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Negash v. DeVry University

United States District Court, E.D. Michigan, Southern Division

March 30, 2018

ABEBE G. NEGASH, Plaintiff,
v.
DEVRY UNIVERSITY, DEPARTMENT OF EDUCATION, Defendants.

          ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS [#18; #28]

          DENISE PAGE HOOD, CHIEF JUDGE, UNITED STATES DISTRICT COURT

         I. BACKGROUND

         A. Procedural Background

         On January 26, 2017, Plaintiff Abebe G. Negash (“Negash”), pro se, brought this action against Defendants DeVry University (“DeVry”) and the Department of Education (“DOE”) (collectively, “Defendants”). (Doc # 1) Negash alleges Defendant DeVry is guilty of misrepresentation and/or misuse of federal funds in violation of Title IV of the Higher Education Act (“HEA”). Negash also alleges Defendant DOE should be held liable for a lack of accountability and oversight over DeVry's handing of federal funds in violation of HEA. Negash seeks injunctive relief and monetary damages for the alleged violations.

         This matter is before the Court on Defendant DeVry's Motion to Dismiss the Complaint for lack of personal jurisdiction (Fed. R. Civ. P. 12(b)(2)), improper venue (Fed. R. Civ. P. 12(b)(3)), and for failure to state a claim upon which relief can be granted (Fed. R. Civ. P. 12(b)(6)) (Doc # 18); and the DOE's Motion to Dismiss for lack of subject matter jurisdiction (Fed. R. Civ. P. 12(b)(1)) and failure to state a claim upon which relief can be granted (Fed. R. Civ. P. 12(b)(6)). All Responses and Replies have been filed. (see Doc # 20; # 23; # 32; # 33)

         For the reasons set forth below, the claims against Defendants DeVry University and the Department of Education are DISMISSED.

         B. Factual Background

         In March 2010, Negash lived near Seattle, Washington. Around that time, he met a recruiter from DeVry University while at an unemployment office. (Doc # 1, Pg ID 6) Negash claims the recruiter made “promises of future employment.” (Id.) Negash claims he enrolled at DeVry based on statements made by the recruiter, information listed on DeVry's website, the number of students that graduate, and potential earnings after graduation. (Id.) DeVry had campuses in Lynwood, Washington and Federal Way, Washington at that time. (Doc # 18, Pg ID 67) From March 2010 to April 2011, Negash was enrolled in five classes at DeVry's Keller Graduate School of Management at the Federal Way, Washington campus. (Doc # 18, Pg ID 66) In order to pay for his graduate school tuition and cost of living, Negash borrowed $28, 875 in federal student loans. He used $11, 186 of his student loans to pay tuition to DeVry. (Doc # 18, Pg ID 67).

         Negash received notice on May 28, 2010 from DeVry's advising office that, among other things, “students at the graduate level are expected to achieve and maintain a minimum 3.00 GPA.” (Doc # 18-3, Pg ID 93) By the end of the Fall 2010 semester, Negash's term GPA was a 2.70 after withdrawing from two of the five courses he enrolled in for the term. (Doc # 18-5, Pg ID 132) On March 7, 2011, Negash was dismissed from the DeVry University Keller Graduate School due to his failure to maintain the minimum academic requirements. (Doc # 18-6, Pg ID 134) DeVry notified Negash that he could remain enrolled and active in his courses, and that he could appeal his dismissal within 7 days of receiving notice of the dismissal. Id. Negash did not appeal. On March 9, 2011, Negash called DeVry and stated that his dismissal was unfair, and that DeVry dismissed him because he “could no longer receive FAFSA money.” (Doc # 18-8, Pg ID 140)

         Negash then filed a complaint with the State of Washington Higher Education Coordinating Board (“HECB”), stating that he was concerned about “academic and financial deception” at DeVry. (Doc # 18-2, Pg ID 89) The Washington HECB “found no specific examples in the documents . . . that showed the type of academic or financial deception [Negash] claim[s] occurred.” (Doc # 18-9, Pg ID 145) The HECB further found “no substantial evidence that DeVry University has violated any provision of the rules governing degree-granting schools.” (Doc # 18-9, Pg ID 147)

         On January 23, 2017, Negash electronically submitted an Application for Borrower Defense to Loan Repayment to the DOE, and the DOE “stopped all collection activity on his debt February 1, 2017 . . . and inactivated the debt from the Treasury Offset Program on March 3rd, 2017.” (Doc # 28-1, Pg ID 290, Doc # 28, Pg ID 275)

         II. ANALYSIS

         A. Standards of Review

         1. Rule 12(b)(1)

         Fed. R. Civ. P. 12(b)(1) provides for the dismissal of an action for lack of subject matter jurisdiction. A Rule 12(b)(1) motion for lack of subject matter jurisdiction can challenge the sufficiency of the pleading itself (facial attack) or the factual existence of subject matter jurisdiction (factual attack). Cartwright v. Garner, 751 F.3d 752, 759-60 (6th Cir. 2014) (citing United States v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994). In the case of a facial attack, and the court takes the allegations of the complaint as true to determine whether the plaintiff has alleged a basis for subject matter jurisdiction. Id.

         In the case of a factual attack, a court has broad discretion with respect to what evidence to consider in deciding whether subject matter jurisdiction exists, including evidence outside of the pleadings, and has the power to weigh the evidence and determine the effect of that evidence on the court's authority to hear the case. Id. Plaintiff bears the burden of establishing that subject matter jurisdiction exists. DLX, Inc. v. Commonwealth of Kentucky, 381 F.3d 511, 516 (6th Cir. 2004).

         2. Rule 12(b)(2)

         Plaintiff bears “the burden of establishing the district court's personal jurisdiction” over the Defendant. Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 887 (6th Cir. 2002). As there has been no evidentiary hearing on the matter, the court will “consider the pleadings and affidavits in a light most favorable to the plaintiff.” Compuserve, Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir. 1996) (citing Theunissen v. Matthews, 935 F.2d 1454, 1458-59 (6th Cir. 1991). Granting a motion to dismiss is only proper “if all the specific facts which the plaintiff . . . alleges collectively fail to state a prima facie case for jurisdiction.” Id. (emphasis in original).

         General jurisdiction is satisfied in a forum if the defendant's contacts within that forum are “so constant and pervasive as to render it essentially at home.” Diamler AG v. Bauman, 134 S.Ct. 746, 751 (2014) (citations omitted). “With respect to a corporation, the place of incorporation and principal place of business are paradigm bases for general jurisdiction.” Id. at 760. Alternatively, personal jurisdiction can be satisfied through specific jurisdiction. Specific jurisdiction “grants jurisdiction only to the extent that a claim arises out of or relates to a defendant's contacts in the forum state.” Miller v. AXA Winterthur Ins. Co., 694 F.3d 675, 679 (6th Cir. 2012) (citation omitted). Whether a defendant's claim arises out of contacts in the forum is determined applying three criteria. Southern Machine Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968). First, the defendant must “purposefully avail himself of the privilege of acting in the forum state . . . .” Id. Second, the “cause of action must arise from the defendant's activities there.” Id. Third, the acts of the defendant must demonstrate a “substantial enough connection with the forum state . . . .” Id.

         3. Rule 12(b)(3)

         Federal Rule of Civil Procedure 12(b)(3) provides for a motion to dismiss based on improper venue. “On a motion to dismiss for improper venue, the plaintiff bears the burden of proving that venue is proper.” Audi AG & Volkswagen of Am., Inc. v. Izumi, 204 F.Supp.2d 1014, 1022 (E.D. Mich. 2002). A dismissal for improper venue may be based on Rule 12(b)(3), but the requirements for what is a proper venue are established by 28 U.S.C. § 1391(b). Kerobo v. Southwestern Clean Fuels, Corp., 285 F.3d 531, 538 (6th Cir. 2002). The statute reads:

(b) Venue in general.-- A civil action may be brought in--
(1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or
(3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court's personal jurisdiction with respect to such action.

28 U.S.C. § 1391(b).

         If venue is found to be improper, a district court “shall dismiss, or if it be in the interest of justice, transfer such case to any district . . . in which it could have been brought.” 28 U.S.C. § 1406(a).

         4. R ...


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