Commercial – Accrediting agency must restore school’s accreditation

Where a beauty school alleged it was due process when its accreditation was withdrawn, and it was likely to prevail on this claim, an accrediting agency was ordered to restore its accreditation on a temporary basis pending a final decision on appeal, arbitration or ruling on the merits of this case.

Background

New Concept Massage & Beauty School Inc.‘s filed a motion for a preliminary injunction against National Accrediting Commission of Career Arts and Sciences Inc., requiring defendant to refrain from withdrawing plaintiff’s accreditation, to reinstate plaintiff’s accreditation which defendant terminated on or about Dec. 12, 2025, and to refrain from taking further action against plaintiff without providing due process of law while plaintiff pursues its appeal.

Likelihood of success

Plaintiff is likely to be successful on the merits. As the parties’ stipulation and the evidence adduced at the hearing establish, although defendant mailed several notices regarding plaintiff’s accreditation status to Ms. Vazquez, defendant was aware that Ms. Vazquez had passed and that there was a dispute over her estate. Yet, defendant never ensured that the individuals with a stake in Plaintiff’s accreditation status received notice of defendant’s actions with respect to plaintiff’s accreditation.

Indeed, defendant introduced testimony that: (i) pursuant to defendant’s rules, defendant could proceed with revoking plaintiff’s accreditation during the pendency of probate proceedings regarding ownership of plaintiff but (ii) no individual could attempt to save or appeal the loss of that accreditation status based on those same rules because plaintiff could only act through an owner or personal representative and the probate court had not yet acted to appoint either one.

Thus, once the wheels were in motion regarding the loss of accreditation, defendant’s own rules prevented plaintiff from being able to save itself. The failure to provide notice to plaintiff’s stakeholders during the pendency of the probate process, as well as the failure to provide an avenue by which plaintiff could act while proceedings against it commenced reflect a violation of principles of due process.

Although defendant summarized its actions as reasonable, because it cannot “send confidential information to non-owners of its accredited schools, particularly those who are actively disputing the ownership structure,” this practice affirmatively prevents plaintiff from being afforded an opportunity to defend itself where its only owner is deceased. Accordingly, plaintiff has demonstrated a likelihood of success in this regard.

Irreparable harm

Because of the loss of its accreditation, plaintiff states that it cannot offer its current or prospective students Title IV federal student aid. Plaintiff further states that this loss of funding has already resulted in a substantial decrease in new enrollees and that, if the institution continues without accreditation, it will have to begin terminating its employees and turning away students to their competitors.

At the preliminary injunction hearing, plaintiff’s president and CEO I. Garcia testified that the institution was in imminent financial danger due to the lack of funds because of the withdrawal of its accreditation status. Garcia testified that the institution was at risk of closing locations and terminating staff after already cutting salaries and compensation for some employees.

Defendant is unlikely to suffer any cognizable harm from the issuance of a limited preliminary injunction, which would only permit plaintiff the same benefits as any other institution undergoing the appeals process. In similar circumstances, courts have found that the balance of harms tips in favor of the schools because, absent accreditation, existing or prospective students would lose what was presumptively a valuable institution performing an important service. Plaintiff faces the same fate.

If plaintiff remains unaccredited for a significant period, it will result in reputational harm and a loss of goodwill. Thus, the harm caused to plaintiff by not having restoration of its accreditation pending the outcome of its appeal is irreparable, and the harm to defendant is unlikely.

Public interest

A preliminary injunction that temporarily restores plaintiff’s accreditation pending appeal serves the public interest rather than harms it. This would allow plaintiff to continue its educational and business operations during its appeal process and allow defendant to adjudicate its claims. Any matter involving an institution of higher learning will implicate the public interest, locally and (varying with the geographic reach of the particular school) even nationally or internationally.

Scope

The court will grant the preliminary injunction only insofar as it seeks restoration of plaintiff’s accreditation pending appeal in accordance with defendant’s rules, the applicable regulations and statute. Specifically, the court orders that defendant restore plaintiff’s accreditation on a temporary basis pending a final decision on appeal, arbitration or ruling on the merits of this case by this court. The previously posted bond of $5,000 shall therefore remain posted.
Plaintiff’s motion for preliminary injunction granted in part, denied in part.

New Concept Massage & Beauty School, Inc. v. National Accrediting Commission of Career Arts and Sciences, Inc., Case No. 1:26-cv-354, May 13, 2026. EDVA at Alexandria (Alston). VLW 026-3-214. 17 pp.

Full-Text Opinion
VLW 026-3-214