Case of the Day: International School of Management v. Accreditation Council for Business Schools and Programs

The case of the day is International School of Management, Inc. v. Accreditation Council for Business Schools and Programs (D. Kan. 2015). ISM ran executive education programs that awarded the degree of master of business administration. One of the programs was in France. ISM claimed that its accrediting body, ACBS, wrongfully terminated its accreditation on the grounds that the ISM entity that ran the program, ISMA, lacked the power to award higher degrees in France. ISM obtained a temporary restraining order requiring ACBS to accredit the French program and to indicate on its website that the program was accredited.

At the TRO hearing, ISM had told the court that its witnesses would probably travel to Kansas for the preliminary injunction hearing. But after the court entered the TRO and before the preliminary injunction hearing, in the period when the parties were supposed to be taking limited discovery, ISM sought to quash the notices of deposition directed at two of its officials. ISM pointed to the French blocking statute to justify its position.

When twenty-eight days had passed since the TRO entered—the maximum time a TRO can last under FRCP 65—ISM moved to vacate the TRO. ISM then said its witnesses would appear at their depositions after all. It also said that while it was prepared to file its motion for a preliminary injunction immediately, its lawyers could not appear for the PI hearing for approximately a month.

On this record, the judge vacated the TRO. He noted that ISM’s position on the blocking statute had been a “moving target,” which is an understatement. One of the reasons US judges are frequently unmoved by invocations of the French or other blocking statutes is that the claims that a witness fears criminal prosecution sometimes seem to be untrue or at least strategic. Here, ISM pointed to the risk of criminal prosecution in France when it invoked the blocking statute, but when the TRO was dissolved and it suddenly had a need for speed in the American proceedings, it announced it would produce the witnesses after all.

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