Title: NEWPORT INTERNATIONAL UNIVERSITY, INC. V. THE STATE OF WYOMING, DEPARTMENT OF EDUCATION and JAMES M. MCBRIDE, in his official Capacity as Superintendent of Public Instruction

State: wyoming

Issuer: Wyoming Supreme Court

Document:

NEWPORT INTERNATIONAL UNIVERSITY, INC. V. THE STATE OF WYOMING, DEPARTMENT OF EDUCATION and JAMES M. MCBRIDE, in his official Capacity as Superintendent of Public Instruction2008 WY 72186 P.3d 382Case Number: S-07-0234Decided: 06/25/2008Modified: 07/15/2008
APRIL TERM, A.D. 2008

 
 
NEWPORT 
INTERNATIONAL UNIVERSITY, INC.,

 
 
Appellant,

 
 

v.

 
 
THE STATE OFWYOMING, DEPARTMENT OF EDUCATION and JAMES M. 
MCBRIDE, in his official Capacity as Superintendent of Public 
Instruction,

 
 
Appellee.

 
 

Appeal 
from the DistrictCourtofAlbanyCounty

The 
Honorable Jeffrey A. Donnell, Judge

 
 

Representing 
Appellant:

C. 
M. Aron and Galen Bruce Woelk of Aron and Hennig, LLP, Laramie, Wyoming.  
Argument by Mr. Woelk.

 
 

Representing 
Appellees:

Bruce 
M. Salzburg, Wyoming Attorney General; and Robin Sessions Cooley, Deputy 
Attorney General.  Argument by Ms. 
Cooley

 
 
Before 
VOIGT, C.J., and GOLDEN, BURKE, and KITE, JJ., and PARK, 
D.J.

 
 
PARK, 
District Judge.

 
 
[¶1]      Newport 
International University, Inc. 
(hereinafter "NIU") appeals from a summary judgment granted in favor of the 
State of Wyoming, Department of Education and Mr. McBride (hereinafter 
collectively "Department"). The district court ruled that the Private School 
Licensing Act, Wyo. Stat. Ann. §§ 21-2-401 to 407 (LexisNexis 2007) (hereinafter 
"Act"), and Department rules promulgated pursuant to the Act did not violate the 
Wyoming Constitution.

 
 
[¶2]      We affirm the 
decision of the district court.

 
 
ISSUE

 
 
[¶3]      Does the Private 
School Licensing Act violate the Wyoming Constitution?

 
 

FACTS

 
 
[¶4]      NIU, a Wyoming corporation, is a 
private educational institution offering post-secondary degrees to students in 
seventeen international learning centers. NIU has approximately 2,300 students, 
and it employs roughly 157 faculty and staff members in the United 
States 
and abroad. The Department licensed NIU in 2003 in accordance with the statutes 
in effect at that time. Wyo. Stat. Ann. §§ 21-2-401 to 407 (LexisNexis 
2003).  The license authorized NIU 
to operate until June 2008.  

 
 
[¶5]      In 2006, the 
Wyoming Legislature amended the Private School Licensing Act, Wyo. Stat. Ann. §§ 
21-2-401 to 407.  2006 Wyo. Sess. Laws ch. 34, § 
1. The amended Act became effective July 1, 2006, and significantly changed the 
licensing of private schools. Prior to July 1, 2006, private post-secondary 
educational institutions could obtain a license from the Department after 
payment of a license fee, an annual fee, and the posting of a bond.  

 
 
[¶6]  After amendment of the Act, all private 
post-secondary educational institutions are required by the Act to become 
accredited within five (5) years unless an extension is granted for good cause. 
 § 21-2-402(b).   The Act also requires that all 
private schools in Wyoming be licensed by the Department. § 
21-2-401.  The Department was 
directed to establish minimum standards for all such schools and to provide for 
the investigation and evaluation of the institutions as necessary to implement 
the rules. § 21-2-401(d). Additionally, the Act mandates registration fees, 
annual fees, and a performance bond of not more than $10,000. § 21-2-402(b); § 
21-2-405.  Finally, the Act provides 
for criminal penalties for violations. § 21-2-407.

 
 
[¶7]      The Department 
adopted emergency rules on June 10, 2006. These rules required all private 
post-secondary degree-granting institutions to submit an application to the 
Department by July 1, 2006, and provide proof of an application for 
accreditation from an association approved by the United States Department of 
Education. 

 
 
[¶8]      NIU attempted to 
renew its license in accordance with the old 2003 statutes.  The Department returned the renewal 
packet and advised NIU that it must comply with the current Act. The Department also extended the 
deadline for submitting an application until September 1, 
2006.

 
 
[¶9]      NIU responded by 
filing a Complaint for Declaratory Judgment and for Preliminary Injunction. The 
Department filed an Answer and a Motion for Judgment on the Pleadings under Rule 
12(c) of the Wyoming Rules of Civil Procedure. The parties agreed to stay all 
pending litigation and administrative proceedings in order to attempt 
settlement. After the parties failed to reach an agreement, NIU filed a Motion 
for Leave to Amend Complaint as well as a Second Amended Complaint. The district 
court deferred ruling on the amendments until after the Department's Motion for 
Judgment on the Pleadings was decided. The district court granted the 
Department's Motion for Judgment on the Pleadings which disposed of NIU's 
pending and renewed motions to amend.

 
 
[¶10]   The Department adopted final rules, 
effective February 27, 2007. The final rules, entitled Private School Registration/Licensing for 
Private Degree Granting Post-Secondary Education Institutions, generally 
required NIU to: (a) pay a $1,000 registration fee; (b) submit a $10,000 bond; 
(c) obtain accreditation from a recognized accreditation agency; and (d) provide 
a detailed timeline setting out specific milestones to obtain accreditation and 
the dates on which they were to be accomplished. Although the Department had 
adopted interim emergency rules, the parties agreed that the final rules were 
the relevant rules to be considered by the district court in making its 
ruling.

 
 
STANDARD 
OF REVIEW

 
 
[¶11]   Rule 12(c) of the Wyoming Rules of 
Civil Procedure allows for a motion for a judgment on the pleadings and 
states:

 
 
            
After the pleadings are closed but within such time as not to delay the 
trial, any party may move for judgment on the pleadings.  If, on a motion for judgment on the 
pleadings, matters outside the pleadings are presented to and not excluded by 
the court, the motion shall be treated as one for summary judgment and disposed 
of as provided in Rule 56, and all parties shall be given reasonable opportunity 
to present all material made pertinent to such a motion by Rule 
56.

 
 
W.R.C.P. 
12(c).         

 
 
[¶12]   The standard of review for 
application of this rule is: 

 
 
A 
defendant is entitled to judgment on the pleadings if the undisputed facts 
appearing in the pleadings, supplemented by any facts of which the district 
court may take judicial notice, establish that no relief can be granted. . . 
.  A judgment on the pleadings is 
appropriate if all material allegations of fact are admitted in the pleadings 
and only questions of law remain. 

 
 

Box 
L Corp. v. Teton County ex rel. Bd. of County Comm'rs of Teton 
County, 
2004 WY 75, ¶ 2, 92 P.3d 811, 813 (Wyo. 2004) (citations omitted). Our review is 
similar to consideration of a motion to dismiss under W.R.C.P. 12(b)(6) for 
failure to state a claim upon which relief can be granted. Id. We consider the allegations of the 
complaint to be true, and view them in the light most favorable to the 
plaintiff. Id.

 
 
[¶13]   This Court has had some difficulty 
ascertaining the precise claims advanced by NIU, a difficulty also experienced 
by the district court. NIU asserts in a general fashion that the Act and the 
final rules violate various provisions of the Wyoming Constitution, such as: 
equal protection; delegation of authority, including the due process clause; and 
impairment of contract rights.

 
 

DISCUSSION

 
 
Equal 
Protection

 
 
[¶14]   NIU asserts that the Act and the 
Department's final rules violate the Equal Protection Clause of the Wyoming 
Constitution. NIU claims that the Act and the final rules create two separate 
classes: accredited schools and nonaccredited schools. The Department denies 
that any such differentiation is created; and to the extent that it exists, it 
is valid.

 
 
[¶15]   The Wyoming Constitution differs 
from the United States Constitution in that it does not contain an express 
"equal protection" clause; rather, it contains a variety of equality provisions, 
viz. Article 1, §§ 2, 3, and 34; and 
Article 3, § 27. Greenwalt v. Ram 
Restaurant Corp. of Wyoming, 2003 WY 77, ¶ 39, 71 P.3d 717, 730 (Wyo. 2003). 
Notwithstanding this difference, this Court uses the conventional federal equal 
protection analysis in the interpretation of the equality provisions of the 
Wyoming Constitution. Id.  

 
 
[¶16] 
The principles of equal protection 
analysis are well established. Greenwalt, ¶ 39, 71 P.3d  at 730-31. 
Claims of unconstitutional classification are analyzed under two levels of 
scrutiny. If the class is suspect or if a fundamental right is involved, a 
strict scrutiny standard is applied that requires a demonstration that the 
classification is necessary to achieve a compelling state interest. In re 
Honeycutt, 908 P.2d 976, 
979 (Wyo. 1995); Allhusen v. State By and 
Through     
 Wyo. Mental Health Professions 
Licensing Bd., 898 P.2d 878, 885 (Wyo. 
1995); Washakie County School Dist. No. One v. 
Herschler, 606 P.2d 310, 
333 (Wyo. 
1980). If a suspect class or a fundamental right is not 
involved, a rational relationship test is used to determine if the 
classification has a rational relationship to a legitimate state interest. Honeycutt, 908 P.2d  at 979 (citing 
Meyer v. Kendig, 641 P.2d 1235, 1239 (Wyo.1982)). A party attacking the rationality of the 
legislative classification has the heavy burden of demonstrating the 
unconstitutionality of a statute beyond a reasonable doubt.  Greenwalt, ¶ 30, 71 P.3d  at 730 (citing 
F.C.C. v. Beach Communications, Inc., 
508 U.S. 307, 315, 113 S. Ct. 2096, 2102, 124 L. Ed. 2d 211 (1993); Small 
v. State, 689 P.2d 420, 426 (Wyo. 1984); Nehring v. Russell, 582 P.2d 67, 74 
(Wyo. 
1978)).

 
 
 [¶17]  NIU concedes that it is not a member of a 
suspect class and that fundamental rights are not involved. Consequently, the 
classification must be analyzed under the rational relationship or rational 
basis test. In order to establish a violation of equal protection, NIU must show 
that similarly situated entities are treated differently and that the disparate 
treatment is not rationally related to a legitimate governmental objective. Bachmeier v. Hoffman, 1 P.3d 1236, 1243 
(Wyo. 2000).

 
 
[¶18] 
We invoke a four part test in analyzing the constitutionality of a 
classification under the rational relationship test. In applying the test, we 
must determine: (1) what class is harmed by the legislation and has that group 
been subjected to a tradition of disfavor by our laws; (2) what is the public 
purpose to be served by the law; (3) what is the characteristic of the 
disadvantaged class that justifies disparate treatment; and (4) how are the 
characteristics used to distinguish people for disparate treatment relevant to 
the purpose the challenged law purportedly intends to serve. Lincoln County School Dist. No. One v. State, 
985 P.2d 964, 967 (Wyo. 1999).

 
 
[¶19] 
NIU seeks to have this Court find that there are two classes; those institutions 
that are accredited, and those that are not.  We agree with the district court that no 
classification has been created by the Act and it is unnecessary to do any 
further analysis under the aforementioned test. The Act regulates one specific 
well-defined class, to wit: private degree-granting post-secondary educational 
institutions. These institutions include all trade, correspondence, distance 
education, technical, vocational, business or other private schools. § 
21-2-401(a). All organizations in this category must be accredited. Those 
institutions that are already accredited obviously do not have to apply to 
become accredited; those institutions that are not accredited must become 
accredited within the timeframe provided. Therefore, we find that no equal 
protection violation has occurred because different classifications are not 
created under the Act or the rules adopted by the 
Department.

 
 
Improper 
Delegation

 
 
[¶20] 
NIU argues that the statutory requirement of accreditation is a delegation of 
power that violates the Wyoming Constitution, specifically Article 1, § 6 (no 
person shall be deprived of life, liberty, or property without due process of 
law); and Article 3, § 1 (the legislative power shall be vested in a senate and 
house of representatives, which shall be designated "the legislature of the 
State of Wyoming"). NIU asserts that there are no standards that govern the 
accreditation process, or if there are standards, they are "arbitrarily 
developed and enforced" by the accrediting agency. In addition, NIU contends it 
has been forced to apply to and accept the decision of a private accrediting 
agency with no "jurisdictional power of oversight." The Department responds that 
there is no "delegation of authority;" and even if this Court were to find that 
there were such delegation, there are appropriate "standards" in place to assure 
adequate protection.

 
 
[¶21]  The legal principles involving 
delegation of authority from the legislature to a private entity have not been 
the subject of much discussion by this Court; therefore, more exegesis is 
required than was necessary for resolution of the other constitutional claims 
raised by NIU.

 
 
[¶22] 
"The delegation of legislative power is an old concern, older than the 
Constitution or even than the separation-of-powers principle." Peter H. Aranson 
et al., A Theory of Legislative Delegation, 68 Cornell L. Rev. 1, 4 (1982). In 1690, John Locke 
articulated the rationale for restrictions on delegation of legislative power, 
arguing that the people had appointed the "power of making laws" solely to the 
legislature and therefore the legislature cannot "transfer their authority of 
making laws and place it in other hands." John Locke, Second Treatise of 
Government ch. XI, § 141 (1960) 
(as edited by C.B. McPherson, Hackett Publishing Co., Inc. 1980). Restraint on 
delegation of lawmaking power is "rooted in the principle of separation of 
powers that underlies our tripartite system of Government." Mistretta v. 
United States, 488 U.S. 361, 371, 
109 S. Ct. 647, 654, 102 L. Ed. 2d 714 (1989). "Congress is not permitted to 
abdicate or to transfer to others the essential legislative functions with which 
it is thus vested." A.L.A. Schechter Poultry 
Corp. v. United 
States, 295 U.S. 495, 529, 
55 S. Ct. 837, 843, 79 L. Ed. 1570 (1935). Likewise, Article 3, § 1 of the Wyoming 
Constitution vests legislative power in the State's legislature. Bulova Watch Co. v. Zale Jewelry Co. of 
Cheyenne, 371 P.2d 409, 
418 (Wyo. 
1962).

 
 
[¶23]   Constitutional claims of "void for 
vagueness" and "unlawful delegation of legislative authority" are closely 
related. Care and Protection of 
Charles, 504 N.E.2d 592, 596-97 (Mass. 1987). Each presents the question of 
whether the statute is so vague that men of common intelligence must necessarily 
guess at its meaning and differ as to its application. Id. The nondelegation doctrine is a 
judicial construction which limits the exercise of power by actors not elected 
to or otherwise employed within a designated branch of government. Julie H. Vallarelli, State Constitutional Restraints on the 
Privatization of Education, 72 B.U. 
L. Rev. 381, 
390-93 (1992).

 
 
[¶24] 
State constitutional vesting clauses, which entrust certain branches of 
government with specified functions and powers, are the primary source of 
limitations on delegations. David 
M. Lawrence, Private Exercise of 
Governmental Power, 61 Ind. L.J. 647, 658-69 (1986). Lawrence 
suggests that the "vesting" clause is not a very satisfactory 
basis for judging private delegation by a legislature. Id. Lawrence 
points out that this clause limits the legislature's delegation of its own 
power, but it does not satisfactorily deal with delegations by state agencies or 
local governments. Id. According to Lawrence, the vesting 
clause helps insure the traditional and important separation of democratic 
powers by disbursing political power to the several branches. The separation of 
power doctrine, critical to our democratic system, implicates improper 
delegation from one branch of government to another; and does not apply to 
delegations of power by one branch to a public agency or private entity. 
Lawrence notes 
that all three branches, to some extent, have lawfully delegated authority to 
both private and public entities. Lawrence suggests that, instead, the proper 
focus should be whether the delegation violates concepts of due process, and 
whether it is reasonable.  The Court 
finds this analysis to be compelling and therefore adopts this 
approach.

 
 
[¶25]   Section 21-2-402(b) of the Wyoming 
Statutes requires accreditation by an accrediting association recognized by the 
United States Department of Education. The question is whether requiring NIU to 
be accredited by an outside, non-governmental entity is an improper delegation 
of power that offends due process as guaranteed by the Wyoming 
Constitution.

            

[¶26]   This Court finds that the 
requirement of accreditation is a delegation of power made by the Department to 
the accrediting institution; however, this delegation does not violate the 
Wyoming Constitution. Like many other states, the Wyoming Constitution does not 
directly prohibit delegations of public power to private entities or to public 
agencies. Any constitutional limitation is therefore indirect. 
 Lawrence, supra, at 658-69.

 
 
[¶27]   Wyoming statutes contain many examples of 
delegation of accreditation to private entities. Wyo. Stat. Ann. § 
21-18-205(a)(i) (LexisNexis 2007) (community colleges must "[b]e accredited 
academically by the regional accrediting agency" to qualify for state funding); 
Wyo. Stat. Ann. § 7-22-105(a) 
(LexisNexis 2007) (private correctional facilities must "meet the percentage of 
standards required for accreditation by the American correctional association, 
except where the contract requires compliance with a higher percentage of 
nonmandatory standards"); Wyo. Stat. Ann. § 35-2-907(a) (LexisNexis 2007) ("[a] 
licensed health care facility which has been accredited by a nationally 
recognized accrediting body approved by federal regulations shall be granted a 
license renewal without further inspection").  In addition, Wyoming requires many 
professionals to obtain degrees from nationally accredited schools as a 
condition of licensure; these include, inter alia, architects, podiatrists, 
dentists, veterinarians, occupational therapists, and respiratory 
therapists.

 
 
[¶28]   These examples of delegation do not 
suggest that all delegation of authority to private entities is constitutional. 
The delegation must meet certain constitutional standards. Fundamental policy 
decisions should be made by members of the legislature, elected for that 
purpose; these standards insure that policy is set by the legislature, and not 
delegated to agencies. 

 
 
[¶29]   Courts have long recognized that 
statutes requiring accreditation by a private agency contain a constitutionally 
sufficient standard; specifically, "the standard of scholarship required of [the 
private educational institution] shall be equal to the standard required by the 
[accrediting entity]." Ex Parte 
Gerino, 77 P. 166, 168 
(Cal. 
1904).  The Court in Gerino recognized that a legislature 
cannot set standards to meet "new and changing conditions." Id. at 168-69. 
Delegation to private entities, properly done, provides the flexibility 
necessary to accommodate societal change.  

 
 
[¶30]   As noted in Texas Boll Weevil Eradication Foundation, 
Inc. v. Lewellen, 952 S.W.2d 454, 466 (Tex. 1997):  "Even in a simple society, a legislative 
body would be hard put to contend with every detail involved in carrying out its 
laws; in a complex society it is absolutely impossible to do so. Hence, 
legislative delegation of power to enforce and apply law is both necessary and 
proper." Delegation of power by the legislature necessarily involves some 
discretion. Chief Justice Taft noted in J.W. Hampton, Jr. & Co. v. United 
States, 276 U.S. 394, 406, 48 S. Ct. 348, 351, 72 L. Ed. 624 (1928), that the 
limits of delegation "must be fixed according to common sense and the inherent 
necessities of the governmental co-ordination." Justice Scalia has observed that 
no statute can be "entirely precise" and that some judgment must be accorded to 
the officer carrying out the law, and to the judge applying it. Therefore, the 
debate over unconstitutional delegation is not a debate over principle, but of a 
"question of degree." Mistretta, 488 U.S.  at 415-16, 
109 S. Ct.  at 677 (Scalia, J., dissenting).  
Justice Scalia also observed that "it is small 
wonder that we have almost never felt qualified to second-guess Congress 
regarding the permissible degree of policy judgment that can be left to those 
executing or applying the law." Id. 
at 416, 109 S. Ct.  at 678.

 
 
[¶31] 
The crucial test in determining whether there is an unlawful delegation is 
whether the statute contains sufficient standards to enable the agency to act 
and the courts to determine whether the agency is carrying out the legislature's 
intent. Gallaher v. Elam, 104 S.W.3d 455, 
464 (Tenn. 2003); Healthscript, Inc. v. State, 770 N.E.2d 810, 814 (Ind. 2002); In re Advisory Opinion to the 
Governor, 509 So. 2d 292, 311 (Fla. 1987). 

 
 
[¶32]   Section 21-2-402(b) requires NIU 
and similarly situated institutions to be accredited by "an accrediting 
association recognized by the United States department of 
education." These accrediting associations are governed by 34 C.F.R. § 
602.1-602.50 (2008). These regulations contain detailed requirements, including 
geographic scope of accrediting activities (§ 602.11); accrediting experience (§ 
602.12); a requirement that the accrediting agency demonstrate that its 
standards are widely accepted in the United States (§ 602.13); the accrediting 
entity must "demonstrate" that it has rigorous standards to ensure quality 
education (§ 602.16); it must also show that it has mechanisms to evaluate 
compliance with the standards prior to accreditation (§ 602.17); it must ensure 
consistent application of its standards (§ 602.18) and must monitor (§ 602.19) 
and enforce its standards (§ 602.20). In short, there are specific and detailed 
standards to govern the accreditation process. 

 
 
[¶33]   In addition to these standards, the 
Department's regulations allow for judicial review of a contested case involving 
a license.  Where certification by a 
private association is a prerequisite to the practice of a given profession, 
courts have scrutinized the standards and procedures employed by the association 
notwithstanding their recognition of the fact that professional societies 
possess a specialized competence in evaluating the qualifications required to 
engage in professional activities. 
Marjorie Webster Jr. College, Inc. v. 
Middle States Ass'n of Colleges & Secondary Schools, Inc., 432 F.2d 650, 655 (D.C. Cir. 1970). The standards must be reasonable, evenly 
applied, and not in conflict with the public policy of the jurisdiction. Id.

 
 
[¶34]   This Court follows the lead of the 
Colorado Supreme Court and takes 

 
 
judicial 
notice that recognized accrediting associations, such as are delineated in the 
statute in question, have become an integral part of the secondary education 
systems in America. They are voluntary, nongovernmental agencies which are 
accountable only to their own membership. Their purpose is to evaluate 
educational institutions according to standards and criteria which have evolved 
over many years of experience commencing in the 1800's. They accredit--that is, 
admit to membership--those colleges and universities they deem qualified. Their 
accrediting standards and criteria are not governmentally imposed. 

 
 

Colorado 
        
 Polytechnic        
 College v. State Bd. for Community Colleges and 
Occupational Ed., 
476 P.2d 38, 42 (Colo. 1970).  

 
 
[¶35]   We hold there is no improper 
delegation in this case because applicants have sufficient guarantees of due 
process, and the delegation is reasonable.  
It is reasonable to require NIU to be accredited by a private entity. NIU 
has a number of overseas facilities, and it is unreasonable to assert that the 
Department should inspect and certify all of these foreign facilities. The 
Department lacks the financial resources, personnel, and expertise to accredit 
private schools that are similar to NIU. The regulations require that the 
accreditation be carried out by disinterested parties. There are appropriate 
standards in place to allow the agency to act; and NIU, as well as others 
covered by the Act, are accorded all due process, judicial review is available 
to guarantee that the Act and the regulations are followed. 

 
 
Impairment 
of Contracts/Special Laws

 
 
[¶36]   NIU also argues that the Act 
violates the following provisions of the Wyoming Constitution: Article 1, § 34 
(all laws of a general nature shall have a uniform operation); Article 1, § 35 
(no ex post facto law, nor any law impairing the obligation of contracts, shall 
ever be made); and Article 3, § 27 ("special laws"). NIU argues that it is 
forced to enter into a contract with an accrediting association; it also asserts 
the Act does not advance the quality of education and it seems to be saying 
there is no evidence of any reasonable relationship between the Act and any 
public interest. The Department responds that private contracts cannot be used 
to prevent the Wyoming Legislature from enacting legitimate and appropriate 
legislation under its police power.

 
 
[¶37]   NIU does not say precisely how the 
"special laws" clause applies. Presumably, it would be: "The legislature shall 
not pass local or special laws in any of the following enumerated cases, that is 
to say: . . . granting to any corporation, association or individualany special 
or exclusive privilege, immunity or franchise whatever, or amending existing 
charter for such purpose; . . .  In 
all other cases where a general law can be made applicable no special law shall 
be enacted." Wyo. Const. art. 3, § 27. NIU also fails to 
provide a specific analysis of its concerns with the other provisions. 

 
 
[¶38] 
It is well-established that the contract clause of the Constitution does not 
restrict the power of the state to legislate in the interest of the morals, 
health, and safety of the public. State 
Farm Mut. Auto. Ins. Co. v.   
Wyoming Ins. 
Dep't, 793 P.2d 1008, 1014 (Wyo. 1990). The rights and obligations that 
are set forth in contracts are subject to regulation for the protection of the 
public health, safety, and morals. Id. The principle is "frequently stated 
that all contracts are made subject to the paramount authority of the state to 
safeguard the vital interests of its people, and all contracts made with 
reference to any matter that is subject to regulation under the police power 
must be understood as made in reference to the possible exercise of that power." 
Id. Therefore, 
legislation adopted pursuant to a state's police power which may impact a 
contract is valid and not violative of the constitution. Id. Otherwise, the protections granted by 
the general police powers could easily be avoided by a contract entered into to 
allow that which would otherwise be prohibited. Id. The authority of the legislature under 
its police powers cannot be restricted by the provisions of private contracts 
between individuals, or between individuals and corporations. Id.

 
 
[¶39]   A state has the authority to enact 
such laws as reasonably are deemed to be necessary to promote the health, 
safety, and general welfare of its people. Zancanelli v. Central Coal & Coke 
Co., 173 P. 981, 985 (Wyo. 1918).  The State of Wyoming has the authority 
to impose reasonable regulations in state educational institutions; as noted by 
the district court, the protracted school finance litigation is clear proof of 
that principle. The requirement of accreditation of private degree-granting 
educational institutions is a reasonable restriction, adopted to ensure that 
quality education is being provided by a private entity licensed in Wyoming. To the extent 
the accreditation process requires a contract between NIU and the accrediting 
entity, the need of the state to protect citizens outweighs the contract rights 
of NIU. We hold that neither the Act nor the rules adopted pursuant to the Act 
violate the contract clause of the Wyoming Constitution.

 
 
[¶40] 
In conclusion, this Court finds that neither the Act nor the final rules violate 
the Wyoming Constitution.  There is 
no equal protection violation because different classifications are not created 
under the Act or the rules.  The 
requirement that private degree granting institutions be accredited contains 
specific standards and allows for judicial review insuring due process 
protections for the institutions.  
The delegation of the accrediting authority is reasonable and often used 
by state governments.  Finally, the 
State of Wyoming has the authority, under its police 
powers, to regulate private educational institutions, even though this may have 
some impact on the institution's contracts. 

 
 
[¶41]   The decision of the district court 
is affirmed.