Cases & Developments - National Association of College and University Attorneys

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Latest Cases & Developments

Date:
2/2/2024
Hartke v. Bonhams & Butterfields Auctioneers Corp. (S.D. N.Y. Dec. 11, 2023)
Memorandum Opinion & Order granting Defendants’ Motion to Dismiss. Plaintiff is the niece of Father Gilbert V. Hartke, a priest of the Dominican order who taught drama at the Catholic University of America until he died intestate in 1986. She, in her individual capacity and on behalf of Father Hartke’s estate, sued the University and its auctioneers, asserting rights to a “blue pinafore dress with a white blouse, which had been worn by Judy Garland when she appeared as Dorothy in The Wizard of Oz film” that had been given to Father Hartke and that was “discovered” in 2021 “in a storage location” on the University’s campus among other items that had belonged to him. In granting dismissal for lack of standing, the court held that plaintiff did not plead facts sufficient to show that she was the real party in interest, noting that Father Hartke had taken a vow of poverty at his ordination in 1933 whereby he renounced his salary and temporal goods in favor of the Dominican order, that the only item listed in the inventory of his estate during probate proceedings was the right to publicize his name, and that plaintiff had shown no basis for her now to assert a claim on behalf of the estate.
Topics:
Endowments & Gifts | Taxes & Finances
Date:
1/19/2024
NACUBO Comment Letter to the FTC on NPRM on Unfair and Deceptive Fees (Jan. 8, 2024)
Comment Letter from the National Association of College and University Business Officers (NACUBO) and the American Council on Education (ACE) to the Federal Trade Commission (FTC) on its Proposed Trade Regulation Rule on Unfair and Deceptive Fees. The Letter expressed concern that the proposed regulations would increase administrative burdens by duplicating regulations already present in the higher education sector from the Higher Education Act, the FAFSA Simplification Act, and related sources. It suggested revisions and proposed collaborative discussions to minimize unnecessary overlap.
Topics:
Taxes & Finances
Date:
8/18/2023
U.S. Dep.’t of the Treasury ANPRM on U.S. Investments in Certain National Security Technologies and Products in Countries of Concern (Aug. 14, 2023)
U.S. Department of the Treasury Office of Investment Security Advance Notice of Proposed Rulemaking (ANPRM) on Provisions Pertaining to U.S. Investments in Certain National Security Technologies and Products in Countries of Concern. Pursuant to Executive Order 14105, the Office of Investment Security issued an ANPRM seeking public comment on multiple topics related to the requirement that it issue regulation to prohibit or require notification to the Department related to “categories of transactions involving technologies and products that pose a particularly acute national security threat to the United States.” These transactions would include investments related to semiconductors and microelectronics, quantum information technologies, and AI systems in countries or regions of concern, including the People’s Republic of China. Comments are due on or before September 28, 2023.
Topics:
Taxes & Finances
Date:
8/4/2023
Pearson Foundation, et al. v. The Univ. of Chi. (N.D. Okla. July 31, 2023)
Memorandum and Order granting-in-part and denying-in-part Defendant’s Partial Motion for Summary Judgment. Plaintiffs, two foundations and one benefactor who had committed $100 million to the University of Chicago to establish a named Institute with related programming, brought contract and fraudulent inducement claims against the University following disputes regarding Institute staffing and programing. The court permitted plaintiffs to proceed on their claim related to faculty hires, finding that although the Grant Agreement provided plaintiffs no “role or authority with respect to making appointments,” the University is nevertheless obligated to use the grant for purposes consistent with the Institute’s stated mission. The court also permitted plaintiffs to proceed on their fraudulent inducement claim alleging that the University misrepresented the extent to which it would contribute funding for salaries and student support rather than operate the Institute as a standalone entity on a perpetual basis. It dismissed plaintiffs’ claim that the University did not develop the agreed upon curriculum, finding that language in recitals stating that the Grant would be used to “create educational programs” did not preclude the University from offering existing courses through the Institute, noting that the operative language merely required the University to offer a specified number of courses.
Topics:
Contracts | Endowments & Gifts | Taxes & Finances
Date:
8/4/2023
Smart v. Nat’l Collegiate Athletic Ass’n (E.D. Cal. July 27, 2023)
Memorandum and Order granting-in-part and denying-in-part Defendant’s Motion to Dismiss. Plaintiffs in two related cases, former “volunteer coaches” in multiple sports at Division I universities in California and Arizona, on behalf of themselves and putative classes, brought antitrust and unjust enrichment claims against the National Collegiate Athletic Association, alleging that, as a result of NCAA Bylaw 11.01.06 (repealed in January 2023) permitting schools to add one unpaid coach position, they worked at a rate of compensation below what they would have received in a competitive market. In permitting plaintiffs’ antitrust claims to proceed, the court found under a quick look analysis that plaintiffs had sufficiently alleged that the Bylaw had an anticompetitive effect, noting the large salaries of other coaches and recent increases in those salaries. The court dismissed their unjust enrichment claims, however, noting that the volunteer coaches had not alleged that they worked without contracts.
Topics:
Antitrust | Athletics & Sports | Athletics Compliance & NCAA Rules | Taxes & Finances
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
The Claremont Canyon Conservancy v. The Regents of the Univ. of Cal. (Cal. App. June 9, 2023)
Opinion reversing grant of peremptory writ of mandate. To reduce the risk of wildfire on approximately 800 acres of its Hill Campus in the East Bay Hills, the University of California, Berkeley developed a vegetation removal plan and prepared and certified an environmental impact review (EIR) as required under the California Environmental Quality Act (CEQA). Two local organizations challenged the EIR, and the trial court ordered the University to vacate the EIR certification, finding that the plan was insufficiently concrete and at points too ambiguous to permit informed decision making and public participation. In reversing, the California Court of Appeals reviewed the descriptions and objectives of specific projects for individual areas of the Hill Campus and found that the EIR provided sufficient detail to enable public understanding, but that arborists and foresters also needed flexibility to respond to potentially highly variable conditions from season to season. In particular, it found that inclusion of a detailed tree inventory was not reasonably feasible.
Topics:
Taxes & Finances
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:
5/12/2023
Loecker v. Bd. of Trustees for Colo. Mesa Univ. (D. Colo. May 1, 2023)
Order granting Defendant’s Motion to Strike and Exclude. Plaintiff, the former head coach of women’s lacrosse at Colorado Mesa University, brought sex discrimination claims against the University after she was terminated following complaints from players and parents that she “created a negative culture.” Plaintiff disclosed as an expert witness a professor of sports management whose report discussed gender bias, stereotypes, and leadership expectations in sports, and how these may affect evaluations of female coaches. The court first held that the testimony is admissible under Rule 702 on expert testimony, even though the expert’s report addressed only general principles, rather than the facts of the instant case. However, the court granted the University’s Motion to Strike and Exclude under Rule 403 on relevance, finding that this was a topic within a layperson’s common knowledge and that “its minimal probative value is substantially outweighed by its prejudicial effect.”
Topics:
Athletics & Sports | Athletics Operations | Discrimination, Accommodation, & Diversity | Sex Discrimination | Sex Discrimination in Employment | Tax Implication of Campus Political Activity | Taxes & Finances

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