It’s unclear when a judge will rule on a lawsuit that could short-circuit the University of Idaho’s purchase of the University of Phoenix.

But the decision won’t come until next week at the earliest.

Attorney General Raúl Labrador’s legal team and the State Board of Education’s hired attorneys wrapped up three days in court Thursday afternoon — arguing an open meetings case that revisits the U of I’s behind-the-scenes courtship of Phoenix.

On May 18, the State Board approved the U of I’s $685 million plan to acquire Phoenix, a huge but beleaguered for-profit online university serving some 85,000 students. The State Board discussed the deal in a series of three closed-door meetings last spring. Labrador’s contends those meetings were illegal; in his lawsuit, he is asking Ada County District Judge Jason Scott to void the State Board’s May 18 vote.

Thursday afternoon’s closing arguments centered on the lawsuit’s focal point: competition. That’s because the State Board’s closed meetings were based on an obscure and seldom-used section of state law, covering transactions that puts an Idaho agency “in competition with governing bodies in other states or nations.” 

As he did throughout the three-day trial, deputy attorney general Gregory Woodard said the State Board did not ask enough questions about competition — relying instead on assurances from U of I President C. Scott Green, who in turn received much of his information from Tyton Partners, a brokerage working on Phoenix’s behalf.

Woodard’s closing arguments honed in on what he called “a three-week gap” in due diligence. On April 24, the University of Arkansas’ board of trustees rejected a Phoenix purchase in a public vote. But board members didn’t press Green for information, instead taking his word that Arkansas was still in the running. Board members also didn’t ask staff to look into the marketplace for Phoenix. Then they held another closed meeting on May 15, partly on the assumption that Arkansas was still a bidder.

“That type of blind vote is a gross violation of the law,” Woodard said.

Trudy Hanson Fouser, one of the State Board’s attorneys, said the board followed a proven process, counting on staff and in-house attorneys to vet open meetings issues. And board members had every reason to believe Phoenix was in high demand — based in part on their professional backgrounds ranging from education to business.

“They are applying their life experiences to what they are hearing,” she said.

Attorneys have until Monday afternoon to file final written arguments, and make their final appeal to Scott, the presiding judge in the case. Scott pledged to issue his ruling as soon as possible, but he didn’t commit to a date.

For the U of I — and Phoenix — time is of the essence. The lawsuit stands as one of the biggest obstacles to the sale.

The U of I’s accreditors still must approve the purchase. A nonprofit affiliated with the U of I must secure financing, and the ongoing legal battle has effectively put bonding on hold.

If the deal isn’t closed by May 31, either side can walk away.

The State Board’s lawyer speaks

After Labrador’s team called a dozen witnesses, including all eight State Board members, the State Board’s team called its lone witness Thursday morning.

That was Jenifer Marcus, the deputy attorney general who has been assigned to the State Board for nearly 12 years.

Marcus’ testimony ran for more than an hour, and focused largely on process and procedure. The requests for the closed meetings came from U of I legal counsel Kent Nelson, a member of the university team studying the Phoenix purchase. In a March phone call, Nelson told Marcus the U of I was vying with other bidders for Phoenix.

Marcus said she did not try to look into the competition issue on her own, but put the closed meetings on board agendas based on what she had heard from Nelson. And based on what she heard herself, as she listened in on the executive sessions, she said it was clear that there were multiple bidders for Phoenix.

“It seemed unlikely to me that the University of Idaho would prevail,” she said, “because it was such a competitive environment.”

Marcus also discussed her relationship with the board. She says it’s her job, as staff attorney, to examine open meetings issues and other legal matters, so volunteer board members don’t have to. “If they see a scheduled executive session, they know it’s been properly vetted.”

Cross-examination illustrated the unusual politics at the heat of the lawsuit, as one deputy attorney general grilled another deputy attorney general. In a tense exchange, Woodard repeatedly and pointedly asked Marcus if she could have counseled board members about competition for Phoenix. Marcus finally said she could have.

The repeated questioning drew fire from Fouser, who called the questioning “rude.”

Scott seemed to agree.

“Let’s not snipe,” he said.

Notes from a board member

Cindy Siddoway was the eighth and final State Board member called to testify in the trial. Her Thursday morning testimony covered Woodard’s standard script of questions — with a plot twist.

The issue: handwritten notes Siddoway took during the March 22 State Board executive session. The notes, jotted on the upper left-hand corner of the meeting agenda, focus on competition. On one line, Siddoway wrote “U. of Arkansas.” Below that, she wrote, “2 others interested,” referring to other suitors. A third line mentioned land-grant institutions.

Siddoway said the notes helped her recall details from that first closed-door meeting, which she attended via Zoom. The board heard about three potential competitors, Arkansas and the unidentified bidders, she testified Thursday morning. And someone in the meeting suggested Phoenix wanted to partner with a land-grant institution such as U of I, although Siddoway said she couldn’t remember details.

Some intrigue surrounded the notes.

Siddoway said she only discovered her notes last week; she said they were misfiled in her home office in Terreton, where she also runs her family’s sheep operation. She passed the notes on to the State Board’s attorneys — who passed them on to Woodard on Saturday, two days before the start of the trial.

Noting that Siddoway had received a records request and subpoena months ago, Woodard objected to having the notes admitted into evidence at the last minute. The notes weren’t admitted as evidence, but still were discussed at length during Siddoway’s testimony.

More reading: Click here for our in-depth coverage of the proposed Phoenix purchase.