Pacific Coast Horseshoeing v. Kimberly Kirchmeyer ( 2020 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PACIFIC COAST HORSESHOEING No. 18-15840
SCHOOL, INC.; BOB SMITH; ESTEBAN
NAREZ, D.C. No.
Plaintiffs-Appellants, 2:17-cv-02217-
JAM-GGH
v.
KIMBERLY KIRCHMEYER, in her OPINION
Official Capacity as Director of
Consumer Affairs; MICHAEL
MARION, in his Official Capacity as
Chief of the Bureau for Private and
Postsecondary Education,
Defendants-Appellees.
Appeal from the United States District Court
for the Eastern District of California
John A. Mendez, District Judge, Presiding
Argued and Submitted October 24, 2019
San Francisco, California
Filed June 10, 2020
2 PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER
Before: Michael J. Melloy,* Jay S. Bybee,
and N. Randy Smith, Circuit Judges.
Opinion by Judge Bybee
SUMMARY**
Civil Rights
The panel reversed the district court’s dismissal for
failure to state a claim of an action challenging, on First
Amendment grounds, aspects of California’s Private
Postsecondary Education Act of 2009, which prohibit
plaintiff, Esteban Narez, from enrolling in plaintiff Bob
Smith’s horseshoeing class unless he first passes an
examination prescribed by the U.S. Department of Education.
The Act requires that any student without a high school
certificate or its equivalent who wishes enroll in a private
postsecondary school must execute an enrollment agreement
with an authorized employee of the school which confirms
that the prospective student has the ability to benefit from the
proposed course of instruction. In order to execute the
ability-to-benefit agreement, the school shall have the student
take an independently administrated examination prescribed
by the United States Department of Education. The Act
*
The Honorable Michael J. Melloy, United States Circuit Judge for
the U.S. Court of Appeals for the Eighth Circuit, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER 3
exempts certain courses and a number of private institutions
from these requirements. The district court determined that
the Act regulates only conduct—the forming of an enrollment
agreement—and any burdens on speech were incidental,
resulting from the government’s regulation of commercial
transactions. The district court thus concluded that plaintiffs
failed to allege a First Amendment claim.
The panel held that the Act regulates speech and therefore
rejected the assertion that only conduct was at issue. The
panel determined that, when viewed in its entirety, the Act
controls more than contractual relations. It also regulates
what kind of educational programs different institutions can
offer to different students. The panel held that the Act
implicates the First Amendment by restricting the rights of
both speakers (Smith) and would-be listeners (Narez).
The panel determined that the Act implicated heightened
First Amendment scrutiny by differentiating between speech
or speakers. The panel noted that the Act is riddled with
exceptions to the examination requirement and the exceptions
turned on one of two things: (1) the content of what is being
taught, or (2) the identity of the speaker. Together these
exceptions demonstrated that the Act did more than merely
impose an incidental burden on speech: it targeted speech
based on its communicative content.
The panel held that the statutory scheme here not only
implicated speech, but also engaged in content
discrimination. Moreover, the panel held that because
content discrimination was apparent, the district court should
have applied some form of heightened scrutiny. The panel
left it to the district court on remand to determine whether
this case involves commercial or non-commercial speech,
4 PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER
whether California must satisfy strict or intermediate
scrutiny, and whether it could carry its burden under either
standard.
COUNSEL
Paul V. Avelar (argued) and Keith E. Diggs, Institute for
Justice, Tempe, Arizona; Bradley A. Benbrook and Stephen
M. Duvernay, Benbrook Law Group PC, Sacramento,
California; for Plaintiffs-Appellants.
P. Patty Li (argued), Deputy Attorney General; Paul Stein,
Supervising Deputy Attorney General; Thomas S. Patterson,
Senior Assistant Attorney General; Xavier Becerra, Attorney
General; Attorney General’s Office, San Francisco,
California; for Defendants-Appellees.
Eugene Volokh (argued), Professor of Law, Scott & Cyan
Banister First Amendment Clinic, UCLA School of Law, Los
Angeles, California; Rodney A. Smolla, Dean & Professor of
Law, Widener University, Delaware Law School,
Wilmington, Delaware; for Amici Curiae Professors Jane
Bambauer, David Bernstein, Clay Calvert, Mark Lemley,
Rodney Smolla, and Eugene Volokh.
Seth E. Mermin and Cindy Pan, Center for Consumer Law
and Economic Justice, Berkeley, California; Thomas
Bennigson, Public Good Law Center, Berkeley, California;
for Amici Curiae Housing and Economic Rights Advocates,
Consumers Union, Project on Predatory Student Lending, and
UC Berkeley Center for Consumer Law and Economic
Justice.
PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER 5
OPINION
BYBEE, Circuit Judge:
Plaintiff Bob Smith is an experienced farrier and offers
classes for those who would like to learn the art and craft of
horseshoeing. Plaintiff Esteban Narez is experienced with
horses and would like to enroll in Smith’s classes to become
a professional farrier. But because Narez does not have a
high school diploma or GED, California’s Private
Postsecondary Education Act of 2009 (“PPEA” or “the Act”)
prohibits him from enrolling in Smith’s courses unless Narez
first passes an examination prescribed by the U.S.
Department of Education. But if Smith were running a flight
school or teaching golf, dancing, or contract bridge, Narez
could enroll without restriction.
We are asked to decide whether the Act burdens
plaintiffs’ free speech. The district court determined that the
Act did not. We conclude that plaintiffs have stated a claim
that the PPEA burdens their rights under the First
Amendment. We therefore reverse and remand to the district
court for further proceedings.
I. BACKGROUND
A. Statutory Framework
In the PPEA, Cal. Educ. Code § 94800 et seq., the
California legislature found that, as of 2013, more than
300,000 Californians were attending more than 1100 private
postsecondary schools in California. Id. § 94801(a). The
legislature acknowledged that such schools “can complement
the public education system and help develop a trained
6 PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER
workforce to meet the demands of California businesses and
the economy.” Id. § 94801(b). Nevertheless, the legislature
expressed its “concern[] about the value of degrees and
diplomas issued by private postsecondary schools,” and found
that the “lack of protections” for “consumers of those
schools’ services” and the possibility of “fraudulent or
substandard educational programs and degrees” demonstrated
“the need for strong state-level oversight of private
postsecondary schools.” Id. § 94801(b), (d)(6).1 To that end,
California sought to ensure that students who enrolled in
private postsecondary schools would actually benefit from
such programs and regulate contracts between students and
any “private entity with a physical presence in [California]
that offers postsecondary education to the public for an
institutional charge.” Id. § 94858. The Act defines a
category of students, known as “[a]bility-to-benefit
student[s],” as those students “who do[] not have a certificate
of graduation from a school providing secondary education,
or a recognized equivalent of that certificate.” Id. § 94811.
Any student wishing to enroll in a private postsecondary
school must execute an enrollment agreement, signed by the
student and an authorized employee of the school. Id.
§ 94902(a). Critically for this case, no “ability-to-benefit
student may execute an enrollment agreement” unless “the
institution shall have the student take an independently
administered examination from the list of examinations
prescribed by the United States Department of Education.”
Id. § 94904(a); see also Higher Education Act of 1965, 20
U.S.C. § 1091(d)(1)(A)(i). “[U]nless the student achieves a
1
The PPEA is enforced by the Bureau for Private Postsecondary
Education within the California Department of Consumer Affairs. See
Cal. Educ. Code §§ 94800.5, 94820.
PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER 7
score . . . demonstrating that the student may benefit from the
education and training being offered,” “[t]he student shall not
enroll.” Cal. Educ. Code § 94904(a).
The PPEA exempts certain courses and a number of
private institutions from these requirements. For example,
educational programs “sponsored by a bona fide trade,
business, professional, or fraternal organization” are exempt,
so long as the program is provided “solely for that
organization’s membership.” Id. § 94874(b)(1). Also exempt
are courses offering “avocational or recreational education
programs”; “[t]est preparation for examinations required for
admission to a postsecondary education institution,” such as
the SAT or ACT; “[c]ontinuing education or license
examination preparation”; and “[f]light instruction.” Id.
§ 94874(a), (d)(1), (j). Aside from subject-matter
exemptions, the PPEA exempts various institutions, including
“[a]n institution that does not award degrees and that solely
provides educational programs for total charges of [$2500] or
less.” Id. § 94874(f).
B. Facts
Narez has an affinity for horses and, after working with
a farrier, decided to enroll in the Pacific Coast Horseshoeing
School, Inc. (“PCHS”).2 He chose horseshoeing as a career
because it pays well and there are no licensing requirements
for farriers in California. Narez does not have a high-school
diploma or a GED and is considered an ability-to-benefit
student under the PPEA.
2
The facts are taken from the complaint. For purposes of this
decision we must assume them to be true. See Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009).
8 PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER
PCHS is California’s only full-time horseshoeing school.
It charges $6000 for an eight-week course, which includes
both classroom and hands-on learning. Smith, the owner of
PCHS, teaches the course himself. Because academic
prowess is not needed to be a good farrier, Smith is willing to
teach and accommodate less-educated students. If he
determines at the end of the first week that a student will not
benefit from the course, he refunds all but $250 of the tuition.
As a private postsecondary-educational institution teaching a
vocational skill, PCHS is subject to the PPEA. Following
inspection by the Bureau of Postsecondary Education, PCHS
began declining admission to prospective students who did
not have a high-school diploma or a GED or who had not
passed an examination prescribed by the PPEA.
Narez alleges that no examination satisfying the ability-
to-benefit requirement tests horseshoeing knowledge or skills.
Because he works seven days a week, Narez does not want to
forgo income to study for a test that has no relevance to
horseshoeing. Absent the ability-to-benefit requirement,
Narez alleges that he would enroll in PCHS and PCHS would
accept him.
C. Procedural History
Smith, Narez, and PCHS filed this action challenging the
ability-to-benefit requirement on First Amendment grounds.
The defendants, two California-state officials (“California”),
moved to dismiss the claim under Federal Rule of Civil
Procedure 12(b)(6). The district court granted the motion.
Pac. Coast Horseshoeing Sch., Inc. v. Grafilo, 315 F. Supp.
3d 1195 (E.D. Cal. 2018). The court concluded that the
ability-to-benefit requirement does not prohibit the imparting
or disseminating of information. Instead, it determined that
PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER 9
the law regulates only conduct—the forming of an enrollment
agreement—and any burdens on speech were “incidental,”
resulting from the government’s regulation of commercial
transactions. Id. at 1200. The district court thus concluded
that plaintiffs failed to allege a First Amendment claim. Id.at 1200–02. This appeal followed.3
II. DISCUSSION
The First Amendment, which is made applicable to the
states through the Due Process Clause of the Fourteenth
Amendment, provides: “Congress shall make no law . . .
abridging the freedom of speech.” U.S. Const. amend. I.
This case raises two interrelated questions. First, is the PPEA
subject to First Amendment scrutiny at all? That is, does the
Act regulate speech? Second, if the Act regulates speech, is
it content based? The answers to these questions are critical
because they determine the level of scrutiny with which
courts will review the PPEA and its ability-to-benefit
requirement.
Ordinarily, we review challenges to legislation regulating
commercial transactions under a rational-basis standard: a
statute is consistent with the Due Process Clause if the
legislature has identified a legitimate state interest and the
legislation has a rational basis for furthering that interest. See
Pennell v. City of San Jose, 485 U.S. 1, 11–13 (1988); United
States v. Carolene Prods. Co., 304 U.S. 144, 152–53 (1938);
3
We review de novo the district court’s grant of a motion to dismiss
for failure to state a claim. Burgert v. Lokelani Bernice Pauahi Bishop
Tr., 200 F.3d 661, 663 (9th Cir. 2000). Constitutional questions
implicating the First Amendment are also reviewed de novo. Cohen v.
San Bernardino Valley Coll., 92 F.3d 968, 971 (9th Cir. 1996).
10 PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER
Retail Dig. Network, LLC v. Prieto, 861 F.3d 839, 847 (9th
Cir. 2017) (en banc). When, however, the legislation burdens
a fundamental right, such as the right to free speech, we must
examine the legislation with more exacting or “heightened
scrutiny.” Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622,
640–41 (1994); Scheer v. Kelly, 817 F.3d 1183, 1189 (9th Cir.
2016).
This heightened scrutiny generally takes one of two
forms: intermediate scrutiny or strict scrutiny. If legislation
regulates conduct but incidentally burdens expression, we
review that legislation under “intermediate scrutiny” to see
whether it “advances important governmental interests
unrelated to the suppression of free speech and does not
burden substantially more speech than necessary to further
those interests.” Turner Broad. Sys., Inc. v. FCC, 520 U.S.
180, 189 (1997); see also United States v. O’Brien, 391 U.S.
367, 377 (1968). We likewise review content-neutral
restrictions on speech—such as time, place, and manner
restrictions—under this same intermediate scrutiny standard.
See McCullen v. Coakley, 573 U.S. 464, 486 (2014) (noting
that a content-neutral regulation of speech violates the First
Amendment unless it is “narrowly tailored to serve a
significant governmental interest.” (quoting Ward v. Rock
Against Racism, 491 U.S. 781, 796 (1989)). But if legislation
regulates the content of the speech—when the government
regulates who may speak or what we may say—then the law
is ordinarily reviewed under “strict scrutiny”: the legislation
must serve a compelling state interest and must be narrowly
tailored to meet that interest. Reed v. Town of Gilbert, 135 S.
Ct. 2218, 2226 (2015); see also United States v. Playboy
Entm’t Grp., Inc., 529 U.S. 803, 813 (2000); Recycle for
Change v. City of Oakland, 856 F.3d 666, 669 (9th Cir.
2017). However, intermediate scrutiny may apply to content-
PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER 11
based restrictions on commercial speech. See CTIA – The
Wireless Ass’n v. City of Berkeley, 928 F.3d 832, 842 (9th
Cir. 2019) (explaining that “one size does not fit all in
commercial speech cases” and contrasting Central Hudson
Gas & Electric Corp. v. Public Service Commission, 447 U.S.
557 (1980), with Zauderer v. Office of Disciplinary Counsel
of the Supreme Court of Ohio, 471 U.S. 626 (1985)).
California maintains, and the district court concluded, that
this case does not implicate speech at all and, therefore, the
legislation must only satisfy rational-basis scrutiny. The state
argues that the ability-to-benefit requirement is a consumer-
protection provision that regulates only non-expressive
conduct—namely, the execution of the enrollment agreement
between a private postsecondary school and a prospective
student. The district court agreed, reasoning that “the Act
does not restrain Smith and the School from ‘imparting
information,’ ‘disseminating opinions,’ or ‘communicating a
message.’” Pac. Coast Horseshoeing Sch., Inc., 315 F. Supp.
3d at 1200 (quoting Pickup v. Brown, 740 F.3d 1208, 1230
(9th Cir. 2014), abrogated by Nat’l Inst. of Family & Life
Advocates v. Becerra, 138 S. Ct. 2361 (2018)). “[T]he only
thing that the School cannot do is execute an enrollment
agreement with a student who has not demonstrated an ability
to benefit under the Act.” Id. Thus, “[n]othing in the Act
prohibits Smith and the School from sharing information and
communicating about horseshoeing generally. Nothing
prohibits Narez from learning about horseshoeing outside of
enrollment at a private postsecondary educational institution
prior to passing an ability-to-benefit-examination.” Id. The
district court concluded that the Act regulated “economic
activity” that was “speech-adjacent” and imposed only an
“incidental burden[] on speech.” Id. Applying rational basis
review, the court upheld the Act. Id. at 1200–02.
12 PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER
In our view, California “is wrong that the only thing
actually at issue in this litigation is conduct.” Holder v.
Humanitarian Law Project, 561 U.S. 1, 27 (2010). Although
the PPEA is a form of education licensing by the state, the
First Amendment deprives the states of “unfettered power to
reduce a group’s First Amendment rights by simply imposing
a licensing requirement.” Nat’l Inst. of Family & Life
Advocates, 138 S. Ct. at 2375. California points out that the
Act regulates enrollment agreements. We agree, but when
the Act is viewed in its entirety, it becomes clear that it
controls more than contractual relations. It also regulates
what kind of educational programs different institutions can
offer to different students. Such a regulation squarely
implicates the First Amendment. See Humanitarian Law
Project, 561 U.S. at 28 (noting that a law which “may be
described as directed at conduct” nevertheless implicates
speech where “the conduct triggering coverage under the
statute consists of communicating a message”); see also
Thomas v. Collins, 323 U.S. 516, 536 (1945) (highlighting
how courts must consider a restriction’s practical effects in
determining whether it implicates speech).
There can be little question that vocational training is
speech protected by the First Amendment. Smith’s “speech
to [students] imparts a ‘specific skill’ or communicates
advice derived from ‘specialized knowledge.’”
Humanitarian Law Project, 561 U.S. at 27. “Facts, after all,
are the beginning point for much of the speech that is most
essential to advance human knowledge and to conduct human
affairs.” Sorrell v. IMS Health Inc., 564 U.S. 552, 570
(2011). And, important to this case, “[a]n individual’s right
to speak is implicated when information he or she possesses
is subjected to ‘restraints on the way in which the information
might be used’ or disseminated.” Id. at 568 (quoting Seattle
PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER 13
Times Co. v. Rhinehart, 467 U.S. 20, 32 (1984)).
Furthermore, “the Constitution protects [Narez’s] right to
receive information and ideas.” Stanley v. Georgia, 394 U.S.
557, 564 (1969). We have explained that when there is “a
speaker who is willing to convey . . . information,” state
“restriction[s] of the right to receive information” produce
“actual injury” under the First Amendment. Johnson v.
Stuart, 702 F.2d 193, 195 (9th Cir 1983). This right to
receive information naturally extends to educational settings.
See Kleindienst v. Mandel, 408 U.S. 753, 765 (1972) (holding
that students had a “constitutional interest” in hearing a
Marxist theoretician speak at academic conferences and
discussions in the United States). Thus, the PPEA implicates
the First Amendment by restricting the rights of both speakers
(Smith) and would-be listeners (Narez).
California contends that if we find that the PPEA
implicates protected First Amendment speech, then we will
“transform every law or regulation applicable to
postsecondary educational institutions into a direct regulation
of speech requiring strict scrutiny.” California points out that
generally applicable regulatory schemes—such as laws taxing
income, controlling the use of property, and regulating
employer-employee relations—do not implicate the First
Amendment. We agree for the most part.4 To be effective,
the government must have the power to maintain public
safety and order, and this requires the government to regulate
4
Even generally applicable laws can implicate First Amendment
concerns, warranting greater scrutiny. See, e.g., O’Brien, 391 U.S.
at 376–77 (making clear that “incidental limitations on First Amendment
freedoms” at times implicate the First Amendment); see also Clark v.
Cmty. for Creative Non-Violence, 468 U.S. 288, 289–98 (1984)
(subjecting a law generally prohibiting sleeping in public parks to First
Amendment scrutiny).
14 PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER
aspects of our lives. In the main, governments can subject
individuals and entities to “generally applicable economic
regulations without creating constitutional problems.”
Minneapolis Star & Tribune Co. v. Minn. Comm’r of
Revenue, 460 U.S. 575, 581 (1983); see also Sorrell, 564 U.S.
at 567 (“It is true that restrictions on protected expression are
distinct from restrictions on economic activity or, more
generally, on nonexpressive conduct. It is also true that the
First Amendment does not prevent restrictions directed at
commerce or conduct from imposing incidental burdens on
speech.”). As a result, not every regulation that financially
burdens a person or an institution affects its First Amendment
rights. Although “[m]oney is fungible,” Humanitarian Law
Project, 561 U.S. at 31, the fact that “[an organization] does
not have as much money as it wants, and thus cannot exercise
its freedom of speech as much as it would like” is irrelevant
to whether its First Amendment rights have been infringed.
Regan v. Taxation with Representation of Wash., 461 U.S.
540, 550 (1983). “[T]he Constitution does not confer an
entitlement to such funds as may be necessary to realize all
the advantages of that freedom.” Id. (internal quotation
marks omitted); see also Interpipe Contracting, Inc. v.
Becerra, 898 F.3d 879, 892 (9th Cir. 2018) (“In other words,
there exists no standalone right to receive the funds necessary
to finance one’s own speech.”).
The question here is not whether the PPEA places a
burden on private postsecondary institutions—it plainly does,
as do California’s tax, zoning, and workplace laws. See
Minneapolis Star, 460 U.S. at 585 (“We need not fear that
government will destroy a selected group of taxpayers by
burdensome taxation if it must impose the same burden on the
rest of its constituency.”). The question is whether, in the
course of that regulation, the Act implicates heightened First
PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER 15
Amendment scrutiny. One way for us to tell is to ask whether
the PPEA differentiates between speech or speakers. See
Humanitarian Law Project, 561 U.S. at 27–28. It does.
California’s PPEA is riddled with exceptions to the ability-to-
benefit rule, and the exceptions turn on one of two things:
(1) the content of what is being taught, or (2) the identity of
the speaker. Together these exceptions demonstrate that the
Act does more than merely impose an incidental burden on
speech: it “target[s] speech based on its communicative
content.” Reed, 135 S. Ct. at 2226. We begin with the first
of these points.
An ability-to-benefit student (one not holding a high
school diploma or a GED) may not enroll in a for-profit
postsecondary educational institution without meeting the
ability-to-benefit requirement. Cal. Educ. Code § 94904(a).5
But the Act contains a number of exemptions that turn on the
nature of what is being taught. If, for example, the course is
“solely avocational or recreational,” Cal. Educ. Code
§ 94874(a), then the course is not covered by the ability-to-
benefit requirement. If, however, the course’s content is not
“solely avocational or recreational,” the restriction is
triggered and covered institutions cannot enroll certain
students. Id. The fact that the Act distinguishes between,
say, golf lessons because they are “solely avocational or
recreational,” and horseshoeing lessons because they are not,
5
It is not entirely clear to us from the statute whether the institution
is responsible for refusing enrollment to the student, or whether the
student is responsible for determining his own eligibility. See Cal. Educ.
Code § 94904(a) (“The student shall not enroll unless the student achieves
a [qualifying] score.”). Under some circumstances the enrollment
agreement is “not enforceable,” which suggests that the student has a
defense to any effort to collect tuition and fees. Id. § 94902(b). The
question of how the Act is enforced is not essential our disposition here.
16 PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER
is significant—even if we assume that the state has no
particular interest in encouraging speech related to golf
lessons or suppressing speech related to horseshoeing. See
Reed, 135 S. Ct. at 2230 (“[A] speech regulation targeted at
specific subject matter is content based even if it does not
discriminate among viewpoints within that subject matter.”).
Communication of factual information about horseshoeing
surely qualifies as protected free speech the same as
communication about golf. See Sorrell, 564 U.S. at 570(explaining that conveying factual information constitutes
“the creation and dissemination of information are speech
within the meaning of the First Amendment”). The Act
excepts other courses as well. See, e.g., Cal. Educ. Code
§ 94874(d)(1) (exempting test preparation courses for
standard examinations), (d)(2) (exempting test preparation
courses for continuing education or license examinations),
(j) (exempting flight instruction courses).
Second, the PPEA distinguishes between speakers. It
picks winners and losers when it comes to which institutions
must ensure that its listeners have satisfied the ability-to-
benefit requirement. For example, the Act exempts
“educational programs sponsored by a bona fide trade,
business, professional, or fraternal organization, solely for
that organization’s membership.” Id. § 94874(b)(1). There
is a similar exemption for “a bona fide organization,
association, or council that offers preapprenticeship training
programs” approved by the California Workforce
Development Board. Id. § 94874(b)(2)(A). There are
exemptions for “[a] state-recognized professional licensing
body . . . that licenses persons in a particular profession,
occupation, trade, or career field” or “[a] bona fide trade,
business, or professional organization,” id. § 94874(d)(2)(B),
PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER 17
(C); for nonprofit religious organizations, id. § 94874(e)(1)6;
for “[a]n institution that does not award degrees and that
solely provides educational programs for total charges of
[$2500 or less],” id. § 94874(f); for a “nonprofit public
benefit corporation,” id. § 94874(h); and for certain nonprofit
“community-based organization[s],” id. § 94874(k)(1).
The PPEA thus favors particular kinds of speech and
particular speakers through an extensive set of exemptions.7
See Sorrell, 564 U.S. at 567 (“[The state’s] law does not
simply have an effect on speech, but is directed at certain
content and is aimed at particular speakers.”); Playboy Entm’t
Grp., 529 U.S. at 812 (“Not only does [the statute] single out
particular programming content for regulation, it also singles
out particular programmers.”). That means the PPEA
necessarily disfavors all other speech and speakers. See
Sorrell, 564 U.S. at 564.
Sorrell is instructive in understanding these principles.
There, the Supreme Court struck down a Vermont law that
prohibited pharmacies from selling doctors’ prescribing
6
The nonprofit religious organization exemption comes with its own
content-based restriction: “The instruction is limited to the principles of
that religious organization . . . .” Cal. Educ. Code § 94874(e)(1)(A).
7
The state’s fallback position is that even if the PPEA does not
regulate pure conduct, any regulation of speech is incidental because it is
not related to expression and the O’Brien intermediate scrutiny standard
applies. See Texas v. Johnson, 491 U.S. 397, 403 (1989); O’Brien,
391 U.S. at 377. This standard is identical to the standard we apply to
content-neutral time, place, and manner restrictions. See McCullen,
573 U.S. at 486; Humanitarian Law Project, 561 U.S. at 27–28; Ward,
491 U.S. at 798. Because we have determined that the Act is content-
based, we necessarily conclude that O’Brien is not the appropriate
standard of review.
18 PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER
records to pharmaceutical companies, which the companies
could then use to market prescription drugs to specific
doctors. Id. at 557, 580.8 The statute, however, exempted
entities that did not use the information for marketing
purposes. Id. at 559–60. And if the information somehow
ended up in the hands of a pharmaceutical company, the
statute proscribed that company’s use of the information to
market drugs to doctors absent certain circumstances. Id.
at 559. Pharmaceutical and data-mining companies
challenged the law, claiming a violation of their First
Amendment right to disseminate information. Id. at 561.
Much like California in this case, Vermont argued that the
case was really about regulating “conduct, not speech.” Id.
at 570. Indeed, Vermont asserted that the prescription
records were simply a “commodity,” entitled to no more
“First Amendment protection than ‘beef jerky.’” Id. The
Supreme Court flatly rejected this argument. It explained
“that the creation and dissemination of information are
speech within the meaning of the First Amendment.” Id. The
Court saw Vermont’s law as presenting two major content-
based restrictions. First, it “disfavor[ed] marketing, that is,
speech with a particular content.” Id. at 564. Second, it
“disfavor[ed] specific speakers, namely pharmaceutical
manufacturers.” Id.; see id. at 567 (“Vermont’s law imposes
a burden based on the content of speech and the identity of
the speaker.”). This created a double burden on the
companies’ speech rights, preventing them “from
communicating with physicians in an effective and
8
The information was usually first sold by the pharmacy to a data-
mining firm, which in turn sold it to the pharmaceutical manufacturer.
564 U.S. at 558. But they were all part of the same economic and
informational chain.
PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER 19
informative manner.” Id. at 564. Accordingly, the Court
concluded that conveying purely factual information is
speech protected by the First Amendment and the state had to
satisfy “heightened judicial scrutiny.” Id. at 557. Finding
that Vermont could not satisfy any standard of heightened
scrutiny, the Court held the statute unconstitutional.
Sorrell controls this case. The PPEA’s operative impact
is similar to that of the Vermont statute held unconstitutional
in Sorrell. In both schemes, the speaker is the one being
forbidden to act: private, for-profit postsecondary institutions
here and pharmaceutical companies in Sorrell. Id. at 559–61.
And in each case, a violation occurs because of who the
listener is and the message the speaker seeks to convey. In
Sorrell, the listener was the doctor and the forbidden topic
was the marketing of prescription drugs. Id. at 564–65.
Here, the listener is a student without a high-school education
and the topic is vocational education. See Cal. Educ. Code
§§ 94811; 94857; 94904. Thus, the PPEA’s overall statutory
scheme precludes certain would-be students from taking a
course when the institution would otherwise admit such
students “because of the topic discussed.” Reed, 135 S. Ct. at
2227.9
9
California argues that the ability-to-benefit requirement does not
preclude speech because PCHS is free, for example, to post online videos
of horseshoeing which Narez could watch. This argument, however,
ignores the value the First Amendment places on in-person expression of
ideas, see Kleindienst, 408 U.S. at 765 (finding First Amendment injury
to listeners who did not have face-to-face access to a speaker), and
ultimately goes to whether California can carry its burden under the
requisite level of scrutiny, see McCullen, 573 U.S. at 477 (explaining that,
even in the intermediate scrutiny context, restrictions on speech must
“leave open ample alternative channels for communication of the
information” to survive First Amendment scrutiny (quoting Ward,
20 PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER
In sum, we agree with the plaintiffs that the PPEA
“requires authorities to examine the contents of the message
to see if a violation has occurred.” Tschida v. Motl, 924 F.3d
1297, 1303 (9th Cir. 2019); see also McCullen, 573 U.S.
at 479. We thus agree that the statutory scheme here not only
implicates speech, but also engages in content discrimination.
Moreover, because content discrimination is apparent, the
district court should have applied some form of heightened
scrutiny. See Sorrell, 564 U.S. at 571–72.10
Before us, the parties disputed only whether the First
Amendment applies, not whether the Act violates the First
Amendment. Although the Supreme Court has warned that
“[i]n the ordinary case it is all but dispositive to conclude that
a law is content based,” id. at 571, the Court has also
recognized that in the commercial-speech context, “content-
based restrictions on protected expression are sometimes
permissible.” id. at 579; see also Fla. Bar v. Went for It, Inc.,
515 U.S. 618, 623 (1995) (“[W]e engage in “intermediate”
scrutiny of restrictions on commercial speech . . . .”); Cent.
491 U.S. at 791)), not whether speech is implicated in the first instance,
see Kleindienst, 408 U.S. at 765 (noting that the Court was “loath to hold
on th[e] record that existence of other alternatives extinguishes altogether
any constitutional interest on the part of the appellees in this particular
form of access”).
10
In reversing the judgment of the district court, we have no reason
to question California’s motives: “A law that is content based on its face
is subject to strict scrutiny regardless of the government’s benign motive,
content-neutral justification, or lack of ‘animus toward the ideas
contained’ in the regulated speech.” Reed, 135 S. Ct. at 2228 (quoting
Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 429 (1993)); see also
Minneapolis Star, 460 U.S. at 592 (“We need not and do not impugn the
motives of the . . . legislature . . . . Illicit legislative intent is not the sine
qua non of a violation of the First Amendment.”).
PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER 21
Hudson, 447 U.S. at 562–63 (“The Constitution . . . accords
lesser protection to commercial speech than to other
constitutionally guaranteed expression.”). The parties did not
brief the question of whether the PPEA regulates commercial
speech and, if so, what level of heightened scrutiny should
apply here. Given the historically different treatment of
commercial versus non-commercial speech, and some
variations within the class of commercial speech, see
Zauderer, 471 U.S. at 651, we decline to assume that
admonitions from non-commercial-speech cases apply with
equal force to cases involving possible commercial speech.
See Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447, 456
(1978) (“To require a parity of constitutional protection for
commercial and noncommercial speech alike could invite
dilution, simply by a leveling process, of the force of the
Amendment’s guarantee with respect to the latter kind of
speech.”); see also Contest Promotions, LLC v. City & Cty.
of S.F., 874 F.3d 597, 601 (9th Cir. 2017) (rejecting “the
notion that Reed altered Central Hudson’s long-standing
intermediate scrutiny framework”).
We will leave it to the district court on remand to
determine whether this case involves commercial or non-
commercial speech, whether California must satisfy strict or
intermediate scrutiny, see Expressions Hair Design v.
Schneiderman, 137 S. Ct. 1144, 1151 (2017), and whether it
can carry its burden under either standard. Cf. Nat’l Inst. of
Family & Life Advocates, 138 S. Ct. at 2375 (declining to
decide what heightened standard of review applies because
the law “cannot survive even intermediate scrutiny”); Sorrell,
564 U.S. at 571 (“[T]he outcome [in this case] is the same
whether a special commercial speech inquiry or a stricter
form of judicial scrutiny is applied.”). We simply hold that,
22 PACIFIC COAST HORSESHOEING SCHOOL V. KIRCHMEYER
because California’s PPEA regulates the content of speech,
plaintiffs have stated a First Amendment claim.
III. CONCLUSION
The district court’s judgment dismissing this cause of
action for failure to state a First Amendment claim is reversed
and the case is remanded for further proceedings consistent
with this opinion.
REVERSED AND REMANDED.