Nova University v. Board of Governors of University of North Carolina

• Decision Date: 03 March 1982
• Docket Number: No. 110A81,110A81
• Citation: 305 N.C. 156,287 S.E.2d 872
• Parties: , 2 Ed. Law Rep. 1206 NOVA UNIVERSITY, v. The BOARD OF GOVERNORS OF the UNIVERSITY OF NORTH CAROLINA. 1
• Court: North Carolina Supreme Court

Page 872

287 S.E.2d 872

305 N.C. 156, 2 Ed. Law Rep. 1206

NOVA UNIVERSITY, v. The BOARD OF GOVERNORS OF the UNIVERSITY OF NORTH CAROLINA.¹ No. 110A81.

Supreme Court of North Carolina.

March 3, 1982.

Powe, Porter & Alphin by E. K. Powe and Charles R. Holton, Durham, Glassie, Pewett, Dudley, Beebe & Shanks by Hershel Shanks and Michael A. Gordon, Washington, D. C., for plaintiff Nova University.

Rufus L. Edmisten, Atty. Gen. by Elizabeth C. Bunting and Marvin Schiller, Asst. Attys. Gen., Raleigh, for defendant Board of Governors.

EXUM, Justice.

The question dispositive of this litigation is whether General Statute 116-15 ³ authorizes the Board of Governors of the University of North Carolina (herein "Board") to regulate through a licensing procedure teaching in North Carolina by Nova University (herein "Nova") when the teaching leads to Nova's conferral of academic degrees in Florida and pursuant to Florida law. The Court of Appeals concluded that the statute contains no such authorization. We agree and affirm.

Defendant Board, acting under G.S. 116-15 and various regulations adopted by it pursuant to the statute, denied plaintiff Nova, a Florida nonprofit corporation, a license to teach in North Carolina curricula designed by Nova to lead to its conferral in Florida of certain academic degrees. Nova has challenged this ruling by filing in superior court what it denominates a "Petition and Complaint." Its petition is filed pursuant to G.S. 150A-45, the section of our Administrative Procedure Act (herein "APA") which provides that "judicial review of a final agency decision" may be obtained through "a petition" filed in Wake Superior Court. By its complaint, or civil action, Nova seeks both a declaratory judgment that the Board has no authority to license its teaching in North Carolina or its conferral of degrees in Florida under Florida law and injunctive relief against the Board's attempt at this kind of regulation. In superior court Nova filed both a motion for summary judgment and a motion for extension of time to conduct discovery. Both motions appear to be related to Nova's civil action, rather than its APA petition for review; but the Board resisted only Nova's motion to extend time for discovery on the ground that Nova's relief, if any, from the Board's decision was via its APA petition for review. The Board argued that the superior court could not entertain a separate civil action and Nova had no right to discovery in a proceeding to review an administrative decision.

Judge Hobgood, after a hearing, denied Nova's motion for summary judgment "without prejudice" to Nova's having its "appeal from an adverse ruling of an administrative agency heard pursuant to [the APA]." Concluding, however, that Nova had a right to conduct discovery, Judge Hobgood allowed Nova's motion to extend time for discovery.

The Court of Appeals allowed both Nova's and the Board's petitions for certiorari, each party having sought review of the ruling adverse to it. The Court of Appeals, after concluding that under G.S. 116-15 the Board "does not have the power to license or regulate Nova University in its teaching program in this state so long as Nova does not confer degrees in this state," reversed Judge Hobgood's denial of Nova's summary judgment motion and remanded for entry of a judgment consistent with its opinion. The Court of Appeals did not, therefore, reach the discovery question raised by the Board's petition for certiorari.

Before us the Board has not sought to sustain the denial of Nova's summary judgment motion on the ground that the superior court had no jurisdiction to entertain it. It continues to argue that Nova's exclusive judicial remedy is under the APA only as a challenge to the superior court's ruling on Nova's discovery motion. Both parties have before us treated the case as if Nova's motion for summary judgment was procedurally a proper way to raise the question of the Board's authority to act. Both have vigorously and ably argued this question here and in the Court of Appeals on the basis that a conclusion that the Board lacked such authority would effectively terminate the litigation in Nova's favor whether the matter is considered as a petition under the APA or civil action against the Board, or both. We approach this aspect of the case as have the parties.

We now proceed to the question at hand.

General Statute 116-15 provides:

"Licensing of nonpublic educational institutions; regulation of degrees.--(a) No nonpublic educational institution created or established in this State after December 31, 1960 ⁴ by any person, firm, organization, or corporation shall have power or authority to confer degrees upon any person except as provided in this section. For the purposes of this section, the term 'created or established in this State' or 'established in this State' shall mean, in the case of an institution whose principal office is located outside of North Carolina, the act of issuance by the Secretary of State of North Carolina of a certificate of authority to do business in North Carolina. ⁵ The Board of Governors shall call to the attention of the Attorney General, for such action as he may deem appropriate any institution failing to comply with the requirements of this section.

(b) The Board of Governors, under such standards as it shall establish, may issue its license to confer degrees in such form as it may prescribe to a nonpublic educational institution established in this State after December 31, 1960, by any person, firm, organization, or corporation; but no nonpublic educational institution established in the State subsequent to that date shall be empowered to confer degrees unless it has income sufficient to maintain an adequate faculty and equipment sufficient to provide adequate means of instruction in the arts and sciences, or in any other recognized field or fields of learning or knowledge.

(c) All nonpublic educational institutions licensed under this section shall file such information with the President as the Board of Governors may direct, and the said Board may evaluate any nonpublic educational institution shall fail to maintain the required standards, the Board shall revoke its license to confer degrees, subject to a right of review of this decision in the manner provided in Chapter 150A of the General Statutes." (Emphasis supplied).

Acting pursuant to subsection (b) of the statute, the Board adopted "Rules and Standards for Licensing Non-Public Educational Institutions To Confer Degrees." ⁶ (Herein "Standards"). These Standards provide for a number of "minimum standards" with which "a non-public degree-granting educational institution operating wholly or in part in North Carolina" must comply. They relate, in part, to "the quality and content of each course or program of instruction;" the adequacy of "space, equipment, instructional materials, and personnel;" the qualifications of administrators and instructors; financial soundness; and absence of discriminatory practices. "Accreditation by the appropriate accrediting agency ... may be accepted by the Board ... as evidence of compliance with [the] minimum standards." The Standards then provide for a procedure whereby an institution may apply for a license. After application, an "examination visit" to the applicant institution's campus by a "team of examiners" is conducted. The Team then files its report and recommendations with the President of the University of North Carolina. After opportunity is given to the applicant to discuss and make additions to the report of the examining team, the matter is submitted to the Board for its "decision and final disposition of the institution's request for licensing." The Rules provide for judicial review of the Board's decision pursuant to article 4 of G.S. 150A.

In addition to its Standards, the Board on 13 February 1976 adopted revised "Guidelines for Interpretation and Implementation" of its Standards (herein "Guidelines"). The Guidelines are expressly designed to "interpret the rules and minimum standards under which the Board ... issues licenses to non-public educational institutions to confer degrees in North Carolina." (Emphasis supplied). The Guidelines, after stating the Board's conception of the "broad purpose of higher education", outline in detail requirements for an acceptable "educational program" for each of several types of academic degrees. ⁷ After stating the Board's conception of the capacities of "[a] generally educated person" and how these capacities are generally developed, the Guidelines provide:

"Extension work Offered by Out-of-State Institutions. Any institution legally operating in another state that wishes to offer in North Carolina courses leading to a degree is to apply in the same manner for a license to grant degrees, and is to be judged by the same standards as institutions applying for initial licensure in North Carolina.'' (Emphasis supplied).

The Guidelines close with a section on how an educational institution should be organized and administered.

It is against this legislative and regulatory backdrop that the dispute before us arose.

It is undisputed that Nova is a nonprofit corporation organized and existing under the laws of Florida with its principal place of business in Fort Lauderdale, Florida. In addition to undergraduate, graduate and professional curricula taught at its 200 acre campus in Fort Lauderdale, Nova, beginning in 1972 and thereafter, instituted various "non-resident" curricula designed to lead to the conferral by Nova in Florida of various degrees for professional persons. ⁸ Candidates for these degrees are not required to fulfill traditional residence requirements at the Nova campus in Fort Lauderdale. Instead, they form "clusters" of 25 to 30 persons who meet regularly at a site in the state where they live. They are taught by professors, most of whom also teach at universities with traditional residency...