# Career Colleges & Schools of Texas v. United States Department of Education

> District Court, N.D. Texas · April 17, 2023

URL: https://www.frixlaw.com/law-library/cases/10452696

## Case

- **Court:** District Court, N.D. Texas
- **Decided:** April 17, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

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## Opinion text

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION

CAREER COLLEGES & SCHOOLS OF
TEXAS,

Plaintiff,

v. No. 4:23-CV-0206-P

UNITED STATES DEPARTMENT OF
EDUCATION, ET AL.,

Defendants.
OPINION & ORDER
Before the Court is Defendants’ Motion to Dismiss for Improper
Venue or in the Alternative to Transfer. ECF No. 12. For the following
reasons, the Court holds that the Motion is GRANTED IN PART and
thus TRANSFERS the case to the Western District of Texas, Austin
Division.
FACTUAL AND PROCEDURAL BACKGROUND
Career Colleges & Schools of Texas (“CCST”) is a trade-board
corporation that represents the interests of various secondary
educational institutions throughout the state. ECF No. 1. CCST is
formed as a Texas corporation and with its principal place of business
in Austin, Texas. Id. Members schools pay annual dues to be a part of
CCST and some of CCST’s members reside in the Fort Worth Division.
Id.
CCST brings a challenge to a final rulemaking proposal by the
Department of Education that makes it easier for students to defend
against repayment of student loans to institutions that make
misrepresentations or omissions to prospective and current students.
See Institutional Eligibility Under the Higher Education Act of 1965, 87
FED. REG. 65,904 (Nov. 1, 2022).
Defendants assert that this case does not belong in this division or
district. The Court agrees.
LEGAL STANDARD
A. Rule 12(b)(3)
Federal Rule of Civil Procedure 12(b)(3) allows for dismissal where
venue is improper. FED. R. CIV. P. 12(b)(3). The Fifth Circuit has not
addressed who bears the burden when a defendant raises
improper venue—creating a split among district courts. Compare
Bounty-Full Entm’t, Inc. v. Forever Blue Entm’t Grp., Inc., 923 F. Supp.
950, 957 (S.D. Tex. 1996) (Hoyt, J.) (placing the burden on defendant),
with Langton v. Cbeyond Commc’n, LLC, 282 F. Supp. 2d 504, 508 (E.D.
Tex. 2003) (Davis, J.) (placing the burden on plaintiff); Bigham v.
Envirocare of Utah, Inc., 123 F. Supp. 2d 1046, 1048 (S.D. Tex. 2000)
(Kent, J.) (placing the burden on the plaintiff). And while courts in this
district usually put the burden exclusively on a defendant, this makes
little sense when the plaintiff is the best situated to make its case for
why it chose the venue in the first place. To hold otherwise places an
unnecessary burden on defendants who must take up the position of
jurisdictional detectives without the tools of discovery. Put simply, if a
plaintiff cannot defend its choice of venue, the case does not belong there
in the first place.
The Court thus holds that after venue is raised by a defendant, the
plaintiff has the burden to prove that venue is proper. McCaskey v.
Cont'l Airlines, Inc., 133 F. Supp. 2d 514, 523 (S.D. Tex. 2001). Plaintiff
need not exhaustively prove venue is appropriate but only needs to make
a prima facie showing. Id.; see also Luv N’ Care, Ltd. v. Insta–Mix,
Inc., 438 F.3d 465, 469 (5th Cir. 2006) (using this same test for personal
jurisdiction). A court should accept undisputed facts in a plaintiff’s
pleadings as true and resolve factual conflicts in the plaintiff's favor.
Int’l Cotton Mktg., Inc. v. Commodity Credit Corp., No. 5:08-CV-159-C
ECF, 2009 WL 10705345, at *2 (N.D. Tex. Feb. 4, 2009) (Cummings, J.);
McCaskey, 133 F. Supp. 2d at 523.
ANALYSIS
A. Transactional Venue
In civil actions where the defendants are officers or employees of the
United States, venue is proper in any judicial district in which: (1) a
defendant in the action resides; (2) a substantial part of the events or
omissions giving rise to the claim occurred; or (3) the plaintiff resides if
no real property is involved in the action. 28 U.S.C. § 1391(e)(1).
Here, the parties concede that neither Defendants nor Plaintiff
reside in this district or division.1 The Court thus addresses whether a
substantial part of the events occurred in this division—also known as
“transactional venue.” See, e.g., Int’l Cotton Mktg., 2009 WL 10705345,
at *2, *3.
Transactional venue occurs were “a substantial part of the events or
omissions giv[e] rise to the claim.” 28 U.S.C. § 1391(e)(1). This Court and
others have held that venue under this provision is proper where “an
unlawful rule imposes its burdens.” See, e.g., Umphress v. Hall, 479 F.
Supp. 3d 344, 351–52 (N.D. Tex. 2020) (Pittman, J.); Texas v. United
States, 95 F. Supp. 3d 965, 973 (N.D. Tex. 2015) (O’Connor, J.). The plain
text “events or omissions giving rise to the claim” implicates “the”
parties bringing the claim and not “a” generalized burden on non-
parties. § 1391(e)(1); See Pioneer Inv. Servs. Co. v. Brunswick Assocs.
Ltd. P'ship, 507 U.S. 380, 388 (1993) (“Congress intends the words in its
enactments to carry “their ordinary, contemporary, common meaning.”).
Plaintiff asserts that the final rule affects many educational
institutions in this division—including some of its members. This
burden in turn qualifies as an “unlawful rule imposing its burdens” in
this division. Plaintiff cites Umphress and Texas as clear guidance. But
Plaintiff has a major problem—none of the “burdened” schools or
institutions that reside in this division are parties here.

1 Defendants are officers and agencies of the United States, and Plaintiff is a Texas
Corporation with its principal place of business in Austin, Texas. See ECF No. 1.
In Umphress, the plaintiff—a state court judge—was a resident in
the Fort Worth Division and performed twelve separate civil ceremonies
in the division. Umphress, 479 F. Supp. 3d at 351–52. The named
plaintiff in Umphress was both (1) present in the division and (2) subject
to the burden imposed by the rule. Id.
Likewise, in Texas, the State of Texas had employees and officers in
the Wichita Falls Division. Texas, 95 F. Supp. 3d at 973. Again, the
named plaintiff—the State of Texas—was both (1) present in the
division and (2) subject to the burden imposed by the rule. Id.
In Sigoloff, the plaintiff failed to establish residency of the division
and did not establish any meaningful connection to the division despite
having ample opportunity to do so. Sigoloff v. Austin, No. 4:22-CV-
00923-P, 2023 WL 2142982, at *2 (N.D. Tex. Feb. 21, 2023) (Pittman,
J.). The Court transferred Sigoloff’s case because (1) the plaintiff had no
presence in the division, and thus (2) there was no burden imposed on
any party in the division. Id. Plaintiff asserts that Sigoloff does not
address the question in this case, “but rather stands for the proposition
that transactional venue requires a link between events or omissions in
the district and the claims at issue.” ECF No. 26 at 17. Plaintiff is exactly
right in the reasoning behind the case but is wrong as to its application
here.
Plaintiff argues that its “members” in the division and non-members,
like Texas Christian University, are equal to the plaintiffs in Umphress
and Texas. But none of the members or non-members that Plaintiff
mentions are parties. This is clearly distinguishable from a named party
having corporate residence, corporate presence, sovereign presence, or
employees in the division. Thus, Plaintiff’s assertion that “transactional
venue requires a link between events or omissions in the district and the
claims at issue” means that a party bringing the claim must be present
in the district or division in some real capacity and burdened by the
unlawful rule. ECF No. 26 at 17. Plaintiff—an Austin, Texas
corporation—may have an interest in assisting various burdened parties
in the division, but it does not have any presence.
Thus, venue is improper in the Fort Worth Division or the Northern
District of Texas.
B. 1404(a) Transfer
Because venue is not proper in this district or division, the Court
must determine whether the case should be dismissed or transferred to
a district where venue is proper. See § 1404(a). The party moving to
transfer venue bears the burden of showing good cause as to why the
case should be transferred. In re Volkswagen of Am., Inc., 545 F.3d 304,
315 (5th Cir. 2008).
Defendant asserts that venue should be transferred to either the
District of Columbia or the Western District of Texas. And while venue
would certainly be proper in the District of Columbia, the Court
determines that the Western District of Texas is a more appropriate
venue to hear this case. Specifically, the Austin Division is where
Plaintiff is located and affords some “respect” to Plaintiff’s original
choice of forum—even though it was an incorrect one. See In re
Volkswagen of Am., 545 F.3d at 315.
To determine whether a case should be transferred, courts must
analyze four private and four public interest factors—none of which are
given dispositive weight. See In re Volkswagen AG, 371 F.3d at 203.
1. Private-Interest Factors
The private-interest factors are: (1) the accessibility of sources of
proof; (2) the ability of the court to secure the attendance of witnesses;
(3) the cost of attendance for witnesses; and (4) all other factors that
make a trial expeditious and inexpensive. See In re Volkswagen AG, 371
F.3d at 203. Regarding Section 1404(a) and APA cases, the private-
interest factors are usually neutral as these cases generally involve only
questions of law and require no merits discovery or testimony to resolve
the case.
First, the accessibility of sources of proof is not a major issue here as
Plaintiff is making a challenge to administrative rulemaking under the
APA. Second, the ability of the court to secure the attendance of
witnesses is likely not an issue due to the nature of the case which likely
requires no witnesses. Third, the cost of attendance for witnesses is also
not a major issue in a case that requires no witnesses. Fourth, requiring
Plaintiff to refile the case in a new district would cause a waste of time
and expenses. And a transfer out of state would likely require an
association with new attorneys—costing more time and money on the
Plaintiff’s part.
The private-interest factors weigh slightly in favor of transfer.
2. Public-Interest Factors
The public-interest factors are: (1) the court’s congestion and ability
to hear the case; (2) the forum’s interest in having localized interests
decided at home; (3) the familiarity of the forum with the applicable law;
and (4) the avoidance of conflict of laws in the application of foreign law.
See In re Volkswagen AG, 371 F.3d at 203–04.
First, the Court determines that the Western District is not
unusually congested and can hear the case. Second, the forum is the
home of CCST, and so the city of Austin and the State of Texas—as
Plaintiff notes—have a direct interest in hearing the case. Third, the
Western District is familiar with the APA because it is a federal district
court in Texas. Fourth, no foreign law affects the case, and conflict of
law is unlikely to exist in an administrative-rule-making challenge like
this one.
Thus, the public interest factors heavily favor transfer, and—taken
together with the private factors—the Court finds that a transfer to the
Western District is warranted.
C. Conclusion
For the reasons stated above, this Court GRANTS Defendants’
motion in part and TRANSFERS this case to the Western District of
Texas, Austin Division.
SO ORDERED on this 17th day of April 2023.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10452696. Public record. Not legal advice.