People v. Ashford University, No. D080671 (D4d1 Mar. 8, 2024).
This is a UCL/FAL case that the Cal. AG brought against an online university for deceptive marketing practices. By the Court’s description, it was a high pressure boiler-room type operation where the University’s marketing employees were encouraged to make a hard sell to perspective students. As part of that, the school’s admissions people made a bunch of false statements on telephone solicitations regarding myriad aspects of the costs and benefits of enrollment and the credential to be obtained. The trial court found that the University made nine different kinds of misrepresentations. Based on a statistical sample taken by the AG’s expert, it determined that that there were 1,243,099 violations of the UCL and FAL and assessed civil penalties of about $22.4 million.
University doesn’t appeal liability, but it challenges the penalty calculation in a bunch of ways. It succeeds in an argument that some of the calls were outside of the UCL or FAL statutes of limitations (4 and 3 years, respectively) and manages to get about $900k of the fine tossed. But it fails on several other challenges to the penalty. Chief among them is the fact that what counts as the unit of a UCL or FAL “violation”—each of which is subject to a $2,500 penalty—is essentially governed by a rudderless gestalt rule of “whatever the trial court thinks it is.” Defendants never win on that (although sooner or later there has to be a 14th amendment issue) and the University doesn’t improve the defense bar’s batting average here.
But the noteworthy procedural point in this case is the six pages the Court spends detailing “Defendants’ Briefing Violations.” In particular, the Court says that the Defendants’ statement of facts in the AOB presented a slanted and unduly argumentative version of the facts, particularly in context of a standard of review that does not view the facts in a light most favorably to an appellant. Rule of Court 8.204(a)(2)(C) requires an AOB to contain summary of significant facts. That has been interpreted to require the appellant to be accurate and fair in dealing with the record. California courts take the requirement seriously.
The Court further dings the University for making factual statements with no support in the record, for citing materials that were not appropriately part of the appellate record, and for seeking judicial notice in a procedurally improper manner.
Reversed in part.