A federal judge has overturned an agency’s 2012 decision to revoke a massage school’s accreditation — and imposed a $429,000 financial penalty as well.

Interestingly, the approach the judge used in deciding the case could apply to any accreditor’s review of any college, and it raises issues much more broadly for higher education quality assurance agencies. Inside Higher Ed’s Doug Lederman files this report:

Professional Massage Training Center sued the Accrediting Commission of Career Schools and Colleges in August 2012, after the agency revoked the school’s accreditation, citing concerns about the continuity of its management, the adequacy of its learning resources, and its verification of faculty qualifications. The lawsuit argued that the agency denied the massage school due process; the court had granted a preliminary injunction in September 2012 blocking the denial of accreditation, but this was the judge’s first full ruling on the merits of the case.

In his ruling, Judge Liam O’Grady, of the Eastern District of Virginia, acknowledged that in line with federal court precedent, judges owe “great deference” to the decisions of accrediting agencies, as they do to administrative decisions of federal agencies. (He also stated that the standard the school must meet for winning — that the agency’s decision was “arbitrary and unreasonable” — is “a high bar.”)

But O’Grady proceeded to find the agency’s analysis lacking on several counts. The judge noted that ACCSC officials had declared the school’s learning resources to be inadequate while passing up an opportunity to review a nearby university library to which the school’s students had been granted access as part of an agreement. “To deem the [learning resource center] inadequate without having examined it is arbitrary by definition,” the judge wrote.

The judge found the accreditor wanting in the other areas, as well, concluding that the agency did not have clear standards or documented evidence for dinging the school on faculty requirements, and that the accreditor had twice previously found the school’s management to be adequate. (The judge also essentially accuses the agency of being biased against the school’s longtime leader.)

…The judge sided with the accreditor on the lawsuit’s other five counts — but the one successful claim was enough for him not only to reverse the accreditor’s decision but to require it to pay damages of $429,000, the school’s lost profits from the students it was unable to enroll because its accreditation was stripped, plus legal fees and costs of rehiring employees.

And rather than simply vacating the loss of accreditation, he mandated that the accreditor must renew the school’s accreditation until its next normal review cycle.