United States District Court, E.D. Virginia, Richmond Division
REPORT & RECOMMENDATION ON DEFENDANTS' MOTION
TO DISMISS THE AMENDED COMPLAINT AND PLAINTIFFS' MOTION
FOR PRELIMINARY INJUNCTION
Roderick C. Young, United States Magistrate Judge.
McGlothian, Tracy McGlothian, and the Mt. Olivet Group, LLC
(collectively, "Plaintiffs") bring this action
against W. Heywood Fralin, H. Eugene Lockhart, Henry Light,
Ken Ampy, Rosa Atkins, Marge Connelly, Victoria D. Harker,
Stephen Moret, William Murray, Carlyle Ramsey, Minnis E.
Ridenour, Tom Slater, Katharine M. Webb, and Peter Blake
(collectively, "Defendants" or "SCHEV")
in their official capacity as leaders and members of the
State Council of Higher Education for Virginia
("SCHEV"), alleging violations of their rights
under the First and Fourteenth Amendments of the United
States Constitution, This matter is before the Court pursuant
to 28 U.S.C. § 636(b) (1) (B) for a Report and
Recommendation on Defendants' Motion to Dismiss for
Failure to State a Claim ("Motion to Dismiss") (ECF
No. 20) under Federal Rules of Civil Procedure 12(b)(1) and
12(b)(6) and Plaintiffs' Motion for Preliminary
Injunction (ECF No. 4). The motions have been fully briefed
and are ripe for review. The Court dispenses with oral
argument because the materials before the Court adequately
present the facts and legal contentions, and argument would
not aid the decisional process at this stage. E.D. Va. Loc.
Civ. R. 7 (J) . For the reasons set forth below, the
undersigned RECOMMENDS that Defendants' Motion to Dismiss
be DENIED and Plaintiffs' Motion for Preliminary
Injunction be DENIED.
FACTUAL AND PROCEDURAL BACKGROUND
12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure
instruct that the Court accept as true a plaintiff's
well-pleaded allegations, viewing all facts and drawing all
reasonable inferences in the light most favorable to him.
T. G. Slater & Son, Inc. v. Donald P. & Patricia
A. Brennan, LLC, 385 F.3d 836, 841 (4th Cir. 2004)
(citing Mylan Labs, Inc. v. Matkari, 7 F.3d 1130,
1134 (4th Cir. 1993)). Applying these standards, the
following facts are established for the purpose of the Motion
to Dismiss and will be considered for purposes of the Motion
for Preliminary Injunction.
JONATHAN AND TRACY MCGLOTHIAN'S COURSES AT THE MT. OLIVET
Jonathan McGlothian teaches project management classes
through contracts with private companies and military units.
(Am. Compl. ¶ 5.) The Project Management Institute, a
private-sector professional body, is the largest
certification body for the project management profession.
(Id. ¶ 17.) The Project Management
Institute's primary certification is the Project
Management Professional ("PMP") certificate, which
signals proficiency in project management, (Id.
¶¶ 17, 18.) To sit for the PMP certification test,
candidates must have completed thirty-five hours of project
management education and possess either: (a) a college degree
and 4, 500 hours of experience leading and directing
projects; or (b) a high school diploma and 7, 500 hours of
experience leading and directing projects. (Id.
McGlothian teaches project management classes through the
entity he co-founded with his wife, Tracy McGlothian-The Mt.
Olivet Group, LLC ("TMOG"). (Id. ¶
26). Within TMOG, there are multiple educational programs,
specifically the TMOG Learning Center and Virginia Beach
Sewing Solutions. (Id. ¶¶ 28, 43.)
Jonathan and Tracy McGlothian are the sole owners of TMOG;
Jonathan McGlothian serves as its President, and Tracy
McGlothian is the Vice-President. (Id. ¶¶
26, 42.) TMOG operates the TMOG Learning Center, through
which Jonathan McGlothian prepares candidates for the PMP
exam through a thirty-five hour course spread over five days
of instruction. (Id. ¶ 28). Because the Project
Management Institute recognizes TMOG as a registered
educational provider, PMP candidates can use Jonathan
McGlothian's course to satisfy the PMP certification
requirement that they complete thirty-five hours in project
management education. (Id.)
addition to the PMP test-preparation course, Jonathan
McGlothian teaches other courses on project management,
including courses titled "Project Management
Fundamentals," "Project Management
Essentials," "Practical Project Management
Training," and "Leadership Skills."
(Id. ¶ 29.) He teaches courses to prepare
students for other Project Management Institute certification
exams, including tests to become a Certified Associate in
Project Management and Agile Certified Practitioner.
(Id. f 30.) In addition to test preparation, he also
teaches general project management skill classes.
(Id. ¶ 31.)
McGlothian, an experienced seamstress, manages Virginia Beach
Sewing Solutions, a custom sewing and embroidery operation
within TMOG. (Id. ¶¶ 41, 43.) In this
role, she trains employees to use commercial-grade sewing
machines through contracts with employers. (Id.
¶ 43.) She also teaches classes training students how to
sew as a hobby. (Id. ¶ 44.)
TMOG Learning Center has never offered degrees of college
credit, accepted student loans, or received federal
Department of Education funds for any of the McGlothians'
classes. (Id. ¶¶ 40, 47.) Jonathan
McGlothian teaches his project management classes only
through contracts with military units and private employers.
(Id. ¶¶ 34, 35.) Tracy McGlothian teaches
her commercial sewing courses only through contracts with
private employers (id. ¶ 43), and teaches
students solicited from the public only how to sew as a hobby
(id. ¶ 44, 45) .
THE CHALLENGED STATUTES
seek injunctive relief against enforcement of Va. Code
§§ 23.1-213 to 23.1-228 and 8 Va. Admin. Code
§§ 40-31-10 to 40-31-320 (collectively, the
"Vocational School Law'') .
is Virginia's coordinating body for higher education
established "to advocate for and promote the development
and operation of an educationally and economically sound,
vigorous, progressive, and coordinated system of higher
education in the Commonwealth . . . ." Va. Code §
23.1-200. SCHEV regulates private postsecondary
schools, which include programs of academic, vocational, and
continuing professional education with curricula designed for
students with a high school diploma or its equivalent, or for
students who are beyond the age of compulsory high school
attendance, and for which tuition or a fee is charged. Va.
Code § 23.1-213; 8 Va. Admin. Code § 40-31-10.
"Postsecondary school" does not include basic adult
educational programs or avocational programs, which are
instructional programs not intended to prepare students for
employment but are intended solely for recreation or as a
hobby, or courses that prepare individuals to teach such
pursuits. Va. Code § 23.1-213; 8 Va. Admin. Code §
40-31-10. SCHEV is responsible for creating and enforcing the
procedures to ensure that postsecondary schools meet the
minimum standards in their operations. Va. Code §
furtherance of its statutory duties, SCHEV requires
postsecondary schools that solicit students from the public
to obtain certification to operate in the Commonwealth once
the school obtains a valid business license. Va. Code §
23.1-217. The certification criteria for career-technical
schools include, inter alia: providing information
and documentation concerning a school's admission
requirements, maintenance of student records and financial
records, and the school's refund policy for tuition, 8
Va. Admin. Code § 40-31-160; determining that a
school's courses, curriculum, and instruction are of
sufficient quality, content, and length to adequately achieve
a school's stated objective, id. §
40-31-150; and, determining that the faculty have appropriate
educational backgrounds for their areas of instruction and
appropriate professional certification or licensure, if
appropriate in that field, id. In the certification
application, a postsecondary school must: provide SCHEV with
the results of an annual audit, id. §
40-31-160(H)(1); demonstrate that it creates transcripts for
students and contracts with a third-party school or records
maintenance organization to preserve such transcripts in the
event that the school closes, id. §
40-31-160(E)(2); demonstrate that students have access to an
"adequate and appropriate" library, id.
§ 40-31-160(M); create publicly available documents,
brochures and catalogues detailing a variety of information
regarding the school, id. § 40-31-160 (B), (C),
(D), (F), (J); and, allow SCHEV to conduct random audits of
its programs to verify compliance with the regulatory scheme,
id. § 40-31-200(A). Postsecondary schools must
pay a $2, 500 application fee, id. § 40-31-260
(D), as well as submit a surety instrument with SCHEV in an
amount equal to the total tuition that the school collects,
§ 40-31-160(1), 40-31-160(B) (3) . SCHEV will certify a
school only after it has conducted a physical examination of
its facilities. Id. § 40-31-130 (D) .
exempts certain schools, programs, degrees, diplomas, and
certificates from its certification process. Id.
§ 40-31-60. Professional programs for professional or
occupational training offered to the extent the program is
subject to approval by a regulatory board pursuant to Title
54.1 are exempt. Id. Also exempt are nursing
education programs at schools that are subject to approval by
the Virginia Board of Nursing, id., theological
education, continuing-education classes, preparation for
professional-practice and educational tests, among others.
See Va. Code § 23.1-226 (B); 8 Va. Admin. Code
§§ 40-31-40 - 40-31-60. Certification is not
required if the school teaches courses offered "solely
on a contractual basis for which no individual is charged
tuition and there is no advertising for open
enrollment." Va. Code § 23.1-226(B)(6).
denied certification or an exemption from certification can
request a fact-finding, administrative review of SCHEVs
determination under the Virginia Administrative Process Act.
8 Va. Admin. Code §§ 40-31-220, 40-31-70.
Administrative hearings are conducted by an independent
hearing officer appointed by the Supreme Court of Virginia,
and the hearing officer's determinations can be further
appealed or reviewed by an independent administrative appeal
panel. Id. Violations of SCHEVs regulations may be
punishable as a Class 1 misdemeanor; each course or program
offered in violation constitutes a separate offense. Va. Code
§ 23.1-228; 8 Va. Admin. Code § 40-31-230. As a
Class 1 misdemeanor, violations are punishable by up to one
year of incarceration, $2, 500 in criminal fines, and a civil
fine of $1, 000 per violation for a maximum total of $25, 000
civil fine per year. Va. Code §§ 18.2-11(a),
PLAINTIFFS' ATTEMPTS AT SCHEV CERTIFICATION
McGlothian attended a SCHEV orientation workshop for new
schools in March 2016 to learn about SCHEVs postsecondary
school certification process. (Am. Compl. ¶ 48.)
Plaintiffs applied for SCHEV certification of the TMOG
Learning center as a "career technical" school in
November 2016 (the "2016 Application").
(Id. ¶ 49.) In the 2016 Application, Plaintiffs
proposed a seventy-hour project management program taught by
Jonathan McGlothian and a sewing, embroidery, and life skills
program taught by Tracy McGlothian. (Id.
¶¶ 50, 51.) Plaintiffs spent more than one-hundred
hours completing the 2016 Application and paid SCHEV $2, 500
in application fees. (Id. ¶¶ 52, 53.) To
prepare for the 2016 Application, Plaintiffs rented
commercial property for classroom space to meet SCHEV s
criterion and spent more than twenty-thousand dollars on rent
payments, furniture, and fixtures. (Id. ¶ 53.)
December 28, 2016, SCHEV informed Plaintiffs that their
application package was incomplete and sent a letter
including SCHEVs "initial assessment," listing the
deficiencies and the additional information required to
complete the application. (Id. ¶ 54; Ex. 5, ECF
No. 21-4).) Plaintiffs resubmitted their SCHEV application on
March 16, 2017 and included additional requested information
(the “2017 Application"). (Am. Compl. ¶ 56.)
The 2017 Application also totaled hundreds of pages, and the
McGlothians spent dozens of hours completing it.
(Id. ¶ 57.) SCHEV informed Plaintiffs that the
2017 Application was unsatisfactory. (Id. ¶
58.) Accordingly, Plaintiffs withdrew from the SCHEV
application process. (Id. ¶ 59.)
September 27, 2017, Plaintiffs sent a letter and an
application to SCHEV seeking an exemption from SCHEV
certification on behalf of the TMOG Learning Center under Va.
Code § 23.1-226(B)(9), which exempts from regulation
"[t]utorial instruction delivered and designed to . . .
prepare an individual for an examination for professional
practice or higher education." (Id. ¶ 61.)
By letter dated October 30, 2017, SCHEV denied
Plaintiffs' exemption application as the project
management classes and PMP preparation courses were not
considered "professional practice." (Id.
¶¶ 63, 64.) SCHEV informed Plaintiffs that they
would need SCHEV certification to offer programs that prepare
individuals for project management certification tests.
(Id. ¶ 66.)
November 29, 2017, Jonathan McGlothian again sought a
statutory exemption from SCHEV certification on behalf of the
TMOG Learning Center. (Id. ¶ 67.) On December
18, 2017, SCHEV again denied the request. (Id.
¶ 68.) Plaintiffs no longer wish to apply for SCHEV
certification but would like to teach project management test
preparation, project management classes, and vocational
sewing to students solicited from the public. (Id.
23, 2018, Plaintiffs filed the instant action praying that
the Court enjoin SCHEV from enforcing the Vocational School
Law against Plaintiffs, allowing them to solicit students
from the public without certification. Plaintiffs received a
letter dated August 9, 2018 from SCHEVs Director of Private
Postsecondary Education, Sylvia Rosa-Casanova, accusing them
of running an illegal postsecondary school, threatening
criminal charges against them, and informing them that SCHEV
would refer their matter to the Virginia Attorney
General's Office to institute a civil proceeding against
them. (Id. ¶¶ 95, 97.) The letter included
a copy of an August 9, 2018 letter SCHEV sent to Virginia
Beach's Commissioner of the Revenue requesting that the
city revoke TMOG's business license. (Id. ¶
96.) Plaintiffs sent a reply letter to SCHEV objecting to its
content. (Id. ¶ 99.) Senior Assistant Attorney
General Allen Wilson sent Plaintiffs' counsel an August
17, 2018 letter on SCHEVs behalf, wherein he claimed that
SCHEV was statutorily required to seek the revocation of
Plaintiffs' business license but that he would halt the
enforcement procedures once SCHEV received documentation
showing that Plaintiffs were not violating SCHEVs
regulations. (Id. ¶¶ 99-100.)
provided SCHEV with sworn declarations that they do not offer
classes to students solicited from the public and were in
full compliance with SCHEV s regulations. (Id.
¶ 101.) SCHEV requested further information regarding
Plaintiffs' statements on their website on August 22,
2018. (Id. ¶ 102.) SCHEV rescinded its
enforcement proceedings against Plaintiffs and informed the
City of Virginia Beach Commissioner of the Revenue that
Plaintiffs were in compliance with the Vocational School Law
on August 28, 2019. (Id. ¶ 103.)
STANDARDS OF REVIEW
MOTION TO DISMISS UNDER RULE 12(B) (1)
Defendant [s] ha[ve] filed both a Motion to Dismiss for lack
of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1)
and a Motion to Dismiss for failure to state a claim under
Fed.R.Civ.P. 12(b)(6), the challenge to subject matter
jurisdiction asserted in the motion under Rule 12(b)(1) must
be addressed first," James v. United States,
143 F.Supp.3d 392, 394 (E.D. Va. 2015) (citing Sucampo
Pharms., Inc. v. Astellas Pharma, Inc., 471 F.3d 544,
548 (4th Cir.2006)).
may file a motion to dismiss under Rule 12(b)(1) for lack of
subject matter jurisdiction. "In determining whether
jurisdiction exists, the district court is to regard the
pleadings' allegations as mere evidence on the issue, and
may consider evidence outside the pleadings without
converting the proceeding to one for summary judgment.
Richmond, Fredericksburg & Potomac R. Co. v. United
States, 945 F.2d 765, 768 (4th Cir. 1991). The plaintiff
bears the burden of establishing that federal jurisdiction is
proper. Piney Run Preservation Ass'n v. Cnty.
Comm'rs of Carroll City/ 523 F.3d 453, 459 (4th Cir.
MOTION TO DISMISS UNDER RULE 12(B) (6)
motion to dismiss under Rule 12(b)(6) tests the sufficiency
of a complaint; importantly, it does not resolve contests
surrounding the facts, the merits of a claim, or the
applicability of defenses." Republican Party of N.C.
v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). Dismissals
under Rule 12(b)(6) are generally disfavored by the courts
because of their res judicata effect.
Fayetteville Investors v. Commercial Builders, Inc.,
936 F.2d 1462, 1471 (4th Cir. 1991). The Federal Rules of
Civil Procedure only require that a complaint set forth
"xa short and plain statement of the claim
showing that the pleader is entitled to relief,' in order
to 'give the defendant fair notice of what the . . .
claim is and the grounds upon which it rests.'"
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)
(omission in original) (quoting Conley v. Gibson,
355 U.S. 41, 47 (1957)). While the complaint's
"[f]actual allegations must be enough to raise a right
to relief above the speculative level,"
"detailed factual allegations" are not
required to satisfy the pleading requirement of Federal Rule
8(a)(2). Id. (emphasis added). In considering a
motion to dismiss for failure to state a claim, a
plaintiff's well-pleaded allegations are assumed to be
true, and the complaint is viewed in the light most favorable
to the plaintiff. Mylan Labs., 7 F.3d at 1134;
see also Martin, 980 F.2d at 952.
MOTION FOR PRELIMINARY INJUNCTION
[A] preliminary injunction is 'an extraordinary remedy
that may only be awarded upon a clear showing that the
plaintiff is entitled to such relief.'" Perry v.
Judd, 471 Fed.Appx. 219, 223 (4th Cir. 2012) (quoting
Winter v. Natural Res. Def. Council, Inc., 555 U.S.
7, 22 (2008)). Such remedy is "never awarded as of
right." Winter, 555 U.S. at 24. "[G]ranting a
preliminary injunction requires that a district court, acting
on an incomplete record, order a party to act, or refrain
from acting, in a certain way." Hughes
Network Sys., Inc. v. InterDigital Commc'ns
Corp., 17 F.3d 691, 693 (4th Cir. 1994). Therefore,
preliminary injunctions are "to be granted only
sparingly." Toolchex, Inc. v. Trainor, 634
F.Supp.2d 586, 590-91 (E.D. Va. 2008) (quoting In re
Microsoft Corp. Antitrust Litig., 333 F.3d 517, 524 (4th
eligible for a preliminary injunction, the party seeking such
relief must demonstrate each of the following factors: (1)
the likelihood of success on the merits; (2) the likelihood
of irreparable harm in the absence of preliminary injunctive
relief; (3) the balance of equities between the parties tips
in favor of the party seeking such relief; and, (4) the
public interest. Winter, 555 U.S. at 20; Real
Truth About Obama, Inc. v. Fed. Election Comm'n, 575
F.3d 342, 346 (4th Cir. 2009), vacated on other
grounds, 559 U.S. 1089 (2010), reinstated in
relevant part, 607 F.3d 355 (4th Cir. 2010). Plaintiffs,
as the party seeking a preliminary injunction, bear the
burden of establishing that each factor supports granting the
injunction. Real Truth, 575 F.3d at 346. Each factor
must be demonstrated by a "clear showing."
Winter, 555 U.S. at 22. The failure to show any one
of the relevant factors mandates denial of the preliminary
injunction. Real Truth, 575 F.3d at 346.
preliminary injunctions are issued to 'protect the status
quo and to prevent irreparable harm during the pendency of a
lawsuit . . . [so as] to preserve the court's ability to
render a meaningful judgment on the merits.'"
Perry, 471 Fed.Appx. at 223 (quoting In re
Microsoft Corp. Antitrust Litig., 333 F.3d at 525).
Mandatory injunctive relief, however, alters the status quo
by commanding or requiring a party to perform a positive act.
Mandatory preliminary injunctive relief "is disfavored,
and warranted only in the most extraordinary
circumstances." Id. (citing In re Microsoft
Corp. Antitrust Litig., 333 F.3d at 525). Here,
Plaintiffs ask the Court to require Defendants to take a
positive act to change by status quo by allowing Plaintiffs
to solicit students from the public for their vocational
skills classes without having obtained SCHEV certification,
as required by the Vocational School Law. “[A]
mandatory preliminary injunction must be necessary both to
protect against irreparable harm in a deteriorating
circumstance created by the defendant and to preserve the
court's ability to enter ultimate relief on the merits of
the same kind." In re Microsoft Corp. Antitrust
Litig., 333 F.3d at 526. Therefore, the Court treats
Plaintiffs' Motion for Preliminary Injunction with
increased caution because it requests mandatory relief.