Esteban Narez decided to enroll in the Pacific Coast Horseshoeing School, Inc. operated by Bob Smith, an experienced horse farrier. However, Narez did not have a high-school diploma or a GED and was considered an “ability-to-benefit student” under the Private Postsecondary Education Act of 2009.
The California Legislature adopted the Act to ensure that students who enrolled in private postsecondary schools in California would benefit from such programs and to regulate contracts between students and a private entity offering postsecondary education to the public for charge. The Act defined a category of students, known as “ability-to-benefit students,” as those students “who do not have a certificate of graduation from a school providing secondary education, or a recognized equivalent of that certificate.”
The Act prohibited an institution from executing an enrollment agreement with ability-to-benefit student unless the student took an examination prescribed by the U.S. Department of Education. If the student did not pass the examination, the institution could not enroll the student. However, the Act exempts certain courses and private institutions from these requirements. For example, educational programs “sponsored by a bona fide trade, business, professional, or fraternal organization” were exempt, so long as the program was provided “solely for that organization’s membership.” The Act also exempted courses that offered recreational education programs, admissions test preparation courses, continuing education or license examination preparation courses, and flight instruction. Additionally, the Act exempted various institutions, including institutions that did not award degrees and that solely provided educational programs for total charges of less than $2,500.
Because Narez did not have a high school diploma or GED, the Act prohibited him from enrolling in Smith’s courses unless Narez first passed an examination prescribed by the U.S. Department of Education. But if Smith operated a flight school or taught golf or dancing, Narez could enroll without restriction. Absent the ability-to-benefit requirement, Narez alleged he would enroll in the School and the School would accept him.
Smith, Narez, and the School filed a lawsuit against the State to challenge the ability-to-benefit requirement on First Amendment grounds. The trial court concluded that the ability-to-benefit requirement did not prohibit the imparting or disseminating of information that implicated the First Amendment. Instead, the Act only regulated conduct (the forming of an enrollment agreement), and its burden on speech was “incidental.” Accordingly, the trial court concluded that Smith, Narez, and the School failed to allege a First Amendment claim. They appealed.
On appeal, the State argued the Act did not implicate speech, and the Act did not prohibit Narez from learning about horseshoeing outside of enrollment at a private postsecondary educational institution prior to passing an ability-to-benefit-examination.
However, the Court of Appeals disagreed and held the Act controlled more than a contractual relationship. Instead, the Act regulated what kind of educational programs different institutions offered to different students, and such a regulation implicated the First Amendment. Because the Act favored particular kinds of speech and particular speakers through an extensive set of exemptions (and therefore disfavored all other speech and speakers), Smith, Narez, and the School properly alleged a First Amendment Claim.
Ultimately, the Court ordered the case back to the trial court to determine whether this case involved commercial or non-commercial speech, what level of scrutiny the trial court must use when analyzing the Act, and whether the State carried its burden under that standard.
Pac. Coast Horseshoeing Sch., Inc. v. Kirchmeyer (2020) __ F.3d. __ [2020 WL 3069768].