California

California AG’s Legal Battle With Ashford University Rages On

The attorneys for both sides recently told a San Diego judge a lot of litigation remains.

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(Photo via iStock)

San Diego Superior Court Judge Eddie C. Sturgeon jokingly boasted at one point during a series of hearings last Friday that even though some Los Angeles courts were setting trials as far out as 2021, he was only scheduling for 2020.

Then the attorneys in the People of the State of California v. Ashford University case came forward for their case management conference.

A lawyer for Ashford said that since there were roughly 40 more depositions to be completed in the case filed in late 2017, a trial date for April 2021 should be set.

A deputy attorney general suggested even that timeline may be ambitious given some of the litigation issues needing to be ironed out.

Sturgeon set a trial date for late April 2021.

The complaint filed by California Attorney General Xavier Becerra’s office alleged for-profit Ashford and its then San Diego-based parent company, Bridgepoint Education, made false promises and provided students with inaccurate information to get them to enroll.

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The AG also accused the defendants of illegal debt collection practices against students who were having difficulty paying their bills.

“The People seek an injunction preventing further misconduct, restitution for victims, civil penalties, the Attorney General’s costs of suit, and other relief that the Court deems just, proper and equitable,” the AG’s office wrote in a recent case management statement.

Ashford and its renamed parent company, Zovio Inc., called the AG’s complaint “politically-motivated.”

“The allegations of any pattern or practice of condoned misrepresentations, fraudulent conduct, and misleading advertising are unfounded and false,” the defendants wrote in the recent case management statement. “At all times relevant to this action, Defendants acted in good faith, having implemented a corporate compliance program and other safeguards — which were carefully designed and implemented based on the model for compliance programs established under federal regulations — to prevent, detect, and remedy the type of conduct being challenged by the AG in this case.”

The defendants also highlighted that prior to the AG filing its suit, they entered into settlement agreements with the state of Iowa and the U.S. Consumer Financial Protection Bureau “that addressed virtually the identical issues raised in the complaint.”

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In 2014, Ashford and Bridgepoint Education agreed to pay Iowa $7.25 million to settle allegations that they violated the state’s Consumer Fraud Act.

“The company also must comply with minimum standards in its future representations and disclosures to prospective and current students nationwide,” the Iowa Attorney General’s Office said.

Two years later, the company agreed to forgive loans and issue refunds totaling $23.5 million to resolve the Consumer Financial Protection Bureau’s findings that Bridgepoint deceived students into taking out loans that cost more than advertised. Bridgepoint also agreed to pay the bureau an $8 million civil penalty.

The bureau’s release about the consent order noted that the California Attorney General’s Office assisted with the investigation.

The AG acknowledged in the recent case management statement in the San Diego case that it did assist with CFPB with its investigation, including participating in two settlement meetings.

“Defendants ultimately chose to approach the CFPB alone with a settlement proposal which CFPB accepted,” the AG’s office wrote. “The People were not a party to and had no standing to object to Defendants’ settlements with the Iowa Attorney General or the CFPB. Furthermore, this case covers different issues than Defendants’ settlements with the Iowa Attorney General’s Office and CFPB.”

Since the filing of the California AG’s case, Bridgepoint not only changed its name to Zovio, but also moved its headquarters to Arizona earlier this year. In addition, Ashford is working to convert from a for-profit to a nonprofit.

In the meantime, the school and its parent company will continue contending with the California AG’s suit.

Lyle Moran is a freelance writer in San Diego who handles both journalism and content writing projects. He previously reported for the Los Angeles Daily Journal, San Diego Daily Transcript, Associated Press, and Lowell Sun. He can be reached at lmoransun@gmail.com and found on Twitter @lylemoran.

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