Pony up for libel, jury tells School District

Wednesday, March 28, 2007 | 7:08 a.m.

A District Court jury has ordered the Clark County School District to pay $161,024 in damages for libeling a software company that provides online classes to educators.

Virtual Education Software Inc., based in Spokane, Wash., sued the district over a series of e-mails and letters sent during a three-month period in 2002. Much of the company's complaint focused on George Ann Rice, who retired in February as associate superintendent of human resources.

William Hoffman, senior counsel for the School District, said an appeal of the March 14 verdict is planned. He could not recall the district facing a libel suit before.

At issue was how Rice decided which online courses could be used to qualify teachers for pay raises. Virtual Education Software claimed in its lawsuit that Rice improperly rejected its software because she wrongly concluded it lacked quality.

In a letter to the company in 2002, Rice contended that Virtual Education Software's classes did not count toward a graduate degree at an accredited university, a requirement for the district's pay raise. Additionally, the entire workload for some of the classes could be completed in less than five hours and tests could be passed without reading the material - as was the case with two of her employees, Rice said.

The company said it provided evidence that its online classes did qualify toward degrees at reputable universities and had been rated highly, according to court papers. But Rice did not budge, and her office continued to tell employees that the classes would not be accepted, according to the company's attorneys.

As a result, teachers canceled their class registrations, costing the company hundreds of thousands of dollars in lost tuition as well as damaging its reputation, according to court documents.

An e-mail that played a central role in the libel suit came from Linda Thompson, who worked as an administrative assistant to Rice. Thompson wrote to another district employee that many of Virtual Education Software's courses "have been deemed frivolous. None of the colleges sponsoring the courses offer degree credit for them," court papers showed.

William Urga, one of the Las Vegas attorneys representing Virtual Education Software, said there was clear evidence that his client had been defamed and suffered professional harm as a result of the district's actions. There was "very little settlement discussion" with the district before the trial, Urga said.

"It was a tough case - the School District fought long and hard," Urga said.

Hoffman said the e-mails in question were not untrue because they were opinion. "And opinion does not fall into the category of defamation," he said.

Rice could not be reached for comment Tuesday.

The district's in-house legal team handled the preliminary work on the case and will oversee the appeal, Hoffman said. The final bills are being calculated, but Hoffman estimated the district spent $30,000 to $50,000 on outside counsel for the trial.