Lincoln Memorial University Duncan School of Law v. American Bar Association (TV1)

Filing 44

MEMORANDUM in Support of Motion re 43 MOTION to Dismiss filed by American Bar Association. (Vogel, Howard)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
KNOXVILLE DIVISION
LINCOLN MEMORIAL UNIVERSITY
DUNCAN SCHOOL OF LAW,
Plaintiff,
v.
THE AMERICAN BAR ASSOCIATION,
Defendant.

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Case No. 3:11-CV-608
Hon. Thomas A. Varlan
Magistrate Judge C. Clifford Shirley

MEMORANDUM IN SUPPORT OF DEFENDANT
AMERICAN BAR ASSOCIATION’S MOTION TO DISMISS
Defendant American Bar Association (“ABA”) submits this Memorandum in support of
its Motion to Dismiss the Complaint of Lincoln Memorial University Duncan School of Law
(“Duncan” or “the School”) pursuant to Federal Rules of Civil Procedure 12(b)(6) and 8(a). In
its Memorandum Opinion and Order dated January 18, 2012, this Court denied the School’s
motion for preliminary injunction after extensive review of the administrative record. Doc. 35.
For substantially the same reasons, and consistent with the standard of “great deference” to
which decisions of accrediting bodies like the Council of the Section of Legal Education and
Admissions to the Bar (“Council”) are entitled, this Court should now dismiss the School’s
Complaint in its entirety as a matter of law.1
The School’s federal due process claim (Count I) should be dismissed because the

1

The ABA notes that it has concurrently filed a Motion to Stay the litigation in this matter, based
on the School having filed an appeal of the Council's December 2011 decision underlying this
case to the Appeals Panel, which appeal was publicly announced on or about January 19, 2012.
To comply with the Court’s January 11, 2012 Order (Doc. 31) that the ABA respond to the
Complaint by February 8, 2012, and in the event the Court does not grant the motion to stay, the
ABA is also filing its Motion to Dismiss and this supporting Memorandum.

administrative record, which the Court properly may consider, establishes as a matter of law that
the Council did not abuse its discretion or reach a decision that was arbitrary and unreasonable,
but rather “conform[ed] its actions to fundamental principles of fairness.” See Doc. 35 at 22
(quoting Thomas M. Cooley Law Sch. v. ABA, 459 F.3d 705, 713 (6th Cir. 2006)). The School’s
derivative state-law due process claim (Count II) should be dismissed because Tennessee courts
apparently have not recognized such a claim when based on a private accreditation decision and,
even if recognized, the claim would be preempted by federal law. Cooley, 459 F.3d at 712.
The School’s antitrust claims under Sections 1 and 2 of the Sherman Act (Counts III and
IV) should also be dismissed. First, the School fails to identify any cognizable “antitrust injury”
arising from the Council’s decision. Second, the School’s claims that the ABA conspired with
unidentified law schools to restrain competition should be dismissed under the “rule of reason”
analysis and, together with its claim that the ABA improperly “monopolized” law school
accreditation, should be dismissed as based on nothing more than conclusory assertions which
fail to comply with Fed. R. Civ. P. 8. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009).
Finally, Count V should be dismissed because it fails to articulate any separate claim for
relief. Because the School has thus failed to state any claim upon which relief can be granted,
the Complaint should be dismissed in its entirety.
STATEMENT OF FACTS AND ALLEGATIONS
A.

Lincoln Memorial University Duncan School of Law

In 2008, Lincoln Memorial University (“LMU”) prepared a feasibility study for a new
law school. Doc. 26-2 at 5-33. 2 The study predicted “great demand” for legal education that

2

For purposes of this motion to dismiss, the Court may consider “public records, items
appearing in the record of the case and exhibits attached to defendant’s motion to dismiss so long
as they are referred to in the Complaint and are central to the claims contained therein.” Bassett
(Footnote continued)

2

would allow LMU “to fill its classes with students whose academic credentials surpass those of
many ABA-approved law schools in times of low demand.” Id. at 19-20. In 2009, before any
students were admitted, LMU “received approval from [the Southern Association of Colleges
and Schools – Commission on Colleges (“SACS-COC”)] to offer a J.D. degree,” and approval
from the Tennessee Board of Legal Examiners (“TBLE”) for its future graduates to take the
Tennessee bar examination. Compl. ¶¶24, 26; Doc. 26-9 at 38, 40-41. Because the School was
not yet operating, these approvals were based only upon plans for the School.
Duncan enrolled its first class of part-time students in Fall 2009, and its first class of fulltime students in Fall 2010. Compl. ¶4. SACS-COC visited the School in March 2010 and
produced a report. Compl. ¶26; see Doc. 26-9 at 42-66. The report was based on limited
information because Duncan had only been in operation for one semester and “final outcomes of
student success [were] basically 2 1/2 years away.” Doc. 26-9 at 64; compare Compl. ¶¶26-27.
B.

The Council of the Section of Legal Education and Admissions to the Bar

Since 1952, the Council has been the national agency for the accreditation of law schools.
See Compl. ¶5. Accreditation decisions are governed by published Standards and Rules of
Procedure for Approval of Law Schools, which are accompanied by Interpretations of the
Standards and the Section’s Internal Operating Practices. Docs. 21-1, 21-2, 21-3.3 The

v. NCAA, 528 F.3d 426, 430 (6th Cir. 2008); see also Youssefi v. Renaud, 794 F. Supp. 2d 585,
591 (D. Md. 2011) (“[T]he Court may review the administrative record attached to Defendants’
motion to dismiss, and the motion need not be treated as one for summary judgment.”). The
administrative record materials referenced in the Complaint and filed by Duncan in this matter
(Doc. 26, 27, 28, 33) are therefore properly before the Court.
3

The Court may consider the published Standards and Rules of Procedure for Approval of Law
Schools in the context of a motion to dismiss. See Toth v. Grand Trunk R.R., 306 F.3d 335, 349
(6th Cir. 2002); New England Health Care Employees Pension Fund v. Ernst & Young, LLP, 336
F.3d 495, 501 (6th Cir. 2003).

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Standards, Interpretations, and Rules govern both provisional and full approval of law schools.
To receive provisional approval, a school must both (i) establish that it is in substantial
compliance with each of the Standards, and (ii) present a reliable plan for bringing the law
school into full compliance within three years. Doc. 21-1, Standard 102(a); see also Compl. ¶33.
C.

The School’s Application for Provisional Approval

The School submitted an application for provisional approval on January 10, 2011, which
exceeded 400 pages. Compl. ¶28. In March 2011, a Site Team visited the School, and, on July
14, 2011, issued its report. Compl. ¶29. The Site Team Report stated on the first page:
The site evaluators do not make the official findings or conclusions for the Section
of Legal Education and Admissions to the Bar of the American Bar Association.
These are made by the Accreditation Committee and the Council of the Section.
Doc. 28-11 at 4; cf. Compl. ¶30. The Site Team reported that the School had projected that it
would enroll 100 new full-time and 60 new part-time students in 2010, but it enrolled just 55
new full-time and 36 new part-time students. Doc. 28-11 at 12. The Site Team also observed
that “the qualitative aspects of the admission profiles for its first two entering classes are
somewhat low,” and it provided a chart showing that, while applications to the School had
declined from 2009 to 2010, its acceptance rate had increased from 51% to 71% and its yield had
dropped. Id. at 43-44. The Site Team further reported the School’s “concern ‘that the 20102011 data indicates the median admission LSAT scores for the academic program declined from
the 2009-2010 academic year.’” Id. at 45 (quoting the School’s Site Evaluation Questionnaire).
In fact, the Site Team reported that LSAT scores declined not only at the median but also at the
75th and 25th quartiles, and UGPAs declined in every quartile as well. Id. The Site Team
concluded that the School’s recruiting “needs to be monitored in order to ensure that [the School]
is only admitting students who can complete the educational program and be admitted to the

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bar.” Id. The Site Team also reported that the director of the academic success program was
being replaced by a law librarian. Id. at 28.
On August 6, 2011, the School responded to the Site Report (Docs. 28-8, 28-9) and did
not dispute any of the foregoing facts. Doc. 28-8. The School provided updated admissions
data, which showed that applications to the School had decreased 27% from 2010 to 2011 and
that LSAT scores and UGPAs had not improved. Id. at 6. Despite the steep decline in
applications, the School did not project any change in enrollment for 2012-2013, which the Site
Team had reported to be 80 full-time and 25 part-time students. Doc. 28-11 at 12.
The School also disclosed for the first time that it had readmitted 6 of 18 students who
had been academically dismissed and sought readmission. Doc. 28-8 at 55. This was in contrast
to the School’s previous report to the Site Team that it “has not readmitted any of its own
students who have been previously disqualified for academic reasons.” Doc. 28-11 at 45. The
School’s standard for readmission following involuntary academic withdrawal required that the
Academic Standards Committee “affirmatively find” that “[e]xtraordinary circumstances
contributed to the student’s inability to meet the academic requirements” and that those
“circumstances … have been remedied or no longer exist.” Doc. 28-11 at 24.
1.

The Accreditation Committee Meeting and Recommendation

In late September 2011, the Accreditation Committee met and considered “a record
which included [Duncan’s] application, the site evaluation report and supplemental letters.”
Compl. ¶32. The School made a presentation and responded to questions in an appearance that
lasted for approximately two hours. Doc. 28-11 at 71-159.
The Committee then prepared a 23-page Recommendation, which the School received on
October 12, 2011. Doc. 28-11 at 204-28. After discussing 96 separate findings of fact, the
Committee concluded that the School had “not established that it [was] in substantial compliance

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with each of the ABA Standards for Approval of Law Schools, and [had] not presented a reliable
plan for bringing itself into full compliance … within three years.” Compl. ¶33; Doc. 28-11 at
227. Specifically, the Committee concluded that the School had failed to establish substantial
compliance with Standard 203, Standard 303(a) and (c) and Interpretation 303-3, Standard
501(b) and Interpretation 501-3, and Standard 511.4 Compl. ¶34; Doc. 28-11 at 227-28. The
Committee therefore “did not recommend to Defendant ABA’s Council that it grant provisional
ABA approval” to the School. Compl. ¶36; Doc. 28-11 at 227.
Standard 203—Strategic Planning and Assessment: The Committee concluded that
the School had failed to establish substantial compliance with Standard 203, which provides:
a law school shall demonstrate that it regularly identifies specific goals for
improving the law school’s program, identifies means to achieve the established
goals, assesses its success in realizing the established goals and periodically reexamines and appropriately revises its established goals.
Doc. 21-1 at 20. The Committee’s conclusion was based on six findings of fact that identified
specific deficiencies in the School’s strategic planning and assessment. Doc. 28-11 at 227, 20709 (Nos. 6-8, 10-11, 13). In connection with the School’s 2008 feasibility study, for example,
the Committee found that the School’s Dean admitted “that there has not been any formal
revisiting of the findings and assumptions in the original Feasibility Study.” Id. at 208. The
Committee further found that the School “did not present any evidence that it has revisited the
predicted growth in LSAT takers beyond February 2009, and whether any decreases in LSAT
takers for 2010, 2011, and beyond may affect strategic planning and the Law School’s success in
realizing its established goals.” Id. at 207. The Committee made similar findings that the School
failed to present evidence that it had revisited other assumptions, including those pertaining to

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The Council did not accept the Committee’s recommendation as to Standard 511. Compl. ¶38.
That Standard, accordingly, is not discussed in this brief.

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post-graduation employment of its students. Id. at 208. It also found that Duncan’s “inability to
reach projected enrollment targets has caused the Law School to revise projected enrollments
downward, and appears to have caused a drop in the LSAT of the entering classes, negatively
affecting student selectivity.” Id. at 209; see also id. at 218. The Committee found: “This poses
strategic planning challenges that the record does not establish the Law School has sufficiently
addressed at this time.” Id. at 209. Cf., Compl. ¶¶34, 35(a), 41-50.
Standards 303(a) and (c); Interpretation 303-3—Academic Standards: The
Committee concluded that Duncan had failed to establish substantial compliance with Standards
303(a) and (c) and Interpretation 303-3 (Doc. 28-11 at 227), which provide:
Standard 303(a): A law school shall have and adhere to sound academic
standards, including clearly defined standards for good standing and graduation.
Standard 303(c): A law school shall not continue the enrollment of a student
whose inability to do satisfactory work is sufficiently manifest so that the
student’s continuation in school would inculcate false hopes, constitute economic
exploitation, or detrimentally affect the education of other students.
Interpretation 303-3: A law school shall provide the academic support necessary
to assure each student a satisfactory opportunity to complete the program,
graduate, and become a member of the legal profession. This obligation may
require a school to create and maintain a formal academic support program.
Doc. 21-1 at 30-31. These conclusions were based upon findings of fact relating to Duncan’s (i)
low standards for continuing enrollment of students in academic distress, (ii) failure to
demonstrate adequate academic support, and (iii) readmission of a high percentage of students
who were dismissed for academic failure. Doc. 28-11 at 227, 214-15, 217-20. The Committee
discussed the School’s standards for academic probation and dismissal, the fact that the Director
of Academic Success has “no prior academic support experience,” and that the School “has
limited data on which to assess the effectiveness of its Academic Success Program.” Id. at 21415. The Committee also found that despite its “extraordinary circumstances” requirement the
School had readmitted one-third of the 18 academically dismissed students who had sought

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readmission. Id. at 214, 219-20. Cf. Compl. ¶¶34, 35(b), 51-56.
Standards 501(b) and Interpretation 501-3—Admissions: The Committee concluded
that the School had failed to establish substantial compliance with Standard 501(b) and
Interpretation 501-3. Doc. 28-11 at 227-28. These provide:
Standard 501(b): A law school shall not admit applicants who do not appear
capable of satisfactorily completing its educational program and being admitted to
the bar.
Interpretation 501-3: Among the factors to consider in assessing compliance with
Standard 501(b) are the academic and admission test credentials of the law
school’s entering students, the academic attrition rate of the law school’s students,
the bar passage rate of its graduates, and the effectiveness of the law school’s
academic support program.
Doc. 21-1 at 45. These conclusions were based upon Duncan’s admissions and first-year class
profiles, which showed that entering student LSAT scores and UGPA had dropped in every
quartile while the acceptance rate increased to 71%. Doc. 28-11 at 43-45. Cf. Compl. ¶¶34,
35(c), 57-64. The Committee also cited the academic dismissal and readmission findings
discussed supra, at 7-8. Doc. 28-11 at 227-28, 217-20.
2.

The Council’s Meeting and Decision

The School appeared at the Council’s meeting in early December 2011. Prior to that
meeting, the School submitted a 48-page Hearing Brief, in which the School asserted that the
Council should reject the Committee’s recommendation. Compl. ¶37 & Ex. A. At the meeting,
the School made a “15-minute presentation.” Compl. ¶37. Thereafter, the School responded to
questions from the Council, and the meeting lasted two hours. Doc. 28-11 at 229-322.
On December 20, 2011, the School received notification that the Council had accepted
the Committee’s recommendation except as to Standard 511, and the School therefore would not
be granted provisional approval. Doc. 28-11 at 370-78. The Council made this decision
consistent with Rule 8(a) of the Standards and Rules of Procedure for the Approval of Law

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Schools, which provides: “In considering a recommendation of the Committee, the Council shall
adopt the Committee’s findings of fact unless the Council determines that the findings of fact are
not supported by substantial evidence on the record.” Doc. 21-2 at 6.
Based on the record consisting of the full record before the Accreditation Committee, the
transcripts of the School’s testimony before the Committee and before the Council, and the
School’s November 18 response (see Doc. 28-11 at 372), the Council concluded that Duncan
failed to establish substantial compliance with the following Standards:
Standard 203. Duncan “has not demonstrated that it regularly identifies specific
goals for improving the Law School’s program, identifies means to achieve the
established goals, assesses its success in realizing the established goals, and
periodically re-examines and appropriately revises the established goals.” Id.
♦ “[T]he Law School has failed to establish that it has re-examined its goals and
the means to achieve them in light of unanticipated economic conditions,
affecting the assumptions in its feasibility study.” Id.
♦ “The Law School has not established that it has determined the cause or
evaluated the impact of the failure to meet its enrollment projections on its ability
to meet its mission or to ultimately succeed as an institution.” Id.
♦ “[T]he Law School has failed to establish that it has re-evaluated and revised its
goals given that, as currently appears based on past enrollment and present
projections, it may be a significantly smaller law school than anticipated when it
was founded.” Id.
Standard 303(a), (c); Interpretation 303-3. “[A]lthough the Law School has
adopted and adheres to clearly defined academic standards, the Law School has
not demonstrated that the standards are sound.” Id. at 373.
♦ “The Law School has not demonstrated that its standards for academic dismissal
and readmission are sufficiently rigorous as to ensure that the Law School does
not continue the enrollment of students whose inability to do satisfactory work is
manifest.” Id.
♦ “While the Law School has established an academic support program, it has not
established that the program is effective. The program is not currently directed by
a person with specific experience in academic support….” Id.
Standard 501; Interpretation 501-3. The Law School has not demonstrated
“that it is not admitting applicants who do not appear capable of completing the
educational program and being admitted to the bar.” Id.
♦ Factors include the “comparatively low entering academic and admission test
credentials of a significant percentage of the Law School’s students, the attrition

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rates of its inaugural classes, the failure of the School to establish the
effectiveness of the academic support program, and the fact that the Law School’s
graduates have yet to sit for a bar examination.” Id.
In the December 20, 2011 letter providing the Council’s decision, the School was also
informed that the School had a right pursuant to the Section’s Rule of Procedure 10 to appeal the
Council’s decision to the Appeals Panel, but was required to do so within 30 days. Doc. 28-11 at
374. The School was also informed that if the School timely filed an appeal the Council’s
decision would be stayed pending the appeal’s conclusion; otherwise the Council’s decision
would become effective on that 30th day. Id.
On January 19, 2012, the School timely appealed the Council’s decision to the Appeals
Panel. That appeal remains pending.
D.

The School’s Complaint

On December 22, 2011, prior to filing its appeal under the Section’s Rule 10, the School
filed its Complaint in this Court asserting a federal common law due process claim (Count I), a
state due process claim under Tennessee common law (Count II), an antitrust claim under
Section 1 of the Sherman Act, 15 U.S.C. § 1 (Count III), an antitrust claim under Section 2 of the
Sherman Act, 15 U.S.C. § 2 (Count IV ), and an unnamed count (Count V) asserting various
injuries allegedly arising from the Council’s decision. As discussed infra at 19, the antitrust
allegations are entirely derivative of the School’s due process claims.
ARGUMENT
“[A] civil complaint only survives a motion to dismiss if it ‘contain[s] sufficient factual
matter, accepted as true, to state a claim to relief that is plausible on its face.’” Courie v. Alcoa
Wheel & Forged Prods., 577 F.3d 625, 629 (6th Cir. 2009) (quoting Ashcroft v. Iqbal, 129 S. Ct.
1937, 1949 (2009)). The Court must accept all well-pleaded allegations of fact as true but “need
not accept as true legal conclusions or unwarranted factual inferences … and conclusory

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allegations or legal conclusions masquerading as factual allegations will not suffice.” In re
Travel Agent Comm’n Antitrust Litig., 583 F.3d 896, 903 (6th Cir. 2009) (citation and internal
quotation marks omitted). Further, Federal Rule of Civil Procedure 8 requires facts that, if true,
show the pleader is entitled to relief, not “labels and conclusions” or “a formulaic recitation of
the elements of a cause of action.” Iqbal, 129 S. Ct. at 1949 (quoting Bell Atlantic v. Twombly,
550 U.S. 544, 555 (2007)). Applying this standard, Duncan’s Complaint should be dismissed in
its entirety.
I.

DUNCAN’S FEDERAL DUE PROCESS CLAIM (COUNT I) IS REFUTED BY
THE ADMINISTRATIVE RECORD AND SHOULD BE DISMISSED.
In Count I of its Complaint, the School alleges that it was denied due process under

federal common law because it was in substantial compliance with the Section’s Standards
(Compl. ¶89); the Council’s decision that the School was not in substantial compliance with each
of the Standards was “arbitrary and capricious” (Compl. ¶90); and the School was not given a
meaningful opportunity to be heard before the Council (Compl. ¶91).
The administrative record, however, readily establishes that the Council’s decision
satisfies the Sixth Circuit’s highly deferential review standard under Thomas M. Cooley Law
Sch. v. ABA, 459 F.3d 705, 713 (6th Cir. 2006) (citation omitted): it was not “arbitrary or
unreasonable” and it did not breach “fundamental principles of fairness.” . As this Court
recognized in its Memorandum Opinion and Order, judicial review of the decisions of
accrediting agencies such as the Council “‘is limited to protecting the public interest,’ and ‘great
deference should be afforded the substantive rules of these bodies and courts should focus on
whether an accrediting agency such as the ABA followed a fair procedure in reaching its
conclusions.’” Doc. 35 at 22 (quoting Cooley, 459 F.3d at 713). Finally, as noted by this Court,
it is the School’s burden under Standard 102(a) to demonstrate substantial compliance with the

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Standards. Doc. 35 at 26 (citing Doc. 21-1 at 12).
Because the administrative record establishes that the Council’s decision was supported
by substantial evidence and was not arbitrary and unreasonable, and that the School was given a
meaningful opportunity to be heard, Count I of the School’s Complaint should be dismissed.
A.

The Administrative Record Contains Substantial Evidence Supporting The
Council’s Conclusion That The School Was Not In Substantial Compliance
With Each Of The Standards.

The conclusory allegations in the School’s Complaint are belied by the extensive
administrative record, which contains substantial undisputed evidence supporting the Council’s
conclusion that the School had not demonstrated that it was in substantial compliance with each
of the Standards. While the Council determined that the School failed to establish substantial
compliance with three separate Standards and two Interpretations, failure to comply with any
single Standard would require the same decision from the Council. See Doc. 21-1 at 12,
Standard 102(a) (requiring “substantial compliance with each of the Standards”) (emphasis
added).
As to Standard 203 (Strategic Planning and Assessment), the Council’s conclusion was
based on six separate findings of fact, discussed supra at 6-7. Each was supported by evidence
in the record that included, inter alia, the School’s admission that it had not evaluated how
changed economic conditions affecting the numbers of potential applicants, employment
prospects for graduates, and other key assumptions in its feasibility study would affect the Law
School’s future and ability to meet its goals and that the School had not sufficiently addressed
strategic planning challenges posed by the undisputed decreases in enrollment and in the
qualifications of entering students. Doc. 28-11 at 207-209.
The School quotes the Site Team Report as stating, inter alia, that the School has a
“culture of assessment at every level—institutional, programmatic, curricular, teaching,

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student—(indeed every aspect of the law school operation).” Compl. ¶35(a). These types of
general allegations do not refute the undisputed evidence in the record showing that the School
had not addressed the particular issues focused on by the Council. See Doc. 28-11 at 372; see
also Doc. 28-11 at 227, 207-09. Indeed, School representatives made clear during the hearings
before the Committee and Council that the School had not addressed these issues. See Doc No.
28-11 at 87-90, 154-56; Doc No. 28-11 at 240-42, 250-57, 263-68.
As to Standards 303(a) and (c) and Interpretation 303-3 (Academic Standards and
Achievements), the Council’s conclusion was based on five separate findings of fact, discussed
supra at 7-8. Each was supported by evidence in the record that included, inter alia, the
School’s readmission of one-third of students who were dismissed for academic failure and
applied for readmission (Doc. 35 at 32 (citing Doc. 21-6 at 16; Doc. 21-8 at 3, 22)), the absence
of empirical data related to the School’s academic support program (Doc. 35 at 32 (citing Doc.
21-7 at 54, 56; 21-5 at 50-51)), and the lack of experience of the School’s Director of Academic
Support (Doc. 35 at 32-33 (citing Doc. 21-7 at 55-56; Doc. 21-8 at 7)). While the School in its
Complaint quotes the statement in the Site Team Report that the School “adheres to clearly
defined academic standards for good standing” (Compl. ¶51), the Council’s conclusion, which
was based on the entire administrative record, was that “although the Law School has adopted
and adheres to clearly defined academic standards, the Law School has not demonstrated that the
standards are sound.” Doc. 28-11 at 373 (emphasis added). This record included the School’s
data regarding academic dismissal and readmission, which was not before the Site Team and
which demonstrated that the School’s standard was not sufficiently rigorous. Id. It also included
undisputed evidence that the School’s director of academic success was inexperienced and the
School lacked data demonstrating the effectiveness of its academic support program. Id.

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Determining whether academic standards are sound and whether academic support is effective is
at the core of the accreditation function and of the Council’s particular expertise.
As to Standard 501(b) and Interpretation 501-3 (Admissions), the Council’s conclusion
was based on two separate findings of fact, discussed supra at 8. These pertained to Duncan’s
first-year class profiles, which reflected low and declining admission statistics, including LSAT
scores and UGPAs, and the School’s standards for academic dismissal and readmission,
discussed above. Doc. 28-11 at 373; Doc. 28-11 at 227-28, 217-20. The record as to the
School’s admission statistics and its readmissions is undisputed. While the School attempts to
overcome the Council’s conclusion by portraying the decline in credentials as insignificant
(Compl. ¶61), a court may not “substitute its judgment for that of the … Council.” Cooley, 459
F.3d at 713.
The School alleges, inter alia, that it was “blatantly arbitrary and capricious” for the
Council to find a lack of compliance with Standard 501(b) based on the School’s LSAT scores
while the Counsel had accredited other schools that the School alleges has the same or lower
scores. Compl. ¶61. However, as the Sixth Circuit has noted, courts “have refused to consider
claims of disparate treatment of accreditation applicants.” Foundation for Interior Design Educ.
Research v. Savannah Coll. of Art, 244 F.3d 521, 528 (6th Cir. 2001) (citing Marlboro Corp. v.
Ass’n of Indep. Colls. & Sch., Inc., 556 F.2d 78, 80 n.2 (1st Cir. 1977); Transport Careers, Inc.
v. Nat’l Home Study Council, 646 F. Supp. 1474, 1485-86 (N.D. Ind. 1986)). Further,
accreditation decisions are based upon a totality of the circumstances and singling out one set of
data (such as LSAT data) ignores other factors that are properly considered. Here, the Council’s
conclusion was based not only on facts related to LSAT scores and UGPAs, but also on the
School’s lack of proven academic support and readmission of academically dismissed students.

14

When academic support has not been proven to be effective, for example, it becomes more
critical to enroll students who have the ability to complete the academic program successfully.
For all of these reasons, as stated by the Foundation for Interior Design Court, where the record
does not provide any credible indication that the accrediting agency acted in an arbitrary and
unreasonable manner in denying accreditation, and where the record indicates that the
accreditation decision was based on substantial evidence, a court should not “give consideration
to the relative qualifications of other schools accredited by the [agency].” 244 F.3d at 529.
B.

The Administrative Record Establishes That The Council’s Decision Was
Not Arbitrary And Unreasonable.

In Count I of its Complaint, the School also asserts that the Council’s decision was
“arbitrary and capricious” because it was “not rationally related to the facts in the record as
required by federal common law as embodied in the [Administrative Procedure Act], 5 U.S.C. §
701 et seq.” Compl. ¶90. However, as this Court previously concluded, “the APA does not
apply here.” Doc. 35 at 15. Rather, “‘great deference should be afforded the substantive rules of
[accrediting agencies].’” Id. at 22 (quoting Cooley, 459 F.3d at 713). Accordingly, “in
analyzing whether the ABA abused its discretion or reached a decision that was arbitrary or
unreasonable, [courts] focus on whether the agency ‘conform[ed] its actions to fundamental
principles of fairness.” Id.
As discussed in Part A, the Council concluded that the School failed to demonstrate
substantial compliance with Standard 203, Standards 303(a) and (c) and Interpretation 303-3, and
Standard 501(b) and Interpretation 501-3. On each of these Standards, the Council’s conclusion
was based on substantial evidence in the administrative record. Further, the School had been
given multiple opportunities to participate in the development of the administrative record. See,
e.g., Docs. 28-8, 28-9 (response to site team report); Doc. 28-11 at 71-159 (School appeared at

15

Committee hearing, which was transcribed); Compl. ¶37 & Ex. A (Hearing Brief); and Doc. 2811 at 229-322 (School appeared at Council meeting, which was transcribed).
The School alleges in the Complaint, nevertheless, that the Council’s decision must be
“arbitrary and capricious” because two other entities—SACS-COC and TBLE—approved the
School based on their standards. See Compl. ¶¶42-43, 52-53, 58-59. As this Court previously
recognized in denying the School’s motion for preliminary relief, however, “these accrediting
agencies evaluated the law school at different times than the Committee or Council, that is prior
to students arriving on campus and shortly after the law school commenced classes.” Doc. 35 at
29; see also Compl. ¶¶24, 26; Doc. 26-9 at 38; Doc. 26-9 at 40-41. Moreover, the SACS-COC
site team report, like the Section’s Site Team Report, was based on limited information available
at the time and contained both negative and positive comments. See Doc. 35 at 29; see also Doc.
26-9 at 42-66. Indeed, the SACS-COC site team report included statements that were fully
supportive of the Council’s subsequent decision. See supra at 3; Doc. 28-11 at 43-45. Finally,
and most importantly, the Council cannot defer to other agencies' review: the Council is
designated by the DOE as the national accrediting agency for law schools and must perform its
duties consistent with its own standards and rules.
Further, even if the School could point to countervailing facts, the result would not be a
conclusion that the Council’s decision was arbitrary and unreasonable because, in accreditation
matters, courts “are not free to conduct a de novo review or substitute [their] judgment for that of
the ABA or its Council.” Cooley, 459 F.3d at 713; see also Tenn. Clean Water Network v.
Norton, 2005 WL 2464675, at *9 (E.D. Tenn. Oct. 4, 2005) (“The Court may not substitute its
judgment . . . for the judgment of [the agency.]”). Rather than reweighing the evidence, a court’s
role is limited to determining whether the facts on which the Council relied are sufficient to show

16

“reasoned decision-making.” Simms v. NHTSA, 45 F.3d 999, 1004 (6th Cir. 1995); Cooley, 459
F.3d at 713 (“the standards of accreditation are not guides for the layman but for professionals in
the field of education.”) (citation omitted).
As this Court stated, “even if there is substantial evidence in the record that would have
supported an opposite conclusion, [a court must defer to the agency] so long as substantial
evidence supports the conclusion reached.” Doc. 35 at 34-35 (quoting Jones v. Commissioner,
336 F.3d 469, 475 (6th Cir. 2003) (citation omitted)). Accordingly, where, as here, the Council’s
decision was based on reasoned decision-making, there is no basis on which the School might
establish that the Council’s decision was arbitrary and unreasonable.
C.

The School Had A Meaningful Opportunity To Be Heard By The Council.

The School’s final claim in Count I of its Complaint is that it was not given a meaningful
opportunity to be heard before the Council. Compl. ¶91. This claim is contradicted by the
School’s own allegations. The School submitted a 48-page hearing brief (Compl. Ex. A), and
made an in-person oral presentation directly to the Council. Compl. ¶37. Further, the School
made written and oral presentations to the Committee and a written response to the Site Team
Report, each of which was in the record before the Council. Compl. ¶28; Docs. 28-8, 28-9. As
this Court determined, these opportunities to be heard were more than sufficient to satisfy due
process. Doc. 35 at 24 (a law school is “afforded ample process” where it is “notified well in
advance [of hearings],” is “afforded the opportunity to submit evidence to support[] its case, and
permitted to appear before the body with counsel present”) (internal quotation marks omitted).
For these reasons, Count I of the Complaint does not “state a claim to relief that is
plausible on its face,” Courie, 577 F.3d at 629, and it accordingly should be dismissed.

17

II.

DUNCAN’S STATE LAW DUE PROCESS CLAIM (COUNT II) IS PREEMPTED
BY FEDERAL LAW AND SHOULD BE DISMISSED.
In Count II, the School alleges a “violation of due process” under Tennessee common

law arising from the Council’s accreditation decision. Compl. ¶¶92-95. However, Tennessee
courts apparently have not recognized a common law due process claim arising from private
accreditation decisions, and the Sixth Circuit has conclusively held that federal law alone
“govern[s] disputes relating to decisions made by [accrediting] bodies” that are “approved by the
[DOE] (such as the ABA).” Cooley, 459 F.3d at 712; accord Foundation for Interior Design,
244 F.3d at 532-33. Even if such a claim was recognized by the Tennessee courts and not
preempted, it must nevertheless fail for the same reasons discussed in Part I.
III.

DUNCAN’S ANTITRUST CLAIMS (COUNTS III AND IV) HAVE BEEN
REJECTED BY THE SIXTH CIRCUIT AND OTHER COURTS IN
ACCREDITATION ACTIONS AND SHOULD BE DISMISSED.
In Count III, the School alleges that the Council’s actions violated Section 1 of the

Sherman Act, 15 U.S.C. § 1, in that unidentified “faculty and staff” from unspecified
“Competitor Law Schools” served on the Committee and Council and allegedly conspired to
deny Duncan’s application for provisional accreditation in order to exclude Duncan from
unidentified “regional” and “national” markets. Compl. ¶¶98-101. The School contends that
this alleged “group boycott” affects “the economic value” of a Duncan degree, harms its ability
to recruit and maintain faculty, donors and economic opportunities, and puts it at a disadvantage
“in competing for law school applicants because of the perceived value of [the School’s]
education or degree.” Compl. ¶¶110-11. Duncan does not allege that the judges, legal
practitioners, and other non-academic members on the Committee and Council also engaged in
this alleged illegal conspiracy or boycott. The School pleads no facts supporting its conclusory

18

allegations.5
In Count IV of its Complaint, the School claims that the Council’s decision violated
Section 2 of the Sherman Act, 15 U.S.C. § 2, because the ABA allegedly “enjoys monopoly
power in accrediting law schools,” and the denial of the School’s application “constitutes an
abuse” of this power. Id. ¶¶123-25. The School does not allege that the Council obtained or has
maintained such power through any improper or anticompetitive conduct and, again, pleads no
facts supporting its conclusory allegations.
The School expressly links its antitrust claims to its allegation that it was in “substantial
compliance with the ABA Standards” and “should be entitled to provisional accreditation.”
Compl. ¶102; see also id. ¶¶123-25 (alleging that accreditation denial constituted an “abuse of
Defendant ABA’s market power” because it is “in substantial compliance with the ABA
Standards”). In addition to lacking any factual basis, these antitrust claims fail for the same
reasons as the federal due process claim: as discussed in Part I, supra, the Council’s decision was
supported by substantial evidence and was not arbitrary and unreasonable.
Moreover, the Sixth Circuit and other courts have decisively rejected the School’s alleged
antitrust claims in the accreditation context. In Foundation for Interior Design, the Sixth Circuit
conducted a comprehensive review of antitrust cases in the accreditation context and stated, “We
have not found a case … in which a denial of school accreditation gave rise to a successful
allegation of antitrust injury.” 244 F.3d at 531; see also Zavaletta v. ABA, 721 F. Supp. 96, 98
5

The School does, however, focus on alleged events that led to a 1996 consent judgment
resolving certain antitrust claims brought by the Department of Justice against the ABA. Compl.
¶¶74–86. In addition to being irrelevant to the issues in this case, the School’s allegations should
be disregarded because they are inaccurate and incomplete. See Mass. Sch. Of Law at Andover,
Inc. v. ABA (“MSL”), 107 F.3d 1026, 1040 n.19 (3d Cir. 1997) (noting that the allegations
“never were proven because the case was settled, and therefore cannot be taken as true in this
case.”).

19

(E.D. Va. 1989) (challenge to ABA accreditation decision was “outside the ambit of the Sherman
Act”); Brandt v. ABA, 1997 WL 279762 (N.D. Tex. May 15, 1997) (dismissing antitrust claims
alleging lawyers were unable to become licensed in other states because law school was denied
accreditation). Duncan’s antitrust claims, similarly, should be dismissed as a matter of law.
A.

The School’s Antitrust Claims Should Be Dismissed Because It Has Not
Alleged Antitrust Injury.

An antitrust injury is a necessary element of both the School’s Section 1 and Section 2
antitrust claims. However, the School has not alleged, and cannot allege, “‘injury of the type the
antitrust laws were intended to prevent and that flows from that which makes defendants’ acts
unlawful.’” Foundation for Interior Design, 244 F.3d at 530 (quoting Brunswick Corp. v.
Pueblo Bowl-O-Mat, Inc. 429 U.S. 477, 489 (1977)). That is, a plaintiff must assert more than
injury to itself “because the antitrust laws are designed for the protection of competition, not
competitors.” Id. (internal quotes and citation omitted); see also Brooke Group Ltd. v. Brown &
Williamson Tobacco Corp., 509 U.S. 209, 224 (1993) (“It is axiomatic that the antitrust laws
were passed for ‘the protection of competition, not competitors.’”) (quoting Brown Shoe Co. v.
United States, 370 U.S. 294, 320 (1962)).
The School’s asserted injuries—e.g., lowering “the economic value” of a Duncan degree
and difficulties with “hiring of faculty and staff” and recruiting law students (Compl.¶¶ 110111)—are all alleged harms to the School as a competitor, not to competition, and thus do not
qualify as antitrust injury. Indeed, in Foundation for Interior Design, the Sixth Circuit expressly
held that neither “a loss of reputation” nor “a drop in school enrollment” from the denial of
accreditation can constitute antitrust injury. 244 F.3d at 531; see also MSL, 107 F.3d at 1038
(stigma effect in marketplace from denial of accreditation, like loss of prestige from failure to
approve a product or service, does not alone make out antitrust injury). Duncan instead must

20

allege facts establishing that there has been an “adverse impact on price, quality, or output” in
the law school market as a result of its denial of accreditation. Betkerur v. Aultman Hosp. Ass’n,
78 F.3d 1079, 1092 (6th Cir. 1996) (quoting Capital Imaging Assocs. v. Mohawk Valley Assocs.,
996 F.2d 537, 547 (2nd Cir. 1993)). It has not done so here.6
The Sixth Circuit recently affirmed the dismissal of an analogous antitrust complaint
because it was “devoid of any allegation of the anticompetitive effect on the [relevant] market.”
Bassett v. NCAA, 528 F.3d 426, 434 (6th Cir. 2008). In Bassett, a football coach had alleged that
the NCAA’s adjudication of his misconduct was “unfair” and inconsistent with “due process.”
Id. The court reasoned that it was not enough for the plaintiff to allege that he suffered injury
because he was banned from coaching; rather his claim had been properly dismissed for failure
to state a claim because he failed to allege facts tending to suggest that the broader market for
coaches was somehow affected. Id. Duncan’s antitrust claims must fail for the same reasons:
the School’s private harms do not amount to antitrust injury.
Duncan also asserts that its ability to compete for law school applicants has been harmed
by the denial of accreditation because most states require graduation from an ABA-accredited
law school in order to sit for the bar, and because federally-secured student loans require
attendance at an ABA-accredited school. Compl. ¶¶6, 109. These requirements, however, are the
result of state action and thus are “immune from antitrust action.” MSL, 107 F.3d at 1036 (citing
Parker v. Brown, 317 U.S. 341, 352 (1943)). As the Sixth Circuit has explained, “No cognizable
antitrust injury exists where the alleged injury is a byproduct of the regulatory scheme or federal

6

Duncan alleges simply that the Council’s decision “increases the price of legal education,”
“increases the cost of legal services,” and “decreases the consistent quality of legal education.”
Compl. ¶¶106-08. But unsupported by facts, such “mere conclusory statements[] do not suffice.”
Iqbal, 129 S. Ct. at 1949.

21

law rather than of the defendant’s business practices.” CBC Cos. v. Equifax, Inc., 561 F.3d 569,
573 (6th Cir. 2009) (internal quotation marks and citation omitted).
“The ABA does not decide who can take the bar examinations.” MSL, 107 F.3d at 1036.
That decision is made exclusively by the States’ bar admission authorities and therefore,
“[w]ithout state action, the ABA’s accreditation decisions would not affect state bar admissions
requirements.” Id.; see also Zavaletta, 721 F. Supp. at 98 (“In accrediting a law school, the
ABA merely expresses its educated opinion . . ., [which] is provided to state supreme courts and
bar examiners, who have the sole power to determine if a school’s graduates are entitled to . . .
practice in their states.”). Without state action, accordingly, the Council’s accreditation decision
has no impact on whether Duncan’s students can sit for the bar in their chosen State.7
Similarly, the ABA does not decide whether students qualify for federal student loan
assistance. Congress, by statute, and the Department of Education, by regulation, exclusively
control those decisions, including whether attendance at an ABA-accredited school is required.
E.g., 20 U.S.C. § 1141(a). Without this state action, the Council’s accreditation decision has no
impact on whether Duncan’s students qualify for federal student loan programs.
Finally, Duncan cannot allege antitrust injury free of state action by focusing on “stigma”
resulting from denial of accreditation. Compl. ¶¶6, 110, 111. Duncan asserts that Council
accreditation is a “proxy for a quality legal education.” Id. ¶110. However, this is precisely
because most states—although not Tennessee—require graduation from an ABA-accredited law
school as a prerequisite to sitting for the bar exam, and because the federal government
conditions certain funding on accreditation. Id. ¶111. Any such stigma, therefore, cannot

7

In fact, Duncan’s graduates may sit for the Tennessee bar based on TBLE’s approval. Doc. 269 at 38.

22

provide the basis for a claim of antitrust injury because it, too, is the result of state action. See
MSL, 107 F.3d at 1038.
B.

The Antitrust Claims Should Be Dismissed Because The School Has Not
Adequately Alleged An Unreasonable Restraint Of Trade, Conspiracy, Or
Improper Monopolization.

The School’s antitrust claims also should be dismissed because the School has failed to
allege any basis for a determination that the denial of accreditation was an unreasonable restraint
of trade under the “rule of reason” analysis, or that it was the result of conspiracy or of improper
monopolization.
Because “accreditation serves an important public purpose and can enhance
competition,” any alleged restraint of trade arising from accreditation activities is subject to a
“rule of reason” analysis. Foundation for Interior Design, 244 F.3d at 530; see also MSL, 107
F.3d at 1033 (same); Lie v. St. Joseph Hosp. of Mount Clemens, Mich., 964 F.2d 567, 570 (6th
Cir. 1992) (“Far from having a direct anticompetitive effect . . . the peer review process, has a
public purpose—policing the competence and conduct of doctors—and can enhance
competition.”) (internal quotation marks and citation omitted).
The rule of reason analysis “requires the court to analyze the actual effect on competition
in a relevant market to determine whether the conduct unreasonably restrains trade.” Total
Benefits Planning Agency, Inc. v. Anthem Blue Cross and Blue Shield, 552 F.3d 430, 436 (6th
Cir. 2008). To meet this standard, the Complaint must at the very least define the relevant
market, describe the net economic effect of the alleged violations on competition within the
identified market, and identify less-restrictive alternatives that would accomplish the same
legitimate accreditation objectives. See Nat’l Hockey League Players’ Ass’n v. Plymouth
Whalers Hockey Club, 419 F.3d 462, 469 (6th Cir. 2005); see also Nat’l Hockey League Players’
Ass’n v. Plymouth Whalers Hockey Club, 325 F.3d 712, 719-20 (6th Cir. 2003) (failure to

23

identify relevant market is proper ground for dismissing Sherman Act claim). The allegations of
the School’s antitrust claims clearly do not meet the rule of reason test. Nor can Duncan avoid
the requirements of the rule of reason analysis by alleging a “group boycott.” See, e.g., MSL,
107 F.3d at 1040-41; Zaveletta, 721 F. Supp. at 98.
As to its allegation of conspiracy, Duncan does not identify the alleged “Competitor Law
Schools” that participated in the alleged conspiracy, when it was formed, or the content of the
alleged agreement except to assert that its purpose was to deny accreditation to Duncan.
“‘[C]onclusory allegations of agreement at some unidentified point do not supply facts adequate
to show illegality.’” Total Benefits, 552 F.3d at 436 (quoting Twombly, 550 U.S. at 557). The
Complaint thus does not offer “enough factual matter (taken as true) to suggest that an agreement
was made.” Twombly, 550 U.S. at 566; see also, Travel Agent Com’n Antitrust Litig., 583 F.3d
at 902-03 (“In the wake of Twombly, . . . [such] bare assertions of conspiracy no longer supply an
adequate foundation to support a plausible § 1 claim.”).
As to the Section 2 monopolization claim, the School’s assertion that the ABA “enjoys
monopoly power in accrediting law schools” (Compl. ¶123) cannot support an antitrust claim:
“[M]onopoly power will not be found unlawful unless it is accompanied by an element of
anticompetitive conduct.” Verizon Comm’ns Inc. v. Law Offices of Curtis V. Trinko, 540 U.S.
398, 407 (2004). The Council’s position as an accreditation body, however, is a consequence of
state action by the Department of Education, and it is therefore immune from antitrust suit based
on any alleged monopoly power. See CBC Cos., 561 F.3d at 573 (“No cognizable antitrust
injury exists where the alleged injury is a byproduct of the regulatory scheme or federal law
rather than of the defendant’s business practices.”) (internal quotation marks and citation
omitted).

24

In sum, Duncan has failed to “state a claim to relief that is plausible on its face,” Courie,
577 F.3d at 629, as to its alleged antitrust claims. Counts III and IV should be dismissed.
III.

DUNCAN’S FINAL CLAIM (COUNT V) ARTICULATES NO SEPARATE
CLAIM FOR RELIEF AND SHOULD BE DISMISSED.
The School’s final claim, set out in Count V of the Complaint, does not articulate any

separate claim for relief recognized under federal or Tennessee law. See Compl. ¶126. In Count
V, therefore, the School has also failed to “state a claim to relief that is plausible on its face,”
Courie, 577 F.3d at 629, and accordingly this Count also should be dismissed.
CONCLUSION
For the foregoing reasons, Duncan’s Complaint should be dismissed in its entirety with
prejudice.
Dated: February 8, 2012
Patricia J. Larson*
Stephanie Giggetts*
American Bar Association
321 N. Clark Street
Chicago, IL 60654
[phone]

Respectfully submitted,
By: s/ Howard H. Vogel
.
Howard H. Vogel (001015)
Jeffrey R. Thompson (20310)
P. Alexander Vogel (023944)
O’Neil, Parker & Williamson, PLLC
7610 Gleason Drive, Suite 200
Knoxville, TN 37919
[phone]
Anne E. Rea*
Michael P. Doss*
Linda R. Friedlieb*
Sidley Austin LLP
One South Dearborn Street
Chicago, IL 60603
[phone]
Attorneys for Defendant

*Pro hac vice

CERTIFICATE OF SERVICE
I certify that on February 8, 2012, I properly served all parties by operation of the Court’s
electronic filing system to all parties indicated on the electronic filing receipt and U.S. Mail.
By:

25

s/ Howard H. Vogel (0001015)