Association of Private Sector Colleges & Universities v. Duncan
401 U.S. App. D.C. 96
D.C. Cir.2012Background
- The Department of Education issued new Title IV regulations in 2010 addressing state authorization, incentive compensation, and misrepresentation.
- Appellant, an association of for-profit schools, sues under the APA and the Constitution challenging these regulations.
- District Court granted summary judgment for the Department on Compensation and Misrepresentation, and held lack of standing on State Authorization; it granted Appellant summary judgment on Distance Education regulation.
- Regulations at issue include State Authorization (600.9), Distance Education (600.9(c)), Compensation (668.14(b)(22)), and Misrepresentation (668.71–.75).
- The court applies Chevron deference and APA arbitrary-and-capacious review to assess whether regulations exceed the HEA’s limits and are reasoned, with issues of standing and First Amendment concerns.
- The court ultimately affirms in part, reverses in part, and remands for further Department explanation and revision consistent with its opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do the Compensation Regulations exceed the HEA limits? | Appellant contends regs exceed incentive ban. | Department argues deference; regulations consistent with statute and record. | Chevron Step Two; compensated rules upheld overall, but remanded on two explanations. |
| Are there adequate reasons for the Compensation Regulations under rational decisionmaking? | Appellant claims lack of adequate explanation for certain safe harbors elimination. | Department offered explanations; some areas need refinement. | Two aspects remanded for better explanation; rest sustained. |
| Do the Misrepresentation Regulations exceed HEA limits, including procedural protections and scope? | Regulations sanction for nonproscribed subjects and remove due-process protections. | Regulations serve to curb misrepresentation; interpretations within statute. | Regulations invalid on three points (procedural protections; misrepresentations about nonproscribed subjects; overbroad definition of substantial misrepresentation) and remanded for revision. |
| Is the State Authorization Regulation valid, and does Appellant have standing to challenge it? | Appellant has standing; regulation exceeds state-federal balance concerns. | Regulation is within statutory spending-power authority and proper policy judgment. | Appellant has standing; regulation valid, but distance education component violates APA; remand for reconsideration. |
| Does the Distance Education Regulation satisfy the APA notice-and-comment requirement as a logical outgrowth? | Final rule extended beyond proposed rule; no adequate notice. | Proposed language implied possible distance-education considerations; notice adequate. | Distance education regulation vacated for APA notice violation; remanded for reconsideration. |
Key Cases Cited
- Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (U.S. Supreme Court 1984) (establishes deference when statute is ambiguous)
- Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (U.S. Supreme Court 1983) (arbitrary and capricious review standards for agency action)
- National Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (U.S. Supreme Court 2005) (agency reversal of policy with explained change permissible)
- Reno v. Flores, 507 U.S. 292 (U.S. Supreme Court 1993) (facially invalid overbreadth challenges require context)
- Int’l Union, United Mine Workers v. Mine Safety & Health Admin., 626 F.3d 84 (D.C. Cir. 2010) (requirement to address substantial comments in rulemaking)
- PPL Wallingford Energy LLC v. FERC, 419 F.3d 1194 (D.C. Cir. 2005) (noting when agency’s notice is adequate or not for rulemaking)