Daghlian v. Devry University, Inc., No. CV 06-994 MMM (PJWx).

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
Writing for the CourtMargaret M. Morrow
Citation582 F.Supp.2d 1231
PartiesSaro DAGHLIAN on behalf of himself and all others similarly situated, Plaintiff, v. DEVRY UNIVERSITY, INC., Devry Inc., and Does 1 through and including 100, Defendants.
Decision Date10 October 2007
Docket NumberNo. CV 06-994 MMM (PJWx).
582 F.Supp.2d 1231
Saro DAGHLIAN on behalf of himself and all others similarly situated, Plaintiff,
v.
DEVRY UNIVERSITY, INC., Devry Inc., and Does 1 through and including 100, Defendants.
No. CV 06-994 MMM (PJWx).
United States District Court, C.D. California.
October 10, 2007.
Order Denying Reconsideration, February 19, 2008.

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Janet Lindner Spielberg, Janet L. Spielberg Law Offices, Michael D. Braun, Braun Law Group PC, Los Angeles, CA, for Plaintiff.

Amir Shlesinger, Deborah E. Yim, Felicia Yu, Jordan Seungjin Yu, Van T. Lam, Reed Smith, Los Angeles, CA, for Defendants.

ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

MARGARET M. MORROW, District Judge.


On December 23, 2005, Saro Daghlian commenced this putative class action against DeVry University, Inc., DeVry Inc. (collectively "DeVry" or "defendants"), and certain fictitious defendants in Los Angeles

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Superior Court.1 On January 11, 2006, plaintiff filed a first amended complaint. Plaintiff alleges that defendants failed to comply with a statutory mandate that they disclose in writing that academic units earned at DeVry probably would not transfer to other educational institutions and that students who sought further education elsewhere would thus have to earn the units anew. The complaint pleads four claims: (1) assorted violations of the California Education Code; (2) violation of the California Consumer Legal Remedies Act ("CLRA"), California Civil Code §§ 1750-1784;2 (3) false advertising in violation of California's False Advertising Law ("FAL"), California Business & Professions Code § 17500; and (4) unlawful, unfair, and deceptive business practices in violation of California's Unfair Competition Law ("UCL"), California Business & Professions Code § 17200.

On June 12, 2007, the court granted plaintiff's renewed3 motion for class certification, certifying a class of all students who had enrolled and paid tuition at a California DeVry school since December 23, 2001. The court concluded that plaintiff's claim for restitution and injunctive relief under the "unlawful" prong of the UCL—predicated on defendants' purported failure to provide enrolling students the written disclosure mandated by California Education Code § 94816 (the "Transferability Disclosure")—was suitable for classwide adjudication under subdivisions (a) and (b)(2) of Rule 23 of the Federal Rules of Civil Procedure.

On July 16, 2007, defendants filed a motion for summary judgment. Defendants contend that the statutory provisions underlying both plaintiffs individual claims under the Education Code and his class claims under the UCL are unconstitutional under the Commerce Clause, U.S. Const., art. I, § 8, cl. 3, the Equal Protection Clause, U.S. CONST., amend. 14, § 1, and the First Amendment, U.S. CONST., amend. 1, as made applicable to the states through the Fourteenth Amendment. Defendants additionally argue, as respects plaintiffs UCL class claim, that he has no evidence that he or any member of the UCL class he represents is entitled to restitutionary relief, and that he lacks standing to seek injunctive relief.

I. FACTUAL BACKGROUND

Illinois-based DeVry University, Inc. is in the business of providing educational services throughout the United States.4 It has campuses in twenty-five states across the country, including nine campuses in California, and is regionally accredited by the North Central Association Commission of Colleges and Schools ("NCA").5 The NCA is one of six non-governmental regional accrediting agencies that operate independently in six different geographic

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regions.6 The NCA's region comprises nineteen states, including Illinois.7 Its counterpart for the region that includes California is the Western Association of Schools and Colleges ("WASC").8 Although the WASC region also includes Hawaii, the territories of Guam, American Samoa, the Federated States of Micronesia, the Republic of Palau, the Commonwealth of the Northern Marianas Islands, and other areas in the Pacific or East Asia where American or international educational institutions operate,9 the vast majority (i.e., over ninety-one percent) of WASC-accredited educational institutions are located in California.10

In 1989, the California legislature enacted the Private Postsecondary and Vocational Education Reform Act (the "Reform Act"), 1989 Cal. Stat. ch. 1307 (S.B.190) (codified as amended at Cal. Educ.Code §§ 94700-94999).11 As amended, the Reform Act completely exempts WASC-accredited

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educational institutions from its student protection provisions. See CAL. EDUC.CODE § 94739(b)(7). As the court found in an earlier order, however, it requires non-WASC regionally accredited educational institutions to comply with those provisions, including one that requires giving prospective students the Transferability Disclosure.12 At the time the Reform Act was originally enacted, the California legislature may have believed that WASC was superior to other regional accreditation bodies;13 it has since recognized, however, that there is "no clear rationale" for exempting some regionally accredited schools but not others from the student protection provisions of the Reform Act.14

The parties dispute whether DeVry University is eligible for WASC accreditation. Defendants have adduced evidence that DeVry is not eligible for regional accreditation by WASC because it is not based in the WASC region.15 Plaintiff, however, has submitted evidence that DeVry might

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"transfer" its accreditation from NCA to "WASC.16 While the criteria that must-be satisfied to "transfer" accreditation are not entirely clear,17 the "transfer" procedure was not available to DeVry until at the earliest June 2007.18

II. DISCUSSION

A. Legal Standard Governing Motions for Summary Judgment

A motion for summary judgment must be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED.R.CIV.PROC. 56(c). A party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and of identifying those portions of the pleadings and discovery responses that demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Where the moving party will have the burden of proof on an issue at trial, the movant must affirmatively demonstrate that no reasonable trier of fact could find other than for the moving party. On an issue as to which the nonmoving party will have the burden of proof, however, the movant can prevail merely by pointing out that there is an absence of evidence to support the nonmoving party's case. See id. If the moving party meets its initial burden, the nonmoving party must set forth, by affidavit or as otherwise provided in Rule 56, "specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

In judging evidence at the summary judgment stage, the court does not make credibility determinations or weigh conflicting evidence. Rather, it draws all inferences in the light most favorable to the

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nonmoving party. See T.W. Electrical Service, Inc. v. Pacific Electrical Contractors Ass'n, 809 F.2d 626, 630-31 (9th Cir. 1987). The evidence presented by the parties must be admissible. Fed.R.Civ.Proc. 56(e). In addition, conclusory, speculative testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and defeat summary judgment. See Thornhill Pub. Co., Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir.1979); see also Falls Riverway Realty, Inc. v. Niagara Falls, 754 F.2d 49, 56 (2d Cir.1985).

B. Whether the Reform Act Violates the Dormant Commerce Clause

Defendants contend that the student protection provisions of the Reform Act are unconstitutional under the dormant Commerce Clause doctrine because they facially (and unjustifiably) discriminate against interstate commerce.19 The Commerce Clause provides that "Congress shall have Power ... [t]o regulate Commerce with foreign Nations, and among the several States." U.S. CONST., art. I, § 8, cl. 3. "Although the Constitution does not in term's limit the power of states to regulate commerce," the Supreme Court has "long interpreted the Commerce Clause as an implicit restraint on state authority, even in the absence of a conflicting federal statute." United Haulers Ass'n, Inc. v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330, 127 S.Ct. 1786, 1792, 167 L.Ed.2d 655 (2007) (citing cases); see also Am. Trucking Ass'ns, Inc. v. Mich. Pub. Serv. Comm'n, 545 U.S. 429, 433, 125 S.Ct. 2419, 162 L.Ed.2d 407 (2005) ("[T]he Constitution's express grant to Congress of the power to regulate Commerce among the several States contains a further, negative command, known as the dormant Commerce Clause, that creates an area of trade free from interference from the States" (citations, internal quotation marks, and alterations omitted)).

To determine whether a law violates the "dormant" aspect of the Commerce Clause, the court must first determine whether it discriminates on its face against interstate commerce. See, e.g., id.; Fort Gratiot Sanitary Landfill, Inc. v. Mich., Dep't of Natural Resources, 504 U.S. 353, 359, 112 S.Ct. 2019, 119 L.Ed.2d 139 (1992). In this context, "`discrimination'

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simply means differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter." Or. Waste Systems, Inc. v. Dep't of Envt'l Quality of Or., 511 U.S. 93, 99, 114 S.Ct. 1345, 128 L.Ed.2d 13 (1994); New Energy Co. of...

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25 practice notes
  • Rocky Mountain Farmers Union v. Goldstene, Case Nos. CV–F–09–2234 LJO DLB, CV–F–10–163 LJO DLB.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • December 29, 2011
    ...discrimination challenge is not defeated simply because other out-of-state interests may benefit. See Daghlian v. DeVry Univ., Inc., 582 F.Supp.2d 1231, 1243–44 (C.D.Cal.2007) (California law's exception for Hawaiian entities did not defeat facial discrimination claim); Limbach, 486 U.S. at......
  • Rocky Mountain Farmers Union v. Goldstene, CASE NO. CV-F-09-2234 LJO DLB
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • December 29, 2011
    ...discrimination challenge is not defeated simply because other out-of-state interests may benefit. See Daghlian v. DeVry Univ., Inc., 582 F. Supp. 2d 1231, 1243-44 (C. D. Cal. 2007) (California law's exception for Hawaiian entities did not defeat facial discrimination claim); Limbach, 486 U.......
  • Wiesmueller v. Kosobucki, No. 08-2527.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • July 9, 2009
    ...evenhandedly." For the privilege is not limited to state residents, compare Daghlian 571 F.3d 704 v. DeVry University, Inc., 582 F.Supp.2d 1231, 1241-43 (C.D.Cal.2007); nor do Wisconsin law schools admit only Wisconsin residents. A state's right to regulate admission to the practice of......
  • Foresight Coal Sales, LLC v. Chandler, CIVIL 3:21-cv-00016-GFVT
    • United States
    • United States District Courts. 6th Circuit. United States District Court of Eastern District of Kentucky
    • November 3, 2021
    ...on the state of production, but rather on the basis of the severance tax. Next, Foresight cites to Daghlian v. DeVry University, Inc., 582 F.Supp.2d 1231 (C.D. Cal. 2007), which is a nonbinding case with a different factual predicate. Daghlian involved school accreditation standards that on......
  • Request a trial to view additional results
25 cases
  • Rocky Mountain Farmers Union v. Goldstene, Case Nos. CV–F–09–2234 LJO DLB, CV–F–10–163 LJO DLB.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • December 29, 2011
    ...discrimination challenge is not defeated simply because other out-of-state interests may benefit. See Daghlian v. DeVry Univ., Inc., 582 F.Supp.2d 1231, 1243–44 (C.D.Cal.2007) (California law's exception for Hawaiian entities did not defeat facial discrimination claim); Limbach, 486 U.S. at......
  • Rocky Mountain Farmers Union v. Goldstene, CASE NO. CV-F-09-2234 LJO DLB
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • December 29, 2011
    ...discrimination challenge is not defeated simply because other out-of-state interests may benefit. See Daghlian v. DeVry Univ., Inc., 582 F. Supp. 2d 1231, 1243-44 (C. D. Cal. 2007) (California law's exception for Hawaiian entities did not defeat facial discrimination claim); Limbach, 486 U.......
  • Wiesmueller v. Kosobucki, No. 08-2527.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • July 9, 2009
    ...regulates evenhandedly." For the privilege is not limited to state residents, compare Daghlian 571 F.3d 704 v. DeVry University, Inc., 582 F.Supp.2d 1231, 1241-43 (C.D.Cal.2007); nor do Wisconsin law schools admit only Wisconsin residents. A state's right to regulate admission to the practi......
  • Foresight Coal Sales, LLC v. Chandler, CIVIL 3:21-cv-00016-GFVT
    • United States
    • United States District Courts. 6th Circuit. United States District Court of Eastern District of Kentucky
    • November 3, 2021
    ...on the state of production, but rather on the basis of the severance tax. Next, Foresight cites to Daghlian v. DeVry University, Inc., 582 F.Supp.2d 1231 (C.D. Cal. 2007), which is a nonbinding case with a different factual predicate. Daghlian involved school accreditation standards that on......
  • Request a trial to view additional results

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