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Court Rules Against Preliminary Injunction in Second GE Lawsuit

Court Rules Against Preliminary Injunction in Second GE Lawsuit

What You Need to Know

Yesterday, the United States District Court for the Northern District of Texas, Fort Worth Division, denied a motion for a preliminary injunction in Ogle School Management v. U.S. Department of Education. Ogle School Management, LLC and Tricoci University of Beauty Culture, LLC filed this lawsuit against the U.S. Department of Education challenging its Gainful Employment rule. This decision was not in the case brought by AACS.  

In his ruling in the Ogle matter, Judge O’Connor held that “Plaintiffs have not met their burden to justify an extraordinary remedy of injunctive relief at this stage….[However] This holding is not a substitute for a merits-based decision. Plaintiffs may ultimately succeed upon review of the full administrative record at summary judgment.” The preliminary injunction would have blocked enforcement of the Gainful Employment Final Rule until the district court ruled on the case.

As part of the order, Judge O’Connor found: 

(1)   At this initial point of the case, the Court is not convinced that the Department misinterpreted the definition of “gainful employment” to necessitate a ruling for injunctive relief. The Court initially held that “gainful employment” encompasses profitability and advantageous financial outcomes and, therefore, the Department has not exceeded its authority in promulgating this Final Rule.

(2)   As to whether the Final Rule is arbitrary and capricious, the Plaintiff has not yet met this burden as the Department engaged in “thorough rulemaking.” The Court found that the Department adequately reviewed and responded to each of the public comments proposed in the rulemaking process in accordance with the requirements of the Administrative Procedure Act.

Judge O’Connor further stated in the order, “Plaintiffs shall confer with Defendants regarding whether consolidation with American Association of Cosmetology Schools is appropriate.”

Why This is Important

AACS was hopeful that Ogle and Tricoci would be successful in obtaining a preliminary injunction against the enforcement of the GE Rule. However, the Judge has stated his ruling does not amount to a ruling on the merits. We additionally want to note that the AACS lawsuit includes a number of different arguments that were not raised in this lawsuit. 

The case brought by AACS remains on track for summary judgment briefing to be completed this fall. 

For more information:

Ogle School Management v. U.S. Department of Education

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