Idaho Supreme Court to hear case involving University of Phoenix purchase

The Idaho Supreme Court has agreed to hear an appeal of a case brought by Idaho Attorney General Raul Labrador, who earlier this year lost a lawsuit challenging the University of Idaho’s pending purchase of the University of Phoenix.

The state’s high court has agreed to hear arguments in June in a suit in which Labrador argued that the Idaho Board of Education violated the state’s Open Meetings Law when it conducted secret meetings to discuss the potential $685 million deal to purchase the for-profit, mostly online university.

While the lawsuit has certain impacts, perhaps its greatest potential repercussion is timing.

UI officials have said they face a nonbinding May 31 deadline. If the deal isn’t closed by then, Idaho or Phoenix officials can walk away from the proposal.

“From the beginning, the State Board of Education has tried to push this deal through on compressed timelines and claimed exigencies. That treatment has denied the public transparency, insulated the Board from accountability, and resulted in poor decision making,” according to a Monday statement from Labrador’s office.

The Board of Education, through its spokesman Mike Keckler, acknowledged the timing problems posed by the legal case.

“The timeline for oral arguments is not what we had hoped for, but this remains a very fluid situation and we will continue to work toward resolution,” Keckler said.

In a legal statement filed Feb. 20, UI general counsel Kent Nelson urged the state’s high court to quickly make a decision about Labrador’s appeal. Nelson noted that the nonprofit formed to purchase the online school cannot begin selling bonds if a lawsuit remains under appeal.

The sale must begin by May 1 in order to meet deadlines.

“Significant efforts by university employees and agents will have been lost if the appeal process is not completed in time for the transaction to proceed,” Nelson wrote.

Even those deadlines remain murky following testimony in Boise by Idaho President C. Scott Green, who told lawmakers that the state board has time. Labrador’s office mentioned those comments in its Monday statement.

“But last week before the legislative committee, President Green finally admitted that the deadline on consummating the deal was not so fixed, contradicting his own lawyer’s statements to the Court,” the statement reads. “We are pleased that the Supreme Court rejected the Board’s attempt to rush this deal through the appellate process.”

In the original lawsuit, Fourth District Judge Jason Scott ruled that the state board did not violate the state’s Open Meetings Law when they conducted three secret meetings last year to discuss the potential purchase of the University of Phoenix.

“This case doesn’t involve examining the proposed acquisition’s wisdom or merits,” Scott wrote in his decision. “The Court’s only call is to determine whether Attorney General Labrador proved his theory that the Board of Regents violated Idaho’s Open Meetings Law. For the reasons that follow, the Court determines that he did not.”

While that appeal proceeds, the Idaho Legislature’s House State Affairs Committee unanimously passed a resolution urging the Board of Education to “reconsider” its support of the Phoenix purchase. The resolution also opened the door to a lawsuit, which would further jeopardize the deal.

Tom Clouse can be reached at (509) 459-5495 or at tomc@spokesman.com.