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Ruling deals setback to Florida Coastal School of Law

School expresses disappointment with judge’s ruling, but still evaluating next steps

Florida Coastal School of Law’s hopes of staying open suffered a setback Monday when a federal judge denied a motion for a court order restoring its eligibility for federal funding.

JACKSONVILLE, Fla. – Florida Coastal School of Law’s hopes of staying open suffered a setback Monday when a federal judge denied a motion for a court order restoring its eligibility for federal funding.

The law school filed a lawsuit last month against the U.S. Department of Education over its decision to block the school’s reinstatement into a student loan program. The school sought a court order granting that reinstatement, saying it could not “survive without Title IV funding.”

In a 73-page ruling Monday, U.S. District Judge Marcia Howard denied the school’s motion for the court to step in. Howard acknowledged the school’s plight but said the school did not show the DOE erred in its decision or why the court’s intervention was needed.

“The closure may significantly jeopardize the dreams of hardworking students and the financial futures of the remaining students, faculty, staff, and investors,” the judge wrote. “But a dire outcome, no matter how devastating, cannot support the entry of injunctive relief in a case such as this where the school has made no showing that it can ultimately succeed on the merits of its attempt under the APA to obtain an order requiring the Department to reinstate its eligibility to participate in Title IV, HEA programs.”

The decision deals a potentially deadly blow to the law school, which indicated in court filings that without court-ordered relief, it would be forced to close its doors before Aug. 23. It wasn’t clear Wednesday whether that remained the case.

News4Jax has reached out to representatives for Florida Coastal to check on the school’s status. In response, the school released a statement expressing its disappointment with the court’s decision. As for its status, the school said it’s still evaluating next steps.

“We are very disappointed with the court’s ruling. Our team made a compelling case that the Department of Education’s decision to deny our eligibility to participate in federal student financial aid programs was arbitrary and capricious,” the statement said in part.

STATEMENT: View the school’s complete statement below

FCSL is owned by InfiLaw Corporation, which previously operated two other law schools: Charlotte School of Law (closed in 2017) and Arizona Summit Law School (closed in 2018).

FCSL’s fate has been in limbo for months. In April, the DOE dropped the school from the student loan program. The school appealed that decision, but that application for reinstatement was also denied. The department cited three reasons for its denial: failure of the financial responsibility standards; failure to meet the fiduciary standard of conduct; and failure to meet the standards of participation.

“Too often, we see for-profit schools that try to take advantage of students, misuse taxpayer dollars, and skirt the rules to participate in federal student aid programs,” Education Secretary Cardona said at the time. “Today we want to be heard and understood by for-profit schools around the country: we will be vigilant in ensuring they meet their commitments to students, families, and taxpayers.”

The school filed a complaint July 20 against the DOE, saying the agency had no legal reason to keep the school from getting back into the student loan program. The suit claimed the agency “manufactured new reasons to keep the school closed.” Among other things, it called for the court to vacate the DOE’s decision and issue an order requiring the agency to reinstate the school.

Rebecca Black, an immigration attorney who graduated from FCSL in 2006, told News4Jax on Wednesday that her alma mater was for years strong at turning out great lawyers. But, she said, watching it struggle the past few years has been difficult.

“Remember, the current president of the Jacksonville Bar Association, Michael Orr, he was in my class,” Black said. “So, we’re aware, and I think we’re discouraged by it. But at the end of the day obviously there’s a good history of solid Coastal graduates practicing in the area. I don’t think the failure of the school will impact us.

As News4Jax previously reported, FCSL was sued in July 2020 by two professors who accused the school’s owners of putting personal interests ahead of the school’s. The school previously came under scrutiny in 2017 when the American Bar Association informed administrators they needed to improve the school’s academic programs or risk facing penalties related to its accreditation.

The law school’s reaction

We are very disappointed with the court’s ruling. Our team made a compelling case that the Department of Education’s decision to deny our eligibility to participate in federal student financial aid programs was arbitrary and capricious.

The Court improperly gave credence to the Department’s conclusion that routine ABA accreditation findings indicated Coastal was not providing services to its students. That is not true. The ABA did not say that Coastal was not providing services. Rather, it found that certain aspects of the school’s programs and services required improvement, which is a normal part of the accreditation process. The ABA determined that these routine compliance issues did not warrant sanctions. In fact, the ABA provided Coastal additional time to resolve those issues to demonstrate compliance, and it was in the process of doing so prior to the Department’s actions. Further, Coastal was on track to enroll a larger, academically stronger, and more diverse entering class for the Fall of 2021.

The Court also expressed concern that Coastal had made statements to the Department in two emails that it was in full compliance with ABA Standards. The school was, in fact, fully accredited by the ABA at the time, which is what the school intended to convey. These statements were inadvertent and obvious misstatements and were in no way intended to misrepresent the school’s status with the ABA. The ABA’s findings were a routine part of the accreditation process and Coastal had no reason to hide them from the Department. It is also important to note that these statements were made in private communications between the Department and the school and not to students or the public at large.

The Court’s ruling is unfortunate because the school has been in discussions with multiple parties interested in acquiring the school, including a 110-year-old nonprofit institution. These opportunities are substantially jeopardized by the Court’s refusal to restore Coastal’s access to student assistance funds. While consummation of these transactions would have likely resolved the Department’s concerns about the school’s financial condition, the Court did not meaningfully consider these options.

Coastal’s reinstatement into the Title IV program would have enabled the school to continue offering its JD program. It thus could have continued pursuing its mission of diversifying the nation’s least diverse profession and stay on the track of continuous improvement. In the last five years, approximately 43% of Coastal’s 855 graduates comprise racial and ethnic minorities including approximately 27% African Americans. Today, roughly 40% of its students are minorities and roughly 60% are women. The school has been honored for its commitment to diversity and inclusiveness.

With respect to bar examination performance, the school’s graduates have been competitive with those of its peer institutions in recent years. Coastal graduates scored six points above the state average on the most recent bar examination. Coastal has also had a profound social and professional impact throughout the region. It has contributed over one million pro bono and clinical hours and graduated students who are leaders in the state and local bar association, judges, law partners, prosecutors, public defenders, and legislators. It is deeply saddening that the Department has threatened the existence of such a valuable asset to the Jacksonville legal community.

Florida Coastal School of Law

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About the Authors:

Specializes in Clay County issues, general assignment reporting and stories off the beaten path and anchors weekend evening newscasts.

Carianne Luter is a social media producer for News4Jax and has worked at Channel 4 since December 2015. She graduated from the University of North Florida with a degree in communications.