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Colorado v. Center for Excellence in Higher Education, Inc.

2021 COA 117. No. 20CA1692.  Colorado Consumer Protection Act—Colorado Uniform Consumer Credit Code—Deceptive Trade Practice—Retroactive Applicability of Statutory Amendment.

August 26, 2021

CollegeAmerica advertises its college degree program on television, on the radio, and in print. In December 2014, the attorney general and the administrator of the Uniform Consumer Credit Code (collectively, AG) sued the corporate entities and the individuals that made up CollegeAmerica’s Colorado operation (collectively, CollegeAmerica, unless otherwise indicated). The complaint alleged that CollegeAmerica’s efforts to recruit consumers and enroll them as CollegeAmerica students violated the Colorado Consumer Protection Act (CCPA) and the Colorado Uniform Consumer Credit Code (UCCC). The court decided that all the named defendants were jointly and severally liable for violating the CCPA. It ordered them to pay $3 million in civil penalties; issued injunctions against CollegeAmerica under both the CCPA and UCCC; denied the AG’s request that CollegeAmerica pay back every dollar that its Colorado consumers had ever paid on tuition and for fees; and determined that CollegeAmerica’s loan program, EduPlan, was not unconscionable.

On appeal, the corporate defendants argued that the trial court erred when it applied a 2019 CCPA amendment that did away with the AG’s burden of proving “significant public impact” retroactively. Here, the 2019 CCPA amendment was applicable, so the trial court erred when it decided that the AG did not have to prove that CollegeAmerica’s conduct significantly impacted the public.

The corporate defendants also contended that the AG’s first three claims constitute “improper qualitative attacks” on the education that CollegeAmerica provided. But the AG’s claims do not pertain to the quality of the education provided by CollegeAmerica; instead, the allegations are based on specific representations made by CollegeAmerica in its advertisements and during the admissions process. Accordingly, the trial court’s decision to deny the corporate defendants’ motion to dismiss based on this argument was proper.

The corporate defendants also argued that, as a matter of law, CollegeAmerica cannot be held liable under the CCPA for using national wage data in its advertisements. However, as a matter of law, CollegeAmerica’s purported compliance with 34 CFR § 668.6 does not shield it from liability under the CCPA.

The corporate defendants also requested an order that all further proceedings on remand be held before a different judge. Here, the court took about two years and nine months to issue its judgment. The significant delay in issuing the court’s order is an extreme circumstance that requires a new judge to take over the case on remand to “preserve the appearance of justice.”

CollegeAmerica argued that it was entitled to a jury trial. Equitable actions are not tried to a jury, and the CCPA claims are equitable in nature. The UCCC does not provide for a jury trial as a matter of right, but even assuming that the UCCC claim is legal, the CCPA claims are more numerous and substantive than the UCCC claim, so the overall character of the action is equitable and CollegeAmerica was not and is not entitled to a jury trial.

On cross-appeal, the AG argued that the trial court erred by concluding that CollegeAmerica’s EduPlan loan program was not unconscionable because the court misread CRS § 5-6-112(3)(a). While the court construed this section too narrowly, its factual findings were supported by the record, and based on those findings, the AG did not prove that all EduPlan loans were either substantively or procedurally unconscionable. Accordingly, the court did not err.

The judgment was affirmed in part and reversed in part, and the case was remanded for proceedings consistent with this opinion.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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