Cases & Developments - National Association of College and University Attorneys

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Latest Cases & Developments

Date:
8/4/2023
S. Cent. Jurisdictional Conference of the United Methodist Church v. S. Methodist Univ. (Tex. App. July 26, 2023)
Opinion affirming-in-part and reversing-in-part summary judgment in favor of the University. In November 2019, the Board of Trustees of Southern Methodist University approved amendments to the University’s Articles of Incorporation to remove reference to the South Central Jurisdictional Conference of the United Methodist Church, including a provision that SMU would be “forever owned, maintained and controlled” by the Conference. Among other issues, the Conference brought breach of contract claims against the University and sought declaratory judgment that the Amended Articles and actions taken pursuant to them were void. The trial court granted summary judgment in favor of the University. In reversing, the Court of Appeals of Texas concluded that the Conference had sufficiently pled that SMU’s previous Articles constituted a binding contract between the Conference and SMU conferring upon the Conference the right to approve any amendments to the Articles. It further concluded that the trial court erred in denying declaratory judgment that the 2019 Amendments were void.
Topics:
Governance
Date:
7/21/2023
Vazquez v. Rider Univ. (N.J. Super. App. Div. June 29, 2023)
Opinion affirming-in-part and reversing-in-part dismissal and remanding for further proceedings. Plaintiffs, multiple stakeholders from the former Westminster Choir College, in consolidated cases, sued Rider University to prevent the sale of the Choir College or its relocation from its Princeton campus to Rider’s Lawrenceville campus. In 1991, Westminster merged with Rider University. In 2018, after announcing significant financial need, Rider announced a plan to sell the College to a for-profit Chinese Education Technology Company, though the deal fell through. Rider subsequently moved the College to its Lawrenceville campus. The trial court dismissed plaintiffs’ claims, finding that under the terms of the Merger Agreement plaintiffs lacked standing to enforce Rider’s obligations under that Agreement. The Appellate Division reversed as to a group of students and faculty of the Choir College, finding (1) that they were third-party beneficiaries of the Merger Agreement and (2) that they had sufficiently alleged that Rider acted arbitrarily and in bad faith in its proposed sale of the College to a company not qualified to run the College to gain contractual standing to sue.
Topics:
Contracts | Financial Exigency & Institutional Merger & Closure | Governance | Real Estate Transactions | Real Property, Facilities & Construction
Date:
7/21/2023
In re Robert T. Keeler Maint. Fund for the Hanover Country Club at Dartmouth Coll. (N.H. July 13, 2023)
Opinion affirming denial of motion to intervene. The last will and testament of Robert T. Keeler left Dartmouth College 50% of his residuary estate “for the sole purpose of upgrading and maintaining its golf course,” which upon his death established the $1.8 million “Robert T. Keeler 1936 Maintenance Fund for the Hanover Country Club at Dartmouth College.” In July 2020, Dartmouth closed the Hanover Country Club golf course and applied under the Uniform Prudent Management of Institutional Funds Act (UPMIFA) to modify the restrictions on permissible use of the Fund. The Robert T. Keeler Foundation, as fiduciary for the Estate, moved to intervene, seeking to direct the Fund to the Foundation at the behest of the Estate. The trial court denied the motion and granted Dartmouth’s application. In affirming, the Supreme Court of New Hampshire held that the Fund was a completed charitable gift and that the Foundation, as a former contingent beneficiary, lacked special standing to intervene.
Topics:
Foundations & Affiliated Entities | Governance
Date:
6/16/2023
IRS Office of Chief Counsel Memo re: Whether NIL Collectives Further Exempt Purposes (May 23, 2023)
U.S. Internal Revenue Service Office of Chief Counsel Memorandum on Whether Operation of an NIL Collective Furthers an Exempt Purpose Under Section 501(c)(3). The memo concludes that “many organizations that develop paid NIL opportunities for student-athletes are not tax exempt as described in section 501(c)(3) because the private benefits they provide to student-athletes are not incidental both qualitatively and quantitatively to any exempt purpose furthered by that activity.” The memo notes that many NIL collectives may already have received favorable determination letters and that these may be candidates for section 7805(b) relief from retroactive enforcement upon reconsideration of their exempt status.
Topics:
Foundations & Affiliated Entities | Governance | Student Athlete Issues | Students | Taxes & Finances
Date:
6/16/2023
Jenkins v. Howard Univ. (D. D.C. June 12, 2023)
Memorandum Opinion granting Defendants’ Motion to Dismiss. Plaintiffs, alumni of Howard University, brought contract and breach of fiduciary duty claims against the University after its Board of Trustees amended its bylaws to permit representatives of affiliate groups, including the alumni association, to serve on Board committees, but otherwise excluded those representatives from membership as Trustees on the Board. Plaintiffs’ contract claim failed because neither a conclusory reference to a 1923-24 agreement with alumni to permit nomination of trustees, nor a 1926 amendment to the bylaws permitting their election was sufficiently definite to allege an enforceable contract. In dismissing plaintiffs’ breach of fiduciary duty claim, and without deciding whether Congress intended to establish the University as a charitable trust, the court held that plaintiffs lacked standing to sue to enforce the alleged trust because they constitute an unlimited class, rather than a limited class with a special interest in the continued performance of the alleged trust.
Topics:
Governance | Governing Boards & Administrators
Date:
6/9/2023
Hastings Coll. Conservation Comm. V. Faigman (Cal. App. June 5, 2023)
Opinion affirming denial of anti-SLAPP motion. In September 2022, the Governor of California signed into law AB 1936 designating the school formally known as the “Hastings College of Law” as the “College of Law, San Francisco.” The legislation also eliminated a seat on the College’s Board for descendants of S.C. Hastings. Plaintiffs, a group of alumni of the school and descendants of S.C. Hastings, sued, alleging, among other claims, that AB 1936 violates the contracts clauses of the California and United States Constitutions. Plaintiffs also seek to enjoin the College’s Directors and Dean (College Defendants) from implementing the changes. The College Defendants moved to strike under the California anti-SLAPP statute, arguing that the acts plaintiffs seek to enjoin are inseparable from their speech referring to the College by its new name, which is protected activity authorized by AB 1936. In affirming denial of the motion, the California Court of Appeals held that “even assuming that AB 1936 is a speech-related measure, it is the State’s speech, not the College Defendants’, and the alleged wrongfulness of [their] implementation of the law is not legally distinct from the alleged wrongfulness of the law itself.” Accordingly, plaintiffs’ claims did not arise from the protected activity.
Topics:
Endowments & Gifts | Governance | Governing Boards & Administrators | Taxes & Finances
Date:
6/2/2023
Bethune-Cookman Univ. v. Dr. Mary McLeod Bethune Nat’l Alumni Ass’n (11th Cir. May 30, 2023)
Opinion affirming denial of a preliminary injunction. Plaintiff, Bethune-Cookman University, Inc., brought trademark infringement, false designation of origin, dilution, and unlawful trade practices claims against the Dr. Mary McLeod Bethune National Alumni Association, formerly known as the National Alumni Association of Bethune-Cookman University, Inc., after the University ended its cooperative relationship with the Alumni Association and sent a cease-and-desist demand. The district court denied the University’s Motion for Preliminary Injunction, because nearly 6 months had elapsed from the time the University filed the complaint until the University moved for preliminary injunctive relief. Though the University argued it was entitled to the presumption of irreparable harm based on the likelihood of success on the merits, the Eleventh Circuit affirmed, finding no clear error in the conclusion that the filing delay undermined the University’s assertion of imminent irreparable harm.
Topics:
Foundations & Affiliated Entities | Governance | Intellectual Property | Trademarks
Date:
5/26/2023
Serv. Emps. Int’l Union, Local 73 v. Bd. of Trs. of the Univ. of Ill. (C.D. Ill. May 22, 2023)
Order & Opinion granting-in-part and denying-in-part Defendant’s Motion to Dismiss. Plaintiff, the union representing groups of service employees at the University of Illinois Urbana-Champaign, brought a First Amendment challenge after the University’s Board Secretary denied their requests to speak during a public comment period of an upcoming Board meeting. The Secretary cited a rule that the Board does not hear presentations on issues under negotiation in the collective bargaining process. In denying the Board’s Motion to Dismiss, the court first held that the public comment period was a limited public forum, noting that requests to comment must be approved by the Board Secretary and that comments are limited to topics under the Board’s jurisdiction. It then held that though the rule was neutral as to viewpoint, it was not reasonable in light of the Board’s asserted purpose of avoiding unauthorized agreements outside of the collective bargaining process that would violate state labor law. In this, it noted both that it would be hard to forge an unauthorized agreement in an open meeting and that the danger is greater in direct email correspondence, which the Board had suggested as an alternative way for the public to address the Trustees. The court, however, dismissed plaintiff’s state Open Meetings Act challenge for lack of jurisdiction.
Topics:
Collective Bargaining | Constitutional Issues | Faculty & Staff | First Amendment & Free Speech | Governance

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