People of the State of California v. DeVos

CourtDistrict Court, N.D. California
DecidedSeptember 29, 2021
Docket5:20-cv-01889
StatusUnknown

This text of People of the State of California v. DeVos (People of the State of California v. DeVos) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
People of the State of California v. DeVos, (N.D. Cal. 2021).

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 AMERICAN FEDERATION OF TEACHERS, Case No. 5:20-cv-00455-EJD et al., Re: Dkt. No. 38 9 Plaintiffs, 10 v. 11 MIGUEL CARDONA, et al., 12 Defendants. Case No. 5:20-cv-01889-EJD 13 PEOPLE OF THE STATE OF CALIFORNIA, Re: Dkt. No. 34 14 Plaintiff, ORDER GRANTING IN PART AND 15 v. DENYING IN PART MOTION FOR PARTIAL RECONSIDERATION 16 MIGUEL CARDONA, et al.,

17 Defendants.

18 19 These actions filed against the United States Department of Education (“DOE”) and its 20 Secretary, Miguel Cardona (collectively “Defendants”)1 involve challenges under the 21 Administrative Procedure Act (“APA”) to a final rule issued by Defendants in 2019 (the “2019 22 Rescission Rule”). Presently before the Court is the Defendants’ motion for partial 23 reconsideration of the Court’s order granting in part and denying in part Defendants’ motions to 24 dismiss under Federal Rule of Civil Procedure 12(b)(1). Having read the papers filed by the 25

26 1 Miguel Cardona is the current Secretary of the United States Department of Education, and he is therefore substituted for Betsy Devos as the proper defendant pursuant to Federal Rule of Civil 27 Procedure 25(d). Case Nos.: 5:20-cv-00455-EJD; 5:20-cv-01889-EJD 1 parties and carefully considered their arguments and the relevant legal authority, the Court hereby 2 rules as follows.2 3 I. BACKGROUND 4 In its order granting in part and denying in part the motions to dismiss, the Court discussed 5 the background facts in detail. The Court will not repeat that discussion here and assumes 6 familiarity with it. At a high level, these cases follow the DOE’s decision to rescind regulations 7 promulgated in 2014 (the “GE Rule”). The regulations relate to Title IV of the Higher Education 8 Act of 1965 (“HEA”) and were designed to counteract the deceptive marketing practices that 9 certain for-profit postsecondary institutions used to entice students to take on large amounts of 10 debt to pursue worthless degrees or credentials. See Program Integrity: Gainful Employment, 79 11 Fed. Reg. 64,890 (Oct. 31, 2014). The final GE Rule subjected all GE Programs to an affirmative 12 disclosure duty (the “Disclosure Requirement”) and (2) would punish those GE Programs that 13 regularly left low-income graduates with overwhelming debt loads (the “Eligibility Framework”). 14 See Ass’n of Priv. Sector Colleges. & Universities. v. Duncan, 110 F. Supp. 3d 176, 182-83 15 (D.D.C. 2015). 16 On January 22, 2020, the American Federation of Teachers (“AFT”), California Federation 17 of Teachers (“CFT”), and Individual Plaintiffs Isai Baltezar and Julie Cho (collectively “AFT 18 Plaintiffs”) filed an action alleging that the 2019 Rescission Rule harmed them and impaired the 19 organizations’ ability to fight for the financial rights of its members. See Complaint for 20 Declaratory and Injunctive Relief (“AFT Compl.”), Dkt. No. 1 ¶¶ 22, 53. The AFT Plaintiffs’ 21 action was soon followed by another action filed by the State of California on behalf of its 22 citizens. See Complaint for Declaratory and Injunctive Relief (“Cal. Compl.”), Dkt. 1. The AFT 23 Plaintiffs set forth eleven separate counts, each of which raised claims related to the Disclosure 24 Requirements and/or Eligibility Framework. AFT Compl. ¶¶ 350-446. California based its claim 25

26 2 The Court took this motion under submission without oral argument pursuant to Civil Local Rule 27 7-1(b). Case Nos.: 5:20-cv-00455-EJD; 5:20-cv-01889-EJD 1 on both the GE Rule’s Disclosure Requirements and Eligibility Framework. Cal. Compl. ¶¶ 130- 2 143. 3 In each action, Defendants filed motions to dismiss for lack of standing. See Defendants’ 4 Motion to Dismiss (“AFT MTD”), Dkt. 26; Defendants’ Motion to Dismiss (“Cal. MTD”), Dkt. 5 18. Defendants argued the AFT Plaintiffs failed to identify cognizable injuries fairly traceable to 6 the 2019 Rescission Rule and could not establish that their Disclosure Requirements and 7 Eligibility Framework based claims were redressable. AFT MTD at 11-23. In response to 8 California’s action, Defendants focused on the State’s alleged cognizable injuries and the 9 redressability of its sole claim. See Cal. MTD at 11. Following a hearing, the Court issued a 10 combined order granting in part and denying in part the motions to dismiss. AFT Dkt. No. 33; 11 Cal. Dkt. No. 29. 12 Defendants now seek reconsideration of two aspects of the Court’s Order. See Mot. for 13 Partial Reconsideration (“Mot.”), AFT Dkt. No. 38; Cal. Dkt. No. 34. First, Defendants argue the 14 Court erred in finding that the AFT Plaintiffs had standing to assert the violation of a procedural 15 right in Count 11 of their complaint. Second, Defendants contend that the Court erred in finding 16 that California had plead a procedural harm and therefore had standing to assert its claim. 17 II. LEGAL STANDARD 18 Motions for reconsideration are disfavored and “should not be granted, absent highly 19 unusual circumstances, unless the district court is presented with newly discovered evidence, 20 committed clear error, or if there is an intervening change in the controlling law.” McDowell v. 21 Calderon, 197 F.3d 1253, 1255 (9th Cir. 1999) (per curiam) (internal quotation and citation 22 omitted). Furthermore, “[a] motion for reconsideration ‘may not be used to raise arguments or 23 present evidence for the first time when they could reasonably have been raised earlier in the 24 litigation.’” Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 880 (9th 25 Cir. 2009) (quoting Kona Enterprises, Inc. v. Est. of Bishop, 229 F.3d 877, 890 (9th Cir. 2000)). 26 In this district, a Rule 54(b) motion for reconsideration must satisfy additional 27 Case Nos.: 5:20-cv-00455-EJD; 5:20-cv-01889-EJD 1 requirements, set forth in Civil Local Rule 7-9(b). Specifically, reconsideration may be sought 2 only if one of the following circumstances exists: (1) a material difference in fact or law from that 3 presented to the Court prior to issuance of the order that is the subject of the motion for 4 reconsideration; (2) new material facts or a change of law occurring after issuance of such order; 5 or (3) a manifest failure by the Court to consider material facts or dispositive legal arguments that 6 were presented to the Court before issuance of such order. Civ. L.R. 7-9(b). 7 III. DISCUSSION 8 Defendants have filed their motion for partial reconsideration pursuant to Civil Local Rule 9 7-9(b)(3), thus arguing that reconsideration is warranted based on a manifest failure by the Court 10 to consider material facts or dispositive legal arguments. The Court concludes that Defendants 11 have not established grounds for reconsideration of the Court’s Order as to the AFT Plaintiffs. 12 However, reconsideration is warranted as to California’s procedural claim. 13 A. AFT Plaintiffs’ Count 11 14 With respect to Count 11 in the AFT Plaintiffs’ complaint, Defendants argue that the Court 15 erred by not considering their dispositive standing arguments after concluding that Count 11 16 qualified as a procedural claim. AFT Mot. at 14. The AFT Plaintiffs maintain that Defendants 17 deprived them of an adequate opportunity to comment before Defendants’ rescission of the 18 Eligibility Framework. See AFT Compl. ¶ 445; see also id. ¶ 446 (“By failing to provide adequate 19 notice and comment, the Department has violated the APA’s procedural requirements, 5 U.S.C.

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People of the State of California v. DeVos, Counsel Stack Legal Research, https://law.counselstack.com/opinion/people-of-the-state-of-california-v-devos-cand-2021.