An Ada County judge has rejected an open meetings lawsuit against the State Board of Education — a potential breakthrough for the $685 million University of Phoenix purchase.
The State Board “reasonably believed” the University of Idaho was vying with other bidders for Phoenix, justifying its closed-door discussions, Ada County District Judge Jason Scott ruled late Tuesday afternoon.
Scott’s ruling clears one major obstacle blocking the U of I’s proposed Phoenix purchase — a complex and controversial deal university officials hope to close early this year. U of I officials have long said the purchase would provide the U of I with millions of dollars in revenues from Phoenix’s national operations, while downplaying the university’s financial risk, which could approach $10 million annually.
Meanwhile, Scott’s ruling also figures to reverberate in Republican Party circles. It represents a high-profile setback for Attorney General Raúl Labrador, who filed the lawsuit in June, and a victory for Gov. Brad Little and his appointed State Board members.
The case itself centered on an obscure section of state open meetings law.
Working in concert with a U of I lawyer, the State Board discussed the possible Phoenix purchase in closed executive sessions on March 22, April 25 and May 15 — before publicly supporting the deal in a May 18 public vote. The three closed meetings were based on a little-used clause that covers a competitive purchase that pits a state agency against public bidders in other states or nations.
As a result, the case focused on competition.
During a three-day trial before Scott last week, Labrador’s team argued that the State Board did not ask for specifics about competition — instead taking U of I President C. Scott Green’s word about the marketplace. And the market changed on April 24, Labrador’s team argued, when the University of Arkansas’ trustees voted to reject a Phoenix purchase.
The State Board’s legal team said competition was a recurring theme in the discussions, and board members were told Phoenix wanted to partner with a public buyer. They also argued that the board and Green had reason to believe Arkansas was still in the Phoenix sweepstakes.
In a 15-page ruling, Scott sided with the State Board and its in-house deputy attorney general, Jenifer Marcus.
“(They) all continued to believe that the University of Arkansas was, along with others, still in competition with the University of Idaho to acquire the University of Phoenix,” Scott wrote. “Under the circumstances, the court finds that this belief was reasonable.”
Scott moved fairly quickly on his ruling — an apparent response to the push to close a purchase. The trial before Scott concluded Thursday, and Labrador’s team and the State Board’s attorneys had a Monday deadline to file their final legal arguments. Scott’s ruling came late Tuesday afternoon, minutes before the close of business.
The court decision is not the final step in the Phoenix purchase — and for the U of I and Phoenix, a nonbinding deadline looms in four months. The U of I’s accreditors still must sign off on the deal. Plus, a U of I-connected nonprofit must finance the purchase.
If a deal is not closed on May 31, the U of I or Phoenix could walk away from the table.
The U of I, the State Board and Labrador’s office did not immediately respond to requests for comment Wednesday morning.
This story was written by Kevin Richert of Idaho Education News.