Nova University v. Educational Institution Licensure Commission

Nova University (Nova) seeks review of an Order of the Educational Institution Li-censure Commission (Commission) denying Nova’s application for a license to offer Doctorate of Public Administration degree courses in the District of Columbia. The Commission denied the license, without prejudice, on the grounds that Nova had not complied with the District’s licensing statutes and regulations with respect to adequate full-time faculty and adequate library resources.

Nova challenges the denial of its application for a license on the grounds that: (1) D.C.Code § 29-815 (1981), the District’s licensing statute, is not applicable to schools, such as Nova, whose degrees are conferred outside the District of Columbia; (2) D.C. Code § 29-815 is unconstitutional on its face and as applied to Nova because it violates the First Amendment; (3) D.C. Code § 29-815 and the regulations guiding the issuance of licenses are unconstitutionally vague; and (4) the Commission’s denial of a license was arbitrary, capricious, and unsupported by substantial evidence in the record.

We disagree with each of Nova’s contentions, and therefore affirm the Commission’s decision.

I.

A preliminary review of the legislation relevant to this case and its history is helpful to place in context the issues raised by Nova. In 1929, the District of Columbia was not only the capital of the United States, but the “capital” for practically all diploma mills operating not only in the District, but throughout the United States and the world. S.Rep.No. 611, 70th Cong., 1st Sess. (1928). This dubious distinction resulted from the District’s lax laws relating to the incorporation of educational institutions, the power these institutions had to confer degrees under their general charters, and the opportunity to advertise themselves as operating under the authority of the United States Government or Congress. Id. at 2. Hundreds of fraudulent institutions of “learning” incorporated in the District and sold degrees from baccalaureate to doctoral in every conceivable field of study with little or no academic work; in addition, the charters themselves were sold to individuals who carried on the “educational” programs in other states and countries. Id. at 2. At the urging of the United States Attorney’s Office, local citizens and schools, sister jurisdictions and foreign countries, Congress enacted a statute “to Regulate Degree-Conferring Institutions in the District of Columbia.” Pub.L.No. 70-949, § 586a, 45 Stat. 1504 (1929) (codified at D.C. Code §§ 29-815 to 818 (1981)). The statute requires licensing of all degree-conferring institutions incorporated in the District or incorporated in another state but operating in the District, and is set out in relevant part below:

§ 29-815. License to confer degrees— Issuance by Educational Institution Li-censure Commission required.

No institution ... incorporated under the provisions of this chapter shall have the power to confer any degree in the District of Columbia or elsewhere, nor shall any institution incorporated outside of the District of Columbia ..., undertaking to confer any degree, operate in the District of Columbia, unless ..., by virtue of a license from the Educational Institution Licensure Commission, which before granting any such license may require satisfactory evidence:

(1) That in the case of ... an incorporated institution, a majority of the trustees, directors, or managers of said institution are persons of good repute and qualified to conduct an institution of learning;

(2) That any such degree shall be awarded only after such quantity and quality of work shall have been completed as are usually required by reputable institutions awarding the same degree...

*1177 (4) That considering the number and character of the courses offered, the faculty is of reasonable number and properly qualified, and that the institution is possessed of suitable classroom, laboratory, and library equipment.

D.C.Code § 29-815 (1981).

The statute provides for criminal penalties against anyone “who shall, directly or indirectly, participate in, aid, or assist in the conferring of any degree by any unlicensed ... institution_D.C.Code § 29-819 (1981).

In 1977, the Council of the District of Columbia established the Educational Institution Licensure Commission to perform licensing functions under D.C.Code § 29-815. See D.C.Code § 31-1601 to 1608 (1981). The purpose of this legislation is outlined in its opening section and set out, in part, below:

[T]o provide for the protection, education, and welfare of the citizens of the District of Columbia, its private educational institutions, and its students, by:

(1) Establishing minimum standards concerning quality of education, ethical and business practices, health and safety, and fiscal responsibility to protect against substandard, transient, unethical, deceptive, or fraudulent institutions and practices;

(2) Prohibiting the granting of false or misleading educational credentials;

(3) Regulating the use of academic terminology in naming or otherwise designating educational institutions;

(4) Prohibiting misleading literature, advertising, solicitation, or misrepresentation by educational institutions or their agents.

D.C.Code § 31-1601 (1981).

In 1980, the Council amended the 1977 statute, giving legislative sanction to regulations previously promulgated by the Commission’s predecessor, the Board of Higher Education. D.C.Code § 31-1606(a) (1981). These regulations set forth the procedures and criteria by which licenses are issued and revoked. See Regulations Relating to the Licensing of Institutions Which Confer Degrees (1978) [hereinafter Regulations].

Section III of the Regulations contains eleven criteria the Commission is to consider in issuing licenses, involving inquiry into: institutional control; administrative staff and procedures; financial resources; number and quality of faculty; curricula, correspondence, extension, and summer session programs; admission requirements; library; physical plant and equipment; student personnel, health, and recreational services; and institutional publications. Applicants for a license are required to submit a statement as to how they plan to meet the criteria or give reasons why they consider themselves justified in not meeting a particular requirement. Regulations at § III (l)-(ll). The regulations provide for flexibility, recognizing that “the ... criteria will not be equally applicable to each institution wishing to award degrees.” Id. Applicants are entitled to a de novo hearing prior to the denial of a license, and to judicial review if a license is denied. Id. at § IV(e), (4)(2). 1

II.

It is against this statutory background that this case arose. Nova University is a non-profit corporation organized and existing under the laws of Florida. In addition to undergraduate, graduate, and professional curricula taught at its home campus in Fort Lauderdale, Nova has instituted a variety of field-based, or external degree programs, designed to lead to the conferral by Nova in Florida of various degrees for professional persons. The field-based program of concern here is the Doctorate of Public Administration (DPA). Candidates for this degree are not required to fulfill traditional residence requirements at the *1178 Nova campus in Fort Lauderdale. Instead, they form “clusters” of 20 to 25 students who meet at a site in the areas where they live. At the time of the hearing, Nova was operating 11 clusters at various locations throughout the United States, with plans to increase to 15 in the near future.

Nova’s DPA program requires a minimum of three years to complete and consists of nine sequences (analogous to semesters or quarters), with each sequence consisting of three to four “units” (analogous to courses). Six of the nine sequences are taught at the cluster sites, and each of the units meets once a month for approximately eighteen to twenty hours from Friday night through Saturday. The remaining three sequences are taught in residence in Ft. Lauderdale. Each of these last about one week and occur annually.

The faculty of the DPA program consists of approximately nine professors from Nova’s Florida campus and thirty-three national members, called preceptors. Generally, preceptors travel to the clusters to teach local course units and the Florida-based faculty teaches Florida units. Preceptors are academicians and practitioners in the public administration field, most of whom also teach at universities with traditional residence requirements. In addition, each cluster is coordinated by a cluster director, a contract employee living in the cluster area whose role consists of administrative and recruitment duties as well as counseling students.

In addition to preparing papers in anticipation of the unit sessions, students must complete a series of research papers, pass comprehensive written and oral examinations, and complete a final paper, an “analytical research project,” which Nova deems to be the equivalent of a doctoral dissertation. The research papers are supervised by Nova’s faculty in Ft. Lauder-dale, during the annual week long conferences, as well as by telephone and written communication. The two-day comprehensive written examination is prepared and graded by the faculty in Florida, but administered locally. The oral examination is taken in Florida and administered by faculty members. If a student successfully completes the course work, comprehensive oral and written tests, and analytical research project, Nova awards a Doctor of Public Administration, under powers derived from its incorporation in Florida.

Since 1971, Nova has been accredited by the Southern Association of Colleges and Schools (SACS), the officially recognized regional accrediting association of the southeastern United States. Nova’s accreditation was most recently affirmed for a ten-year period after a review in 1974-75 of its educational programs, including its external degree programs, such as the one here at issue. In 1980, SACS separately reviewed Nova’s field-based programs, including the DPA program, and this review had no effect on Nova’s accreditation.

In October 1980, Nova applied to the Commission for a license to offer DPA degree courses in the District of Columbia. In response to Nova’s application, the Commission appointed a three-person evaluation team, composed of non-members of the Commission and approved by Nova, to visit Nova in Florida to determine whether Nova’s DPA program met the District’s statutory and regulatory criteria for licensing.

The team issued a report recommending denial of a license. Nova responded to the team report, pointing out what it believed were factual errors, and providing the Commission with additional information and proposals. The Commission then appointed a Task Force, made up of two Commission members, to evaluate the team’s report and Nova’s response. On March 4, 1981, the Task Force submitted its findings and concluded that the Commission should deny licensure. The Commission approved the recommendations of the site evaluation team and notified Nova of its intention to deny a license, the reasons for this intent, and Nova’s right to request a hearing.

*1179 A de novo hearing was held before the Commission on August 19, 23, and 24,1982. On January 19, the Commission rendered its decision denying Nova’s license application, concluding that Nova failed to demonstrate that it would have adequate full-time faculty or adequate library resources in the District of Columbia as required by D.C. Code § 29-815(4) and the Regulations § IV(e). Although the Commission denied the license, it did so without prejudice to Nova renewing its application, and offered to explain to Nova how it could meet the faculty and library requirements.

III.

As a preliminary matter, we must address Nova’s contention that this court can and should avoid the constitutional questions raised in this case by interpreting D.C.Code § 29-815 as excluding Nova from the licensing requirement. Section 29-815 requires “any institution incorporated outside of the District of Columbia ... undertaking to confer any degree, operate in the District of Columbia ...” unless it obtains a license from the Commission. Nova suggests that we interpret the statute as reading “undertak[es] to confer any degree in the District of Columbia.” Such a reading would exclude Nova from the license requirement because Nova confers its degree in Florida.

In urging this statutory interpretation, Nova reminds us of the well-established rule of statutory construction — a court “will not pass on the constitutionality of an [a]ct ... if a construction of the statute is fairly possible by which the question may be avoided.” United States v. Clark, 445 U.S. 23, 27, 100 S.Ct. 895, 899, 63 L.Ed.2d 171 (1980). Accord, District of Columbia v. Edgcomb, 305 A.2d 506, 510 (D.C.1973); see generally 2A C. Sands & Sutherland, Statutes and Statutory Construction § 45.11 (4th ed. 1973 & 1984 Supp.). The operative words of this axiom, however, are fairly possible, for a court cannot avoid constitutional questions by interpreting a statute in a way that is unreasonable in light of the language, purpose, and history of the legislation. See, e.g., Edward J. DeBartolo Corp. v. NLRB, 463 U.S. 147, 103 S.Ct. 2926, 2933 & n. 10, 77 L.Ed.2d 535 (1983).

Examining the language of § 29-815 we note the quite obvious fact that the statute does not contain the words Nova urges us to insert. Rather, the statute plainly requires degree conferring institutions incorporated outside the District to obtain a license to operate in the District without regard to where the degree is conferred. 2 “Operating” is defined as “main-tainting] any facility or location in the District ... through which education is offered or given, or educational credentials are offered or granted, and includes contracting with any person, group, or entity, to perform any such act.” D.C.Code § 31-1602(11) (1981). Given this definition and the fact that no words in the statute limit the licensing requirement to schools conferring degrees in the District, this plain language alone is sufficient for this court to reject Nova’s argument. We have stated on numerous occasions that when the language of a statute is clear and admits of no more than one meaning, we are not empowered to look beyond the literal words of the statute. See, e.g., Davis v. United States, 397 A.2d 951, 956 (D.C.1979); United States v. Stokes, 365 A.2d 615, 618 (D.C.1976); Harrison v. J.H. Marshall & Associates, 271 A.2d 404, 406 (D.C.1970). Much less are courts free to insert words into a statute that is complete and clear on its face where, as here, the words would render the “operating” clause of the *1180 statute superfluous and be contrary to the clear intent of Congress. See Hurst v. V & M of Virginia, Inc., 293 Md. 575, 446 A.2d 55, 56-57 (1982).

The language of the statute, as well as its legislative history, plainly indicate Congress’ intention to comprehensively regulate degree conferring institutions operating in the District of Columbia, whether the institutions were incorporated in the District or were foreign corporations seeking to operate in the District.

IV.

We turn now to Nova’s argument that § 29-815 violates the First Amendment “on its face’’ 3 and as applied to Nova. As discussed previously, D.C. Code § 29-815 requires private educational institutions incorporated in the District to obtain a license as a condition to conferring a degree. Nova does not challenge this aspect of the statute, stating that the District may arguably regulate the "conduct” of degree conferral. However, Nova contends that the additional statutory requirement that private schools incorporated elsewhere and which undertake to confer degrees obtain a license as a condition to “operating” in the District, is unconstitutional because it licenses and regulates “pure speech” on the basis of quality. Nova points out that it has the authority to confer degrees from the state of Florida and seeks only to teach its degree program in the District. Because the District has no extrajurisdictional power to regulate Nova’s degree conferral, Nova contends that the District is necessarily licensing teaching.

We reject this argument at the outset as well as the. artificial conduct/speech distinction Nova draws because it has no practical or First Amendment substance. First, § 29-815 does not regulate or license teaching or "pure speech.” The “operating” clause of § 29-815 merely subjects out-of-District schools to the same regulations as schools incorporated in the District, e.g. both have unfettered freedom to teach so long as no degree credits or degrees are promised or given. According to the Senate Report, “[ijnstitutions which do not undertake to confer degrees do not come within the purview of this bill.” S. Rep. No. 611, 70th Cong., 1st Sess., at 4 (1928). The 1929 congressional statute was described in its title as an amendment to the D.C.Code “Relating to Degree-Conferring Institutions.” Pub.L. No. 70-949, § 586a, 45 Stat. 1504 (1929). The statute itself states that schools incorporated in the District are required to obtain a license “to confer a degree,” and schools incorporated elsewhere “undertaking to confer a degree” must obtain a license to “operate” in the District. The regulations setting forth the criterion for licensing are entitled “Regulations Relating to the Licensing of Institutions which Confer Degrees.” The statutory penalties apply to anyone “who shall, directly or indirectly, participate in, aid, or assist in the conferring of any degree by any unlicensed ... institution ....” D.C.Code § 29-819 (1981). And in Kraft v. Board of Education, 247 F.Supp. 21, 25 (D.D.C.1965), cert. denied, 386 U.S. 958, 87 S.Ct. 1026, 18 L.Ed.2d 106 (1967), the court affirmed revocation of a license to award a degree, observing that the absence of a license did not prevent schools from teaching non-degree subjects or programs in the District. In short, Nova would not have needed to apply to the Commission for a license (an application requesting “a License to Offer Doctorate of Public Administration Degree Courses in the District of Columbia”) nor would Nova be before this court if it did nothing in the District of Columbia but teach.

*1181 Second, the District’s power to regulate Nova is no different than its power to regulate educational institutions incorporated in the District. Nova does not and could not contest the power of the District to regulate degree conferral by its own institutions. Compare New Jersey Board of Higher Education v. Shelton College, 90 N.J. 470, 448 A.2d 988 (1982) (Shelton II). Educational institutions have no inherent or constitutional right to confer degrees; rather, degree conferral is business conduct, a corporate privilege conferred by the state of incorporation. Id. 448 A.2d at 990; National Association of Certified Public Accountants v. United States, 53 App.D.C. 391, 292 F. 668 (1923); Townshend v. Gray, 62 Vt. 373, 19 A. 635, 636 (1890). Schools are not shielded by the First Amendment from governmental regulation of business conduct deemed detrimental to the public merely because they are engaged in First Amendment activities. See generally Associated Press v. NLRB, 301 U.S. 103, 132-33, 57 S.Ct. 650, 655-56, 81 L.Ed. 953 (1937); Grosjean v. American Press Co., 297 U.S. 233, 250, 56 S.Ct. 444, 449, 80 L.Ed. 660 (1936); Kunda v. Muhlenberg College, 621 F.2d 532, 550-51 (3d Cir.1980); Shelton II, supra, 448 A.2d at 996-97; State ex rel. v. Clarksville School, 636 S.W.2d 706 (Tenn.1982). Although Nova has the power to confer degrees from the state of Florida, as a foreign corporation, Nova has no constitutional right to operate its degree program in the District of Columbia, e.g., WHYY, Inc. v. Borough of Glassboro, 393 U.S. 117, 119, 89 S.Ct. 286, 287, 21 L.Ed.2d 242 (1968); Paul v. Virginia, 75 U.S. (8 Wall.) 168, 181, 19 L.Ed. 357 (1868), and the District may impose the same restrictions upon Nova as it imposes upon its own degree-conferring schools. E.g. Northwestern National Life Insurance Co. v. Riggs, 203 U.S. 243, 27 S.Ct. 126, 51 L.Ed. 168 (1906); Orient Insurance Co. v. Daggs, 172 U.S. 557, 19 S.Ct. 281, 43 L.Ed. 552 (1899); Paul v. Virginia, supra; Watergate South, Inc. v. Duty, 464 A.2d 141, 144 n. 5 (D.C.1983).

Finally, the most serious flaw in the conduct speech distinction drawn by Nova is that it has no First Amendment relevance and, if accepted, would undermine the very freedoms Nova asserts in this case. 4 As we have already stated, in requiring schools incorporated outside the District to obtain a license to operate degree programs in the District, the District is regulating no more and no less than when it requires schools incorporated in the District to obtain a license to confer a degree. The question in each case is whether the school meets minimal academic standards as set out in the statute and regulations. Yet under the conduct/speech distinction drawn by Nova, Nova may engage in exactly the same activities in the District as a college incorporated in the District, and although D.C.Code § 29-815 would have an identical impact on both schools, the District is absolutely prohibited by the First Amendment from regulating Nova but not from regulating a District school, merely because Nova is incorporated elsewhere. We cannot accept a theory of the First Amendment that conditions its protection on where a school is incorporated.

Our holding that D.C.Code § 29-815 regulates the business conduct of degree conferral and leaves schools free to teach does not end our First Amendment inquiry, for although degree conferral and the operation of degree programs are “privileges” granted by the District, the District can not place conditions on the receipt of these privileges that themselves violate the Constitution or require the receipt to forego the exercise of fundamental rights. See, e.g., Keyishian v. Board of Regents, 385 U.S. 589, 605-06, 87 S.Ct. 675, 684-85, 17 L.Ed.2d 629 (1967); Speiser v. Randall, 357 U.S. 513, 518, 78 S.Ct. 1332, 1338, 2 *1182 L.Ed.2d 1460 (1958). Nor can the District regulate its businesses in ways that impinge on fundamental rights. E.g., Frost Trucking Co. v. Railroad Commission of California, 271 U.S. 583, 593-99, 46 S.Ct. 605, 607-09, 70 L.Ed. 1101 (1926).

Educational institutions, as well as individuals, have a First Amendment right to teach and to academic freedom. Regents of the University of California v. Bakke, 438 U.S. 265, 312, 98 S.Ct. 2733, 2759, 57 L.Ed.2d 750 (1978); Griswold v. Connecticut, 381 U.S. 479, 482-83, 85 S.Ct. 1678, 1680-81, 14 L.Ed.2d 510 (1965) (dicta); Sweezy v. New Hampshire, 354 U.S. 234, 250, 77 S.Ct. 1203, 1211, 1 L.Ed.2d 1311 (1957); Keyishian, supra, 385 U.S. at 603, 87 S.Ct. at 683; 5 see generally Finkin, On “Institutional” Academic Freedom, 61 Tex.L.Rev. 817 (1983). In his concurring opinion in Sweezy v. New Hampshire, 6 Justice Frankfurter characterized academic freedom as the right of an educational institution to be free from direct or indirect “governmental intervention in the intellectual life of a university,” 354 U.S. at 262, 77 S.Ct. at 1218, and summarized the “four essential freedoms” that constitute academic freedom as the right of a university “ 'to determine for itself on academic grounds who may teach, what may be taught, and how it shall be taught, and who may be admitted to study.’ ” Id. at 263, 77 S.Ct. at 1218. The Open Universities in South Africa 10-12 (A statement of a conference of senior scholars from the University of Cape Town and the University of the Withwatersrand, including A. v. d. S. Centlivres and Richard Feetham, as Chancellors of the respective universities) (footnote omitted).

It cannot be gainsaid that D.C. Code § 29-815, by requiring educational institutions to obtain a license as a condition to operating a degree program and predicating that license on meeting District criteria interferes with an educational institution's operation. In particular, Nova was denied a license because the Commission found that its library and faculty resources did not meet District requirements. However, to say that D.C.Code § 29-815 constrains a degree-granting educational institution’s freedom to make decisions as to how an educational program will be run, is not to say that the constraints violate the First Amendment. Not every limit on institutional autonomy also implicates academic freedom. See Kunda v. Muhlenberg College, 621 F.2d 532, 547 (3d Cir.1980). The Supreme Court has recognized that First Amendment freedoms are not absolute and “the state may sometimes curtail speech when necessary to advance a significant and legitimate state interest.” City Council of Los Angeles v. Taxpayers for Vincent, — U.S. -, -, 104 S.Ct. 2118, 2128, 80 L.Ed.2d 772 (1984) (citing Schenck v. United States, 249 U.S. 47, 52, 39 S.Ct. 247, 249, 63 L.Ed. 470 (1919)). See also Shelton II, supra, 448 A.2d at 993-99.

In determining whether § 29-815 violates the First Amendment, we look first to whether the statute is content-neutral, for however valid the government’s interest in regulating, it generally cannot be pursued by discriminating between particular viewpoints and information. E.g., City Council of Los Angeles v. Taxpayers for Vincent, supra, — U.S. at -, 104 S.Ct. at 2128-29. The Supreme Court has consistently recognized that if the constitutional guarantee means anything, it *1183 means that, ordinarily at least, “government has no power to restrict expression because of its message, its ideas, its subject matter, or its content.” Police Department of Chicago v. Mosley, 408 U.S. 92, 95, 92 S.Ct. 2286, 2290, 33 L.Ed.2d 212 (1972); e.g., Consolidated Edison Co. v. Public Service Commission, 447 U.S. 530, 537, 100 S.Ct. 2326, 2333, 65 L.Ed.2d 319 (1980); First National Bank of Boston v. Bellotti, 435 U.S. 765, 783, 98 S.Ct. 1407, 1419, 55 L.Ed.2d 707 (1978); Bates v. City of Little Rock, 361 U.S. 516, 80 S.Ct. 412, 4 L.Ed.2d 480 (1960); see generally Farber, Content Regulation and the First Amendment: A Revisionist View, 68 Geo. L.J. 727 (1980); Redish, The Content Distinction in First Amendment Analysis, 34 Stan.L.Rev. 113 (1981).

We think it evident that the general rule that forbids the government to regulate speech on the basis of content has no application to this case, for there is not even a hint of bias or censorship in Congress’ enactment or the Commission’s enforcement of D.C.Code § 29-815. In enacting § 29-815, Congress was not motivated by hostility to particular ideas, opinions, or educational philosophies, 7 nor was Congress concerned with harms that might occur from public exposure to particular information. 8 The sole interest of Congress was to ensure that degree-conferring educational institutions incorporated or operating in the District met minimal academic standards — whatever their message was, and to protect the public against harms arising from the abuse and misuse of degree-conferring powers, harms that arose independently of any message or teaching that might or might not precede degree conferral. On their face, the statutory and regulatory criteria for licensing are content neutral, censoring no subject, opinion, or educational philosophy. And contrary to Nova’s suggestion, we do not believe that Commission inquiry into faculty qualifications, library resources, and curriculum content necessarily makes the statute content-related or amounts to a constraint on academic freedom. 9 This inquiry is limited to <