Keiser University, a regional for-profit college, has dropped a lawsuit filed last month against Florida State College at Jacksonville and two top administrators.
The suit, filed last month in Broward County, was based on e-mails from FSCJ President Steven Wallace and Susan Lehr, the school’s vice president of government relations. The e-mail exchanges involved messages to multiple Wall Street short sellers including Steve Eisman, who criticized the for-profit college sector in a speech before a congressional committee in May.
Keiser had said that FSCJ was in collusion with for-profit detractors and was trying to launch a behind-the-scenes "smear campaign" against proprietary education, starting with the Fort Lauderdale-based school.
FSCJ General Counsel Jeanne Miller moved to dismiss the lawsuit Friday, saying the suit had no merit and was a “politically motivated effort” to silence FSCJ’s call for greater accountability in the for-profit industry.
The formerly strained relationship between schools wasn’t mentioned in the joint statement issued by both schools Wednesday after the suit was dropped Tuesday.
“FSCJ and Keiser University hold each other in high esteem,” the release said. “FSCJ denies the allegations in the lawsuit and never intended to disparage Keiser University or its principals or to cause harm to the institution, its principals or its students.”
No money was exchanged between the schools, and neither side was able to say how much was spent in legal fees.
Wallace said they chalked the lawsuit up to a misunderstanding during a six-hour meeting Tuesday morning with chancellor Arthur Keiser and his legal team.
“We had a really good, frank dialogue and kind of talked through each party’s concerns,” Wallace said. “They found we never did the things that they believe we did, and we were able to establish that, as a regionally accredited institution, Keiser is not a concern of ours.”
The e-mails cited in the lawsuit were obtained by Keiser through a public records request.
Some of the messages included some harsh words from Lehr, who criticized an editorial written by Keiser.
“Here is the guy I can’t stand!” the e-mail said. “We did good if he whines!”
A message from Wallace to Gilchrist Berg, the founder of a multibillion-dollar Jacksonville-based hedge-fund firm, was also cited in the lawsuit.
“All right, my friend. Here is a bunch of good stuff to get you started in your exploration of greed, corruption and predatory schemes among Florida’s proprietary and for-profit career ‘colleges,’ ” the e-mail said. “The new technical college we will launch on 8/1/09 is designed, in part, to drive the sleazebags out of our region.”
Wallace said he wasn’t thinking of Keiser when he wrote the e-mail to Berg, a longtime friend. He said there are some “bad actors” in the for-profit education world that have ties to Northeast Florida, but he declined to identify any of the schools he was referencing.
“That was intended to be a private e-mail to a friend, and I never imagined it would become public,” Wallace said. “Lesson learned. If I had known it was going public, I would’ve been more careful. And I was never referring to Keiser in that particular e-mail anyway.”
Keiser said he was prepared to go ahead with the suit but changed his mind after the meeting. He said college leaders immediately agreed on two points: Jacksonville residents need quality higher education, and no one wins in court.
“We were ready for the long haul, but we instead came to an agreement to the benefit of everyone involved,” Keiser said.
This is the first time Keiser University has had any problems with a public college, he said. The school has articulation agreements with other regional community colleges, and there have been few battles over enrollment.
“It was definitely out of the ordinary,” he said. “We never anticipated something like this to happen, but we’re moving on. Now, we’re ready to make this water under the bridge and get back to making Jacksonville and other communities better.”