In the film A Civil Action, Jan Schlichtmann says, “The whole idea of lawsuits is to settle…”.1 There is no settlement yet but the court case between2 the University of South Florida (USF) and INTO University Partnerships (INTO) has been closed and further dispute resolution is planned. USF has dropped the case with the claim it has achieved the outcome it was seeking from its initial action.
Its Notice of Voluntary Dismissal3 on 3 January 2023 says that at the receivership hearing on 16 December 2022, the “evidence submitted by the parties proved Defendants, INTO USF LP and INTO USF, Inc., are taking the actions that the Financing Corporation’s declaratory judgment lawsuit sought (i.e., acknowledging the termination of the Stockholder agreement, gathering and protecting the Joint Venture assets, budgeting to fund the teach-out, and winding-up the joint venture).” In the transcript of the hearing the judge, The Honorable Darren D. Farfante, made broadly the same points while declining USF’s motion to appoint a receiver4.
It seems likely that further discussions between the parties will be conducted in private but after two previous failures there remains the possibility that these will be unproductive. Most importantly for some observers is that students, including a group arriving in Spring 2023, are being taught out. The transcript also tells us that the joint venture board has hired Berger Singerman, “to provide the joint venture with advice regarding the operation of the business during a wind-down, to provide advice regarding corporate governance matters and fiduciary duties.”
Presuming that wind-down results in the eventual closure of the joint venture it will leave INTO with six pathway joint ventures in the US from the eleven that have been started since 2008.5
| Joint Venture Partner | Opened/Announced | Joint Venture Closed6 |
| Oregon State University | 2008 | |
| University of South Florida | 2009 | 2022 |
| Colorado State University | 2012 | 2021 |
| Marshall University | 2012 | 2020 |
| Drew University | 2015 | |
| George Mason University | 2014 | |
| St Louis University | 2015 | 2021 (became 100% INTO owned |
| University of Alabama – Birmingham | 2015 | |
| Washington State University | 2017 | 2022 |
| Suffolk University | 2017 | |
| Illinois State University | 2018 |
Last Orders7
While the case regarding the teach out and wind down of the joint venture has closed the flurry of claims and counter-claims suggests there is still plenty to be resolved. In this respect there are some helpful insights based on how the case might have developed according to a Joint Case Management Report filed on 6 December 20228. The document summarizes the dispute and then goes on to outline key areas of activity ahead of being ready for a trial in February 2024 if the case had gone ahead.
The process includes witnesses to be deposed (up to 30 fact witnesses and four expert witnesses) and “an alternative dispute resolution” by the end of second quarter 2023. Other key dates in 2023 include selecting a mediator by 1 April, deadline to identify experts by 7 July, and expert discovery closure by 6 October. The expert testimony focused on the financial status of the joint venture, including its solvency, on 21 April 2022, and “alleged damages to the INTO parties.”
A recent article in Business Law Today made the point that the “median duration of a joint venture is ten years” and suggested that “all joint ventures end—so plan for it.” The trajectory of traditional pathways in the US is uncertain and this may not be the last closure, so universities considering joint ventures as a way forward may want to pay close attention. Another data point could be the reported settlement resolution with a total value of “around $6.4m” passed by Washington State University Board of Regents in July 2022 after the university’s relationship with INTO changed.
NOTES
This blog recognizes the complexity of the case and is not intended to reflect any view on the merits of either plaintiffs or defendants. References for filings are given in order that readers can seek further insight if they wish. Any amendments on matters of fact are welcome from authoritative sources.
- The film is based on a 1995 book which tells the story of a real court case about environmental pollution in Massachusetts in the 1980s.
- The case in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida Circuit Civil Division is formally between USF Financing Corporation (plaintiffs) and INTO USF LP and INTO USF, INC. The Consolidated Lead Case is 22-CA-006001, Div. L. Filing numbers below relate to this case.
- Filing # 163938884 E-Filed 01/03/2023
- Filing # 163938229 E-Filed 01/03/2023
- Hofstra University is omitted – there is no listing in the INTO University Partnership report and accounts indicating it is a joint venture. All other entries in the grid are taken from publicly available information or observation of websites at the time of launch/closure.
- Closures are rarely the subject of public announcements. Any authoritative amendments to these dates are welcome. In several cases the relationship has changed to become a direct recruitment rather than joint venture pathway arrangement.
- Last Orders is a 1996 Booker Prize-winning novel by British writer Graham Swift. Its title relates to the Last Will and Testament of Jack Dodds and the instructions therein, but also to “last orders” the common call in the UK for final orders of drink before a public house closes.
- Filing # 162471158 E-Filed 12/06/2022
Image by Chris Sansbury from Pixabay