Professional Massage Training Center, Inc. v. Accreditation Alliance of Career Schools & Colleges

PUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 14-1086

PROFESSIONAL MASSAGE TRAINING CENTER, INCORPORATED, a
Missouri Corporation,

Plaintiff - Appellee,

v.

ACCREDITATION ALLIANCE OF CAREER SCHOOLS AND COLLEGES, d/b/a
Accrediting Commission of Career Schools and Colleges, a
Virginia Corporation,

Defendant - Appellant.

------------------------

ACCREDITATION REVIEW COMMISSION ON EDUCATION FOR THE
PHYSICIAN ASSISTANT; ACCREDITATION COMMISSION FOR
ACUPUNCTURE AND ORIENTAL MEDICINE; ACCREDITATION COUNCIL FOR
PHARMACY EDUCATION; ACCREDITING BUREAU OF HEALTH EDUCATION
SCHOOLS, INCORPORATED; ACCREDITING COMMISSION FOR COMMUNITY
AND JUNIOR COLLEGES, WESTERN ASSOCIATION OF SCHOOLS AND
COLLEGES; ACCREDITING COUNCIL FOR CONTINUING EDUCATION &
TRAINING; ACCREDITING COUNCIL FOR INDEPENDENT SCHOOLS AND
COLLEGES; AMERICAN COUNCIL ON EDUCATION; ASSOCIATION OF
SPECIALIZED AND PROFESSIONAL ACCREDITORS; ASSOCIATION OF
TECHNOLOGY, MANAGEMENT, AND APPLIED ENGINEERING; COMMISSION
ON INSTITUTIONS OF HIGHER EDUCATION OF THE NEW ENGLAND
ASSOCIATION OF SCHOOLS AND COLLEGES; COUNCIL FOR
ACCREDITATION OF COUNSELING AND RELATED EDUCATIONAL
PROGRAMS; COUNCIL FOR HIGHER EDUCATION ACCREDITATION;
COUNCIL FOR PODIATRIC MEDICATION EDUCATION; COUNCIL ON
EDUCATION FOR PUBLIC HEALTH; COUNCIL ON OCCUPATIONAL
EDUCATION; DISTANCE EDUCATION AND TRAINING COUNCIL; MIDDLE
STATES COMMISSION ON HIGHER EDUCATION, THE; NATIONAL
ARCHITECTURAL ACCREDITING BOARD; SOUTHERN ASSOCIATION OF
COLLEGES AND SCHOOLS COMMISSION ON COLLEGES; WESTERN
ASSOCIATION OF SCHOOLS AND COLLEGES SENIOR COLLEGE
COMMISSION; HIGHER LEARNING COMMISSION,

Amici Supporting Appellant,

AMERICAN COUNCIL OF TRUSTEES AND ALUMNI; THE JOHN WILLIAM
POPE CENTER FOR HIGHER EDUCATION POLICY; JUDICIAL EDUCATION
PROJECT,

Amici Supporting Appellee.

No. 14-1136

PROFESSIONAL MASSAGE TRAINING CENTER, INCORPORATED, a
Missouri Corporation,

Plaintiff - Appellant,

v.

ACCREDITATION ALLIANCE OF CAREER SCHOOLS AND COLLEGES, d/b/a
Accrediting Commission of Career Schools and Colleges, a
Virginia Corporation,

Defendant - Appellee.

------------------------

ASSOCIATION OF SPECIALIZED AND PROFESSIONAL ACCREDITORS;
ACCREDITING BUREAU OF HEALTH EDUCATION SCHOOLS,
INCORPORATED; ACCREDITING COUNCIL FOR CONTINUING EDUCATION &
TRAINING; ACCREDITING COUNCIL FOR INDEPENDENT SCHOOLS AND
COLLEGES; COUNCIL ON OCCUPATIONAL EDUCATION; DISTANCE
EDUCATION AND TRAINING COUNCIL; COUNCIL FOR HIGHER EDUCATION
ACCREDITATION; ACCREDITING COMMISSION FOR COMMUNITY AND
JUNIOR COLLEGES, WESTERN ASSOCIATION OF SCHOOLS AND
COLLEGES; ACCREDITATION COUNCIL FOR PHARMACY EDUCATION;
ASSOCIATION OF TECHNOLOGY, MANAGEMENT, AND APPLIED
ENGINEERING; COUNCIL ON EDUCATION FOR PUBLIC HEALTH; COUNCIL
FOR PODIATRIC MEDICATION EDUCATION; MIDDLE STATES COMMISSION
ON HIGHER EDUCATION, THE; NATIONAL ARCHITECTURAL ACCREDITING
BOARD; COMMISSION ON INSTITUTIONS OF HIGHER EDUCATION OF THE
NEW ENGLAND ASSOCIATION OF SCHOOLS AND COLLEGES; SOUTHERN
ASSOCIATION OF COLLEGES AND SCHOOLS COMMISSION ON COLLEGES;

2
AMERICAN COUNCIL ON EDUCATION; ACCREDITATION REVIEW
COMMISSION ON EDUCATION FOR THE PHYSICIAN ASSISTANT; COUNCIL
FOR ACCREDITATION OF COUNSELING AND RELATED EDUCATIONAL
PROGRAMS; WESTERN ASSOCIATION OF SCHOOLS AND COLLEGES SENIOR
COLLEGE COMMISSION; ACCREDITATION COMMISSION FOR ACUPUNCTURE
AND ORIENTAL MEDICINE,

Amici Supporting Appellee,

AMERICAN COUNCIL OF TRUSTEES AND ALUMNI; THE JOHN WILLIAM
POPE CENTER FOR HIGHER EDUCATION POLICY; JUDICIAL EDUCATION
PROJECT,

Amici Supporting Appellant.

Appeals from the United States District Court for the Eastern
District of Virginia, at Alexandria. Liam O'Grady, District
Judge. (1:12-cv-00911-LO-IDD)

Argued: January 28, 2015 Decided: March 24, 2015

Before WILKINSON, AGEE, and HARRIS, Circuit Judges.

Affirmed in part, reversed in part, and remanded with
instructions by published opinion. Judge Wilkinson wrote the
opinion, in which Judge Agee and Judge Harris joined.

ARGUED: Craig C. Martin, Michael Anthony Scodro, JENNER & BLOCK,
LLP, Chicago, Illinois, for Appellant/Cross-Appellee. Matthew
Lorn Hoppock, DUNN & DAVISON LLC, Kansas City, Missouri, for
Appellee/Cross-Appellant. ON BRIEF: Sarah A. Palmer, JENNER &
BLOCK, LLP, Chicago, Illinois, for Appellant/Cross-Appellee.
Ronald L. Holt, Julie G. Gibson, DUNN & DAVISON LLC, Kansas
City, Missouri, for Appellee/Cross-Appellant. Mary E. Kohart,
Dean R. Phillips, Gregory S. Voshell, Michelle L. Modery,
ELLIOTT GREENLEAF & SIEDZIKOWSKI, P.C., Blue Bell, Pennsylvania;
Kenneth J. Ingram, Thomas Mugavero, WHITEFORD TAYLOR PRESTON,
LLP, Washington, D.C.; Ada Meloy, AMERICAN COUNCIL ON EDUCATION,
Washington, D.C., for Amici Accreditation Review Commission on
Education for the Physician Assistant, Accreditation Commission
for Acupuncture and Oriental Medicine, Accreditation Council for

3
Pharmacy Education, Accrediting Bureau of Health Education
Schools, Incorporated, Accrediting Commission for Community and
Junior Colleges-Western Association of Schools and Colleges,
Accrediting Council for Continuing Education & Training,
Accrediting Council for Independent Schools and Colleges,
American Council on Education, Association of Specialized and
Professional Accreditors, Association of Technology, Management,
and Applied Engineering, Commission on Institutions of Higher
Education of the New England Association of Schools and
Colleges, Council for Accreditation of Counseling and Related
Educational Programs, Council for Higher Education
Accreditation, Council for Podiatric Medication Education,
Council on Education for Public Health, Council on Occupational
Education, Distance Education and Training Council, Higher
Learning Commission, The Middle States Commission on Higher
Education, National Architectural Accrediting Board, Southern
Association of Colleges and Schools Commission on Colleges, and
Western Association of Schools and Colleges Senior College
Commission. Shannen W. Coffin, Jeffrey M. Theodore, STEPTOE &
JOHNSON LLP, Washington, D.C., for Amici American Council of
Trustees and Alumni, Judicial Education Project, and The John
William Pope Center for Higher Education Policy.

4
WILKINSON, Circuit Judge:

The Professional Massage Training Center (PMTC) brought

this suit against the Accreditation Alliance of Career Schools

and Colleges (ACCSC or the Commission) for violation of its due

process rights after ACCSC denied the school’s application for

re-accreditation in 2010. Following a four-day bench trial, the

district court awarded PMTC more than $400,000 in damages and

reinstated the school’s accreditation.

The proper standard of review of actions by private

accrediting agencies considers only whether the accreditation

decision was supported by substantial evidence or otherwise

arbitrary and capricious. What the district court conducted here

amounted to a de novo approach to the accreditation process that

resulted in a wholesale substitution of the judgment of the

court for that of the agency. Judged by the correct standard of

review, the accreditation decision here was well supported, not

arbitrary or capricious, and we thus reverse the judgment of the

district court in that regard. We affirm, however, its dismissal

of PMTC’s state law claims for breach of contract, negligence,

and tortious interference. We remand to the district court with

directions to enter judgment in favor of ACCSC on PMTC’s due

process claim and to dismiss the case.

5
 I.

ACCSC is a non-profit, non-stock corporation established in

Virginia that accredits private schools of higher education

offering career-oriented programs. It is recognized by the

Secretary of Education as an accrediting agency, see 20 U.S.C.

§ 1099b, and it accredits nearly 750 institutions nationwide.

Accreditation, among other things, entitles educational

institutions to access Title IV federal student aid funding. See

20 U.S.C. §§ 1070 et seq. PMTC is a single-discipline massage

therapy training school in Springfield, MO. It has been owned

and operated by Juliet Mee since 1994. ACCSC first accredited

the school in 2000 and renewed its accreditation in 2005. The

case at bar arose from PMTC’s application for renewal of

accreditation in 2010.

ACCSC has set Standards of Accreditation that define both

the process for schools to seek or renew accreditation as well

as the substantive criteria schools must meet to be accredited.

See J.A. 4729-4858. ACCSC’s accreditation process begins when a

school sends a full-time on-site management representative to an

informational accreditation workshop, id. at 4747, which PMTC

did in December of 2009, id. at 1448. The school then submits an

application and a self-evaluation report. Id. at 4747-48. The

application is followed by an on-site evaluation, led by a team

6
from ACCSC, which then provides to the school a Team Summary

Report.

The Team Summary Report is a factual report and summary of

the team’s compliance findings, and does not include any final

recommendation for the Commission’s action on accreditation. Id.

at 4752. A team from ACCSC visited PMTC on August 9-10, 2010.

The team was led by Michael Ackerman, the Director of ATI

Enterprises, which operates for-profit career schools. Id. at

1455. The team also included other education and massage therapy

professionals and ACCSC staffers Courtney Kiesel Moraites and

Lisa Miles. Moraites, supervised by Miles, wrote the subsequent

Team Summary Report issued on September 23, 2010. Id. The report

detailed a number of areas of concern, including problems with

management capability and retention of administrative staff,

failures in strategic planning, lack of ongoing faculty

assessment and professional development, failure to demonstrate

adequate student achievement and employment rates, failure to

comply with federal financial requirements, as well as

deficiencies in the learning resource system and processes for

verification of faculty credentials. See id. at 1460-64.

Pursuant to the ACCSC Standards, PMTC had 30 days to submit

additional material in response to the report. It did so

following a brief deadline extension, at which point the entire

record was reviewed by a preliminary school action panel of

7
three Commissioners, and then by the full Commission. See id. at

435-37. Within ACCSC, the Commission is composed of four public

Commissioners and nine private Commissioners. Id. at 4848.

Public Commissioners are those “[p]ersons with an interest and

expertise in employment, education and training” who are not

connected to an institution accredited by ACCSC. Id. Private, or

School, Commissioners are “[p]roprietors or bona fide

executives” of institutions accredited by ACCSC. Id. In December

2010, the Commission issued a Probation Order listing eleven

areas in which PMTC had failed to establish compliance, and gave

PMTC until March 2011 to respond and demonstrate improvements in

areas of concern. Id. at 1781-91. PMTC submitted a response

including documentation in March of 2011, seven days after the

March 8 deadline. Id. at 1792-1867.

In June 2011, the Commission notified PMTC that it had

vacated the Probation Order, “defer[ing] final action on the

school’s Application for Renewal of Accreditation until the

November 2011 meeting in order to provide PMTC with an

additional opportunity to demonstrate compliance.” Id. at 1868.

ACCSC conducted a second on-site visit to focus on PMTC’s

Institutional Assessment and Improvement Plan (IAIP),

specifically with regard to management issues, the learning

resource system, faculty qualification verification, and

financial stability. See id. at 1868-73.

8
 The second on-site team was led by Mollie Hager and ACCSC

staff member Lisa Miles. Id. at 1874. Miles wrote the Team

Summary Report, which identified five areas in which PMTC was

still failing to meet ACCSC Standards, specifically including

management, learning resources, and faculty qualification

verification. Id. at 1878-99. PMTC submitted a number of

documents in response, and notably provided Miles with two

binders full of documents as part of the on-site visit, which

Miles took to her home and did not share directly with the

Commission. In December 2011, following PMTC’s submission, the

Commission issued a second Probation Order instructing PMTC to

provide evidence of compliance with accrediting standards on

management continuity and capacity, institutional assessment and

improvement activities, the learning resource system, and

faculty qualifications and verification. Id. at 2156-67. PMTC

submitted its response in January 2012. Id. at 2169-2373.

In February 2012, a school action panel met and recommended

that ACCSC not renew PMTC’s accreditation. The panel expressed

concern with PMTC’s continued compliance failures, especially

relating to management turnover. Id. at 855, 858-60. The full

Commission voted 12-0 not to renew accreditation on the grounds

that PMTC had failed to demonstrate “continuity of management

and administrative capacity,” id. at 2377, had failed to bring

the learning resource system into compliance with accrediting

9
standards, and had failed to demonstrate compliance with

standards on faculty qualifications and verification, id. at

2374-84. On April 5, 2012, PMTC appealed the denial decision to

an independent ACCSC appeals panel, which affirmed the

Commission’s denial. Id. at 2574-92. The denial decision became

final on July 11, 2012 and the Department of Education began

withholding Title IV funds on July 27, 2012. Id. at 2574, 4030.

On August 16, 2012, PMTC filed a six-count complaint

against ACCSC in the Eastern District of Virginia, sounding in

common law due process, breach of contract, negligence and

tortious interference with various business and contractual

relations. The district court granted a preliminary injunction

requiring ACCSC to reinstate PMTC’s accreditation. In its

Amended Complaint, PMTC added allegations of bias by ACCSC’s

staff against PMTC.

After a four-day bench trial, the court entered judgment in

favor of PMTC, finding that ACCSC had violated the school’s due

process rights. It awarded the school $429,016.62 in damages,

and ordered ACCSC to fully reinstate its accreditation, but

dismissed the remaining state law claims. The court found that

ACCSC’s Standards were not clearly defined and did not provide

guidance and metrics for schools to ascertain how to meet the

Standards. In addition, it found the agency had violated PMTC’s

due process rights by denying accreditation in a manner that was

10
arbitrary and unreasonable. It reasoned that Juliet Mee, PMTC’s

owner and director, provided sufficient continuity of management

to meet ACCSC’s performance Standards and that bias had

impermissibly influenced the agency’s denial of accreditation.

ACCSC appealed the finding that PMTC was denied due process of

law and PMTC cross-appealed the dismissal of its state law

claims for breach of contract, negligence, and tortious

interference.

II.

ACCSC contends that the district court erred in not

according sufficient, if any, deference to the decision of the

accrediting agency. We agree that elementary principles of

administrative law call for significant, though not total,

deference to decisionmaking by accreditation agencies. See

Thomas M. Cooley Law Sch. V. Am. Bar Ass’n, 459 F.3d 705 (6th

Cir. 2006); Wilfred Acad. of Hair & Beauty Culture v. S. Ass’n

of Colls. & Schs., 957 F.2d 210 (5th Cir. 1992); see also Chi.

Sch. of Automatic Transmissions, Inc. v. Accreditation Alliance

of Career Schs. & Colls., 44 F.3d 447, 450 (7th Cir. 1994).

Unfortunately, the district court applied this deferential

standard in name only -- instead conducting what amounted to an

improper de novo approach to the accreditation process.

11
 A.

We begin the inquiry by considering the underlying claim at

issue: that ACCSC violated PMTC’s right to due process of law.

Accreditation agencies are private entities, not state actors,

and as such are not subject to the strictures of constitutional

due process requirements. See e.g., Med. Inst. of Minn. v. Nat’l

Ass’n of Trade & Technical Schs., 817 F.2d 1310, 1314 (8th Cir.

1987) (finding that accreditation agency was “not governed by

constitutional guidelines”); cf. Moore v. Williamsburg Reg’l

Hosp., 560 F.3d 166, 179 (4th Cir. 2009) (setting framework for

private entity’s actions to be considered state action).

Moreover, “nearly every court to consider the issue” in the

last three decades agrees that there is no express private right

of action available to enforce the Higher Education Act (“HEA”),

which governs the administration of federal student aid programs

and the accreditation of institutions of higher education.

McCulloch v. PNC Bank Inc., 298 F.3d 1217, 1221 (11th Cir. 2002)

(finding that the HEA “does not expressly confer a private right

of action,” but only provides for suit by or against the

Secretary of Education); see also Cooley, 459 F.3d at 710.

This is not to say however that accreditation agencies are

wholly free of judicial oversight. They, like all other

bureaucratic entities, can run off the rails. We thus recognize,

along with our sister circuits, that there exists a “common law

12
duty on the part of ‘quasi-public’ private professional

organizations or accreditation associations to employ fair

procedures when making decisions affecting their members.”

McKeesport Hosp. v. Accreditation Council for Graduate Med.

Educ., 24 F.3d 519, 534-35 (3d Cir. 1994); see also Cooley, 459

F.3d at 711-12; Wilfred, 957 F.2d at 214; Med. Inst. of Minn.,

817 F.2d at 1314 (finding that accreditation agencies

“nevertheless must conform [their] actions to fundamental

principles of fairness”); Marjorie Webster Jr. Coll., Inc. v.

Middle States Ass’n of Colls. & Secondary Schs., Inc., 432 F.2d

650, 655-58 (D.C. Cir. 1970).

Courts began to recognize this common law duty as early as

1938. See Found. for Interior Design Educ. Research v. Savannah

Coll. of Art & Design, 244 F.3d 521, 527 (6th Cir. 2001)

(quoting North Dakota v. N. Cen. Ass’n of Colls. & Secondary

Schs., 99 F.2d 697, 700 (7th Cir. 1938) (noting that courts will

not uphold accreditation decisions if “arrived at arbitrarily

and without sufficient evidence”)). The duty was meant to

operate as a “check on organizations that exercise significant

authority in areas of public concern such as accreditation and

professional licensing.” Cooley, 459 F.3d at 712.

The common law duty has several underpinnings. Congress,

in the Higher Education Act, delegated to accreditation agencies

a decisionmaking power that affects student access to federal

13
education funding. Accreditation, as noted, is a prerequisite to

Title IV funding and it provides assurance that the federal

loans and grants are awarded to students who will get the

education for which they are paying. By the same token, the

cost to an educational institution and its students of denial of

accreditation can be steep. An institution denied accreditation

is likely to “promptly [go] out of business -- as very few

people [are] willing [or able] to pay” tuition out of their own

pockets. Chi. Sch., 44 F.3d at 448. The denial of accreditation

to an institution may also diminish the value of a degree earned

there by students in past years. So the accreditors wield

enormous power over institutions -- life and death power, some

might say -- which argues against allowing such agencies free

rein to pursue personal agendas or go off on some ideological

toot. Their duty, put simply, is to play it straight.

The federal common law duty on accreditation agencies also

derives in part from the fact that Congress has given exclusive

jurisdiction to United States district courts over “any civil

action brought by an institution of higher education seeking

accreditation from, or accredited by, an accrediting

agency . . . involving the denial, withdrawal, or termination of

accreditation.” 20 U.S.C. § 1099b(f). We recognize that “the

vesting of jurisdiction in the federal courts does not in and of

itself give rise to authority to formulate federal common law.”

14
Tex. Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630,

640-41 (1981); see also United States v. Little Lake Misere Land

Co., 412 U.S. 580, 591 (1973). However, it is hard to imagine

that Congress intended federal courts to adjudicate only state

law claims at the same time it prohibited state courts from

participating. We are not alone in this supposition. See Cooley,

459 F.3d at 712 (“This grant of exclusive federal jurisdiction

necessarily implies that federal law should govern disputes

relating to decisions made by [accrediting agencies].” (citation

omitted)); Chi. Sch., 44 F.3d at 449 (“If a grant of federal

jurisdiction sometimes justifies creation of federal common law,

a grant of exclusive federal jurisdiction necessarily implies

the application of federal law.”).

However, recognition that such a common law duty exists

does not authorize courts to undertake a wide-ranging review of

decisionmaking by accreditation agencies. The other circuits

that have recognized this common law claim have consistently

limited the judicial inquiry, drawing on principles of

administrative law and judicial deference. See Cooley, 459 F.3d

at 712; Chi. Sch., 44 F.3d at 449-50; Wilfred, 957 F.2d at 214;

Med. Inst. of Minn., 817 F.2d at 1314-15. Of course, we do not

go so far as to say the ACCSC is equivalent to a federal agency.

See Cooley, 459 F.3d at 712. But, “while the [APA] does not

specifically apply to [the accrediting agency], principles of

15
administrative law are useful in determining the standard by

which we review the [agency’s] decision-making process.” Id.;

see also Chi. Sch., 44 F.3d at 450. Furthermore, while the

amendments to the HEA in 2008 and 2010 made changes to the

accreditation process, by strengthening, inter alia, the level

of independent agency review, nothing in those amendments

purported to alter the level of judicial scrutiny established by

the above decisions. See Higher Education Opportunity Act, Pub.

L. No. 110-315, 122 Stat. 3078 (2008)(codified as amended 20

U.S.C. § 1099b(a)(6)(2008)).

The most familiar standard of review is one in which the

court is authorized to consider “only whether the decision of an

accrediting agency such as [ACCSC] is arbitrary and unreasonable

or an abuse of discretion and whether the decision is based on

substantial evidence.” Cooley, 459 F.3d at 712. Under this

standard, courts are “not free to conduct a de novo review or to

substitute their judgment for the professional judgment of the

educators involved in the accreditation process.” Wilfred, 957

F.2d at 214.

B.

We adopt the above standard, in part, because there is

value to be gained in the uniformity of standards of review

throughout the circuits. However, while we think our sister

circuits correct, we do not embrace uniformity for uniformity’s

16
sake. The quasi-public nature of the accrediting institutions

and their wide-ranging expertise in what may be highly technical

and specialized fields of education also provide justification

for a deferential standard.

Although accreditation agencies do serve an important

quasi-public role in the dispersal of federal student aid

funding, they are also private entities. The U.S. Department of

Education does not itself accredit educational institutions,

instead relying on a number of select nationally recognized

accrediting agencies that the Secretary of Education deems to be

“reliable authorit[ies] regarding the quality of the education

or training provided by” schools. 34 C.F.R. § 602.16(a).

Accrediting agencies must go through a certification process set

up by the Department. The procedures and standards of

accreditation set by the agency must “meet[] criteria

established by the Secretary” in order to ensure they are a

“reliable authority.” 20 U.S.C. § 1099b(a).

In totality, the accreditation process operates as an

instrument of quality control on educational institutions. While

the visit of the accreditor may be as unwelcome as that of the

auditor, accreditation does encourage institutional self-

examination and the attainment of high standards. It also gives

the public some assurance that professionals have received the

17
training commensurate with their responsibilities in the

workplace.

As with federal administrative agencies, the accreditation

agency’s expertise and knowledge merits a measure of deference

from generalist federal courts. See, e.g., Chevron U. S. A.,

Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984).

ACCSC provides a representative example; staff members,

Commissioners, and volunteers have significant knowledge not

just about the accreditation process and education generally but

also in the specialized fields under review. The Commission

itself is comprised of proprietors and executives of career-

oriented institutions of higher education as well as individuals

with expertise in education, training, and employment.

The agency’s executive staff have experience with the

accreditation process as well as with higher education,

including but not limited to “curriculum development, faculty

and academic administration, and distance learning,” “regulatory

issues . . . including changes to, and interpretations of,

federal regulations that pertain to accrediting agency

recognition,” and “nonprofit management experience.” J.A. 3019-

21. ACCSC also relies on occupational specialists with training

and involvement in the field of study for each school as part of

the on-site visits. Here, for example, the 2010 on-site

evaluation team included the director of for-profit career

18
training schools, an associate professor from the University of

North Texas, a massage therapist and esthetician, a

representative from the Missouri Department of Higher Education,

and representatives from ACCSC staff with expertise in the

accreditation process and compliance with ACCSC Standards. In

the accreditation process, these experts perform important fact-

finding missions akin to investigative undertakings at federal

agencies. They review self-evaluations from applicants, conduct

on-site visits, and work with institutions to improve areas of

weakness in order to meet accreditation standards.

Although judicial oversight of the accreditation process

surely has its place, it is not realistic to think courts

possess either the expertise or the resources to perform the

accreditation function ab initio. The range of specialized

subjects taught at all levels of higher education is vast, and

the prospect that courts can replicate the required knowledge on

the bench is dim. We thus do not presume to be equipped to

“substitute [our own] judgment for the professional judgment of

the educators involved in the accreditation process.” Wilfred,

957 F.2d at 214. As the Fifth Circuit noted, the “standards of

accreditation are not guides for the layman but for

professionals in the field of education.” Id. (quoting Parsons

Coll. v. N. Cent. Ass’n of Colls. & Secondary Schs., 271 F.

Supp. 65, 73 (N.D. Ill. 1967)). In fact, due process claims

19
dovetail nicely with administrative law concepts of substantial

evidence and arbitrary and capricious review because the

prominent point of emphasis of due process is one of procedure.

When adjudicating common law due process claims against

accreditation agencies, courts should “focus primarily on

whether the accrediting body’s internal rules provide[d] a fair

and impartial procedure and whether it [followed] its rules in

reaching its decision.” Id.

III.

The district court’s review here did not adhere to the

appropriate standard in a number of regards. The court greatly

expanded the administrative record, held a full multi-day bench

trial, received depositions and live testimony in a way that

sought to make itself the primary investigator and finder of

fact, and went far beyond the focus on procedural fairness to

refashion the accreditation decision on the merits. To that end,

the district court was remedially aggressive not only in its

awarding of a large amount of damages, but also in ordering that

the institution in question be reaccredited, thereby overturning

the judgment and expertise of an agency that in this case rested

on a sound and supportable basis. All in all, and without

question, the district court conducted an impermissible de novo

review.

20
 A.

Judged by the appropriate standards, the accreditation

denial was in fact a permissible one. Indeed, we hold that the

agency did not act in an arbitrary and capricious manner but

rather “conform[ed] its actions to fundamental principles of

fairness” through both the procedural and substantive standards

it employed in making the accreditation decision. Med. Inst. of

Minn., 817 F.2d at 1314.

ACCSC provided PMTC with significant procedural

opportunities to make its case over the course of almost two

years prior to the revocation of accreditation. Following the

first on-site visit in 2010, the Commission issued a Probation

Order even though it was not required prior to denial. J.A.

4781. It then conducted a second on-site evaluation to give PMTC

an additional opportunity to demonstrate that the school was

meeting the Commission’s metrics for accreditation. Following

that visit, the Commission issued a second Probation Order. PMTC

was given the opportunity to, and did, respond in writing to

each of the reports detailing the school’s deficiencies

following both on-site visits and both Probation Orders. The

school submitted hundreds of pages of documentation for the

agency to consider. ACCSC also repeatedly granted the school’s

requests for additional time to submit its responses. The

decision to revoke PMTC’s accreditation was unanimous and the

21
rationale was provided to PMTC. Subsequent to the revocation,

Mee, accompanied by an attorney, filed a written appeal and

appeared before an independent appeals panel, which affirmed the

denial.

In addition to providing numerous procedural safeguards,

ACCSC measured PMTC’s performance against discernible

substantive standards embodied in the Standards of

Accreditation. Most importantly in this case, ACCSC’s Standards

of Accreditation require that accredited schools “have adequate

management and administrative capacity in place” that includes:

a. Full-time on-site supervision by an individual or
team with the appropriate combination of education,
experience, and demonstrated ability to lead and
manage a post-secondary educational institution;
b. Owners, members of school management, and
administrative employees who are qualified for their
particular roles and who possess the appropriate
education, training, and experience commensurate with
the level of their responsibilities;
c. A sufficient number of managers and administrative
employees necessary to support the school’s
operations, student services, and educational
programs; and
d. Appropriate administrative and operational
policies and procedures to which the school adheres
and reviews and updates as needed.

J.A. 4799 (ACCSC Standards Ch. 2 § I(A)(1)(a)-(d)). In addition,

the Standards require that the school ensure “the continuity of

management and administrative capacity” through “the reasonable

retention of management and administrative staff.” Id. (ACCSC

Standards Ch. 2 § I(A)(4)).

22
 Also at issue here, the Standards necessitate that to be

accredited a school must provide a learning resource system that

“include[s] material commensurate with the level of education

provided and appropriate to the courses of study in sufficient

quantity and scope to meet the educational objectives of each

program.” Id. at 4805 (ACCSC Standards Ch. 2 § II(A)(6)(a)).

More specifically, such resources “must be integrated into a

school’s curriculum and program requirements” and “must be

managed by qualified school personnel with sufficient experience

to provide oversight and supervision.” Id. (ACCSC Standards Ch.

2 § II(A)(6)(b), (c)). In addition, the Standards outline

faculty and administrator qualifications and require that “[t]he

school must verify prior work experience and maintain

documentation of academic credentials of all faculty members and

administrators . . . to demonstrate compliance with applicable

[qualification] Standards.” Id. at 4814 (ACCSC Standards Ch. 2

§ III(A)(4)).

Furthermore, the Commission outlines additional Standards

in strategic planning, financial stability and responsibility,

tuition, admissions and recruiting policies, degree program

qualifications, student achievement metrics, student loan

repayment programs, and physical facilities, among others. See

id. at 4799-4834.

23
 The district court took issue with the generality of these

Standards, particularly the management requirements, finding

Chapter 2, Section I(A)(1)(c) to be “internally inconsistent,”

especially with regard to how a school can predict what

constitutes a “sufficient” number of management staff

“necessary” to support the school’s operations. Prof’l Massage

Training Ctr., Inc. v. Accreditation Alliance of Career Schs. &

Colls., No. 1-12-cv-911, 2014 WL 201879, at *7 (E.D. Va. Jan.

17, 2014). The district court explained that it “[could not]

imagine how a school seeking to gain or maintain accreditation

would obtain practical guidance” from the Standards. Id.

The Standards are often general in nature, but we do not

think to the point of invalidity. It was not necessary, or

indeed practical, for the Standards to outline more specific

numerical goals for management and staff. Instead, it was

permissible for the Standards to retain some element of

flexibility. ACCSC accredits nearly 750 educational institutions

nationwide of many different sizes and types. A more specific

numerical requirement with regard to how many management

personnel are sufficient would be nearly impossible to dictate.

ACCSC must maintain a balance between specificity, to provide

notice to those seeking accreditation, and generality, to allow

itself flexibility in accrediting varied institutions ranging

over many different fields and disciplines. Rewriting the

24
Standards to contain more specific numerical requirements could

actually harm educational institutions themselves, requiring

many fine programs and good colleges to reach targets that are

financially not sustainable, especially if tuition is to remain

at affordable levels. See Ambrose v. New England Ass’n of Schs.

& Colls., Inc., 252 F.3d 488, 495 (1st Cir. 2001) (“In

constructing such benchmarks, standards that are definitive in

theory easily may become arbitrary in application. Flexibility

blunts the sharp edges of this potential hazard.”); Med. Inst.

of Minn., 817 F.2d at 1314 (“Strict guidelines would strip . . .

[the accreditor of] the discretion necessary to adequately

assess the multitude of variables presented by different

schools.”).

Given the procedures afforded to PMTC, including the

opportunities it had to demonstrate compliance and the time it

was given to make improvements and meet ACCSC’s Standards, we

cannot say the accreditation revocation was arbitrary and

capricious. PMTC was afforded ample notice that it was not in

compliance with ACCSC’s Standards and numerous opportunities to

remedy identified deficiencies. We do not think due process

required more than that.

B.

Furthermore, the denial decision was clearly supported by

substantial evidence. The Supreme Court has defined substantial

25
evidence to be anything “more than a mere scintilla” provided

that a “reasonable mind might accept [the evidence] as adequate

to support a conclusion.” Almy v. Sebelius, 679 F.3d 297, 301

(4th Cir. 2012) (internal quotations omitted) (quoting Consol.

Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). Federal courts do

not undertake to “re-weigh conflicting evidence, make

credibility determinations, or substitute [their] judgment” for

that of the agency. Craig v. Chater, 76 F.3d 585, 589 (4th Cir.

1996). In considering whether the denial was supported by

substantial evidence, we confine ourselves to the record that

was considered by the accrediting agency at the time of the

final decision.

Under the ACCSC Standards, accreditation can be revoked in

a case of “[f]ailure to demonstrate compliance with the

Standards of Accreditation or other accreditation requirements.”

J.A. 4783 (ACCSC Standards Ch. 1 § VII(P)(1)(b)). Here, PMTC

demonstrated multiple and continued failures in a number of

areas. The 2010 on-site evaluation Team Summary Report listed

thirteen areas in which the school failed to comply with ACCSC

Standards. Although the school made progress in some areas, it

continued to fall short with regard to sufficiency and

continuity of management, as well as with its learning resource

system and the verification of faculty credentials. See id. at

2377-83.

26
 The continuity and sufficiency of management and staff

presents the most obvious deficiency in PMTC’s application for

accreditation. The ACCSC Standards require “adequate management

and administrative capacity” that includes “[f]ull-time on-site

supervision by an individual or team with the appropriate

combination of education, experience, and demonstrated ability

to lead and manage.” Id. at 4799. In addition, “the continuity

of management and administrative capacity [must be] ensured

through the reasonable retention of management and

administrative staff.” Id. The record is replete with evidence

that PMTC failed to comply with these requirements.

In response to the 2010 Probation Order, PMTC acknowledged

that eight of its sixteen administrative employees had been

employed at the school for less than a year, that in the

previous year it had fired two School Administrators within

their first ninety days, and that three other employees had been

terminated recently. Id. at 1809. In August 2011, the 2011 Team

Summary Report following the second on-site visit noted that the

school had “had three administrators in the previous nine

months” and found that while Juliet Mee provided “a constant

influence as the school’s director,” the “shifting management

structures [had] had a negative impact on the operation of the

school.” Id. at 1886.

27
 At the time of the 2011 on-site visit, PMTC again presented

a new management team which included Juliet Mee, Rebecca Cox

(who was hired as School Director in June of 2011), and April

Durnell (hired as School Administrator in March of 2011) and

argued the new team would help to rectify ACCSC’s concerns

regarding the management and administration of the school. Id.

at 1884; see also id. at 2378. However, by December 2011, as

explained in PMTC’s response to the Commission’s second

Probation Order, both Cox and Durnell had already been

terminated due to a “poor job match” and the “evasion of

relevant information” respectively. Id. at 2225; 2378.

Despite this upheaval, the Commission extended the

evaluation period for PMTC twice, placing the school on

probation following both the 2010 and 2011 on-site evaluations

on the grounds that “additional information was necessary in

order to determine the school’s compliance with accrediting

standards.” Id. at 2377. In response, PMTC repeatedly presented

ACCSC with new and shifting management structures. By December

2011, in response to the second Probation Order, the school

listed its management team as Juliet Mee, Owner/School Director,

Jeremiah Mee, Director of Finance, Jeremy Beatty, Compliance

Administrator, and Linda Mayhugh, Curriculum Administrator. Id.

at 2187, 2378-79.

28
 ACCSC expressed concern in its written explanation of the

denial that Jeremiah Mee, the brother of Juliet Mee, who started

as Director of Finance in August 2011, had made clear that he

was buying his own firm and intended to “guide and direct the

hiring of a new on-site Director of Finance,” implying he too

would soon be leaving. Id. at 2378. In addition, the Commission

found that PMTC “failed to demonstrate” that Jeremy Beatty and

Linda Mayhugh met either the school’s qualifications for their

administrative positions or that either was “qualified to meet

the Commission’s expectations to serve in this capacity.” Id. at

2379. Thus, even after multiple opportunities to remedy the

deficiency, the final management structure submitted in response

to the 2011 Probation Order still presented problems. See id. at

2379; see also id. at 1896, 2099, 2163, 2179-81, 2205-2224,

2228.

The District Court took issue with this conclusion, and

stated that ultimately, Juliet Mee’s role as the “primary

manager of PMTC since she founded the school in 1994” should

have satisfied ACCSC’s management standards. Prof’l Massage

Training Ctr., 2014 WL 201879 at *6-*8. While it may be true

that “the Standards of Accreditation do not require multiple

staff members [to constitute adequate management],” id. at *6,

the record abounds with evidence of repeated and ongoing

turnover. Given the turmoil in administrative and management

29
staff at PMTC, it would stretch the imagination, to say the

least, to credit PMTC’s contention that ACCSC lacked substantial

evidence to support its decision. There is more than a “mere

scintilla” of evidence that PMTC’s management and administration

was in shambles. Almy, 679 F.3d at 301.

We note also that in reviewing for substantial evidence, it

is not within the purview of this court to measure whether

Juliet Mee as an individual manager was sufficient to comply

with Chapter 2, Section I(A)(1)(a)-(d) or to what degree her

presence might provide for “continuity of management and

administrative capacity” in light of the significant staff

turnover. J.A. 4799 (ACCSC Standards Ch. 2 § I(A)(4)). Nor do we

profess any expertise as to what extent an educational

institution can ignore its own stated job qualifications when

hiring underqualified management without running afoul of the

Standards for management personnel.

In sum, the well-documented disorder, constant turnover and

questionable qualifications of PMTC’s management staff provided

substantial evidence that the school was out of compliance with

accreditation Standards. The record also provides substantial

evidence to support the Commission’s additional findings of

deficiencies regarding both the learning resource system and the

faculty qualification verification processes. See id. at 2380-

83.

30
 In the Team Summary Report following the 2010 on-site

evaluation, ACCSC explained that a significant number of

students surveyed during the evaluation reported

“dissatisfaction with the school’s learning resource system.”

Id. at 1464. Students said that the “library [was] not adequate

for their educational needs,” and “they [did] not have access to

the library resources at Missouri State University (MSU) as

advertised by the school.” Id.; see also id. at 1788-89. While

the 2011 Probation Order found that PMTC had made satisfactory

progress on the materials available, PMTC still did not

demonstrate that “the school’s learning resource system [was]

managed by qualified school personnel” or that “use of the

learning resource system materials [was] integrated into the

school’s curriculum and program requirements.” Id. at 2162. PMTC

hired a part-time administrator to manage the learning resource

system prior to its response to the 2011 Probation Order, but

stated that it did not “feel that [it would] need a full time

person who dedicate[d] themselves 100% to the Learning Resource

System until [it was] able to increase the resources within the

on-site facility.” Id. at 2264. The Commission took this

admission as acknowledgment that the learning resource system

“continued to be out of compliance with accrediting standards.”

Id. at 2381.

31
 In addition, the 2010 Team Summary Report also noted that

“[t]he school did not demonstrate that the prior work experience

of faculty members [was] verified or that the school

maintain[ed] documentation of academic credentials of all

faculty members” in violation of Chapter 2, Section III(A)(4).

Id. at 1464. In the 2010 Probation Order, ACCSC explained that

PMTC had submitted some examples of instructor files to

demonstrate faculty qualifications, but had failed to provide

documentation that such credentials were verified for all

faculty members. Id. at 1789-90. In response, PMTC provided only

blank verification forms and an explanation of how the process

should be completed. See id. at 1872, 2303, 2382.

The 2011 on-site evaluation team found that these forms

were not consistently completed and that April Durnell was

marking faculty qualifications as verified when she had

“conducted the verification process, even if she had not been

successful in verifying the information provided by the

instructor.” Id. at 1892. The results of the team’s review

indicated that some faculty members’ qualifications had been

verified in June of 2011, but many faculty members’ backgrounds

remained unverified. Id. at 1892-93, 1897-98. The record

supports ACCSC’s conclusion that PMTC “failed to properly

address” the concern that the school did not verify faculty

qualifications nor maintain adequate documentation in violation

32
of the Standards Chapter 2, Section III(A)(4). Id. at 2383. It

is not surprising that an accreditation agency would find

recurring questions about something so elementary as faculty

qualifications to be problematic. It is basic to the functioning

of an educational institution that the qualifications of its

teachers and instructors be both accurate and available.

C.

PMTC contends, and the district court agreed, that bias

against the school on the part of the ACCSC staff members

justified a less deferential inquiry into the agency’s

decisionmaking and resulted in a denial of due process owed to

the school. See Appellee’s Br. 45-48; Prof’l Massage Training

Ctr., 2014 WL 201879, at *7 (“Deeply negative staff bias against

Ms. Mee completely infected the record that the commission

reviewed and as a result denied PMTC due process.”).

This court has made clear that an “impartial decisionmaker

is an essential element of due process.” Morris v. City of

Danville, 744 F.2d 1041, 1044 (4th Cir. 1984) (quoting Bowens v.

N.C. Dept. of Human Res., 710 F.2d 1015, 1020 (4th Cir. 1983)).

That ACCSC is a private entity (albeit one with significant

public responsibilities) does not alter this imperative. And

although we are considering a common law due process claim

rather than a constitutional one, a “fair trial in a fair

tribunal” remains a basic requirement of due process. Withrow v.

33
Larkin, 421 U.S. 35, 46-47 (1975) (internal quotations and

citations omitted) (applying the due process requirement of an

unbiased tribunal to administrative agencies). A federal court

may be justified in conducting a more searching inquiry into the

motivations of administrative decisionmakers in the case of “a

strong showing of bad faith or improper behavior.” Citizens to

Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420 (1971),

abrogated on other grounds by Califano v. Sanders, 430 U.S. 99

(1977). However, the evidence presented here does not rise to

that level.

An administrative decisionmaker “[is] entitled to a

‘presumption of honesty and integrity.’” Morris, 744 F.2d at

1044 (quoting Withrow, 421 U.S. at 47). However, personal bias

may disqualify an adjudicator if it “stem[s] from a source other

than knowledge . . . acquire[d] from participating in a case.”

Bowens, 710 F.2d at 1020. As the Supreme Court has explained,

“various situations have been identified in which experience

teaches that the probability of actual bias on the part of the

[agency] is too high” to allow the adjudicator to consider the

case. Withrow, 421 U.S. at 47. For instance, the potential for

bias is impermissibly high in “those [cases] in which the

adjudicator has a pecuniary interest in the outcome and in which

he has been the target of [prior] personal abuse or criticism

from the party before him.” Id. (internal citations omitted).

34
Neither of those situations is present here. There was no

pecuniary interest at stake for members of the Commission, nor

were any members of the Commission targeted for abuse by Juliet

Mee or PMTC prior to the proceeding. In fact, there is no

allegation that the individual members of the Commission

themselves were biased or had an identifiable conflict of

interest.

Rather, PMTC alleges that frustration and dislike of Juliet

Mee by the staff at ACCSC influenced the creation of the record

on which the Commission relied when casting its vote for

revocation of PMTC’s accreditation. See Appellee’s Br. at 53-54.

PMTC cites to a number of instances in which ACCSC staff members

expressed frustration with Mee or a negative opinion of PMTC’s

application. However, the “expressions of impatience,

dissatisfaction, annoyance, and even anger, that are within the

bounds of what imperfect men and women . . . sometimes display”

are not sufficient to “establish[] bias or partiality.” Liteky

v. United States, 510 U.S. 540, 555-56 (1994); see also

Consolidation Coal Co. v. Williams, 453 F.3d 609, 620 (4th Cir.

2006) (“[T]he tone and tenor of frustration expressed in the

ALJ’s comments do not, in and of themselves, establish bias.”).

An unfavorable impression of an applicant on the part of the

accreditation agency is likewise not bias. To find otherwise

35
would render every denial of accreditation subject to a

searching inquiry for lack of impartiality.

As evidence of bias, PMTC primarily points to emails and

testimony where ACCSC staff members, primarily Lisa Miles,

Christopher Lambert, and Sean Forman, 1 expressed an alleged

“disdain for PMTC and for Juliet Mee.” Appellee’s Br. at 53. In

addition, the school contends that Miles failed to present to

the Commission two binders of documents that were provided to

her during the 2011 on-site visit and that she instead took them

to her home and destroyed them. See id.; see also J.A. 2819. The

district court found there was evidence sufficient to support

the claim that ACCSC staff “intentionally drafted the report in

a negative light to cause the commissioners to vote to withdraw

PMTC’s accreditation.” Prof’l Massage Training Ctr., 2014 WL

201879, at *7.

1
Lisa Miles was a Manager of Accreditation at ACCSC and
served as part of the on-site evaluation teams in both 2010 and
2011. She was responsible for editing and drafting,
respectively, the Team Summary Reports following the each visit.
See J.A. 243, 1455, 1874, 3022. Christopher Lambert served as
ACCSC’s Director of External Affairs and here supervised the
process of drafting the Compliance Summary presented to the
Commission prior to its vote and the written explanation for the
revocation sent to Mee. Id. at 3020; see also id. at 2826-76
(correspondence between Forman and Lambert and partial drafts of
revocation letter and Compliance Summary). Sean Forman was a
Senior Analyst for Institutional Review and Development and here
participated in the drafting of the Compliance Summary and of
the 2012 revocation letter under Lambert’s supervision. See id.
at 2826-76.

36
 We think this is not a balanced characterization of the

record. Emails between staff members revealed that Mee was upset

by the possibility that PMTC might lose accreditation and was

often difficult to deal with or even hostile. See, e.g., J.A.

2821-23, 2866. However, staff frustration with Mee, justified or

not, is not dispositive evidence of bias. Furthermore, the

record does not demonstrate that ACCSC was impermissibly

building a case against PMTC. The emails between Lambert and

Forman paint a picture of a subordinate and supervisor

discussing and revising the drafts of the Compliance Summary

(which is presented to the Commission prior to the vote) and the

revocation letter. See, e.g., id. at 2826-39, 2866-74, 2886.

Discussions of this sort are inevitable if the staff is to do

its job.

Due process requires that the basis for revocation of

accreditation be provided in writing and supported by the

evidence. We see nothing sinister in Forman’s raising with his

supervisor areas where he had questions about which evidence to

include in the written document or with Lambert asking his

subordinate to strengthen his explanation for certain findings. 2

2
PMTC argues that the email correspondence between Forman
and Lambert demonstrates that ACCSC was building a case against
them by purposefully including statements Forman knew to be
false in the record put before the Commission. This assertion is
simply not supported by the record. When he was drafting the
(Continued)
37
There is no evidence that information was improperly included or

omitted. Again, this type of back and forth is commonplace in

the drafting of any statement of reasons in the administrative

process. Furthermore, as we have noted, the evidence, including

submissions PMTC itself made to the Commission, supported

ACCSC’s findings, especially with regard to fundamental

revocation letter, Forman wrote to Lambert raising a number of
questions about the draft. He did express concern that the tie
between “the [learning resource system] supervision” and the
“difficulties verifying faculty work experience” and the ongoing
administrative and management failures at PMTC was “fairly weak
in the grand scheme of things.” J.A. 2870. He also noted when
drafting the Compliance Summary that given Jeremy Beatty’s
experience, it might be “a stretch to state that Mr. Beatty may
not have 3 years experience.” Id. at 2854. Appellant has given
us no reason to take these comments to be anything other than
instances of a subordinate asking a supervisor for advice on a
tough call. In the course of this correspondence, Forman had
explained that PMTC had provided some evidence of compliance but
noted the school “also fell short in many areas.” Id. at 2860.
Lambert gave Forman guidance in response to his questions,
directing him to “strengthen [the] finding on faculty
verification” prior to finalization of the letter. Id. at 2867.
He also noted places where Forman needed additional evidence to
support his assertions. Id. Lambert explained to Forman that
“management [had] been a long standing issue at the school, one
that the Commission [had] afforded multiple opportunities” for
PMTC to rectify, id. at 2887, and that the revocation rationale
was to focus on “the management issue that [the Commission] was
building around,” id. at 2872. Lastly, Lambert, when sharing the
final draft of the letter with his colleagues, wrote that it was
“compelling.” Id. at 2866-67. Again, we are given no reason to
read comments commending Forman’s work as anything more than
routine praise from a supervisor to a subordinate upon
completion of an assigned task. Id. at 2837 (“Nice, Sean”). The
emails simply fail to present the kind of case of improper
motivation or bad faith on the part of the Commission or its
staff members necessary to demonstrate bias.

38
management issues. Compare id. at 2378 (explanation of

management staff turnover in the revocation letter) with id. at

2225 (evidence of management staff turnover submitted by PMTC).

PMTC also makes much of the fact that Lisa Miles took home

two binders of information given to her by Juliet Mee during the

school’s second on-site visit instead of presenting them to the

Commission. However, the record suggests Miles did in fact rely

on the binders when drafting the 2011 Team Summary Report which

was included in the record before the Commission. See id. at

2819. In addition, the Commission only considers official

submissions, which must be filed with the Commission

electronically. See id. at 4745 (Standards Ch. 1 § I(E)(1)(b));

see also, e.g., id. at 1453 (response to Team Summary Report due

electronically). There is no suggestion that it would consider

every document handed to an on-site evaluation team member. In

both the 2010 and 2011 Team Reports, as well as the 2010 and

2011 Probation Orders, PMTC was notified that it must “submit

its response in an electronic format,” id. at 1453 (2010 Team

Summary Report); see also id. at 1791 (2010 Probation Order),

1875 (2011 Team Summary Report), 2167 (2011 Probation Order),

and it did formally submit portions of the binders to ACCSC, id.

at 758, 1829-49 (PMTC response to 2010 Probation Order).

In conclusion, there was not sufficient evidence that ACCSC

was motivated by bias to justify departure from the deferential

39
standard ordinarily due to the accreditation agency under a

common law due process claim. Because we find that ACCSC did not

act arbitrarily or capriciously and grounded its revocation on

substantial evidence, we conclude that the accreditation agency

did not deprive PMTC of its right to due process of law.

IV.

Last, PMTC cross-appeals the district court’s holding that

it was not entitled to relief on any of its state law claims for

breach of contract, negligence, and tortious interference with a

contract and with a prospective business or economic advantage.

See Prof’l Massage Training Ctr., 2014 WL 201879, at *8. We

agree with the district court that these claims fail as a matter

of law, and we affirm its holding in this regard. 3

Virginia’s choice-of-law rules determine what law to apply.

See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496

3
ACCSC contends that state law claims are not cognizable
grounds to challenge an accreditation decision. See Appellant’s
Response-Reply Br. at 47-48. ACCSC would have us follow the
example set by the Seventh Circuit, which found that because
federal courts have exclusive jurisdiction to hear challenges to
accreditation decisions under 20 U.S.C. § 1099b(f), it is not
possible for such courts to “apply state law to the actions of
accrediting agencies when state courts have been silenced.” Chi.
Sch., 44 F.3d at 449. We agree that a serious question of
cognizability exists with respect to PMTC’s state law claims.
However, we need not decide today the broader question as to
whether Congress intended to preempt state law causes of action
through the grant of exclusive federal jurisdiction in
§ 1099b(f), because the state law claims here are meritless on
their own accord.

40
(1941). The parties agree that Virginia law applies to the

breach of contract claim inasmuch as the contract was made in

Virginia, see Lexie v. State Farm Mut. Auto. Ins. Co., 469

S.E.2d 61, 63 (Va. 1996), but that Missouri law governs the tort

claims as that was the place where the alleged tort was

committed, see Jones v. R.S. Jones & Assocs., Inc., 431 S.E.2d

33, 34 (Va. 1993).

The district court did not err in finding that PMTC’s

contract claim fails as a matter of law. The Standards of

Accreditation do not constitute a binding contract between the

agency and the accredited educational institutions because the

Commission can alter the alleged “contract” at will and, thus,

is not bound by its terms. See J.A. 4790 (ACCSC Standards, Ch. 1

§ IX(A)(1)). Under Virginia law, “[b]oth parties must be bound

or neither is bound.” Town of Vinton v. City of Roanoke, 80

S.E.2d 608, 617 (Va. 1954) (quoting Am. Agric. Chem. Co. v.

Kennedy & Crawford, 48 S.E. 868, 870 (Va. 1904)). And, even

assuming arguendo that a valid contractual relationship exists

between an educational institution and an accrediting agency,

PMTC has still failed to point to any specific term or condition

that ACCSC impermissibly breached. ACCSC had an unquestionable

right to revoke PMTC’s accreditation if compliance with the

Standards was not demonstrated. See J.A. 4783 (ACCSC Standards

Ch. 1 § VII(P)(1)(b)). Exercising one’s lawful rights is not a

41
breach of contract. In addition, for the reasons set forth

above, in Section III.C, PMTC has not demonstrated that ACCSC

exercised any contractual discretion in bad faith, even in the

highly dubious event that a “contract” between the parties

existed.

PMTC’s state law tort claims suffer a similar fate to that

of its breach of contract claims. PMTC’s negligence claim fails

as a matter of law because, as the district court found, it is

foreclosed by the economic loss doctrine. See R.W. Murray Co. v.

Shatterproof Glass Corp., 697 F.2d 818, 829 (8th Cir. 1983)

(concluding that the economic loss doctrine “precludes the

appellants from pursuing a negligence cause of action seeking

recovery for only economic loss”). PMTC’s three additional state

law claims allege tortious interference with a contract and with

a prospective business or economic advantage.

Under Missouri law, tortious interference “requires proof

of: (1) a contract or valid business expectancy; (2) defendant’s

knowledge of the contract or relationship; (3) a breach induced

or caused by defendant’s intentional interference; (4) absence

of justification; and (5) damages.” Nazeri v. Mo. Valley Coll.,

860 S.W.2d 303, 316 (Mo. 1993) (en banc). The district court

properly found that PMTC cannot show a lack of justification.

The record is replete with evidence of continued failure by the

school to meet the Standards of Accreditation, which gave ACCSC

42
“an unqualified legal right” to revoke PMTC’s accreditation. Id.

at 317; see also J.A. 4783 (ACCSC Standards Ch. 1 § VII(P)(1)(b)

(grounds for revocation)).

Under Missouri law, a plaintiff can “establish a lack of

justification” where “the defendant employed improper means in

seeking to further only his own interests.” Nazeri, 860 S.W.2d

at 316-17; see also Stehno v. Sprint Spectrum, L.P., 186 S.W.3d

247, 252 (2006) (en banc). PMTC contends on appeal that the

school is entitled to relief because staff bias at ACCSC led to

a “misrepresentation of facts” in the record relied on by the

Commission. Appellee’s Reply Br. at 10; see also Nazeri 860

S.W.2d at 317 (“[I]mproper means are those that are

independently wrongful, such as threats, violence, trespass,

defamation, misrepresentation of fact . . . .“). However, as we

explained above, there is insufficient evidence of any

impermissible bias in this case. Because PMTC cannot demonstrate

that improper means were employed, it has not met its burden of

proof with regard to the tortious interference claims. As such,

we affirm the district court’s finding that PMTC was not

entitled to relief on its state law tort claims as a matter of

law.

V.

For the foregoing reasons, we believe that ACCSC acted

lawfully in revoking PMTC’s accreditation. The district court’s

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ruling to the contrary is reversed, and we remand to that court

with directions to enter judgment in ACCSC’s favor on PMTC’s due

process claim and to dismiss the case.

AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED WITH INSTRUCTIONS

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