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Security University v. Acosta

United States District Court, District of Columbia

July 10, 2018

SECURITY UNIVERSITY, Plaintiff,
v.
R. ALEXANDER ACOSTA et al., Defendants.

          MEMORANDUM OPINION

          TREVOR N. McFADDEN UNITED STATES DISTRICT JUDGE

         The resolution of this case depends on the meaning of the word “is.” The Plaintiff, Security University (the “University”), which trains information technology and cybersecurity professionals, obtained a grant from the Department of Labor. The Defendants, officials for the Department of Labor and the Department itself (collectively, “DOL”), terminated the grant after the University lost its accreditation. The DOL asserted that to be eligible for the grant, the University must be an institution of higher education that “is accredited” throughout the term of the grant. Because the University lost its accreditation halfway through the grant period, the DOL concluded that the University was no longer eligible and that the grant should be terminated. The University challenges the DOL's position as arbitrary and capricious, arguing that the University only needed to be accredited at the time of the grant award. The University further challenges as arbitrary and capricious the deadline imposed by the DOL for the University to regain accreditation. The parties' cross-motions for summary judgment are now ripe for adjudication. Upon consideration of the pleadings, relevant law, related legal memoranda in opposition and in support, and the entire record, the Court finds that the relevant statutes required the University to maintain its accreditation throughout the term of the grant and that neither the DOL's decision to terminate the grant nor its deadline for the University to regain accreditation were arbitrary and capricious. Accordingly, the Plaintiff's motion will be denied and the Defendants' cross-motion for summary judgement will be granted.

         I.

         In early 2013, the DOL published notice of a coming award of funds under the Trade Adjustment Assistance Community College and Career Training grant program. J.A. at 1, ECF No. 28-1.[1] The statute authorizing the grant program, 19 U.S.C. § 2371, allows the DOL to award a grant to an “eligible institution, ” meaning “an institution of higher education (as defined in section 1002 of Title 20).” 19 U.S.C. §§ 2371(a)(1), (b)(1). As defined, an “institution of higher education” is an institution which “is accredited by a nationally recognized accrediting agency or association.” 20 U.S.C. § 1002(a)(1) (cross-referencing to 20 U.S.C. § 1001(a)(5)).

         Under this grant program, the DOL awarded the University a $2.75 million grant for a performance term between October 1, 2013, and September 30, 2017. J.A. at 11. The award notification specified that the University must “fully comply with the following regulations” including “29 C.F.R. Part 95.” Id. Under Part 95, the DOL has the authority to terminate a grant if “a recipient materially fails to comply with the terms and conditions of an award, whether stated in a Federal statute, regulation, assurance, application, or notice of award.” 29 C.F.R. § 95.62(a)(3); see also 29 C.F.R. § 95.61(a)(1).

         At the time the University received the grant, it was accredited by the Accrediting Council for Continuing Education and Training (the “Council”), a non-governmental organization. See Am. Compl. ¶ 17, ECF No. 31. On August 21, 2014, the Council revoked the University's accreditation for “twelve (12) findings of non-compliance.” J.A. at 36. The University internally appealed with the Council, which upheld the revocation on January 5, 2015. Id. The DOL subsequently sent an “Initial Determination” to the University by letter dated February 12, 2015. Id. at 43. The DOL's two findings and determinations were that (1) the University's accreditation was revoked by the Council and the University must “provide evidence that its accreditation has been reinstated” and (2) the University's certification to operate in Virginia was under review and may potentially be revoked. Id. at 46-47.

         The University responded that (1) the Council had revoked its accreditation but that appeal of this revocation was pending before the Department of Education and (2) the revocation of certification to operate in Virginia had been overturned at a hearing. Id. at 48-49. On May 20, 2015, the Department of Education denied the University's appeal, stating that it “does not have the authority to reverse, revise, or vacate accrediting decisions or to direct an accrediting agency's decision.” Id. at 66.

         On September 1, 2015, the DOL suspended the University's grant through a “Final Determination” letter. Id. at 69. Although the lack of certification to operate in Virginia had been resolved, id. at 74-76, the lack of accreditation remained uncorrected. Id. at 72-74. The DOL, therefore, suspended the University's grant effective September 16, 2015. Id. at 69. Instead of immediately terminating the grant, however, the DOL set a deadline of January 1, 2016 for the University to regain accreditation and warned that if the University still lacked accreditation after that date, the grant would be terminated. Id. at 74.

         In November 2015, the Middles States Association of Colleges and Schools Commission on Elementary and Secondary Schools (“MSA”) accepted the University as a candidate for accreditation. Id. at 77. On December 15, 2015, as the January 1, 2016 deadline drew near, MSA informed the DOL that the University was “on track for an early 2016 school visit.” Id. at 80. If all went well with the visit, MSA intended to make the University's accreditation retroactive to December 1, 2015. Id.

         On February 8, 2016, the DOL sent a termination notice to the University stating that “as of January 1, 2016, it is our finding that Security University remains unaccredited.” Id. at 81. The DOL addressed the pending accreditation from MSA: “The possibility of retroactive accreditation, which has not even been yet approved or finalized, is not relevant to our determination. Security University remained unaccredited as of January 1, 2016.” Id. The University quickly sought reconsideration of this decision. Id. at 83-85. While the reconsideration was pending, the University received an “Official Notice of Accreditation” from MSA beginning retroactively on December 1, 2015. Id. at 86. On March 1, 2016, the DOL denied the University's request for reconsideration, emphasizing again that “regardless of the retroactive accreditation, ” the fact remained that on January 1, 2016, the University was unaccredited and “not in compliance with the grant requirements.” Id. at 89.

         II.

         The Administrative Procedure Act (“APA”) authorizes courts to review agency decisions. 5 U.S.C. § 702. A court's review is limited to the administrative record, and the court must determine if that record supports the agency's decision. Coe v. McHugh, 968 F.Supp.2d 237, 239 (D.D.C. 2013). The court will grant summary judgment to the agency if the agency action is “supported by the administrative record and otherwise consistent with the APA standard of review.” Id. at 240. On the other hand, if the agency decision is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, ” the court will grant summary judgment to the plaintiff. See 5 U.S.C. § 706. In resolving this question, the court asks whether “the agency acted within the scope of its legal authority, whether the agency has explained its decision, whether the facts on which the agency purports to have relied have some basis in the record, and whether the agency considered the relevant factors.” Fulbright v. McHugh, 67 F.Supp.3d 81, 89 (D.D.C. 2014), aff'd sub nom. Fulbright v. Murphy, 650 Fed.Appx. 3 (D.C. Cir. 2016).

         III.

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