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Arm's Length or Arm in Arm?

September 20, 2007

College lawyers and leaders have watched with increasing wariness as a series of lawsuits against universities under the federal False Claims Act make their way through the U.S. courts. They fear that rulings in the cases could make it significantly easier for individuals to sue colleges for minor missteps.

Now one of those lawsuits, involving California’s Chapman University, has ensnared one of higher education’s six regional accrediting agencies, and it has done so in a way that some observers believe raises questions about the independence of the entities designed to ensure the quality of American colleges and universities.

The lawyer for three former Chapman instructors -- whose suit accuses the university of having consistently shortchanged part-time students in the number of classroom hours they were taught – is alleging in a brief filed this week (opposing Chapman's request for summary judgment) that the university's lawyers collaborated with lawyers for the Western Association of Schools and Colleges to shape the testimony of the accrediting agency’s executive director in the case.

Documents subpoenaed by the plaintiffs’ lawyer, Daniel R. Bartley, show that lawyers for the agency’s senior college commission and for Chapman met and exchanged reams of e-mail messages and documents in advance of Ralph A. Wolff’s deposition last December. Among the documents is a seven-page memo in which the university laid out a set of expected questions and suggested answers for the accreditor's lawyers to use in preparing Wolff for his testimony.

Legal experts agree that such cooperation between a third-party witness and one side in a case does not violate any ethics laws or rules -- and some say unequivocally that it is absolutely appropriate.

But some higher education and accreditation officials concur with Bartley that the Western accreditor erred in giving at least the appearance that it did not maintain an arm’s length relationship with the university in the legal case. That is especially true, they say, at a time when critics are increasingly questioning the extent to which accrediting agencies are fulfilling their role as arbiters of the quality and colleges.

“WASC would have been well-advised to have a standoffish relationship and certainly not appear to be coached [by Chapman] as to what was likely to happen in a deposition, if for no other reason than the appearance,” says Robert H. Atwell, a higher education consultant and former president of the American Council on Education, who has served on about a dozen accrediting teams for the Western accreditor. “Particularly in this day and age when the accreditors are under siege.”

Wolff and lawyers for the Western accreditor take umbrage at the suggestion that they inappropriately took a side in the lawsuit against Chapman. Wolff says he was completely unaware of any interaction between his lawyers and Chapman’s, and deems any suggestion that his testimony was influenced in any way by whatever communication did occur between the lawyers “complete rubbish.”

Western’s lawyer, Lawrence J. Kessenick, says that he cooperated fully with lawyers for both parties and that his interactions with Chapman’s lawyers were aimed entirely at helping him and his colleagues understand the complex issues in the case so they could prepare their client to testify accurately and intelligently. “Even if I had tried to influence him, which I didn’t,” says Kessenick, “the thought that Ralph would be influenced by what Chapman would want him to say is laughable.”

The Chapman Case

The lawsuit in question was brought against Chapman (and made public in 2005) by two former instructors in its marriage and family therapy program under the False Claims Act, which allows an individual who believes he or she has identified fraud committed against the federal government to sue an entity, with the hope that the U.S. Justice Department will agree with the complaint and seek to join the suit. (The suit can proceed even if the Justice Department does not formally join the suit, as it chose not to in the Chapman case.) The plaintiffs, known as "relators" in False Claims Act parlance, then shares in any financial penalties, which can include trebled damages.

Western’s Accrediting Commission of Senior Colleges is not formally a party to the lawsuit, but the actions of the accrediting agency – one of six regional associations that regulate most nonprofit colleges in the United States -- are central to the legal theory put forward by the plaintiffs.

The gist of their argument is that Chapman encouraged instructors in its night-time programs for part-time students to let students out of class early, depriving the students of the training they were supposed to receive. Had the Western association known about that practice, the former instructors argue, Chapman would have lost its accreditation, and without that stamp of approval, the university would have forfeited millions of dollars in federal student aid. That’s where the alleged fraud comes in; the plaintiffs are seeking to show that Chapman gained its accreditation (and the aid that follows) by making false statements to Western.

To prove their case in advance of the trial that is expected to begin this fall, the plaintiffs (through Bartley, their lawyer) subpoenaed Wolff, the Western accreditor’s director, to submit to questioning last year. When the deposition took place last December, Bartley says he was struck by the degree to which Wolff’s testimony was consistent with the arguments Chapman officials had made throughout the early stages of the case. Wolff said he believed the plaintiffs misinterpreted the accreditor's standards to require courses to meet for a minimum number of hours, for instance.

Suspicious, Bartley subpoenaed WASC’s lawyers for all documents related to their communications to and from Chapman, and the 800 or so pages they produced – about 55 of which Bartley shared with a reporter -- reveal significant interaction between Chapman’s lawyers and the Western association’s lawyers in advance of the deposition.

In them, Fred Plevin, whose law firm, Paul, Plevin, Sullivan & Cannaughton, represents Chapman, gave Kessenick and other lawyers for Western documents explaining Chapman’s view of the case and expressed a desire to “get more information about Mr. Wolff’s views on the various issues we discussed based on your conversation(s) with him in order to prepare for my examination of him.”

Plevin also -- in what Bartley describes in “Law and Order” fashion as a “smoking gun” -- provided WASC’s lawyers with a seven-page memo containing questions that he anticipated Wolff being asked during the deposition, and Chapman’s perspective on the answers. In the memo, sent a week before the lawyers for Chapman and WASC met in the accreditors’ lawyers’ office in Oakland, Calif., Plevin explains Chapman’s point of view on most of the key issues in the case; he also calls the plaintiffs’ claims “totally without merit.”

The cover letter also notes: “This letter is strictly to assist you in your role as counsel for WASC; I ask that you not share a copy of this letter with Mr. Wolff as part of his deposition preparation. I hope that you will have the opportunity to review these issues with Mr. Wolff so that we can meet ... and I can get an idea of where Mr. Wolff stands on these issues.”

To Bartley, the act of anticipating questions and “suggesting” answers, as he characterizes it, crosses a line. “Here you have the regulating agency being counseled by the entity that it is supposed to be regulating,” Bartley says. “This type of communication certainly gives an appearance of impropriety. It is inconsistent with WASC’s standards and mission, which is to have some degree of independence, an arm’s length relationship, toward its member entities.”

The lawyer for the plaintiffs says the documents support his initial suspicion that Wolff had been coached (through his lawyers) by Chapman, a suspicion formed because he found the accrediting official’s deposition testimony to largely embrace Chapman’s views. “He pretty much followed their spin,” Bartley asserts.

Plevin, the lawyer for Chapman, says Bartley mischaracterizes Chapman's interactions with Western's lawyers. "The primary purpose of the communications was to provide WASC's counsel with the background of the case and to acquaint counsel with the contentions and theories of both sides, so that counsel would be able to provide Mr. Wolff with context for the questioning at his deposition," Plevin said via e-mail. "Chapman's counsel was also interested to determine whether its understanding of WASC's guidelines and requirements was correct. This kind of communication between counsel is routine in a complex case."

Wolff's testimony may have supported some of Chapman's arguments, Plevin says, but if so, that's because the facts are on the university's side. "The relators' theory of liability is based upon a misunderstanding and/or mischaracterization of WASC's standards. Specifically, the relators assert that WASC's standards require a minimum number of classroom hours per class. Mr. Wolff confirmed in his deposition that WASC's Handbook of Accreditation contains no such requirement. To this extent his testimony demonstrated the lack of merit of the relators' theory."

Kessenick, the lawyer for the Western association, rejects the idea that WASC inappropriately sided with Chapman in its preparation for Wolff’s deposition. “It’s the role of accrediting associations; we’re not in any kind of fraternal relationship, we’re in a regulatory relationship with the institutions.”

He says it was his job, as the accrediting agency’s lawyer, to ensure that he understood the issues in the case “as well as I could ... so I could anticipate” the questions Chapman and the plaintffs alike would ask him. Kessenick says that he had “tried to be cooperative with counsel for both sides,” giving Bartley personal access to the Western association’s files early in the case and reading the many documents the plaintiffs’ lawyer sent him. And while “I didn’t meet with Mr. Bartley” in advance of the deposition, Kessenick says, “I would have met with him if he had asked to meet with me.... I didn’t shut myself off to either side.”

Kessenick also challenges Bartley’s assertion that the substance of Wolff’s testimony proved that there had been collaboration between Chapman and WASC. “He testified that if an institution had systematically covered up some kind of policy of letting students out early ... that that would be something WASC would be interested in and concerned about,” Kessenick says. On that and perhaps other points, he says, Wolff’s views did not line up with Chapman’s. “I did not see his testimony as making Chapman say, ‘Ralph said everything we could have hoped he’d say,’ “ Kessenick says. “To me, that’s a reflection of the fact that Ralph was being entirely both honest and candid about his understanding of how WASC would view the issues in the case.”

Which Side of the Line?

The question of whether Chapman and/or the Western accreditor crossed a line can be viewed through different prisms. Interviews with several experts on legal ethics, in California and elsewhere, suggest that the lawyers did not violate any laws or formal ethics rules.

John Steele, a lecturer at Boalt Hall, the University of California at Berkeley’s law school and an expert on legal ethics, says there is “nothing wrong” with the lawyer for one party in a lawsuit preparing a non-client witness, as long as the witness is not in any way encouraged to testify falsely. In fact, Steele says, “you can argue that it actually falls within the standard of care” for a lawyer to ensure that every witness testifying in a lawsuit understands the client’s case to the fullest extent possible.

But several experts on higher education and accreditation – including some accrediting officials who asked not to be identified -- say they believe officials of an accrediting agency should avoid any situation that might give the impression that they are overly cozy with the institutions they are supposed to be monitoring.

“I think accrediting bodies have to bend over backwards to retain a neutral position in these kinds of things,” says Atwell, the former head of the American Council on Education. That is even more essential, he says, as critics and the federal government increasingly question whether accrediting agencies are fulfilling their role as the primary means by which higher education assures quality to students and the public.

Wolff, head of the Western accrediting commission, says that he and the association are “well aware of our need to maintain an arm’s length relationship,” and have done so in the Chapman lawsuit. “I am not aware of anything we have done that would have prejudiced us in the case.”

 

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