4th Circuit affirms dismissal of collateral attack on arbitration award in accreditation dispute

Where a claim set out in a complaint purports to evade the Federal Arbitration Act‘s exclusivity but nevertheless in substance simply asks that the arbitration award be vacated, the court will dismiss the claim as an impermissible collateral attack.

Background

The Accreditation Alliance of Career Schools and Colleges‘ set minimum standards for graduation and employment rates as benchmarks for accreditation. In 2021, the Alliance informed Center for Excellence in Higher Education, or CEHE, that it was officially withdrawing its accreditation. The Alliance’s internal Appeals Panel affirmed that decision.

CEHE then exercised its right under the Alliance’s rules to have the matter reviewed in binding arbitration. The arbitrator found substantial evidence to support the
Appeals Panel’s decision to affirm the accreditation withdrawal.

CEHE then filed a motion to vacate the arbitration award and a complaint against the Alliance in the district court. It denied CEHE’s motion to vacate and granted the Alliance’s Rule 12(c) motion.

Motion to vacate

CEHE argues that the arbitrator “denied CEHE an opportunity to present pertinent and material evidence based on” the Alliance’s internal rules, “which categorically limited the evidence to only [the Alliance’s] record.” The court disagrees.

CEHE was given extensive time and runway to present its argument that it had a plan to get Independence University back on track to meet the Alliance’s benchmarks. The Alliance issued three different warning letters in the form of probation letters, which then allowed CEHE to respond with thousands of pages of data in its defense.

Once the withdrawal decision was made, the sole evidence CEHE was not allowed to present was evidence of the terms of other schools’ probations. But that evidence was irrelevant to the Alliance and the Appeals Panel because they needed only to determine whether CEHE was meeting benchmarks and whether good cause existed to extend the time for compliance. And it was irrelevant to the sole question before the arbitrator: Whether the Appeals Panel’s decision was supported by the evidence that was in the record when the Panel rendered its decision.

Moreover, the parties’ arbitration agreement specifically provides that “[t]he arbiter may not consider evidence that was not in the record before the Appeals Panel”
and that “[d]epositions, interrogatories, requests for admission, and other forms of adversarial discovery shall not be used during the arbitration proceeding.” CEHE does not (and cannot) dispute that the arbitrator, in denying CEHE’s discovery requests, merely did what the agreement instructed him to do.

Collateral attack

CEHE’s federal court complaint alleged the withdrawal of accreditation violated its due process rights and tortiously interfered with its contracts and business opportunities. The district court found that the complaint represented an impermissible collateral attack against the arbitration award and thus entered judgment for the Alliance.

Though several other circuits have already done so, this court has not yet formally adopted the impermissible-collateral-attack rule. It does so today. Litigants wishing to vacate or modify an arbitration award have an exclusive remedy in Sections 10 and 11 of the Federal Arbitration Act.

Conversely, where a claim set out in a complaint purports to evade the Federal Arbitration Act’s exclusivity but nevertheless in substance simply asks that the arbitration award be vacated, the court will dismiss the claim as an impermissible collateral attack. Signs of an impermissible collateral attack include “[a]lleging wrongdoing that would justify vacatur,” a purported harm that “is the kind of harm appropriately remedied through Section 10 of the [Federal Arbitration Act]” and requested relief that is in essence the relief sought in arbitration.

Here, the thrust of the alleged wrongdoing in the complaint is that the arbitrator (and the Alliance) refused to consider evidence of the Alliance’s disparate treatment. But such a complaint is “squarely within the scope of section 10.” The purported harms CEHE suffered—including damages, loss of students and loss of reputation and goodwill—all flowed from its loss of accreditation, precisely the issue in front of the arbitrator.

The core of the complaint’s requested relief—an injunction overturning the withdrawal decision—is intimately connected with the kind of relief one would seek in a Section 10 motion to vacate. And the rest of CEHE’s proposed remedies flow from the Alliance’s alleged due process violations for failing to consider pertinent evidence in its appeal—exactly the “same wrongdoing” with which the arbitrator already dispensed.

Affirmed.

Center for Excellence in Higher Education Inc. v. Accreditation Alliance of Career Schools and Colleges, Case No. 25-1372, Feb. 5, 2026. 4th Cir. (Wynn), from EDVA at Alexandria (Alston Jr.). David Aleksander Obuchowicz for appellant. Michael Randolph Shebelskie for appellee. VLW 026-2-037. 19 pp.

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