WARDS CORNER BEAUTY ACADEMY, a Virginia Corporation, Plaintiff - Appellant,
NATIONAL ACCREDITING COMMISSION OF CAREER ARTS & SCIENCES, Defendant-Appellee.
Argued: March 20, 2019
from the United States District Court for the Eastern
District of Virginia, at Norfolk. Mark S. Davis, Chief
District Judge. (2:16-cv-00639-MSD-LRL)
William A. Lascara, PENDER & COWARD, Virginia Beach,
Virginia, for Appellant.
Kim Whitelock, GORDON REES SCULLY MANSUKHANI, LLP,
Washington, D.C., for Appellee.
KEENAN and DIAZ, Circuit Judges, and DUNCAN, Senior Circuit
DUNCAN, Senior Circuit Judge.
Wards Corner Beauty Academy ("WCBA") appeals the
district court's dismissal of its case following a bench
trial. After the National Accrediting Commission of Career
Arts and Sciences ("NACCAS") withdrew WCBA's
accreditation as a barbering and cosmetology academy, WCBA
filed suit against NACCAS alleging due process violations in
the accreditation proceeding and seeking injunctive and
declaratory relief. On appeal, WCBA challenges the district
court's dismissal of its due process claims based on
three alleged violations: first, that one Commissioner had an
impermissible pecuniary interest in the outcome of the
decision; second, that NACCAS's alleged failure to follow
its own conflict of interest rules violated WCBA's due
process rights; and third, that the Commissioners reviewing
WCBA's accreditation prejudged the decision by acting as
both investigators and adjudicators. For the following
reasons, we affirm.
is a non-profit corporation organized under the laws of
Virginia. It is recognized by the United States Department of
Education as a national accrediting agency, see 20
U.S.C. § 1099b(f), and is responsible for granting and
reviewing accreditation for institutions such as WCBA.
a cosmetology and barbering institution in Virginia. WCBA was
first accredited in 1977 by NACCAS's predecessor, the
Cosmetology Accrediting Commission, and its accreditation was
continuously renewed until 2014. This case arises from
NACCAS's decision to withdraw WCBA's accreditation in
maintains Rules of Practice and Procedure (the "NACCAS
Rules") as well as Standards and Criteria that define
both the process for schools to renew accreditation and the
substantive criteria they must meet to maintain
accreditation. Pursuant to these requirements, schools must
maintain a benchmark graduation rate of at least fifty
percent. Each accredited school must submit an annual report
of aggregated student data to demonstrate compliance with the
benchmark graduation rate. If NACCAS determines that a school
has not met the benchmark graduation rate, the school must
bring itself into compliance with the NACCAS Rules. Should a
school fail to do so, NACCAS may take adverse action,
including placing the school on probation or withdrawing the
school's accreditation. A school may appeal such adverse
action to an Appellate Review Panel.
November 2014, WCBA submitted its 2013 Annual Report to
NACCAS reporting a graduation rate below the fifty percent
benchmark. NACCAS informed WCBA that it had twelve months to
bring its graduation rate into compliance. WCBA submitted its
2014 Annual Report to NACCAS in the fall of 2015, at which
point NACCAS determined that WCBA had failed to demonstrate a
compliant graduation rate. Nonetheless, NACCAS permitted WCBA
to submit supplemental information demonstrating that its
graduation rate was in fact compliant. WCBA submitted this
information in January 2016.
February 2016, NACCAS held a week-long Commission Meeting at
which the NACCAS Commission considered and voted upon
numerous school actions, including WCBA's accreditation.
A day or two before the Commission votes on a school action
(e.g., WCBA's accreditation), its File Review Teams, each
comprised of three Commissioners, independently investigate
the school action in question and make a recommendation to
the full Commission. As part of this process, File Review
Teams consider written reports prepared by NACCAS's
Compliance Department staff. NACCAS staff assigns case files
to the File Review Teams, who do not know which school
actions they will investigate until they meet on the
designated day. After the File Review Teams submit their
recommendations, the full Commission convenes to discuss and
then vote on the various school actions.
February 2016 Commission Meeting, the Chairman of the
Commission, Michael Bouman, presided over the Commission
Meeting by calling the agenda items and moderating the
discussion. Bouman also personally participated in reviewing
WCBA's file as part of the File Review Team process.
Typically, as Chairman, Bouman would not have been assigned
to a File Review Team. Because one of the File Review Teams
was missing a member, however, Bouman filled in as a
substitute. Bouman's File Review Team was tasked with
determining whether to recommend that the full Commission
withdraw WCBA's accreditation.
was also the President, Chief Operating Officer
("COO"), and part owner of Empire Education Group,
Inc. ("EEG"), which operated a school near
WCBA. The district court later determined that
at the time of the Commission Meeting, Bouman was unaware of
a potential conflict between WCBA and EEG. He had no prior
dealings with WCBA, nor was he aware of the geographic
proximity between the two schools. Consequently, he did not
reviewing the WCBA file, Bouman's File Review Team
recommended that NACCAS withdraw WCBA's accreditation. In
doing so, Bouman personally signed the "action
form" recommending that the full Commission vote to
withdraw accreditation. Subsequently, the full Commission
considered WCBA's case and unanimously voted to withdraw
WCBA's accreditation. As Chairman, Bouman did not
participate in the discussion before the full Commission, nor
did he vote on the matter, though he was present in the room.
WCBA appealed the decision in May 2016 to an Appellate Review
Panel, which affirmed the decision in October 2016.
then sued in federal district court, asserting that it was
denied its common law right to due process in the NACCAS
accreditation proceedings and requesting injunctive and
declaratory relief. Specifically, WCBA contended that
Bouman's involvement in the proceedings--given his
purported pecuniary interest in their outcome ...