Massachusetts School v. American Bar
Case Date: 04/27/1998
Court: United States Court of Appeals
Docket No: 97-1926
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FOR THE FIRST CIRCUIT _________________________ No. 97-1926 MASSACHUSETTS SCHOOL OF LAW AT ANDOVER, INC., Plaintiff, Appellant, v. AMERICAN BAR ASSOCIATION, ET AL., Defendants, Appellees. _________________________ APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Morris E. Lasker, Senior U.S. District Judge] _________________________ Before Selya, Circuit Judge, Campbell, Senior Circuit Judge, and Boudin, Circuit Judge. _________________________ Michael L. Coyne, with whom Peter M. Malaguti was on brief, for appellant. Joseph L. Kociubes, with whom Peter J. Mancusi, Bingham, Dana LLP, David T. Pritikin, David R. Stewart, Sidley & Austin, Darryl L. DePriest, and Catherine A. Daubard were on brief, for appellees American Bar Association and affiliated individuals. Vincent M. Amoroso, with whom Peabody & Arnold, Robert A. Burgoyne, and Fulbright & Jaworski L.L.P. were on brief, for appellee Association of American Law Schools. James R. DeGiacomo, with whom Judith K. Wyman and Roche, Carens & DeGiacomo, P.C. were on brief, for appellee New England School of Law. _________________________ April 24, 1998 _________________________ SELYA, Circuit Judge. The lawsuit that undergirds this appeal pits a fledgling law school, built on a foundation of unconventional premises, against the legal establishment. The gargantuan record, capable of inducing tapephobia in even the hardiest appellate panel, is forbidding, but sheer bulk rarely is an accurate proxy for complexity. Having scaled the mountain of papers and obtained a clear view of the legal landscape, we conclude that the lower court correctly apprehended both the issues and the answers. Consequently, we uphold the several rulings that the appellant so vigorously contests. I. THE PROTAGONISTS In late 1995, Massachusetts School of Law (MSL) sued the American Bar Association (the ABA), the American Association of Law Schools (the AALS), New England School of Law (NESL), and fourteen individual defendants. The facts that inform MSL's wide-ranging allegations are too diffuse to shed much light at this juncture, so we leave them shuttered until they can illuminate the specific issues raised by this appeal. We deem it helpful, however, to describe at the outset the institutions and individuals involved in the litigation. We begin with MSL, a non-profit institution that opened its doors in 1988. The school's self-proclaimed mission is to provide high-quality, affordable legal education to capable persons who traditionally have been shut out of the legal profession, including members of disadvantaged demographic populations and persons turning to the law in search of a second career. To this end, MSL does not require applicants to take the Law School Aptitude Test (LSAT) because it considers the test biased. Moreover, MSL's curriculum features a higher-than-usual percentage of adjunct instructors and a concentrated focus on professional skills courses. MSL is not a fully accredited law school, but in 1990, the Massachusetts Board of Regents authorized the school to award the J.D. degree and thereby enabled MSL graduates to sit for the Massachusetts bar. The ABA is the largest national organization of the legal profession. It has a membership of more than 380,000, composed principally of practicing lawyers (including lawyers in government and corporate America), judges, court administrators, and legal educators. Though the ABA does not have the power to discipline lawyers, it promulgates model rules, develops guidelines, and strives to function as the national voice of the legal profession. In that capacity, it long has served as the chief accreditor of law schools. The AALS is a non-profit association of 160 law schools. Its stated objective is "the improvement of the legal profession through legal education." It serves as a trade organization for law professors and, with reference to legal education, acts as the academy's principal representative to the federal government and to national higher education organizations. The AALS is separate from the ABA, but the two informally interlock in various ways. Many individuals are active in both organizations and many AALS members participate in the ABA accreditation process. The fourteen individual defendants divide into two groups. One group (the Eight Individual Defendants) comprises the seven members of the ABA's Accreditation Committee (the Committee) plus the immediate past chair of the ABA's Section of Legal Education and Admissions to the Bar (the Section). The other group (the Six Individual Defendants) comprises the five members of the ABA team that visited MSL during its unsuccessful effort to obtain accreditation, plus a consultant who advised the ABA during that process. All fourteen individual defendants are active participants in accreditation-related matters. NESL is an ABA-accredited law school located in Boston, Massachusetts. MSL regards itself as a competitor of NESL and one which, if accredited, would be all the more formidable. II. THE ACCREDITATION PROCESS For more than 70 years, the ABA has promulgated the standards for law school accreditation (the Standards). It is widely believed among legal educators and regulatory organizations that compliance with the Standards enhances the quality of legal education. MSL disputes this conventional wisdom but, since 1952, the United States Department of Education (the DOE) has recognized the ABA as a "reliable authority" anent the quality of legal education and has designated it as the relevant accrediting body. 20 U.S.C. 1099b(a). As a result of this recognition, ABA- accredited schools are eligible to participate in federal student loan programs. See 20 U.S.C. 1141(a)(5). Accredited institutions also receive various state-based benefits, not the least of which is that all fifty states, the District of Columbia, and the Commonwealth of Puerto Rico deem graduation from an ABA- accredited institution sufficient to satisfy the legal education requirement for admission to the bar. The accreditation process works something like this. A law school may apply for ABA accreditation after three years of operation. Its application must include a self-study, delineating its perception of its present and projected compliance with the Standards and explaining any deviations from them. The Committee reviews each application and appoints a site-visit team to conduct interviews and inspect the applicant's physical plant. This team reports its findings to the Committee. If the Committee determines that the school is in compliance with the Standards, the accreditation process moves forward. If a school is found not to be in compliance with the Standards, the Committee nonetheless may recommend provisional accreditation if it receives satisfactory assurances that the applicant will achieve compliance within three years. See Standard 104(a). In the absence of compliance (actual or anticipated), there is another potential route to accreditation: the applicant may request a variance from the Standards, and the body that oversees the accreditation process, the Council of the Section (the Council), may choose to grant it as a matter of discretion. Standard 802 governs the variance procedure. Because this Standard is central to MSL's accreditation effort, we reprint it in full: A law school proposing to offer a program of legal education contrary to the terms of the Standards may apply to the Council for a variance. The variance may be granted if the Council finds that the proposal is consistent with the general purpose of the Standards. The Council may impose such conditions or qualifications as it deems appropriate. III. MSL'S ACCREDITATION EFFORT MSL applied for ABA accreditation in 1992. From the outset, MSL recognized that its practices were discordant with the Standards, yet remained steadfast in its deliberately contrarian mission. At no time did MSL argue present compliance with the Standards or promise future compliance. Instead, it confessed in its self-study that "[t]o the considerable extent MSL's goals and methods are innovative, sometimes they deliberately run counter to conventional ABA criteria of accreditation." Not surprisingly, MSL invoked Standard 802 by letter dated January 27, 1993, and requested "a waiver of each and every Standard that . . . might bar accreditation" on the ground that, despite its admitted lack of conformity, "MSL provides a high quality legal education that meets the underlying objectives of the accreditation process." An ABA team visited MSL's campus in April 1993. The next month, the site-visit team recommended that the Committee deny accreditation because MSL was in default of myriad Standards. The Committee accepted the recommendation and rejected the application. MSL successively appealed to the Council and to the ABA's House of Delegates, both of which upheld the denial of accreditation. IV. PROCEDURAL HISTORY Although the instant litigation has all the hurly-burly of a major engagement, it is in point of fact a rear-guard action. In November 1993, MSL brought an antitrust suit against the ABA, the AALS, and twenty-one individual defendants (including twelve of the fourteen persons sued here) in the United States District Court for the Eastern District of Pennsylvania. The Third Circuit subsequently characterized MSL's complaint as alleging that the named defendants conspired "to enforce the ABA's anticompetitive accreditation standards [and thus violated the Sherman Act] by: (1) fixing the price of faculty salaries; (2) requiring reduced teaching hours and non-teaching duties; (3) requiring paid sabbaticals; (4) forcing the hiring of more professors in order to lower student/faculty ratios; (5) limiting the use of adjunct professors; (6) prohibiting the use of required or for-credit bar review courses; (7) forcing schools to limit the number of hours students could work; (8) prohibiting ABA-accredited schools from accepting credit transfers from unaccredited schools and from enrolling graduates of unaccredited schools in graduate programs; (9) requiring more expensive and elaborate physical and library facilities; and (10) requiring schools to use the LSAT." Massachusetts Sch. of Law at Andover, Inc. v. American Bar Ass'n, 107 F.3d 1026, 1031-32 (3d Cir.) (MSL I), cert. denied, 118 S. Ct. 264 (1997). Between 1994 and 1996, the district court published no fewer than nine opinions. At the end of the line, the district court entered summary judgment in favor of all remaining defendants (including the ABA and the AALS), and the Third Circuit affirmed. See id. With the antitrust case still extant, MSL sought to try its luck in the Massachusetts state courts. Its suit named the ABA, the AALS, twelve of the same individuals whom it had sued in MSL I, and three virgin defendants (NESL and two additional Committee members, Moeser and Yu). MSL's complaint asserts claims for violation of Mass. Gen. Laws ch. 93A and for tortious misrepresentation against all the defendants, as well as claims for fraud, deceit, civil conspiracy, and breach of contract against the AALS, the ABA, and the fourteen named individuals. The strand that sews together this tapestry of charges is MSL's accusation that the ABA and the AALS for many years have banded together to monopolize legal education with a goal of increasing their institutional power and boosting the salaries of law professors and administrators. MSL asserts that its educational philosophy poses a threat to the ABA/AALS cabal and that the two organizations therefore conspired to deny MSL accreditation, despite the fact that MSL's educational offerings are exemplary. Invoking 20 U.S.C. 1099b(f), discussed infra Part V, the defendants removed the case to the United States District Court for the District of Massachusetts. The district court denied MSL's timely motion to remand. After a full year's worth of pretrial skirmishing, the court methodically dismembered MSL's complaint, defendant by defendant, during a four month period in 1997: on January 10, it granted NESL's motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6); on February 13, it granted the Eight Individual Defendants' motion to dismiss for lack of personal jurisdiction; on March 3, it granted the AALS's motion for summary judgment; and on May 8, it granted summary judgment in favor of the ABA and the Six Individual Defendants. MSL appeals from each of these rulings. We first address two threshold jurisdictional issues: the refusal to remand and the court's holding that it lacked jurisdiction over the Eight Individual Defendants. From that point forward, we proceed on a defendant-by-defendant basis. V. THE MOTION TO REMAND The court below denied MSL's motion to remand, ruling that the suit arose under federal law. See 28 U.S.C. 1331 (1994); see also Viqueira v. First Bank, ___ F.3d ___, ___ (1st Cir. 1998) [No. 97-2127, slip. op. at 8-13] (discussing federal question jurisdiction). Judge Lasker premised this holding on 20 U.S.C. 1099b(f), which provides in pertinent part: Notwithstanding any other provision of law, any civil action brought by an institution of higher education seeking accreditation from, or accredited by, an accrediting agency or association approved by the Secretary . . . and involving the denial, withdrawal, or termination of accreditation of the institution of higher education, shall be brought in the appropriate United States district court. We review the denial of a motion to remand de novo and place the burden of persuasion upon the party who insists that federal jurisdiction obtains. See BIW Deceived v. Local S6, 132 F.3d 824, 831 (1st Cir. 1997). We appear to be the first appellate court to address this seldom-used removal statute. The statutory language is straightforward and the provision's meaning clear: if a civil action brought by an institution of higher education involves a denial of accreditation, then federal jurisdiction exists. MSL, by self-characterization, is an institution of higher education, and the ABA's withholding of accreditation is the cynosure of its suit. Thus, to the extent that MSL alleges harms within the accreditation process and such allegations permeate its complaint section 1099b(f) applies. The only colorable issue that MSL raises with regard to remand implicates the constitutionality of section 1099b(f). This, too, is a question of first impression. For a case properly to "aris[e] under" federal law, 28 U.S.C. 1331, Congress must confer federal jurisdiction in the context of a broad statutory framework within an area susceptible to congressional regulation. In other words, the jurisdictional grant must be "simply one part of [a] comprehensive scheme." Verlinden B. V. v. Central Bank of Nigeria, 461 U.S. 480, 496 (1983). MSL contends that section 1099b(f) fails this test and that Article III does not permit Congress to confer federal jurisdiction by means of such a freewheeling jurisdictional statute. See, e.g., The Propellor Genesee Chief v. Fitzhugh, 53 U.S. (12 How.) 443, 452 (1851); Mossman v. Higginson, 4 U.S. (4 Dall.) 12, 13 (1800) (per curiam). The focus of our inquiry thus becomes whether section 1099b(f)'s grant of jurisdiction occurs within a sufficiently comprehensive regulatory scheme. We answer this question affirmatively. Accreditation serves an important national function because once an institution of higher education becomes accredited by the DOE or its designated accrediting agency, the institution becomes eligible for federal student loan monies. See Chicago Sch. of Automatic Transmissions, Inc. v. Accreditation Alliance of Career Schs. & Colleges, 44 F.3d 447, 449 (7th Cir. 1994). The Higher Education Act and the DOE's implementing regulations spin a sophisticated regulatory web that governs the relationship between accrediting agencies and accreditation applicants. See, e.g., 34 C.F.R. 602.24, 602.28 (1996) (requiring that accrediting agencies apply consistent standards and give applicants due process). The grant of federal jurisdiction over matters involving accreditation is reasonably related to the efficient operation of that system. No more is exigible. To summarize, section 1099b(f)'s grant of federal jurisdiction occurs within a broad statutory framework, properly the subject of congressional concern. Accordingly, the statute comports with Article III. Removal was altogether appropriate. VI. THE EIGHT INDIVIDUAL DEFENDANTS When the district court applies the prima facie standard and grants a motion to dismiss for want of in personam jurisdiction without conducting an evidentiary hearing to resolve disputed jurisdictional facts, the court of appeals reviews its ruling de novo. See Foster-Miller, Inc. v. Babcock & Wilcox Canada, 46 F.3d 138, 147 (1st Cir. 1995). The lower court's decision to dismiss MSL's action as to the Committee members defendants Hasl, Moeser, Ryan, Schneider, Sowle, Walwer, and Yu falls within this sphere. So does the order dismissing the action against the last of the Eight Individual Defendants, Henry Ramsey, Jr. (the chair of the Section). Withal, Ramsey's situation requires a more extended analysis. The factual basis for MSL's jurisdictional initiative derives predominantly from three events that occurred in 1993. According to the complaint, Hasl, Moeser, Schneider, and Ramsey met in Boston on February 6. The quartet allegedly "used false statements and charges" the nature of which is not disclosed in order "to try to bring their plan of non-accreditation of MSL to fruition." A review of the parties' proffers reveals, however, that the only MSL-related business transacted at this meeting involved a decision to delay the site visit by one month. MSL next alludes to a Committee meeting that took place on June 23 in Brooklyn, New York. The Eight Individual Defendants all attended this session and participated in the denial of MSL's application for accreditation. The Eight Individual Defendants, save Ramsey, also attended a retreat that took place on Nantucket Island, in Massachusetts, from June 24-27. MSL asserts conclusorily that the Committee "finalized" the denial of its application during this period, but the record flatly contradicts this assertion: the retreat participants all maintain (to quote from typical language appearing in their several affidavits) that "[w]hile in Nantucket, the Committee did not take up any agenda item concerning MSL, as all matters concerning MSL had been concluded in Brooklyn, New York, on June 23, 1993." MSL proffers no clear evidence showing that these statements are inaccurate. On a motion to dismiss for want of in personamjurisdiction, Fed. R. Civ. P. 12(b)(2), the plaintiff ultimately bears the burden of persuading the court that jurisdiction exists. See McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189 (1936); Rodriguez v. Fullerton Tires Corp., 115 F.3d 81, 83 (1st Cir. 1997). In conducting the requisite analysis under the prima facie standard, we take specific facts affirmatively alleged by the plaintiff as true (whether or not disputed) and construe them in the light most congenial to the plaintiff's jurisdictional claim. See Ticketmaster, Inc. v. Alioto, 26 F.3d 201, 203 (1st Cir. 1994). We then add to the mix facts put forward by the defendants, to the extent that they are uncontradicted. See, e.g., Topp v. Compair Inc., 814 F.2d 830, 836-37 (1st Cir. 1987). We caution that, despite the liberality of this approach, the law does not require us struthiously to "credit conclusory allegations or draw farfetched inferences." Ticketmaster-N.Y., 26 F.3d at 203. A district court may exercise authority over a defendant by virtue of either general or specific jurisdiction. SeeDonatelli v. National Hockey League, 893 F.2d 459, 462-63 (1st Cir. 1990). General jurisdiction "exists when the litigation is not directly founded on the defendant's forum-based contacts, but the defendant has nevertheless engaged in continuous and systematic activity, unrelated to the suit, in the forum state." United Elec., Radio & Mach. Workers v. 163 Pleasant St. Corp., 960 F.2d 1080, 1088 (1st Cir. 1992). MSL does not argue, and we find no facts to suggest, that any of the Eight Individual Defendants can be brought before a Massachusetts court on a general jurisdiction theory. In the absence of general jurisdiction, a court's power depends upon the existence of specific jurisdiction. Specific jurisdiction exists when there is a demonstrable nexus between a plaintiff's claims and a defendant's forum-based activities, such as when the litigation itself is founded directly on those activities. See Donatelli, 893 F.2d at 462. In this instance, MSL asserts specific jurisdiction under Mass. Gen. L. ch. 223A. 3 (1992). MSL cites variously to section 3(a), which extends "personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's . . . transacting any business" in Massachusetts, and to section 3(c), which authorizes personal jurisdiction over a non- resident who causes "tortious injury" by an "act or omission in this Commonwealth." We need not pause to consider the particulars of the Massachusetts long-arm statute. Even if that statute, correctly applied, would purport to grant jurisdiction over the Eight Individual Defendants a matter of state law on which we take no view MSL still would have to demonstrate that "the exercise of jurisdiction pursuant to that statute comports with the strictures of the Constitution." Pritzker v. Yari, 42 F.3d 53, 60 (1st Cir. 1994). In the personal jurisdiction context, we have characterized compliance with the Constitution as implicating "three distinct components, namely, relatedness, purposeful availment (sometimes called 'minimum contacts'), and reasonableness." Foster-Miller, 46 F.3d at 144. We analyze the situations of the Eight Individuals Defendants through this prism. In order for the extension of personal jurisdiction to survive constitutional scrutiny, a claim must "arise out of, or be related to, the defendant's in-forum activities." Ticketmaster- N.Y., 26 F.3d at 206. We have approached the relatedness inquiry with slightly different emphases when the plaintiff asserts a contract claim then when she asserts a tort claim: if a contract claim, our stereotypical inquiry tends to ask whether the defendant's forum-based activities are "instrumental in the formation of the contract," Hahn v. Vermont Law Sch., 698 F.2d 48, 51 (1st Cir. 1983); if a tort claim, we customarily look to whether the plaintiff has established "cause in fact (i.e., the injury would not have occurred 'but for' the defendant's forum-state activity) and legal cause (i.e., the defendant's in-state conduct gave birth to the cause of action)." United Elec., Radio & Mach. Workers, 960 F.2d at 1089; see also Ticketmaster-N.Y., 26 F.3d at 207 (noting that the relatedness inquiry is intended in part to "ensure[] that the element of causation remains in the forefront of the due process investigation"). In respect to the Eight Individual Defendants, MSL presents only tort claims before us, and thus our relatedness analysis thus focuses on causation. We find this element clearly lacking as regards the seven Committee members. The only activities undertaken in Massachusetts by any of these seven persons that possibly could relate to MSL's state-law claims consists of the participation of three of them in the Boston meeting and the attendance of all seven at the Nantucket retreat. MSL's insinuations notwithstanding, the particularized facts that were before the district court show conclusively that both of these activities were benign: the Boston meeting dealt with MSL in a purely peripheral sense (doing no more than to delay the site visit to MSL's facility by one month), and the retreat did not deal with MSL at all. MSL also argues that two letters written to it by James White, an ABA consultant, are sufficient to extend personal jurisdiction over the Eight Individual Defendants. One of these communiques informed MSL of the Committee's decision not to grant MSL provisional approval; contemporaneous copies were sent by White to the seven Committee members. The other letter informed MSL of the Council's decision to reject its application for a variance pursuant to Standard 802 and to deny its accreditation appeal. Contemporaneous copies of this letter were sent to defendants Hasl, Moeser, and Ramsey. These missives do not carry weight in the jurisdictional calculus vis- |