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January 17, 2016

COA – False academic credentials issued by online university have no place in the State of Michigan

“Life Experience Degrees” issued by an online university based in the Caribbean violate the Michigan Authentic Credentials in Education Act (the “MACEA”), MCL 390.1601 et seq., an statute prohibiting “diploma mills,” according to the Michigan Court of Appeals in City of Fraser v Almeda University, No. 323499.  While the online school violated the Act, all but one of the Plaintiff’s claims ultimately were barred by the statute of limitations.  In addition, the Court held that the trial court correctly exercised its jurisdiction over the Defendant online university and the Defendant was subject to damages under the Act.
 
Almeda University (“Almeda”) is an online university, incorporated in the Caribbean Island of Nevis, which with a meager online credit card payment, will issue “life experience degrees” to applicants who can show verifiable professional and educational achievements.  Once issued, Almeda will mail the degree directly to the applicant’s home.  Between 2003 and 2009, the City of Fraser (the “City”) had 11 of its employed police officers receive bachelor or master’s degrees from Almeda.  The police officers used their degrees to receive salary increases as well as educational reimbursements from the City, totaling $143,848.  In early 2013, the City filed suit against Almeda alleging that Almeda violated the MACEA by issuing academic degrees to its police officers and that they were actually damaged by Almeda’s actions.  The City moved for summary disposition, which was granted, and the trial court awarded it $600,000 in damages; Almeda appealed.
 
On appeal, Almeda argued that (1) the trial court lacked personal jurisdiction over Almeda; (2) the trial court improperly concluded that the MACEA applied to it; (3) the City did not suffer damages as a result of its actions; and (4) the City’s claim was barred by the statute of limitations.  As to Almeda’s personal jurisdiction argument, the Court of Appeals held that the trial court properly exercised jurisdiction under Michigan’s long-arm statute and that Almeda purposefully availed itself of the privilege of conducting business in Michigan, thus making the exercise of personal jurisdiction in line with the requirements of due process.  Next, the Court looked to the dictionary definition of “issue” and determined that Almeda did in fact issue false academic credentials in the state of Michigan, in violation of the MACEA.  In light of this violation, the Court concluded that the City was damaged by Almeda’s actions because it relied on the issued academic credentials and increased employee salaries.  Finally, the Court addressed Almeda’s statute of limitations argument and held that the MACEA does contain a six-year statute of limitations, thus making only one of the City’s claims against Almeda allowed.  The Court affirmed in part, reversed in part, and remanded the case to the trial court for further proceedings.    
 
Judge Murray filed a partial concurrence and dissent in this case.  He agreed with the trial court’s exercise of personal jurisdiction, but would have held that Almeda did not violate the MACEA because it did not “issue” false academic credentials “in this state,” as required by the Act.  Because Almeda did not put forth or distribute the credentials in the State of Michigan, it did not violate the Act, according to Murray.
 

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