484 F.Supp.3d 731
N.D. Cal.2020Background
- The Higher Education Act requires Title IV-eligible programs to “prepare students for gainful employment,” but the statute does not define that term and delegates rulemaking authority to the Secretary of Education.
- In 2014 the Department of Education (DOE) promulgated a Gainful Employment (GE) Rule that (1) imposed disclosure requirements for GE programs and (2) used debt-to-earnings metrics (based on Social Security Administration (SSA) earnings data) to determine program eligibility for federal aid.
- The DOE began implementing the 2014 rule but delayed aspects of implementation in 2017; the DOE subsequently issued a 2019 Rescission Rule that repealed the 2014 GE Rule, including disclosures and the debt-to-earnings eligibility framework.
- Plaintiffs (AFT, CFT, two individual members, and the State of California) sued to set aside the rescission under the Administrative Procedure Act (APA), alleging informational, economic, and procedural injuries.
- The DOE moved to dismiss for lack of Article III standing and failure to state a claim; the court held that (a) plaintiffs lacked standing to pursue the Disclosure and Eligibility claims for lack of cognizable informational injury and redressability, but (b) plaintiffs adequately pleaded a procedural APA claim challenging the adequacy of the agency’s notice and supporting analysis.
- The court denied leave to amend as futile because the 2014 disclosure rule left content of disclosures to the Secretary’s discretion and the DOE no longer had access to SSA data needed to compute the debt-to-earnings metric.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing for Disclosure claims (informational injury) | AFT/CFT/individuals lost required program disclosures and thus face risk of poor decisions, informational injury, and increased search costs | The 2014 regulation left the content of the disclosure template to the Secretary’s discretion, so plaintiffs have no statutory right to particular information; thus no cognizable informational injury or redress | Dismissed: plaintiffs lack informational standing and associated derivative injuries; disclosure claims dismissed |
| Standing for Eligibility claims (debt-to-earnings) | Repeal increases risk that poor programs will remain eligible; reinstatement would provide warnings/eligibility data | DOE cannot compute debt-to-earnings because SSA refused to renew MOU; even vacatur would not restore SSA data, so plaintiffs’ injury is not redressable | Dismissed: eligibility claims lack redressability and are dismissed |
| Procedural APA claim (notice/comment and supporting analysis) | DOE failed to disclose the research/analysis underlying the rescission, denying meaningful comment | DOE argues it disclosed adequate analysis and sources in the record | Allowed to proceed: plaintiffs adequately alleged failure to disclose analyses and studies underpinning the rescission; motion to dismiss denied as to procedural claim |
| California's standing and redressability | California asserted parens patriae, institutional and fiscal harms from rescission | Even if injury alleged, court cannot redress by ordering specific disclosures (Secretary discretion) or restore SSA data; redressability fails for substantive claims | California’s substantive claims dismissed for lack of redressability; procedural claim survives |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing requirements)
- Friends of the Earth v. Laidlaw, 528 U.S. 167 (2000) (standing and redressability principles for injunctive relief)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (concreteness requirement for injury-in-fact)
- Lewis v. Casey, 518 U.S. 343 (1996) (standing must be proven for each claim; "standing is not dispensed in gross")
- WildEarth Guardians v. Jewell, 738 F.3d 298 (D.C. Cir. 2013) (distinguishable precedent on remedy covering multiple alleged procedural errors)
- Ctr. for Biological Diversity v. Bernhardt, 946 F.3d 553 (9th Cir. 2019) (plaintiff must establish standing for every claim challenged)
- Ass'n of Private Sector Colls. & Univs. v. Duncan, 110 F. Supp. 3d 176 (D.D.C. 2015) (prior litigation and review of gainful-employment regulations)
- Nat'l Educ. Ass'n v. DeVos, 345 F. Supp. 3d 1127 (N.D. Cal. 2018) (informational-standing analysis under agency disclosure requirements)
- Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26 (1976) (limits on speculative chain-of-causation for standing)