360 Degree Education, LLC v. U.S. Department of Education

CourtDistrict Court, N.D. Texas
DecidedJune 21, 2024
Docket4:24-cv-00508
StatusUnknown

This text of 360 Degree Education, LLC v. U.S. Department of Education (360 Degree Education, LLC v. U.S. Department of Education) is published on Counsel Stack Legal Research, covering District Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
360 Degree Education, LLC v. U.S. Department of Education, (N.D. Tex. 2024).

Opinion

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS FORT WORTH DIVISION

360 DEGREES EDUCATION, LLC, ET AL.,

Plaintiffs,

v. No. 4:24-cv-00508-P

U.S. DEPARTMENT OF EDUCATION, ET AL.,

Defendants. MEMORANDUM OPINION & ORDER

Before the Court is Plaintiffs’ Motion for Temporary Restraining Order, Preliminary Injunction, and Stay. ECF No. 5. Having considered the Motion, briefs, hearing arguments, and applicable law, the Court concludes the Motion should be and hereby is GRANTED in part and DENIED in part. BACKGROUND A new Department of Education (the “Department”) rule goes into effect on July 1, 2024. The so-called “Bare Minimum Rule”1 will restrict federal student aid to vocational programs that require the minimum hours a state mandates for licensure in a given field. For instance, Texas requires a minimum of 500 hours for licensure as a massage therapist. If a massage therapy program requires 600 hours, students are free to attend—but they won’t qualify for federal student aid. This represents a sea-change from thirty years of established practice. Over the past three decades, the Department has enforced a “150% Rule,” which

1 Plaintiffs call the rule the “Bare Minimum Rule” to elucidate its purpose. See ECF No. 5. The Department calls it the “Revised Provision” because it was one revised provision within broader Final Regulations issued last October. See ECF No. 23 at 13. The Court adopts Plaintiffs’ nomenclature for clarity. provides access to federal funds so long as a program does not exceed 150% of a state’s hours requirement. See 34 C.F.R. § 668.14(b)(26)(ii)(A). Plaintiffs (“the Schools”) are a coalition of vocational schools with a member-program in Arlington, Texas. The Schools argue the Bare Minimum Rule exceeds the Department’s authority under the Higher Education Act of 1965 (“HEA”) and violates the Administrative Procedure Act (“APA”). Facing imminent enforcement of an allegedly unlawful rule, the Schools sued the Department in federal court on May 31, 2024. To maintain the status quo pending their claim’s resolution, the Schools subsequently sought preliminary injunctive relief. The Court conducted a hearing on their request for injunctive relief earlier this week. Having considered the arguments of counsel at that hearing, along with the Parties’ briefs and applicable legal authorities, the Court determines a limited preliminary injunction is warranted pending resolution of the Schools’ lawsuit. LEGAL STANDARD Preliminary injunctions are a “drastic and extraordinary remedy.” Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 165 (2010). A movant must show four things to get one: (1) a substantial likelihood of success on the merits, (2) a substantial threat of irreparable harm if the injunction is not issued, (3) that the threatened injury if the injunction is denied outweighs any harm that will result if the injunction is granted, and (4) that the grant of an injunction will not disserve the public interest. Mock v. Garland, 75 F.4th 563, 577 (5th Cir. 2023) (quoting Byrum v. Landreth, 556 F.3d 442, 445 (5th Cir. 2009)). Given their “drastic” nature, preliminary injunctions are awarded “only if the movant has clearly carried the burden of persuasion with respect to all four factors.” Allied Mktg. Grp., Inc. v. CDL Mktg., Inc., 878 F.2d 806, 809 (5th Cir. 1989). ANALYSIS As noted above, the Schools seek a temporary restraining order, preliminary injunction, and stay. See ECF No. 5. For reasons further explained below, the Court finds a limited preliminary injunction is warranted and thus constrains this Order to legal frameworks germane to preliminary injunctions. In doing so, the Court is mindful that preliminary injunctions “preserve the status quo” while a lawsuit is resolved. Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981). To obtain such relief, the Schools must carry their burden for each injunctive-relief factor enumerated above. See Allied Mktg., 878 F.2d at 809. As explained below, they do. A. The Schools demonstrate a substantial likelihood of success on the merits. The Schools must first demonstrate a “substantial likelihood of success on the merits.” Mock, 75 F.4th at 577. While they don’t have to prove “entitlement to summary judgment,” see Byrum, 566 F.3d at 446, they must still “present a substantial case on the merits.” See Alliance for Hippocratic Med. v. FDA, 78 F.4th 210, 242 (5th Cir. 2023) (cleaned up) (collecting cases), reversed on other grounds, FDA v. Alliance for Hippocratic Med., ___ U.S. ___, 2024 WL 2964140 (2024); see also Jefferson Cmty. Health Care Ctrs., Inc. v. Jefferson Parish, 849 F.3d 615, 626 (5th Cir. 2017) (“Though there is no particular degree of likelihood of success that is required in every case, the party seeking a preliminary injunction must establish at least some likelihood of success on the merits before the court may proceed to assess the remaining elements.”). The Schools raise three arguments that the Bare Minimum Rule is unlawful—one under the HEA and two under the APA. First, they argue the Department exceeded its authority under the HEA in promulgating the rule. See ECF No. 5 at 15–17. Specifically, they argue the Department prescribes conduct for educational institutions in a manner traditionally reserved for states. See id. at 16. Second, they argue the Bare Minimum Rule is arbitrary and capricious under the APA. See id. at 17–25. Third, they argue the Bare Minimum Rule violates the APA because, as issued, the rule was not the “logical outgrowth” of the Department’s Notice of Proposed Rulemaking (“NPRM”). See id. at 25– 29. The Court takes each in turn, careful to reiterate that any determination on this factor is not a determination that the Schools will or will not prevail at summary judgment for a given argument. See Byrum, 556 F.3d at 445. 1. The Schools do not establish a substantial likelihood of success on the merits for their challenge to the Department’s authority under the HEA. The Schools’ first argument hinges on the Department’s authority under the HEA. The HEA empowers the Department to “exercise any discretion, supervision, or control” over regulated entities “except to the extent authorized by law.” See 20 U.S.C. § 3403(b). The Schools say the Bare Minimum Rule “treats state minimums as federal maximums” and thus “contradicts this limitation by setting a maximum program length” for entities courting students who might receive federal student aid. See ECF No. 5 at 15. At base, the Schools argue the feds are attempting to usurp authority traditionally reserved for states—e.g., the hours required for licensure of certain regulated vocations. See id. As the Schools note, while federal law “includes an exception to § 3403(b) for ‘[s]ecretarial determinations made regarding the appropriate length of instruction for programs measured in clock hours,’ 20 U.S.C. § 1099c-1(e), the Bare Minimum Rule is not such a determination.” Id. at 16. Thus, because the Bare Minimum Rule applies to entities regardless of their time-registration model, the Schools argue it exceeds the Department’s authority and encroaches on the turf of state education regulators. See id.

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360 Degree Education, LLC v. U.S. Department of Education, Counsel Stack Legal Research, https://law.counselstack.com/opinion/360-degree-education-llc-v-us-department-of-education-txnd-2024.