Guzman v. Bridgepoint Educ., Inc.
| Decision Date | 26 March 2015 |
| Docket Number | Case No. 11-cv-69-BAS(WVG) |
| Court | U.S. District Court — Southern District of California |
| Parties | BETTY GUZMAN, individually and on behalf of all other similarly situated, Plaintiff, v. BRIDGEPOINT EDUCATION, INC., et al., Defendants. |
(1) GRANTING DEFENDANTS' MOTION FOR SANCTIONS; AND
On January 11, 2011, Plaintiff Betty Guzman commenced this class action against Defendants Bridgepoint Education, Inc. ("Bridgepoint"), Ashford University ("Ashford"), and University of the Rockies ("The Rockies"),1 alleging that Defendants "engaged in a pattern of improper and unlawful conduct in order to recruit students and over-charge the federal government for federal financial aid . . . through the use of standardized, misleading recruitment tactics[.]" (Compl. ¶ 6.) Plaintiff amended thecomplaint twice, the current operative complaint being the Second Amended Complaint ("SAC"). Now pending before the Court are Defendants' motion for sanctions and Plaintiff's motion for class certification. Both motions are opposed.
Having reviewed the papers submitted and oral argument from both parties, the Court GRANTS Defendants' motion for sanctions (ECF No. 86) and DENIES Plaintiff's motion for class certification (ECF No. 78).
Bridgepoint is "one of the largest publicly-traded for-profit college companies in the United States" with more than 5,800 employees. (SAC ¶¶ 22, 25.) Ashford is an academic entity founded, owned, and operated by Bridgepoint. (SAC ¶¶ 23-25.) It "offer[s] Associate's, Bachelor's, Master's, and Doctoral degree programs, primarily online." (SAC ¶ 25.) Though most of Ashford's students are enrolled in the online program, it nonetheless maintains a physical campus in Clinton, Iowa. (SAC ¶ 23.) Students take only one online class at a time, each course typically being five weeks in length. (Ng Dep. 221:12-23.)
According to the complaint, 67,744 students have enrolled in Bridgepoint's institutions, "99% of whom were attending classes exclusively online." (SAC ¶ 26.) The total student enrollment at Ashford and The Rockies increased from 19,509 students at the end of the first quarter in 2008 to 42,025 students as of March 31, 2009. (SAC ¶ 27.) New student enrollment for the first quarter of 2009 was approximately 16,800 compared to new enrollments of approximately 8,800 for the first quarter of 2008. (Id.) As of December 31, 2012, over 50,300 students have graduated from the Bridgepoint institutions with students having enrolled from all 50 states, the District of Columbia, and 60 different countries. (Bridgepoint 10-K (2012) at 5.)
At the heart of this action is Plaintiff's assertion that "Bridgepoint's explosive enrollment growth at its online academic institutions is a direct result of misleading marketing tactics designed to recruit students to attend its schools, and its implementation of federally-prohibited employee incentive programs that were designed to encourage 'enrollment advisors' to recruit as many students as possible." (SAC ¶ 28.)
Prior to 2012, Ashford's only national marketing was through third-party "aggregator websites," which are "websites that allow students interested in information regarding post-secondary education to input their information to be sent to a number of universities," including Ashford. (Mignone Decl. ¶ 4; Mignone Dep. 118:10-23.) Currently, however, marketing efforts include digital, print, and television advertising. (Mignone Dep. 109:7-111:12.) Digital advertising composed of "70 to 80 percent" of all advertising with the remaining "20 to 30 percent" consisting of print and television advertising. (Id.) Ashford does not use the same messaging across all advertising forms. (Id. at 139:8-19.)
Ashford's main website is www.ashford.com. A communications review committee—consisting of "compliance, legal, and other individuals that are part of Ashford University"—vets all content posted on the website. (Mignone Dep. 51:3:-16.) "The marketing content on the current website is . . . different from what was on the website in 2005 because Ashford University has expanded its programs and regularly changes its marketing message." (Mignone Decl. ¶ 5.)
In addition to the main website, Ashford has also used other website addresses, the quantity depending on considerations such as the current "campaign" and site testing. (Mignone Dep. 113:7-23.) Currently, Ashford has three additional websites. (Id. at 113:16-114:25.) One of these websites is degrees.ashford.edu, which is a "landing environment for paid search." (Id.) In other words, it is a site whereprospective students "simply submit information if they would like to request more information." (Id.) The other two websites are here.ashford.edu and belong.ashford.edu, which are also landing environments associated with current or former advertising campaigns. (Id.) Students cannot enroll at these landing environments. (Id.)
Ashford also sends representatives to military bases and military conferences to recruit potential students. (Mignone Dep. 142:22-144:12.) It sends representatives to community colleges and conferences to recruit and speak about corporate partnerships, among other things, as well. (Id. at 144:13-25.) Furthermore, "[o]ftentimes, people may refer friends or family members or people that they work with to attend Ashford University, and that's an important group of inquiries[.]" (Id. at 103:14-24; see also Grady Decl. ¶ 10.)
After Ashford received contact information from aggregator websites, it would have its enrollment advisors follow up. (Mignone Dep. 120:1-9.) Enrollment advisors "provid[e] whatever is necessary to what the student is asking[.]" (Ng Dep. 66:12-19.) Questions typically received from prospective students range "from the specific education they are looking for all the way to normal questions that students ask when they are looking for what is the right college for them[,]" including questions related to costs and programs. (Id. at 67:6-21.)
Enrollment advisors are trained to give "accurate and truthful information" to prospective students. (Ng Dep. 54:8-55:24.) As a part of this training, advisors are given written materials including "the content piece for student services" and "conversation guides." (Id.) The purpose of the written materials is so that a newly hired enrollment advisor can first learn "what the content is" and then have "conversation guides to ensure that they are giving students . . . information that's pertinent to that specific student." (Id.) Though all newly hired enrollment advisorsreceive training materials, different training materials are given depending on the relevant department. (Id.) Defendants insist that enrollment advisors are not given scripts. (Id.)
One document provided in the training materials is titled "Ethics of Admissions, which provides nine ethical guidelines for enrollment advisors, including "[a]here[nce] to state and federal Do Not Call regulations," and "[m]aintaining truth and accuracy of all areas of advertisement." (Young Decl. Ex. 16; see also Young Decl. Ex. 17 (document titled "Enrollment Compliance Acknowledgment").) Elaborating on the latter, the guidelines explicitly state that "[i]t is unacceptable to misrepresent or advise students incorrectly in any area, (i.e. length of time for completion, program content, attendance requirements, certification, technology requirement, PLA, all charges associated with degree program)" and that "[i]t is not permissible to discuss a definitive amount of funds a student may receive in student loans/grants, a definitive amount of transfer credits prior to an unofficial pre-evaluation or employability upon graduation[.]" (Young Decl. Ex. 16.)
In a document titled "Incorporating Quality Control," presumably from the training materials, Ashford instructed enrollment advisors that "ALL outbound calls must include this verbiage": (Bottini Decl. Ex. 22.) That document makes clear that (Id.) The purpose of the verbiage is to prevent the conversation from "get[ting] away from us[,]" which is why enrollment advisors should not ask "How are you, today?" in their introductions. (Id.) Enrollment advisors are further instructed that their first role is to increase enrollment and achieving that goal may be done if they "Create Urgency" in a "polite, helpful way!" (Bottini Decl. Ex. 11.)
Ashford also provided guides to its enrollment advisors addressing follow-ups and leaving effective messages. (Bottini Decl. Ex. 12.) In these guides, fields are left open for enrollment advisors to presumably fill out to develop a consistent approach in their own words. (Id.) For example, in the document titled "Leaving Effective Messages - The Rules," enrollment advisors are told to "[w]rite down 6 [reasons to call you back] and circle 2-3 you might use" to complete the sentence "When you call me back, we will discuss . . . ." (Id.) Example language is also provided throughout this document along with occasional instructions to the enrollment advisor. (Id.) Some instructions provided state, for example: "Be Persistent!"; "It's important to mix things up a little with your message to avoid sounding like a broken record"; "Spend your time wisely and focus on meeting the students [sic] needs"; and "Slow down and listen to your students." (Id.) Other documents are similar in form including instructions given with example language. (See, e.g., Bottini Decl. Ex. 23.)
Despite the instructions in these guides, a former enrollment advisor at Ashford from August 2009 to January 2011—Ryan Ferguson—states in a declaration that ...
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