Southern California Institute of Law v. Archie “Joe” Biggers et al., SACV 13-193 JVS

18 Pages·2013·0.13 MB·English

Southern California Institute of Law v. Archie “Joe” Biggers et al.,
SACV 13-193 JVS (RNBx)
Tentative Order re: Motion to Dismiss
Defendants Archie “Joe” Biggers, James Bolton, J. Scott Bovitz, David
Carrillo, Lisa Cummins, Patrick Dixon, Cometria Cooper, Richard Frankel, K. V.
Kumar, Sean McCoy, John McNicholas, Sandra Mendoza, Martha Pruden-
Hamiter, Steven Renick, Sandra Salazar, Larry Sheingold, James Vaughn, Jeanne
Vanderhoff, Lee Wallach, Patricia White, Alan Yochelson, and George Leal
(collectively, “Defendants”) are each current or former members of the State Bar
of California’s Committee of Bar Examiners (“CBE”). They move in their
individual and official capacities to dismiss Plaintiff Southern California Institute
of Law’s (“SCIL”) Second Amended Complaint (“SAC,” Docket No. 26) pursuant
to Fed. R. Civ. P. 12(b)(6). (Motion to Dismiss, Docket No. 30.) SCIL opposes.
(Opposition, Docket No. 33.) Defendants replied. (Reply, Docket No. 34.) For the
following reasons, the Court GRANTS the Motion.
I. BACKGROUND
The Court detailed much of the background when it dismissed SCIL’s First
Amended Complaint. (MTD Order, Docket No. 24.) The background consists of
California law, factual allegations in the SAC, and documents attached to or
incorporated by reference in the SAC. See New.Net., Inc. v. Lavasoft, 356 F.
Supp. 2d. 1090, 1115–16 (C.D. Cal. 2004) (A court may “consider a document if it
is ‘necessarily relied’ upon by the complaint” in ruling on a motion to dismiss.).
The Court also may take judicial notice of matters of public record. See Fed.
R. Evid. 201(b); C.B. v. Sonora Sch. Dist., 691 F. Supp. 2d 1123, 1138 (E.D. Cal.
2009). “When a written instrument or subject of judicial notice contradicts
allegations in a complaint to which it is attached, the Court need not accept the
allegations of the complaint as true.” Woods v. Asset Resources, No. CV 06-398
SMS, 2006 WL 3782704, at *2 (C.D. Cal. Dec. 21, 2006). The Court takes judicial
notice of the following documents in Defendants’ Request for Judicial Notice
(“RJN,” Docket No. 30-1):
1
RJN Ex. F Notice and Agenda for CBE’s June 29, 2012, Meeting
RJN Ex. H CBE’s Request for Public Comment re: 2012 Revisions1
RJN Exs. L, P, Q SCIL Webpages: (1) Accreditation, (2) Frequently Asked
Questions, and (3) About Us (as visited on July 18, 2013)2
A. Factual Background
SCIL, a California Accredited Law School (“CALS”), was first accredited
by CBE in 1996. (SAC ¶ 1.) This 42 U.S.C. §§ 1983 and 1988 action against
members of CBE is based on their adoption of a rule requiring all CALS to make
certain disclosures to the public, including current and prospective students.
The State Bar of California is a constitutional entity established within the
judicial branch of California. Cal. Const. art. VI, § 9. An administrative arm of the
California Supreme Court, CBE “has the power to examine applicants for
admission to practice law, [and] to administer the requirements for admission to
practice.” Greene v. Zank, 158 Cal. App. 3d 497, 505 (1984); see Cal. Bus. &
Prof. Code §§ 6060 et seq. CBE also is charged with the approval, regulation, and
oversight of degree-granting law schools. Cal. Bus. & Prof. Code § 6060.7. CBE,
“by setting standards for accreditation, can impose minimum standards on the
quality of education at accredited schools.” Bib’le v. Comm. of Bar Examiners, 26
Cal. 3d 548, 555 (1980). CBE generally inspects CALS at least every five years
1 RJN Exs. F and H are judicially noticeable as official records of the State Bar and are
authenticated by a State Bar employee. (Declaration of Gayle Murphy, Docket No. 30-1.) The
Court specifically takes notice of the fact that CBE was amending the Guidelines for Accredited
Law School Rules (“ALS Guidelines”). The Court also takes notice of the fact that CBE thought
a change in ALS Guideline 2.3(D) was necessary because schools “no longer print and
disseminate hardcopy ‘course catalogs’ or ‘school bulletins,’ and the nomenclature as to what
constitutes the ‘principal page of a website has become increasingly vague and ambiguous.”
(RJN Ex. F, at 5.) The Court does not take judicial notice of the latter fact for its truth or validity.
See Lee v. City of L.A., 250 F.3d 668, 689–90 (9th Cir. 2001).
2 The Court may take judicial notice of the webpages because the SAC details the
“Accreditation” webpage, and SCIL’s website in general is referred to in the SAC. (E.g., SAC ¶¶
4, 19, 21.) SCIL does not claim it has modified the website or that the accuracy of the webpage
screenshots cannot be readily determined. See Fed. R. Evid. 201.
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for compliance with the then-current Accredited Law School Rules and ALS
Guidelines, the latter of which CBE may amend. (MTD Order, at 4.) CBE may
grant, deny, or terminate accreditation. (Id.)
On January 1, 2013, CBE amended ALS Guideline 2.3(D), which is part of
a section of the ALS Guidelines titled “Honesty in Communications.” (SAC ¶ 2;
SAC Ex. A.) It requires CALS to create a “discrete page readily accessible to the
public found on the law school’s website entitled ‘Accreditation.’” ALS Guideline
2.3(D). On that page, and in the course catalog or student handbook, CALS must
state, inter alia, that “[s]tudy at, or graduation from, this law school may not
qualify a student to take the bar examination or be admitted to practice law in
jurisdictions other than California.” Id. The prior version explained this disclosure
was “[t]o ensure that prospective students of, applicants to, and students of a law
school’s J.D. degree program are fully informed about the requirements and
possible limitations associated with attending and graduating from an accredited
law school.” (Old ALS Guideline 2.3(D), SAC Ex. B.) SCIL does not challenge
this part of the provision.
The Guideline also requires that CALS publish “information relating to the
pass rates of its graduates on the ten most recent administrations of the California
Bar Examination” either (i) “[b]y means of posting an active link to the California
Bar Examination ‘Statistics’ page of the State Bar’s website”; or, alternatively, (ii)
by posting the pass rates of its graduates for the ten most recent administrations of
the California Bar Examination.3 ALS Guideline 2.3(D). No specific language is
mandated. SCIL challenges this part of the provision. It claims that CBE’s
“premise is that without the regulation, there is a risk that students will be
deceived.” (SAC ¶ 22.)
D. SCIL’s Allegations
SCIL’s First Amendment claim rests on the following sentence on the
“Accreditation” page of its website, www.lawdegree.com:
3 The prior version required a CALS to “advise potential students in its law school
bulletin or other document that is always provided to prospective or incoming students, that
information related to the school’s bar examination passing rates can be found at”
www.calbar.ca.gov/admissions; or, alternatively, the law school’s own website.
3
For more information relating to bar pass rates, on this school and
other CBE-accredited law schools you may consult
http://admissions.calbar.gov/Examinations/Statistics.aspx.
SCIL claims that this requires it “to publish a government message with
which it disagrees” and “publicize CBE’s unsubstantiated views,” violating its free
speech rights under the First and Fourteenth Amendments. (SAC ¶¶ 5, 17.) It seeks
declaratory, injunctive, and monetary relief. (Id. ¶ 5.) Defendants are sued in their
official and individual capacities. (Id. ¶ 12.)
SCIL disagrees “with linking the quality of a law school’s education
program to the performance of its graduates on a bar examination,” which CBE
does by emphasizing bar exam passage rates on the “Accreditation” page. (Id. ¶ 4.)
SCIL alleges that no current or prospective students or alumni have complained of
a risk of deception related to the likelihood of passing the bar after attending a
CALS. (Id. ¶ 22.) It also claims Defendants “made no reasoned response” to
several CALS’s objections to the amendment and threatened SCIL with a Notice
of Noncompliance if it did not make the disclosure. (Id. ¶ 19.)
SCIL further claims that its website and publications are not intended solely
for the purpose of proposing commercial transactions. (Id. ¶ 21.) The website
details SCIL’s faculty and curriculum and provides tools and resources to existing
students to support their education. (Id.) SCIL provides materials to prospective
and current students to market the school and for informational and educational
purposes. (Id.) SCIL’s website also advises students that a “legal education at
SCIL alone” will not be “enough to pass the CA Bar Exam,” and that “passing the
[bar examination] requires additional ‘test taking’ skills that are geared to the
particular format, content, and structure” of the exam. (Id. ¶ 22.)
II. LEGAL STANDARD
Under Federal Rule of Civil Procedure 12(b)(6), a defendant may move to
dismiss for “failure to state a claim upon which relief can be granted.” A plaintiff
must provide “enough facts to state a claim to relief that is plausible on its face.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has “facial
plausibility” if the plaintiff pleads facts that “allow[] the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.”
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Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
In resolving a Rule 12(b)(6) motion under Twombly, the court must follow
a two-pronged approach. First, the court must accept all well-pleaded factual
allegations as true, but “[t]hreadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678.
Nor must the court “accept as true a legal conclusion couched as a factual
allegation.” Id. (quoting Twombly, 550 U.S. at 555). Second, assuming the
veracity of well-pleaded factual allegations, the court must “determine whether
they plausibly give rise to an entitlement to relief.” Id. at 679. This determination
is context-specific, requiring the court to draw on its experience and common
sense, but there is no plausibility “where the well-pleaded facts do not permit the
court to infer more than the mere possibility of misconduct.” Id.
III. DISCUSSION
The case is about compelling speech under the First Amendment, not
restricting speech. It is not a challenge to the entirety of ALS Guideline 2.3(D) or
the ALS Rules and Guidelines in general, and it is not about arbitrary and
capricious rule-making. Rather, SCIL focuses on ALS Guideline 2.3(D)(i)–(ii),
which SCIL believes forces it to “reflect[] CBE’s unsubstantiated notion that the
quality of legal education is linked to bar examination passage rates” and
improperly ties bar passage rates to accreditation. (SAC ¶¶ 3–5.)
Defendants move to dismiss the entire claim or, alternatively, to the extent it
is brought for damages and in their individual capacity. First, they argue that ALS
Guideline 2.3(D) regulates commercial speech. (Motion, at 9.) Second, they argue
that SCIL must only make a neutral factual disclosure and is not prohibited from
any speech of its own, so a rational basis can justify the rule. (Id. at 8–10.) Third,
they contend the disclosure “is rationally related to CBE’s legitimate interest in
making sure prospective students are not misled by the imprimatur of accreditation
into believing that graduation from a given law school will necessarily result in the
ability to pass the bar examination.” (Id. at 1–2, 10–12.)
A. SCIL’s Speech and ALS Guideline 2.3(D)(i)–(ii)
Generally, “freedom of speech prohibits the government from telling people
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what they must say.” Video Software Dealers Ass’n v. Schwarzenegger, 556 F.3d
950, 966 (9th Cir. 2006) (quoting Rumsfeld v. Forum for Academic & Inst.
Rights, Inc., 547 U.S. 47, 61 (2006) [hereinafter FAIR]). Compelled statements of
fact, like those of opinion, are subject to First Amendment scrutiny. FAIR, 547
U.S. at 62. The degree of protection depends on whether the speech sought to be
regulated constitutes commercial or noncommercial speech. The parties dispute
which standard of review governs: strict scrutiny, applied to noncommercial
speech, Riley v. Nat’l Fed. of the Blind of N.C., Inc., 487 U.S. 781 (1988); or
reasonableness review, as defined in Zauderer v. Office of Disciplinary Counsel,
471 U.S. 626, 651 (1985). To succeed in this facial challenge, SCIL must show
that “no set of circumstances exists under which the [regulation] would be valid.”
Reno v. Flores, 507 U.S. 292, 301 (1993) (citation omitted).
1. Commercial or Noncommercial Speech
a. Legal Standard
Commercial speech is “expression related solely to the economic interests
of the speaker and its audience,” Cent. Hudson Gas & Elec. Corp. v. Pub. Serv.
Comm’n of N.Y., 447 U.S. 557, 561 (1980), or, at its core, “speech which does ‘no
more than propose a commercial transaction,’” Dex Media West, Inc. v. City of
Seattle, 696 F.3d 952, 957 (9th Cir. 2012) (quoting Bolger v. Youngs Drug Prods.
Corp., 463 U.S. 60, 66 (1983)). A determination of whether speech is commercial
should rest on “‘the commonsense’ distinction between speech proposing a
commercial transaction . . . and other varieties of speech.” Bolger, 463 U.S. at 64.
When analyzing mixed-content publications, the court must analyze “the
nature of the speech taken as a whole” to determine the level of First Amendment
protection. Dex Media West, 696 F.3d at 957 (quoting Riley, 487 U.S. at 796).
First, the court must determine whether the publication as a whole constitutes
commercial speech either (1) under the traditional test, because the speech “does
no more than propose a commercial transaction” or (2) in “close question[s],”
because the publication reflects other characteristics, such as the factors identified
by the Supreme Court in Bolger. Id. at 957–58 (citing Hunt v. City of L.A., 638
F.3d 703, 715 (9th Cir. 2011)). Those factors are (1) the publication’s advertising
format; (2) the publication’s reference to a specific product; and (3) the underlying
economic motive of the speaker. Id. (citation omitted). These “factors are not
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dispositive, but the ‘combination of all these characteristics . . . provides strong
support for the . . . conclusion that the [publication at issue is] properly
characterized as commercial speech.’” Id. (quoting Bolger, 463 U.S. at 67).
“Second,” even if this threshold classification is met, the court “must
determine whether the speech still receives full First Amendment protection,
because the commercial aspects of the speech are ‘inextricably intertwined’ with
otherwise fully protected speech, such that the publication sheds its commercial
character and becomes fully protected speech.” Id. (citing Riley, 487 U.S. at 796).
b. Application to SCIL’s Website
SCIL contends that the Court must apply noncommercial speech standards
because ALS Guideline 2.3(D) “applies to law school websites as a whole” and its
website contains extensive non-commercial information. (Opposition, at 18–20.)
The Court rejects SCIL’s legal conclusion that ALS Guideline 2.3(D)
regulates CALS’s websites “as a whole.” (Opposition, at 20.) The Guideline’s
plain language directs the creation of an “Accreditation” webpage. It does not
dictate or require the modification of any other content on a CALS’s website. Nor
must a CALS publish the disclosure in its course catalog or handbook. This
distinguishes the regulation from that in Dex Media West, where the court
acknowledged that many of the advertisements in yellow pages directories fit
within the “core notion of commercial speech” but concluded that the yellow
pages were not commercial speech “as a threshold matter” because, inter alia, the
ordinance at issue regulated the book “as a whole, not simply the individual
advertisements contained therein.”4 696 F.3d at 957. Dex Media does not suggest
that the Court must consider the publication “as a whole”—even unregulated
aspects of it—to determine the character of the speech.
4 Dex Media is further distinguishable because the telephone directory and community
listings in the yellow pages did not “refer to a specific product,” 696 F.3d at 959 (citation
omitted); and there was “no clear link” between that information and the advertisements, unlike
an “advertising leaflet put forth by an individual merchant to tout only its own products,” id.
(quoting Ad World, Inc. v. Twp. of Doylestown, 672 F.3d 1136, 1140 (3d Cir. 1982)) (emphasis
in original). The court also worried about undermining “[t]he full First Amendment protection”
of publications like newspapers, magazines, and television programs. Id. at 963–65.
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Nevertheless, it is not facially obvious that ALS Guideline 2.3(D) regulates
commercial speech. Turning to the Bolger factors, the Court finds all three present
in the speech regulated by ALS Guideline 2.3(D). First, SCIL publishes the
disclosure in its “About Us” section and in the “Frequently Asked Questions by
Prospective Students” section. (See RJN Exs. L, P.) These sections, albeit
informational, clearly are a vehicle to advertise SCIL and its accreditation status to
prospective students (consumers). Courts consistently hold that statements about
accreditation status are commercial speech. See, e.g., Am. Acad. of Pain Mgmt. v.
Joseph, 353 F.3d 1099, 1104, 1106 (9th Cir. 2004) (noting that board certification
‘designate[s] a certain level of qualification” and holding that statute regulated
commercial speech because it regulated statements in advertising about such
accreditation, advertising related to medical services, and economic motive for the
speech was to “solicit a patient base”); Killian v. Pac. Educational Servs. Co., 486
F. Supp. 2d 1132, 1137–39 (D. Haw. 2006) (analyzing prohibition on statements
about applications for accreditation and finding “no question that the statements
regarding [the school’s] accreditation status fall into the category of commercial
speech”). More broadly, SCIL’s website details its faculty, curriculum, and
mission. (SAC ¶ 21.) Although this information may be useful to current students
and is not equivalent to, for example, a car dealer’s website, it is designed to
market SCIL. That it is not merely speech “on a commercial subject,” Va. State
Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc., 425 U.S. 748, 761–62
(1976), does not mean it is not commercial speech. See Am. Acad. of Pain Mgmt.,
353 F.3d at 1106 (statute covered advertising about practitioner’s foreign language
ability, education, publications authored, public health information, and other
facts).5 Second, the regulated content relates to a specific product: the CALS and
its educational services. Finally, it is evident that SCIL has an economic motive
for this speech: soliciting students to build a student body.6 Therefore, the Court
finds that ALS Guideline 2.3(D) regulates commercial speech.7
5 Although this fact is not material to the disposition, the Court notes that SCIL uses a
“.com” (commercial) top-level domain, which more generally is used by commercial entities.
Brookfield Comm’cns, Inc. v. W. Coast Entm’t Grp., 174 F.3d 1036, 1044 (9th Cir. 1999).
6 The prior version of ALS Guideline 2.3(D) supports the conclusion that the object of
CBE’s regulation is “advertising.” It emphasized that the bar examination passing rates
information had to be provided to “potential students.” Old ALS Guideline 2.3(D).
7 The Court is cautious not to swallow every statement by an educational institution in its
publications under the umbrella of commercial speech. The line, admittedly, is blurry. But
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The Court further finds that ALS Guideline 2.3(D) regulates commercial
speech that is not “inextricably intertwined” with noncommercial speech.
In Bd. of Trs. of State Univ. of N.Y. v. Fox, 492 U.S. 469 (1989), the Court
considered the character of a houseware sales party where attendees also discussed
home economics. Id. at 472. The university invoked a regulation to prohibit the
party. The Court found that the party was held merely to “propose a commercial
transaction.” Id. at 473. It held that the commercial and noncommercial speech
was not inextricably intertwined, because “[n]o law of man or nature ma[de] it
impossible to sell housewares without teaching home economics, or to teach home
economics without selling housewares.” Id. at 474. In Riley, the law required a
fundraiser soliciting charitable contributions to disclose to potential donors the
average percentage of gross receipts actually turned over to charities by the
fundraiser within the previous twelve months. 487 U.S. at 804. The Court assumed
the compelled statement was commercial speech and held that it was “inextricably
intertwined” with the fully-protected solicitation of contributions, because the
fundraiser could not fundraise without making the disclosure. Id. at 796. In Hunt,
the Ninth Circuit found that the plaintiff boardwalk vendors clearly proposed a
commercial transaction, because “the core of [their] speech was directed to their
products and why a consumer should buy them.” 638 F.3d at 716. The court held
that any noncommercial aspects were not “inextricably intertwined,” because the
vendors “could easily sell their wares without reference to any religious,
philosophical, and/or ideological element, and they could also express any
noncommercial message without selling these wares.” Id.
SCIL alleges that its website is not intended solely to recruit students,
because it has information about the faculty and curriculum, teaching tools and
resources for existing students, and more. (See SAC ¶ 21.) This allegation does
not create any dispute of fact that precludes the Court from making a conclusion at
the motion to dismiss stage that the noncommercial and commercial speech at
issue is not “inextricably intertwined.” SCIL’s website has “About Us,”
“commonsense” suggests a significant difference between a disinterested presentation of
resources to current students about courses or career resources, for example, and an institution’s
desire to highlight what makes it unique and appealing to prospective students. See United States
v. Wenger, 292 F. Supp. 2d 1296, 1302 (D. Utah 2003) (“Commonsense suggests that there is a
significant difference between disinterested analysis of the nation’s stock markets and
compensated promotion of particular stocks.”).
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“Prospective Students,” “Academics,” “Staff,” and “Student & Alumni Services”
sections. (See, e.g., RJN Ex. L.) The disclosures mandated by CBE appear in the
“About Us”/”Accreditation” section. SCIL cannot evade the regulation simply
because its website as a whole does more than evince an economic motive. SCIL’s
entire website may not be only a vehicle to recruit students, but the aspects ALS
Guideline 2.3(D) regulates are. Cf. Dex Media West, 696 F.3d at 963 (“[The
phone book] was not created to serve merely as a vehicle for the delivery of ads.
The telephone directory started as just that, a directory of telephone numbers. The
commercial elements came later. . . .”); Am. Acad. of Pain Mgmt., 353 F.3d at
1106 (commercial speech covered by statute included extensive nonmisleading
factual information). Therefore, the Court finds that unlike in Riley, CALS’s
noncommercial speech can occur without the compelled disclosures. “No law of
man or nature makes it impossible” to separate the commercial and
noncommercial aspects: selling the school while also providing resources for
current students. Fox, 492 U.S. at 474.
Lastly, the Ninth Circuit has applied commercial speech standards to speech
that does not fit within traditional definitions of commercial speech. See, e.g.,
Envtl. Def. Ctr., Inc. v. U.S. E.P.A., 344 F.3d 832, 849–51 & n.27 (9th Cir. 2003)
(applying commercial speech standards to requirements to educate the public
about the impacts of stormwater discharge on water bodies and to inform affected
parties, including the public, about the hazards of improper waste disposal);
CTIA–The Wireless Ass’n v. City & Cnty. of San Francisco, 827 F. Supp. 2d
1054, 1059–61 (N.D. Cal. 2011) (applying commercial speech standards to
mandated disclosures by cell phone retailers about health risks of cell phones in
light of presumption that government may require disclosures about public health
risks), aff’d in part and vacated in part on other grounds, 494 F. App’x 752 (9th
Cir. 2012). As the Court discusses more fully infra, the principles addressed in
Environmental Defense Center further justify an analysis under the Supreme
Court’s commercial speech precedents.
Accordingly, the Court holds that the challenged regulation is a required
disclosure in the commercial context and that SCIL’s regulated commercial speech
is not “inextricably intertwined” with noncommercial speech.
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