young six years ago mr young enrolled in a program with grand canyon university to improve his professional standing it was a leadership and education program doctoral degree program little did he know that grand canyon was more about its multibillion dollar valuation on wall street and profits taking federal student loan funds and hitting straight to the bottom line luckily the federal government and department of education have been through this before with other for profit colleges and they have established rules that allow students such as mr young to proceed in cases like this one despite the fact that the school had an arbitration clause and its agreement and that's what this case focuses in on and some of the very specific language of the regulations in this instance corinthian college was a good example after that was revealed as a fraudster institution the federal government was stuck with over forty million dollars in student loans they noted  regulations the department of education that if class actions had been allowed to proceed and had not been stymied by arbitration clauses in that instance of corinthian colleges the federal government likely would have saved tens of millions of dollars so they adopted the borrower defense regulations and one of the very important provisions of that is that class actions on behalf of students that have received federal student loan funds cannot be stymied b arbitration clause here there's no dispute that mr young received student loan funds federal student loan funds and that the bar defense regulations do apply the only question is some very specific language of one provision of the clause and i can only state that in very broad and expansive terms the department of education was very clear in adopting the regulations that it was doing away with the idea of enforcing arbitration clauses in this type of case however there is one less than artful section of the regulations and that's what we are forced to deal with here today thirty four dollars c f r section six hundred and eighty five point three zero one and obviously this is in the papers but since this is really the heart of our discussion i will quote it to your honor's the bard of defense claim borrower defense claim means a claim that is work could be asserted as a borrower defense as defined in section six b if reduced to judge the st clause leading up to the comma there is very very expansive and there's no dispute that if we were just talking about bar defenses as defined in t five we would be covered here that's a very expansive definition that includes you know basically you know any provision of educational services for which alone was provided but we have the comma and the after clause there and the question is what does that mean we submit to the court that it's obvious that it's stating that it also includes that this general very expansive definition under a five also includes one other type of claim however the district court found that essentially that clause after the comma was to be read to say you know only including or to include only this claim and what is the defined there in that clause this is completely out of keeping with the common sense and plain understanding of this language  also defies this court's determination and bell south technology telecommunications versus town of palm beach that is the intent that you look at st then you would look at how the regulator has interpreted the regulation then you would look at the legislative or regulatory history and in each of those phases of the analysis here it is  of mr young st the common sense understanding of what the term including means is to simply state that the broad category the a five category at the beginning of the rule also includes what is there for letter after defined in this up cause that simply relies are all understanding of the word including we've cited some cases in our brief but we all know what that means including does not mean including only or limited to or but only including those of the words that essentially the district court found should be implied here and the grand canyon is suggesting should be included frankly if you were to take out the comma the words including a claim and just have the general cause and then the general definition of a five and then say other than one based on c and d you would actually have what the district court has determined is the fair interpretation here but that is not the plain language of the regulation have been a position that mean excluding breach of contract and this right ones very very close to that they certainly are contesting that that it excludes c n d which is what it would say if it said other than ones based on d it be very simple to do that but what it does say is that it includes other than c and d those that are have to have been reduced to judgement under b and so b is very expensive b can be anything it could be a former class action it could be an attorney general action any ruling against the school in a prior time can be enforced by the student as a bar or defense a claim so it is simply saying that it doesn't have to be a b contract or misrepresentation that c n d it can also be any other prior claim that was reduced to a judgment and you know that's only fair under the language but it's also if this court was defined ambiguity then you look to what the regulator has stated and i think the best source of analysis of that is in the california association of private sector post secondary schools case st of oss that is the subject of our twenty a j letter from february of two thousand and twenty one along and that goes through a very detailed analysis of all the thinking that went into the regulations the various pronouncements within the regulatory framework the comments that were received the responses of the department of education very comprehensive and it's very clear that there was no intent to exclude from this protection the very very core focus of the regulations which is breach of the contract misrepresentations by the schools that the for profit schools lastly the legislative history is the same if you look at the proposal the comments that received the responses and all of that shows so under the analysis that this court is to apply under bell south telecommunications everything all the criteria are in favor of mr young i would note i know it's only a state court decision but this exact issue just came up and we certainly commend to your attention judge caissons decision in the ward case where she can to the exact same issue as before you and determined and you know diametrically opposed analysis that you know that just didn't make any sense what what this court what this federal district court did in this instance does not make any sense and so we submit  that it is a fairly straightforward question of the plain language of the statute of the regulation but if it the court does need to go for forward or further than that excuse me under bell south everything is resoundingly in favor of mr young being able to proceed with a class action lawsuit in this instance i think we have your argument mr website q thank you and we'll hear from  independent reasons st the district court properly held that the two thousand and sixteen department of education regulations do not apply to plaintiffs claims in this lawsuit nd even if they did those regulations do not and could not consistent with the federal arbitration act invalidate the arbitration agreement between the parties some context is help for the borrower defense regulations and regulations that we're discussing this morning were implemented by the department of education in one hundred thousand nine hundred and thirty two permit student loan borrowers to raise defenses to paying back student loans to the federal government and the regulation definition the partner really met to make the definition the same then it would have said that instead of including the awkward language including a claim other than under c and  and let me ask you a quick question so you have your ice cream example i've tried to fashion my own example and i want to tell you i want to have you tell me where it goes wrong i've tried to structure it precisely according to the regulatory language here  so here's my example a tort claim means a claim alleging culpable conduct resulting in personal harm including a claim other than one based on negligence or reckless conduct does that mean on your reading that a tort claim does not include negligent or reckless conduct i think if it's been definition were stated in the way that you stated i think the plain language of that would exclude those those claims really i mean really really that  have we have to construe the regulation cording to the rules of statutory interpretation which require what you know one of which is the word including is typically a word of inclusion as as as judge anderson says not a word of explanation and there's nothing to prevent this language from meaning including in addition to that it's a perfectly plausible reading that's the way my tort example reads i mean if the language had been drafted only slightly differently to say including claims other than those based on c and b nobody would think this is an big list and you're saying that just because it says including a claim other than include instead of including claims other than it's all different that doesn't make any sense i think that there's another reason that this is the definition have to be different because if the department intended for them to be the same they would have just written in the at the educational process in a way that it makes sense for the department to resolve those claims through the bar or defense process but i do think i think there's another issue that's important as well and that in their agreement with the department so this is this is really an agreement between the schools and apartment and that that agreement is no longer the operative agreement so schools are not prohibited from enforcing  enforceable courts must and will enforce the agreement so my contention is that the twenty six team regulations don't apply i have an interpretation of them that perhaps the court doesn't share but even if i'm any event if we if we accept grand canyon's interpretation of the text of the regulation isn't that inconsistent with the weight of authority we create  cats they merely we cited the definition of bar defense but they quoted two hundred and twenty two dollars as opposed to three hundred dollars so they never even reached the issue in fact that the language including other than a few brief points st i want to clarify and i know it's very clear from the regulations and cells and i believe it was essentially stipulated by the parties in the briefing there there have been changes to these regulations the trumpet ministration has changed them  but it's very clear that the effective date for those changes is after july one thousand and twenty when the effective date of those occurred and that will apply to loans made after that date so i don't want there to be any confusion that there's any real conflict about whether the regulation we've all been addressing throughout these arguments is the one that's at issue that is the one that's at issue secondly judge anders is correct that the argument is a sort of broader presumption in favor arbitration arguments have not been made here and this appeal however i would point out that it is you know to me very clear and i think the caps case does a great job of analyzing it that the federal purse can be protected by the department of education and it can put limits on its borrowers in this case a grand canyon university literally takes hundreds of millions of dollars in student loan funds every year from the federal government and it is the most important responsibility of the department of education to safeguard those funds and frankly it's been doing a horrible job doing so and grand canyon and many other for profit schools have been robbing us taxpayer which is really what cases like this boil down to not only are they protecting students who have been wronged they're also protecting the federal taxpayer and if courts however no one has ever suggested that in entering agreements with the federal government you know contractors or schools in this case cannot be forced to protect the federal purse and in this instance the federal government has decided that if you're going to take federal student loan funds you must allow a class action litigation to proceed to protect those federal funds because of instances that they highlighted in adopting those regulations where schools used arbitration clauses and were able to get away with fraud for years and years costing the federal government tens of millions of dollars so the answer is yes if this  was if there was not a federal federal regulatory body involved here if the student loans had not been obtained this is an enforceable arbitration agreement between the school and mr young but everything in this case has always focused on the fact that that is a binding obligation federal student loans were obtained here and those rules are in effect and so you know the general rule of thumb that might apply if mr young had sued completely outside of the context of the federal rules you know it would it might be different out of this but that analysis is not in play here because it was not briefed not before the court and we don't think it would be successful anyway there is a detailed examination of that issue in the capps decision that we have proved before the court and our twenty a j letter and if if the court has nothing further i do not either thank you so much for your time all right thank you mr weber mr dicker