You may have read in the The Dartmouth this morning that the Executive Committee of the Association of Alumni, by a divided vote, decided last night to have the Association file a lawsuit against the College concerning the governance changes adopted by the Board of Trustees earlier this month and to seek an injunction to prevent the Board from filling any of the new charter trustee seats authorized by the Board.I agree with President Wright that the lawsuit is ill-advised. Obviously I am not a lawyer, but it is difficult to see what legal grounds the Association could successful sue on. I doubt that a court would see the 1891 agreement as contractual, to the extent that it calls for a divided board beyond the original 5 alumni trustees.
I am deeply disappointed that some members of the Association Executive Committee have decided to take this action, which can only harm the College. Although the Association's formal legal complaint has not yet been served on the College, the College has been advised by its attorneys that the Board has full authority to enlarge the Board as it did and make the other governance changes that it authorized, and that there is no merit to the legal claims asserted by the Executive Committee members who voted to bring the suit. The College is well-prepared to respond to this legal action.
Ed Haldeman, Chair of the Board, has asked me to share the following statement with all members of the College community:
"While I respect the many different views held by Dartmouth's alumni on governance issues, I think it's regrettable that a small group of individuals would cause the Alumni Association to file a lawsuit against the College, particularly when there is no legal basis for the suit. It's certainly not in the best interest of the College or its students for Dartmouth to be tied up with costly and counterproductive litigation. I would hope instead that thoughtful alumni and friends of Dartmouth would come together in support of our common goal of continuing to build on Dartmouth's world-class academic programs."
While the action by some members of the Executive Committee to sue the College is ill-advised, I hope that it will not prove a distraction to the good work of the faculty, students, and staff. Dartmouth is in great shape and we need to continue to focus on continuing to provide the best experience possible for our students.
Wednesday, October 3, 2007
Letter from President Wright
James Wright sent out a letter via blitz to the Dartmouth community this morning regarding the Association of Alumni's decision to take legal action:
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10 comments:
Whether or not the agreement is contractual, please tell me you won't join Wright and Haldeman in saying this will make communication with alumni better.
It's clear to all that the Board of Trustees and Wright were simply tired of being accountable. No one can actually believe they did this in anyone's interest but their own.
I oppose the changes to board composition, but I think that the lawsuit is a bad idea. I don't think that the Association can win, and I believe a loss would erode any leverage that they still have.
Hey, it is pretty clear that this Board is out of control and that the AoA has no leverage at all. They had no choice but to file suit.
Wright runs the show with no oversight at all.
The board was never directly "accountable" to anyone or under somebody's "control." It's a board of trustees. It is "accountable" to the IRS and to N.H. authorities to follow its charter and pay its taxes. It doesn't have to run its decisions by you, even if you really, really want it to.
A.S., what makes you think adding charter trustees is a breach of contract? The "contract," if you want to call it that, promises "five" seats, and the alumni still nominate five. It was a minority before, and it's still a minority.
Speaking of accountability, what do you think the Attorney General would say if he found out that Dartmouth had exceeded the authority given by its charter? He might take legal action and get a court to prohibit whatever acts are found to violate the charter.
So which act do you think is more likely to exceed the authority of the charter: amending the charter to expand the board, as the legislature allowed; or contracting to sell off the right to elect five trustees, even though the charter says that that right belongs to the board?
I don't think A.S. said there was a breach of contract, but you would probably know that if you had read his post.
A.S. referenced the contract theory in his comment, and the Association based its lawsuit on a contract theory, according to its press release.
There is no "accountability" without a contract. If the agreement's not contractual, then A.S. has nothing to be upset about.
Where in the charter is the Board's right to elect trustees specifically stated to be non-assignable and not delegatable, and if it is there, why has the partial assignment/delegation done in 1891 gone unchallenged for over a hundred years?
A corporation "has such powers and such only as are expressly granted to it, or such as are necessarily incidental to those granted. Its incidental powers are such and only such as are directly and immediately essential to the exercise and execution of those powers which are specifically granted, and not such as have a slight or remote relation to those granted."
Burke v. Concord R.R., 61 N.H. 160, 1881 WL 4692, at *14 (1881).
Where the New Hampshire Supreme Court dealt with the articles of incorporation of a homeowner's association, it said "Because the association is a corporation, it may not act in any way not authorized by the articles or the declaration." Schaefer v. Eastman Community Ass'n, 150 N.H. 187, 836 A.2d 752, 755 (2003).
Dartmouth's charter says that a new trustee other than the governor must be elected by a majority of trustees. The plain language of that provision obviously prohibits the trustees from selling the charter right to outside groups, as does the legal presumption that almost anything not mentioned is not authorized.
Why has the 1891 agreement gone unchallenged? Because the idea that it is a contractual sale of election rights (Todd Zywicki said that the alumni paid for the right with a promise to raise funds) is a misinterpretation, and it's not the board's job to point out other people's misinterpretations. The board has always been able to elect its own nominee in place of an alumni nominee, but it doesn't have to reject someone just to maintain its charter rights. It doesn't have to do anything to maintain its charter rights except exist as a corporation.
The fact that the board has not rejected an alumni nominee suggests that the board has paid little attention to the alumni nominees over the years, has found them all acceptable, or has decided to avoid controversy by appointing those it found somewhat unappealing.
Do you think the board should reject a qualified nominee every now and then just to prove it still had a right that it couldn't give away if it tried? How often would be enough? Every 10 years? Every century?
The board did not reject the recent nominees. Based upon all the board concerns expressed over candidate qualifications, clearly they believe the current process has resulted in unqualified candidates. So why did they seat them when it would have been the perfect opportunity to establish their supposedly air-tight case? Please do not answer that they were afraid of upsetting alumni... they have certainly demonstrated that is not true.
The Baord didn't refuse to seat Smith because (a) it thought him qualified despite its distaste; (b) it really did not want to upset alumni more than it has done (and refusing a nominee would cause a much greater furore than the present action); (c) it wanted time to research its rights and be sure of its position; (d) it wanted to avoid being put in a position where anyone could claim reliance on its actions -- it's much better strategically to announce the changes before an election than during one, and it can't be claimed that the board's actions harmed somebody. There are no candidates for the next race yet.
People keep wanting the board to exercise its rights in order to simply keep them. It doesn't work that way. You don't lose your right of free speech by avoiding controversial public statements, do you? Do you think only those people who assert their basic rights ought to be able to keep them?
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