Ninth Circuit Panel Holds that California Private Post-Secondary School Regulation Infringes on the First Amendment

July 20, 2020

 

On June 10, the United States Court of Appeals for the Ninth Circuit held, in Pacific Coast Horseshoeing School v. Kirchmeyer, that a provision of California’s Private Postsecondary Education Act of 2009 (PPEA) regulates speech and implicates heightened First Amendment scrutiny. Though cloaked as a modest decision, in fact the court’s opinion represents a radical expansion of the use of the First Amendment as a deregulatory tool. 

 

California enacted the PPEA to address the lack of protections for students at private postsecondary schools, which have become notorious for fraudulent or substandard educational programs and degrees. The statute requires, among other things, that students without a high school degree or its equivalent must be shown to have an “ability to benefit” from the instruction before enrolling in a private post-secondary school. In order to demonstrate the ability to benefit, students must take a test prescribed by the United States Department of Education, or schools may develop their own admissions test and submit it to the Bureau for Private Postsecondary Education for approval. 

 

In this case, the director of a horseshoeing school and a prospective student who did not meet the pre-existing “ability to benefit” requirements (the school did not submit an alternative test for approval) sued the California Department of Consumer Affairs and the Bureau for Private and Postsecondary Education. The plaintiffs challenged the law under the First Amendment, arguing that teaching is speech, and that preventing plaintiffs from executing an enrollment agreement inhibits their teaching and learning of horseshoeing, which impermissibly burdened their right to speak freely.  

 

The district court disagreed, determining that execution of an enrollment agreement is non-expressive conduct, not speech. In dismissing the case, the district court held that the law imposed only an incidental burden on speech, so plaintiffs’ First Amendment claim could not succeed.

 

The Ninth Circuit rejected the district court’s assertion and held that the PPEA controls more than contractual relations. According to the panel, the law regulates the type of educational programs institutions can offer to students, restricting the rights of both speakers (teachers) and would-be listeners (students). Thus, the court determined, the PPEA regulates speech. 

 

Having determined that the PPEA implicates the First Amendment, the court turned to the question of how to evaluate the burden on speech. The court noted that challenges to legislation regulating commercial transactions are usually reviewed under a “rational basis” standard. A statute may survive a constitutional challenge “if the legislature has identified a legitimate state interest and the legislation has a rational basis for furthering that interest.” However, if the legislation burdens a fundamental right, such as the right to free speech, it is to be examined with more exacting or “heightened scrutiny.” 

 

The Ninth Circuit determined that the PPEA requires heightened First Amendment scrutiny — not rational basis review — because the statute makes content-based distinctions among speakers and subjects. Under the PPEA, a solely avocational or recreational course, for example, is not covered by the ability-to-benefit requirement. The court noted that the PPEA contains several exceptions to the ability-to-benefit rule, and the exceptions turn on one of two things: (1) the content of what is being taught, or (2) the identity of the speaker. 

 

The court declined to decide whether the PPEA should be evaluated under an intermediate scrutiny or strict scrutiny standard, ostensibly leaving it up to the District Court on remand which form of heightened scrutiny should apply. However, since the court stated that content-based distinctions generally involve strict scrutiny, and expressly foreclosed the possibility of applying the “intermediate scrutiny” standard used for laws that restrict speech only incidentally, the district court will have limited options.

 

Further, the Ninth CIrcuit did not attempt to avoid the constitutional question, even though the possibility of submitting an alternative test for approval (which the school did not do) would appear to obviate the need for a First Amendment inquiry at all.

 

It is difficult to avoid the conclusion that this was an ideologically driven case — a conclusion corroborated by the statement by plaintiffs’ co-counsel, the Institute for Justice, that its mission is to use the First Amendment “to ensure that government regulation is constrained.” 

 

The Center for Consumer Law & Economic Justice at Berkeley Law, along with the Public Good Law Center and several other consumer advocacy organizations, joined the case as amici curiae. The Center’s brief details the financial harm that private post-secondary schools can inflict on students, and the importance of regulating these schools so that students — especially low-income students and students of color — are not saddled with debt for a useless education. The brief stressed that the private post-secondary industry has reaped financial rewards from defrauding students, and that robust regulation is needed to protect those students. 

 

The Center’s brief also highlights the difficulty of regulating the private post-secondary school industry under the plaintiffs’ construction of the PPEA. The brief notes that finding that the PPEA implicates protected speech would invite a First Amendment challenge to every law designed to regulate postsecondary educational institutions, including those aimed at establishing basic consumer protection standards.

 

The court’s opinion addressed this argument briefly. The court agreed “for the most part” that generally applicable laws — such as tax, zoning, and employment — do not implicate the First Amendment. The court described how, in order to maintain public safety and order, the government has power to subject individuals and entities to “generally applicable economic regulations without creating constitutional problems.” However, the Court found the PPEA implicates the First Amendment because it distinguishes between types of speech and speakers.

 

The court’s decision has wider implications than what the court acknowledged. If the PPEA implicates speech because it affects higher education, which involves communication, then any regulation directed at any business that operates through communication will require heightened scrutiny under the First Amendment. It is difficult to see an end-point to the court’s reasoning. 

 

The opinion effectively invites businesses that use communication to exempt themselves from basic and well-established standards of conduct. Even regulations on normal economic activity that involves communication, according to the Court, may now need to survive intermediate scrutiny. Challengers need not prevail in order to succeed in their deregulatory purpose; an industry could tie the government up in litigation over the most basic regulations. The process of adjudication itself could make regulating communication-based businesses unworkable.

 

It seems odd indeed to require that the government meet the heightened requirements of intermediate scrutiny, not to mention strict scrutiny, in order to engage in oversight of businesses and protection of consumers. The court’s invocation of the First Amendment here is reminiscent of the automatic invocation of “substantive due process” to strike down worker health and safety laws a century ago. 

 

The Lochner era witnessed extensive harm to ordinary citizens who were deprived of the basic protections their elected representatives had deemed necessary. With the Pacific Coast Horseshoeing decision, the new Lochner era — “weaponizing the First Amendment” rather than the due process clause — continues.

 

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