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INTERBORO INST., INC. v. MAURER

October 6, 1997

INTERBORO INSTITUTE, INC., Plaintiff, against ROBERT J. MAURER, Individually and as President of Higher Education Services Corp.; H. CARL McCALL, Individually and as Comptroller of the State of New York; ROBERT ATTMORE, Individually and as Deputy Comptroller of the State of New York; RICHARD P. MILLS, Individually and as Commissioner of Education of the State of New York; JEANINE GRINAGE, Individually and as Deputy Commissioner for Higher and Professional Education of the New York State Department of Education; and DONALD J. NOLAN, Individually and as Former Commissioner for Higher and Professional Education of the New York State Department of Education, Defendants.


The opinion of the court was delivered by: MCAVOY

 I. BACKGROUND

 A. Procedural History

 Plaintiff, Interboro Institute, Inc. ("Interboro"), commenced this action against various present and former state officials of the New York State Comptroller's Office ("Comptroller"), the Department of Education and the Higher Education Services Corporation ("HESC"). The action arises from a determination of the Comptroller to disallow approximately $ 4.8 million of awarded financial aid funds forwarded to Interboro on behalf of students previously certified as eligible by the school for the Tuition Assistance Program ("TAP") and the Supplemental Tuition Assistance Program ("STAP"). *fn1"

 According to the defendants, the decision to seek repayment of these funds resulted from conducted audits of Interboro for the 1989-1990, 1990-1991 and 1991-1992 grant years, revealing that Interboro improperly certified many students as eligible for tuition assistance. Interboro, in turn, contends that the Comptroller's decision to disallow funds was motived by animus, subjecting it to selective treatment much different from other similarly situated colleges, in violation of its equal protection rights. *fn2"

 For the reasons that follow, defendants' motion for summary judgment is granted.

 B. Facts

 As required on a motion for summary judgment, the following facts are construed in the light most favorable to Interboro, the non-moving party. Consarc Corp. v. Marine Midland Bank, N.A., 996 F.2d 568, 572 (2d Cir. 1993).

 Interboro is an accredited junior college located in New York City. Interboro is authorized to confer Associate in Occupational Studies degrees in six areas: accounting, business administration, paralegalism, secretarial sciences, security management and ophthalmic dispensing. Interboro enrolls approximately 1000 students, 95% of whom are minorities, and most of whom are women. Additionally, approximately 95% of the students receive TAP or STAP awards.

 Because Interboro alleges that state officials acted out of animus and selectively enforced regulations against the school for the 1989-1992 years, the Court examines Interboro's historical relationship with the defendants. For purposes of clarity, the Court first examines Interboro's relationship with the Department of Education, and then surveys Interboro's relationship with the Comptroller as it relates to the conducted audits.

 i) Registration Proceedings with the Department of Education

 On May 4-6, 1983, the Education Department conducted a routine on-site evaluation of Interboro's programs. Numerous deficiencies were identified in the Education Department's final report, which was sent to Interboro. Based upon Interboro's response to the report, Deputy Commissioner Nolan registered Interboro until March 1, 1985, conditioned on Interboro's efforts to remedy the deficiencies.

 In its first follow-up visit in October 1984, the Education Department concluded that Interboro had not made sufficient improvement in several remaining areas, such as remediation, the role of the faculty and attendance. Nolan notified Interboro that conditional registration was extended until September 1, 1985, to permit Interboro to address these problems.

 A second follow-up visit occurred on May 29-31, 1985. The team consisted of an Education Department representative and five professors and officials from Community Colleges across the state. The team reviewed course syllabi, textbooks, class schedules, library resources, instructional facilities, faculty resumes and student data. After review, the team concluded that Interboro had not made sufficient progress in correcting deficiencies. Specifically, the team found that the library was inadequate to support any of Interboro's programs, that the school exhibited pervase absenteeism, that grades were inflated, that classes offered were not of college level standards, that program requirements were modified to enable students to graduate and that credit was given to students who should have received a failing grade. Nolan thereafter decided not to register Interboro. Interboro appealed this decision internally.

 That appeal, however, was suspended when Interboro commenced a federal action against the Education Department, seeking to prevent it from denying re-registration. Interboro Institute, Inc. v. Ambach, 86-CV-274 (N.D.N.Y.). The district court dismissed this action, and Interboro appealed to the Second Circuit.

 Ultimately, Interboro withdrew its appeal to the Second Circuit, allowing the administrative appeal to continue. On appeal, the Commissioner decided that another site evaluation was required. The Commissioner reasoned that another site evaluation was warranted because of the conflicting allegations presented and the lapse of time since the last visit in 1985.

 An evaluation team visited Interboro from February 23-27, 1990. The final report issued by the Education Department concluded that Interboro was deficient in four areas: admissions, remediation and student progress; faculty; and facilities. Specifically, the report found that Interboro did not require its students to meet its own published admissions criteria, that remediation efforts were inadequate as reflected by a nearly two-thirds drop-out rate for the 1985 academic year, that faculty members were overburdened and that the facilities were totally inadequate. Additionally, the Education Department received several letters of complaint ...


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