JONATHAN E. NUECHTERLEIN 

General Counsel

LESLIE RICE MELMAN 

Assistant General Counsel for Litigation

BURKE KAPPLER

Attorney

FEDERAL TRADE COMMISSION

600 Pennsylvania Ave., N.W., Mail Drop H-585 

Washington, DC 20580 

Telephone: (202) 326-2043 (Kappler) 

Facsimile: (202) 326-2477 

E-mail: bkappler@ftc.gov

Attorneys for the Federal Trade Commission

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA 

) 

FEDERAL TRADE COMMISSION, ) 

) 

Petitioner, ) 

) 

v. ) 

) 

APOLLO EDUCATION GROUP, INC., ) 

) 

and ) 

) 

THE UNIVERSITY OF PHOENIX, INC., ) 

) 

Respondents. ) 

) 

) 

) 

)

Case No.

UNOPPOSED PETITION FOR AN 

ORDER GOVERNING 

COMPLIANCE WITH CIVIL 

INVESTIGATIVE DEMANDS 

ISSUED IN FURTHERANCE OF A 

LAW ENFORCEMENT 

INVESTIGATION

Case 2:16-mc-00002-SRB Document 1 Filed 01/12/16 Page 1 of 6
1 

The Federal Trade Commission petitions this Court under Section 20 of the Federal

Trade Commission Act (FTC Act), 15 U.S.C. § 57b-1, and Section 1232g of the Family 

Educational Rights and Privacy Act (FERPA), 20 U.S.C. §§ 1232g(b)(1)(J)(ii) and

1232b(b)(2)(B), for an order requiring Respondents Apollo Education Group, Inc., and the 

University of Phoenix, Inc. (collectively, the Companies) to produce education records sought 

by civil investigative demands (CIDs) issued by the FTC without disclosing the contents of 

CIDs, or any information provided in response thereto, as permitted by FERPA. The

Companies do not oppose the Petition, and no previous application for the relief sought herein 

has been made to this Court or any other. 

The Declaration under penalty of perjury of Thomas J. Widor, which verifies the 

statements in this Petition, is attached as Exhibit 1. The Commission’s Resolution Directing Use 

of Compulsory Process in a Nonpublic Investigation of Secondary or Postsecondary Education 

Products and Services or Educational Accreditation Products and Services, November 14, 2013 

(FTC File No. P138402) is attached as Exhibit 2. 

Petition Statements

In support of this Unopposed Petition, the Commission states as follows: 

1. The Commission is an administrative agency of the United States, organized and 

existing pursuant to the FTC Act, 15 U.S.C. § 41 et seq. The Commission is authorized and 

directed by Section 5 of the FTC Act, 15 U.S.C. § 45(a), to prevent the use of unfair methods of 

competition and unfair or deceptive acts or practices in or affecting commerce. 

2. Section 3 of the FTC Act, 15 U.S.C. § 43, empowers the Commission to prosecute 

any inquiry necessary to its duties in any part of the United States. Section 6 of the Act,

15 U.S.C. § 46, empowers the Commission to gather and compile information concerning, and to

investigate from time to time, the organization, business, conduct, practices and management of, 

Case 2:16-mc-00002-SRB Document 1 Filed 01/12/16 Page 2 of 6
2 

any person, partnership or corporation engaged in or whose business affects commerce, with

certain exceptions not relevant here. Section 20 of the FTC Act, 15 U.S.C. § 57b-1, 

empowers the Commission to require by CID the production of documents or other 

information relating to any Commission law enforcement investigation. 

3. This Court has jurisdiction to enforce the Commission’s duly issued CIDs under 

Section 20(e) of the FTC Act, 15 U.S.C. § 57b-1(e), which provides, in pertinent part: 

Whenever any person fails to comply with any civil investigative demand duly 

served upon him under this section, or whenever satisfactory copying or

reproduction of material requested pursuant to the demand cannot be 

accomplished and such person refuses to surrender such material, the

Commission, through such officers or attorneys as it may designate, may file, in 

the district court of the United States for any judicial district in which such person 

resides, is found, or transacts business, and serve upon such person, a petition for 

an order of such court for the enforcement of this section. 

Respondents reside, are found, and transact business in this district. Pet. Exh 1, ¶¶ 3-4. 

4. Apollo Education Group, LLC (“Apollo”) is a private education provider 

incorporated in Arizona and headquartered in Phoenix, Arizona. The University of Phoenix, Inc. 

(“University”) is a for-profit university that is wholly-owned by Apollo. The University is also 

incorporated in Arizona and headquartered in Phoenix, Arizona. The University offers 

undergraduate and graduate degrees in nine schools, and operates through a series of campuses 

and centers nationwide. The University currently has approximately 200,000 students and 

900,000 alumni. Pet. Exh. 1, ¶¶ 3-4.

5. On November 14, 2013, the Commission issued a Resolution Directing Use of 

Compulsory Process in a Nonpublic Investigation of Secondary or Postsecondary Educational 

Products or Services or Educational Accreditation Products or Services (P138402). Pet. Exh 1,

¶ 5; Pet. Exh. 2. The Resolution authorized all compulsory process available to the Commission 

Case 2:16-mc-00002-SRB Document 1 Filed 01/12/16 Page 3 of 6
3 

to be used in connection with an investigation into possible violations of Section 5 of the FTC 

Act. Pet. Exh. 1, ¶ 5; Pet. Exh. 2. 

6. Following this resolution, on July 23, 2015, the Commission issued the CIDs to 

the Companies to investigate possible violations of Section 5 in connection with their 

advertising, marketing, and sale of their educational products or services. Pet. Exh. 1, ¶ 6. The 

CIDs require the Companies to produce material relevant to the Commission’s investigation, 

including information and documents relating to complaints, marketing and recruiting, student 

advisement, call recordings, and billing and debt collection. Pet. Exh. 1, ¶ 6. (The return dates 

of the CIDs were modified by letter dated January 11, 2016. Id.) 

7. Many of the materials requested by the CIDs are “records, files, documents, 

and other materials” maintained by the Companies that “contain information directly related to a 

student,” which are known as “education records” under the Family Educational Rights and 

Privacy Act (FERPA). 20 U.S.C. § 1232g(a)(4)(A); 34 CFR § 99.31. Educational institutions 

such as the University of Phoenix risk the loss of federal funding if they violate FERPA by 

disclosing education records without written consent from the affected parents and students. 20 

U.S.C. § 1232g(b)(1). However, in some circumstances FERPA does not require such 

consent. Most pertinent here, FERPA allows an educational institution to disclose education 

records without obtaining consent in response to a “subpoena issued for a law 

enforcement purpose.” 20 U.S.C. § 1232g(b)(1)(J)(ii); see also 34 C.F.R. § 99.31(a)(9). The 

CIDs at issue are “subpoena[s] issued for a law enforcement purpose” within the meaning of 

FERPA.

8. FERPA generally requires educational institutions to notify affected students and 

their parents before making such a disclosure. 20 U.S.C. 1232g(b)(2)(B); 34 C.F.R. § 

Case 2:16-mc-00002-SRB Document 1 Filed 01/12/16 Page 4 of 6
4 

99.31(a)(9)(ii). For good cause, however, a court or the issuing agency may relieve an 

educational institution of the obligation to provide such notice by entering an order directing the 

institution to not “disclose to any person the existence or contents of the subpoena or any 

information furnished in response to the subpoena.” 20 U.S.C. §§ 1232g(b)(1)(J(ii), 

1232g(b)(2)(B); 34 C.F.R. § 99.31(a)(9)(ii)(B).

9. To date, the Companies have made several productions of documents called for in 

the CIDs, but have not provided education records called for in the CIDs. They assert that

providing the notice required by FERPA would be impractical and complex given the nature of 

the responsive material, the number of current and former students, and the difficulty in locating 

students or their families. Pet. Exh. 1, ¶¶ 7-8. The FTC acknowledges that this notice process 

would be costly, time-consuming, resource-intensive, and that it potentially will require multiple 

attempts to contact affected students. Pet. Exh. 1, ¶ 8. 

10. In addition, the contents of the CID have not been made public by either the FTC 

or the Companies. Pet. Exh. 1, ¶ 7. 

11. The CIDs directed to the Companies are within the Commission’s statutory 

authority, and the information and documents sought are reasonably relevant to the

Commission’s investigation. However, due to the unique circumstances imposed by FERPA and 

its disclosure requirements, and the number of current and former students at issue, requiring 

Companies to provide notice before producing these educational records would result in 

significant delays that will impede the Commission’s investigation and prevent completing it in

a timely manner. Pet. Exh. 1, ¶¶ 8-9. Moreover, no harm will result from the absence of 

notice in this instance because the governing FTC statutes protect the information from any 

public disclosure. See 15 U.S.C. §§ 46(f), 57b-2. For these reasons, there is good cause for 

Case 2:16-mc-00002-SRB Document 1 Filed 01/12/16 Page 5 of 6
5 

entry of an order requiring the Companies to produce responsive education records without 

disclosing the contents of the CIDs, or information provided in response, in accordance with 

Sections 1232g(b)(1)(i) and 1232g(b)(2)(B). Pet. Exh. 1, ¶ 9. The Companies do not oppose 

this request. 

Prayer for Relief

WHEREFORE, the Commission invokes the aid of this Court and prays:

a. for an order requiring the Companies to produce responsive education records to 

the FTC without disclosing the contents of the CIDs or any information furnished in response; 

b. For such other relief as the Court deems just and proper. 

Respectfully submitted, 

Dated: January 12, 2016 JONATHAN E. NUECHTERLEIN 

General Counsel

LESLIE RICE MELMAN 

Assistant General Counsel for Litigation

 /s/ Burke Kappler 

BURKE KAPPLER

Attorney, Office of General Counsel

FEDERAL TRADE COMMISSION

600 Pennsylvania Ave., NW 

Washington, DC 20580 

Telephone: (202) 326-2043 

Fax: (202) 326-2477 

E-mail: bkappler@ftc.gov

Attorneys for the Federal Trade 

Commission

Case 2:16-mc-00002-SRB Document 1 Filed 01/12/16 Page 6 of 6
Petition Exhibit 1 

Declaration of Thomas J. Widor 

(January 12, 2016) 

Case 2:16-mc-00002-SRB Document 1-1 Filed 01/12/16 Page 1 of 7
Case 2:16-mc-00002-SRB Document 1-1 Filed 01/12/16 Page 2 of 7

JONATHAN E. NUECHTERLEIN 

General Counsel 

LESLIE RICE MELMAN 

Assistant General Counsel for Litigation 

BURKE KAPPLER 

Attorney 

FEDERAL TRADE COMMISSION 

600 Pennsylvania Ave., N.W., Mail Drop H-585 

Washington, DC 20580 

Telephone: (202) 326-2043 (Kappler) 

Facsimile: (202) 326-2477 

E-mail: bkappler@ftc.gov 

Attorneys for the Federal Trade Commission 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

) 

FEDERAL TRADE COMMISSION, 

Petitioner, 

V. 

APOLLO EDUCATION GROUP, INC., 

and 

THE UNIVERSITY OF PHOENIX, INC., 

Respondents. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

Case No. 

DECLARATION OF ATTORNEY 

THOMAS J. WIDOR 
Case 2:16-mc-00002-SRB Document 1-1 Filed 01/12/16 Page 3 of 7

I, Thomas J. Widor, pursuant 28 U.S.C. § 1746, declare as follows: 

1. I am an attorney employed by the Federal Trade Commission in Washington, 

D.C. I am assigned to the FTC's non-public investigation of Apollo Education Group, Inc. and 

the University of Phoenix, Inc. (collectively, the Companies). 

2. I am authorized to execute a declaration verifying the facts that are set forth in the 

Unopposed Petition for an Order Governing Compliance with Civil Investigative Demands 

Issued in Furtherance of a Law Enforcement Investigation. I have read the petition and the 

exhibits thereto and verify that the exhibits are true and correct copies of the original documents. 

The facts set forth herein are based on my personal knowledge or information made known to me 

in the course of my official duties. 

3. Apollo Education Group, Inc. is a public company, incorporated in Arizona, with 

its principal place of business in Phoenix, AZ. Apollo Educ. Grp., Inc., Annual Report 

(Form 10-K) (Oct. 22, 2015). Apollo Education Group is one of the world's largest private 

education providers. See id. Apollo Education Group is engaged in, and its business affects 

"commerce," as that term is defined in Section 4 of the FTC Act, 15 U.S.C. § 44. 

4. The University of Phoenix, Inc. is a wholly-owned subsidiary of Apollo 

Education Group, incorporated in Arizona, with its principal place of business in Phoenix, AZ. 

Id. The University of Phoenix offers undergraduate and graduate degrees through nine schools 

in a wide range of program areas. Id. A majority of the University's students attend classes 

exclusively online, and the University also offers educational programs and services at ground 

locations in selected metropolitan areas throughout the United States. Id. At present, the 

University of Phoenix has approximately 200,000 students and 900,000 graduates. University 
Case 2:16-mc-00002-SRB Document 1-1 Filed 01/12/16 Page 4 of 7

of Phoenix is engaged in, and its business affects "commerce," as that term is defined in 

Section 4 of the FTC Act, 15 U.S.C. § 44. 

5. On November 14, 2013, the Commission issued a Resolution Directing Use of 

Compulsory Process in a Nonpublic Investigation of Secondary or Postsecondary Educational 

Products or Services or Educational Accreditation Products or Services (P138402). This 

Resolution authorized the use of compulsory process 

[t]o determine whether unnamed persons, partnerships, corporations, or others 

have engaged or are engaged in deceptive or unfair acts or practices in or affecting 

commerce in the advertising, marketing, or sale of secondary or postsecondary 

educational products or services, or educational accreditation products or 

services, in violation of Section 5 of the Federal Trade Commission Act, 15 

U.S.C. § 45, as amended. The investigation is also to determine whether 

Commission action to obtain redress for injury to consumers or others would be in 

the public interest. 

Pet. Exh. 2. The Resolution also authorized all compulsory processes available to the 

Commission to be used in connection with an investigation into possible violations of Section 5. 

Pet. Exh. 2. 

6. Following this resolution, on July 23, 2015, the Commission issued civil 

investigative demands (Cills) - a form of compulsory process - to the Companies to investigate 

possible violations of Section 5 in connection with their advertising, marketing, and sale of their 

educational products or services. The CIDs were issued consistent with Commission regulations 

and were signed by Commissioner Terrell McSweeny. The CIDs require the Companies to 

produce material that includes information and documents relating to complaints, marketing and 

recruiting, student advisement, call recordings, and billing and debt collection. This information 

is relevant to the Commission's investigation. For example, call recordings with prospective, 

current, or former students may reveal whether the Companies or its employees engaged in 

deceptive acts or practices when advertising, marketing, or selling the Companies' educational 

2 
Case 2:16-mc-00002-SRB Document 1-1 Filed 01/12/16 Page 5 of 7

products or services. Consumer complaints provide extrinsic information about the nature and 

prevalence of any potentially deceptive or unfair acts or practices, and material related to the 

Companies' investigation and resolution of these complaints will likely show how and whether 

the Companies are addressing potentially deceptive or unfair acts or practices. (The return dates 

of the CIDs were modified by letter dated January 11, 2016.) 

7. Since issuance of the CIDs, I have discussed with the Companies' counsel on 

several occasions the status of the Companies' compliance with the CIDs and the effect of the 

Family Educational Rights and Privacy Act (FERP A). During those discussions, the 

Companies expressed a willingness to produce responsive information, and indeed have made 

several productions of documents called for in the CIDs. The Companies also stated, however, 

that many of the responsive materials sought by the CIDs constitute "education records" 

pursuant to FERPA, 20 U.S.C. § 1232g(a)(4), and that, absent a nondisclosure order from a 

court or an issuing agency, the Companies would risk the loss of federal funds if they produced 

these records to the Commission without individually notifying affected students and parents. 

The Companies further stated that compliance with this notification requirement would be 

costly, time-consuming, and resource-intensive given the nature of the responsive records, the 

number of current and former students, and the difficulty in locating students or parents. To my 

knowledge, neither the Companies nor the FTC has publicly disclosed the contents of the CIDs. 

8. The FTC acknowledges that, to provide notice under FERP A, the Companies 

would first have to undertake a time-consuming, resource intensive process of reviewing 

responsive material to determine if the material constitutes an education record and to identify 

the student or students referenced in or associated with the material. The Companies then 

would have to locate each student's last known physical or email address and send notice to 

3 
Case 2:16-mc-00002-SRB Document 1-1 Filed 01/12/16 Page 6 of 7

each such address, following up with additional email, regular mail, and telephone calls for 

returned or invalid notifications or for students who simply would not respond or otherwise 

verify receipt. Providing such notice would require the Companies to devote significant 

resources to the effort, necessitating, for example, dedicated personnel to review the material, 

identify the affected students, locate their last known addresses, distribute notices, follow up on 

non-responses, track responses, field inquiries from students by telephone, mail, and email, and 

receive and process objections. Because of these impediments, and the Companies' and the 

FTC's ongoing discussions regarding how best to comply with FERP A in producing education 

records in response to the CIDs, the Companies have not produced any educational records 

responsive to the CIDs and thus have not fully complied with the Commission's Cills. 

9. The FTC's inability to obtain these materials has deprived the Commission of 

valuable information and significantly delayed the investigation. Further, due to the unique 

circumstances imposed by FERP A and its notice requirements, requiring the Companies to 

provide notice before producing these educational records to the Commission would result in 

significant delays that could impede the Commission's investigation and prevent the 

Commission from completing the investigation in a timely manner, contrary to the public 

interest. In addition, no harm would result from not providing notice in this case because 

education records provided by respondents would be statutorily protected from any public 

disclosure by the Commission, which is entrusted to protect the rights of consumers. These 

circumstances thus constitute good cause for entry of an order that would require the Companies 

to produce responsive education records without providing notice that would otherwise be 

required. 

4 
Case 2:16-mc-00002-SRB Document 1-1 Filed 01/12/16 Page 7 of 7

I declare under penalty of perjury that the foregoing is true and correct. 

Executed on January ~, 2016. 

THOMAS J. WIDOR 

Attorney 

FEDERAL TRADE COMMISSION 

5 
Petition Exhibit 2 

Resolution Directing Use of Compulsory 

Process in a Non-Public Investigation of 

Secondary or Postsecondary Education Products 

and Services or Educational Accreditation 

Products and Services, November 14, 2013 

(FTC File No. P138402) 

Case 2:16-mc-00002-SRB Document 1-2 Filed 01/12/16 Page 1 of 2
Joshua D. Wright 

RESOLUTION DIRECTING USE OF COMPULSORY PROCESS IN A NON-PUBLIC 

INVESTIGATION OF SECONDARY OR POSTSECONDARY 

EDUCATIONAL PRODUCTS OR SERVICES OR 

EDUCATIONAL ACCREDITATION PRODUCTS OR SERVICES 

File l\o. Pl 38402 

Nature and Scope. of Investigation: 

To dctcnnine whether unnamed persons. partnerships. corporations, or others have 

engaged or are engaging in deceptive or unfair acts or practices in or affectiog commerce in the 

advertising, marketing, or sak of secondary or postsecondary educational products or services. 

or educational accreditation products or services. in violation of Section 5 of the Federal Trade 

Commission Act, 15 U.S.C. § 45, as amended. lbe investigation is also to determine whether 

Commission actinn to obtain redress for injury to consu:n1e.rs or others would be in the public 

intere~t. 

Tbe Federal Trade Commission hereby resolves and directs that any aml an compulsory 

processes available to it be used in connection with this investigation for aperiod not to exceed 

five t5) ye::irs from the date ofissuance ofthis resolution. The e:irpiration of this five-year peri0d 

shall not limit or tenp.inate the investigation or the legal effect of any compulsory process issued 

during the fhe-year period, The Federal Trade Commission specifically authorizes the filing or 

continuation pf actions to enforce any such compulsory process after the expiration {1f the fh'eyear period. 

Authority to Conduct Investigation: 

Sections 6 •. 9. IO~ and 20 ofth~ Federal Trade Commission Act, 15 U.S.C. ~§ 46, 49, 50. 

and 57b-1, as amended; and FTC' Procedures and Rules of Practice, 16 C.F.R § 1J et seq., ::tnd 

supplements thereto, 

By directk>n of the Commission. c-, ', .-1 1n r; /'1 / "-.;- . /1 , v i L 1,, ,,, 

1 /I , •. &}i \ . 4,:, . - ,_ .fA ~· '.-.fl'f._., . • ; ~"' ,,,,._"<P/..·"·- > -. 

Donald S, Clark 

Secretary 

Issut!'d: Non:mber 14. 2013 
UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

Civil Cover Sheet 

This automated JS-44 conforms generally to the manual JS-44 approved by the Judicial Conference of the United States in September 1974. The data is

required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. The information contained herein neither replaces nor

supplements the filing and service of pleadings or other papers as required by law. This form is authorized for use only in the District of Arizona.

The completed cover sheet must be printed directly to PDF and filed as an attachment to the Complaint or

Notice of Removal.

Apollo Education Group, Inc. ; The University of Plaintiff(s): Federal Trade Commission Defendant(s):Phoenix, Inc.

County of Residence: Outside the State of Arizona County of Residence: Maricopa

County Where Claim For Relief Arose: Outside the State of Arizona

Plaintiff's Atty(s): Defendant's Atty(s):

Burke W. Kappler , Attorney Gil M. Soffer , Partner

Office of General Counsel Katten Muchin Rosenman LLP

600 Pennsylvania Avenue, N.W. 525 W. Monroe Street

Washington, DC 20580 Chicago, Illinois 60661-3693

202-326-2043 312-902-5474

Terence A. Gonsalves , Partner

Katten Muchin Rosenman LLP

525 W. Monroe Street

Chicago, Illinois 60661-3693

312-902-5615

II. Basis of Jurisdiction: 1. U.S. Government Plaintiff

III. Citizenship of Principal Parties

(Diversity Cases Only)

Plaintiff:-N/A

Defendant:-N/A

IV. Origin : 1. Original Proceeding

V. Nature of Suit: 410 Antitrust

VI.Cause of Action: Proceeding for order governing production of education records subject to nondisclosure

pursuant to 15 U.S.C. s. 57b-1, 20 U.S.C. 1232g(b)(1)(J)(ii), and 20 U.S.C. s. 1232b(b)

(2)(B).

VII. Requested in Complaint

Class Action:No

Dollar Demand:

Jury Demand:No

VIII. This case is not related to another case.

Signature: s/ Burke W. Kappler

Date: 1/12/2016

If any of this information is incorrect, please go back to the Civil Cover Sheet Input form using the Back button in your browser and change it. Once

correct, save this form as a PDF and include it as an attachment to your case opening documents.

Case 2:16-mc-00002-SRB Document 1-3 Filed 01/12/16 Page 1 of 2
Revised: 01/2014

Case 2:16-mc-00002-SRB Document 1-3 Filed 01/12/16 Page 2 of 2
Petition Exhibit 1 

Declaration of Thomas J. Widor 

(January 12, 2016) 

Case 2:16-mc-00002-SRB Document 1-1 Filed 01/12/16 Page 1 of 7
Case 2:16-mc-00002-SRB Document 1-1 Filed 01/12/16 Page 2 of 7

JONATHAN E. NUECHTERLEIN 

General Counsel 

LESLIE RICE MELMAN 

Assistant General Counsel for Litigation 

BURKE KAPPLER 

Attorney 

FEDERAL TRADE COMMISSION 

600 Pennsylvania Ave., N.W., Mail Drop H-585 

Washington, DC 20580 

Telephone: (202) 326-2043 (Kappler) 

Facsimile: (202) 326-2477 

E-mail: bkappler@ftc.gov 

Attorneys for the Federal Trade Commission 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

) 

FEDERAL TRADE COMMISSION, 

Petitioner, 

V. 

APOLLO EDUCATION GROUP, INC., 

and 

THE UNIVERSITY OF PHOENIX, INC., 

Respondents. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

Case No. 

DECLARATION OF ATTORNEY 

THOMAS J. WIDOR 
Case 2:16-mc-00002-SRB Document 1-1 Filed 01/12/16 Page 3 of 7

I, Thomas J. Widor, pursuant 28 U.S.C. § 1746, declare as follows: 

1. I am an attorney employed by the Federal Trade Commission in Washington, 

D.C. I am assigned to the FTC's non-public investigation of Apollo Education Group, Inc. and 

the University of Phoenix, Inc. (collectively, the Companies). 

2. I am authorized to execute a declaration verifying the facts that are set forth in the 

Unopposed Petition for an Order Governing Compliance with Civil Investigative Demands 

Issued in Furtherance of a Law Enforcement Investigation. I have read the petition and the 

exhibits thereto and verify that the exhibits are true and correct copies of the original documents. 

The facts set forth herein are based on my personal knowledge or information made known to me 

in the course of my official duties. 

3. Apollo Education Group, Inc. is a public company, incorporated in Arizona, with 

its principal place of business in Phoenix, AZ. Apollo Educ. Grp., Inc., Annual Report 

(Form 10-K) (Oct. 22, 2015). Apollo Education Group is one of the world's largest private 

education providers. See id. Apollo Education Group is engaged in, and its business affects 

"commerce," as that term is defined in Section 4 of the FTC Act, 15 U.S.C. § 44. 

4. The University of Phoenix, Inc. is a wholly-owned subsidiary of Apollo 

Education Group, incorporated in Arizona, with its principal place of business in Phoenix, AZ. 

Id. The University of Phoenix offers undergraduate and graduate degrees through nine schools 

in a wide range of program areas. Id. A majority of the University's students attend classes 

exclusively online, and the University also offers educational programs and services at ground 

locations in selected metropolitan areas throughout the United States. Id. At present, the 

University of Phoenix has approximately 200,000 students and 900,000 graduates. University 
Case 2:16-mc-00002-SRB Document 1-1 Filed 01/12/16 Page 4 of 7

of Phoenix is engaged in, and its business affects "commerce," as that term is defined in 

Section 4 of the FTC Act, 15 U.S.C. § 44. 

5. On November 14, 2013, the Commission issued a Resolution Directing Use of 

Compulsory Process in a Nonpublic Investigation of Secondary or Postsecondary Educational 

Products or Services or Educational Accreditation Products or Services (P138402). This 

Resolution authorized the use of compulsory process 

[t]o determine whether unnamed persons, partnerships, corporations, or others 

have engaged or are engaged in deceptive or unfair acts or practices in or affecting 

commerce in the advertising, marketing, or sale of secondary or postsecondary 

educational products or services, or educational accreditation products or 

services, in violation of Section 5 of the Federal Trade Commission Act, 15 

U.S.C. § 45, as amended. The investigation is also to determine whether 

Commission action to obtain redress for injury to consumers or others would be in 

the public interest. 

Pet. Exh. 2. The Resolution also authorized all compulsory processes available to the 

Commission to be used in connection with an investigation into possible violations of Section 5. 

Pet. Exh. 2. 

6. Following this resolution, on July 23, 2015, the Commission issued civil 

investigative demands (Cills) - a form of compulsory process - to the Companies to investigate 

possible violations of Section 5 in connection with their advertising, marketing, and sale of their 

educational products or services. The CIDs were issued consistent with Commission regulations 

and were signed by Commissioner Terrell McSweeny. The CIDs require the Companies to 

produce material that includes information and documents relating to complaints, marketing and 

recruiting, student advisement, call recordings, and billing and debt collection. This information 

is relevant to the Commission's investigation. For example, call recordings with prospective, 

current, or former students may reveal whether the Companies or its employees engaged in 

deceptive acts or practices when advertising, marketing, or selling the Companies' educational 

2 
Case 2:16-mc-00002-SRB Document 1-1 Filed 01/12/16 Page 5 of 7

products or services. Consumer complaints provide extrinsic information about the nature and 

prevalence of any potentially deceptive or unfair acts or practices, and material related to the 

Companies' investigation and resolution of these complaints will likely show how and whether 

the Companies are addressing potentially deceptive or unfair acts or practices. (The return dates 

of the CIDs were modified by letter dated January 11, 2016.) 

7. Since issuance of the CIDs, I have discussed with the Companies' counsel on 

several occasions the status of the Companies' compliance with the CIDs and the effect of the 

Family Educational Rights and Privacy Act (FERP A). During those discussions, the 

Companies expressed a willingness to produce responsive information, and indeed have made 

several productions of documents called for in the CIDs. The Companies also stated, however, 

that many of the responsive materials sought by the CIDs constitute "education records" 

pursuant to FERPA, 20 U.S.C. § 1232g(a)(4), and that, absent a nondisclosure order from a 

court or an issuing agency, the Companies would risk the loss of federal funds if they produced 

these records to the Commission without individually notifying affected students and parents. 

The Companies further stated that compliance with this notification requirement would be 

costly, time-consuming, and resource-intensive given the nature of the responsive records, the 

number of current and former students, and the difficulty in locating students or parents. To my 

knowledge, neither the Companies nor the FTC has publicly disclosed the contents of the CIDs. 

8. The FTC acknowledges that, to provide notice under FERP A, the Companies 

would first have to undertake a time-consuming, resource intensive process of reviewing 

responsive material to determine if the material constitutes an education record and to identify 

the student or students referenced in or associated with the material. The Companies then 

would have to locate each student's last known physical or email address and send notice to 

3 
Case 2:16-mc-00002-SRB Document 1-1 Filed 01/12/16 Page 6 of 7

each such address, following up with additional email, regular mail, and telephone calls for 

returned or invalid notifications or for students who simply would not respond or otherwise 

verify receipt. Providing such notice would require the Companies to devote significant 

resources to the effort, necessitating, for example, dedicated personnel to review the material, 

identify the affected students, locate their last known addresses, distribute notices, follow up on 

non-responses, track responses, field inquiries from students by telephone, mail, and email, and 

receive and process objections. Because of these impediments, and the Companies' and the 

FTC's ongoing discussions regarding how best to comply with FERP A in producing education 

records in response to the CIDs, the Companies have not produced any educational records 

responsive to the CIDs and thus have not fully complied with the Commission's Cills. 

9. The FTC's inability to obtain these materials has deprived the Commission of 

valuable information and significantly delayed the investigation. Further, due to the unique 

circumstances imposed by FERP A and its notice requirements, requiring the Companies to 

provide notice before producing these educational records to the Commission would result in 

significant delays that could impede the Commission's investigation and prevent the 

Commission from completing the investigation in a timely manner, contrary to the public 

interest. In addition, no harm would result from not providing notice in this case because 

education records provided by respondents would be statutorily protected from any public 

disclosure by the Commission, which is entrusted to protect the rights of consumers. These 

circumstances thus constitute good cause for entry of an order that would require the Companies 

to produce responsive education records without providing notice that would otherwise be 

required. 

4 
Case 2:16-mc-00002-SRB Document 1-1 Filed 01/12/16 Page 7 of 7

I declare under penalty of perjury that the foregoing is true and correct. 

Executed on January ~, 2016. 

THOMAS J. WIDOR 

Attorney 

FEDERAL TRADE COMMISSION 

5 
Petition Exhibit 2 

Resolution Directing Use of Compulsory 

Process in a Non-Public Investigation of 

Secondary or Postsecondary Education Products 

and Services or Educational Accreditation 

Products and Services, November 14, 2013 

(FTC File No. P138402) 

Case 2:16-mc-00002-SRB Document 1-2 Filed 01/12/16 Page 1 of 2
Joshua D. Wright 

RESOLUTION DIRECTING USE OF COMPULSORY PROCESS IN A NON-PUBLIC 

INVESTIGATION OF SECONDARY OR POSTSECONDARY 

EDUCATIONAL PRODUCTS OR SERVICES OR 

EDUCATIONAL ACCREDITATION PRODUCTS OR SERVICES 

File l\o. Pl 38402 

Nature and Scope. of Investigation: 

To dctcnnine whether unnamed persons. partnerships. corporations, or others have 

engaged or are engaging in deceptive or unfair acts or practices in or affectiog commerce in the 

advertising, marketing, or sak of secondary or postsecondary educational products or services. 

or educational accreditation products or services. in violation of Section 5 of the Federal Trade 

Commission Act, 15 U.S.C. § 45, as amended. lbe investigation is also to determine whether 

Commission actinn to obtain redress for injury to consu:n1e.rs or others would be in the public 

intere~t. 

Tbe Federal Trade Commission hereby resolves and directs that any aml an compulsory 

processes available to it be used in connection with this investigation for aperiod not to exceed 

five t5) ye::irs from the date ofissuance ofthis resolution. The e:irpiration of this five-year peri0d 

shall not limit or tenp.inate the investigation or the legal effect of any compulsory process issued 

during the fhe-year period, The Federal Trade Commission specifically authorizes the filing or 

continuation pf actions to enforce any such compulsory process after the expiration {1f the fh'eyear period. 

Authority to Conduct Investigation: 

Sections 6 •. 9. IO~ and 20 ofth~ Federal Trade Commission Act, 15 U.S.C. ~§ 46, 49, 50. 

and 57b-1, as amended; and FTC' Procedures and Rules of Practice, 16 C.F.R § 1J et seq., ::tnd 

supplements thereto, 

By directk>n of the Commission. c-, ', .-1 1n r; /'1 / "-.;- . /1 , v i L 1,, ,,, 

1 /I , •. &}i \ . 4,:, . - ,_ .fA ~· '.-.fl'f._., . • ; ~"' ,,,,._"<P/..·"·- > -. 

Donald S, Clark 

Secretary 

Issut!'d: Non:mber 14. 2013 
UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

Civil Cover Sheet 

This automated JS-44 conforms generally to the manual JS-44 approved by the Judicial Conference of the United States in September 1974. The data is

required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. The information contained herein neither replaces nor

supplements the filing and service of pleadings or other papers as required by law. This form is authorized for use only in the District of Arizona.

The completed cover sheet must be printed directly to PDF and filed as an attachment to the Complaint or

Notice of Removal.

Apollo Education Group, Inc. ; The University of Plaintiff(s): Federal Trade Commission Defendant(s):Phoenix, Inc.

County of Residence: Outside the State of Arizona County of Residence: Maricopa

County Where Claim For Relief Arose: Outside the State of Arizona

Plaintiff's Atty(s): Defendant's Atty(s):

Burke W. Kappler , Attorney Gil M. Soffer , Partner

Office of General Counsel Katten Muchin Rosenman LLP

600 Pennsylvania Avenue, N.W. 525 W. Monroe Street

Washington, DC 20580 Chicago, Illinois 60661-3693

202-326-2043 312-902-5474

Terence A. Gonsalves , Partner

Katten Muchin Rosenman LLP

525 W. Monroe Street

Chicago, Illinois 60661-3693

312-902-5615

II. Basis of Jurisdiction: 1. U.S. Government Plaintiff

III. Citizenship of Principal Parties

(Diversity Cases Only)

Plaintiff:-N/A

Defendant:-N/A

IV. Origin : 1. Original Proceeding

V. Nature of Suit: 410 Antitrust

VI.Cause of Action: Proceeding for order governing production of education records subject to nondisclosure

pursuant to 15 U.S.C. s. 57b-1, 20 U.S.C. 1232g(b)(1)(J)(ii), and 20 U.S.C. s. 1232b(b)

(2)(B).

VII. Requested in Complaint

Class Action:No

Dollar Demand:

Jury Demand:No

VIII. This case is not related to another case.

Signature: s/ Burke W. Kappler

Date: 1/12/2016

If any of this information is incorrect, please go back to the Civil Cover Sheet Input form using the Back button in your browser and change it. Once

correct, save this form as a PDF and include it as an attachment to your case opening documents.

Case 2:16-mc-00002-SRB Document 1-3 Filed 01/12/16 Page 1 of 2
Revised: 01/2014

Case 2:16-mc-00002-SRB Document 1-3 Filed 01/12/16 Page 2 of 2