The Michigan Court of Appeals examined the Michigan Authentic Credentials in Education Act, MCL 390.1601 et seq. in City of Fraser v. Almeda University, No. 2013-000449-CZ (Jan. 14, 2016). Defendant Almeda University is an online university incorporated in the Caribbean. To obtain a degree, an applicant submits an application and resume outlining the applicant’s “verifiable professional and educational achievements.” Then the applicant pays a certain amount for a bachelor’s, master’s, or doctorate degree. The degree is mailed to the applicant’s home. No coursework or exams required.
Between 2004 and 2009, 16 police officers employed by the City of Fraser obtained degrees from the university. Eleven of these employees used these degrees to increase their salaries or were reimbursed by the city for educational allowances spent on obtaining their degrees. Fraser filed suit against Almeda alleging it violated the Michigan Authentic Credentials in Education Act and sought over $1 million in damages. The trial court ruled in Fraser’s favor, awarding it $600,000, and Almeda appealed.
First, Almeda argued the trial court lacked personal jurisdiction over the university. MCL 600.715 provides for personal jurisdiction of corporations and is referred to as Michigan’s “long arm” statute. Almeda conceded that that trial court could exercise limited personal jurisdiction over the university under the long arm statute. Thus, the court had to decide whether the trial court’s jurisdiction comported with due process. This means that the university had to have established minimum contacts with Michigan so that jurisdiction in Michigan was fair and reasonable. The court determined that Almeda had established minimum contacts with the state. Almeda accepted applications and payment from Fraser’s employees who they knew were Michigan residents. Almeda awarded them their “degrees” and offered other products, and even highlighted success stories of its “alumni” who lived in Michigan.
Next, the court determined whether the Michigan Authentic Credentials in Education Act applied to Almeda. MCL 390.1603 provides “[a] person shall not knowingly issue or manufacture a false academic credential in this state.” Almeda conceded that any academic credit it awarded was false, but argued it did not “issue” false academic credentials “in the state” because the statute only applies to false credentials that originate in the state. The court rejected this argument and concluded that a false academic credential is “issued” in Michigan if it is distributed to or provided by mail or e-mail to an individual in Michigan. The statute is meant to address the problem of all academic credentials in the state, not just those produced and physically sent from a location in Michigan. Thus, the court concluded that Almeda issued fraudulent educational credentials in Michigan and violated the Act.
Almeda tried to make various other arguments against Fraser’s claims. Almeda argued the City could not recover because their employees who accepted the degrees caused the City damage. Almeda argued Fraser had “unclean hands” because it knew the degrees were fraudulent and therefore could not recover. And Almeda argued the Michigan Authentic Credentials in Education Act violated the dormant Commerce Clause of the U.S. Constitution. The court rejected all of these arguments.
However, Almeda did argue that Fraser’s claims were barred by the statute of limitations and succeeded. The City’s claims were subject to a six-year statute of limitations. Fraser filed its complaint on January 31, 2013. To fall within the limitations period, the degrees must have been issued no earlier than January 31, 2007. Only one of the degrees was issued after this date. The trial court applied the “continuing violations doctrine” and concluded that all 11 claims accrued until 2009 when the last degree was issued to one of the City’s employees. On appeal, the court said this was in error. The case was remanded and Fraser will only be able to proceed on the one remaining claim.
Interestingly, one judge wrote a dissenting opinion because he did not believe that the Michigan Authentic Credentials in Education Act applied to Almeda. He did not believe the act applies to a person issuing false academic credentials in another state or locale, as Almeda did. “Once the administrative decision is made to award the degree, the diploma is issued –put forth or distributed –from that administrative office, not in the state where the recipient is located.” To include mailing and delivering within the term “to issue” expanded the statute beyond what the legislature provided for in the actual words of the Act according to this dissenting judge.