Letters
Two Elmwood Court
Hilton Head Island, SC 29926
June 13, 2004
Mr. John Golden
Chair, Colgate University Board of Trustees
13 Oak Drive
Hamilton, New York 13346
Dear Mr. Golden:
I have received and reviewed your open letter to the fraternity/sorority alumni of Colgate University.
I think it perfectly appropriate for you to recognize the class of alumni who peculiarly identify with their fraternal affiliation ( in my case, Beta Theta of Beta Theta Pi ), given that their relationship with University life both during and after their stay in Hamilton, was driven through fraternity ( or later, sorority affiliation ) including housing, and elective social relationships. The traditions and values of the University experience was thusly manifest in more than one dimension.
And that relationship, more intimate than Town and Gown, subsisted without material change for more than 100 years. The fraternity houses have owned the land bordering University property on Broad Street for that period and longer, and during that time the University has not only symbiotically interrelated to the Greek community, it has relied and depended upon it for housing more than 35% of the college community, and for providing an important social alternative in the University lifestyle spectrum. Encouraged by the University, the houses in recent years made substantial investments to provide more and better housing, including significant upgrades to meet safety requirements, and to meet State, local and University codes and compliance standards.
Now, this independently owned and operated housing alternative is under attack; but sadly not by the mere offering of choice, rather by a calculated campaign intended by the University to eliminate competition in elective upperclass housing.
Operating under vague inferences of inferior housing, and an unproven abnormally high disregard of social standards relative to the overall University population, the Board takes the view that “ only ownership will create the major changes necessary for the system to survive”.
We are not told what these “major changes” are, or why ownership of the houses is the only means to affect them. What, precisely, will the University be able to accomplish with ownership, over and above the present plenary powers to mandate compliance with standards, withdraw recognition, impose restrictions, and so forth? Where is the transparency we have come to expect? May we not visit with the motivation, and logic of the Board; or will that only surface from an examination of the minutes of the Board, or that of its Committees, and Task Forces? Will they fairly meet the light of day, or will they show instead a predatory and clumsy attempt to acquire the most valuable adjacent property, already zoned, approved and permitted for student occupancy. For it is a fact that for all these years, the University depended upon the fraternities to provide housing and a social environment, at no cost to the University. When was the last time the University expended capital funds to provide alternative housing for upperclassmen, and at what cost per student, relative to the proposed cost of forcing the sale of the fraternity housing, by foreclosing them from their market? And this in the face of a $45mm campaign for a new library.
Instead of building housing of interest to students, the
University proposes to use its monopoly parietal power to require the
sale of the fraternities, filling them nevertheless, with the same student
population.
Wherefore go the fraternal owners of these properties, or their members
of long standing, with a sense for tradition, an interest in the continuation
of their legacy, and a desire to maintain their relationship both with
their Greek society and the University? By action of the University, the
alumni owned facility has no revenues, no means except through dues, assessments,
and other demands upon active alumni to pay its mortgage or maintenance
expenses, or otherwise meet its needs. It is simply foreclosed from its
natural market of student upperclassmen in the business it has conducted
in the University environment for 100 years and more. Why? Because the
University wants and needs the very same properties to house the very
same students and has arranged no alternative. An objective observer would
consider this to be the work of a monopolist, or one who seeks to achieve
a monopoly with market power in a well defined market.
In 1997, the Second Circuit Court of Appeals decided Hamilton/Alpha Delta v. Hamilton College, 128 F. 3d 59, involving a claim by fraternities there involved that the college had violated Section 2 of the Sherman Act, in view of the requirement that all students live in college housing: which plaintiffs alleged unlawfully monopolized the market for college residential services in the relevant market. Although the original complaint was dismissed for lack of subject matter jurisdiction, the Court reversed the ruling below, and upheld the right of the plaintiffs to proceed to trial. For want of resources, the case did not proceed, but the ruling remains good law. This is apparent from Hack v. President & Fellows of Yale College ,237 F. 3d 81 ( 2d Cir. 2000 ) involving two entering freshmen at Yale, where the Second Circuit denied relief . expressly distinguishing the Hamilton case, noting that, in view of the Supreme Court decision in Eastman Kodak v. Image Technical Services Inc., 504 US 451 (1992), the Hamilton case was very different, indeed: “ Plaintiffs in Hamilton were “locked in” by their investment in housing which they could no longer use because of an abrupt change in policy. That might have raised the concerns voiced in Eastman Kodak…” This is a tying case, where the Court perceives a tying (the parietal rules governing student housing) and a tied product (upperclass housing), evidence of coercion (by the University requiring the students to abide their housing policy) economic power in the tying product to coerce acceptance, anticompetitive effects in the tied market, and the involvement of a not insubstantial amount of interstate commerce in the tied market.
The affected parties include students, alumni, and the alumni associations, owners of the properties subject of the University’s demands. As an alumnus, I am deeply concerned with what I consider to constitute an unlawful attempt to monopolize the upperclass housing market by the imposition by the University of requirements upon, and as a condition of their status as students. The anticompetitive action of the University in precluding free association of students electing to utilize the fraternities housing option is predatory, and has for its purpose the acquisition of uniquely valuable and uniquely positioned property to the economic advantage of the University. It is no answer to say that the prices offered are fair. A related concern is that the University’s action creates a dangerous probability of success, given the exhaustion of resources consequent from the action of the University, affecting the ability of the alumni associations to resist, just as occurred in the Hamilton situation. This in turn will manifest in economic injury to individual alumni, in an effort to vindicate their rights.
As an alumnus, separate and apart from the alumni corporations, I will sustain injury, including economic injury, from the implementation of this policy by the University, as will others similarly situated.
I object in the strongest terms to this manipulative, coercive undertaking, which is contrary to every ethical principle we learned at Colgate, and try to practice in our everyday lives.
We understand your fear of liability in these times, but violation of the law is not the answer here, no more so than it was during your career at Goldman Sachs. Sincerely, Stephen D. Murphy ‘62
SDM:j
Cc: The Honorable Eliot Spitzer
Attorney General
State of New York
The Capitol
Albany, NY 12224-0341
Mr. Eric Will – via E-mail