DENVER — An ongoing lawsuit by the state first generated under former Republican Attorney General (AG) John Suthers continues to cost Colorado taxpayers millions of dollars and has resulted in a highly unusual rebuke of a district court judge, as it enters its eighth year and third AG.
In December 2014, just before he left office, Suthers brought a suit against the Center for Excellence in Higher Education, which is the Colorado entity of College America, claiming it violated the state’s consumer protection laws. The suit also named two individuals, Carl Barney and Eric Juhlin, who were the founder and CEO of the for-profit college, respectively. Suthers argued the college made false representations about its degrees and loan programs.
The suit was continued by Suthers’ replacement, fellow Republican Cynthia Coffman, where it finally made it to trial in October 2017. But it didn’t end there. Now in its eighth year, the case is awaiting a possible hearing before the Colorado Supreme Court at the request of current Attorney General Phil Weiser, a Democrat, after a three-judge appellate court remanded it back for a new trial with an unusual ruling.
To date, the only resolution — which has now been nullified by that appellate court — was a ruling that not only took the presiding judge three years from the end of the trial to announce, but one where the cost to try the case is double that of the penalties assessed.
And the cost of the suit is soaring. Current totals obtained through an open records request by Complete Colorado to the AG’s office are just under $6 million in expenses and legal fees through Nov. 8, 2021.
The original court ruled partly in the state’s favor, ordering that the defendants pay $3 million in civil penalties. It also issued “detailed injunctions against CollegeAmerica under both the Consumer Act and the Credit Code.”
But, the district court denied the (AG’s) request that CollegeAmerica pay back “every dollar that its Colorado consumers had ever paid on tuition and for fees, and it determined that CollegeAmerica’s loan program, known as EduPlan, was not unconscionable,” a recent ruling reversing the findings says.
Both the state and CollegeAmerica appealed the findings, with CollegeAmerica arguing the ruling was too stringent and the state arguing it wasn’t stringent enough. However, the outcome of that appeal went farther than most would have ever expected with the appellate court issuing a highly unusual and stinging rebuke to the original presiding judge, Ross Buchanan, for taking so long to hand down his decision.
“There’s no good reason that the trial judge took three years to issue a decision that was mostly cut-and-pasted from the findings proposed by attorneys for the State,” Mark Hillman, executive director of Colorado Civil Justice League, which advocates for tort reform and an end to abusive lawsuits, told Complete Colorado.
Hillman’s remarks echo the appellate court judges’ comments in their August 2021 ruling where they said Buchanan erred in his decision on several issues, including questioning the reason behind Buchanan’s decision, stating that much of the findings of fact and conclusions of law Buchanan noted were “copied verbatim from the Attorney General’s proposed order, and one of the reasons we know this is because the same typographical errors that appear in the trial court’s order are also found in the Attorney General’s proposed order.”
The court also included an unusual requirement in its decision to grant College America a new trial — the removal of Buchanan from hearing the case again.
Although the judges said they were not ordering a new judge because they believed Buchanan “harbors any personal bias that renders him unfit to preside,” they said it was “an extreme circumstance that requires a new judge to take over the case on remand to preserve the appearance of justice.”
Hillman, who also served as the Colorado Senate majority leader and state treasurer was pleased with the decision.
“The Court of Appeals decision to remove Judge Buchanan from this case was a refreshing indication that there is accountability for judges who simply do not do their job,” Hillman said.
That delay, to date, has cost the state $1.25 million in expense for such things as expert witnesses, dispositions, travel costs, service processes and transcription services, among other legal needs. On a larger scale, however, it has also paid the equivalent of $4.75 million in current market rates for the salaries of the attorneys and other professionals in the AG’s office primarily working on the case. The hours clocked by those state employees through August 2021 include:
- Olivia D. Webster — 3,795 hours for $1,280,875 (or 95, 40-hour work weeks)
- Mark T. Bailey — 4368.4 hours for $1,445,810 (or 109, 40-hour work weeks)
- Hanah M. Harris — 2744.8 hours for $673,826 (or 69, 40-hour work weeks)
- Benjamin J. Saver — 1491.4 hours for $351,588 (or 37, 40-hour work weeks)
- Kerry O’Hanlon — 3631.1 hours for $544,665 (or 91, 40-hour work weeks)
- Nettie Morano — 2800.8 hours for $420,120 (or 70, 40-hour work weeks).
As of this publication, there has not been an announcement yet as to whether the Supreme Court will review the appellate court’s ruling to overturn the original decision and order a new trial, with a new judge. If the court chooses not to hear the case, then it will be up to Weiser to determine if he wants to start over and retry the case.
A new trial could potentially cost taxpayers several million more.
In a news release shortly after the appellate court’s ruling, CollegeAmerica said the decision was bittersweet.
“The Court of Appeals’ reversal came too late for CollegeAmerica,” the release said. “Webster’s [a lawyer in the AG’s office] assault, coupled with Buchanan’s unconscionable delay and unjust decision, ultimately destroyed the reputation, credibility, and operations of CollegeAmerica. This travesty of justice forced the closure of and destroyed some of the best private career colleges in the country, including all CollegeAmerica colleges in Colorado, Independence University, and Stevens-Henager College in Utah, which had been operating since 1891. The human toll and fallout has been disastrous. It has disrupted the lives of more than seven thousand students and caused 1,500 employees to lose their jobs.”
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