Update on APSCU Litigation
On February 21, 2012, a three judge panel1 of the U.S. Circuit Court of Appeals for the D.C. Circuit heard oral arguments from the Association of Private Sector Colleges and Universities (“APSCU”) and the U.S. Department of Education (“Department”) regarding APSCU’s challenge to several of the Department’s “program integrity” regulations including those on state authorization. APSCU was successful in having the District Court strike down Section 600.9(c) of the state authorization regulations, the regulation related to distance education, on technical grounds. The lower court found that the Department failed to provide proper notice and opportunity for public comment.2
The oral arguments focused mostly on the other two issues on appeal: the federal misrepresentation and incentive compensation regulations. There was, however, discussion about whether the Department provided sufficient notice that the state authorization regulations would be changed in the rulemaking. The Department argued that related discussions in the notice of proposed rulemaking, focused mostly on reciprocity agreements and citations to the relevant statute, were sufficient to constitute notice, while APSCU argued that they were not. APSCU also renewed its argument, rejected by the District Court, that it had standing to challenge the broader state authorization rule beyond 34 C.F.R. 600.9(c), which was the only provision vacated.
The appeals court panel is expected to issue an opinion by early summer. If the court upholds the lower court ruling, it is possible the Department may elect to re-issue the rule.