The Idaho Supreme Court Thursday threw yet another wrench into the University of Idaho’s $685 million bid to acquire the University of Phoenix.

The court overturned an Ada County District Court ruling from January, which said the State Board of Education’s closed-door discussions of the Phoenix purchase were allowed under Idaho law.

“The district court erred in several ways,” the Supreme Court said in a 4-1 ruling issued late Thursday morning.

The ruling might — or might not — have an immediate impact on the U of I’s plans to acquire Phoenix, a for-profit online giant serving some 85,000 students. The Legislature slammed the brakes on the Phoenix purchase earlier this year, although the universities, the State Board and Gov. Brad Little’s office continue to discuss a possible purchase.

The parties have until June to come to terms, but Phoenix now has the option of talking to other would-be buyers.

But Thursday’s ruling represented a big win for Attorney General Raúl Labrador, who has launched an 18-month legal battle centering on the earliest days of the U of I’s Phoenix courtship. However, the Supreme Court stopped short of declaring the closed meetings illegal; “We have not concluded that the Open Meetings Law was violated by the State Board,” said Justice Gregory Moeller, writing on behalf of the court.

The State Board held three closed executive sessions to discuss a potential Phoenix purchase, starting in March 2023. The third closed meeting took place on May 15, 2023 — only three days before the State Board held a hastily announced public meeting, and gave its green light to the Phoenix purchase.

Since June 2024, Labrador has argued that the closed-door discussions violated Idaho’s open meetings law. The case centered on the State Board’s justification for the closed meetings: a section of state law covering “preliminary negotiations” on a purchase that pits a state agency against “governing bodies in other states or nations.”

Labrador argued that the discussions, particularly the May 15 meeting, were not preliminary at all. The State Board and the U of I said the negotiations were in flux in the days, and even hours, leading up to the board’s May 18 vote.

And he has questioned whether the U of I was vying with other public bidders in its pursuit of Phoenix — especially after April 25, 2023, when the University of Arkansas’ board of trustees walked away from a potential purchase. In court testimony in January, U of I President C. Scott Green said the U of I was in competition with multiple, unnamed public bidders.

And while the legal arguments centered on open meetings law, the case has taken on added importance. The legal battle essentially put financing of the Phoenix purchase on hold — delaying the purchase past the parties’ original deadline in May 2024. It also represented a high-stakes political showdown between two Republican adversaries: Labrador, the state’s elected lawyer, and Little, who appoints seven of the State Board’s eight members.

This is a developing story. Check back for updates.

Click here for our Idaho Education News’ exclusive, in-depth coverage of the proposed University of Phoenix purchase.