National College penalized until it responds to Kentucky AG subpoena

FRANKFORT, Ky. (Legal Newsline) - Kentucky Attorney General Jack Conway announced a court order Wednesday against National College that will penalize the for-profit school until it fully responds to a subpoena issued by Conway's office.

In December 2010, Conway's office issued a civil subpoena to National College pursuant to an inquiry of some for-profit colleges operating in the state under the Kentucky Consumer Protection Act. National allegedly refused to respond to the subpoena and filed a lawsuit to block Conway's inquiry.

"National's actions to date have to make you wonder what they're trying to hide from investigators, their students and prospective students," Conway said.

In March 2011, the Franklin Circuit Court ruled in Conway's favor and found the subpoena was reasonable and supported by valid concerns. National appealed the decision to the Court of Appeals and the Kentucky Supreme Court, but both appeals were denied. After the litigation was remanded to the Franklin Circuit Court, the court determined National College could present no legitimate argument for challenging the subpoena.

The court ordered National College to pay a civil penalty of $1,000 per day, starting on July 31 and continuing until National completely responds to Conway's subpoena. To date, the penalties would include $126,000 in fines. If National produces the requested information within 10 days of the order's entry, a portion of the civil penalty will be suspended.

The court also ordered National to pay $10,000 to Conway's office.

"I appreciate the solemn consideration the court gave to this troubling conduct," Conway said. "National College and its lawyers have abused the legal system in an effort to delay this investigation. It is my hope that National College will stop the games, turn over all of the documents requested, and pay the fine. If National has nothing to hide - the time is now to comply with the court order."

In a separate action, Conway filed suit against National College in September 2011, alleging the for-profit school violated the Kentucky Consumer Protection Act by posting false job placement rates for the school's graduates on its website.