Newport Intern. Univ. V. Dept. of Educ.

• Citation: 2008 WY 72,186 P.3d 382
• Decision Date: 25 June 2008
• Docket Number: No. S-07-0234.,S-07-0234.
• Parties: NEWPORT INTERNATIONAL UNIVERSITY, INC., Appellant, v. The STATE of Wyoming, DEPARTMENT OF EDUCATION and James M. McBride, in his official Capacity as Superintendent of Public Instruction, Appellee.
• Court: Wyoming Supreme Court

186 P.3d 382

2008 WY 72

NEWPORT INTERNATIONAL UNIVERSITY, INC., Appellant, v. The STATE of Wyoming, DEPARTMENT OF EDUCATION and James M. McBride, in his official Capacity as Superintendent of Public Instruction, Appellee.

No. S-07-0234.

Supreme Court of Wyoming.

June 25, 2008.

Representing Appellant: C.M. Aron and Galen Bruce Woelk of Aron and Hennig, LLP, Laramie, Wyoming. Argument by Mr. Woelk.

Representing Appellees: Bruce M. Salzburg, Wyoming Attorney General; and Robin Sessions Cooley, Deputy Attorney General. Argument by Ms. Cooley.

Before VOIGT, C.J., and GOLDEN, BURKE, and KITE, JJ., and PARK, D.J.

PARK, District Judge.

[¶ 1] Newport International University, Inc. (hereinafter "NIU") appeals from a summary judgment granted in favor of the State of Wyoming, Department of Education and Mr. McBride (hereinafter collectively "Department"). The district court ruled that the Private School Licensing Act, Wyo. Stat. Ann. §§ 21-2-401 to 407 (LexisNexis 2007) (hereinafter "Act"), and Department rules promulgated pursuant to the Act did not violate the Wyoming Constitution.

[¶ 2] We affirm the decision of the district court.

ISSUE

[¶ 3] Does the Private School Licensing Act violate the Wyoming Constitution?

FACTS

[¶ 4] NIU, a Wyoming corporation, is a private educational institution offering post-secondary degrees to students in seventeen international learning centers. NIU has approximately 2,300 students, and it employs roughly 157 faculty and staff members in the United States and abroad. The Department licensed NIU in 2003 in accordance with the statutes in effect at that time. Wyo. Stat. Ann. §§ 21-2-401 to 407 (LexisNexis 2003). The license authorized NIU to operate until June 2008.

[¶ 5] In 2006, the Wyoming Legislature amended the Private School Licensing Act, Wyo. Stat. Ann. §§ 21-2-401 to 407. 2006 Wyo. Sess. Laws ch. 34, § 1. The amended Act became effective July 1, 2006, and significantly changed the licensing of private schools. Prior to July 1, 2006, private post-secondary educational institutions could obtain a license from the Department after payment of a license fee, an annual fee, and the posting of a bond.

[¶ 6] After amendment of the Act, all private post-secondary educational institutions are required by the Act to become accredited within five (5) years unless an extension is granted for good cause. § 21-2-402(b). The Act also requires that all private schools in Wyoming be licensed by the Department. § 21-2-401. The Department was directed to establish minimum standards for all such schools and to provide for the investigation and evaluation of the institutions as necessary to implement the rules. § 21-2-401(d). Additionally, the Act mandates registration fees, annual fees, and a performance bond of not more than $10,000. § 21-2-402(b); § 21-2-405. Finally, the Act provides for criminal penalties for violations. § 21-2-407.

[¶ 7] The Department adopted emergency rules on June 10, 2006. These rules required all private post-secondary degree-granting institutions to submit an application to the Department by July 1, 2006, and provide proof of an application for accreditation from an association approved by the United States Department of Education.

[¶ 8] NIU attempted to renew its license in accordance with the old 2003 statutes. The Department returned the renewal packet and advised NIU that it must comply with the current Act. The Department also extended the deadline for submitting an application until September 1, 2006.

[¶ 9] NIU responded by filing a Complaint for Declaratory Judgment and for Preliminary Injunction. The Department filed an Answer and a Motion for Judgment on the Pleadings under Rule 12(c) of the Wyoming Rules of Civil Procedure. The parties agreed to stay all pending litigation and administrative proceedings in order to attempt settlement. After the parties failed to reach an agreement, NIU filed a Motion for Leave to Amend Complaint as well as a Second Amended Complaint. The district court deferred ruling on the amendments until after the Department's Motion for Judgment on the Pleadings was decided. The district court granted the Department's Motion for Judgment on the Pleadings which disposed of the Department's pending and renewed motions to amend.

[¶ 10] The Department adopted final rules, effective February 27, 2007. The final rules, entitled Private School Registration/Licensing for Private Degree Granting Post-Secondary Education Institutions, generally required NIU to: (a) pay a $1,000 registration fee; (b) submit a $10,000 bond; (c) obtain accreditation from a recognized accreditation agency; and (d) provide a detailed timeline setting out specific milestones to obtain accreditation and the dates on which they were to be accomplished. Although the Department had adopted interim emergency rules, the parties agreed that the final rules were the relevant rules to be considered by the district court in making its ruling.

STANDARD OF REVIEW

[¶ 11] Rule 12(c) of the Wyoming Rules of Civil Procedure allows for a motion for a judgment on the pleadings and states:

After the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings. If, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.

W.R.C.P. 12(c).

[¶ 12] The standard of review for application of this rule is:

A defendant is entitled to judgment on the pleadings if the undisputed facts appearing in the pleadings, supplemented by any facts of which the district court may take judicial notice, establish that no relief can be granted.... A judgment on the pleadings is appropriate if all material allegations of fact are admitted in the pleadings and only questions of law remain.

Box L Corp. v. Teton County ex rel. Bd. of County Comm'rs of Teton County, 2004 WY 75, ¶ 2, 92 P.3d 811, 813 (Wyo.2004) (citations omitted). Our review is similar to consideration of a motion to dismiss under W.R.C.P. 12(b)(6) for failure to state a claim upon which relief can be granted. Id. We consider the allegations of the complaint to be true, and view them in the light most favorable to the plaintiff. Id.

[¶ 13] This Court has had some difficulty ascertaining the precise claims advanced by NIU, a difficulty also experienced by the district court. NIU asserts in a general fashion that the Act and the final rules violate various provisions of the Wyoming Constitution, such as: equal protection; delegation of authority, including the due process clause; and impairment of contract rights.

DISCUSSION

Equal Protection

[¶ 14] NIU asserts that the Act and the Department's final rules violate the Equal Protection Clause of the Wyoming Constitution. NIU claims that the Act and the final rules create two separate classes: accredited schools and nonaccredited schools. The Department denies that any such differentiation is created; and to the extent that it exists, it is valid.

[¶ 15] The Wyoming Constitution differs from the United States Constitution in that it does not contain an express "equal protection" clause; rather, it contains a variety of equality provisions, viz. Article 1, §§ 2, 3, and 34; and Article 3, § 27. Greenwalt v. Ram Restaurant Corp. of Wyoming, 2003 WY 77, ¶ 39, 71 P.3d 717, 730 (Wyo. 2003). Notwithstanding this difference, this Court uses the conventional federal equal protection analysis in the interpretation of the equality provisions of the Wyoming Constitution. Id.

[¶ 16] The principles of equal protection analysis are well established. Greenwalt, ¶ 39, 71 P.3d at 730-31. Claims of unconstitutional classification are analyzed under two levels of scrutiny. If the class is suspect or if a fundamental right is involved, a strict scrutiny standard is applied that requires a demonstration that the classification is necessary to achieve a compelling state interest. In re Honeycutt, 908 P.2d 976, 979 (Wyo.1995); Allhusen v. State By and Through Wyo. Mental Health Professions Licensing Bd., 898 P.2d 878, 885 (Wyo. 1995); Washakie County School Dist. No. One v. Herschler, 606 P.2d 310, 333 (Wyo. 1980). If a suspect class or a fundamental right is not involved, a rational relationship test is used to determine if the classification has a rational relationship to a legitimate state interest. Honeycutt, 908 P.2d at 979 (citing Meyer v. Kendig, 641 P.2d 1235, 1239 (Wyo.1982)). A party attacking the rationality of the legislative classification has the heavy burden of demonstrating the unconstitutionality of a statute beyond a reasonable doubt. Greenwalt, ¶ 30, 71 P.3d at 730 (citing F.C.C. v. Beach Communications, Inc., 508 U.S. 307, 315, 113 S.Ct. 2096, 2102, 124 L.Ed.2d 211 (1993); Small v. State, 689 P.2d 420, 426 (Wyo.1984); Nehring v. Russell, 582 P.2d 67, 74 (Wyo.1978)).

[¶ 17] NIU concedes that it is not a member of a suspect class and that fundamental rights are not involved. Consequently, the classification must be analyzed under the rational relationship or rational basis test. In order to establish a violation of equal protection, NIU must show that similarly situated entities are treated differently and that the disparate treatment is not rationally related to a legitimate governmental objective. Bachmeier v. Hoffman, 1 P.3d 1236, 1243 (Wyo.2000).

[¶ 18] We invoke a four part test in analyzing the constitutionality of a classification under the rational relationship test. In applying the test, we must determine: (1) what class is harmed by the legislation and has that group been subjected to a tradition of disfavor by our laws; (2) what is the public purpose to be served by the law; (3) what is the characteristic of the disadvantaged class that...