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Association of Private Sector Colleges & Univs. v. Duncan

United States District Court, District of Columbia

March 19, 2013

ASSOCIATION OF PRIVATE SECTOR COLLEGES AND UNIVERSITIES, Plaintiff,
v.
ARNE DUNCAN, in his official capacity as Secretary of the Department of Education, and UNITED STATES DEPARTMENT OF EDUCATION, Defendants

For ASSOCIATION OF PRIVATE SECTOR COLLEGES AND UNIVERSITIES, also known as CAREER COLLEGE ASSOCIATION, Plaintiff: Douglas R. Cox, LEAD ATTORNEY, Derek S. Lyons, Nikesh Jindal, Veronica S. Root, GIBSON, DUNN & CRUTCHER, L.L.P., Washington, DC; Timothy John Hatch, GIBSON, DUNN & CRUTCHER, Los Angeles, CA.

For ARNE DUNCAN, In his official capacity as Secretary of the Department of Education, UNITED STATES DEPARTMENT OF EDUCATION, Defendants: Marcia Berman, LEAD ATTORNEY, Gregory Peter Dworkowitz, Michelle Renee Bennett, UNITED STATES DEPARTMENT OF JUSTICE, Civil Division, Federal Programs Branch, Washington, DC.

OPINION

Page 211

Rudolph Contreras, United States District Judge.

MEMORANDUM OPINION

The Department of Education and its Secretary (collectively, " the Department" ) have moved the court to amend its judgment, which vacated 34 C.F.R. § § 600.10(c), 600.20(d), 668.6(a), and 668.7. The Department argues that the disclosures required by 34 C.F.R. § 668.6(b)(1)(v), which the court upheld,

Page 212

cannot be fully effective without both the vacated reporting requirements, 34 C.F.R. § 668.6(a), and portions of the vacated debt measures, 34 C.F.R. § § 668.7(a)(2), (b)-(f). For the reasons set out below, the Department's motion will be denied.

I. BACKGROUND

The Association of Private Sector Colleges and Universities (the " Association" ) brought this suit to challenge three related regulations governing institutions of higher education that must " prepare students for gainful employment in a recognized occupation" in order for those students to receive federal funds under Title IV of the Higher Education Act. 20 U.S.C. § § 1001(b)(1), 1002(b)(1)(A)(i), (c)(1)(A). One regulation established reporting and disclosure requirements for such institutions, 34 C.F.R. § 668.6, another attempted to assess whether programs were in fact preparing their students for gainful employment by examining the income earned and debt repaid by students after leaving the programs, 34 C.F.R. § 668.7, and a third required schools to submit new gainful employment programs to the Department for its approval, 34 C.F.R. § § 600.10(c), 600.20(d). The court vacated the debt measures, 34 C.F.R. § 668.7, because the Department lacked a reasoned basis for one of the three debt and income tests established therein; [1] the other tests, though supported by reasoned decisionmaking, were inextricably intertwined with the third and therefore vacated along with it.

Turning to the reporting requirements, 34 C.F.R. § 668.6(a), which mandated that institutions report, among other things, " [i]nformation needed to identify [a] student and the institution the student attended," id. § 668.6(a)(1)(i)(A), the court said that " the Higher Education Act prohibits 'the development, implementation, or maintenance of a Federal database of personally identifiable information on individuals receiving assistance under this chapter' unless that information 'is necessary for the operation of programs authorized by' Title IV (among other subchapters)." Assoc. of Private Sector Colleges & Univs. v. Duncan, 870 F.Supp.2d 133, 155 (D.D.C. 2012) (" APSCU " ) (quoting 20 U.S.C. § § 1015c(a), (b)(1)). Although the Department argued that the information to be collected under the reporting requirements was " necessary for the operation of" the debt and income tests, the court noted that once those tests were vacated, that argument had little force. Referring to that newly-collected information--which was to be stored in the National Student Loan Data System, a Congressionally-mandated

Page 213

database containing extensive information about the beneficiaries of Title IV programs, see 20 U.S.C. § 1092b--as " the database [that the Department] would maintain," the Court concluded that " the Department cannot show that the database it would maintain is necessary for the operation of any other Title IV program," and therefore vacated the reporting requirements as contrary to the prohibition of 20 U.S.C. § 1015c. APSCU, 870 F.Supp.2d at 155. The court further noted its concern that that statutory provision, which only allows the Department to develop, implement, or maintain " a Federal database of personally identifiable information on individuals receiving assistance under this chapter," 20 U.S.C. § 1015c(a), if that database is " a system (or a successor system) that . . . was in use by the Secretary . . . as of the day before August 14, 2008," id. § 1015c(b), (2), not be interpreted to allow the Department to " fold any new database into an existing one" and thereby evade the statutory limitation, APSCU, 870 F.Supp.2d at 155 n.8.

The disclosure requirements, 34 C.F.R. § 668.6(b)--(c), by contrast, did " not run afoul of th[e] statutory prohibition" set out in 20 U.S.C. § 1015c because they did not require the creation of any database. APSCU, 870 F.Supp.2d at 155-56. The court found that the disclosure requirements were authorized by the Department's " broad authority 'to make, promulgate, issue, rescind, and amend rules and regulations governing the manner of operation of, and governing the applicable programs administered by, the Department,'" APSCU, 870 F.Supp.2d at 156 (quoting 20 U.S.C. § 1221e-3), and that they were neither arbitrary nor capricious. It further found that the disclosure requirements were severable from the reporting requirements, and so left them in place. Id. at 156-57. Finally, the court vacated the program approval rule, 34 C.F.R. § § 600.10(c), 600.20(d), because it was " centered on" the vacated debt measures set out in 34 C.F.R. § 668.7. APSCU, 870 F.Supp.2d at 157-58.

The Department now moves the court to reinstate the reporting requirements, 34 C.F.R. § 668.6(a), and portions of the debt measures, 34 C.F.R. § § 668.7(a)(2), (b)--(f), arguing that those regulations are necessary for the operation of the disclosure requirements, 34 C.F.R. § 668.6(b)-(c), which are in turn necessary for the operation of Title IV programs, and that reinstating them would not require the Department to create a new database of personally identifiable information about students in violation of 20 U.S.C. § 1015c(b)(2). With this motion, the Department does not challenge the court's determination that the debt repayment test contained an arbitrary threshold, nor that the program approval rule could not stand without the debt measures.

II. LEGAL STANDARD

Rule 59(e) permits a court to alter or amend a judgment. Fed.R.Civ.P. 59(e). " A Rule 59(e) motion is discretionary and need not be granted unless the district court finds that there is an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice." Firestone v. Firestone, 76 F.3d 1205, 1208, 316 U.S. App. D.C. 152 (D.C. Cir. 1996) (per curiam) (internal quotation marks omitted).

III. ANALYSIS

This motion arises from a basic tension in the court's judgment. In its earlier opinion, the court upheld 34 C.F.R. § 668.6(b)(1)(v), which requires covered institutions to disclose to their prospective students " [t]he median loan debt incurred by students who completed the program as provided ...


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