply to

institutions that offer “solely avocational or recreational educational

programs.” Id. § 94874.

In adopting the ability-to-benefit requirement, the Legislature did not

purport to regulate the content of any course of instruction offered by private

postsecondary schools; rather, it determined that the ability-to-benefit

requirement is needed to protect the public because the promise of

vocational school training—the prospect of being able to earn a living and

pursue a career—provides a powerful incentive for students to spend large


16

amounts of money on such courses, and renders them vulnerable to

potentially deceptive marketing and other unfair practices.

Indeed, there is broad regulatory interest in and concern over

postsecondary educational institutions’ enrollment practices, and the

economic incentives such institutions have to enroll as many students as

possible. Various federal laws and regulations seek to address precisely

these issues. See 20 U.S.C. § 1091(d)(1)(A) (federal ability-to-benefit

requirement); United States v. Stephens Inst., No. 17-15111, 2018 WL

4038194 (9th Cir. Aug. 24, 2018) (affirming denial of defendant educational

institution’s motion for summary judgment in False Claims Act lawsuit

alleging violations of the federal “incentive compensation ban,” which

“prohibits schools from rewarding admissions officers for enrolling higher

numbers of students,” 20 U.S.C. § 1094(a)(20); 34 C.F.R. § 668.14(b)(22));

Bauer v. DeVos, No. CV 17-1330 (RDM), --- F.Supp.3d ----, 2018 WL

4353656, at *1, *25 (D.D.C. Sept. 12, 2018) (granting student borrower and

state plaintiffs’ motions for summary judgment challenging delayed

implementation of “Borrower Defense Regulations,” a package of regulatory

changes to federal student loan programs designed to “protect student loan

borrowers from misleading, deceitful, and predatory practices”).


17

State-level enforcement of consumer protection laws has also been

required to address the problem, in particular in California. In 2016, the

California Attorney General obtained a $1.1 billion default judgment against

Corinthian Colleges, Inc., based on claims that it intentionally targeted low-

income prospective students through deceptive and false advertisements and

aggressive marketing campaigns that misrepresented job placement rates for

Corinthian graduates, and left thousands of students burdened with useless

degrees and enormous amounts of student loan debt. See The People of the

State of California v. Heald College, LLC, No. CGC13534793, 2016 WL

1130744 (Cal. Super. Ct. San Francisco County, Mar. 23, 2016), Final

Judgment. And in 2017, the California Attorney General sued an online for-

profit school that enrolled over 80,000 students, alleging numerous

violations of California consumer protection laws, including misleading

prospective students regarding their ability to obtain financial aid, the costs

of attendance, job preparation, and credit transferability, as well as unlawful

debt collection practices and misrepresentations to investors about the results

of surveys assessing how well the college’s programs prepared students for

jobs. See People of the State of California v. Ashford University, LLC, No.

RC17883963, 2017 WL 5903538 (Cal. Super. Ct. Alameda County, Nov.


18

29, 2017), Complaint for Civil Penalties, Permanent Injunction, and Other

Equitable Relief.

This public welfare concern—the risk that prospective students, many

of whom are low-income and have minimal education, will expend large

amounts of money to get a vocational degree based on unrealistic

expectations about their career prospects—is reflected in Appellants’ own

factual allegations. As alleged in the Complaint, PCHS offers instruction to

students who intend to make horseshoeing their profession: classroom

instruction includes “business advice on client management, self-

employment, and how to interact with barns, trainers, and veterinarians,” ER

20, ¶ 30; a typical class has “a mix of hobbyists and aspiring professional

farriers,” id., ¶ 32; and PCHS “teaches horseshoeing for a vocational

purpose” and does not qualify for the “avocational or recreational”

exemption, id., ¶ 38. Further, Narez “wants to attend PCHS because its

curriculum would teach him the skills he needs to advance his chosen career

as a farrier.” Id. 26, ¶ 80. Narez “believes in his ability to make a stable and

satisfying career out of horseshoeing—if he only had the right training.” Id.

25, ¶ 72. Narez “would only consider leaving work—and thus forgoing

income—if he thought doing so would substantially advance him in the

career he has chosen. Id. 26, ¶ 79.


19

Thus, the ability-to-benefit requirement plays an important function in

regulating the conditions under which a postsecondary educational

institution can solicit and then charge a student thousands of dollars for a

course of instruction, when that student believes that completion of the

course will provide the student with the ability to pursue a career or

profession and thereby support him or herself financially. As such, it is a

regulation of conduct, not speech.

The Supreme Court’s reasoning in Rumsfeld v. Forum for Academic &

Institutional Rights, Inc. (“FAIR”), 547 U.S. 47 (2006), directly supports this

conclusion. There, the Court held that a law prohibiting law schools from

discriminating against military recruiters when providing campus access to

outside employers was not a regulation of speech. Id. at 60. The Court

found that the law regulated “conduct, not speech” because “[i]t affects what

law schools must do—afford equal access to military recruiters—not what

they may or may not say.” Id. That reasoning applies equally here. The

ability-to-benefit requirement affects what private postsecondary schools

“must do”—verify a prospective student’s ability to benefit from the

proposed course of instruction—“not what they may or may not say.”


20

B. Regulations Imposing Incidental Burdens on Speech Do Not Violate the First Amendment.

Appellants disagree that the ability-to-benefit requirement regulates

enrollment practices, and argue instead that it regulates speech because the

“practical operation” of the requirement “makes it illegal to speak to each

other about shoeing horses”; put another way, because the ability-to-benefit

requirement must be completed before PCHS and Smith may engage in

“teaching horseshoeing,” which is “pure speech,” to a prospective student, it

triggers heightened First Amendment scrutiny. Opening Br. at 18, 21, 27,

32. Appellants are thus attempting to convert the requirement into a

regulation of expressive activity by focusing on the requirement’s

downstream effects on “teaching horseshoeing,” as opposed to the conduct

that is actually regulated—the solicitation and enrollment of students in a

private postsecondary educational institution for a course of academic,

vocational, or continuing professional instruction. Cal. Educ. Code § 94857.

Appellants’ approach would subject any regulation of any activity that might

have a secondary or incidental effect on speech to heightened First

Amendment scrutiny, and courts have consistently rejected such a simplistic

approach.


21

The Supreme Court has stated on numerous occasions that restrictions

on conduct imposing incidental burdens on speech do not violate the First

Amendment. “[T]he First Amendment does not prevent restrictions directed

at commerce or conduct from imposing incidental burdens on speech. That

is why a ban on race-based hiring may require employers to remove ‘White

Applicants Only’ signs; why ‘an ordinance against outdoor fires’ might

forbid ‘burning a flag’; and why antitrust laws can prohibit ‘agreements in

restraint of trade’”—even though all of these restrictions undoubtedly have

secondary or practical effects on speech or expressive activity. Sorrell v.

IMS Health Inc., 564 U.S. 552, 567 (2011) (quoting FAIR, 547 U.S. 47, 62

(2006); R.A.V. v. St. Paul, 505 U.S. 377, 385 (1992); Giboney v. Empire

Storage & Ice Co., 336 U.S. 490, 502 (1949)). Indeed, the Supreme Court

recently reaffirmed that “regulations of . . . conduct that incidentally burden

speech” are constitutional. Nat’l Inst. of Family & Life Advocates v.

Becerra, 138 S. Ct. 2361, 2373 (2018) (citations omitted) (“NIFLA”).4

4 Appellants incorrectly describe NIFLA as having abrogated a case relied upon by the district court, Pickup v. Brown, 740 F.3d 1208 (9th Cir. 2014). The Supreme Court criticized dicta in Pickup that the level of protection afforded “professional speech” depends on the context and exists along a continuum, 740 F.3d at 1227, but did not disturb or call into question Pickup’s holding that the statute in question regulated conduct (i.e., the provision of certain discredited psychological treatments to minors), and


22

The Ninth Circuit also recently reaffirmed this well-established

principle of First Amendment jurisprudence, in Interpipe Contracting, Inc. v.

Becerra, 898 F.3d 879 (9th Cir. 2018). At issue in Interpipe was a labor law

requiring that employer payments to a third-party industry advancement

fund be made in accordance with a collective bargaining agreement, in order

for those payments to count towards prevailing wage requirements. An

employer challenged the law on First Amendment grounds, arguing that

“[l]aws that restrict the ability to fund one’s speech are burdens on speech.”

Id. at 891. The court rejected this challenge, because the law regulated

“employer conduct—the payment of wages—that is not inherently

expressive.” Id. at 895. The court observed that “scrapping conduct-based

laws that have only an attenuated relationship to speech would have the

perverse effect of invalidating legitimate exercises of state authority to

protect the general health and welfare. A labor standard . . . that ensures

not speech, and was therefore subject to deferential, rational basis review. Id. at 1229-1231 (holding that the prohibited treatments are not “inherently expressive” and receive little, if any, First Amendment protection, even if the challenged statute may have an incidental effect on speech). This holding is entirely consistent with the Supreme Court’s opinion in NIFLA, which explicitly states that “[t]he First Amendment does not prevent restrictions directed at commerce or conduct from imposing incidental burdens on speech . . . and professionals are no exception to this rule.” NIFLA, 138 S. Ct. at 2373.


23

employee approval before their wages are rerouted to third-party advocacy

groups would, under [appellant’s] theory, be subject to scrutiny simply

because it affects [appellant’s] ability to finance its speech. That cannot be

the law.” Id. at 896.

In sum, Appellants’ theory improperly treats any and all state

regulation that may have a downstream effect on speech as a direct

regulation of speech itself. That is not the law.

C. A Law Does Not Regulate Speech Simply Because It Applies to Educational Institutions.

Adopting Appellants’ approach in the context of regulations that apply

to or might impact educational institutions and activities would transform

every law or regulation applicable to postsecondary educational institutions

into a direct regulation of speech requiring strict scrutiny. But even though

educational institutions carry out their work through speech, courts have

repeatedly rejected attempts by educational institutions to use the First

Amendment to shield themselves from government regulation and oversight.

In Illinois Bible Colleges Association v. Anderson, the Seventh Circuit held

that a state did not infringe on a group of schools’ “right to free speech by

regulating degree-issuing post-secondary education.” 870 F.3d 631, 642

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


24

Bible Colleges Ass’n v. Cross, No. 17-960, 2018 WL 325305 (U.S. Feb. 20,

2018). The schools sought “a blanket exemption to the regulation—

absolutely no oversight—as well as the right to issue bachelor’s, master’s,

and doctorate degrees or whatever degree they desire,” but the court found

that “any interference with the [schools’] speech is at most incidental and

within constitutional bounds.” Id. The Sixth Circuit has also rejected a First

Amendment free speech challenge to a “state requirement that nonpublic

high schools administer the same proficiency tests as public high schools to

students prior to their graduation.” Ohio Ass’n of Indep. Sch. v. Goff, 92

F.3d 419, 420 (6th Cir. 1996). The plaintiff private schools had argued that

they were forced to “alter their school calendars and curricula,” but the Sixth

Circuit found that “[t]he testing requirement in no way restricts plaintiffs

from teaching any particular subjects, nor does it limit the manner in which

they may teach the material.” Id. at 424.

Academic institutions are “properly subject to numerous administrative

regulatory schemes which do not implicate First Amendment concerns.

Some of the most obvious examples include [regulation] of income, taxation

and property, and regulation . . . of employee matters.” Cuesnongle v.

Ramos, 835 F.2d 1486, 1501 (1st Cir. 1987).


25

Appellants acknowledge this, Opening Br. at 21, but offer no

explanation for why some regulations affecting an educational institution’s

operations, such as tax laws, do not regulate speech, even though a failure to

comply with such laws would impact PCHS’s ability to “teach

horseshoeing” as much as or more than the ability-to-benefit requirement.

For example, the Education Code provides that “[a] student shall enroll

solely by means of executing an enrollment agreement.” Cal. Educ. Code

§ 94902(a). The Education Code further provides that for an enrollment

agreement to be enforceable, “[t]he student [must have] received the

institution’s catalog and School Performance Fact Sheet prior to signing the

enrollment agreement,” the institution must have “a valid approval to

operate,” and the institution and student must have “signed and dated the

information required to be disclosed in the Student Performance Fact

Sheet . . . .” Id., § 94902(b). These are all requirements that the institution

and student must comply with before an instruction can begin—just like the

ability-to-benefit requirement. But Appellants do not contend that any of

these requirements are regulations of speech, even though all of them

ultimately affect Appellants’ ability to “teach horseshoeing.”

Thus, Appellants are incorrect that a law necessarily regulates speech

simply because it applies to an educational institution, or might have some


26

consequences for the institution’s educational program. If Appellants’

approach were correct, the Supreme Court’s decision in FAIR, 547 U.S. 47,

should have come out the other way. That is, the fact that the law at issue (a

requirement to offer military and nonmilitary recruiters the same access)

applied to a school and had the potential to impact the school’s teaching

(through the loss of federal funds) should have meant that the requirement

was a regulation of speech. Instead, the Court determined that the law did

not regulate speech or inherently expressive conduct. Id. at 64, 66.

Moreover, none of the cases from the educational context cited by

Appellants and amici stand for the proposition that any regulations

impacting the conduct of educational institutions are per se regulations of

speech. Opening Br. at 20; Amicus Br. at 6. Those cases involved

compelled speech or the direct regulation of instructional content, and are

limited to those contexts. See Circle Schools v. Pappert, 381 F.3d 172 (3d

Cir. 2004) (requirement that school officials notify parents of students who

declined to recite Pledge of Allegiance, or refrained from saluting flag,

constituted First Amendment viewpoint discrimination); Associacion de

Educacion Privada de Puerto Rico, Inc. v. Garcia-Padilla, 490 F.3d 1 (1st

Cir. 2007) (statute regulating school’s selection of textbooks violated First

Amendment). Appellants’ reliance on Cuesnongle v. Ramos, 713 F.2d 881


27

(1st Cir. 1983), is also misplaced. That court’s reference to a “zone of First

Amendment protection for the educational process itself” is unquestionably

dicta, because the plaintiffs had “argued only the religion clause of the First

Amendment.” Id. at 884. And when the First Circuit subsequently

considered a newly asserted First Amendment speech claim, the court

squarely rejected the contention that administrative review of “any matter

concerning private Academia” abridges First Amendment academic

freedom, finding the argument to be “completely unsupported by law.”

Cuesnongle v. Ramos, 835 F.2d 1486, 1501 (1st Cir. 1987).5

D. The Cases Regarding Laws that Limit Disclosure or Control Content and Its Distribution Are Distinguishable.

In addition to insisting that “teaching is speech” and that a regulation

having a downstream effect on speech is a direct regulation of speech itself,

Appellants and amici rely on cases involving regulations on the disclosure of

information, or regulations on the content of expressive activity, or that

5 Goulart v. Meadows, 345 F.3d 239 (4th Cir. 2003), is also

inapposite, because there the court asked a different question than the question presented here. In Goulart, the court asked whether the activity that plaintiffs sought to engage in (“instructing children on the topics of geography and fiber arts”) was a form of protected speech. Id. at 248. Here, the Court must consider whether the ability-to-benefit requirement regulates speech or expressive conduct, not whether “teaching horseshoeing” is a form of protected speech.


28

impose conditions on expressive activity. But the ability-to-benefit

requirement does none of these things.

1. The Ability-to-Benefit Requirement Does Not Regulate the Disclosure of Information.

Appellants characterize the ability-to-benefit requirement as a

“restriction[] on teaching and learning” that implicates First Amendment

rights, similar to the law challenged in Holder v. Humanitarian Law Project,

561 U.S. 1 (2010), which involved a law prohibiting the provision of

“material support” to designated “foreign terrorist organizations.” Opening

Br. at 18-19. The challenged law defined “material support” to include

providing “training” or “expert advice or assistance.” 561 U.S. at 8.

Appellants also rely on Sorrell., 564 U.S. 552, arguing that, like the law in

Sorrell, the ability-to-benefit requirement regulates “the creation and

dissemination of information.” Opening Br. at 26. The Supreme Court

described the law in Sorrell as “enact[ing] content-and speaker-based

restrictions on the sale, disclosure, and use of prescriber-identifying

information.” Sorrell, 564 U.S. at 563-64.

In contrast to Holder and Sorrell, the ability-to-benefit requirement

does not define prohibited conduct to include specific types of speech, nor

does it regulate “the creation and dissemination of information.” The


29

ability-to-benefit requirement does not prohibit anyone from engaging in

expressive activity. Nor does it require that specific information be

disclosed, or that information be conveyed in a certain way. Cf. NIFLA, 138

S. Ct. 2361 (disclosure requirements applicable to crisis pregnancy centers

violated First Amendment free speech rights); Expressions Hair Design v.

Schneiderman, 137 S. Ct. 1144, 1151 (2017) (law prohibiting merchants

from imposing a surcharge on customers using a credit card was a regulation

of speech because it “regulat[ed] the communication of prices rather than

prices themselves”).

Rather, the ability-to-benefit requirement regulates only non-

expressive conduct, by requiring private postsecondary educational

institutions to confirm that a prospective student is well-suited to take a

proposed course of instruction before enrolling that student. Once a student

is properly enrolled, the ability-to-benefit requirement places no restrictions

or requirements of any kind upon the content of an instructor’s speech. See

FAIR, 547 at 60 (finding that the challenged law regulated “conduct, not

speech” because “[i]t affects what law schools must do—afford equal access

to military recruiters—not what they may or may not say”); Kagan v. City of

New Orleans, La., 753 F.3d 560, 562 (5th Cir. 2014) (rejecting comparison

to Holder and finding that licensing requirements for tour guides have “no


30

effect whatsoever on the content of what tour guides say. Those who have

the license can speak as they please . . . ”).

2. The Ability-to-Benefit Requirement Does Not Regulate the Content of or Impose Conditions on Expressive Activity.

The cases involving “contracts to speak” (Opposition Br. at 29-31) or

“payment for speech” (Amicus Br. at 14) are also inappposite. The laws in

those cases all involved direct prohibitions or regulations on expressive

activities, including laws regulating the making or writing of “an

appearance, speech or article,” United States v. Nat’l Treasury Employees

Union, 513 U.S. 454, 459-60 (1995); “the reenactment of [a] crime, by way

of a movie, book, magazine article, tape recording, phonograph record, radio

or television presentation, live entertainment of any kind,” Simon &

Schuster, Inc. v. Members of New York State Crime Victims Bd., 502 U.S.

105, 109 (1991); the “solicitation of charitable contributions,” Riley v. Nat’l

Fed'n of the Blind of N. Carolina, Inc., 487 U.S. 781, 784 (1988); “the

placement of newsracks,” City of Lakewood v. Plain Dealer Pub. Co., 486

U.S. 750, 753 (1988); “the tattooing process,” Anderson v. City of Hermosa

Beach, 621 F.3d 1051, 1062 (9th Cir. 2010); an “artist’s sale of his original

paintings” in the context of applying a First Amendment exception to a

vendor permitting policy, White v. City of Sparks, 500 F.3d 953, 957 (9th


31

Cir. 2007); and political petition circulators, Meyer v. Grant, 486 U.S. 414,

424 (1988).6

All of the restrictions in these cases directly targeted speech or

expressive conduct, and that is why the courts applied heightened scrutiny,

not because they were triggered by or involved an economic transaction

involving the sale of speech. But the ability-to-benefit requirement does not

resemble any of the laws in these cases, because it regulates enrollment

practices, not the content of instruction.

E. The Ability-to-Benefit Requirement Regulates Conduct that Is Not Inherently Expressive.

The ability-to-benefit requirement regulates conduct—the solicitation

and execution of an enrollment agreement—that is non-expressive.

Appellants do not contend otherwise; in fact, they have expressly disclaimed

reliance on a theory that the ability-to-benefit requirement regulates

6 Amici also rely upon United States v. Dahlstrom, 713 F.2d 1423 (9th

Cir. 1983) (Amicus Br. at 15), but this is not a First Amendment case. In reviewing a conviction for aiding in the preparation of a fraudulent tax return arising from seminars promoting a tax shelter program, the court determined that “the legality of the tax shelter program . . . was completely unsettled by any clearly relevant precedent on the dates alleged in the indictment.” 713 F.2d at 1428. The court went on to state that “the first amendment would require a further inquiry before a criminal penalty could be enforced,” but the court did not determine that the defendants in the criminal proceeding had a First Amendment right to offer the seminars in question. Id.


32

expressive conduct. See Opening Br. at 31. Accordingly, the ability-to-

benefit requirement is subject to deferential, rational basis review.

Conduct intending to express an idea may be constitutionally protected

only if it is “sufficiently imbued with elements of communication to fall

within the scope of the First and Fourteenth Amendments,” which means

that “[a]n intent to convey a particularized message [is] present, and . . . the

likelihood [is] great that the message w[ill] be understood by those who

view [ ] it.” Spence v. State of Wash., 418 U.S. 405, 409, 410-11 (1974).

The conduct regulated by the ability-to-benefit requirement—the

solicitation and enrollment of students at private postsecondary educational

institutions—would not be understood by outside observers to convey a

particularized message.7 See Int’l Franchise Ass’n, Inc. v. City of Seattle,

803 F.3d 389, 408 (9th Cir. 2015) (minimum wage ordinance was “plainly

7 Even assuming that the ability-to-benefit requirement is actually a

regulation of “teaching horseshoeing,” such an activity does not have the “expressive quality of a parade, a newsletter, or the editorial page of a newspaper.” FAIR, 547 U.S. at 64. Unlike flag burning, tattooing, and distributing handbills, “teaching horseshoeing” does not evince the requisite “intent to convey a particularized message” of the instructor’s choosing, nor would the instructor likely be understood by the student as attempting to communicate such an expressive message. See Waugh v. Nevada State Bd. of Cosmetology, 36 F. Supp. 3d 991, 1010 (D. Nev. 2014) (teaching makeup artistry found to be non-expressive conduct), subsequently ordered to be vacated as moot by Waugh v. Nevada State Bd. of Cosmetology, No. 14-16674, 2016 WL 8844242, at *1 (9th Cir. Jan. 27, 2016).


33

an economic regulation that does not target speech or expressive conduct”

because formation of “a business relationship and . . . resulting business

activities” was not expressive activity). And because the ability-to-benefit

requirement regulates conduct that is not “inherently expressive,” it does not

implicate the First Amendment, and is only subject to rational basis review.

See Interpipe Contracting, Inc., 898 F.3d at 896, 903 (applying rational basis

review where challenged law “regulates conduct that is not ‘inherently

expressive,’” and “does not regulate . . . speech”).

F. The Ability-to-Benefit Requirement Survives Rational Basis Review.

As a regulation of non-expressive conduct, the ability-to-benefit

requirement is subject to rational basis review, which it survives. See Retail

Digital Network, LLC v. Prieto, 861 F.3d 839, 847 (9th Cir. 2017). Under

rational basis review, duly enacted laws are presumed to be constitutional.

See Nat’l Ass’n for Advancement of Psychoanalysis v. California Bd. of

Psychology, 228 F.3d 1043, 1050 (9th Cir. 2000). “We do not require that

the government’s action actually advance its stated purposes, but merely

look to see whether the government could have had a legitimate reason for

acting as it did.” Id. (internal quotation marks and citation omitted). Courts

applying rational basis review “ask only whether there are plausible reasons


34

for [the legislature’s] action, and if there are, [the] inquiry is at an

end.” Romero–Ochoa v. Holder, 712 F.3d 1328, 1331 (9th Cir. 2013)


The ability-to-benefit requirement easily satisfies rational basis review.

As the district court found, “California has a legitimate state interest in

preventing private postsecondary schools operating in the state from

harming students and deceiving the public. That desire to prevent harm and

deception is rationally related to the requirement that students at private

postsecondary educational institutions show sufficient competency to benefit

from that education.” ER 15 (citing Cal. Educ. Code §§ 94904, 94811). As

set forth above, there are numerous other laws aimed at addressing these

dangers, as well as numerous instances of abusive or misleading enrollment

practices documented by significant enforcement actions under federal and

state law. See supra, Argument, Part I.A. The district court correctly

concluded that the ability-to-benefit requirement is “rationally related to the

legitimate government interest of protecting students and the public from

harm and deception,” ER 15-16, because “[i]t is plausible that the legislature

thought requiring students to prove their ability to benefit through

examinations or diplomas would improve the students’ opportunities for

success at postsecondary institutions, and that is enough to sustain the Act,”


35

id. 15 (citing Romero–Ochoa, 712 F.3d at 1331). This Court should affirm

that decision. 8

II. THE ABILITY-TO-BENEFIT REQUIREMENT IS CONTENT NEUTRAL

Even if the ability-to-benefit requirement were found to regulate speech

or expressive conduct protected by the First Amendment, it should be

analyzed as a content-neutral regulation that receives intermediate scrutiny.

See O’Brien, 391 U.S. at 377. Appellants rely on Reed v. Town of Gilbert,

Ariz., 135 S. Ct. 2218 (2015) to argue that the ability-to-benefit requirement

is a content-based regulation subject to strict scrutiny because (1) the ability-

to-benefit requirement is content-based on its face, and (2) one must

examine the content of the teaching in order to determine whether the

requirement applies, i.e., one must determine whether the instruction offered

8 The Opening Brief does not seek relief from the district court’s

decision to dismiss the complaint with prejudice, as opposed to a dismissal with leave to amend. Appellants have thus waived any challenge to the district court’s decision to dismiss with prejudice. See U.S. ex rel. Meyer v. Horizon Health Corp., 565 F.3d 1195, 1201 (9th Cir. 2009) (Ninth Circuit “deems issues unsupported by argument to be abandoned”), overruled on other grounds by U.S. ex rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d 1121, 1129 (9th Cir. 2015); Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir. 1994) (“We review only issues which are argued specifically and distinctly in a party’s opening brief. We will not manufacture arguments for an appellant, and a bare assertion does not preserve a claim . . . .”) (citations omitted).


36

is vocational in nature. Opening Br. at 37-38. Under their approach, the

requirement is by definition content-based because it only applies to schools

offering a particular type of instruction. This Court should reject this

approach, for several reasons.

First, the analogy to the sign regulation in Reed is a poor fit. The local

ordinance in Reed regulated the placement of outdoor signs, based on the

content of those signs. 135 S.Ct. at 2227. The ability-to-benefit requirement

regulates the conditions under which an enrollment agreement may be

executed, but not based on the content of the agreement, or because of the

subject of instruction. Rather, the requirement applies to a particular set of

circumstances in the marketplace that renders prospective students

vulnerable to potentially misleading marketing and other unfair practices,

which can result in students going deeply into debt to pay for degrees that

they cannot use.

Second, the analysis that Appellants propose would mean that any of

the Act’s requirements—which apply generally to institutions offering

“academic, vocational, or continuing professional education” programs (Cal.

Educ. Code § 94857)—would be considered content-based. Appellants’

assurances that “[n]othing prevents California from regulating schools

without reference to the content of their speech,” or from “regulating


37

fraudulent or misleading commercial speech” (Opening Br. at 39), do not

change the fact that, under Appellants’ theory, every attempt to regulate

“academic, vocational, or continuing professional education” instruction as

such would be considered a content-based regulation subject to strict

scrutiny. Indeed, every regulation that applies to or makes a distinction

based on the subject matter at issue would be subject to strict scrutiny, not

just those that apply to or affect educational institutions.

The fact that a law applies to certain subject areas does not mean that it

is per se a content-based regulation requiring strict scrutiny. “[V]irtually all

government activities involve speech, many of which involve the regulation

of speech. Regulatory programs almost always require content

discrimination. And to hold that such content discrimination triggers strict

scrutiny is to write a recipe for judicial management of ordinary government

regulatory activity.” Reed, 135 S. Ct. at 2234 (Breyer, J., concurring).

Thus, areas in which “a strong presumption against constitutionality has no

place” include:

[G]overnmental regulation of securities, e.g., 15 U.S.C. § 78l (requirements for content that must be included in a registration statement); of energy conservation labeling-practices, e.g., 42 U.S.C. § 6294 (requirements for content that must be included on labels of certain consumer electronics); of prescription drugs, e.g., 21 U.S.C. § 353(b)(4)(A) (requiring a prescription drug label to bear the symbol “Rx only”); of


38

doctor-patient confidentiality, e.g., 38 U.S.C. § 7332 (requiring confidentiality of certain medical records, but allowing a physician to disclose that the patient has HIV to the patient’s spouse or sexual partner); of income tax statements, e.g., 26 U.S.C. § 6039F (requiring taxpayers to furnish information about foreign gifts received if the aggregate amount exceeds $10,000); of commercial airplane briefings, e.g., 14 CFR § 136.7 (2015) (requiring pilots to ensure that each passenger has been briefed on flight procedures, such as seatbelt fastening); of signs at petting zoos, e.g., N.Y. Gen. Bus. Law Ann. § 399–ff(3) (West Cum. Supp. 2015) (requiring petting zoos to post a sign at every exit “‘strongly recommend[ing] that persons wash their hands upon exiting the petting zoo area’”); and so on.

Reed, 135 S.Ct. at 2235 (Breyer, J., concurring). Appellants’ approach

would require the application of strict scrutiny to all of these laws. But this

cannot be correct, because it would leave the government entirely unable to

regulate anything based on subject matter.

Consistent with this, in McCullen v. Coakley, 134 S. Ct. 2518 (2014),

the Supreme Court determined that a law establishing “buffer zones” outside

of abortion clinics “[did] not draw content-based distinctions on its face,”

even if the law “has the ‘inevitable effect’ of restricting abortion-related

speech more than speech on other subjects.” Id. at 2531. This is because “a

facially neutral law does not become content based simply because it may

disproportionately affect speech on certain topics.” Id. Rather, “[a]

regulation that serves purposes unrelated to the content of expression is


39

deemed neutral, even if it has an incidental effect on some speakers or

messages but not others.” Id. (internal quotation marks and citation

omitted). In finding the buffer zone law to be content-neutral, the Court

noted that “[i]t is not the case that ‘[e]very objective indication shows that

the provision’s primary purpose is to restrict speech’” with a particular

viewpoint. Id. (internal quotation marks and citation omitted). Rather, the

Court determined that the Massachusetts legislature was reacting to a

problem that was, “in its experience,” limited to a certain context; the

legislature established the buffer zones outside abortion clinics based on “a

record of crowding, obstruction, and even violence outside such clinics”).

Id. at 2532. The Court found, “In light of the limited nature of the problem,

it was reasonable for the Massachusetts Legislature to enact a limited

solution.” Id.9

Here, as in McCullen, the ability-to-benefit requirement is not a

content-based restriction on speech simply because the Legislature chose to

limit the requirement to certain types of educational programs—those that

students might be more motivated to spend thousands of dollars on, i.e.,

9 McCullen ultimately determined that the buffer zone law was subject

to, but did not survive, intermediate scrutiny, because it “burden[ed] substantially more speech than necessary to achieve the Commonwealth’s asserted interests.” McCullen, 134 S. Ct. at 2537.


40

“programs whose purpose is academic, vocational, or continuing

professional education.” Cal. Educ. Code § 94857. The ability-to-benefit

requirement “serves purposes unrelated to the content of expression,” and so

should be “deemed neutral,” even if it impacts certain kinds of speech more

than others. McCullen, 134 S. Ct. at 2531 (internal quotation marks and

citation omitted).

Appellants also rely on Holder, 561 U.S. 1, in which the Supreme

Court found the “material support” law to be a regulation of speech, and

stated that whether the plaintiffs could engage in their desired speech

“depends on what they say,” and that “as applied to plaintiffs the conduct

triggering coverage under the statute consists of communicating a message.”

Id. at 27, 28. But as noted above, the material support law in Holder was a

prohibition on conduct, and that conduct was defined not only to include

speech, but speech about specific topics. Id. at 8-9.

Even assuming that the ability-to-benefit requirement regulates speech

at all—which it does not—the requirement much more closely resembles the

law at issue in McCullen than in Holder. It is a requirement that applies in a

specific context, and it is not an explicit prohibition on speech to specific

persons, covering specific topics (“training” or “expert advice or assistance”


41

to foreign terrorist organizations). Holder, 561 U.S. at 8-9.10 It is therefore

a content-neutral regulation subject to intermediate scrutiny, if it is a

regulation of speech at all (which it is not).

III. THE ABILITY-TO-BENEFIT REQUIREMENT SURVIVES INTERMEDIATE SCRUTINY AS A MATTER OF LAW

Although the ability-to-benefit requirement does not regulate speech or

expressive conduct, the requirement would nevertheless satisfy the test

applicable to content-neutral regulations of expressive conduct set forth in

United States v. O’Brien, 391 U.S. 367 (1968), as a matter of law. As a

threshold matter, Appellants have waived any argument that it does not pass

intermediate scrutiny.11 Even if they had not waived this argument, the

10 The other cases cited by amici as examples of content-based

regulations (Amicus Br. at 12-13) are distinguishable for the same reason. Like Holder, those cases involved laws that directly regulated the content of speech. See Boos v. Barry, 485 U.S. 312, 315 (1988) (prohibition on displaying within 500 feet of a foreign embassy signs tending to bring foreign government into “public odium” or “public disrepute”); Carey v. Brown, 447 U.S. 455, 457 (1980) (prohibition on picketing of residences or dwellings, except picketing of place of employment concerning a labor dispute); Police Dept. of City of Chicago v. Mosley, 408 U.S. 92, 92-3 (1972) (prohibition on all picketing within 150 feet of a school, except picketing concerning a labor dispute).

11 Appellants’ Opening Brief focuses entirely on arguments that the ability-to-benefit requirement is a content-based regulation of speech subject to strict scrutiny (Opening Br. at 18-43), and that intermediate scrutiny cannot be performed on a motion to dismiss (id. at 43-49). The Opening Brief does not address the application of intermediate scrutiny to the ability-


42

outcome should be the same because: (1) Appellants are incorrect that a First

Amendment claim should not be resolved on the pleadings; and (2) the

ability-to-benefit requirement passes muster under O’Brien, as set forth in

more detail below.

A. Courts Regularly Uphold Laws After Applying Intermediate Scrutiny on the Pleadings.

Appellants contend that the only question on a motion to dismiss is

“whether the First Amendment applies,” and not “whether the [ability-to-

benefit] requirement violates the First Amendment.” Opening Br. at 44

(emphases omitted). They argue that because the government bears the

burden of proving the constitutionality of a challenged provision regardless

of the level of scrutiny that applies, it is ordinarily inappropriate to resolve a

First Amendment claim on a motion to dismiss. But there is no such

presumption against resolving First Amendment claims before summary

to-benefit requirement. Appellants have thus waived any argument that the ability-to-benefit requirement does not survive intermediate scrutiny. The Ninth Circuit “deems issues unsupported by argument to be abandoned.” Meyer, 565 F.3d at 1201; see also Greenwood, 28 F.3d at 977 (“We review only issues which are argued specifically and distinctly in a party’s opening brief. We will not manufacture arguments for an appellant, and a bare assertion does not preserve a claim . . . .” (citations omitted)). Nor can Appellants revive this issue in their reply brief, because arguments raised for the first time in a reply brief are waived. See United States v. Ramirez-Lopez, 251 F. Appx. 390, 391 (9th Cir. 2007).


43

judgment. Numerous courts, including the Supreme Court, have affirmed

the dismissal of First Amendment claims after a motion to dismiss or motion

for judgment on the pleadings. This Court should do so here as well.12

A content-neutral law regulating expressive conduct survives

intermediate scrutiny if “it furthers an important or substantial government

interest; if the governmental interest is unrelated to the suppression of free

expression; and if the incidental restriction on alleged First Amendment

freedoms is no greater than is essential to the furtherance of that interest.”

O’Brien, 391 U.S. at 377. “[A]n incidental burden on speech is no greater

than is essential, and therefore is permissible under O’Brien, so long as the

neutral regulation promotes a substantial government interest that would be

achieved less effectively absent the regulation.” FAIR, 547 U.S. at 67

(quoting United States v. Albertini, 472 U.S. 675, 689 (1985)).

12 To the extent Appellants suggest that this Court cannot affirm the

dismissal of a First Amendment claim at the pleading stage based on the determination that the ability-to-benefit requirement is a regulation of non-expressive conduct that survives rational basis review, they are mistaken. Appellants contend that a pleading that recites the bare elements of a First Amendment claim “is more than adequate to state a First Amendment claim, which ends the inquiry on a Rule 12(b)(6) motion.” Opening Br. at 46. This conflicts with the basic requirements for surviving a challenge to the pleadings. Iqbal, 556 U.S. at 678 (a pleading based on “labels and conclusions” or assertions “devoid of further factual enhancement” will not survive a motion to dismiss) (internal quotation marks and citation omitted).


44

This analysis can be performed before summary judgment, as the

Supreme Court did in FAIR, 547 U.S. 47. On review of a preliminary

injunction, the Supreme Court rejected the court of appeals’ reasoning that

the government “failed to produce evidence establishing that the [challenged

law] was necessary and effective.” 547 U.S. at 67. Instead, the Supreme

Court concluded (with no citation to an evidentiary record), “Military

recruiting promotes the substantial Government interest in raising and

supporting the Armed Forces—an objective that would be achieved less

effectively if the military were forced to recruit on less favorable terms than

other employers.” Id. The law “clearly satisfies” the requirement under

O’Brien that “an incidental burden on speech is no greater than is essential,”

and that “the neutral regulation promotes a substantial government interest

that would be achieved less effectively absent the regulation.” Id. at 67


Indeed, courts regularly resolve First Amendment challenges at the

motion to dismiss stage while applying intermediate scrutiny, as evidenced

by numerous recent Ninth Circuit opinions affirming dismissals under these

circumstances. See, e.g., Interpipe Contracting, Inc., 898 F.3d at 884-85

(affirming dismissal of claims, including First Amendment claims, on

motion to dismiss and motion for judgment on the pleadings); San Francisco


45

Apartment Ass’n v. City & Cty. of San Francisco, 881 F.3d 1169, 1177-78

(9th Cir. 2018) (affirming granting of motion for judgment on the pleadings,

and finding that ordinance requiring certain disclosures by landlords to

tenants satisfied Central Hudson intermediate scrutiny test applicable to

commercial speech); Erotic Serv. Provider Legal Educ. & Research Project

v. Gascon, 880 F.3d 450, 460-61 (9th Cir. 2018), as amended (Feb. 2, 2018),

(affirming dismissal of First Amendment claim, and finding that statute

criminalizing prostitution satisfied Central Hudson); Taub v. City and

County of San Francisco, 696 Fed.Appx. 181, 182 (9th Cir. 2017) (affirming

dismissal of First Amendment claim, and finding public nudity ordinance to

be a valid, content-neutral regulation under O’Brien); Contest Promotions,

LLC v. City and County of San Francisco, 704 Fed.Appx. 665, 667-68 (9th

Cir. 2017) (affirming dismissal of First Amendment claim, and finding that

signage ordinance satisfied Central Hudson). Similarly, the Ninth Circuit

performed a “plenary review of the issues” in reviewing preliminary

injunction motions in Pickup v. Brown, finding that the district courts’

rulings “rest[ed] solely on a premise as to the applicable rule of law, and the

facts are established or of no controlling relevance.” 740 F.3d 1208, 1222

(9th Cir. 2014). The court concluded that the challenged law “survives the

constitutional challenges presented here.” Id. at 1236.


46

Appellants fault the district court’s citations to San Francisco

Apartment Association and Taub, arguing that the challenged laws in those

cases are distinguishable. Opening Br. at 46-47. But those cases are still

good law, and they demonstrate that courts may find, as a matter of law, that

a challenged restriction furthers important governmental interests. See San

Francisco Apartment Ass’n, 881 F.3d at 1177-78 (considering the fit

between the legislature’s ends and means under Central Hudson, and

concluding that the ordinance is “sufficiently tailored”); Taub, 696 F. Appx.

at 183 (finding that public nudity ordinance “furthers San Francisco’s

important and substantial interests in protecting individuals ‘who are

unwillingly or unexpectedly exposed’ to public nudity and preventing

‘distractions, obstructions, and crowds that interfere with the safety and free

flow of pedestrian and vehicular traffic’”); see also Erotic Serv. Provider

Legal Educ. & Research Project, 880 F.3d at 460-61 (finding based on

“common sense” that “the State’s substantial interest in limiting the

commodification of sex is directly and materially advanced by” a prohibition

on prostitution).

Thus, Appellants’ contention that “it is rare that the government will

meet a First Amendment burden on a motion to dismiss,” is contradicted by

numerous precedents. Opening Br. at 46. Indeed, in the case Appellants cite


47

in support of this contention, the Ninth Circuit actually affirmed the district

court’s dismissal of First Amendment claims on a motion to dismiss. In

O’Brien v. Welty, 818 F.3d 920, 933 (9th Cir. 2016), the Ninth Circuit

reversed dismissal of a First Amendment retaliation claim, after determining

that the complaint plausibly pleaded such a claim. But the Ninth Circuit also

affirmed the district court’s granting of the motion to dismiss as to the facial

and as-applied First Amendment claims, thus demonstrating that it can be

appropriate to resolve such claims on a motion to dismiss. Id. at 929.13

B. The Ability-to-Benefit Requirement Satisfies Intermediate Scrutiny.

The ability-to-benefit requirement survives intermediate scrutiny as a

matter of law because it furthers the important government interest of

protecting students, many of whom are low-income and have minimal

13 The other cases cited by Appellants (see Opening Br. at 44-45)

stand for the unremarkable proposition that, when intermediate scrutiny applies, the government “must demonstrate that the recited harms are real, not merely conjectural, and that the regulation will in fact alleviate these harms in a direct and material way.” Turner Broad. Sys., Inc. v. F.C.C., 512 U.S. 622, 664 (1994). See also Italian Colors Rest. v. Becerra, 878 F.3d 1165, 1176 (9th Cir. 2018) (same); Edenfield v. Fane, 507 U.S. 761, 770 (1993) (same); Doe v. Harris, 772 F.3d 563, 570 (9th Cir. 2014) (“[T]he moving party bears the initial burden of making a colorable claim that its First Amendment rights have been infringed, or are threatened with infringement, at which point the burden shifts to the government to justify the restriction.”) (internal quotation marks and citation omitted).


48

education, from spending thousands of dollars on a course of instruction

from which they cannot benefit; is unrelated to the suppression of free

expression; and is no more restrictive than necessary, and achieves the

government interest more effectively than the absence of such a requirement.

See O’Brien, 391 U.S. at 377; FAIR, 547 U.S. at 67 (citation omitted).

1. The ability-to-benefit requirement furthers the important and substantial government interest of protecting students.

As set forth in the Legislative findings supporting the 1989 Maxine

Waters Act and the 2009 Act, in enacting and updating the ability-to-benefit

requirement, the Legislature was concerned about private postsecondary

educational institutions charging large sums of money for courses “that are

supposed to prepare students for employment in various occupations.” Cal.

Educ. Code § 94316(b) (1990). The important governmental interest served

by the ability-to-benefit requirement is to guard against the enrollment of

students who “do not have the ability to benefit” from the proposed course

of instruction, in the context of “concerns about the value of degrees and

diplomas issued by private postsecondary schools, and the lack of

protections for private postsecondary school students and consumers of

those schools’ services.” Id. §§ 94316(b) (1990), 94801(b).


49

California has an important, indeed a compelling, interest in regulating

private postsecondary educational institutions. The ability-to-benefit

requirement promotes California’s interest in protecting students from the

harm that may result from being enrolled in courses when they “do not have

the ability to benefit from the instruction.” Cal. Educ. Code § 94316(b)

(1990). The Legislature has determined that “concerns about the value of

degrees and diplomas issued by private postsecondary schools, and the lack

of protections for private postsecondary school students and consumers of

those schools’ services, have highlighted the need for strong state-level

oversight of private postsecondary schools,” id. § 94801(b), and the ability-

to-benefit requirement is intended to “ensure minimum standards of

instructional quality and institutional stability,” as part of this important

oversight function. Calif. Stats. 2011, c. 167 (A.B. 1013). As the district

court noted:

The Act’s legislative findings detail that “[n]umerous reports and studies have concluded that California’s previous attempts at regulatory oversight of private postsecondary schools under the Department of Consumer Affairs ha[d] consistently failed to ensure student protections or provide effective oversight of private postsecondary schools.” CAL. EDUC. CODE § 94801(c). In adding additional operational requirements for private postsecondary educational institutions, the Act aimed to ensure that these schools would have “[m]inimum educational quality standards and opportunities for success” and an “appropriate level of oversight.” CAL. EDUC. CODE


50

§ 94801(d)(1,3). The Act further sought to ensure the “[p]revention of the harm to students and the deception of the public that results from fraudulent or substandard educational programs and degrees.” CAL. EDUC. CODE § 94801(d)(6).

ER 14.

California’s interest in protecting students and setting minimum

standards for educational institutions is a well-established government

interest. Other courts have acknowledged that “[t]he state clearly has an

interest in ensuring that certain minimum educational standards are met.”

Ohio Ass’n of Indep. Sch. v. Goff, 92 F.3d 419, 423 (6th Cir. 1996) (citing

Board of Educ. v. Allen, 392 U.S. 236, 245-46 (1968) (state may require that

private schools “provide minimum hours of instruction, employ teachers of

specified training, and cover prescribed subjects of instruction”)). Indeed,

the Supreme Court has recognized “the power of the State reasonably to

regulate all schools, to inspect, supervise and examine them, their teachers

and pupils . . . .” Runyon v. McCrary, 427 U.S. 160, 178-79 (1976) (citation

omitted).

Appellants dispute that the ability-to-benefit requirement plays a

protective function, asserting that “California . . . deems [Narez] incapable

of entering into contracts for education, because it doubts his capacity to

learn particular skills,” and that “what the State seeks to do with its


51

examination requirement” is to “restrict speech in order to protect willing

listeners from themselves.” Opening Br. at 42, 49. Appellants also maintain

that “[t]he State cannot plausibly assert (and has not plausibly asserted) a

nonspeech justification for the examination requirement.” Opening Br. at

42. More broadly, they argue that “[w]hen it comes to speech, this sort of

paternalism has no place in the American legal landscape.” Id. at 16.

However, the allegations in the Complaint fall far short of plausibly alleging

that the ability-to-benefit requirement does not serve an important state

interest. Appellants have not sufficiently alleged that the ability-to-benefit

requirement fails to guard against the (deliberate or just inadvertent)

enrollment of students who cannot benefit from a proposed course of

instruction, even in the context of “teaching horseshoeing.” See Iqbal, 556

U.S. at 678 (a pleading based on “labels and conclusions” or assertions

“devoid of further factual enhancement” will not survive a motion to

dismiss) (internal quotation marks and citation omitted).

2. The ability-to-benefit requirement is not related to the suppression of free expression.

Second, the ability-to-benefit requirement has no relation to the

“suppression of free expression,” O’Brien, 391 U.S. at 377, because it does

not concern itself with expression at all. Although Appellants ascribe to


52

California various motives underlying the ability-to-benefit requirement,

Opening Br. at 42, 49, they do not argue in their Opening Brief or allege in

their Complaint that suppression of free expression is one of them.

3. Any incidental restriction on alleged First Amendment freedoms is no greater than necessary, and the requirement serves the important government interest more effectively than its absence.

Third, and finally, the ability-to-benefit requirement is no more

restrictive than necessary. See FAIR, 547 U.S. at 67. The requirement

applies to courses for which students may be more easily persuaded to

commit significant financial resources—academic, vocational, or continuing

professional courses, through which students expect to advance in an

occupation or profession and thereby gain financial rewards. To satisfy the

requirement, a postsecondary educational institution need only have a

student take a test demonstrating preparedness for postsecondary education,

or for the particular type of occupational training being offered. Cal. Educ.

Code § 94904(b). The requirement thus directly addresses the need to

prevent enrollment of students who might not benefit from the proposed

course of instruction, by requiring some demonstration of those students’

ability to benefit. This also allows the requirement to achieve the state’s


53

regulatory objective more effectively than the absence of such a requirement

would. See FAIR, 547 U.S. at 67.

Appellants’ suggestion that the ability-to-benefit requirement fails to

verify a prospective student’s ability to benefit from a course of instruction

in horseshoeing conflicts with the plain language of the statutory

requirement.14 Appellants assert that the ability-to-benefit requirement

“forbid[s] PCHS from enrolling [Narez] unless he passes a literacy-

numeracy test,” Opening Br. at 10, but the ability-to-benefit requirement

does not require Narez to obtain a high school diploma, its equivalent, or to

pass an examination from a list approved by the United States Department of

Education. Narez may “take an independently administered examination

from the list of examinations prescribed by the United States Department of

Education,” and if there is no “list of relevant examinations that pertain to

the intended occupational training, the [Bureau] may publish its own list of

acceptable examinations and required passing scores.” Cal. Educ. Code

§§ 94904(a), (b). Thus, although Appellants contend that “[n]one of the

14 In addition, as alleged in the Complaint, the PCHS curriculum

includes “business advice on client management, self-employment, and how to interact with barns, trainers, and veterinarians,” ER 20, ¶ 30, for which basic literacy and numeracy skills may be required.


54

skills tested by the approved ability-to-benefit exams are necessary in order

to learn how to shoe a horse,” ER 22, ¶ 46, the statute permits the use of an

alternative examination, which Appellants may propose for approval by the

Bureau.15

The ability-to-benefit requirement therefore supports the Legislature’s

goal of protecting students in a sufficiently tailored manner, and satisfies the

O’Brien factors.16

CONCLUSION

For the foregoing reasons, Defendants-Appellees respectfully request

that this Court affirm the district court.

15 As the district court noted, the Complaint does not allege that

Appellants have proposed an alternative ability-to-benefit examination. ER 12, n. 9.

16 For many of the same reasons, even assuming that strict scrutiny applies, the ability-to-benefit requirement satisfies such scrutiny, as “the least restrictive means of achieving a compelling state interest.” McCullen, 134 S. Ct. at 2530. California has a compelling interest in regulating private postsecondary educational institutions and protecting students from spending significant amounts of money based on misleading enrollment practices. See supra, Argument, Parts I.A; III.B.1. And the requirement is narrowly tailored, since it confirms that a student is prepared for a postsecondary vocational course of instruction through verification that (1) the student has completed his or secondary education, Cal. Educ. Code § 94811; or (2) has passed an exam approved by the United States Department of Education as demonstrating this level of education, id. § 94904(a); or (3) has passed an alternative examination “pertain[ing] to the intended occupational training,” id. § 94904(b).


55

Dated: October 9, 2018

Respectfully submitted, XAVIER BECERRA Attorney General of California THOMAS S. PATTERSON Senior Assistant Attorney General PAUL STEIN Supervising Deputy Attorney General /s/ P. Patty Li P. PATTY LI Deputy Attorney General Attorneys for Defendants-Appellees Dean Grafilo and Michael Marion, in their official capacities

SA2018101550


56

18-15840




Plaintiffs-Appellants,

v.



STATEMENT OF RELATED CASES

To the best of our knowledge, there are no related cases.


57


Respectfully Submitted, XAVIER BECERRA Attorney General of California THOMAS S. PATTERSON Senior Assistant Attorney General PAUL STEIN Supervising Deputy Attorney General /s/ P. Patty Li P. PATTY LI Deputy Attorney General Attorneys for Defendants-Appellees Dean Grafilo and Michael Marion, in their official capacities


Form 8. Certificate of Compliance Pursuant to 9th Circuit Rules 28.1-1(f), 29-2(c)(2) and (3), 32-1, 32-2 or 32-4 for Case Number

Note: This form must be signed by the attorney or unrepresented litigant and attached to the end of the brief.I certify that (check appropriate option):

This brief complies with the length limits permitted by Ninth Circuit Rule 28.1-1. The brief is words or pages, excluding the portions exempted by Fed. R. App. P. 32(f), if applicable. The brief's type size and type face comply with Fed. R. App. P. 32(a)(5) and (6).

This brief complies with the length limits permitted by Ninth Circuit Rule 32-1. The brief is words or pages, excluding the portions exempted by Fed. R. App. P. 32(f), if applicable. The brief's type size and type face comply with Fed. R. App. P. 32(a)(5) and (6).

This brief complies with the length limits permitted by Ninth Circuit Rule 32-2(b). The brief is words or pages, excluding the portions exempted by Fed. R. App. P. 32(f), if applicable, and is filed by (1) separately represented parties; (2) a party or parties filing a single brief in response to multiple briefs; or (3) a party or parties filing a single brief in response to a longer joint brief filed under Rule 32-2(b). The brief's type size and type face comply with Fed. R. App. P. 32(a)(5) and (6).

This brief complies with the longer length limit authorized by court order dated The brief's type size and type face comply with Fed. R. App. P. 32(a)(5) and (6). The brief is words or pages, excluding the portions exempted by Fed. R. App. P. 32(f), if applicable.

This brief is accompanied by a motion for leave to file a longer brief pursuant to Ninth Circuit Rule 32-2(a) and is words or pages, excluding the portions exempted by Fed. R. App. P. 32(f), if applicable. The brief’s type size and type face comply with Fed. R .App. P. 32(a)(5) and (6).

This brief is accompanied by a motion for leave to file a longer brief pursuant to Ninth Circuit Rule 29-2(c)(2) or (3) and is words or pages, excluding the portions exempted by Fed. R. App. P. 32(f), if applicable. The brief's type size and type face comply with Fed. R. App. P. 32(a)(5) and (6).

This brief complies with the length limits set forth at Ninth Circuit Rule 32-4. The brief is words or pages, excluding the portions exempted by Fed. R. App. P. 32(f), if applicable. The brief’s type size and type face comply with Fed. R. App. P. 32(a)(5) and (6).

Signature of Attorney or Unrepresented Litigant

("s/" plus typed name is acceptable for electronically-filed documents)

Date

(Rev.12/1/16)

18-15840

11,730

s/ P. Patty Li 10/09/2018


58

18-15840




Plaintiffs-Appellants,

v.



ADDENDUM TO APPELLEES’ ANSWERING BRIEF

TABLE OF CONTENTS

California Education Code (1990) § 94316 .................................................................................................. A-1 § 94319.2 ................................................................................................ A-3

California Education Code § 94800 ................................................................................................... A-5 § 94801 ................................................................................................... A-6 § 94811 ................................................................................................... A-8 § 94818 ................................................................................................... A-9 § 94857 ................................................................................................. A-10 § 94858 ................................................................................................. A-11 § 94874 ................................................................................................. A-12 § 94875 ................................................................................................. A-16


59

§ 94902 ................................................................................................. A-17 § 94904 ................................................................................................. A-18

Cal. Code Regs. Title 5, § 71770 .................................................................................... A-19

Cal. Stats. 2011 c. 167 (A.B. 1013) ............................................................................... A-23

United States Code Title 20, § 1091 .................................................................................... A-25


Respectfully Submitted, XAVIER BECERRA Attorney General of California THOMAS S. PATTERSON Senior Assistant Attorney General PAUL STEIN Supervising Deputy Attorney General /s/ P. Patty Li P. PATTY LI Deputy Attorney General Attorneys for Defendants-Appellees Dean Grafilo and Michael Marion, in their official capacities


§ 94316. Short title; findings and declaration, West's Ann.Cal.Educ.Code § 94316

© 2018 Thomson Reuters. No claim to original U.S. Government Works. 1

California Statutes Annotated - 1990West's Ann.Cal.Educ.Code § 94316

WEST'S ANNOTATED CALIFORNIA CODESEDUCATION CODE

TITLE 3. POSTSECONDARY EDUCATIONDIVISION 10. PRIVATE POSTSECONDARY AND HIGHER EDUCATION INSTITUTIONS

PART 59. PRIVATE POSTSECONDARY AND HIGHER EDUCATION INSTITUTIONSCHAPTER 3. PRIVATE POSTSECONDARY INSTITUTIONS

ARTICLE 2.5. STUDENT PROTECTIONS

(Information regarding effective dates, repeals, etc. is provided subsequently in this document.)

§ 94316. Short title; findings and declaration

(a) This article shall be known and may be cited as the Maxine Waters School Reform and Student Protection Actof 1989.(b) The Legislature finds and declares that students have been substantially harmed and the public perception of

reputable institutions has been damaged because of the fraudulent, deceptive, and unfair conduct of some institutionsthat offer courses of instruction for a term of two years or less that are supposed to prepare students for employment invarious occupations. Students have been induced to enroll in these schools through various misrepresentations includingmisrepresentations related to the quality of education, the availability and quality of equipment and materials, thelanguage of instruction, and employment and salary opportunities. Some of the most egregious misrepresentations aremade by representatives who recruit students at places other than the institution's premises. Some students have beenenrolled who do not have the ability to benefit from the instruction. In addition, the quality of the education offered isoften inadequate to enable students to obtain jobs after the completion of instruction.(c) The Legislature further finds and declares that many students who enroll in these schools pay their tuition from

the proceeds of loans and grants guaranteed or provided by the state and federal governments. Students who leaveschools before the completion of instruction, often because of misrepresentations and inadequate instruction, do notreceive adequate refunds of tuition for the instruction not received. Students remain liable to repay student loans butare frequently unable to do so in part because they were unable to obtain the proper educational preparation for jobs.Students are also harmed by the closure of institutions, often caused by the fraud or mismanagement of the institution'soperators, because the students neither obtain the education promised nor a refund of tuition and the cost of materials.As a result of all of the foregoing, the state and federal governments spend many millions of dollars annually to satisfyloan guarantees for often inadequate and misrepresented vocational school courses.(d) It is the intent and purpose of this article to protect students and reputable institutions, assure appropriate

state control of business and operational standards, assure minimum standards for educational quality, prohibitmisrepresentations, require full disclosures, prohibit unfair dealing, and protect student rights. It is the intent and purposeof this article to save millions of dollars of taxpayer's funds from being misused to underwrite the activities of institutionsthat depart from the standards of fair dealing and the requirements of this article.(e) This article shall be liberally construed to effectuate its intent and achieve its purposes.

1990 Pocket Part Credit(s)

(Added by Stats.1989, c. 1239, § 4, operative Jan. 1, 1990.)

CHAPTER 3. PRIVATE POSTSECONDARY INSTITUTIONS

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§ 94316. Short title; findings and declaration, West's Ann.Cal.Educ.Code § 94316


REPEAL

<The heading of Chapter 3 is repealed by Stats.1989, c. 1307, § 3, operative Jan. 1, 1991. See Editorial Commentunder § 94300.>

<For another Chapter 3, added by Stats.1989, c. 1307, § 4, to be operative Jan. 1, 1991, see Chapter 3, PrivatePostsecondary and Vocational Institutions, commencing with § 94300, post.>

<Chapter 3 was added by Stats.1977, c. 1202, § 2.>

<Former Chapter 3, Private Postsecondary Institutions, consisting of §§ 94300 to 94327, enacted by Stats.1976, c.1010, § 2, was repealed by Stats.1977, c. 1202, § 1.>

INOPERATIVE DATE AND REPEAL

<Chapter 3 becomes inoperative on June 30, 1991 and is repealed on Jan. 1, 1992, under the terms of § 94350.>


<Article 2.5 was added by Stats.1989, c. 1239, § 4, operative Jan. 1, 1990. Under the terms of Stats.1989, c. 1239, § 12,Article 2.5 is to remain in full force and effect following the repeal of Chapter 3, Private Postsecondary Institutions,by Stats.1989, c. 1307, § 3, operative Jan. 1, 1991. See Editorial Comment under § 94300.>

HISTORICAL NOTES

HISTORICAL AND STATUTORY NOTES

1990 Pocket Part Historical and Statutory Notes

1989 Legislation

Section 12(b)(4) of Stats.1989, c. 1239 provides:

“(b) If this bill and SB 190 [Stats.1989, c. 1307] are both enacted before January 1, 1990, then the following shall occurregardless of the order of enactment:

“(4) Section 4 of this bill shall become operative on January 1, 1990, and shall remain in effect notwithstanding Section3 of SB 190 [Stats.1989, c. 1307].”

REFERENCES

CROSS REFERENCES

1990 Pocket Part Cross References

Failure to comply with this article, see § 69507.7.

End of Document © 2018 Thomson Reuters. No claim to original U.S. Government Works.

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§ 94319.2. Entrance test requirement; list of tests to be..., West's...


California Statutes Annotated - 1990West's Ann.Cal.Educ.Code § 94319.2

WEST'S ANNOTATED CALIFORNIA CODESEDUCATION CODE

TITLE 3. POSTSECONDARY EDUCATIONDIVISION 10. PRIVATE POSTSECONDARY AND HIGHER EDUCATION INSTITUTIONS

PART 59. PRIVATE POSTSECONDARY AND HIGHER EDUCATION INSTITUTIONSCHAPTER 3. PRIVATE POSTSECONDARY INSTITUTIONS


(Information regarding effective dates, repeals, etc. is provided subsequently in this document.)

§ 94319.2. Entrance test requirement; list of tests to be used; administration of test

(a) An institution shall not enter into an agreement for a course of instruction with a student unless the institution firstadministers to the student and the student passes a test that establishes the student's ability to benefit from the courseof instruction.(b)(1) No later than March 1, 1990, the superintendent shall publish a list of tests and their respective passing scores,

time limits, and testing rules, which shall be used by institutions, on and after that date, to test a student's ability tobenefit from a course of instruction. The superintendent shall indicate whether a particular test is generally applicable or,instead, is to be used only for one or more specific courses of instruction. From April 1, 1990, to June 30, 1991, inclusive,all institutions shall use one or more of the appropriate tests on that list in order to comply with subdivision (a). No laterthan July 1, 1990, the superintendent shall adopt the procedure that he or she will use in approving tests, the respectivepassing scores for those tests, testing time limits, and testing rules for purposes of paragraph (2).(2) Subject to subdivision (c), the superintendent shall approve, no later than July 1, 1991, each test and the passing score

for that test to be used to establish the student's ability to benefit from each course of instruction for which that test willbe used, as well as testing time limits and testing rules. On and after July 1, 1991, in order to comply with subdivision (a),each institution shall use only the tests, the respective passing scores for those tests, testing time limits, and testing rulesapproved by the superintendent pursuant to this paragraph, as may be subsequently modified by the superintendent.(3) The superintendent may approve nationally recognized standardized tests for use in testing a student's ability to

benefit from a particular course of instruction.(c) The institution shall have the burden of establishing to the superintendent's reasonable satisfaction that the test

is a reliable and valid indicator of a student's ability to benefit from the course of instruction when administered inaccordance with the test's instructions, rules, and time limits, that the minimum passing score is appropriate, and thatthe institution administers the test in accordance with the test's instructions, rules, and time limits.(d) The superintendent shall not approve any test unless the superintendent concludes that sufficient data derived from

reliable and valid studies and evaluations reasonably establish that the test is a reliable and valid indicator of a student'sability to benefit from the course of instruction.(e) The test shall be completed solely by the student. No institution or any person in any manner associated with the

institution shall (1) answer any of the test questions, or (2) provide any assistance whatsoever to the student in answeringtest questions. If a prospective student has failed a test, no institution shall administer another test to that prospectivestudent for at least 60 days. Any subsequent test administered by an institution to the same prospective student shall besubstantially different than the preceding test and shall be approved by the superintendent as provided in this section.

1990 Pocket Part Credit(s)

(Added by Stats.1989, c. 1239, § 4, operative Jan. 1, 1990.)

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§ 94319.2. Entrance test requirement; list of tests to be..., West's...


CHAPTER 3. PRIVATE POSTSECONDARY INSTITUTIONS

REPEAL

<The heading of Chapter 3 is repealed by Stats.1989, c. 1307, § 3, operative Jan. 1, 1991. See Editorial Commentunder § 94300.>

<For another Chapter 3, added by Stats.1989, c. 1307, § 4, to be operative Jan. 1, 1991, see Chapter 3, PrivatePostsecondary and Vocational Institutions, commencing with § 94300, post.>

<Chapter 3 was added by Stats.1977, c. 1202, § 2.>

<Former Chapter 3, Private Postsecondary Institutions, consisting of §§ 94300 to 94327, enacted by Stats.1976, c.1010, § 2, was repealed by Stats.1977, c. 1202, § 1.>

INOPERATIVE DATE AND REPEAL

<Chapter 3 becomes inoperative on June 30, 1991 and is repealed on Jan. 1, 1992, under the terms of § 94350.>


<Article 2.5 was added by Stats.1989, c. 1239, § 4, operative Jan. 1, 1990. Under the terms of Stats.1989, c. 1239, § 12,Article 2.5 is to remain in full force and effect following the repeal of Chapter 3, Private Postsecondary Institutions,by Stats.1989, c. 1307, § 3, operative Jan. 1, 1991. See Editorial Comment under § 94300.>


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§ 94800. Short title, CA EDUC § 94800


West's Annotated California CodesEducation Code (Refs & Annos)

Title 3. Postsecondary Education (Refs & Annos)Division 10. Private Postsecondary and Higher Education Institutions (Refs & Annos)

Part 59. Private Postsecondary and Higher Education Institutions (Refs & Annos)Chapter 8. Private Postsecondary Institutions (Refs & Annos)

Article 1. General Provisions (Refs & Annos)

West's Ann.Cal.Educ.Code § 94800

§ 94800. Short title

Effective: January 1, 2010Currentness

This chapter shall be known, and may be cited, as the California Private Postsecondary Education Act of 2009.

Credits(Added by Stats.2009, c. 310 (A.B.48), § 6.)

West's Ann. Cal. Educ. Code § 94800, CA EDUC § 94800Current with urgency legislation through Ch. 1016 of 2018 Reg.Sess, and all propositions on 2018 ballot.


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§ 94801. Legislative findings and declarations, CA EDUC § 94801





Article 1. General Provisions (Refs & Annos)


§ 94801. Legislative findings and declarations


The Legislature finds and declares all of the following:

(a) In 2013, more than 300,000 Californians attended more than 1,100 private postsecondary schools in California.

(b) Private postsecondary schools can complement the public education system and help develop a trained workforce tomeet the demands of California businesses and the economy; however, concerns about the value of degrees and diplomasissued by private postsecondary schools, and the lack of protections for private postsecondary school students andconsumers of those schools' services, have highlighted the need for strong state-level oversight of private postsecondaryschools.

(c) Numerous reports and studies have concluded that California's previous attempts at regulatory oversight of privatepostsecondary schools under the Department of Consumer Affairs have consistently failed to ensure student protectionsor provide effective oversight of private postsecondary schools.

(d) It is the intent of the Legislature in continuing the operation of this chapter for two years until January 1, 2017, toensure all of the following:

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

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

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

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

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§ 94801. Legislative findings and declarations, CA EDUC § 94801


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

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

(e) The Legislature advises future policymakers to continually and carefully evaluate this chapter and its administrationand enforcement. Where there are deficiencies in the law or regulatory oversight, the Governor and the Legislatureshould act quickly to correct them.

Credits(Added by Stats.2009, c. 310 (A.B.48), § 6. Amended by Stats.2014, c. 840 (S.B.1247), § 1, eff. Jan. 1, 2015.)



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§ 94811. Ability-to-benefit student, CA EDUC § 94811





Article 3. Definitions (Refs & Annos)


§ 94811. Ability-to-benefit student


“Ability-to-benefit student” means a student who does not have a certificate of graduation from a school providingsecondary education, or a recognized equivalent of that certificate.




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§ 94818. Avocational education, CA EDUC § 94818







§ 94818. Avocational education


“Avocational education” means education offered for the purpose of personal entertainment, pleasure, or enjoyment.




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§ 94857. Postsecondary education, CA EDUC § 94857







§ 94857. Postsecondary education


“Postsecondary education” means a formal institutional educational program whose curriculum is designed primarilyfor students who have completed or terminated their secondary education or are beyond the compulsory age of secondaryeducation, including programs whose purpose is academic, vocational, or continuing professional education.




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§ 94858. Private postsecondary educational institution, CA EDUC § 94858







§ 94858. Private postsecondary educational institution


“Private postsecondary educational institution” means a private entity with a physical presence in this state that offerspostsecondary education to the public for an institutional charge.




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§ 94874. Institutions exempt from chapter, CA EDUC § 94874





Article 4. Exemptions (Refs & Annos)


§ 94874. Institutions exempt from chapter


Except as provided in Sections 94874.2 and 94874.7, the following are exempt from this chapter:

(a) An institution that offers solely avocational or recreational educational programs.

(b)(1) An institution offering educational programs sponsored by a bona fide trade, business, professional, or fraternalorganization, solely for that organization's membership.

(2)(A) Except as provided in subparagraph (B), a bona fide organization, association, or council that offerspreapprenticeship training programs, on behalf of one or more Division of Apprenticeship Standards-approved labor-management apprenticeship programs that satisfies one of the following conditions:

(i) It is not on the Eligible Training Provider List established and maintained by the California Workforce DevelopmentBoard but has met the requirements for placement on the list.

(ii) It is on the Eligible Training Provider List established and maintained by the California Workforce DevelopmentBoard and meets the requirements for continued listing.

(B) If an organization, association, or council has been removed from the Eligible Training Provider List establishedand maintained by the California Workforce Development Board for failure to meet performance standards, it is notexempt until it meets all applicable performance standards.

(c) A postsecondary educational institution established, operated, and governed by the federal government or by thisstate or its political subdivisions.

(d) An institution offering either of the following:

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(1) Test preparation for examinations required for admission to a postsecondary educational institution.

(2) Continuing education or license examination preparation, if the institution or the program is approved, certified, orsponsored by any of the following:

(A) A government agency, other than the bureau, that licenses persons in a particular profession, occupation, trade, orcareer field.

(B) A state-recognized professional licensing body, such as the State Bar of California, that licenses persons in a particularprofession, occupation, trade, or career field.

(C) A bona fide trade, business, or professional organization.

(e)(1) An institution owned, controlled, and operated and maintained by a religious organization lawfully operating asa nonprofit religious corporation pursuant to Part 4 (commencing with Section 9110) of Division 2 of Title 1 of theCorporations Code, that meets all of the following requirements:

(A) The instruction is limited to the principles of that religious organization, or to courses offered pursuant to Section2789 of the Business and Professions Code.

(B) The diploma or degree is limited to evidence of completion of that education.

(2) An institution operating under this subdivision shall offer degrees and diplomas only in the beliefs and practices ofthe church, religious denomination, or religious organization.

(3) An institution operating under this subdivision shall not award degrees in any area of physical science.

(4) Any degree or diploma granted under this subdivision shall contain on its face, in the written description of the titleof the degree being conferred, a reference to the theological or religious aspect of the degree's subject area.

(5) A degree awarded under this subdivision shall reflect the nature of the degree title, such as “associate of religiousstudies,” “bachelor of religious studies,” “master of divinity,” or “doctor of divinity.”

(f) An institution that does not award degrees and that solely provides educational programs for total charges of twothousand five hundred dollars ($2,500) or less when no part of the total charges is paid from state or federal studentfinancial aid programs. The bureau may adjust this cost threshold based upon the California Consumer Price Indexand post notification of the adjusted cost threshold on its Internet Web site, as the bureau determines, through thepromulgation of regulations, that the adjustment is consistent with the intent of this chapter.

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(g) A law school that is accredited by the Council of the Section of Legal Education and Admissions to the Bar of theAmerican Bar Association or a law school or law study program that is subject to the approval, regulation, and oversightof the Committee of Bar Examiners, pursuant to Sections 6046.7 and 6060.7 of the Business and Professions Code.

(h) A nonprofit public benefit corporation that satisfies all of the following criteria:

(1) Is qualified under Section 501(c)(3) of the United States Internal Revenue Code. 1

(2) Is organized specifically to provide workforce development or rehabilitation services.

(3) Is accredited by an accrediting organization for workforce development or rehabilitation services recognized by theDepartment of Rehabilitation.

(i) An institution that is accredited by the Accrediting Commission for Senior Colleges and Universities, WesternAssociation of Schools and Colleges, or the Accrediting Commission for Community and Junior Colleges, WesternAssociation of Schools and Colleges.

(j) Flight instruction providers or programs that provide flight instruction pursuant to Federal Aviation Administrationregulations and meet both of the following criteria:

(1) The flight instruction provider or program does not require students to enter into written or oral contracts ofindebtedness.

(2) The flight instruction provider or program does not require or accept prepayment of instruction-related costs inexcess of two thousand five hundred dollars ($2,500).

(k)(1) An institution owned, controlled, operated, and maintained by a community-based organization, as defined inSection 7801 of Title 20 of the United States Code, as that section exists on March 1, 2017, that satisfies all of thefollowing criteria:

(A) The institution has programs on or is applying for some or all of their programs to be on the Eligible TrainingProvider List established and maintained by the California Workforce Development Board.

(B) The institution is registered as a nonprofit entity qualified under Section 501(c)(3) of the federal Internal RevenueCode.

(C) The institution does not offer degrees, as defined in Section 94830.

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(D) The institution does not offer educational programs designed to lead directly or specifically to positions in aprofession, occupation, trade, or career field requiring licensure, if bureau approval is required for the student to beeligible to sit for licensure.

(E) The institution would not otherwise be subject to oversight of the bureau under this chapter if it did not receivefunding under the federal Workforce Innovation and Opportunity Act (29 U.S.C. Sec. 3101 et seq.). For purposes ofthis requirement, funds received through the federal Workforce Innovation and Opportunity Act (29 U.S.C. Sec. 3101et seq.) do not count towards the total referenced in subdivision (f) or any other fee charge limitation condition for anexemption from this chapter.

(F) The institution can provide a letter from the local workforce development board that demonstrates the institutionhas met the initial criteria of that board.

(2) An institution granted an exemption pursuant to paragraph (1) shall comply with all of the following requirements:

(A) The institution shall provide to the Employment Development Department all required tracking informationand data necessary to comply with performance reporting requirements under the federal Workforce Innovation andOpportunity Act, codified in Chapter 32 (commencing with Section 3101) of Title 29 of the United States Code, forprograms on the Eligible Training Provider List.

(B) The institution shall comply with the Eligible Training Provider List policy developed by the California WorkforceDevelopment Board.

(C) The institution shall not charge a student who is a recipient of funding under the federal Workforce Innovation andOpportunity Act (29 U.S.C. Sec. 3101 et seq.) any institutional charges, as defined in Section 94844, for attending andparticipating in the program.

Credits(Added by Stats.2009, c. 310 (A.B.48), § 6. Amended by Stats.2011, c. 309 (S.B.619), § 1, eff. Sept. 21, 2011; Stats.2014,c. 840 (S.B.1247), § 9, eff. Jan. 1, 2015; Stats.2015, c. 558 (A.B.509), § 1, eff. Jan. 1, 2016; Stats.2016, c. 593 (S.B.1192),§ 5, eff. Jan. 1, 2017; Stats.2017, c. 260 (A.B.868), § 1, eff. Jan. 1, 2018.)

Footnotes1 Internal Revenue Code sections are in Title 26 of the U.S.C.A.



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§ 94875. Bureau for Private Postsecondary Education;..., CA EDUC § 94875





Article 5. Bureau Powers and Duties (Refs & Annos)


§ 94875. Bureau for Private Postsecondary Education;continuation; exercise of powers and duties; protection of the public


The Bureau for Private Postsecondary Education, as established by Section 6 of Chapter 635 of the Statutes of 2007,is continued in existence and shall commence operations. This chapter establishes the functions and responsibilities ofthe bureau, for the purposes of Section 6 of Chapter 635 of the Statutes of 2007. The bureau shall regulate privatepostsecondary educational institutions through the powers granted, and duties imposed, by this chapter. In exercisingits powers, and performing its duties, the protection of the public shall be the bureau's highest priority. If protection ofthe public is inconsistent with other interests sought to be promoted, the protection of the public shall be paramount.




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§ 94902. Enrollment solely by enrollment agreement; requirements, CA EDUC § 94902





Article 11. Enrollment Agreements and Disclosures (Refs & Annos)


§ 94902. Enrollment solely by enrollment agreement; requirements


(a) A student shall enroll solely by means of executing an enrollment agreement. The enrollment agreement shall besigned by the student and by an authorized employee of the institution.

(b) An enrollment agreement is not enforceable unless all of the following requirements are met:

(1) The student has received the institution's catalog and School Performance Fact Sheet prior to signing the enrollmentagreement.

(2) At the time of the execution of the enrollment agreement, the institution held a valid approval to operate.

(3) Prior to the execution of the enrollment agreement, the student and the institution have signed and dated theinformation required to be disclosed in the Student Performance Fact Sheet pursuant to subdivisions (a) to (d), inclusive,of Section 94910. Each of these items in the Student Performance Fact Sheet shall include a line for the student to initialand shall be initialed and dated by the student.

(c) A student shall receive a copy of the signed enrollment agreement, in writing or electronically, regardless of whethertotal charges are paid by the student.




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§ 94904. Independently administered examination; required..., CA EDUC § 94904





Article 11. Enrollment Agreements and Disclosures (Refs & Annos)


§ 94904. Independently administered examination; required score; listof acceptable examinations and passing scores; alternative examination


(a) Except as provided in subdivision (c), before an ability-to-benefit student may execute an enrollment agreement,the institution shall have the student take an independently administered examination from the list of examinationsprescribed by the United States Department of Education pursuant to Section 484(d) of the federal Higher EducationAct of 1965 (20 U.S.C. Sec. 1070a et seq.). The student shall not enroll unless the student achieves a score, as specifiedby the United States Department of Education, demonstrating that the student may benefit from the education andtraining being offered.

(b) If the United States Department of Education does not have a list of relevant examinations that pertain to the intendedoccupational training, the bureau may publish its own list of acceptable examinations and required passing scores.

(c) The bureau shall, on or before July 1, 2016, review the list of examinations prescribed by the United States Departmentof Education. If the bureau determines there is no examination on the list appropriate for ability-to-benefit students withlimited English proficiency, the bureau shall approve an alternative examination for these students. When approving thealternative examination, the bureau may consider the Comprehensive Adult Student Assessment System examination.

Credits(Added by Stats.2009, c. 310 (A.B.48), § 6. Amended by Stats.2011, c. 167 (A.B.1013), § 1; Stats.2014, c. 840 (S.B.1247),§ 24, eff. Jan. 1, 2015; Stats.2015, c. 560 (A.B.752), § 1, eff. Jan. 1, 2016.)



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§ 71770. Admissions Standards and Transferred Credits Policy., 5 CA ADC § 71770


Barclays Official California Code of Regulations CurrentnessTitle 5. Education

Division 7.5. Private Postsecondary EducationChapter 3. Institutional Operating Standards

Article 2. Admissions and Academic Achievement Standards

5 CCR § 71770

§ 71770. Admissions Standards and Transferred Credits Policy.

(a) The institution shall establish specific written standards for student admissions for each educational program. Thesestandards shall be related to the particular educational program. An institution shall not admit any student who isobviously unqualified or who does not appear to have a reasonable prospect of completing the program. In addition toany specific standards for an educational program, the admissions standards must specify as applicable that:

(1) Each student admitted to an undergraduate degree program, or a diploma program, shall possess a high schooldiploma or its equivalent, or otherwise successfully take and pass the relevant examination as required by section94904 of the Code.

(2) Each student admitted into a post-baccalaureate degree program shall possess a bachelor's degree or itsequivalent. If a graduate program leads to a profession or an occupation requiring state licensure and the licensingagency does not require that a member of the profession or occupation possess a Bachelor's degree or its equivalent,this subdivision does not apply.

(b) The institution shall specify the maximum credit it will transfer from another institution for each educationalprogram, and the basis upon which the transferred credit will be awarded.

(1) Except as limited by subdivision (c) of this section, a maximum of 75 percent of the units or credit that may beapplied toward the award of a bachelor's degree may be derived from a combination of any or both of the following:

(A) Units earned at institutions approved by the Bureau, public or private institutions of higher learning accreditedby an accrediting association recognized by the U. S. Department of Education, or any institution of higher learning,including foreign institutions, if the institution offering the undergraduate program documents that the institutionof higher learning at which the units were earned offers degree programs equivalent to degree programs approvedby the Bureau or accredited by an accrediting association recognized by the U.S. Department of Education;

(B) Challenge examinations and standardized tests such as the College Level Placement Tests (CLEP) for specificacademic disciplines.

(2) No more than 20% of graduate semester units or the equivalent in other units awarded by another institutionmay be transferred for credit toward a Master's degree. An institution may accept transfer credits only from theinstitutions of higher learning described in subsection (1)(A).

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(3) No more than 30 graduate semester credits or its equivalent awarded by another institution may be creditedtoward a doctoral degree. This subdivision does not apply to graduate programs that lead to a profession or anoccupation requiring state licensure where the licensing agency has a regulation permitting a different standard.

(c) If credit for prior experiential learning is to be granted, the policy for granting such credit shall be included in theinstitution's catalog.

(1) An institution may grant credit to a student for prior experiential learning only if:

(A) The prior learning is equivalent to a college or university level of learning;

(B) The learning experience demonstrates a balance between theory and practice and;

(C) The credit awarded for the prior learning experience directly relates to the student's degree program and isapplied in satisfaction of some of the degree requirements.

(2) Each college or university level learning experience for which credit is sought shall be documented by the studentin writing.

(3) Each college or university level learning experience shall be evaluated by faculty qualified in that specific subjectarea who shall ascertain (1) to what college or university level learning the student's prior experience is equivalentand (2) how many credits toward a degree may be granted for that experience.

(4) The faculty evaluating the prior learning shall prepare a written report indicating all of the following:

(A) The documents in the student's record on which the faculty member relied in determining the nature of thestudent's prior experience;

(B) The bases for determining that the prior experience (i) is equivalent to college or university level learning and(ii) demonstrates a balance between theory and practice; and

(C) The bases for determining (i) to what college or university level the experience is equivalent and (ii) the propernumber of credits to be awarded toward the degree for that experience.

(5)(A) The institution shall designate at least one administrator to be responsible for the review of facultydeterminations regarding the award of credit for prior experiential learning.

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(B) The administrator shall document the institution's periodic review of faculty evaluations to assure that the facultywritten evaluations and awards of credit comply with this section and the institution's policies and are consistent.

(6) The amount of credit awarded for prior experiential learning shall not be related to the amount charged thestudent for the assessment process.

(7)(A) Of the first 60 semester credits awarded a student in an undergraduate program, no more than 15 semestercredits may be awarded for prior experiential learning.

(B) Of the second 60 semester units (i.e., credits 61 to 120) awarded a student in an undergraduate program, nomore than 15 semester credits may be awarded for prior experiential learning.

(C) Of the first 30 semester credits awarded a student in a graduate program, no more than 6 semester credits maybe awarded for prior experiential learning.

(D) Of the second 30 semester credits (i.e., credits 31 to 60) awarded a student in a graduate program, no more than3 semester credits may be awarded for prior experiential learning.

(E) No credit for experiential learning may be awarded after a student has obtained 60 semester credits in a graduateprogram.

Note: Authority cited: Sections 94803, 94877 and 94885, Education Code. Reference: Sections 94885 and 94909,Education Code.

HISTORY

1. New section filed 8-17-92 as an emergency; operative 8-17-92 (Register 92, No. 34). A Certificate of Compliance mustbe transmitted to OAL 2-13-93 pursuant to Education Code section 94337(a) or emergency language will be repealedby operation of law on the following day.

2. Certificate of Compliance as to 8-17-92 order transmitted to OAL on 2-3-93; disapproved by OAL on 3-24-93 (Register93, No. 14).

3. New section refiled 4-12-93 as an emergency; operative 4-12-93 (Register 93, No. 16). A Certificate of Compliance mustbe transmitted to OAL 10-9-93 pursuant to Education Code section 94337(a) or emergency language will be repealedby operation of law on the following day.

4. Certificate of Compliance as to 4-12-93 order transmitted to OAL on 10-6-93; disapproved by OAL on 11-22-93(Register 93, No. 49).

5. New section refiled 11-17-93 as an emergency; operative 11-17-93 (Register 93, No. 47). A Certificate of Compliancemust be transmitted to OAL by 5-16-94 or emergency language will be repealed by operation of law on the following day.

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6. Certificate of Compliance as to 11-17-93 order transmitted to OAL with amendment of subsection (a) 3-11-94 andfiled 4-19-94 (Register 94, No. 16).

7. Renumbering and amendment of former chapter 2, article 12 heading to chapter 3, article 2 (sections 71770-71865)and amendment of section heading, section and Note filed 2-1-2010 as an emergency; operative 2-1-2010 (Register 2010,No. 6). A Certificate of Compliance must be transmitted to OAL by 8-2-2010 or emergency language will be repealedby operation of law on the following day.

8. Renumbering and amendment of former chapter 2, article 12 heading to chapter 3, article 2 (sections 71770-71865)and amendment of section heading, section and Note refiled 7-30-2010 as an emergency; operative 7-30-2010 (Register2010, No. 31). A Certificate of Compliance must be transmitted to OAL by 10-28-2010 or emergency language will berepealed by operation of law on the following day.

9. Editorial correction of Histories 1 and 3 (Register 2010, No. 34).

10. Certificate of Compliance as to 7-30-2010 order, including further amendment of subsection (b)(2), transmitted toOAL 10-7-2010 and filed 11-18-2010 (Register 2010, No. 47).

This database is current through 9/21/18 Register 2018, No. 38

5 CCR § 71770, 5 CA ADC § 71770


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STATE DEPARTMENTS--EDUCATION--EXAMINATIONS..., 2011 Cal. Legis. Serv....


2011 Cal. Legis. Serv. Ch. 167 (A.B. 1013) (WEST)

CALIFORNIA 2011 LEGISLATIVE SERVICE

2011 Portion of 2011-2012 Regular Session

Additions are indicated by Text; deletions by* * * .

Vetoes are indicated by Text ;stricken material by Text .

CHAPTER 167A.B. No. 1013

STATE DEPARTMENTS--EDUCATION--EXAMINATIONS AND EXAMINERS

AN ACT to amend Sections 94904 and 94920 of the Education Code, relating to private postsecondary education.

[Filed with Secretary of State August 3, 2011.]

LEGISLATIVE COUNSEL'S DIGEST

AB 1013, Committee on Higher Education. Private postsecondary education.

Existing law establishes the Bureau for Private Postsecondary Education in the Department of Consumer Affairs.

Existing law imposes various requirements upon the private institutions subject to the act in order to ensureminimum standards of instructional quality and institutional stability, including a requirement that an ability-to-benefit student, as defined, must take and pass an independently administered examination from the list of

examinations prescribed by the United States Department of Education before executing an enrollment agreement.

This bill would provide that if the United States Department of Education doesnot have a list of relevant examinations that pertain to the intended occupational

training, the bureau may publish its own list of acceptable examinations.

Existing law requires institutions that do not participate in the federal student financial aidprograms to refund to a student 100% of the amount paid for institutional charges, less a

reasonable deposit or application fee, as specified, if notice of cancellation is made throughattendance at the first class session, or the 7th class day after enrollment, whichever is later.

This bill would reduce the time period during which the notice of cancellation maybe made from the 7th class day after enrollment to the 7th day after enrollment.

The people of the State of California do enact as follows:

SECTION 1. Section 94904 of the Education Code is amended to read:

<< CA EDUC § 94904 >>

94904. (a) Before an ability-to-benefit student may execute an enrollment agreement, the institution shall have thestudent take an independently administered examination from the list of examinations prescribed by the United StatesDepartment of Education pursuant to Section 484(d) of the federal Higher Education Act of 1965 (20 U.S.C. Sec. 1070aet seq.) as it is, from time to time, amended. The student shall not enroll unless the student achieves a score, as specifiedA-23


STATE DEPARTMENTS--EDUCATION--EXAMINATIONS..., 2011 Cal. Legis. Serv....


by the United States Department of Education, demonstrating that the student may benefit from the education andtraining being offered.

(b) If the United States Department of Education does not have a list of relevant examinations that pertain to the intendedoccupational training, the bureau may publish its own list of acceptable examinations.

SEC. 2. Section 94920 of the Education Code is amended to read:

<< CA EDUC § 94920 >>

94920. An institution that does not participate in the federal student financial aid programs shall do all of the following:

(a) The institution shall advise each student that a notice of cancellation shall be in writing, and that a withdrawal maybe effectuated by the student's written notice or by the student's conduct, including, but not necessarily limited to, astudent's lack of attendance.

(b) Institutions shall refund 100 percent of the amount paid for institutional charges, less a reasonable deposit orapplication fee not to exceed two hundred fifty dollars ($250), if notice of cancellation is made through attendance atthe first class session, or the seventh * * * day after enrollment, whichever is later.

(c) The bureau may adopt by regulation a different method of calculation for instruction delivered by other means,including, but not necessarily limited to, distance education.

(d) The institution shall have a refund policy for the return of unearned institutional charges if the student cancels anenrollment agreement or withdraws during a period of attendance. The refund policy for students who have completed60 percent or less of the period of attendance shall be a pro rata refund.

(e) The institution shall pay or credit refunds within 45 days of a student's cancellation or withdrawal.


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§ 1091. Student eligibility, 20 USCA § 1091


United States Code AnnotatedTitle 20. Education

Chapter 28. Higher Education Resources and Student Assistance (Refs & Annos)Subchapter IV. Student Assistance (Refs & Annos)

Part G. General Provisions Relating to Student Assistance Programs (Refs & Annos)

20 U.S.C.A. § 1091

§ 1091. Student eligibility

Effective: December 18, 2015Currentness

(a) In general

In order to receive any grant, loan, or work assistance under this subchapter, a student must--

(1) be enrolled or accepted for enrollment in a degree, certificate, or other program (including a program of studyabroad approved for credit by the eligible institution at which such student is enrolled) leading to a recognizededucational credential at an institution of higher education that is an eligible institution in accordance with theprovisions of section 1094 of this title, except as provided in subsections (b)(3) and (b)(4), and not be enrolled in anelementary or secondary school;

(2) if the student is presently enrolled at an institution, be maintaining satisfactory progress in the course of study thestudent is pursuing in accordance with the provisions of subsection (c);

(3) not owe a refund on grants previously received at any institution under this subchapter, or be in default on anyloan from a student loan fund at any institution provided for in part E, or a loan made, insured, or guaranteed by theSecretary under this subchapter for attendance at any institution;

(4) file with the Secretary, as part of the original financial aid application process, a certification, which need not benotarized, but which shall include--

(A) a statement of educational purpose stating that the money attributable to such grant, loan, or loan guaranteewill be used solely for expenses related to attendance or continued attendance at such institution; and

(B) such student's social security number;

(5) be a citizen or national of the United States, a permanent resident of the United States, or able to provide evidencefrom the Immigration and Naturalization Service that he or she is in the United States for other than a temporarypurpose with the intention of becoming a citizen or permanent resident; and

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(6) if the student has been convicted of, or has pled nolo contendere or guilty to, a crime involving fraud in obtainingfunds under this subchapter, have completed the repayment of such funds to the Secretary, or to the holder in the caseof a loan under this subchapter obtained by fraud.

(b) Eligibility for student loans

(1) In order to be eligible to receive any loan under this subchapter (other than a loan under section 1078-2 or 1078-3of this title, or under section 1078-8 of this title pursuant to an exercise of discretion under section 1087tt of this title)for any period of enrollment, a student who is not a graduate or professional student (as defined in regulations of theSecretary), and who is enrolled in a program at an institution which has a participation agreement with the Secretary tomake awards under subpart 1 of part A of this subchapter, shall--

(A) (i) have received a determination of eligibility or ineligibility for a Pell Grant under such subpart 1 for such period ofenrollment; and (ii) if determined to be eligible, have filed an application for a Pell Grant for such enrollment period; or

(B) have (i) filed an application with the Pell Grant processor for such institution for such enrollment period, and (ii)received from the financial aid administrator of the institution a preliminary determination of the student's eligibilityor ineligibility for a grant under such subpart 1.

(2) In order to be eligible to receive any loan under section 1078-1 1 of this title for any period of enrollment, a studentshall--

(A) have received a determination of need for a loan under section 1078(a)(2)(B) of this title;

(B) if determined to have need for a loan under section 1078 of this title, have applied for such a loan; and

(C) has applied for a loan under section 1078-8 of this title, if such student is eligible to apply for such a loan.

(3) A student who--

(A) is carrying at least one-half the normal full-time work load for the course of study that the student is pursuing,as determined by an eligible institution, and

(B) is enrolled in a course of study necessary for enrollment in a program leading to a degree or certificate,

shall be, notwithstanding paragraph (1) of subsection (a), eligible to apply for loans under part B or D of this subchapter.The eligibility described in this paragraph shall be restricted to one 12-month period.

(4) A student who--

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(A) is carrying at least one-half the normal full-time work load for the course of study the student is pursuing, asdetermined by the institution, and

(B) is enrolled or accepted for enrollment in a program at an eligible institution necessary for a professional credentialor certification from a State that is required for employment as a teacher in an elementary or secondary school inthat State,

shall be, notwithstanding paragraph (1) of subsection (a), eligible to apply for loans under part B, D, or E or work-studyassistance under part C of this subchapter.

(5) Notwithstanding any other provision of this subsection, no incarcerated student is eligible to receive a loan underthis subchapter.

(c) Satisfactory progress

(1) For the purpose of subsection (a)(2), a student is maintaining satisfactory progress if--

(A) the institution at which the student is in attendance, reviews the progress of the student at the end of each academicyear, or its equivalent, as determined by the institution, and

(B) the student has a cumulative C average, or its equivalent or academic standing consistent with the requirementsfor graduation, as determined by the institution, at the end of the second such academic year.

(2) Whenever a student fails to meet the eligibility requirements of subsection (a)(2) as a result of the application ofthis subsection and subsequent to that failure the student has academic standing consistent with the requirements forgraduation, as determined by the institution, for any grading period, the student may, subject to this subsection, againbe eligible under subsection (a)(2) for a grant, loan, or work assistance under this subchapter.

(3) Any institution of higher education at which the student is in attendance may waive the provisions of paragraph (1)or paragraph (2) of this subsection for undue hardship based on--

(A) the death of a relative of the student,

(B) the personal injury or illness of the student, or

(C) special circumstances as determined by the institution.

(d) Students who are not high school graduates

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(1) Student eligibility

In order for a student who does not have a certificate of graduation from a school providing secondary education, orthe recognized equivalent of such certificate, to be eligible for any assistance under subparts 1, 3, and 4 of part A andparts B, C, D, and E of this subchapter, the student shall meet the requirements of one of the following subparagraphs:

(A) The student is enrolled in an eligible career pathway program and meets one of the following standards:

(i) The student shall take an independently administered examination and shall achieve a score, specified bythe Secretary, demonstrating that such student can benefit from the education or training being offered. Suchexamination shall be approved by the Secretary on the basis of compliance with such standards for development,administration, and scoring as the Secretary may prescribe in regulations.

(ii) The student shall be determined as having the ability to benefit from the education or training in accordancewith such process as the State shall prescribe. Any such process described or approved by a State for the purposesof this section shall be effective 6 months after the date of submission to the Secretary unless the Secretarydisapproves such process. In determining whether to approve or disapprove such process, the Secretary shalltake into account the effectiveness of such process in enabling students without secondary school diplomas orthe equivalent thereof to benefit from the instruction offered by institutions utilizing such process, and shall alsotake into account the cultural diversity, economic circumstances, and educational preparation of the populationsserved by the institutions.

(iii) The student shall be determined by the institution of higher education as having the ability to benefit fromthe education or training offered by the institution of higher education upon satisfactory completion of 6 credithours or the equivalent coursework that are applicable toward a degree or certificate offered by the institutionof higher education.

(B) The student has completed a secondary school education in a home school setting that is treated as a homeschool or private school under State law.

(2) Eligible career pathway program

In this subsection, the term “eligible career pathway program” means a program that combines rigorous and high-quality education, training, and other services that--

(A) aligns with the skill needs of industries in the economy of the State or regional economy involved;

(B) prepares an individual to be successful in any of a full range of secondary or postsecondary educationoptions, including apprenticeships registered under the Act of August 16, 1937 (commonly known as the “NationalApprenticeship Act”; 50 Stat. 664, chapter 663; 29 U.S.C. 50 et seq.) (referred to individually in this chapter as an

“apprenticeship”, except in section 171); 2

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(C) includes counseling to support an individual in achieving the individual's education and career goals;

(D) includes, as appropriate, education offered concurrently with and in the same context as workforce preparationactivities and training for a specific occupation or occupational cluster;

(E) organizes education, training, and other services to meet the particular needs of an individual in a manner thataccelerates the educational and career advancement of the individual to the extent practicable;

(F) enables an individual to attain a secondary school diploma or its recognized equivalent, and at least 1 recognizedpostsecondary credential; and

(G) helps an individual enter or advance within a specific occupation or occupational cluster.

(e) Certification for GSL eligibility

Each eligible institution may certify student eligibility for a loan by an eligible lender under part B of this subchapterprior to completing the review for accuracy of the information submitted by the applicant required by regulations issuedunder this subchapter, if--

(1) checks for the loans are mailed to the eligible institution prior to disbursements;

(2) the disbursement is not made until the review is complete; and

(3) the eligible institution has no evidence or documentation on which the institution may base a determination thatthe information submitted by the applicant is incorrect.

(f) Loss of eligibility for violation of loan limits

(1) No student shall be eligible to receive any grant, loan, or work assistance under this subchapter if the eligibleinstitution determines that the student fraudulently borrowed in violation of the annual loan limits under part B, part D,or part E of this subchapter in the same academic year, or if the student fraudulently borrowed in excess of the aggregatemaximum loan limits under such part B, part D, or part E.

(2) If the institution determines that the student inadvertently borrowed amounts in excess of such annual or aggregatemaximum loan limits, such institution shall allow the student to repay any amount borrowed in excess of such limitsprior to certifying the student's eligibility for further assistance under this subchapter.

(g) Verification of immigration status

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(1) In general

The Secretary shall implement a system under which the statements and supporting documentation, if required, of anindividual declaring that such individual is in compliance with the requirements of subsection (a)(5) shall be verifiedprior to the individual's receipt of a grant, loan, or work assistance under this subchapter.

(2) Special rule

The documents collected and maintained by an eligible institution in the admission of a student to the institutionmay be used by the student in lieu of the documents used to establish both employment authorization and identityunder section 1324a(b)(1)(B) of Title 8 to verify eligibility to participate in work-study programs under part C of thissubchapter.

(3) Verification mechanisms

The Secretary is authorized to verify such statements and supporting documentation through a data match, using anautomated or other system, with other Federal agencies that may be in possession of information relevant to suchstatements and supporting documentation.

(4) Review

In the case of such an individual who is not a citizen or national of the United States, if the statement describedin paragraph (1) is submitted but the documentation required under paragraph (2) is not presented or if thedocumentation required under paragraph (2)(A) is presented but such documentation is not verified under paragraph(3)--

(A) the institution--

(i) shall provide a reasonable opportunity to submit to the institution evidence indicating a satisfactoryimmigration status, and

(ii) may not delay, deny, reduce, or terminate the individual's eligibility for the grant, loan, or work assistance onthe basis of the individual's immigration status until such a reasonable opportunity has been provided; and

(B) if there are submitted documents which the institution determines constitute reasonable evidence indicating suchstatus--

(i) the institution shall transmit to the Immigration and Naturalization Service either photostatic or othersimilar copies of such documents, or information from such documents, as specified by the Immigration andNaturalization Service, for official verification,

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(ii) pending such verification, the institution may not delay, deny, reduce, or terminate the individual's eligibilityfor the grant, loan, or work assistance on the basis of the individual's immigration status, and

(iii) the institution shall not be liable for the consequences of any action, delay, or failure of the Service to conductsuch verification.

(h) Limitations of enforcement actions against institutions

The Secretary shall not take any compliance, disallowance, penalty, or other regulatory action against an institution ofhigher education with respect to any error in the institution's determination to make a student eligible for a grant, loan,or work assistance based on citizenship or immigration status--

(1) if the institution has provided such eligibility based on a verification of satisfactory immigration status by theImmigration and Naturalization Service,

(2) because the institution, under subsection (g)(4)(A)(i), was required to provide a reasonable opportunity to submitdocumentation, or

(3) because the institution, under subsection (g)(4)(B)(i), was required to wait for the response of the Immigration andNaturalization Service to the institution's request for official verification of the immigration status of the student.

(i) Validity of loan guarantees for loan payments made before immigration status verification completed

Notwithstanding subsection (h), if--

(1) a guaranty is made under this subchapter for a loan made with respect to an individual,

(2) at the time the guaranty is entered into, the provisions of subsection (h) had been complied with,

(3) amounts are paid under the loan subject to such guaranty, and

(4) there is a subsequent determination that, because of an unsatisfactory immigration status, the individual is noteligible for the loan,

the official of the institution making the determination shall notify and instruct the entity making the loan to cease furtherpayments under the loan, but such guaranty shall not be voided or otherwise nullified with respect to such paymentsmade before the date the entity receives the notice.

(j) Repealed. Pub.L. 110-315, Title IV, § 485(a)(4), Aug. 14, 2008, 122 Stat. 3288

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(k) Special rule for correspondence courses

A student shall not be eligible to receive grant, loan, or work assistance under this subchapter for a correspondencecourse unless such course is part of a program leading to an associate, bachelor or graduate degree.

(l) Courses offered through distance education

(1) Relation to correspondence courses

(A) In general

A student enrolled in a course of instruction at an institution of higher education that is offered principally throughdistance education and leads to a recognized certificate, or recognized associate, recognized baccalaureate, orrecognized graduate degree, conferred by such institution, shall not be considered to be enrolled in correspondencecourses.

(B) Exception

An institution of higher education referred to in subparagraph (A) shall not include an institution or school describedin section 2302(3)(C) of this title.

(2) Reductions of financial aid

A student's eligibility to receive grants, loans, or work assistance under this subchapter shall be reduced if a financialaid officer determines under the discretionary authority provided in section 1087tt of this title that distance educationresults in a substantially reduced cost of attendance to such student.

(3) Special rule

For award years beginning prior to July 1, 2008, the Secretary shall not take any compliance, disallowance, penalty, orother action based on a violation of this subsection against a student or an eligible institution when such action arisesout of such institution's prior award of student assistance under this subchapter if the institution demonstrates to thesatisfaction of the Secretary that its course of instruction would have been in conformance with the requirements ofthis subsection.

(m) Students with a first baccalaureate or professional degree

A student shall not be ineligible for assistance under parts B, C, D, and E of this subchapter because such student haspreviously received a baccalaureate or professional degree.

(n) Data base matching

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To enforce the Selective Service registration provisions of section 3811(f) of Title 50, the Secretary shall conduct database matches with the Selective Service, using common demographic data elements. Appropriate confirmation, throughan application output document or through other means, of any person's registration shall fulfill the requirement to filea separate statement of compliance. In the absence of a confirmation from such data matches, an institution may alsouse data or documents that support either the student's registration, or the absence of a registration requirement for thestudent, to fulfill the requirement to file a separate statement of compliance. The mechanism for reporting the resolutionof nonconfirmed matches shall be prescribed by the Secretary in regulations.

(o) Study abroad

Nothing in this chapter shall be construed to limit or otherwise prohibit access to study abroad programs approved bythe home institution at which a student is enrolled. An otherwise eligible student who is engaged in a program of studyabroad approved for academic credit by the home institution at which the student is enrolled shall be eligible to receivegrant, loan, or work assistance under this subchapter, without regard to whether such study abroad program is requiredas part of the student's degree program.

(p) Verification of social security number

The Secretary of Education, in cooperation with the Commissioner of the Social Security Administration, shall verifyany social security number provided by a student to an eligible institution under subsection (a)(4) and shall enforce thefollowing conditions:

(1) Except as provided in paragraphs (2) and (3), an institution shall not deny, reduce, delay, or terminate a student'seligibility for assistance under this part because social security number verification is pending.

(2) If there is a determination by the Secretary that the social security number provided to an eligible institution bya student is incorrect, the institution shall deny or terminate the student's eligibility for any grant, loan, or workassistance under this subchapter until such time as the student provides documented evidence of a social securitynumber that is determined by the institution to be correct.

(3) If there is a determination by the Secretary that the social security number provided to an eligible institution bya student is incorrect, and a correct social security number cannot be provided by such student, and a loan has beenguaranteed for such student under part B of this subchapter, the institution shall notify and instruct the lender andguaranty agency making and guaranteeing the loan, respectively, to cease further disbursements of the loan, but suchguaranty shall not be voided or otherwise nullified with respect to such disbursements made before the date that thelender and the guaranty agency receives such notice.

(4) Nothing in this subsection shall permit the Secretary to take any compliance, disallowance, penalty, or otherregulatory action against--

(A) any institution of higher education with respect to any error in a social security number, unless such error wasa result of fraud on the part of the institution; or

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(B) any student with respect to any error in a social security number, unless such error was a result of fraud onthe part of the student.

(q) Use of income data

(1) Matching with IRS

The Secretary, in cooperation with the Secretary of the Treasury, is authorized to obtain from the Internal RevenueService such information reported on Federal income tax returns by applicants, or by any other person whose financialinformation is required to be provided on the Federal student financial aid application, as the Secretary determinesis necessary for the purpose of--

(A) prepopulating the Federal student financial aid application described in section 1090 of this title; or

(B) verifying the information reported on such student financial aid applications.

(2) Consent

The Secretary may require that applicants for financial assistance under this subchapter provide a consent to thedisclosure of the data described in paragraph (1) as a condition of the student receiving assistance under thissubchapter. The parents of an applicant, in the case of a dependent student, or the spouse of an applicant, in the case ofan applicant who is married but files separately, may also be required to provide consent as a condition of the studentreceiving assistance under this subchapter.

(r) Suspension of eligibility for drug-related offenses

(1) In general

A student who is convicted of any offense under any Federal or State law involving the possession or sale of a controlledsubstance for conduct that occurred during a period of enrollment for which the student was receiving any grant, loan,or work assistance under this subchapter shall not be eligible to receive any grant, loan, or work assistance under thissubchapter from the date of that conviction for the period of time specified in the following table:

If convicted of an offense involving:

The possession of a controlledsubstance:

Ineligibility period is:

First offense...............................................................................

1 year

Second offense............................................................................

2 years

Third offense.............................................................................. Indefinite.

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The sale of a controlled substance:

Ineligibility period is:

First offense...............................................................................

2 years

Second offense............................................................................

Indefinite.

(2) Rehabilitation

A student whose eligibility has been suspended under paragraph (1) may resume eligibility before the end of theineligibility period determined under such paragraph if--

(A) the student satisfactorily completes a drug rehabilitation program that--

(i) complies with such criteria as the Secretary shall prescribe in regulations for purposes of this paragraph; and

(ii) includes two unannounced drug tests;

(B) the student successfully passes two unannounced drug tests conducted by a drug rehabilitation program thatcomplies with such criteria as the Secretary shall prescribe in regulations for purposes of subparagraph (A)(i); or

(C) the conviction is reversed, set aside, or otherwise rendered nugatory.

(3) Definitions

In this subsection, the term “controlled substance” has the meaning given the term in section 802(6) of Title 21.

(s) Students with intellectual disabilities

(1) Definitions

In this subsection the terms “comprehensive transition and postsecondary program for students with intellectualdisabilities” and “student with an intellectual disability” have the meanings given the terms in section 1140 of this title.

(2) Requirements

Notwithstanding subsections (a), (c), and (d), in order to receive any grant or work assistance under section 1070a ofthis title, subpart 3 of part A, or part C, a student with an intellectual disability shall--

(A) be enrolled or accepted for enrollment in a comprehensive transition and postsecondary program for studentswith intellectual disabilities at an institution of higher education;

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(B) be maintaining satisfactory progress in the program as determined by the institution, in accordance withstandards established by the institution; and

(C) meet the requirements of paragraphs (3), (4), (5), and (6) of subsection (a).

(3) Authority

Notwithstanding any other provision of law unless such provision is enacted with specific reference to this section,the Secretary is authorized to waive any statutory provision applicable to the student financial assistance programsunder section 1070a of this title, subpart 3 of part A, or part C (other than a provision of part F related to such aprogram), or any institutional eligibility provisions of this subchapter, as the Secretary determines necessary to ensurethat programs enrolling students with intellectual disabilities otherwise determined to be eligible under this subsectionmay receive such financial assistance.

(4) Regulations

Notwithstanding regulations applicable to grant or work assistance awards made under section 1070a of this title,subpart 3 of part A, and part C (other than a regulation under part F related to such an award), including with respectto eligible programs, instructional time, credit status, and enrollment status as described in section 1088 of this title,the Secretary shall promulgate regulations allowing programs enrolling students with intellectual disabilities otherwisedetermined to be eligible under this subsection to receive such awards.

(t) Data analysis on access to Federal student aid for certain populations

(1) Development of the system

Within one year of August 14, 2008, the Secretary shall analyze data from the FAFSA containing informationregarding the number, characteristics, and circumstances of students denied Federal student aid based on a drugconviction while receiving Federal aid.

(2) Results from analysis

The results from the analysis of such information shall be made available on a continuous basis via the Departmentwebsite and the Digest of Education Statistics.

(3) Data updating

The data analyzed under this subsection shall be updated at the beginning of each award year and at least oneadditional time during such award year.

(4) Report to Congress

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The Secretary shall prepare and submit to the authorizing committees, in each fiscal year, a report describing theresults obtained by the establishment and operation of the data system authorized by this subsection.

CREDIT(S)

(Pub.L. 89-329, Title IV, § 484, as added Pub.L. 99-498, Title IV, § 407(a), Oct. 17, 1986, 100 Stat. 1479; amendedPub.L. 99-603, Title I, § 121(a)(3), Nov. 6, 1986, 100 Stat. 3388; Pub.L. 100-50, § 15(7) to (9), June 3, 1987, 101 Stat.356, 357; Pub.L. 100-369, §§ 1, 2, 6, July 18, 1988, 102 Stat. 835, 836; Pub.L. 100-525, § 2(g), Oct. 24, 1988, 102 Stat.2611; Pub.L. 101-508, Title III, § 3005(a), Nov. 5, 1990, 104 Stat. 1388-27; Pub.L. 102-26, § 2(b), (c)(2), (d)(2)(A), Apr.9, 1991, 105 Stat. 123, 124; Pub.L. 102-73, Title VIII, § 801(a), July 25, 1991, 105 Stat. 359; Pub.L. 102-325, Title IV, §484(a), (b)(1), (c) to (h), July 23, 1992, 106 Stat. 615 to 619; Pub.L. 103-208, § 2(h)(13) to (25), Dec. 20, 1993, 107 Stat.2476, 2477; Pub.L. 103-382, Title III, § 360A, Oct. 20, 1994, 108 Stat. 3969; Pub.L. 104-208, Div. C, Title V, § 507(b),Sept. 30, 1996, 110 Stat. 3009-673; Pub.L. 105-244, Title IV, § 483(a) to (f)(1), Oct. 7, 1998, 112 Stat. 1735, 1736; Pub.L.109-171, Title VIII, §§ 8020(c), 8021, Feb. 8, 2006, 120 Stat. 178; Pub.L. 109-270, § 2(c)(2), Aug. 12, 2006, 120 Stat. 746;Pub.L. 110-315, Title IV, § 485(a), Aug. 14, 2008, 122 Stat. 3287; Pub.L. 111-39, Title IV, § 407(b)(4), July 1, 2009, 123Stat. 1950; Pub.L. 112-74, Div. F, Title III, § 309(c)(1), Dec. 23, 2011, 125 Stat. 1100; Pub.L. 113-235, Div. G, Title III,§ 309(a)(1), Dec. 16, 2014, 128 Stat. 2504; Pub.L. 114-113, Div. H, Title III, § 313(1), Dec. 18, 2015, 129 Stat. 2638.)

Footnotes1 Section 1078-1 of this title was repealed by Pub.L. 103-66, § 4047(b) to (d), except with respect to loans provided under that

section prior to Aug. 10, 1993. Subsequently, a new section 1078-1, relating to voluntary flexible agreements with guarantyagencies, was enacted by Pub.L. 105-244.

2 Section 171 may mean section 171 of the Workforce Innovation and Opportunity Act, Pub.L. 113-128, which is classifiedto 29 U.S.C.A. § 3226.

20 U.S.C.A. § 1091, 20 USCA § 1091Current through P.L. 115-231. Also includes P.L. 115-233 to 115-243. Title 26 current through P.L. 115-244.


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CERTIFICATE OF SERVICE Case Name: Pacific Coast Horseshoeing v.

Garfilo, et al. No. 18-15840

I hereby certify that on October 9, 2018, I electronically filed the following documents with the Clerk of the Court by using the CM/ECF system:

ANSWERING BRIEF OF DEFENDANTS-APPELLEES; ADDENDUM TO APPELLEES’ ANSWERING BRIEF

I certify that all participants in the case are registered CM/ECF users and that service will be accomplished by the CM/ECF system.

I declare under penalty of perjury under the laws of the State of California the foregoing is true and correct and that this declaration was executed on October 9, 2018, at San Francisco, California.

Susan Chiang s/ Susan Chiang Declarant Signature

SA2018101550 42061199.docx


pacific coast horseshoeing school, inc.; bob smith

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