Judge may set trial in Labrador suit

BOISE — An Ada County district judge said if he doesn’t rule on all the issues in Attorney General Raúl Labrador’s open meetings lawsuit against the Idaho State Board of Education, it will go to trial.

Ada County Fourth District Judge Jason Scott heard arguments Thursday afternoon on whether he should rule in preliminary judgment on a number of items of dispute over the board of education’s meetings leading up to a decision for the University of Idaho to try to acquire the University of Phoenix.

Scott may enter a judgment on all or none of the claims against the state board; he said if any issues remain, they’ll be resolved in a trial. He didn’t provide an estimated timeline for his decision but said a trial, if needed, would be scheduled within two to three months of the decision.

Labrador’s office is questioning the legality under Idaho’s Open Meetings Law of three executive sessions that the board held in which the members discussed UI’s proposal to form a not-for-profit entity and use it to purchase the online higher education institution. In more recent filings, it’s also questioning the validity of the public meeting held May 18 in which the board voted to form the not-for-profit and pursue the purchase, because the office alleges that no physical agenda was posted, as is required by state law.

The executive sessions were held March 22, April 25 and May 15.

Attorney for the state board Trudy Fouser argued that the attorney general’s office is using its lengthy depositions and discovery process to bring up new allegations not included in the original complaint as a way to stall the purchase through litigation.

“This came out of a deposition where they are searching for facts that will keep this open meetings case alive,” Fouser said.

The attorney general’s office, represented Thursday by attorney Greg Woodard, is claiming that it is simply required to enforce the Open Meetings Law.

“(The board) breached the public’s trust,” Woodard said.

The hearing revolved around whether the three executive sessions complied with one of the narrow exemptions in the Open Meetings Law, which allows for consideration of “preliminary negotiations involving matters of trade or commerce in which the governing body is in competition with governing bodies in other states or nations.”

In his original complaint, Labrador argued that the May 15 meeting couldn’t have been “preliminary” discussions, because the decision was made just three days later.

In new filings, the office is arguing that the March 22 meeting was too early to even be considered negotiations. Woodard said that board members in their depositions said they didn’t know anything about the deal prior to going into the session.

Fouser said that the office’s application of the law is “unworkable,” because members would have had to discuss in open meetings why the executive sessions were allowable under the law, which would make “the exception worthless.”

Labrador’s office is also questioning if the board actually faced any competition from other “governing bodies in other states or nations,” as required in the exemption. Woodard said that while the University of Phoenix and UI President Scott Green had told the board that there was competition, no one asked or received any information about who it was.

On April 24, the University of Arkansas Board of Regents rejected a proposal to purchase the online school, Higher Ed Dive reported. After this decision, the office argued, there was no other known competition.

“They just assume throughout the entire process there was competition based upon whatever ethereal knowledge they had,” Woodard said.

Fouser argued that, given the circumstances and the facts at the time, it was reasonable for board members to assume there was competition for the purchase.

She quoted a declaration from board President Linda Clark, who said, “If you know education today, everybody is scrambling to try and get something like this,” regarding the purchase of an online university.

Fouser said the board members had been told by Green and the University of Phoenix that other entities were interested, and the board’s Deputy Attorney General Jenifer Marcus had OK’d the executive sessions.

“Truly, when you look at the substance of it, everyone believed that this was a competitive situation and they were reasonable to believe that,” she said.

Woodard argued that the board members didn’t have a reasonable basis for their assumptions. He also argued that the best way to get to facts of the case would be live testimony in a trial instead of the depositions.

The purchase of the University of Phoenix is still up in the air and subject to approval from both schools’ accreditors. If it goes through, the net purchase price to UI would be $350 million, university officials have said.

State Board of Education attorney Eric Stokes told the judge it’s unclear where the negotiations stand, but that the ongoing litigation “casts a cloud” by causing the seller to have some uncertainty over the deal.

Scott said Thursday he’d take the motions under advisement and said in “hindsight,” he would have set a trial right away.

He added that “if any portion of the case survives the motions for summary judgment, that is what I intend to do.”

Guido covers Idaho politics for the Lewiston Tribune, Moscow-Pullman Daily News and Idaho Press of Nampa. She may be contacted at lguido@idahopress.com and can be found on Twitter @EyeOnBoiseGuido.