William Loveland Coll. v. Distance Educ. Accreditation Comm'n

• Decision Date: 28 September 2018
• Docket Number: Civil Action No. 17-2037 (ABJ)
• Citation: 347 F.Supp.3d 1
• Parties: WILLIAM LOVELAND COLLEGE, Plaintiff, v. DISTANCE EDUCATION ACCREDITATION COMMISSION, Defendant.
• Court: U.S. District Court — District of Columbia

347 F.Supp.3d 1

WILLIAM LOVELAND COLLEGE, Plaintiff,

v.DISTANCE EDUCATION ACCREDITATION COMMISSION, Defendant.

Civil Action No. 17-2037 (ABJ)

United States District Court, District of Columbia.

Signed September 28, 2018

Anitha Wileen Johnson, Odelugo & Johnson, LLC, Lanham, MD, for Plaintiff.

Robert Patrick Scanlon, Anderson & Quinn, LLC, Rockville, MD, Joshua N. Ruby, T. Christopher Donnelly, Donnelly, Conroy & Gelhaar, LLP, Boston, MA, for Defendant.

MEMORANDUM OPINION

AMY BERMAN JACKSON, United States District Judge

Plaintiff William Loveland College ("WLC" or "the College") has brought this lawsuit against defendant Distance Education Accrediting Commission ("DEAC," "the agency," or "the Commission").¹

DEAC is authorized by the United States Department of Education to accredit institutions that offer distance or online post-secondary degree programs. The College received accreditation from DEAC in 2001 to offer online education to students.

In February 2017, DEAC issued a Show Cause Directive informing the College that it had concerns about the institution's ability to comply with DEAC's accreditation standards and policies, and ordering it to show cause why its accreditation should not be withdrawn. WLC's accreditation remained in effect in the interim, but it was directed to take corrective action in order to vacate the order, and it was required to file a new application for accreditation within thirty days.

The College then brought this lawsuit in federal court alleging five causes of action: denial of due process (Count I); breach of contract (Count II); defamation (Count III); tortious interference with prospective business or economic advantage (Count IV); and negligence (Count V).² See Compl. ¶¶ 18–50. Because the College did not attempt to invoke the procedures or address any of the concerns outlined in the Show Cause Directive, its accreditation eventually lapsed.³

Pending before the Court is DEAC's motion to dismiss. See Notice of DEAC's Mot. to Dismiss [Dkt. # 25-1] ("Def.'s Mot."); DEAC's Mem. of Law in Supp. of Def.'s Mot. [Dkt. # 25-2] ("Def.'s Mem.").⁴ Because the College failed to exhaust its administrative remedies before bringing the due process claim, and because none of the state law counts states a claim upon which relief can be granted, the Court will grant defendant's motion.

BACKGROUND

Plaintiff is a not-for-profit degree-granting institution located in Loveland, Colorado, Compl. ¶¶ 1, 9. The College's original mission was to provide training in the emerging field of traffic management, but in 1996, it transitioned "to a distance based education model to leverage emerging technological opportunities" in education markets. Id. ¶ 9. Distance education or distance-based education is also commonly referred to as online education. See id. ¶ 10.

Defendant is a private, not-for-profit organization that operates as an institutional accreditor of distance education institutions. Compl. ¶ 10; see Distance Educ. Accrediting Comm'n, http://www.deac.org (last visited Sept. 5, 2018). It was first recognized by the United States Department of Education in 1959, and it continues to be an accreditor of "postsecondary institutions in the United States that offer degree and/or non-degree programs primarily by the distance or correspondence education method up to and including the professional doctoral degree." Compl. ¶ 14; Accreditation in the United States , U.S. Dep't of Educ., https://www2.ed.gov/admins/finaid/accred/accreditation_pg6.html (last visited Sept. 26, 2018).

I. Accreditation Procedures

DEAC must comply with the Higher Education Act ("HEA"), 20 U.S.C. § 1001 et seq. , the statute governing accrediting agencies, as well as Department of Education regulations. This framework requires each accrediting agency to maintain and make available to the public: written materials describing the accreditation process; the procedures institutions must follow to apply; the standards used to make accreditation decisions; the institutions and programs the agency currently accredits; and information about members of the agency's decision-making bodies and principal administrative staff. 20 U.S.C. § 1099b ; 34 C.F.R. § 602.23(a). The agency must afford certain due process protections to each educational institution it accredits, which include, among other things, providing written statements of agency requirements and standards, written notice of any "adverse accrediting action or action to place the institution or program on probation or show cause," and an opportunity to appeal any adverse action prior to the action becoming final. 20 U.S.C. § 1099b(a)(6) ; 34 C.F.R. § 602.25. The accrediting agency must also have procedures in place for providing written notice about certain accrediting decisions to the public, the Secretary of Education, and the appropriate State licensing or authorizing agency. 20 U.S.C. § 1099b(a)(7)–(8) ; 34 C.F.R. § 602.26.

To be accredited by DEAC, an institution has the burden of proving that it is in compliance with all of the standards set out in the agency's accreditation handbook. See Compl. ¶ 19; Decl. of Joshua N. Ruby in Supp. of DEAC's Mot., Ex. C to Def.'s Mot. [Dkt. # 25-3] ("Ruby Decl."); DEAC Accreditation Handbook, Ex. 1 to Ruby Decl. [Dkt. # 25-3] ("Handbook").⁵ The Handbook is a manual published by DEAC that sets forth the requirements of accreditation, and member schools agree to be bound by those standards if they receive accreditation. Compl. ¶¶ 19, 33.

The application process includes a self-evaluation by the applicant, a curricular review by DEAC-engaged subject matter specialists with an opportunity for the institution to respond, and an on-site evaluation of the institution's compliance with DEAC accreditation standards. Handbook at 12–20. Following the on-site evaluation, the Chair of the on-site team prepares a report, and the institution has thirty-days to submit a response. Id. at 19.

The Commission usually meets twice a year, in January and June, to review applications for initial accreditation or renewal of accreditation. Handbook at 20. After reviewing all submitted materials, the Commission may take one of four courses of action: (1) accredit a new applicant institution for up to three years, or continue an institution's accredited status for up to five years; (2) defer a decision pending receipt of a Progress Report, submission of additional information, and/or the results of a follow-up-on-site evaluation; (3) direct the institution to Show Cause as to why its accreditation should not be withdrawn; or (4) deny accreditation to an applicant or withdraw accreditation from an accredited institution. Id. at 20–23.

Of particular relevance to this case are the steps DEAC and the institution must take if the Commission decides to issue a Show Cause Directive to an institution. "In cases where the Commission has reason to believe that an institution is not in compliance with accreditation standards and other requirements, the Commission may direct the institution to Show Cause as to why its accreditation should not be withdrawn." Handbook at 21. An institution must receive written notice of a Show Cause Directive, and the notice must: (1) state the reasons why the directive was issued; (2) identify the standards or accreditation requirements for which compliance is a concern; (3) recite the reasons for and the evidence supporting the claim that the institution may not be in compliance with accreditation requirements; and (4) advise the institution of its obligations under the directive and of the deadline for its response. Id. at 22.

When an institution receives a Show Cause Directive, it is "required to demonstrate corrective action and compliance with accrediting standards or procedures." Handbook at 21. The "burden of proof rests with the institution to demonstrate that it is meeting DEAC's accreditation standards." Id. Once the time for an institution to respond or comply with the requirements in the directive has expired, the Commission may do one of four things: (1) vacate the Show Cause Directive if the response demonstrates that removal of the order is warranted or that the institution is in compliance with the cited accreditation standards and requirements; (2) continue the Show Cause Directive, pending the receipt of additional information or further institutional reports; (3) order a special visit to the institution; or (4) withdraw the institution's accreditation, an action "that would be subject to an appeal by the institution." Id. at 22. The Commission must notify the institution of its decision within thirty days, and in all cases, the Commission must "allow the institution sufficient time to respond to any findings before making any final decision regarding the institution's accredited status." Id. at 23.

If the Commission decides to deny or withdraw accreditation, the institution has the right to appeal that decision by submitting an Application for Appeal to the Executive Director of the Commission. Handbook at 23–24. The institution must appeal within ten days of receipt of the letter advising it of the denial or withdrawal of accreditation, or the right to appeal will be deemed waived and the "Commission's action [will] become final." Id. The institutional appeal "is heard by an independent appeals panel that is separate from the Commission and serves as an additional level of due process for the institution." Id. at 24. The panel may affirm, remand, amend, or reverse the Commission's decision. Id. at 25–26.

"Upon being notified that its appeal did not change an adverse Commission decision, an institution has five business days to request arbitration, during which no public notification of the Commission action will be made." Handbook at 27. If the institution's arbitration proceeding is unsuccessful, and the accreditation decision becomes final, the institution may file suit in the District Court for the District of Columbia. Id. at 150 ("An...