State Board launches all-out defense against attorney general’s lawsuit

It was a flurry of filings.

Last week, the State Board of Education’s hired outside attorney submitted four motions designed to undercut Attorney General Raúl Labrador’s open meetings lawsuit.

An Ada County district judge considered one of these motions Thursday morning.

The multiple motions represent the board’s most aggressive pushback against Labrador. On June 20, the attorney general sued the State Board — saying the board broke state law when it discussed the University of Idaho’s proposed University of Phoenix purchase behind closed doors.

The board’s final closed executive session was held on May 15, three days before the board voted unanimously to endorse the $685 million purchase.

And while the open meetings lawsuit is a civil complaint, it is also a high-profile battle between Labrador, the state’s elected lawyer, and the State Board, a powerful policymaking body made up largely of gubernatorial appointees.

Here’s a deep dive into the nearly 200 pages of court filings from last week:

Can Labrador sue the State Board?

In one of her four Aug. 14 motions, Trudy Hanson Fouser said Labrador should be disqualified from suing the board.

Fouser — hired by the State Board after Labrador launched his lawsuit — argued that the board is one of Labrador’s clients. She said Labrador and his solicitor general, Theo Wold, exploited a “relationship of trust and confidence” to seek information to use against the State Board. She again noted that a Labrador deputy, Jenifer Marcus, attended the closed board meetings and deemed them appropriate.

“The Idaho Attorney General’s Office has a history of suing its own clients based on advice that it gave to its own clients,” Fouser wrote.

On Aug. 18, District Judge Jason Scott agreed to take up the disqualification issue. This will be the topic before the court Thursday morning.

In his brief order, Scott worked in a dig at Labrador — citing an ongoing legal dispute pitting the attorney general against the Department of Health and Welfare.

“Having recently faced a similar motion to disqualify in another case, Attorney General Labrador should be well positioned to respond to this one in short order.”

Fast-tracking the case

Thursday’s court date isn’t an accident.

In a pair of related Aug. 14 motions, Fouser asked the court for a speedy hearing — and asked the court to consider that request as quickly as possible.

She said the lawsuit centers on a straightforward open meetings dispute that can be quickly resolved. And if the case remains mired in court, she said, accreditors for the U of I and Phoenix might balk at signing off  — and without their approval, the deal can’t go forward. “The need to move forward as expeditiously as possible is substantial.”

In a statement supporting this motion, U of I general counsel Kent Nelson noted that Phoenix’s accreditors have a site visit scheduled for Aug. 30. “Unless this matter is resolved, the concern is that the accreditation team will decline to approve the transaction.”

And Scott did move quickly. On Aug. 16, he ordered Labrador to respond to the motion for a speedy hearing — by noon the next day.

In his response, Labrador said a speedy trial would short-circuit the “discovery” process — the fact-finding leading up to a court hearing. The claim that the case jeopardizes the purchase is, he said, merely “speculative.” And after discussing a multimillion-dollar purchase behind closed doors, he said, the State Board is again trying to bypass the public through a hurried court hearing. “The board’s stubborn attempts to shield the transaction from public scrutiny should not receive any traction in this court.”

Another motion for dismissal

In her fourth motion, Fouser again asked the court to dismiss Labrador’s case. Consistent with previous filings, Fouser argued that the closed meetings were legal — since the board was considering a possible purchase that put the U of I in competition with other public bidders. Fouser also called Labrador’s lawsuit “an attempt to advance his policy position on the proposed transaction.”

Other key players weigh in

Last week, several central figures in the U of I-Phoenix purchase filed written statements with the court, submitted on Fouser’s behalf. The statements shed some new light on the process, and supported Fouser’s motions.

C. Scott Green. The U of I president said the university first discussed a possible Phoenix purchase in February. But he said the process picked up through the spring — and on April 27, the U of I hired a national accounting firm “to perform deep due diligence” on Phoenix. In May, with a potential purchase “becoming much more likely,” the U of I worked up its proposal to create a separate nonprofit to purchase Phoenix.

That’s the plan the State Board approved on May 18.

Matt Freeman. The State Board executive director said the plan was still in flux leading up to that pivotal public meeting. He said the board initially wanted to meet on May 17. U of I officials asked for a one-day delay, “because the terms of the proposed transaction were still being negotiated.” This statement seems to support one of the defense team’s key arguments: The proposed Phoenix purchase was not a done deal on May 15, when the State Board held its third and final closed-door meeting.

Freeman also recounted his June 20 meeting with Labrador and Wold, in terms that support the motion to disqualify Labrador. He said he “openly and candidly” discussed the open meeting questions — and was told, only at the end of the meeting, that Labrador was planning to file a lawsuit.

Kurt Liebich. The State Board member said the board received “assurances” from U of I officials that “multiple entities, including state entities” were interested in a Phoenix purchase.

William Gilbert. The State Board member said the board conducted a “comprehensive review” of the Phoenix purchase — but also suggested this work could go for naught. “The uncertainty created by Attorney General Labrador’s lawsuit has the potential to jeopardize the transaction.”

Gregory Finkelstein.  The managing director of Tyton Partners, the New York-based financial advisers working on a purchase on Phoenix’s behalf, Finkelstein said the U of I faced competition in the weeks leading up to the purchase. Specifically, he said, a “highly reputable state university system” had expressed interest in buying Phoenix.

Kevin Richert

Kevin Richert

Senior reporter and blogger Kevin Richert specializes in education politics and education policy. He has more than 30 years of experience in Idaho journalism. He is a frequent guest on "Idaho Reports" on Idaho Public Television and "Idaho Matters" on Boise State Public Radio. Follow Kevin on Twitter: @KevinRichert. He can be reached at [email protected]

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