ACCREDITING COUNCIL FOR INDEPENDENT COLLEGES AND SCHOOLS v. UNITED STATES DEPARTMENT OF EDUCATION et al
Filing
76
MEMORANDUM OPINION. Signed by Judge Reggie B. Walton on March 23, 2018. (lcrbw3)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
ACCREDITING COUNCIL FOR
INDEPENDENT COLLEGES AND
SCHOOLS,
Plaintiff,
v.
BETSY DEVOS, 1 in her official capacity
as Secretary of the United States
Department of Education, and the UNITED
STATES DEPARTMENT OF
EDUCATION,
Defendants.
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Civil Action No. 16-2448 (RBW)
MEMORANDUM OPINION
The plaintiff, the Accrediting Council for Independent Colleges and Schools (the
“Accrediting Council”), 2 brings this civil action under the Administrative Procedure Act
(“APA”), 5 U.S.C. §§ 701–706 (2012), challenging the decision of the Secretary of the United
States Department of Education (the “Department”) to revoke the Accrediting Council’s
recognition as an “accrediting agency” for certain institutions of higher education. See
Complaint (“Compl.”) ¶¶ 1, 6, 37–42. Currently before the Court are the parties’ cross-motions
for summary judgment. See generally Plaintiff’s Motion for Summary Judgment (“Pl.’s Mot.”);
Defendants’ Cross[-]Motion for Summary Judgment (“Defs.’ Cross-Mot.”). Upon careful
1
Pursuant to Federal Rule of Civil Procedure 25(d), Secretary Betsy DeVos has been automatically substituted for
her predecessor, former Secretary John B. King. Although former Secretary King issued the decision that is the
subject of this case, because he is no longer a party to this case, the Court’s references to the Secretary of the United
States Department of Education will refer to Secretary DeVos.
2
The Court has substituted more descriptive terms for some of the acronyms used by the parties, due to complaints
several appellate judges have expressed about the use of acronyms that are not readily recognized, as opposed to
readily recognized acronyms like the “FBI.”
consideration of the parties’ submissions, 3 the Court will grant in part and deny in part the
Accrediting Council’s motion, deny the defendants’ motion, and remand this case for further
proceedings consistent with this memorandum opinion.
I.
A.
BACKGROUND
Statutory and Regulatory Framework
Title IV of the Higher Education Act of 1965 (“HEA”) “provides billions of dollars
[every year] through loan and grant programs to help students pay tuition for their postsecondary
education.” Ass’n of Private Sector Colls. & Univs. v. Duncan, 681 F.3d 427, 433 (D.C. Cir.
2012); see also 20 U.S.C. § 1070 (2012) (stating that the purpose of the Act is to “assist in
making available the benefits of postsecondary education to eligible students . . . in institutions
of higher education by” “providing Federal Pell Grants . . . [,] supplemental educational
opportunity grants . . . [, and] payments to the States to assist them in making financial aid
available”). To participate in these programs, an institution of higher education must have
certain qualifications, including the requirement that it must be accredited by a nationally
recognized accrediting agency or association. See 20 U.S.C. § 1002(a) (incorporating 20 U.S.C.
§ 1001(a)(5)); see also id. § 1099c.
The Secretary of the Department (the “Secretary”) determines which accrediting agencies
are nationally recognized for the purposes of the HEA. See id. § 1099b; see also 34 C.F.R.
3
In addition to the filings already identified, the Court considered the following submissions in rendering its
decision: (1) the Plaintiff’s Memorandum of Points and Authorities in Support of Motion for Summary Judgment
(“Pl.’s Mem.”); (2) the Memorandum of Points and Authorities in Support of Defendants’ Cross[-]Motion for
Summary Judgment, and in Opposition to Plaintiff’s Motion for Summary Judgment (“Defs.’ Mem.”); (3) the
Plaintiff’s Memorandum of Points and Authorities in Opposition to Defendants’ Cross-Motion for Summary
Judgment and Reply in Further Support of Plaintiff’s Motion for Summary Judgment (“Pl.’s Opp’n”); (4) the Reply
in Support of Defendants’ Cross[-]Motion for Summary Judgment (“Defs.’ Reply”); (5) the Accrediting Council’s
Notice of Supplemental Authority; (6) the Plaintiff’s Motion to Supplement the Record (“Pl.’s Mot. to Supp.”);
(7) the Defendants’ Opposition to Plaintiff’s Motion to Supplement the Administrative Record (“Defs.’ Supp.
Opp’n”); and (8) the Plaintiff’s Reply in Further Support of Plaintiff’s Motion to Supplement the Administrative
Record.
2
§ 602.1 (2016). To be recognized, an accrediting agency must satisfy certain criteria designated
by the HEA and the Secretary’s implementing regulations. See 20 U.S.C. § 1099b(a); see also
34 C.F.R. pt. 602, subpt. B. Those criteria require an accrediting agency to demonstrate, inter
alia, that it: (1) has “standards for accreditation” that effectively address areas such as “student
achievement,” “[r]ecruiting and admissions practices,” and compliance with its responsibilities
under Title IV, see 34 C.F.R. § 602.16(a)(1)(i), (vii), (x); (2) has “effective mechanisms for
evaluating an institution’s . . . compliance with the [accreditation] standards,” id. § 602.17;
(3) has “a set of monitoring and evaluation approaches that enables the [accrediting] agency to
identify problems with an institution’s . . . continued compliance with [accreditation] standards,”
id. § 602.19(b); (4) enforces the accreditation standards against institutions that are not in
compliance with them, see id. § 602.20(a); and (5) “maintain[s] a systematic program of review
that demonstrates that its standards are adequate to evaluate the quality of the education . . .
provided by the institutions,” id. § 602.21(a). The statute provides that in order to determine
whether an accrediting agency is in compliance with these criteria, the Secretary “shall conduct a
comprehensive review and evaluation of the [agency’s] performance,” as well as “an
independent evaluation of the information provided by [the] agency.” 20 U.S.C. § 1099b(n)(1).
Additionally, the statute requires the Secretary to “consider all available relevant information
concerning the compliance of the accrediting agency . . . with the criteria.” Id. § 1099b(n)(3).
Pursuant to the HEA, the Secretary has promulgated regulations establishing procedures
for the review of an accrediting agency’s application for recognition. See 20 U.S.C. § 1099b(o)
(providing that “[t]he Secretary shall by regulation provide procedures for the recognition of
accrediting agencies”). First, the staff of the Department’s Office of Postsecondary Education
(the “Department staff”) “analyzes the [accrediting] agency’s application . . . to determine
3
whether the agency satisfies the criteria for recognition, taking into account all available relevant
information concerning the compliance of the agency with those criteria and in the agency’s
effectiveness in applying the criteria.” 34 C.F.R. § 602.32(b). The Department staff’s analysis
includes, inter alia, “[r]eview of [ ] public comments and other third-party information the
Department staff receives . . . , [ ] the agency’s responses to third-party comments, . . . as well as
any other information [the] Department staff assembles for purposes of evaluating the agency.”
Id. § 602.32(b)(2). Once it completes its evaluation, the Department staff prepares and sends to
the accrediting agency “a written draft analysis” that “includ[es] any identified areas of noncompliance and a proposed recognition recommendation” and that “[i]nvites the agency to
provide a written response . . . , specifying a deadline that provides at least [thirty] days for the
agency’s response.” Id. § 602.32(f)(1)–(3). Upon receipt of the accrediting agency’s response,
the Department staff reviews the response and “prepares [a final] written [ ] analysis,” which
“includes a recognition recommendation to the senior Department official, . . . including . . . a
recommendation to approve, deny, limit, suspend, or terminate recognition, [or] require the
submission of a compliance report and continue recognition pending a final decision on
compliance.” Id. § 602.32(f)(4). The Department staff must “[p]rovide [its final written
analysis] to the agency[] no later than seven days before the [National] Advisory Committee [on
Institutional Quality and Integrity (the “Advisory Committee”)] meeting,” which is the next step
in the process. Id. § 602.32(f)(5).
The Department staff then submits its final written analysis and certain other relevant
materials to the Advisory Committee for its review. See id. § 602.34(c). 4 Thereafter, the
4
The Advisory Committee is comprised of eighteen members, six of whom are appointed by the Secretary, six
appointed by the Speaker of the United States House of Representatives, and six appointed by the President pro
tempore of the United States Senate. See 20 U.S.C. § 1011c(b).
4
Advisory Committee holds a public meeting to “consider[] the materials provided . . . and invites
[the] Department staff, the [accrediting] agency, and other interested parties to make oral
presentations during the meeting.” Id. § 602.34(e). At the meeting, the Advisory Committee
adopts “a written motion . . . regarding the agency’s recognition,” id. § 602.34(f), which it then
“forwards to the senior Department official” in the form of “a recommendation to[, inter alia,]
approve, deny, limit, suspend, or terminate recognition, . . . or to require the agency to submit a
compliance report and to continue recognition pending a final decision on compliance,” id.
§ 602.34(g). “Within ten days following the Advisory Committee meeting, the [accrediting]
agency and [the] Department staff may submit written comments to the senior Department
official,” id. § 602.35(a); however, neither party “may submit additional documentary
evidence . . . unless the Advisory Committee[] . . . proposes finding the agency noncompliant
with . . . a criterion . . . not identified in the [ ] Department staff[’s final] written analysis,” id.
§ 602.35(c)(1).
“The senior Department official [then] makes a decision” on the accrediting agency’s
application for recognition “based on the record compiled” in the prior proceedings, including all
materials submitted to the Advisory Committee, the Advisory Committee meeting transcript, the
Advisory Committee’s recommendation, and any written comments from the accrediting agency
or the Department staff in response to the Advisory Committee’s recommendation. See id.
§ 602.36(a). “[I]f the agency either fails to comply with the criteria for recognition, . . . or to
apply those criteria effectively, the senior Department official denies, limits, suspends, or
terminates recognition” and “specifies the reasons for this decision, including all criteria the
agency fails to meet and all criteria the agency has failed to apply effectively.” Id.
§ 602.36(e)(2)(i)–(ii). However, “if . . . the senior Department official concludes that the agency
5
will demonstrate or achieve compliance with the criteria . . . and effective application of those
criteria within [twelve] months or less, the senior Department official may continue the agency’s
recognition, pending submission by the agency of a compliance report [and] review of the
report.” Id. § 602.36(e)(3)(i). The senior Department official must notify the agency of his or
her decision in writing “regarding the agency’s recognition within [ninety] days of the Advisory
Committee meeting.” Id. § 602.36(d).
“[An accrediting] agency may appeal the senior Department official’s decision to the
Secretary.” Id. § 602.37(a). On appeal, the Secretary considers the senior Department official’s
decision, the accrediting agency’s and the senior Department official’s written submissions on
appeal, and the entire record that was before the senior Department official. Id. § 602.37(d). If
the Secretary determines that the agency has failed to demonstrate compliance with or effective
application of any of the recognition criteria, the Secretary is authorized to take any of the
actions available to the senior Department official, see id. (recognizing that “the Secretary makes
a recognition decision, as described in § 602.36(e)”), including “den[ying], limit[ing],
suspend[ing], or terminat[ing] recognition” or “continu[ing] the agency’s recognition, pending
submission by the agency of a compliance report [and] review of the report,” id. § 602.36(e). If
the Secretary ultimately decides to deny, limit, suspend, or terminate an agency’s recognition,
“[a]n agency may contest the Secretary’s decision . . . in the Federal courts as a final decision in
accordance with applicable Federal law.” Id. § 602.38.
B.
Factual and Procedural History
The Accrediting Council is a nonprofit organization that was, until recently, recognized
by the Department as an accrediting agency for certain institutions of higher education. See Pl.’s
Mem. at 1; see also AR 3 (“[The Accrediting Council] is a previously-recognized national
accrediting agency[.]”). On January 8, 2016, the Accrediting Council submitted its Petition for
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Continued Recognition, which was comprised of a narrative submission and approximately one
hundred exhibits. See Pl.’s Mem. at 1; see also AR 9,677–752 (petition); AR 932–7,089
(exhibits). Thereafter, the Department informed the Accrediting Council that its petition would
be considered at the Advisory Committee meeting scheduled for June 23, 2016. See Pl.’s Mem.,
Exhibit (“Ex.”) A (Declaration of Anthony S. Bieda (“Bieda Decl.”) (Mar. 30, 2017)) ¶ 7.
On March 3, 2016, Herman Bounds, the Director of the Accreditation Group for the
Department’s Office of Post Secondary Education, emailed Albert Gray, the Accrediting
Council’s then-President and Chief Executive Officer, informing him “that the Office of the
Under Secretary [ ] ha[d] developed a set of question[s] [it] want[ed] to ask [the Accrediting
Council] during the recognition process.” AR 437. He explained that the questions, which he
attached to the email, see AR 438–42, were “tied . . . to relevant recognition criteria,” and that
the Accrediting Council’s petition would be “return[ed] . . . so [that the Accrediting Council]
c[ould] respond to the[] questions[] in [its] petition,” AR 437. He further informed Gray that the
Accrediting Council would be “allow[ed] [ ] up to [thirty] days to respond.” Id.
The Under Secretary’s questions were divided into two parts: “Overall Questions” (“Part
I”) and “Questions related to specific standards in [the Accrediting Council’s] Jan[uary] 2016
submission” (“Part II”). See AR 438–42. Part I contained questions regarding “[Accrediting
Council]-accredited institutions [that] have been the subject of major investigations and lawsuits
from multiple federal agencies and state attorneys general,” including Corinthian schools, ITT
Technical Institute, and the Michigan Jewish Institute. AR 438. Part II requested “further
information, and [d]ocumentation as appropriate, on . . . questions related to [the Accrediting
Council’s] January 2016 submission to the Department.” AR 439. Each of the Part II questions
sought information related to the Accrediting Council’s performance as to particular recognition
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criteria, specifically, 34 C.F.R. §§ 602.13, .15–.17, .19–.21, .24, .27–.28, and many of the
questions referenced the “problem schools” identified in Part I. See AR 439–42.
On March 10, 2016, Gray responded to Bounds’s email and requested a 45-day extension
for the Accrediting Council to submit its response to the Under Secretary’s questions, noting that
the questions were “substantial” and would require it to “supplement or replace more than
[thirty] narrative sections and more than [one hundred] exhibits in [its] petition that was
submitted . . . in early January.” AR 435. On March 15, 2016, Bounds responded to Gray’s
request, informing him that the Department would deny an extension as to Part I, but would grant
an extension as to Part II, which would therefore be due on May 16, 2016. See AR 434. The
Department further explained that “given that information received as late as May 16, 2016,
would not allow [the] Department staff the time to fully review and analyze [that information] in
time for the June [Advisory Committee] meeting, [the Accrediting Council] should be prepared
to return at the fall [Advisory Committee] meeting for further discussion and possible action as
warranted.” AR 434. Additionally, the Department emphasized that “the information [it]
requested is important to the Department’s responsibility to monitor and review [the Accrediting
Council]’s effectiveness as a recognized accrediting agency.” Id. The Accrediting Council
timely submitted its response to Part I on April 1, 2016. See AR 10,152–165; see also Pl.’s
Mem., Ex. A (Bieda Decl.) ¶ 12.
On May 4, 2016, the Department staff provided the Accrediting Council with a draft
analysis and report, in which it found the Accrediting Council noncompliant with multiple
recognition criteria and recommended that its petition be denied. See AR 9,753–894. The
8
Department staff instructed the Accrediting Council to respond to the draft report by June 3,
2016. See id.
On May 16, 2016, the Accrediting Council uploaded its Part II response to the
Department’s system, but did not technically “submit” the response due to questions it had about
the proper method for submission, specifically, its desire “to be sure . . . that [the Accrediting
Council would] have the opportunity to submit more information . . . as [pa]rt of [its] response
to” the Department staff report. AR 431. On May 18, 2016, Steve Porcelli, a member of the
Department staff, see Pl.’s Mem. at 25, instructed Anthony Bieda, the then-Executive in Charge
at the Accrediting Council, that “[u]nless [he] hear[d] otherwise from [the Department] within
the next two hours,” he should “hit the submit button,” AR 431. Approximately one hour later,
Bounds emailed Bieda, instructing him to “not include the supplemental information in the
petition at all,” noting that the Accrediting Council could “submit[] [it] to [the Department] on a
flash drive.” AR 430. As the explanation for this decision, Bounds stated that “the Department
do[es] not want to mix the responses. [It] will review the supplemental information . . .
separately outside of the recognition process.” Id. On May 19, 2016, pursuant to Bounds’s
instructions, the Accrediting Council delivered to the Department a thumb drive containing its
Part II response. See Pl.’s Mem., Ex. A (Bieda Decl.) ¶ 18; see also Defs.’ Supp. Opp’n, Ex. 1
(Declaration of Herman Bounds, Jr. (“Bounds Decl.”) (Apr. 13, 2017)) ¶ 11. According to the
Accrediting Council, its Part II response contained:
•
A 27-page single-spaced narrative responding to each of the
Department’s questions regarding specific recognition criteria . . . ; and
•
Approximately 36,000 pages of documents relating to:
o [Its] adverse actions taken against dozens of campuses of schools
that [it] has accredited;
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o Accreditation application materials submitted to [it] by specific
institutions identified by the Department, and [its] evaluations of
those institutions’ applications (including site visit reports); and
o Voluminous email correspondence between [it] and specific
institutions identified by the Department.
Pl.’s Mem. at 10.
On June 3, 2016, the Accrediting Council requested an extension of time to file its
response to the Department staff’s draft analysis and report. See AR 429; see also Defs.’ Supp.
Opp’n, Ex. 1 (Bounds Decl.), Attachment A. Bounds denied the request in a letter the same day,
explaining that “[t]he draft analysis include[d] numerous findings of non-compliance,” and,
consequently, a “[d]eferral would violate the[] [HEA’s] requirements,” and in any event, Bounds
had “no authority to grant one.” AR 429. Bounds additionally explained that “[the Accrediting
Council] w[ould] not be compelled to respond at the June[] 2016 [Advisory Committee] meeting
to any analysis by the staff of its [Part II] submission,” noting that “[t]he delayed submission of
th[at] material, and the additional deferral of consideration of it, was an accommodation
provided to [the Accrediting Council], and does not postpone the need for [the Accrediting
Council] to establish its compliance for purposes of renewal.” Id. In other words, the
Department staff would not consider the Accrediting Council’s petition or the Part II submission
at the fall Advisory Committee meeting as it originally suggested. See Pl.’s Mem. at 11 (citing
AR 429).
On June 3, 2016, the Accrediting Council timely filed its response to the Department
staff’s draft analysis and report. See Defs.’ Supp. Opp’n, Ex. 1 (Bounds Decl.) ¶ 13; see also
Pl.’s Mem., Ex. A (Bieda Decl.) ¶ 20; AR 7,100–9,424. As part of its response, the Accrediting
Council detailed various actions it had taken to address compliance issues identified by the
Department staff in its draft analysis and report. For example, in response to the Department
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staff’s finding that the Accrediting Council did not comply with 34 C.F.R. § 602.16(a)(1)(v)
because its “fiscal and administrative standards ha[d] failed to identify institutions that were
unable to run their programs efficiently,” AR 9,873, the Accrediting Council represented that,
effective May 1, 2016, it had established an “‘At-Risk Institution’ committee to review all
actions facing an institution, as well as information that calls into question its general
operations,” AR 829–30, including information related to the institutions’ “financial stability[,]
[ ] student achievement performance[, and] [ ] adverse information,” see AR 830; see also AR
8,430. The Accrediting Council further represented that pursuant to this new system, it had
already “conducted three special visits” and “ha[d] authorized four additional special visits in
June 2016.” AR 830.
On June 15, 2016, the Department staff issued its final report. See AR 763–92; see also
Pl.’s Mem. at 12. The report found the Accrediting Council to be noncompliant with at least
twenty-one recognition criteria. See AR 763–65. As support for a number of its findings of
noncompliance, the Department staff cited various government investigations and lawsuits
demonstrating “widespread placement rate fraud” and other misconduct by Accrediting Councilaccredited institutions nationwide. See AR 775 (citing the Department’s and the California
Attorney General’s findings of placement rate fraud by numerous Corinthian Colleges
campuses); see also AR 774 (citing “investigations from [twenty] different [Attorneys General]
regarding, e.g., placement [and] other rates,” against ITT Technical Institute campuses); AR 779
(citing the Department’s findings of Title IV fraud by the Michigan Jewish Institute). The
Department staff concluded that, in a number of instances, the Accrediting Council was aware of
misconduct by institutions it had accredited, but failed to appropriately address the misconduct or
report it to the Department. See AR 774 (“[The Accrediting Council] had irrefutable evidence of
11
[falsified or low placement rates], . . . [yet, it] left the institution’s accreditation in place or reaccredited it anyway[.]”); see also AR 779 (despite being notified by the Department of concerns
regarding Title IV fraud by the Michigan Jewish Institute and subsequently discovering
“numerous findings of noncompliance,” the Accrediting Council “renewed the institution’s
accreditation ‘with admonishment’” and failed to report its findings of noncompliance to the
Department). In the Department staff’s view, these failures demonstrated that the Accrediting
Council had failed to effectively apply its standards regarding student achievement, recruiting,
and Title IV compliance, as well as failed to effectively enforce and monitor institutions’
compliance with those standards. See AR 783 (concluding that “the large number of substantial
settlements agreed to by [Accrediting Council]-accredited institutions in qui tam actions and
actions by State attorneys general indicate that [the Accrediting Council]’s . . . monitoring
regime appears insufficient to deter widespread misconduct regarding placement, recruiting[,]
and admissions”); see also AR 786 (citing the Accrediting Council’s failure “to provide [ ]
documentation to demonstrate that it initiated [the required enforcement actions against] an
institution found to be out-of-compliance with any standard,” including ITT Technical Institute
and other institutions subject to state and federal investigations). Consequently, the Department
staff recommended that the Department “[d]eny the [Accrediting Council]’s petition for renewal
of recognition, and withdraw the [Accrediting Council]’s recognition[,] . . . which would mean
[the Accrediting Council] could not remedy its compliance issues.” AR 763.
On June 23, 2016, the Advisory Committee reviewed the Accrediting Council’s petition
at its biannual meeting. See AR 470–762 (transcript of proceedings). The Advisory Committee
heard presentations from representatives of the Accrediting Council, the Department staff, and
various interested third parties, including the Maryland Assistant Attorney General, who testified
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regarding state investigations into schools accredited by the Accrediting Council, including ITT
Technical Institute. See AR 616–27. At the conclusion of the hearing, the Advisory Committee
voted ten to three to revoke the Accrediting Council’s recognition. See AR 761; see also AR 747
(introducing the motion to revoke the Accrediting Council’s recognition).
Following the Advisory Committee meeting, in July 2016, the Department staff and the
Accrediting Council submitted comments to the senior Department official for her consideration.
See AR 361–429. In its comments, the Accrediting Council argued that it “c[ould] demonstrate
compliance with all accrediting agency criteria, and provide evidence of effective application of
those criteria, by April 2017, well within the [twelve]-month period the [senior Department
official] is permitted to allow [the Accrediting Council] to come into compliance.” AR 398–99.
Specifically, it represented that “more than half ([eleven]) of the [twenty-one] problems
identified in the [Department s]taff [r]eport were remedied [on] July 1, 2016[,] . . . or will be
remedied by . . . August 2016,” and that as to the “remaining [ten] findings,” the Accrediting
Council “[wa]s acting . . . to establish new policies and procedures[,] . . . with evidence of
implementation to be established no later than . . . April 2017.” AR 397–98.
On September 22, 2016, the senior Department official issued her decision, in which she
found that the Accrediting Council was noncompliant with the same twenty-one recognition
criteria identified by the Department staff in its final report. See AR 314–15. She ultimately
“agree[d] with [the] Department Staff and [the Advisory Committee] that [the Accrediting
Council] could not come into full compliance within [twelve] months,” reasoning that the
Accrediting Council’s violations “reveal[ed] fundamental problems with [its] functions as an
accreditor,” and that its “track record d[id] not inspire confidence that it c[ould] address all of the
problems effectively.” AR 315. She further reasoned that “most of the remedial efforts
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currently underway began in earnest just several months ago, despite having reason to take
action long before that,” id., and, in any event, “demonstrating compliance . . . requires more
than just new policies that address the issues identified by [the] Department staff,” AR 316.
Rather, “it requires evidence of effective application and implementation of those new
policies . . . , which the [Accrediting Council] simply c[ould ]not provide for all of the[] criteria
within [twelve] months.” Id. Based on these findings, the senior Department official
“concur[red] with the recommendations of [the] Department staff and [the Advisory Committee,
and a]ccordingly, . . . terminat[ed] the Department’s recognition of [the Accrediting Council] as
a nationally recognized accrediting agency.” AR 314. On October 4, 2016, the Accrediting
Council filed a request for reconsideration of the senior Department official’s decision, see AR
236–313, which the senior Department official denied, see AR 231–32.
On September 23, 2016, the Accrediting Council appealed the senior Department
official’s decision to the Secretary. See AR 228–30. In its briefings before the Secretary, the
Accrediting Council represented that it “continue[d] to take aggressive action to implement
recent changes to its accrediting standards and review procedures, . . . [and t]hese ongoing efforts
evidence[d] that [it would] be able to demonstrate full compliance within twelve months,
particularly in the areas that appear[ed] to be of concern to the [senior Department official].” AR
121. As evidence of these efforts, the Accrediting Council cited the following actions taken after
the Advisory Committee meeting: (1) “significant leadership changes,” including the fact that as
of August 1, 2016, “the President, and five Vice Presidents, [we]re no longer employed by [the
Accrediting Council,] [t]he Board doubled the number of public members . . . [, and] [t]he Board
also appointed Roger J. Williams – a [twenty-five]-year veteran of management of higher
education accreditation – as the new Interim Chief Executive Officer and President,” AR 120–
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21; and (2) various adverse actions and other enforcement measures, including that it took
adverse action against DuBois Business College on August 1, 2016, and that in or after August
2016, it conducted “nine unannounced on-site visits to assess the level of compliance across a
broad spectrum of ITT’s campuses,” AR 122. 5
On December 12, 2016, the Secretary issued her final decision. See AR 14. Although
not addressing all of the recognition criteria as to which the Department staff had found the
Accrediting Council noncompliant, the Secretary found the Accrediting Council to be
noncompliant with at least five separate recognition criteria relating to the Accrediting Council’s
standards, application of its standards, monitoring, enforcement, and review of its standards. See
AR 6–8 (citing 34 C.F.R. §§ 602.16(a), .17, .19(b), .20–.21). The Secretary additionally
determined that
[i]n the context of the[] examples of [the Accrediting Council’s] failures and others,
the profound problems with [the Accrediting Council’s] accreditation scheme . . . ,
and the lack of progress in addressing those problems in crucial areas, I cannot
conclude that [the Accrediting Council] would be able to both revise (or, in some
instances, enact) policies and demonstrate its effective implementation of those
policies within [twelve] months as required to come into compliance.
. . . Both [the Accrediting Council’s] insufficient progress in addressing its areas of
noncompliance and [its] past track record weigh against granting a renewal of
recognition for [twelve] months. Rather, I find that [the Accrediting Council]’s
petition for renewal should be denied and that the Department should withdraw its
recognition.
AR 10.
On December 15, 2016, the Accrediting Council initiated this action seeking judicial
review of the Secretary’s decision and simultaneously seeking immediate injunctive relief from
that decision. See generally Compl.; see also Plaintiff’s Motion for Temporary Restraining
5
The Accrediting Council also presented this information to the senior Department official in its motion for
reconsideration of the senior Department official’s decision. See AR 239–43.
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Order and Preliminary Injunction (Dec. 15, 2016). On December 21, 2016, following a hearing,
the Court denied the Accrediting Council’s request for immediate injunctive relief. See Order at
1 (Dec. 21, 2016). Thereafter, on February 22, 2017, following a second hearing, the Court
denied the Accrediting Council’s motion for a preliminary injunction. See Order at 1 (Feb. 22,
2017). This opinion resolves the parties’ cross-motions for summary judgment.
II.
STANDARD OF REVIEW
A moving party is entitled to summary judgment “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). In the APA context, summary judgment is the mechanism for
deciding whether as a matter of law an agency action is supported by the administrative record
and is otherwise consistent with the APA standard of review. See, e.g., Citizens to Preserve
Overton Park, Inc. v. Volpe, 401 U.S. 402, 415–16 (1971). But, due to the limited role a district
court plays in reviewing the administrative record, the typical summary judgment standards set
forth in Federal Rule of Civil Procedure 56 are not applicable. Stuttering Found. of Am. v.
Springer, 498 F. Supp. 2d 203, 207 (D.D.C. 2007), aff’d, 408 F. App’x 383 (D.C. Cir. 2010).
Rather, “[u]nder the APA, it is the role of the agency to resolve factual issues to arrive at a
decision that is supported by the administrative record, whereas ‘the function of the district court
is to determine whether or not as a matter of law the evidence in the administrative record
permitted the agency to make the decision it did.’” Id. (quoting Occidental Eng’g Co. v. INS,
753 F.2d 766, 769–70 (9th Cir. 1985)). In other words, “when a party seeks review of agency
action under the APA, the district judge sits as an appellate tribunal,” and “[t]he ‘entire case’ on
review is a question of law.” Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083 (D.C. Cir.
2001) (footnote and citations omitted).
16
The APA “sets forth the full extent of judicial authority to review executive agency
action for procedural correctness.” Fed. Commc’ns Comm’n v. Fox Television Stations, Inc.,
556 U.S. 502, 513 (2009). It requires courts to “hold unlawful and set aside agency action,
findings, and conclusions” that are “arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law.” 5 U.S.C. § 706(2)(A). However, “the scope of review under the
‘arbitrary and capricious’ standard is narrow and a court is not to substitute its judgment for that
of the agency.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 43 (1983). Nonetheless, “the agency must examine the relevant data and articulate a
satisfactory explanation for its action including a ‘rational connection between the facts found
and the choice made.’” Id. (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168
(1962)). “Courts ‘will uphold a decision of less than ideal clarity if the agency’s path may
reasonably be discerned.’” Pub. Citizen, Inc. v. Fed. Aviation Admin., 988 F.2d 186, 197 (D.C.
Cir. 1993) (quoting Bowman Transp., Inc. v. Arkansas–Best Freight Sys., Inc., 419 U.S. 281,
286 (1974)).
III.
A.
ANALYSIS
Reviewability
The defendants assert that the Secretary’s decision should be understood as two
decisions, and contend that only one of these decisions is reviewable by this Court. According to
the defendants, the first decision is the Secretary’s determination that the Accrediting Council
failed to comply with multiple recognition criteria. See Defs.’ Mem. at 1, 3. Although the
defendants concede that this decision is subject to judicial review, see id. at 16, they argue that
the Accrediting Council does not challenge this decision in this Court, see id. at 1, and in any
event, “[g]iven the extensive and undisputed record evidence of [the Accrediting Council]’s
pervasive noncompliance[,] including [its] numerous admissions of non-compliance” in the
17
administrative proceedings, the Accrediting Council “cannot sustain an argument challenging
[that decision],” Defs.’ Reply at 1. The defendants contend that the second decision is the
Secretary’s “choice of remedy,” i.e., “the decision of whether to deny [federal recognition] or
conditionally (and temporarily) extend [it].” Defs.’ Mem. at 1–2. According to the defendants,
this is the decision that the Accrediting Council is challenging, see Defs.’ Reply at 1, but the
defendants argue that because this “is a decision that Congress committed by law to the
discretion of the Secretary,” Defs.’ Mem. at 2 (citing 20 U.S.C. § 1099b(a)), it is unreviewable
under the APA, id. (citing 5 U.S.C. § 701(a)(2)). Although the Accrediting Council does appear
to concede that it does not challenge the Secretary’s determination of its noncompliance, it
nonetheless argues that “under the Department’s own regulations[,] a Secretary’s ultimate
decision to deny, limit, suspend, or terminate an agency’s recognition can be reviewed,” Pl.’s
Opp’n at 1 (internal quotation marks omitted), and that ultimate decision “necessarily includes
the Secretary’s ‘choice of remedy,’” id. at 2. It further argues that “although the [Secretary] is
afforded discretion in discharging [her] recognition responsibilities, that discretion is not
unlimited,” and “[a] federal agency’s decision can be shielded from review only under narrow
circumstances, none of which are present[ed] here.” Id. at 3.
“[T]he APA explicitly excludes from judicial review those agency actions that are
‘committed to agency discretion by law.’” Sierra Club v. Jackson, 648 F.3d 848, 855 (D.C. Cir.
2011) (quoting 5 U.S.C. § 701(a)). However, there is a “strong presumption that Congress
intends agency action to be reviewable,” which may only be overcome by “clear and convincing
evidence of a contrary legislative intent.” Amador Cty. v. Salazar, 640 F.3d 373, 380 (D.C. Cir.
2011) (quoting Bowen v. Mich. Academy of Family Physicians, 476 U.S. 667, 671–72 (1986)).
“Accordingly, the APA’s exception to judicial review is a ‘very narrow exception,’ reserved for
18
‘those rare instances where statutes are drawn in such broad terms that in a given case there is no
law to apply,’” Capital Area Immigrants’ Rights Coalition v. U.S. Dep’t of Justice, 264 F. Supp.
2d 14, 22 (D.D.C. 2003) (quoting Citizens to Preserve Overton Park, 401 U.S. at 410), or when
“the statute is drawn so that a court would have no meaningful standard against which to judge
the agency’s exercise of discretion,” Heckler v. Chaney, 470 U.S. 821, 830 (1985). Nonetheless,
“if no judicially manageable standards are available for judging how and when an agency should
exercise its discretion, then it is impossible to evaluate agency action for ‘abuse of discretion.’”
Heckler, 470 U.S. at 830. “To determine whether a matter has been committed to agency
discretion, [courts] ‘consider both the nature of the administrative action at issue and the
language and structure of the statute that supplies the applicable legal standards for reviewing
that action,’” Sierra Club, 648 F.3d at 855 (citation omitted), as well as “Congress’s intent to
commit the matter fully to agency discretion as evidenced by, among other things, the statutory
scheme,” Watervale Marine Co. v. U.S. Dep’t of Homeland Sec., 55 F. Supp. 3d 124, 138
(D.D.C. 2014) (citing Dickson v. Sec’y of Def., 68 F.3d 1396, 1404 (D.C. Cir. 1995)).
In assessing reviewability, courts in this Circuit must first address the nature of the
administrative action, which refers to whether an action falls into certain “categories of
administrative decisions” that the Supreme Court and this Circuit have held are unreviewable.
See Sec’y of Labor v. Twentymile Coal Co., 456 F.3d 151, 156 (D.C. Cir. 2006). “Categories of
actions committed to agency discretion include: (1) agency decisions to institute enforcement
proceedings; (2) an agency’s refusal to grant reconsideration of an action; (3) a decision by the
CIA to terminate an employee in the interests of national security; and (4) an agency’s allocation
of funds from a lump-sum appropriation.” Capital Area Immigrants’ Rights Coalition, 264 F.
Supp. 2d at 22 (citing Lincoln v. Vigil, 508 U.S. 182, 191 (1993)). Additionally, “it is
19
established in this [C]ircuit that ‘executive branch decision[s] involving complicated foreign
policy matters,’” or “sensitive matters of national security, are nonjusticiable by nature.”
Watervale Marine Co., 55 F. Supp. 3d at 138 (internal citations omitted) (second alteration in
original) (first quoting Legal Assistance for Vietnamese Asylum Seekers v. Dep’t of State, 104
F.3d 1349, 1353 (D.C. Cir. 1997), then citing Oryszak v. Sullivan, 576 F.3d 522, 526 (D.C. Cir.
2009)). The Secretary’s decision to deny the Accrediting Council’s application for renewal of
recognition does not fit into any of these categories, and therefore, the Court cannot conclude
that it is unreviewable simply by the nature of the decision. See id. at 140.
Courts in this Circuit next look to the language and structure of the statute, which
“involves applying typical canons of statutory construction to determine whether the statute
provides standards for the agency to apply and for the courts to review.” Id. at 138 (citing Delta
Air Lines, Inc. v. Export-Import Bank of the U.S., 718 F.3d 974, 976–77 (D.C. Cir. 2013)). The
HEA provides that
[i]f the Secretary determines that an accrediting agency . . . has failed to apply
effectively the [recognition] criteria . . . , the Secretary shall-(A) after notice and opportunity for a hearing, limit, suspend, or terminate
the recognition of the agency . . . ; or
(B) require the agency . . . to take appropriate action to bring the agency . . .
into compliance with such requirements within a timeframe specified by the
Secretary, except that—
(i) such timeframe shall not exceed [twelve] months unless the
Secretary extends such period for good cause[.]
20 U.S.C. § 1099b(l)(1). The defendants argue that the language of the HEA supports their
position that the Secretary’s “choice of remedy” is committed to the Secretary’s discretion by
law because the HEA “do[es] not obligate the Secretary to choose one [remedial action] over the
other in any particular circumstance, and it provides no standards whatsoever that a court might
20
use to judge the Secretary’s choice of one remedial action over another.” Defs.’ Mem. at 15.
Additionally, they argue that “the HEA’s implementing regulations, which reflect the statutory
scheme, contain no standards for determining what severity of sanctions is appropriate . . . and
explicitly invoke discretionary language.” Id. (citing 34 C.F.R. §§ 602.36(e)(3)(i), 602.37).
Although the Court agrees with the defendants that the HEA does not require the
Secretary to conditionally renew an accrediting agency’s recognition, “th[is] Circuit has made
clear that a grant of broad discretion in a statute, through permissive language or otherwise, does
not necessarily mean there are no standards for the court to apply.” Watervale Marine Co., 55 F.
Supp. 3d at 141 (first citing Amador Cty., 640 F.3d at 381, then citing Dickson, 68 F.3d at 1401–
04). Here, other provisions of the relevant section of the HEA provide standards that the Court
can apply. For example, the HEA provides that in reviewing an accrediting agency’s
application, the “Secretary shall consider all available relevant information concerning the
compliance of the accrediting agency with the [recognition] criteria,” and also that the Secretary
“shall not, under any circumstances, base decisions on the recognition or denial of recognition of
accreditation agencies . . . on criteria other than those contained in this section.” 20 U.S.C
§ 1099b(n)(3). 6 These standards are judicially manageable. See Am. Petroleum Tankers Parent,
LLC v. United States, 943 F. Supp. 2d 59, 69–70 (D.D.C. 2013) (in a challenge to the Maritime
Administrator’s denial of an application for a loan guarantee, and where “Congress [had]
limit[ed] the Administrator to considering factors relevant to particular inquiries, such as the
economic soundness of the application,” “the [c]ourt ha[d] jurisdiction to review the
Administrator’s . . . finding that the [p]laintiff’s applications were not economically sound”).
6
To the extent that the defendants argue that these standards apply only to the Secretary’s determination of
compliance, and not to her ultimate decision to deny or conditionally extend recognition, that position is undermined
by the text of the provision in which these standards are found, which refers broadly to “decisions on the recognition
or denial of recognition of accreditation agencies.” 20 U.S.C. § 1099b(n)(3).
21
Furthermore, the Secretary’s regulations provide additional applicable standards. See
Twentymile Coal Co., 456 F.3d at 158–59 (citation omitted) (“‘[J]udicially manageable
standards may be found in . . . regulations as well as in statutes.’”). First, the implementing
regulations specifically addressing the actions available to the Secretary provide that
if a recognized agency fails to demonstrate compliance with or effective application
of a criterion or criteria, but the [Secretary] concludes that the agency will
demonstrate or achieve compliance with the criteria for recognition and effective
application of those criteria within [twelve] months or less, the [Secretary] may
continue the agency’s recognition, pending submission by the agency of a
compliance report [and] review of the report[.]
34 C.F.R. § 602.36(e)(3)(i); see also id. § 602.37(d) (incorporating § 602.36(e)(3)(i)).
Although this regulation, like the HEA, does not require the Secretary to conditionally
renew an accrediting agency’s recognition in any given case, it does require the Secretary, before
continuing recognition on a conditional basis, to make a threshold determination of whether an
agency could achieve compliance with the recognition criteria within twelve months. See id.
§ 602.36(e)(3)(i); see also id. § 602.37(d). The Circuit’s decision in Menkes v. Department of
Homeland Security is instructive. See 486 F.3d 1307 (D.C. Cir. 2007). In Menkes, an
independent pilot challenged the Coast Guard’s decision to not permit him to provide pilotage
service pursuant to 46 C.F.R. § 401.720(b). See id. at 1313. That regulation provided that
“[w]hen pilotage service is not provided by [a designated pool] . . . because of a physical or
economic inability to do so, . . . the Director may order any U.S. registered pilot to provide
pilotage service.” 46 C.F.R. § 401.720(b) (emphasis added); see also Menkes, 486 F.3d at 1310
n.3. The district court had concluded that the Director’s decision under this regulation was
unreviewable because it provided no judicially manageable standards by which to review that
decision. See Menkes, 486 F.3d at 1313. The Circuit disagreed, explaining that
even if the Coast Guard is entitled to prefer the [a]ssociation over non-member
pilots when there is limited demand, a court could still review the Director’s
22
determination with respect to the adequacy of the service provided by the pool-i.e.,
whether the pool has the physical and economic ability to provide sufficient
service. . . . We have often held that standards similar to that set forth in section
401.720(b) are reviewable. See, e.g., Dickson v. Sec’y of Defense, 68 F.3d 1396,
1401[–]03 (D.C. Cir. 1995) (reviewing decision of military review board where
board “may excuse failure to file” if in the “interest of justice”); Marshall [Cty.]
Health Care Auth. v. Shalala, 988 F.2d 1221, 1223[–]25 (D.C. Cir. 1993) (allowing
review of agency decision to provide exceptions “as the Secretary deems
appropriate” because statutory scheme provided sufficient standards to guide
review). To be sure, the Director might be entitled to a good deal of deference in
determining whether the pool was physically or economically able to provide
adequate service, but that does not mean the Director could make such decisions
unreasonably. For example, it would be presumably arbitrary and capricious for
the Coast Guard to ignore an obvious unfilled demand for pilotage service, or to
change its standards for determining what level of service is adequate without
explanation. Also dubious would be a refusal to appoint a pilot for reasons not
mentioned in the regulations, such as an effort to force the pilot to join the
Association.
Id.
Although the Secretary is “entitled” to decline to conditionally renew an accrediting
agency’s recognition in any given case, in doing so here, she determined that “[the Accrediting
Council] would [not] be able to both revise (or, in some instances, enact) policies and
demonstrate its effective implementation of those policies within [twelve] months as required to
come into compliance.” AR 10. As Menkes instructs, even if that determination is “entitled to a
good deal of deference . . . [,] that does not mean the [Secretary] c[an] make such decisions
unreasonably.” See 486 F.3d at 1313; see also Am. Petroleum Tankers Parent, 943 F. Supp. 2d
at 68 (concluding in regards to a challenge to the denial of a loan guarantee application that
“[t]he fact that the Administrator is not by statute commanded to guarantee all eligible
obligations does not preclude this Court from reviewing the Administrator’s decision to deny an
application for a loan guarantee”). And the challenges the Accrediting Council raises here are
particularly well-suited for this Court’s review in light of the examples provided by the Circuit in
Menkes. See 486 F.3d at 1313 (“[I]t would be presumably arbitrary and capricious for the Coast
23
Guard to ignore an obvious unfilled demand for pilotage service.”). Specifically, the Accrediting
Council argues, inter alia, that the Secretary acted arbitrarily and capriciously by failing to
consider relevant evidence. See, e.g., Pl.’s Mem. at 20–27. As to this challenge, although the
defendants are correct that “even if the Secretary were to determine that a non-compliant
accrediting agency was theoretically capable of achieving compliance within a [twelve-]month
period, neither the statute nor the regulations would require the Secretary to provide that agency
with conditional recognition,” Defs.’ Mem. at 15–16, that threshold determination, which the
Secretary made in this case, see AR 10 (“I cannot conclude that [the Accrediting Council] would
be able to both revise (or, in some instances, enact) policies and demonstrate its effective
implementation of those policies within [twelve] months as required to come into compliance.”),
is nevertheless subject to judicial review.
Moreover, the Department’s regulations provide additional standards to guide the Court
in its review of the challenges the Accrediting Council raises in this case. As already described,
see supra Part I.A, the regulations provide a detailed set of procedures that the Department must
follow when considering an accrediting agency’s application for recognition, see 34 C.F.R.
§§ 602.31–.37. As the defendants appear to concede in their reply, the Department’s application
of these standards is subject to judicial review. See Defs.’ Reply at 11 (recognizing that case law
supports “the proposition that courts might retain the ability to review . . . whether an agency
engaged in procedural impropriety”); see also Ctr. for Auto Safety v. Dole, 846 F.2d 1532, 1535
(D.C. Cir. 1988) (recognizing a “presumption of reviewability of agency compliance with legally
binding regulations”); Capital Area Immigrants’ Rights Coalition, 264 F. Supp. 2d at 23 (“In the
absence of clear congressional intent to preclude review, judicial review is available to hold an
[administrative] agency to the procedural and substantive standards contained in its own
24
regulations governing administrative action, even where the statute grants the agency absolute
discretion over administrative decisions”). Additionally, similar to the HEA’s requirement that
the Secretary “consider all available relevant information concerning the compliance of the
accrediting agency . . . with the [recognition] criteria,” 20 U.S.C. § 1099b(n)(3), the Secretary’s
regulations provide that the Department staff must “tak[e] into account all available relevant
information concerning the compliance of the agency with th[e recognition] criteria and [ ] the
agency’s effectiveness in applying the criteria,” 34 C.F.R. § 602.32(b). As discussed below, see
infra Part III.B, these regulations form the basis for several of the Accrediting Council’s
challenges in this case.
Having considered the nature of the administrative action and the language and structure
of the statute, the Court finally considers Congress’s intent regarding whether judicial review is
available, as evidenced by the statute’s structure and other factors. See Watervale Marine Co.,
55 F. Supp. 3d at 138–39. Notwithstanding the “strong presumption that Congress intends
agency action to be reviewable,” Amador Cty., 640 F.3d at 380, “[c]ompelling legislative history
or a law’s own structure may manifest a Congressional intent to deny review when the statute
itself is silent on the matter,” Ctr. for Auto Safety, 846 F.2d at 1535. The HEA is silent as to
whether a Secretary’s decision under § 1099b(l) is subject to judicial review; however, the
defendants have not identified any “clear and convincing evidence that Congress meant to take
th[e] unusual step” of denying review. Id. Indeed, at least two other provisions of § 1099b of
the HEA suggest the opposite. First, § 1099b(o) provides that “[t]he Secretary shall by
regulation provide procedures for the recognition of accrediting agencies . . . and for the appeal
of the Secretary’s decisions.” 20 U.S.C. § 1099b(o) (emphasis added). This provision shows
that Congress did not provide absolute discretion to the Secretary, but rather, it intended for the
25
Secretary’s decision be subject to some form of review. And indeed, as the Accrediting Council
points out, see Pl.’s Mem. at 17–18, the Secretary promulgated a regulation that explicitly
provides that “[a]n agency may contest the Secretary’s decision [to deny, limit, suspend, or
terminate an agency’s recognition] in the Federal courts as a final decision in accordance with
applicable Federal law,” 34 C.F.R. § 602.38. Although the defendants acknowledge this
regulation and generally assert that the Secretary’s implementing regulations “reflect the
statutory scheme,” see Defs.’ Mem. at 15, they attempt to dismiss this regulation by arguing that
“[n]othing in that provision . . . allows for . . . judicial review of the Secretary’s choice of
remedy,” id. at 16 (emphasis in original). However, the Court agrees with the Accrediting
Council that “nothing in the [HEA] or the Department’s regulations draws this distinction.” Pl.’s
Opp’n at 2; see also 20 U.S.C. § 1099b(o) (referring generally to an “appeal of the Secretary’s
decisions”); 34 C.F.R. § 602.38 (referring to the “Secretary’s decision under this part,” which
includes the decision to “deny . . . [an] agency’s recognition”). Second, § 1099b(n)(3) provides
that “[t]he Secretary shall not, under any circumstances, base decisions on the recognition or
denial of recognition of accreditation agencies . . . on criteria other than those contained in this
section.” 20 U.S.C. § 1099b(n)(3). Again, this section demonstrates that Congress intended to
limit the Secretary’s discretion and to subject her decisions to some form of review. See Am.
Petroleum Tankers Parent, 943 F. Supp. 2d at 69–70 (concluding that the Maritime
Administrator’s denial of a loan application was reviewable in part because “Congress [had]
limit[ed] the Administrator to considering factors relevant to particular inquiries”).
Consequently, even though the HEA does appear to afford the Secretary discretion in
determining what action to take upon a finding of noncompliance, the statute’s structure suggests
26
that Congress did not intend for that decision to be fully committed to the Secretary’s unfettered
discretion.
Additionally, the cases that the defendants cite in support of their position are
distinguishable. See Defs.’ Mem. at 15–16. First, this Circuit’s decision in NTCH, Inc. v.
Federal Communications Commission is easily distinguishable because, in that case, the Circuit
concluded that the agency action at issue, the Commission’s decision not to initiate proceedings
to revoke a company’s radio license, see 841 F.3d 497, 499 (D.C. Cir. 2016), “was equivalent to
a decision not to commence an enforcement action” and therefore, “presumptively
unreviewable,” id. at 503 (internal quotation marks omitted). As already explained, the
Secretary’s decision in this case is unlike a decision not to enforce or any other decision
recognized by the Supreme Court or this Circuit as unreviewable by its very nature. See Capital
Area Immigrants’ Rights Coalition, 264 F. Supp. 2d at 22.
Second, the defendants cite Watervale Marine Co. v. United States Department of
Homeland Security for the proposition that when “the word ‘may’ [in a statute or regulation] is
coupled with absolutely no guidance as to how the agency should exercise [a discretionary
choice], the matter has been committed to agency discretion by law.” Defs.’ Mem. at 15
(quoting 55 F. Supp. 3d at 143). In Watervale, the plaintiff challenged the Coast Guard’s
decision to impose nonfinancial conditions on the release of a vessel that the Coast Guard had
detained based on violations of various international and environmental laws. See 55 F. Supp.
3d at 127. The relevant statute provided that “clearance may be granted upon the filing of a bond
or other surety satisfactory to the Secretary.” Id. at 143 (quoting 33 U.S.C. § 1908(e)).
Although the statute at issue in Watervale was similar to the HEA in that it did not require the
Coast Guard to grant departure clearance in any given circumstance, the challenge the plaintiff
27
raised in that case was notably different from the challenge the Accrediting Council raises here.
In Watervale, there was no dispute that the “bond or other surety” condition set forth in the
statute had been satisfied, see id. at 143; rather, the plaintiff challenged the Secretary’s
imposition of additional conditions not provided in the statute, id. at 131–32. The Court
concluded that the Secretary’s decision was unreviewable because “the statute and its attendant
regulations [we]re devoid of any [ ] limits, requirements, or criteria that provide[d] any
guideposts by which a court c[ould] measure the Coast Guard’s discretionary decision to
continue to withhold departure clearance after the owner ha[d] provided a bond (or other
surety”). Id. at 143. Here, by contrast, in challenging the Secretary’s refusal to grant it
temporary renewal of recognition, the Accrediting Council challenges the Secretary’s
determination that the condition for temporary renewal set forth in the regulations—that the
Accrediting Council be able to demonstrate full compliance with the recognition criteria within
twelve months—had not been met, see Pl.’s Opp’n at 19 (arguing that evidence presented to the
Secretary demonstrated that the Accrediting Council “could be fully compliant with all of the
recognition criteria within one year or sooner”). Furthermore, in determining that the Secretary’s
decision was unreviewable, the court in Watervale relied on additional factors not present here,
specifically, “[t]he breadth of the authorized tools that the Coast Guard c[ould] bring to bear”
under the relevant statute in response to the suspected violations of the law, 55 F. Supp. 3d at
143 (citing, inter alia, a statutory provision providing that the Coast Guard “shall use all
appropriate and practical measures” to deter environmental law violations), and the fact that the
relevant statute “provide[d] an alternative avenue for relief for unwarranted detention of a
vessel—an action for compensation for unlawful detention,” id. at 144. Here, the defendants do
not identify any comparable provisions in the HEA.
28
Finally, the Eleventh Circuit’s decision in Forsyth County v. United States Army Corps
of Engineers, 633 F.3d 1032 (11th Cir. 2011), also fails to support the defendants’ position.
Forsyth County involved a statute authorizing the United States Army Corps of Engineers (the
“Corps”) to lease certain public land for purposes that it deemed were “reasonable in the public
interest,” but requiring the Corps to give preference to local governmental agencies. Id. at 1035–
36. In its challenge to the Corps’ decision to award a lease to a private nonprofit organization,
the plaintiff county argued that the Corps had failed to properly consider the preference for local
government agencies. See id. at 1040. The Corps responded, however, that it had considered the
preference, but ultimately decided that the preference was outweighed by other statutory factors.
See id. at 1042. The Eleventh Circuit ultimately held that the Corps’ decision was unreviewable
because “[n]o law provide[d] how the agency should balance these factors in a particular case, or
what weight to assign to each factor.” Id. at 1041 (internal quotation marks omitted). Thus, in
Forsyth County, the plaintiff’s position was not that the Corps had failed to consider a relevant
factor, but rather, that the Corps had failed to assign the proper weight to that factor. See id. at
1040; see also id. at 1042 (“The [plaintiff] offered no proof that the Corps had wholly ignored
the preference clause . . . but . . . asked the district court to second guess the weight accorded that
preference amidst a host of other factors[.]”). Here, by contrast, the Accrediting Council’s
challenges largely center on its claims that the Secretary completely failed to consider relevant
evidence. See Pl.’s Mem. at 18–27. Moreover, Forsyth County provides no insight on the
reviewability of the Accrediting Council’s challenges that the Secretary failed to follow her
procedural regulations. See Forsyth Cty., 633 F.3d at 1040 (only addressing a “regulation [that]
repeat[ed] the substantive requirements” of the statutory provision at issue).
29
In sum, the Court concludes that the Secretary’s decision to deny the Accrediting
Council’s petition is subject to judicial review under the APA because both the HEA and the
Secretary’s implementing regulations provide judicially manageable standards to guide the
Court’s review and the structure of the statute suggests that Congress did not intend that the
decision being challenged here be totally subject to the Secretary’s discretion.
B.
Arbitrary and Capricious Review
Having concluded that the Secretary’s decision is subject to judicial review, the Court
turns to the Accrediting Council’s arguments that the decision should be set aside as arbitrary
and capricious, an abuse of discretion, and otherwise not in accordance with law. See Pl.’s
Mem. at 18. The Accrediting Council’s challenges can be organized into two categories:
(1) challenges to the Secretary’s decisionmaking process, see, e.g., id. (challenging the
Secretary’s alleged “fail[ure] . . . to consider all of the available dynamic and relevant
evidence”); id. at 33 (arguing that the Department staff report, the Advisory Committee
recommendation, and the senior Department official’s decision were “each . . . the product of
flawed procedures” (capitalization removed)), and (2) challenges to the merits of the Secretary’s
decision, see, e.g., id. at 30 (“The Secretary’s conclusion is not grounded by the record evidence;
there is simply ‘no rational connection’ between the facts found and the ‘choice made’ by the
Secretary.” (citing Dickson, 68 F.3d at 1404)). For the reasons explained below, the Court
concludes that the Secretary’s decisionmaking process was flawed, and because this conclusion
compels it to remand this case to the Secretary, the Court need not consider the Accrediting
Council’s challenges to the merits of the Secretary’s decision.
1.
Failure to Consider Relevant Evidence
The Accrediting Council first argues that the Secretary’s decision was arbitrary and
capricious because it “failed . . . to consider all of the available dynamic and relevant evidence,”
30
id. at 18, specifically (1) the Accrediting Council’s Part II submission, which consisted of “a
detailed narrative and tens of thousands of pages of documents,” id. at 20–21; (2) evidence of
leadership changes it made and adverse actions it took against institutions following the
Advisory Committee’s meeting, see id. at 22–24; and (3) evidence of its placement verification
and data integrity procedures, see id. at 25–27. The Court will address each category of evidence
in turn.
a.
The Accrediting Council’s Part II Submission
The Accrediting Council argues that the Secretary’s failure to consider its Part II
submission violated the HEA’s and the implementing regulations’ requirement that the Secretary
consider all available relevant information, see id. at 21 (citing 20 U.S.C. 1099b(n); 34 C.F.R.
§ 602.32(b)), as well as the APA’s requirement that an agency must “examine the relevant data,”
id. (quoting PPL Wallingford Energy LLC v. Fed. Energy Regulatory Comm’n, 419 F.3d 1194,
1198 (D.C. Cir. 2005)). The Court agrees. 7
An agency must not only comply with the terms of its authorizing statute, see Eco Tour
Adventures, Inc. v. Zinke, 249 F. Supp. 3d 360, 381 (D.D.C. 2017), but “[i]t is a fundamental
principle of administrative law that an agency is [also] bound to adhere to its own regulations,”
Fuller v. Winter, 538 F. Supp. 2d 179, 186 (D.D.C. 2008) (citing Frizelle v. Slater, 111 F.3d
172, 177 (D.C. Cir. 1997)); see also Steenholdt v. Fed. Aviation Admin., 314 F.3d 633, 639
(D.C. Cir. 2003) (“[F]ederal agencies [must] follow their own rules, even gratuitous procedural
rules that limit otherwise discretionary actions.”). Consequently, “an agency action may be set
7
The Accrediting Council has also filed a motion to supplement the administrative record with its Part II
submission. See Pl.’s Mot. to Supp. at 1. In light of the Court’s decision to remand this case to the Secretary for
consideration of the Part II submission and other evidence, the Court denies as moot the plaintiff’s motion to
supplement the administrative record. See BFI Waste Sys. of N. Am., Inc. v. Fed. Aviation Admin., 293 F.3d 527,
535 n.6 (D.C. Cir. 2002) (in light of decision to remand, dismissing as moot the plaintiff’s motion to supplement the
administrative record); see also Calif. Valley Miwok Tribe v. Jewell, 5 F. Supp. 3d 86, 88 n.1 (D.D.C. 2013)
(similar).
31
aside as arbitrary and capricious if the agency fails to comply with its own regulations.” Nat’l
Envtl. Dev. Ass’ns Clean Air Project v. Envtl. Prot. Agency, 752 F.3d 999, 1009 (D.C. Cir.
2014) (internal quotation marks omitted).
As already explained, see supra Part I.A, the HEA and its implementing regulations
require the Secretary and the Department staff to consider “all available relevant information
concerning the compliance of the accrediting agency . . . with the [recognition] criteria,” 20
U.S.C. § 1099b(n)(3); see also 34 C.F.R. § 602.32(b) (requiring the Department staff to “tak[e]
into account all available relevant information concerning the compliance of the agency with th[e
recognition] criteria and in the agency’s effectiveness in applying the criteria”). Additionally,
the regulations require the Department staff to review “any [ ] information [the] Department staff
assembles for purposes of evaluating the agency[.]” 34 C.F.R. § 602.32(b)(2). The defendants
do not dispute that the Accrediting Council’s Part II submission was solicited by the Department
and was available to it as of May 19, 2016. See Defs.’ Supp. Opp’n, Ex. 1 (Bounds Decl.) ¶ 11;
see also Defs.’ Mem. at 8–9 n.2. Furthermore, they do not dispute that the submission contained
information relevant to the Accrediting Council’s compliance with the recognition criteria. See
Defs.’ Mem. at 8–9 n.2 (arguing only that the Part II submission “w[as] not considered, directly
or indirectly, by any agency decision makers at any point in the administrative process”); see
also Defs.’ Reply at 15 (asserting only that the Accrediting Council “does [not] contend that the
contents of the [Part II submission] would have proven its compliance with the [recognition]
criteria” or “altered the Secretary’s finding of non-compliance”). Indeed, the Department staff
explicitly tied each of the Part II questions to a particular criterion or criteria, see AR 439–42,
and represented that the questions were “important to the Department’s responsibility to monitor
and review [the Accrediting Council]’s effectiveness as a recognized accrediting agency,” AR
32
434. Moreover, the Accrediting Council has represented that the Part II submission “respond[ed]
to each of the Department’s questions regarding specific recognition criteria” and included
numerous materials related to the Accrediting Council’s dealings with institutions identified by
the Department. See Pl.’s Mem. at 10. And critically, the defendants admit that they did not
consider the Accrediting Council’s Part II submission at any point in the recognition process.
See Defs.’ Supp. Opp’n, Ex. 1 (Bounds Decl.) ¶ 11 (“[The Department staff] did not review or
otherwise consider, directly or indirectly, the information contained [in the Part II submission]
thumb-drive in the course of its review of [the Accrediting Council’s] petition, nor did [it]
provide the contents . . . to [the Advisory Committee], the [s]enior Department [o]fficial . . . , or
the Secretary.”); see also Defs.’ Mem. at 32 (same). 8 Therefore, the Court concludes that the
Secretary and the Department staff violated the HEA and the implementing regulations by failing
to consider the Part II submission.
In addition to the Secretary’s violation of the HEA and the regulations, both which
independently support findings that the APA was violated, see Eco Tour Adventures, Inc., 249 F.
Supp. 3d at 381 (concluding that an agency’s decision violated the APA because it “was contrary
to the plain meaning of the relevant statute and regulations”); see also Nat’l Envtl. Dev. Ass’n’s
Clean Air Project, 752 F.3d at 1010–11 (holding that agency action was contrary to law in
violation of the APA because it was “plainly contrary to the agency’s own . . . rules”), the
Secretary’s failure to consider the Accrediting Council’s Part II Submission also violated the
APA’s mandate that an “agency must examine the relevant data and articulate a satisfactory
8
The Department staff notes that it did consider three of the documents in the Part II submission because the
Accrediting Council attached those documents as Exhibits 150, 150-2, and 150-3 to its response to the Department
staff’s draft report. See Defs.’ Supp. Opp’n, Ex. 1 (Bounds Decl.) ¶¶ 14–15; see also Pl.’s Mot. to Supp. at 9
(representing that these documents were included in the Part II submission). However, these exhibits contain only
approximately 150 pages, see AR 7,156–314, meaning that they only represent a small fraction of the 36,000-page
Part II submission.
33
explanation for its action including a rational connection between the facts found and the choice
made,” Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43 (citations and quotation marks omitted)
(emphasis added); see also PPL Wallingford, 419 F.3d at 1198 (“To survive review under the
‘arbitrary and capricious’ standard, an agency must ‘examine the relevant data and articulate a
satisfactory explanation for its action including a rational connection between the facts found and
the choice made.’” (quoting Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43)). “If an agency fails to
examine the relevant data[,] . . . it has failed to comply with the APA.” District Hosp. Partners,
L.P. v. Burwell, 786 F.3d 46, 57 (D.C. Cir. 2015); see also Butte Cty. v. Hogen, 613 F.3d 190,
194 (D.C. Cir. 2010) (“[A]n agency’s refusal to consider evidence bearing on the issue before it
constitutes arbitrary agency action within the meaning of § 706.”). Although an agency “need
not address every aspect of [a] plaintiff’s [claims] at length and in detail,” Mori v. Dep’t of the
Navy, 917 F. Supp. 2d 60, 65 (D.D.C. 2013) (citing Frizelle, 111 F.3d at 176), it “must provide
enough information to ensure the Court that [it] properly considered the relevant evidence
underlying [a] plaintiff’s request,” id. (citing Occidental Petroleum Corp. v. SEC, 873 F.2d 325,
338 (D.C. Cir. 1989)).
Again, there is no dispute that the Accrediting Council’s Part II Submission contained
data relevant to its compliance with the recognition criteria. See Defs.’ Mem. at 8–9 n.2; see
also Defs.’ Reply at 15; AR 439–42, 434. More importantly, these data are relevant to the
Secretary’s determination that the Accrediting Council would be unable to come into compliance
with the recognition criteria within twelve months. The Secretary concluded that “[b]oth [the
Accrediting Council]’s insufficient progress in addressing its areas of noncompliance and [its]
past track record weigh[ed] against granting a renewal of recognition for [twelve] months.” AR
10. And the Secretary found that the Accrediting Council’s “past track record” included its
34
failures to comply with five categories of recognition criteria identified by the Secretary, see AR
6–8, with particular emphasis on the Accrediting Council’s failures to take action against the
Michigan Jewish Institute or Everest Colleges, despite knowledge of misconduct by those
institutions, see AR 9. The Part II questions sought information relevant to these same
recognition criteria and the same institutions, see AR 439–42, and as already explained, the
Accrediting Council represents, and the defendants do not dispute, that its 36,000-page Part II
submission contained information responsive to those questions, see Pl.’s Mem. at 10
(representing that the submission included “[a]ccreditation application materials submitted to
[the Accrediting Council] by specific institutions identified by the Department, and [the
Accrediting Council]’s evaluations of those institutions’ applications,” as well as “[v]oluminous
email correspondence between [the Accrediting Council] and specific institutions identified by
the Department”). It is undisputed that the Secretary failed to consider this submission. See
Defs.’ Supp. Opp’n, Ex. 1 (Bounds Decl.) ¶ 11.
Furthermore, the Department staff did not provide an adequate explanation for its refusal
to consider this evidence. Although the Department staff, after granting the Accrediting
Council’s request for an extension to respond to the Part II questions, informed the Accrediting
Council that it would not have “time to fully review and analyze [that information] in time for
the June [Advisory Committee] meeting,” it suggested that it would consider the information at
the fall Advisory Committee meeting. See AR 434 (“[The Accrediting Council] should be
prepared to return at the fall [Advisory Committee] meeting for further discussion and possible
action as warranted.”). And at the same time, the Department staff emphasized that “the
information [it] requested is important to the Department’s responsibility to monitor and review
[the Accrediting Council]’s effectiveness as a recognized accrediting agency.” Id. Later, when
35
it informed the Accrediting Council that it would consider the Part II submission “separately
outside the recognition process,” it provided no explanation for its decision beyond that it “d[id]
not want to mix the responses” to the Part II questions and the Department staff’s draft report.
See AR 430.
The defendants now contend that the Department staff did not consider the Part II
submission because doing so “would have obliged the Department [staff] . . . to postpone the
[Advisory Committee] hearing on [the Accrediting Council’s] application by six months,” and in
light of “the severity of [the] findings of [the Accrediting Council]’s noncompliance, and the
statutory requirement for a re-assessment of whether to continue recognition at least every five
years,” the Department staff concluded that postponement “would not have been consistent with
responsible administration of the statute.” Defs.’ Mem. at 33. Although this rationale is similar
to the one the Department staff gave for denying the Accrediting Council an extension of time to
respond to the Department staff’s draft report, see AR 429 (explaining that in light of “numerous
findings of noncompliance,” “[d]eferral would violate the[] [HEA’s] requirements, and [the
Department staff] ha[d] no authority to grant [deferral]”), as explained above, the Department
staff did not provide this or any other meaningful explanation when it informed the Accrediting
Council that it would not consider the Part II submission as part of the recognition process, see
AR 430. The defendants “cannot fill the holes of [their] decision by providing post hoc
explanations in [the] briefs.” See Mori, 917 F. Supp. 2d at 66 (citing Camp v. Pitts, 411 U.S.
138, 143 (1973)). Even if this were the Department staff’s reason for not considering the Part II
submission, as the Accrediting Council correctly notes, see Pl.’s Opp’n at 10–11, the defendants’
position that considering the submission would have required postponing review by six months
is undermined by the defendants’ argument that “[the Accrediting Council] had ample
36
opportunity to cure any deficiencies it believed existed in the evidentiary record,” including “on
or before June 3, 2016,” the deadline for the Accrediting Council’s response to the Department
staff’s draft report, Defs.’ Mem. at 33. This position necessarily assumes that the Department
staff would have considered the Part II submission had it been re-submitted as part of the
Accrediting Council’s response, which directly contradicts the defendants’ claim that the
Department staff would not have had time to consider the submission before the June Advisory
Committee meeting.
The Court is also not persuaded by other counterarguments raised by the defendants. The
defendants argue that the Department staff’s failure to consider the Part II submission did not
violate the Department’s regulations because those regulations “do not require the Department to
provide unlimited time for the submission of supplemental information.” Defs.’ Mem. at 33.
Relatedly, they argue in their reply that “allow[ing] an applicant nearly unlimited opportunity to
disrupt the Department’s ability to set and adhere to a schedule of review, [ ] is a particularly
serious concern [ ] given that binding statutory and regulatory authority require the Department
to comport with specific timelines.” Defs.’ Reply at 16 (citing 20 U.S.C. § 1099b(d); 34 C.F.R.
§ 602.31). However, the authority cited by the defendants does not compel the Department staff
to complete its review within any set period of time. Rather, it only provides that “[n]o
accrediting agency . . . may be recognized by the Secretary for the purpose of this chapter for a
period of more than [five] years.” 20 U.S.C. § 1099b(d); see also 34 C.F.R. § 602.31(a) (“Each
accrediting agency must submit an application for continued recognition at least once every five
years[.]”). Indeed, the defendants concede that the regulations provide for at least two occasions
in the administrative process when it is appropriate for an accrediting agency to submit (and the
Department to consider) supplementary evidence—when an accrediting agency submits its
37
response to the Department staff’s draft report, and prior to or during the Advisory Committee
meeting. See Defs.’ Reply at 17. And the Department received the Accrediting Council’s Part II
submission on May 19, 2016, see Defs.’ Supp. Opp’n, Ex. 1 (Bounds Decl.) ¶ 11, prior to both of
those events. Moreover, it appears that the regulations already account for the defendants’
concern, as they explicitly set various deadlines for the parties to ensure that the application
review process proceeds expeditiously, see, e.g., 34 C.F.R. § 602.35(a) (requiring the accrediting
agency and the Department staff to submit any written comments to the senior Department
official “[w]ithin ten days following the Advisory Committee meeting”), and prohibit, except in
narrow circumstances, the introduction of new evidence in the later stages of the application
review process, see 34 C.F.R. § 602.35(c)(1) (“Neither the Department staff nor the agency may
submit additional documentary evidence with its comments [to the senior Department official]”
except only in limited circumstances.); see also id. § 602.37(c) (“Neither the agency nor the
senior Department official may include in its submission [on appeal to the Secretary] any new
evidence it did not submit previously[.]”).
Next, the defendants argue that the Accrediting Council “had ample opportunity to cure
any deficiencies it believed existed in the evidentiary record,” including when it submitted its
Petition in January 2016 or “on or before June 3, 2016,” when it submitted its response to the
Department staff’s draft report. Defs.’ Mem. at 33. This argument is also not persuasive. Prior
to June, the defendants claim that the Department staff had informed the Accrediting Council
that it would not consider its Part II submission as part of the recognition process, so it is
perplexing that the defendants now claim that the Accrediting Council should have ignored that
communication and submitted its Part II submission a second time. In any event, it is the
defendants’ responsibility to comply with the HEA, the implementing regulations, and the APA,
38
and as already explained, those authorities required the defendants to consider the Part II
submission.
Finally, the defendants argue that because the Accrediting Council “d[oes] not allege . . .
that the contents of [its Part II submission] would have altered the Secretary’s finding of
noncompliance, it cannot show that any purported procedural error arising from the
Department[] [staff’s] decision not to consider th[ose] contents . . . was prejudicial.” See Defs.’
Reply at 15. “In administrative law, as in federal civil and criminal litigation, there is a harmless
error rule: § 706 of the [APA] instructs reviewing courts to take ‘due account . . . of the rule of
prejudicial error.’” PDK Labs. v. U.S. Dep’t of Drug Enf’t, 362 F.3d 786, 799 (D.C. Cir. 2004)
(citation omitted) (quoting 5 U.S.C. § 706); see also Ozark Auto. Distrib., Inc. v. Nat’l Labor
Relations Bd., 779 F.3d 576, 582–83 (D.C. Cir. 2015) (collecting cases). Although the
defendants are correct that the Accrediting Council does not appear to allege that its Part II
submission would have compelled the Secretary to find that it was fully compliant with the
recognition criteria, the Court is unable to conclude that no part of the 36,000-page Part II
submission would have affected the Secretary’s determination that the Accrediting Council could
not come into compliance within twelve months of her ultimate decision to deny recognition. As
explained above, that determination was based in part on the Accrediting Council’s “past track
record” of violations, with emphasis on failures to act against certain problem institutions
identified by the Department, see AR 6–10, and the Part II submission contained information that
was indisputably relevant to assessing those violations, see Pl.’s Mem. at 10 (representing that
the Part II submission contained “approximately 36,000 pages of documents relating to[, inter
alia,] . . . [a]ccreditation application materials submitted to [the Accrediting Council] by specific
institutions identified by the Department and [the Accrediting Council]’s evaluations of those
39
institutions’ applications . . . and [v]oluminous email correspondence between [the Accrediting
Council] and specific institutions identified by the Department”). Moreover, the Court is unable
to discern from the Secretary’s decision what weight she assigned to the Accrediting Council’s
“past track record,” as opposed to its “insufficient progress in addressing its areas of
noncompliance.” AR 10; see also PDK Labs., 362 F.3d at 799 (declining to find the Deputy
Administrator’s error harmless where his decision was based on a “totality of the circumstances,”
the error implicated four of the circumstances “prominently mentioned” by the Deputy
Administrator, and “[w]hat weight he gave to those circumstances (or any others) [wa]s
impossible to discern”); Level the Playing Field v. Fed. Elec. Comm’n, 232 F. Supp. 3d 130, 143
(D.D.C. 2017) (“The court cannot brush aside this procedural violation . . . and determine that it
was harmless error, because there is no way for the court to determine that [the p]laintiffs
experienced no harm from having their evidence ignored.”); cf. Sugar Cane Growers Coop. v.
Veneman, 289 F.3d 89, 96 (D.C. Cir. 2002) (“[A]n utter failure to comply with notice and
comment cannot be considered harmless if there is any uncertainty at all as to the effect of that
failure.”). Therefore, the Court cannot find that the Accrediting Council was not prejudiced by
the Secretary’s failure to consider its Part II submission.
In sum, the Court concludes that the Secretary’s failure to consider the Part II submission
violated the APA because it violated the HEA and the implementing regulations, see Eco Tour
Adventures, Inc., 249 F. Supp. 3d at 381 (concluding that agency’s decision violated the APA
because it “was contrary to the plain meaning of the relevant statute and regulations”), and also
because it violated the APA’s basic tenet that an administrative agency must consider relevant
data in rendering its decisions, see PPL Wallingford, 419 F.3d at 1200 (concluding that
administrative agency action was arbitrary and capricious in part because the agency “did not
40
address [the plaintiff]’s evidence at all”). In reaching this conclusion, the Court recognizes that
“relevant” is a term that can be broadly construed, and an administrative agency’s failure to
consider data that could be construed as relevant will not always be arbitrary and capricious or
otherwise violate the APA. However, under the circumstances presented here—where the
Department solicited the data, represented that it was “important” to the recognition process, and
then refused to consider it with practically no explanation—and given the sheer volume of the
data and the fact that the defendants do not dispute its relevance, the Court does not have
difficulty concluding that the defendants acted arbitrarily and capriciously by failing to consider
the Part II submission.
b.
The Accrediting Council’s Improvements After the Advisory
Committee Hearing
The Accrediting Council further argues that the Secretary acted arbitrarily and
capriciously by failing to meaningfully consider evidence that (1) “during the three months
following the [Advisory Committee] meeting . . . [the Accrediting Council]’s Board doubled the
number of public members, replaced [its] President with Mr. Williams, and others who
previously served in leadership roles [ ] left [the Accrediting Council],” Pl.’s Mem. at 23; 9 and
(2) the Accrediting Council pursued various adverse actions and other enforcement measures
following the June Advisory Committee meeting, id. at 32; see also id. at 26; AR 121–23
(describing, inter alia, adverse action taken against DeBois Business College in August 2016, as
well as “nine unannounced on-site visits” conducted thereafter “to assess the level of compliance
across a broad spectrum of ITT [Technical Institute]’s campuses”). The defendants respond that
9
Although the Accrediting Council also argues that the Secretary ignored evidence that it “substantially restructured
its leadership in the weeks leading up to . . . the [Advisory Committee] meeting,” Pl.’s Mem. at 22, it only
specifically refers to leadership changes that took place after the meeting, see id. at 22–23 (referring to changes
made “during the three months following the [Advisory Committee] meeting”). Thus, the Court will consider only
the evidence of leadership changes that took place after the meeting in conducting its analysis.
41
the Accrediting Council “was not entitled to submit new evidence directly to the [Secretary and]
thus, the Secretary was under no obligation to consider [it],” Defs.’ Reply at 18 (citing 34 C.F.R.
§ 602.37(c)), but in any event, the Secretary did consider this evidence, see id.
The Court agrees with the defendants that the regulations did not require the Secretary (or
the senior Department official) to consider this evidence. The Department’s regulations provide
that “[n]either the agency nor the senior Department official may include in its submission [on
appeal to the Secretary] any new evidence it did not submit previously in the proceeding,” 34
C.F.R. § 602.37(c), nor may the accrediting agency or the Department staff “submit additional
documentary evidence with its comments [to the senior Department official],” id. § 602.35(c)(1).
In other words, absent exceptional circumstances not applicable here, 10 the factual record that
can be considered by the senior Department official and the Secretary is limited to the factual
record that was before the Advisory Committee. See id. § 602.36(a) (“The senior Department
official makes a decision . . . based on the record compiled [in the prior proceedings].”); see also
id. § 602.37(c) (requiring the Secretary to consider “the [ ] record before the senior Department
official”). The Accrediting Council did not take these actions until after the Advisory
Committee meeting, see Pl.’s Mem. at 23, 26, 32, and the record reflects that it did not submit
evidence of these actions until after the senior Department official issued her decision, see AR
10
These regulations provide two limited exceptions, both of which are inapplicable here. First, they permit an
accrediting agency to submit “additional documentary evidence” to the senior Department official if the Advisory
Committee’s “recommendation proposes finding the agency noncompliant with, or ineffective in its application of, a
criterion or criteria for recognition not identified in the final Department staff analysis.” 34 C.F.R. § 602.35(c)(1);
see also id. § 602.36(f)(1). Here, however, the senior Department official found the Accrediting Council
noncompliant with the same recognition criteria as found by the Department staff. See AR 314–15. Second, the
regulations permit the senior Department official or the Secretary to consider “relevant and material information
pertaining to an agency’s compliance . . . [that is] not contained in the record, [but that] comes to the senior
Department official’s [or the Secretary’s] attention while a decision . . . is pending,” 34 C.F.R. §§ 602.36(g),
602.37(f); however, the regulations expressly prohibit an accrediting agency from “submit[ting] information to the
[senior Department official or the Secretary], or ask[ing] others to submit information on its behalf, for purposes of
invoking” this exception, id. §§ 602.36(h), 602.37(g).
42
236–43 (requesting reconsideration of the senior Department official’s decision based on this
“new evidence”). Therefore, under the regulations, the Secretary was not permitted to consider
this evidence. See Fuller v. Winter, 538 F. Supp. 2d 179, 186 (D.D.C. 2008) (“It is a
fundamental principle of administrative law that an agency is bound to adhere to its own
regulations.” (citing Frizelle, 111 F.3d at 177); see also Nat’l Envtl. Dev. Ass’ns Clean Air
Project, 752 F.3d at 1009 (“[An] agency is not free to ignore or violate its regulations while they
remain in effect.” (quoting U.S. Lines, Inc. v. Fed. Mar. Comm’n, 584 F.2d 519, 526 n.20 (D.C.
Cir. 1978)).
Nonetheless, the Accrediting Council totally ignores the regulations barring the
submission of new evidence to the senior Department official and the Secretary, see Pl.’s Mem.
at 22–27; see also Pl.’s Opp’n at 14–15, and simply argues that the HEA and the APA require the
Secretary “to consider all relevant evidence,” Pl.’s Mem. at 24 (citing 20 U.S.C. § 1099b(n)).
However, the HEA mandates that “[t]he Secretary shall by regulation provide procedures for the
recognition of accrediting agencies,” 20 U.S.C. § 1099b(o), and pursuant to that mandate, the
Secretary promulgated the regulations restricting the introduction of new evidence as described
above. Notably, the Accrediting Council does not argue that these regulations violate the HEA
or the APA or are otherwise unlawful or inapplicable. See Pl.’s Mem. at 22–27; see also Pl.’s
Opp’n at 14–15. Moreover, the APA “sets forth the full extent of judicial authority to review
executive agency action for procedural correctness,” Fox Television Stations, Inc., 556 U.S. at
513, and it “simply does not confer upon participants in informal adjudications a right to
supplement the evidentiary record,” New Life Evangelistic Ctr., Inc. v. Sebelius, 753 F. Supp. 2d
103, 119 (D.D.C. 2010) (holding that administrative agency did not err in denying the plaintiff’s
request to supplement its application with additional materials on remand, where neither the
43
relevant statute nor the regulations provided the plaintiff the right to do so); cf. Interstate
Commerce Comm’n v. Jersey City, 322 U.S. 503, 514 (1944) (“If upon the coming down of the
order litigants might demand rehearings as a matter of law because some new circumstance has
arisen, some new trend has been observed, or some new fact discovered, there would be little
hope that the administrative process could ever be consummated in an order that would not be
subject to reopening”). 11
The two decisions cited by the Accrediting Council as support for its position are
distinguishable. See Pl.’s Mem. at 23–24 (citing Butte Cty., 613 F.3d 190, and Aragon v.
Tillerson, 240 F. Supp. 3d 99 (D.D.C. 2017)). Although both cases held that an agency acted
arbitrarily and capriciously by failing to consider evidence that only became available after some
part of the relevant proceedings had commenced, neither decision referenced or otherwise
indicated the existence of regulations expressly barring the agency from considering such
evidence. In Butte County, which involved a challenge to the National Indian Gaming
Commission’s decision approving the use of certain lands for gaming, although the Circuit held
that the Secretary of the Interior acted arbitrarily and capriciously by refusing to consider
evidence submitted by the plaintiff after the Gaming Commission’s decision was rendered, see
613 F.3d at 195–96, it is unclear whether the relevant administrative process had even
11
The Secretary’s decision is not a formal adjudication within the meaning of the APA. “An adjudication is formal
only when the decision is ‘required by statute on the record after opportunity for an agency hearing.’” Shell Oil Co.
v. U.S. Dep’t of Labor, 106 F. Supp. 2d 15, 19 (D.D.C. 2000) (quoting 5 U.S.C. § 554(a)). Although the HEA
provides that the Secretary shall make her decision to deny recognition “after notice and opportunity for a hearing,”
20 U.S.C. § 1099b(l)(1)(a), it does not require the hearing to be “on the record.” And, “[w]hile it is not clear what
specific statutory language is required by the APA to trigger a formal adjudication,” Shell Oil, 106 F. Supp. 2d at 19,
this Circuit’s precedent suggests that merely requiring an “opportunity for a hearing” is not sufficient, see W. Res.,
Inc. v. Surface Transp. Bd., 109 F.3d 782, 793 (D.C. Cir. 1997) (finding it “doubtful” that the statutory requirement
to “hold a public hearing” required formal adjudicative procedures); Chemical Waste Mgmt., Inc. v. U.S. Envtl.
Prot. Agency, 873 F.2d 1477, 1482 (D.C. Cir. 1989) (finding that statutory requirement for a “hearing” did not give
rise to presumption of formal adjudication).
44
commenced, as the Gaming Commission’s decision was merely an “advisory” opinion, and in
any event, the plaintiff had submitted the evidence nearly two years before the Secretary issued
his decision, see id. at 195 & n.3. In Aragon, which involved a foreign service officer’s
challenge to the Foreign Service Grievance Board’s decision denying him tenure, although the
Court held that the Board acted arbitrarily and capriciously by failing to consider evidence that
did not become available until “after the plaintiff was denied tenure and thus w[as] not seen by
the [initial reviewing body] in making that decision,” it explicitly recognized that the evidence
was “part of the record before the [Board],” 240 F. Supp. 3d at 112, and although it did not
explain the latter determination, the regulations applicable to the Board’s procedures appear to
explicitly permit the introduction of new evidence before the Board, see 22 C.F.R. § 906.7(d), (f)
(providing that at any hearing held before the Board, “the parties may offer [ ] evidence” and a
“transcript shall be made of [the] hearing and shall be part of the record of proceedings”); see
also id. § 907.1(b) (providing that where no hearing is held, “[e]ach party will be offered the
opportunity to review and to supplement . . . the record of proceedings, prior to the date fixed by
the Board for closing of the Record. The Board shall then consider the case and make a decision
based on that Record.”); id. § 909.1 (“Decisions of the Board . . . shall include findings of
fact[.]”).
In any event, the Court agrees with the defendants that the Secretary adequately
considered this post-Advisory Committee evidence. In the course of assessing whether the
Accrediting Council could come into compliance within the requisite twelve months, the
Secretary explicitly acknowledged that the Accrediting Council “ha[d] undertaken major changes
in leadership” and “immediate adverse actions against institutions such as DuBois Business
College.” AR 8. Nevertheless, in light of the Secretary’s conclusion that the Accrediting
45
Council had failed to effectively revise or adopt certain standards, as well as the “comprehensive
and systematic failure of [its] monitoring and enforcement scheme,” AR 9, the Secretary
ultimately concluded that the Accrediting Council had made “insufficient progress in addressing
its areas of noncompliance,” and that “[b]oth [the Accrediting Council]’s insufficient
progress . . . and past track record weigh[ed] against granting a renewal of recognition for twelve
months,” AR 10. In other words, the Secretary considered this evidence, but concluded that it
was outweighed by other evidence of “insufficient progress” and the Accrediting Council’s “past
track record.” See AR 10. Although the Secretary does not, for example, reference the
Accrediting Council’s new president or name each and every enforcement action that the
Accrediting Council had undertaken, and therefore, she “could have explained [her] reasons for
rejecting [the Accrediting Council’s] arguments in more detail, . . . [a] reviewing court will
‘uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned.’”
Frizelle, 111 F.3d at 176; see also Mori, 917 F. Supp. 2d at 65 (recognizing that an agency “need
not address every aspect of [a] plaintiff’s [claims] at length and in detail” so long as it
“provide[s] enough information to ensure the Court that [it] properly considered the relevant
evidence underlying [a] plaintiff’s request”). Here, the Court finds that it can reasonably discern
the Secretary’s decisionmaking path, which is further illuminated by her citation to “concerns
expressed by a majority of [the Advisory Committee] members . . . , [including] one member’s
comment that ‘track record . . . is still the best predictor of future performance’ . . . and the
failures at [the Accrediting Council] were [ ] widespread and systemic.” AR 9 n.67 (quoting
Advisory Committee Transcript at 65–66). And, the Court finds no reason to question the
reasonableness of the weight that the Secretary assigned to the evidence. See Nat’l Coal Ass’n v.
Hodel, 825 F.2d 523, 532 (D.C. Cir. 1987) (declining to “second-guess” the Secretary of
46
Interior’s determination that its action was in the public interest where that determination “[wa]s
one involving a variety of factors, the relative weights of which are left in its discretion”); see
also Citizens to Preserve Overton Park, 401 U.S. at 416 (a reviewing court is not “to substitute its
judgment for that of the agency”); Burke v. U.S. Envtl. Prot. Agency, 127 F. Supp. 2d 235, 241
(D.D.C. 2001) (finding “substantial evidence in the record to support [the] EPA’s assessment of
each factor and the relative weight assigned to each factor” because “[w]hile there are some
aspects of the record that support [the plaintiff]’s position, [the] EPA’s determination that such
evidence is outweighed by other evidence in the record is reasonable and must be upheld under
the applicable standard of review”). 12
c.
The Accrediting Council’s Placement Verification and Data
Integrity Procedures
The Accrediting Council additionally argues that the Secretary “ignored” evidence of its
placement verification and data integrity procedures, including that it had implemented (1) “a
robust [Placement Verification Program] and enhanced data integrity algorithm that establishe[d]
random monthly testing of institutions’ placement data,” Pl.’s Mem. at 25; (2) an “At-Risk
Institutions Group,” which “use[d] the [placement] data to identify at risk institutions and
patterns of concern,” id.; (3) an “enhanced process of on-site random sampling of placement
documentation through the addition of a dedicated Dat[a] Integrity Reviewer [ ] to every campus
12
The Accrediting Council argues that the Secretary’s failure to adequately consider its evidence of leadership
changes is demonstrated by the fact that the Secretary’s decision “included but one brief reference [to] the
Department [s]taff’s comments [prior to the Advisory Committee meeting], and thus before [the Accrediting
Council] had fully installed its new leadership team.” Pl.’s Mem. at 23. However, the Secretary’s discussion of this
evidence also cited an Advisory Committee’s member’s comment “express[ing] doubt as to whether [the
Accrediting Council], even with a ‘fresh team of people’ had the ‘talent and capability and . . . culture’ to achieve
compliance in the face of the challenges accumulated over a number of ‘disastrous . . . years and failures of
schools.” AR 9 n.62 (quoting Advisory Committee Transcript at 258–59).
47
review that [the Accrediting Council] conducts,” id.; and (4) a “Campus Effectiveness Plan
[which] espoused a comprehensive approach to evaluating student achievement,” id. at 29.
As the Accrediting Council notes, see id. at 25, 29, and the defendants do not appear to
dispute, see generally Defs.’ Mem., this evidence is relevant to the recognition criteria regarding
student achievement standards, including monitoring compliance with and evaluation of those
standards, see 34 C.F.R. §§ 602.16(a)(1)(i), .17, .19(b). Moreover, it appears that this evidence
was presented to and considered by the Department staff in its final report, and thus, was
properly part of the administrative record before the Secretary. See AR 770 (assessing the
Accrediting Council’s “addition of a dedicated data integrity reviewer to each site visit”); see
also AR 773 (assessing the Accrediting Council’s Campus Effectiveness Plan); AR 775–76
(assessing the Accrediting Council’s data integrity algorithm, placement verification program,
and “establish[ment] of an ‘At-Risk Institution’ committee to review all actions facing an
institution[ and] information that calls into question its general operations”). 13 But, upon review
of the Secretary’s decision, the Court is unable to conclude that the Secretary considered it, as
the Secretary made no reference to it. Although the Secretary’s decision referred broadly to, and
rejected, the Accrediting Council’s “assertions of progress,” AR 6, as well as evidence that the
Accrediting Council “ha[d] enacted and/or plan[ned] to enact, and then plan[ned] to effectively
apply, the new accrediting standards and review procedures that it needs to come into
compliance,” AR 8, it does not indicate whether these broad categories of evidence included
evidence of the Accrediting Council’s placement verification and data integrity procedures.
Therefore, because this evidence was “available relevant information concerning the compliance
13
To the extent that the Accrediting Council refers to enhancements to these programs and initiatives that were
made and presented to the senior Department official following the Advisory Committee meeting, see, e.g., AR 411
(referring to enhancements to its algorithm that would be made by December 2016), as already explained, see supra
Part III.B.1.b, under the applicable regulations, the Secretary was not required to consider that evidence.
48
of the accrediting agency . . . with the [recognition] criteria,” 20 U.S.C. § 1099b(n)(3); see also
34 C.F.R. § 602.32(b), the Secretary violated the HEA and its implementing regulations by
seemingly failing to consider it, which, again, supports finding a violation of the APA. See Eco
Tour Adventures, Inc., 249 F. Supp. 3d at 381.
Additionally, the Secretary’s apparent failure to consider this relevant evidence violates
the basic requirement of the APA that an “agency must examine the relevant data.” Motor
Vehicle Mfrs. Ass’n, 463 U.S. at 43. The evidence of the Accrediting Council’s placement
verification and data integrity procedures is not only relevant to the Secretary’s determinations in
this case, but it appears to contradict the Secretary’s conclusions regarding the Accrediting
Council’s “lack of evident progress” and its “track record,” which formed the basis for the
Secretary’s determination that the Accrediting Council could not come into compliance within
twelve months, and ultimately, her decision to deny it recognition. See AR 10 (“Both [the
Accrediting Council]’s insufficient progress in addressing its areas of noncompliance and past
track record weigh against granting a renewal of recognition for [twelve] months.”); see also AR
8 (concluding that the Accrediting Council’s “lack of progress” was a “strong[] indicat[or] that
[it could not] meet its ambitious promises to come into compliance within [twelve] months”).
For example, the Secretary cited as an example of the Accrediting Council’s poor “track record”
the fact that “in 2013[, it] committed to implement new data verification procedures[,] . . . [y]et
rather than timely implementing the . . . procedures as promised . . . , [the Accrediting
Council] . . . only began efforts to improve data quality when it again began seeking renewal of
its recognition in 2016.” AR 9–10. However, the Accrediting Council submitted evidence that it
had implemented a new data integrity algorithm in 2014, see AR 411, and as Department staff
member Steve Porcelli testified at the Advisory Committee meeting, the evidence demonstrated
49
that “falsified placements dropped dramatically” as a result of the use of the algorithm, see AR
525; see also AR 775 (noting in the Department staff’s final report that the Accrediting Council
had submitted evidence that its “data integrity algorithm resulted in incidences of data integrity
problems dropping from 3,000 in 2011 to 150 in 2015; and that [its] placement verification
program resulted in review of 1,137 placements for 85 [Accrediting Council]-accredited
campuses in 2016, with a verification rate of 90%”). In addition, as support for the Accrediting
Council’s “lack of sufficient progress,” the Secretary cited the senior Department official’s
conclusion that “despite notice of deficiencies in th[e] area [of student achievement], in these
proceedings[, the Accrediting Council] ha[d] not put forward a plan to effectively develop and
apply standards for evaluating student achievement.” AR 6–7 (citing the senior Department
official’s brief on appeal to the Secretary). However, the Accrediting Council presented
evidence to the Department staff that it had established an At-Risk Institutions Group, developed
a Campus Effectiveness Plan, and taken other steps as part of its Placement Verification
Program. See Pl.’s Mem. at 25, 29; see also AR 770, 773, 775–76.
Although the Court is mindful that “an agency’s decision [need not] be a model of
analytic precision to survive a challenge,” Frizelle, 111 F.3d at 176 (alteration in original)
(quoting Dickson, 68 F.3d at 1404), it nevertheless must be clear to the Court that an agency has
“grapple[d] with” evidence contradicting its position, see Aragon, 240 F. Supp. 3d at 112.
Because the Secretary failed to even reference this evidence, the Court simply cannot conclude
that the Secretary did that here. See Robinson v. Nat’l Transp. Safety Bd., 28 F.3d 210, 216
(D.C. Cir. 1994) (finding the Board’s decision arbitrary and capricious where the Board’s order
“d[id] not mention [relevant] testimony, much less explain how the Board evaluated it”); see also
Mori, 917 F. Supp. 2d at 64 (“By not discussing [the] plaintiff’s evidence, the Secretary leaves
50
[the] plaintiff and the Court to scratch their heads as to why the Secretary found [the] plaintiff’s
evidence unpersuasive.”); Smith v. Dalton, 927 F. Supp. 1, 10 (D.D.C. 1996) (“[The agency
must] show that it has considered all of the evidence before it and . . . state why evidence
contrary to the ultimate conclusion reached was disregarded or given lesser weight.”).
Accordingly, “[w]hile the [Secretary]’s decision [ultimately] may be valid, this Court cannot
affirm it because the [Secretary seemingly] did not consider all relevant evidence in the
record[.]” Erhman v. United States, 429 F. Supp. 2d 61, 68, 70 (D.D.C. 2006). 14
The defendants’ counterargument that “the Secretary reviewed the entire record de novo,
including documents in which [the Accrediting Council] posited its arguments” regarding this
evidence, Defs.’ Mem. at 27 (citing AR 1), is not persuasive. “The assertion that the Secretary
reviewed the administrative record . . . is not nearly enough to satisfy h[er] burden to reveal the
decision-making process.” Fuller, 538 F. Supp. 2d at 192. Moreover, to the extent that the
defendants argue that the Accrediting Council was not prejudiced by any failure to consider this
evidence, see Defs.’ Mem. at 29, that argument also fails. Because the evidence implicates, and
appears to contradict, conclusions upon which the Secretary relied in determining that the
Accrediting Council could not come into compliance within twelve months, the Court cannot
conclude that consideration of this evidence would not have affected the Secretary’s decision.
See PDK Labs., 362 F.3d at 799; see also Level the Playing Field, 232 F. Supp. 3d at 143.
2.
Alleged Failure to Consider Relevant Factors
The Accrediting Council appears to also challenge the Secretary’s failure to discuss all of
the recognition criteria as to which the Department staff and the senior Department official found
14
Although the Department staff appears to have ultimately found evidence of the Accrediting Council’s placement
verification and data integrity procedures unpersuasive, see, e.g., AR 775 (“Overall, in the context of documentation
of widespread placement rate fraud, [the Accrediting Council]’s statements regarding . . . the effectiveness of its
algorithm cannot be credited.”), the Secretary does not explicitly adopt this analysis.
51
the Accrediting Council noncompliant. See Pl.’s Mem. at 27 (“[T]he Secretary’s brief discussion
of a handful of [r]ecognition [c]riteria did not provide the depth of analysis required under the
APA and did not reflect consideration of all available relevant evidence.”). The Secretary
admittedly only considered “a non-exhaustive selection of violations that demonstrate the
profound and systemic failure of [the Accrediting Council] to effectively meet the basic Title IV
responsibilities of a nationally recognized accrediting agency.” AR 6; see also id. (“While th[e]
[Department staff] report highlights [twenty-one] separate violations of the recognition criteria, I
will not delve into every violation here.”). Although this failure does appear to be inconsistent
with the requirements of the HEA, which requires the Secretary, upon deciding “not [to]
recognize any accrediting agency . . . [to] make publicly available the reason for denying
recognition, including reference to the specific [recognition] criteria . . . which have not been
fulfilled,” 20 U.S.C. § 1099b(n)(4) (emphasis added), and the APA, which requires consideration
of the relevant data, see Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43, the Accrediting Council has
not demonstrated that this error was prejudicial, see 5 U.S.C. § 706. As to the recognition
criteria that the Secretary did consider, the Accrediting Council conceded in the proceedings
before the Department that it had not yet fully complied with those criteria. See AR 410–25
(representing that as to the recognition criteria of 34 C.F.R. §§ 602.16(a)(1)(x), 602.19(b) and
602.20 it was “developing revisions” to its policies and procedures and/or would demonstrate
effective application of those policies and procedures “no later than April 2017,” and as to the
recognition criteria of 34 C.F.R. §§ 602.16(a)(1)(v), (vii), and (ix), 602.17(a), 602.18(d), and
602.21, it would have evidence of effective application of its policies and procedures as of
August 1, 2016). Thus, the Accrediting Council cannot argue that the Secretary would have
found the Accrediting Council fully compliant had the Secretary considered the remainder of the
52
criteria as to which the Department staff found the Accrediting Council noncompliant.
Furthermore, the Accrediting Council does not argue that the evidence of the additional criteria
would have changed the Secretary’s determination that it could not come into compliance within
twelve months. See generally Pl.’s Mem. at 18–33 (only specifically arguing that evidence
related to the criteria as to which the Secretary found it noncompliant would have changed that
decision). Therefore, the Court is unable to conclude that the Secretary’s failure to consider
these additional factors prejudiced the Accrediting Council, and consequently, this failure is not
an independent basis for finding a violation of the APA.
3.
Alleged Procedural Errors by the Department staff, the Advisory
Committee, and the Senior Department Official
The Accrediting Council also argues that the Department staff, the Advisory Committee,
and the senior Department official committed various procedural errors, and that the Secretary
acted arbitrarily and capriciously by “ultimately relying” on their flawed decisions and
recommendations. See Pl.’s Mem. at 33. The defendants argue in response that these entities’
decisions and recommendations were intermediate actions and therefore not reviewable under
the APA, which only permits challenges to final agency action, see Defs.’ Mem. at 29 (citing 5
U.S.C. § 704), and that, in any event, the procedural errors alleged by the Accrediting Council
either did not occur or did not prejudice the Accrediting Council because “at no point does [the
Accrediting Council] suggest that, but for those purported errors, the Secretary would have
concluded that [it] was compliant,” id.
As a threshold matter, the Court rejects the defendants’ argument that intermediate
agency action is never reviewable, as that position is explicitly contradicted by the APA, which
provides that “[a] preliminary, procedural, or intermediate agency action . . . not directly
reviewable is subject to review on the review of the final agency action.” 5 U.S.C. § 704; see
53
also Fed. Trade Comm’n v. Standard Oil Co. of Cal., 449 U.S. 232, 245 (1980) (recognizing that
under § 704, a court “reviewing a [final] cease-and-desist order has the power to review alleged
unlawfulness in the issuance of a complaint”); Yaman v. U.S. Dep’t of State, 634 F.3d 610, 613
(D.C. Cir. 2011) (recognizing that the plaintiff’s challenge to the agency’s denial of her request
for a copy of a hearing officer’s findings of fact and recommendation was reviewable because it
was part of a case challenging the agency’s final decision on the merits); Gulf Restoration
Network, Inc. v. Nat’l Marine Fisheries Serv., 730 F. Supp. 2d 157, 174 (D.D.C. 2010)
(recognizing that the plaintiff would be permitted to challenge an agency’s intermediate action if
it were to challenge that agency’s future final action). The Secretary’s decision denying the
Accrediting Council’s recognition constitutes “a final decision,” see 34 C.F.R § 602.38; see also
Defs.’ Mem. at 35 (acknowledging that “the Secretary’s decision . . . is the final agency action
under review in this lawsuit”), and therefore, the Court may review the intermediate decisions
that preceded the final decision.
a.
The Department Staff’s Report
The Court has already determined that the Department staff violated the HEA and the
Secretary’s regulations by declining to consider the Accrediting Council’s Part II submission,
and thus, it need not address that claim again here. However, the Court must dismiss the
Accrediting Council’s remaining arguments that the Department staff committed procedural
error.
The Accrediting Council first argues that the Under Secretary’s request for supplemental
information violated the Secretary’s regulations because those regulations “do not contemplate
involvement of the Secretary or the Secretary’s deputies at the [Department staff] review stage.”
Pl.’s Mem. at 34 (emphasis removed). However, as the defendants point out, see Defs.’ Mem. at
30, the Accrediting Council has provided no evidence that the Secretary was involved in the
54
Department staff’s review, and indeed, as the Secretary observed, evidence in the record
expressly refutes the Secretary’s involvement, see AR 12 n.88 (citing testimony of the
Department staff at the Advisory Committee meeting that “both the [senior Department official]
and the Secretary ‘ha[d] been completely walled off from the discussion of [the Accrediting
Council] and from the preparation of the staff report’”). Further, although it is undisputed that
the Under Secretary was involved in the Department staff proceedings, see, e.g., AR 355 (stating
in the Department staff’s written submission to the senior Department official that “[it] is true
that the Under Secretary and his Office participated in the efforts of the Department [s]taff to
develop the record on the [Accrediting Council] matter”), the Accrediting Council has failed to
cite any regulation or other authority for its assertion that the involvement of the Under
Secretary, who is “himself a member of the Department staff,” Defs.’ Mem. at 30, was improper.
Nor is the Court persuaded that a Department staff member’s vague statement at the Advisory
Committee hearing that he did not “want to comment” on “advice [he received] from outside”
the Department staff’s accreditation office, AR 520 (Advisory Committee Transcript at 51),
“suggest[s] that the outside involvement [ ] violated the prescribed regulatory process,” Pl.’s
Mem. at 35. The Court therefore agrees with the defendants that the Accrediting Council’s
allegations are insufficient to overcome the “presum[ption] that [public officers] have properly
discharged their official duties.” Defs.’ Mem. at 30 (quoting Riggs Nat’l Corp. v. Comm’r of
Internal Revenue, 295 F.3d 16, 21 (D.C. Cir. 2002)).
The Accrediting Council next argues that the Department staff erred when it failed to
consider “[i]ts use of algorithms designed to further verify job placement data . . . [from] the
schools it accredits.” Pl.’s Mem. at 37. However, the Court does not find it necessary to address
this claim because it has already determined that the Secretary must consider this evidence on
55
remand. See supra Part III.B.1.c. In any event, the Department staff did address the Accrediting
Council’s algorithm. See AR 775 (“Overall, in the context of the documentation of widespread
placement rate fraud, . . . the effectiveness of [the Accrediting Council]’s algorithm cannot be
credited.”).
Finally, the Accrediting Council argues that the Department staff “relied on irrelevant
factors by highlighting the investigations and lawsuits against some institutions that [it had]
accredited, even though [the Accrediting Council] had nothing to do with those lawsuits[] [and]
often did not have knowledge of these investigations.” Pl.’s Mem. at 38; see also id. (“There [ ]
are no recognition criteria that require an accrediting agency to establish its compliance by
explaining how it has responded to a filed lawsuit against an institution[.]”). Although it is true
that an agency acts arbitrarily and capriciously when it “relie[s] on factors which Congress has
not intended it to consider,” Puerto Rico Higher Educ. Assistance Corp. v. Riley, 10 F.3d 847,
850 (D.C. Cir. 1993) (quoting Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43), the Court simply
cannot conclude that the existence of numerous investigations and lawsuits regarding misconduct
by Accrediting Council-accredited institutions is “irrelevant” to the recognition criteria set forth
in the HEA, which require the Secretary to assess an accrediting agency’s ability to effectively
implement and enforce standards to ensure an institution’s “educational quality and program
effectiveness,” 20 U.S.C. § 1099b(c)(1). Therefore, this final challenge to the Department staff’s
report is also rejected.
b.
The Advisory Committee Meeting
The Accrediting Council also argues for two reasons that the Advisory Committee
proceedings were procedurally flawed, neither of which the Court finds persuasive. First, the
Accrediting Council argues that the Advisory Committee permitted the presentation of
“[i]mproper [t]hird [p]arty [c]omments” in violation of the Secretary’s regulations, which it
56
asserts only allow “the Department [to] invite [presentations from] parties who submitted written
comments ‘concerning the agency’s compliance with the criteria for recognition,’” Pl.’s Mem. at
39 (emphasis removed) (quoting 34 C.F.R. § 602.34(d)). Specifically, the Accrediting Council
takes issue with the presentation of comments from a Maryland Assistant Attorney General
regarding state investigations into institutions accredited by the Accrediting Council. See id.
The Court agrees with the defendants that “[n]either the statute nor the regulations limit the
scope of allowable comments [at the Advisory Committee meetings] in the manner asserted by
the [Accrediting Council],” but they rather “contemplate that any interested member of the
public may present to [the Advisory Committee], without regard as to whether those commenters
previously submitted written comments.” Defs.’ Mem. at 36. Section 602.34(d), the regulation
cited by the Accrediting Council as support for its position, requires the Department to “invit[e]
interested parties . . . to make oral presentations before the Advisory Committee,” and merely
specifies that such parties may “includ[e] those who submitted third-party comments concerning
the agency’s compliance with the criteria for recognition.” 34 C.F.R. § 602.34(d) (emphasis
added) (“At least [thirty] days before the Advisory Committee meeting, the Department
publishes a notice of the meeting in the Federal Register inviting interested parties, including
those who submitted third-party comments concerning the [accrediting] agency’s compliance
with the criteria for recognition, to make oral presentations before the Advisory Committee.”).
And, various provisions of the HEA encourage public participation at the Advisory Committee
meeting and in the recognition process generally. See 20 U.S.C. § 1011c(d)(2)(B) (providing
that at a meeting of the Advisory Committee, “[t]he agenda shall include, at a minimum,
opportunity for public comment during the Committee’s deliberations”); id. § 1099b(n)(1)
(requiring the Secretary to “conduct an independent evaluation” of information including “third
57
party-information concerning the performance of the accrediting agency”); id. § 1099b(n)(3)
(requiring the Secretary to “consider all available relevant information . . . including any
complaints . . . against [an accrediting] agency”). The Accrediting Council’s claim that the
presentations by individuals who did not submit written comments were improper therefore fails.
Second, the Accrediting Council contends that the Advisory Committee was “unduly
influenced by politics,” Pl.’s Mem. at 41, specifically, by (1) the Under Secretary’s comments at
the opening of the Advisory Committee meeting “expressi[ng] . . . his preferred outcome of the
hearing,” id. at 39; and (2) a report issued by Senator Elizabeth Warren two weeks before the
Advisory Committee meeting “criticizing [the Advisory Committee] itself and encouraging the
panel to recommend revoking [the Accrediting Council]’s recognition,” id. at 40. The
defendants respond that “no regulation prohibits the Under Secretary from expressing his views
to [the Advisory Committee]” or “authorize[s] [or] obligate[s] [the Department] to prohibit
members of the public, including sitting federal politicians, from issuing public statements in the
weeks preceding a[n Advisory Committee] meeting,” Defs.’ Mem. at 36, and with regards to the
Under Secretary’s comments, that “[the Accrediting Council] cannot show any prejudice arising
from those remarks,” id. at 37.
The Court concludes that the Accrediting Council has not shown that these events
constitute procedural error. As to the Under Secretary’s comments, the Accrediting Council
cites no provision of the HEA or rule or regulation that prohibits the Under Secretary from
expressing his views at an Advisory Committee meeting. And although the HEA provides that
“[t]he Secretary shall not, under any circumstances, base decisions on the recognition or denial
of recognition . . . on criteria other than those contained in th[e] [statute],” 20 U.S.C.
§ 1099b(n)(3), the Accrediting Council fails to offer any evidence that the Advisory Committee
58
based its decision, or any part of it, on the Under Secretary’s remarks. And, as the defendants
note, see Defs.’ Mem. at 36, the remarks did not make any reference to the Accrediting Council,
see generally AR 9,897–903; see also AR 9,897–98 (reflecting the Under Secretary’s statement
that “the truth is that some agencies need to up their game and occasionally agencies demonstrate
such wide and deep failure that they simply cannot be trusted with making the determinations
we[,] you[,] and the public count on.”). Furthermore, the Court is not persuaded by the handful
of statements from Advisory Committee members that the Accrediting Council claims suggest
that the Under Secretary’s statements may have jeopardized “the integrity of the Department’s
evaluation of [the Accrediting Council]’s petition.” Pl.’s Mem. at 40 (citing, for example, one
member’s comment that the opening comments were “very odd”). As the Secretary concluded in
her decision, none of these statements show that the Advisory Committee proceedings were
compromised by the Under Secretary’s comments. See AR 11 (“Any individual statements by
[Advisory Committee] members prior to the vote do not indicate that the votes by the majority of
the members [against recognition of the Accrediting Council] were not based on their expert
assessment of the facts.”).
As to Senator Warren’s report, the Accrediting Council has not directed the Court to any
evidence demonstrating that any of the members of the Advisory Committee even considered the
report, let alone that they improperly relied upon it to make their decision. The Accrediting
Council merely asserts that the senior Department official’s argument on appeal that “[Advisory
Committee] members neither can, nor are expected to, close their eyes to information they are
exposed to day-to-day by virtue of th[eir] expertise,” AR 354, demonstrates that “[the Advisory
Committee] members may have been influenced by the report,” Pl.’s Mem. at 40 (emphasis
added). This speculative statement is not proof that any Advisory Committee member in fact
59
considered or was influenced by the report. Nor is the Court persuaded by the statement of “one
[Advisory Committee] member expressly acknowledg[ing] the impact of politics on the
proceedings,” Pl.’s Mem. at 41, as the Accrediting Council has not identified anything in the
record as support for this claim, and in any event, the general opinion of one member that
politics had some impact on the Advisory Committee proceedings does not persuade the Court
that the Advisory Committee’s recommendation, or the Secretary’s ultimate decision, were
improperly influenced by politics. Finally, the Accrediting Council’s reliance on a statement
from a third-party observer that “the [Advisory Committee’s recommendation] makes clear the
extent to which both [the Advisory Committee]—and accreditation—have been politicized” is
even less persuasive. Id. (citing AR 386, statement of Judith Eaton, President of the Council for
Higher Education Accreditation).
c.
The Senior Department Official’s Decision
The Accrediting Council’s final argument is that the senior Department official’s
decision was procedurally flawed in two respects. 15 Similarly, none of these arguments is
persuasive.
First, the Accrediting Council contends that the senior Department official’s “truncated”
decision failed to comply with the procedures set forth in 34 C.F.R. § 602.36. See id. at 41.
That regulation requires only that the senior Department official “specif[y] the reasons for [her]
decision, including all criteria the agency fails to meet and all criteria the agency has failed to
apply effectively.” 34 C.F.R. § 602.36(e)(2)(ii). The Court agrees with the defendants that the
15
The Accrediting Council also argues that the senior Department official failed to consider “the specific leadership
changes that [it] had made” and other evidence of its improvements made after the Advisory Committee meeting.
See Pl.’s Mem. at 43–44. Because the Court has already determined that this evidence was not timely submitted
and, in any event, was properly considered by the Secretary, see supra Part III.B.1.b, the Court need not separately
address whether the senior Department official failed to consider this evidence.
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senior Department official’s decision meets these requirements, see Defs.’ Mem. at 37–38, albeit
just barely. The senior Department official’s decision listed each of the twenty-one criteria as to
which she found the Accrediting Council noncompliant, see AR 315, and incorporated the
Department staff’s findings as to those criteria, see AR 314 (indicating that she “agree[d]” with
the Department staff report). Further, she provided reasons for her conclusion that the
Accrediting Council could not come into compliance within twelve months, including that “[the
Accrediting Council]’s track record d[id] not inspire confidence that it [could] address all of [its]
problems effectively” and “most of the remedial efforts currently underway began in earnest just
several months ago, despite having reason to take action long before that.” AR 315. The plain
language of the regulation does not require more. 16
Second, the Accrediting Council argues that “the [senior Department official]’s
determination not to allow [the Accrediting Council twelve] months to come into compliance
marks a significant break with precedent as to [Department s]taff and [Advisory Committee]
recommendations,” which required “an adequate explanation” for the break that the senior
Department official failed to provide. Pl.’s Mem. at 42. The Accrediting Council cites as
“precedent” the fact that, “[i]n all but one” of the “[seventy] petitions for continued recognition
heard by [the Advisory Committee] since December 2010 in which an agency was found to have
one or more violations of the [r]ecognition [c]riteria,” the “Department staff and [the Advisory
Committee] recommended that the institution be given more time to come into compliance.” Id.
42 n.15 (citing AR 140); see also AR 427. For several reasons this argument must be rejected.
As an initial matter, the Accrediting Council cites no authority for the proposition that the
non-final recommendations of the Department staff or the Advisory Committee are precedential,
16
For the reasons explained, infra, the Court does not decide whether the senior Department official’s decision
satisfies the requirements of the APA.
61
and it also fails to indicate whether the senior Department official or the Secretary ultimately
adopted these recommendations in any of the cases it cites. More importantly, although it is true
in some cases that “[a]n agency’s failure to come to grips with conflicting precedent constitutes
an inexcusable departure from the essential requirement of reasoned decisionmaking,” Jicarilla
Apache Nation v. U.S. Dep’t of Interior, 613 F.3d 1112, 112 (D.C. Cir. 2010) (alteration in
original) (internal quotation marks omitted), the Accrediting Council has failed to explain how
the senior Department official’s (or the Secretary’s) decision in this case conflicts with what it
has cited as precedent. Cf. LePage’s 2000, Inc. v. Postal Regulatory Comm’n, 642 F.3d 225, 234
(D.C. Cir. 2011) (concluding that Commission’s order departed from a prior order because it
changed the focus of its analysis and considered new factors); Water Quality Ins. Syndicate v.
United States, 225 F. Supp. 3d 41, 71 (D.D.C. 2016) (concluding that an administrative agency
was required to explain its departure “from prior agency precedent, where the agency ha[d]
declined to find gross negligence in circumstances involving more egregious conduct” than the
conduct presented). Rather, it only claims that these prior cases involved findings of “one or
more violations of the [r]ecognition [c]riteria,” and that they resulted in a different outcome at
the Department staff and Advisory Committee level. See Pl.’s Mem. at 42 n.15. The Court
cannot conclude based on these assertions alone that the Secretary acted arbitrarily and
capriciously in failing to address its prior cases. See U.S. Postal Serv. v. Postal Regulatory
Comm’n, 842 F.3d 1271, 1274 (D.C. Cir. 2016) (recognizing that an agency is “not required to
grapple with every last one of its precedents, no matter how distinguishable” (internal quotation
marks omitted)); see also AR 11 (explaining that “[e]ach [accrediting] agency is judged on a case
by case basis”). Accordingly, the Court must reject the Accrediting Council’s claims that the
Department staff’s, the Advisory Committee’s, and the senior Department official’s
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recommendations and decisions suffered from procedural flaws beyond those already identified
with respect to the Secretary’s decision.
4.
The Accrediting Council’s Additional Challenges
The Court must resolve two final matters. First, as already indicated, the Accrediting
Council has challenged the merits of the Secretary’s decision, see, e.g., Pl.’s Mem. at 30 (“The
Secretary’s conclusion is not grounded by the record evidence; there is simply ‘no rational
connection’ between the facts found and the ‘choice made’ by the Secretary.”), as well as the
merits of the Department staff’s recommendation and the senior Department official’s decision,
see, e.g., id. at 36 (arguing that the Department staff report “made numerous conclusory
findings”); id. at 37 (questioning the soundness of the Department’s staff’s conclusion that the
Accrediting Council did not comply with 34 C.F.R. § 602.15(a)(1)); id. at 44 (“The [senior
Department official]’s determinations regarding why [the Accrediting Council] could not
demonstrate or achieve compliance within [twelve] months are [ ] conclusory[.]”). However,
because the Court concludes that the Secretary procedurally erred by failing to consider various
categories of relevant evidence in violation of the HEA, the Secretary’s implementing
regulations, and the APA, the Court finds it unnecessary to reach these challenges at this time.
“Under settled principles of administrative law, when a court reviewing agency action
determines that an agency made an error of law, the court’s inquiry is at an end: the case must be
remanded to the agency for further action consistent with the corrected legal standards.” PPG
Indus., Inc. v. United States, 52 F.3d 363, 365 (D.C. Cir. 1995). And as here, where a court
determines that the flaw in the agency’s process is the failure to consider relevant evidence, the
proper remedy is to remand the case to the Secretary so that she may consider the evidence in the
first instance. See Jicarilla Apache Nation, 613 F.3d at 1121 (“These are issues for [the agency],
not this court, to consider in the first instance.”); see also Fuller, 538 F. Supp. 2d at 193
63
(concluding that where the “deficiencies [identified by the court] concern[ed] only the flaws in
the Secretary’s decisionmaking process” and not “flaws specific to the substance of the decision
that the Secretary reached on the merits,” “[t]he appropriate remedy [ ] [wa]s to vacate the
Secretary’s decision and remand [the plaintiff]’s petition for further proceedings consistent with
th[e] [ ] [o]pinion”); Erhman, 429 F. Supp. 2d at 70 (recognizing that “[w]hile the [agency]’s
decision may be valid, this Court cannot affirm it because the [agency] did not consider all
relevant evidence,” and consequently, remanding the case to the agency was the proper course
because “th[e] [c]ourt [wa]s not in a position to determine the legitimacy of the remainder of the
[agency]’s [d]ecision”); Smith, 927 F. Supp. at 10 (finding remand appropriate in part because
“it [wa]s not apparent to the court that the [agency] [ ] had a full opportunity to consider the
[relevant] evidence”).
Second, the Accrediting Council requests that the Court “return [its p]etition for
recognition to [the] Department [s]taff for reconsideration,” Proposed Order at 1, ECF No. 55-1
(emphasis added). However, the Accrediting Council cites no authority that compels the Court
to do so. See generally Pl.’s Mem.; Pl.’s Opp’n. Because the HEA requires the Secretary to
consider an application de novo, see 20 U.S.C. 1099b(n)(1) (“The Secretary shall conduct an
independent evaluation of the information provided by [the accrediting] agency . . . .”), the Court
finds it appropriate to remand the case to the Secretary for proceedings consistent with this
opinion. This is not to say, however, that the Secretary may not decide to return the Accrediting
Council’s petition to the Department staff. Indeed, the regulations contemplate, although in
circumstances not applicable here, that the Secretary may do so if necessary to consider evidence
not in the record. See 34 C.F.R. § 602.37(f), (f)(1)(ii) (“If relevant and material information
pertaining to an agency’s compliance with recognition criteria, but not contained in the record,
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comes to the Secretary’s attention while a decision regarding the agency’s recognition is pending
before the Secretary, and if the Secretary concludes that the recognition decision should not be
made without consideration of the information, the Secretary . . . [may r]efer[] the matter to [the]
Department staff for review and analysis . . . , as appropriate, and review by the Advisory
Committee . . . ; and consideration by the senior Department official”). Additionally, although
the Court has concluded that the Secretary was not required to consider the evidence of the
Accrediting Council’s purported improvements made after the Advisory Committee meeting,
that is not to say that she may not decide on remand to consider some or all of that evidence, or
take into account new evidence. See PPG Indus., 52 F.3d at 366 (“[T]here is no principle of
administrative law that restricts an agency from reopening proceedings to take new evidence
after the grounds upon which it relied are determined by a reviewing court to be invalid. Indeed,
the Supreme Court has specifically indicated that a reopening is one of the courses an agency
may follow after a reviewing court has determined that the agency’s initial determination
included an error of law.”)
IV.
CONCLUSION
For the foregoing reasons, the Court concludes that the Secretary violated the APA by
failing to consider the Accrediting Council’s Part II submission and evidence of its placement
verification and data integrity programs and procedures, and finds that the proper remedy for
these violations is to remand this case to the Secretary for consideration of this evidence. The
Court rejects, however, the Accrediting Council’s remaining bases for challenging the
Secretary’s decision in this case. Accordingly, the Accrediting Council’s motion for summary
65
judgment is granted in part and denied in part, and the defendants’ cross-motion for summary
judgment is denied. 17
SO ORDERED this 23rd day of March, 2018.
REGGIE B. WALTON
United States District Judge
17
The Court will contemporaneously issue an Order consistent with this Memorandum Opinion.
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