Ambrose v. New England Associat, 252 F.3d 488, 1st Cir. (2001)
Ambrose v. New England Associat, 252 F.3d 488, 1st Cir. (2001)
Ambrose v. New England Associat, 252 F.3d 488, 1st Cir. (2001)
2001)
We recount the facts in the light most favorable to the nonmovants (here, the
plaintiffs), consistent with record support. See Nieves v. McSweeney, 241 F.3d
46, 50 (1st Cir. 2001).
Disgruntled by this sad state of affairs, the appellants banded together and
brought suit against the College in a Maine state court. They sued NEASC in a
separate action. See Ambrose v. NEASC, 100 F. Supp. 2d 48, 49 (D. Me. 2000)
(describing the two actions). In their suit against NEASC, the plaintiffs alleged
that the accreditation statements which appeared in the College's course
catalogs were actionable under three distinct theories: (1) fraud, (2) negligent
misrepresentation, and (3) deceptive business practices. NEASC promptly
removed the case against it to the federal district court based on diversity of
citizenship and the existence of a controversy in the requisite amount. See 28
U.S.C. 1332(a)(1), 1441(a). This left the case against the College pending in
a different forum, but the district court quite properly refused to order a remand.
Ambrose, 100 F. Supp. 2d at 49-53.
After the parties had engaged in some discovery, NEASC moved for summary
judgment. See Fed. R. Civ. P. 56. Judge Carter referred the motion to a
magistrate judge. Concluding that no misrepresentation had been made and that
the appellants, at any rate, failed to show that they had relied justifiably on the
accreditation statements, the magistrate judge recommended brevis disposition.
Judge Carter reviewed the magistrate judge's recommended ruling de novo,
accepted it, and entered judgment accordingly. This appeal followed.
II. THE ACCREDITATION STATEMENTS
7
Since the accreditation statements lie at the epicenter of the dispute between
the parties, we pause to place them into perspective. NEASC wrote two
"approved" versions of an accreditation statement and supplied both versions to
accredited institutions of higher education. It permitted those institutions to
publish either or both of the statements, but did not require them to do so.
Six of the appellants claim that, prior to matriculating at the College, they read
course catalogs which contained the "long-form" version of the accreditation
statement (used in the College's 1993-94, 1994-95, and 1995-96 catalogs). This
statement reads in pertinent part:
10
11
12
Maine law controls in this diversity case. See Crellin Techs., Inc. v.
Equipmentlease Corp., 18 F.3d 1, 4 (1st Cir. 1994). We review the lower court's
application of that law and its entry of summary judgment de novo. Nieves, 241
F.3d at 50. In that review, we focus on whether "the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits,
if any, show that there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P.
56(c).
13
14
Under Maine law, a party alleging fraud must make a five-part showing which
encompasses (1) a false representation (2) of material fact (3) with knowledge
of its falsity or in reckless disregard of whether it is true or false (4) for the
purpose of inducing another to act in reliance upon it, as well as a showing that
(5) the plaintiff justifiably relied upon the representation as true and acted upon
it to his detriment. Diversified Foods, Inc. v. First Nat'l Bank, 605 A.2d 609,
615 (Me. 1992). In contrast, a negligent misrepresentation occurs when
15
16
Chapman v. Rideout, 568 A.2d 829, 830 (Me. 1990) (emphasis omitted) (citing
Restatement (Second) of Torts 552(1) (1977)); see also Jordan-Milton Mach.,
Inc. v. F/V Teresa Marie, II, 978 F.2d 32, 36 (1st Cir. 1992). Thus, these two
torts, though distinct, possess a common element: a false representation.
17
The appellants' third count, as pleaded and pressed, shares this element, albeit
in a slightly altered form. That count alleges a violation of Maine's Deceptive
Trade Practices Act, Me. Rev. Stat. Ann. tit. 10, 1211-1216. The appellants'
brief focuses this count on two subsections of section 1212(1) of that statute.
Under the first subsection, a party is guilty of a deceptive trade practice if it "
[r]epresents that goods or services have sponsorship, approval, characteristics,
ingredients, uses, benefits or quantities that they do not have." Id. 1212(1)(E).
The other subsection renders a party liable for a deceptive trade practice if it
engages in conduct of any kind that "creates a likelihood of confusion or
misunderstanding." Id. 1212(1)(L). Thus, liability under this count turns on
the existence of a false or misleading representation.1
18
19
20
The appellants assert that the following excerpt from the long-form
accreditation statement is false or misleading: "Accreditation of an institution
by [NEASC] indicates that it meets or exceeds criteria for the assessment of
institutional quality periodically applied through a peer group review process."
To set the stage for further analysis, we recount what the record reveals
concerning the relevant phase of NEASC's peer review process.
21
The College went through this process in 1993-94. Following its receipt of a
comprehensive self-study prepared by the College, the Commission sent an
eight-member evaluation team to the campus in October of 1993. The team
looked into the eleven designated standards and issued a report addressing each
of them. As is customary, the team added a summary of its findings.
23
The College survived this scrutiny. Based on the self-study report and the
evaluation team's assessment, the Commission voted to renew the College's
accreditation for ten years. It warned, however, that it would perform an
interim evaluation of the institution's finances and off-campus programs after
five years.3
24
The appellants do not deny that this peer review process took place. They argue
instead that, in implementing it, NEASC failed properly to apply the criteria
described in the accreditation statement and reaccredited the College even
though the College did not "meet[] or exceed[] criteria for the assessment of
institutional quality." To buttress this argument, the appellants refer us to two
pieces of evidence: (i) the deposition of the Commission's director, Dr. Charles
M. Cook, and (ii) the evaluation team's report. Neither item bears the weight
that the appellants pile upon it.
25
As the appellants read Dr. Cook's deposition, NEASC did not require the
College to meet or exceed each stated standard, but, rather, engaged in a
balancing process whereby shoddy performance in one area could be offset by
better-than-average performance in another. This reading finds support in Dr.
Cook's holistic view of the process. He forthrightly admitted that accreditation
involves a "weighing of factors," and he indicated more than once that the
Commission, in applying the standards, endeavors to "address[] the
effectiveness of the institution as a whole." Indeed, when asked if this meant
that an institution could be weak in one area and strong in another, yet still gain
accreditation, Dr. Cook answered in the affirmative.
26
The appellants contend that this merging of the standards belies the
26
The appellants contend that this merging of the standards belies the
representation contained in the long-form accreditation statement because the
test for accreditation should be "digital, up or down, pass or fail," so that "either
all the standards are met or they are not." But the accreditation statements make
no such commitment. The short-form statement is entirely silent on the nature
of the process for gaining accreditation. The long-form statement declares that:
"Accreditation of an institution by [NEASC] indicates that it meets or exceeds
criteria for the assessment of institutional quality periodically applied through a
peer group review process." The appellants' gloss notwithstanding, nothing in
this statement indicates that each standard must be evaluated separately ("pass
or fail") or that an institution must satisfy each and every standard in order to
gain accreditation. The plain language of the accreditation statement does not
prohibit NEASC from applying the standards in a way that lets an institution's
strengths compensate for its weaknesses, thus allowing the standards as a whole
to be satisfied by the overall assessment of the institution as a whole.
27
Dr. Cook's testimony shows this to be the case. Throughout his deposition, Dr.
Cook emphasized that NEASC does not accredit programs, and that the
evaluation team probably would not consider a programmatic shortcoming (if it
came to the team's attention at all) as fatal to accreditation, but, rather, would
treat it as a mundane problem touching upon the institution's ability to monitor
itself properly. The short of it, then, is that the protocol actually employed by
NEASC, as described by Dr. Cook, is not at odds with the accreditation
statements published in the Thomas College catalogs.
28
Nor do we think that either the law or sound scholastic practices impose a
contrary duty. A certain amount of flexibility in fashioning accrediting
standards long has been recognized as a virtue. See, e.g., Parsons Coll. v. N.
Cent. Ass'n of Colls. & Secondary Sch., 271 F. Supp. 65, 73 (N.D. Ill. 1967)
(explaining that an accreditor is "entitled to make a conscious choice in favor of
flexible standards to accommodate variation in purpose and character among its
constituent institutions, and to avoid forcing all into a rigid and uniform mold").
This makes perfect sense: after all, benchmarks for accreditation are not
intended as reference points for laymen. To the contrary, their raison d'etre is to
guide professionals in a particular field of endeavor (here, education). 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.
29
31
The appellants have another blackbird baked in their pie. Following the
evaluation team's site visit, the team issued a written report addressing each of
the eleven standards. The appellants assert that the report showed the College
failed to attain the benchmarks NEASC itself had set; that NEASC blithely
ignored this fact; and that NEASC proceeded to renew the College's
accreditation anyway. Thus, the appellants argue, the representation that "
[a]ccreditation of an institution by [NEASC] indicates that it meets or exceeds
criteria for the assessment of institutional quality" was deliberately false
because NEASC knew, from the report, that the College had not met or
exceeded the applicable criteria, but had flunked. To assay the validity of this
charge, we turn to the report itself, keeping in mind that the appellants' burden
is to produce probative evidence that the team found that the College did not
meet or exceed NEASC's own criteria.
32
33
Be that as it may, nothing in the report indicates that the team concluded that
the College, overall, did not meet the usual criteria for accreditation. In
assessing the second standard (planning and evaluation), the report relates that
the absence of a coherent institutional plan has limited the College's selfevaluation efforts at all levels. But this sharply-worded critique is not used as
the basis for a conclusion that the College failed the standard and, thus, cannot
be accredited. Instead, the team uses the observation as a basis for suggesting
that the College undertake the creation of an institutional plan as the next step
in its overall long-range strategic planning process.
34
In analyzing standard four (programs and instruction), the team concluded that
"[a]ll programs are appropriate in scale and rigor." Although the appellants
have good reason to disagree with that conclusion insofar as it pertains to the
associate's degree in medical assisting, the question before us is not whether the
College should have failed its accreditation review, but, rather, whether the
team found that it had failed (and the Commission accredited it anyway). Here,
the most that can be said is that the evaluation team raised some red flags in its
discussion of standard four (noting, for example, that "[p]rogram quality is in
danger of being compromised by the consequences of overtaxing available
human and material resources"), but found that, on the whole, the College
satisfied the standard.
35
To say more on this subject would be supererogatory. We have read the report
carefully and it simply does not state that the College failed to meet NEASC's
criteria for accreditation. The only reasonable inference to be drawn from the
report is that, pursuant to the peer review process, the Commission found that
the College had significant room for improvement in some areas but was
worthy of accreditation because, viewed in an holistic manner, it attained the
benchmarks which NEASC had set. Thus, the report does not prove that the
challenged representation -- that "[a]ccreditation of an institution by [NEASC]
indicates that it meets or exceeds criteria for the assessment of institutional
quality periodically applied through a peer group review process" -- is either
false or misleading.
B.
36
The appellants point to three more representations that they consider false or
misleading. All are contained within the long-form accreditation statement. The
first declares that "[a]n accredited school or college . . . has available the
necessary resources to achieve its stated purposes through appropriate
educational programs." The second proclaims that accreditation "provides
38
39
40
41
This aspect of the appellants' case suffers from an even more fundamental flaw.
Although the appellants cloak their claim in the raiment of misrepresentation,
this seems to be little more than creative labeling. The claim, as the appellants
present it, boils down to a claim for negligent accreditation -- a claim that
NEASC acted carelessly in conferring accreditation because the College did not
in fact meet NEASC's own accreditation requirements. Such a claim invites us
to substitute our judgment for that of professional educators regarding the
College's suitability for accreditation. We decline the invitation.
42
We readily acknowledge that there is no Maine case law directly on point. Our
task, then, is to discern the rule the state's highest court would be most likely to
follow under these circumstances, even if our independent judgment might
differ. See Blinzler v. Marriott Int'l, Inc., 81 F.3d 1148, 1151 (1st Cir. 1996). In
making this informed prophecy, we are guided, inter alia, by persuasive case
law from other jurisdictions and relevant public policy considerations. Id.; see
also FDIC v. Ogden Corp., 202 F.3d 454, 460-61 (1st Cir. 2000). Analogous
cases strongly suggest the inappropriateness of a court undertaking a
substantive reevaluation of NEASC's decision to accredit the College.
43
44
The claim that [the school] was denied equal protection because the
Commission granted accreditation to schools in equally poor financial condition
. . . really amounts to a claim that the Commission was incorrect in its
evaluation of either Emery or the other schools. Whatever may be the proper
scope of judicial monitoring of [accrediting] associations like AICS, it does not
include de novo review of their evaluative decisions.
45
Id. at 80 n.2; accord Rockland Inst., Div. of Amistad Vocational Sch., Inc. v.
Ass'n of Indep. Colls. & Sch., 412 F. Supp. 1015, 1019 (C.D. Cal. 1976)
(refusing to conduct a trial de novo on the issue of accreditation).
46
This reasoning is applicable here. Since the only way to reach the appellants'
claim that the cited statements are false or misleading is to review the substance
of NEASC's accreditation decision -- to ask ourselves if the College, on the
whole, really had the needed resources, offered an appropriate curriculum,
helped to assure graduates of opportunities in the job market, and possessed
institutional integrity -- the claim sounds in negligent accreditation rather than
in misrepresentation. We conclude, therefore, that the claim is not actionable.
47
To be sure, one can find cases in which courts have entertained claims by
educational institutions that accrediting agencies have arbitrarily denied
accreditation. E.g., Wilfred Acad. of Hair & Beauty Culture v. S. Ass'n of
Colls. & Sch., 957 F.2d 210, 214 (5th Cir. 1992); Med. Inst. of Minn. v. Nat'l
Ass'n of Trade & Tech. Sch., 817 F.2d 1310, 1314 (8th Cir. 1987); Rockland
Inst., 412 F. Supp. at 1016; see Interior Design Educ. Research v. Savannah
Coll. of Art & Design, 244 F.3d 521, 527-28 (6th Cir. 2001) (tracing
development of this doctrine). We do not believe, however, that the existence of
this body of law undermines our conclusion.
48
49
Autumn 1994, at 185; cf. Louisiana v. Joint Comm'n on Accred. of Hosps., 470
So. 2d 169, 177-78 (La. Ct. App. 1985) (finding that hospital accreditor had no
liability to patients harmed by malfunctioning dialysis machines because
accreditor had no duty to incidental beneficiaries of accreditation).
50
51
To sum up, we could only evaluate the appellants' contention that the
representations complained of were false or misleading by engaging in a
substantive review of the correctness vel non of NEASC's decision to accredit
the College. We are confident that Maine would not blaze a new,
unprecedented trail and hold an accreditor liable to a consumer of the
accredited service under a negligent accreditation theory. Accordingly, the
appellants' claims insofar as they are based on the "representations" about
resources, programs, employment opportunities, and institutional integrity,
perforce must fail.
IV. CONCLUSION
52
We need go no further.5 Taking the facts in the light most flattering to the
appellants, we conclude that they are unable to show that any of the four cited
excerpts from the accreditation statements were false or misleading. In turn, the
absence of any false or misleading representation dooms all of the appellants'
putative causes of action.
53
Affirmed.
Notes:
Notes:
1
The magistrate judge concluded that the appellants, in order to prevail on any
of their three counts, "must prove . . . that [NEASC's] representation to them
was untrue." Ambrose v. NEASC, 2000 WL 1195363, at *3 (D. Me. Aug. 7,
2000). As applied to the deceptive practices count, this is too isthmian a view.
Although subsection 1212(1)(E) requires a false representation, subsection
1212(1)(L) may be satisfied by any conduct that creates a likelihood of
confusion or misunderstanding. Under that standard, a misleading
representation may be actionable. Cf. Odom v. Fairbanks Mem'l Hosp., 999
P.2d 123, 132 (Alaska 2000) (construing similar language in Alaska's unfair
trade practices statute to require only that "acts and practices were capable of
being interpreted in a misleading way").
The appellants, who have disclaimed any reliance on such a theory, see
Appellants' Reply Br. at 13 ("Appellants repeat that they are not asking this
Court to review the accreditation decision or to reverse it."), apparently share
this skepticism.
It is NEASC's position that Maine's Deceptive Trade Practices Act, Me. Rev.
Stat. Ann. tit. 10, 1211-1216, does not apply here because NEASC did not
engage in a consumer transaction with any of the appellants. Given our
conclusion that the appellants have not shown any false or misleading
representation, we need not reach the question of the Act's applicability to
situations of this genre.