SAN DIEGO (Legal Newsline) - The former owner of an online university's quest to reduce a $22 million verdict has barely made a dent.
The California Fourth Appellate District on Feb. 20 took up the issue of a nearly $22.4 million verdict that had found Zovio, which owned Ashford University before selling it to the University of Arizona to create a global campus, had misled prospective students for more than a decade.
A San Diego judge found Zovio committed more than 1 million violations under the state Unfair Competition and False Advertising laws, assessing $22,375,782 in civil penalties.
Zovio appealed but only convinced the Fourth District it was charged penalties for violations that occurred outside the statute of limitations. That figure represented $933,453, and the rest of the verdict was left intact.
Former state Attorney General Xavier Becerra instituted a lawsuit against Zovio in 2017, alleging the company misled the costs of attending Ashford, the availability of financial aid, the ability of its programs to prepare students for careers and the likelihood its academic credits would transfer elsewhere.
Also alleged were fraudulent billing and collections practices. The trial court found there was a high-pressure, fear-based culture in the admissions department to find more and more students.
"As a result, admissions counselors mad misrepresentations to students on matters critical to students' decision-making," says the opinion, authored by Justice Truc Do.
"(T)he trial court's findings do not compel the conclusion defendants' overall culpability was only modest. Theirs were not mere technical violations of law," she added later.
"Instead, the nature of defendants' misrepresentations, the overwhelming number of violations, and the length of time over which they were committed, all indicate a serious level of culpability that was not substantially diminished b the mitigators the court identified."