University of Idaho President Scott Green has been a driving force behind plans to amass the net University of Phoenix.
University of Idaho
The University of Idaho’s plans to amass the net University of Phoenix for $685 million hit one other speed bump: the state Supreme Court overturned a lower court’s support for the plan.
The university was on target to issue debt to assist fund the acquisition before the Legislature balked and Idaho Attorney General Raul Labrador filed a lawsuit difficult the sale for violating the open meetings law.
The 45-page high court ruling may or may not impact UI’s plans to amass the University of Phoenix, a for-profit online university serving roughly 85,000 students. The ruling returns the legal battle back to the district court’s jurisdiction.
Labrador claims the Idaho State Board of Education’s move to conduct meetings regarding the sale in executive session didn’t allow for robust public discussion before it voted to sign the contract with the University of Phoenix at its May 18, 2023, meeting.
The court overturned an Ada County District Court ruling from January, which said the state board’s closed-door discussions on the potential Phoenix purchase were allowed under Idaho law.
“The district court erred in several ways,” the Supreme Court wrote in a 4-1 ruling handed down Thursday.
UI and the University of Phoenix have until June to achieve an agreement under the present contract, however the delays give the University of Phoenix the choice of speaking with other potential buyers.
Labrador joined dissenters in attempting to derail the acquisition while Gov. Brad Little and the State Board of Education have worked to maneuver it forward.
The ruling represents a partial win for Labrador, who filed a lawsuit in June 2023, difficult closed-door meetings conducted by the State Board of Education in early talks concerning the purchase. It held three meetings from March-May 2023 to debate a possible Phoenix purchase, but the guts of the discussion was conducted behind closed doors in executive session.
The state board has defended holding those discussions in executive session by dusting off a state law that enables preliminary discussions for a purchase order to occur in executive session to be able to guard against alerting competing buyers.
While the high court concluded the open meetings law was not violated, it ruled in Labrador’s favor on other issues, before sending it back to the district court for further review.
“We’ve not concluded that the open meetings law was violated by the State Board,” wrote Justice Gregory Moeller, who authored the high court’s majority opinion.
The high court parted ways with the ruling by Ada County District Judge Jason Scott on several key points, nevertheless.
First, Labrador had argued the discussions weren’t, the truth is, preliminary, particularly by the May 15 meeting. The State Board and the UI said the negotiations were in flux in the times, and even hours, leading as much as the board’s May 18 vote to sign a contract to buy the net university.
Scott had ruled that every one negotiations resulting in a contract could possibly be considered preliminary, but within the high court ruling, Moeller’s majority opinion disputes this, saying the district judge’s ruling defies all preference for sunshine on government that’s at the guts of the open meetings law.
The district court’s reading of the problem “effectively cloaks all negotiations and actions taken prior to a final public vote in shadow,” Moeller wrote within the high court ruling.
Within the high court’s dissenting opinion, Justice Colleen Zahn opined that the court’s majority opinion would only create more confusion. “(It) leaves an agency to guess whether its negotiations are still preliminary, or whether or not they have developed to the purpose that they’re ‘final.'”
Labrador has also questioned whether there have been the truth is competing bidders that might justify conducting the discussions around the acquisition in closed session.
Favoring Labrador’s contention, the bulk opinion found: “This statute requires that a governing body actually be ‘in competition with’ other governing bodies, not simply consider that they’re or could be,” Moeller wrote.
UI declined to comment on the larger ramifications of the ruling and the way it would affect the sale or plans to issue bonds.
“We’re reviewing the ruling and can work with our Board of Regents on next steps,” said Jodi Walker, UI’s executive director of communications. “It stays pending litigation and we don’t comment on pending litigation.”
In a June 28 letter addressed to the university’s Vandal family that Walker shared with The Bond Buyer, UI President Scott Green explained the necessity for the acquisition, which he sees as countering declining enrollment being experienced by four-year universities nationally.
“Without delay, higher education is facing possibly probably the most difficult time in its history,” Green wrote. “Declining traditional enrollment together with decreasing financial support of legislatures across the nation is juxtaposed with increased needs of industries for trained employees and growing adult learner populations.”
He noted within the letter the UI Board of Regents unanimously approved on June 28 a “request to increase the Asset Purchase Agreement for the University of Phoenix transaction through June 10, 2025.”
He said there was no commitment to a closing at the moment and any amended transaction would go to the regents for consideration and approval in a public meeting. He added the university “stays committed to the affiliation” and the extension “allows us time to include feedback from legislators and other Idaho stakeholders into the transaction.”
June’s extension agreement protects UI’s interests, in response to Green’s letter.
For example, UI would receive $5 million for releasing the University of Phoenix from the exclusivity clause, allowing it to think about purchase offers from other universities; and if UP is acquired by one other university, UI would collect $15 million.