California Crane School sues over loss of accreditation

The California Crane School trains its students so well that 90 percent of them get certified on the first try, said owner John Nypl, and that's what killed his Grass Valley business.

At least, that's what Nypl alleges in a lawsuit he filed against the agency that accredits crane schools, the National Commission for the Certification of Crane Operators, and a rival school, the International Assessment Institute.

In the lawsuit filed in Nevada Superior Court, Nypl asserts:

• As much as half of the $30 million garnered by the commission and the institute annually comes from fees associated with retesting candidates.

• Half of the students from the International Assessment Institute fail their certification tests on their first try.

The performance of Nypl's school cut into the potential revenue and set the stage for a dirty tricks campaign to derail it, according to the lawsuit. It alleges that the national commission and the institute are violating the Cartwright Act, the state's antitrust law, and the California Unfair Competition Law.

Commission officials said they have had a tense relationship with Nypl and said that a court found that one of Nypl's examiners misappropriated their tests and trade secrets.

The commission will vigorously fight this lawsuit, said attorney John Zarian of Zarian, Midgley & Johnson PLLC in Boise, adding: "The allegations are absolutely false. The suit is entirely without merit. This will all be fleshed out in court."

The International Assessment Institute's owner, Anthony Mitchell, has not returned telephone queries placed by The Bee to his Clearwater, Fla., offices.

Mitchell is under contract with responsibilities that include testing administration, school reporting and examination development, according to an official with the national commission.

Nypl asserts in the lawsuit that Mitchell maintains his dominant role in testing and certification by paying kickbacks to the institute and by playing a key role in developing its programs.

"They're simply trying to put this guy out of business. They don't want him to teach, to give physical examinations. The whole thing is outrageous," said Joseph M. Alioto, a San Francisco antitrust attorney representing Nypl.

Nypl said the nonprofit accrediting commission has tried since 2004 to shut his school and secure business for the International Assessment Institute. Nypl and the California Crane School are seeking monetary damages and a court judgment that the national commission and the institute violated and continue to violate state unfair competition statutes.

In the suit, Nypl says a commission campaign to discredit his school culminated with the school being removed from the commission's list of recognized institutions and its permanent suspension from all accreditation and certification in January. The action has effectively shut down the school's operations.

The lawsuit offers a glimpse into the relationship between states and the third-party accrediting agencies that test and certify workers in an alphabet soup of professions and trades.

Although California's Department of Industrial Relations requires crane operators to be certified, California does not offer certification.

Rather, the state relies on evaluators such as International Assessment Institute, schools like the California Crane School and certifiers like the National Commission for the Certification of Crane Operators. In this regard, it is much the same as many other states.

In California's case, the national commission and Southern California's Operating Engineers Local 12 are the sole certifiers of crane operators.

"They think they are powerful. They think they are the government. They are the only store in town and they're abusing that," Alioto said. "They're setting up a little government. This is a huge issue that affects crane operators and will have an impact across the country."

The National Commission for the Certification of Crane Operators has a broad and involved reach within government, according to information posted on its Web site:

• It has administered more than 250,000 written examinations to more than 50,000 operators in all 50 states.

• It developed an agreement with the federal Occupational Safety and Health Administration that provides incentives for employers who adopt its certification program.

• It works closely with other federal agencies including the U.S. Army Corps of Engineers, the Department of Defense, the Department of Education, the Department of Energy and the Department of Veterans Affairs.

Such arrangements create a gray area for antitrust jurists, said professor Franklin Gevurtz, a legal scholar and antitrust expert at University of the Pacific McGeorge School of Law in Sacramento. He reviewed the lawsuit for The Bee.

"If the state farms this out, it raises a murky area of law if a state action creates monopoly powers," Gevurtz said. "There's a certain immunity (from litigation) that might occur, but it's not a blanket immunity. There's a gray area whether the state aspect takes the case out of antitrust law."

Gevurtz said the case will turn on whether the issue was created by a state action and whether that harms competitors. Still, he said, the suit raises an interesting issue.

"If (California Crane School) can prove it is a more efficient course provider, that could call for some inquiry," Gevurtz said.

About the writer:

• Call The Bee's Darrell Smith, (916) 321-1040.