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U.S. v. AMERICAN BAR ASSOCIATION

February 6, 2001

UNITED STATES OF AMERICA, PLAINTIFF,
v.
AMERICAN BAR ASSOCIATION, DEFENDANT.



The opinion of the court was delivered by: Royce C. Lamberth, United States District Judge

MEMORANDUM AND ORDER

Now before the Court are two motions to modify the Final Judgment entered in this case on June 25, 1996. Both parties, the United States and the American Bar Association, agree on the modification. Finding that the modification is in the public interest, the Court GRANTS the plaintiff's and the defendant's motions.

BACKGROUND

In 1995, the Antitrust Division of the United States Department of Justice filed a civil suit in this Court against the American Bar Association ("ABA"). The complaint alleged that the ABA had restrained competition by fixing compensation levels of professional personnel at ABA-approved schools and by acting in ways to limit competition from non-ABA-approved schools. The Final Judgment*fn1 in the case enjoined the ABA from engaging in certain anticompetitive practices and promulgated new procedures which the ABA must follow in its accreditation process. One of these procedures dealt with the ABA's final accreditation decisions.
Prior to the Final Judgment, accreditation decisions at the ABA were made by a Council which was composed of, inter alia, an Accreditation Committee and a Standards Review Committee. The Accreditation Committee would evaluate individual applications and make recommendations regarding whether or not to accredit a particular school. The Standards Review Committee reviewed current accreditation standards and proposed new standards, as well as interpretations of those standards. While new standards were forwarded to the ABA House of Delegates for final approval, interpretations of those standards were not similarly treated.

The Antitrust Division regarded the House of Delegates lack of supervision over standard interpretations as problematic. According to the government's findings, the members of the Standards Review Committee had a direct economic interest in the outcome of their interpretations. The 1996 Final Judgment attempted to correct this by ordering that interpretations of standards made by the Standards Review Committee be reviewed by the ABA's full House of Delegates. This new arrangement appeared successful until the following year.

In 1997, the ABA applied to the Department of Education ("DOEd") for a renewal of its status as a nationally-recognized accrediting agency. The DOEd evaluated the ABA's accreditation procedures, particularly in light of 20 U.S.C. § 1099(a)(3), (b) and 34 C.F.R. § 602.14(a), (b). These laws require a trade association wishing to retain its status as an accrediting agency to follow, inter alia, three standards in administering its accreditation program. First, the trade association may not make its own accreditation decisions, but rather must see to it that they are made by a "separate and independent" body. Second, the members of the accrediting body may not be selected by the trade association's president or board of directors. Third, 1/7 of the accrediting body's members must come from the general public, not the trade association's membership.

The DOEd, after concluding its evaluation of the ABA's accreditation program in February 2000, determined that the practice of having the ABA's full House of Delegates approve the accreditation decision violated the above accreditation rules. With an interest in complying with applicable laws, but also retaining some independent oversight of the accreditation process, the Antitrust Division and the ABA sought advice from the DOEd on how to restructure the ABA's accreditation process.

Based on the DOEd's suggestions, the Antitrust Division and the ABA devised a process whereby final accreditation-related decisions would be made according to a review and remand process. Under the new process, the ABA House of Delegates would review accreditation-related decisions made by the Council, and, if found to be questionable, remand the decision to the Council for further consideration. The House of Delegates may remand a Council decision twice, but must accept it the third time it is submitted for review.*fn2 Under no circumstances may the House reverse a Council decision on accreditation. The DOEd has indicated that these new procedures will not violate any applicable laws.
These new procedures, upon which the government and the ABA are in full agreement, are what the government proposes as modifications to the 1996 Final Judgment. The Court now considers whether these modifications are permissible.

ANALYSIS

I. Standard of Review

When, as here, all parties to a final judgment assent to its modification, a court is "bound to accept any modification that the [Antitrust Division] . . . reasonably regard[s] as advancing the public interest." United States v. Western Elec. Co., 993 F.2d 1572, 1576 (D.C. Cir. 1993). It should be stressed that the court's function is not to undertake its own evaluation of what is in the public interest, but rather just to ensure that the proposed modification is within the "zone of settlements consonant with the public interest." United States v. Western Elec. Co, 900 F.2d 283, 309 (D.C. Cir. 1990) (emphasis in original). See also Western Elec., 993 F.2d at 1576. Put more fully, "the court's function is not to determine whether the resulting array of rights and liabilities is the one that will best serve society, but ...

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