Tell et al. v. Dartmouth College CV-96-357-B 07/15/97

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

William K. Tell, et a l .

v. Civil No. 96-357-B

Trustees of Dartmouth College

MEMORANDUM AND ORDER

The Dartmouth College Alumni Association amended its

constitution in 1990 to change the way in which the Alumni's

representatives to the College's Board of Trustees are selected.

William Tell and six other Alumni litigated and lost a state

court action against the Alumni Association challenging the 1990

amendments. Having failed in that effort, the same plaintiffs

then filed this class action against the Trustees in which they

assert that the new selection procedures violate an 1891 contract

between the College and the Alumni. Because I conclude that the

Alumni Association is an indispensable party to this dispute

under Fed. R. Civ. P. 19, I dismiss the complaint without

prej udice.

BACKGROUND

A. The Trustee Selection Procedure

Dartmouth College has sixteen Trustees: the President of the

College, the Governor of New Hampshire, and fourteen other

members, seven of whom are nominated by the Alumni. The Trustees are a New Hampshire Corporation. The Alumni are organized into

two groups, the Alumni Association and the Dartmouth Alumni

Council. The Alumni Association is an unincorporated association

of all living Alumni, which was formed in or around 1854. The

Association holds an annual meeting at which it elects its

officers and nominates candidates for open Alumni Trustee

positions. The Dartmouth Alumni Council is a group of

approximately 100 elected or appointed Alumni which conducts most

Alumni business and acts as a representative body for the Alumni.

Prior to 1990, the Alumni Council chose Alumni Trustees directly,

unless a group of Alumni nominated a petition candidate to oppose

the Council's selection. If a petition candidate was nominated,

the Alumni Association would choose between the candidates by

ballot. This process was used to fill both a Trustee's initial

term and any subseguent terms.

B. The 1990 Amendments

The Trustees convened a committee of Trustees and Alumni in

1989 to recommend changes to the procedures for selecting

Trustees. Among the recommended changes was that the Trustees be

empowered to reseat Alumni Trustees for an additional term

without the Alumni's approval. The Alumni Association later

amended its constitution in September 1990 to adopt the

- 2 - committee's recommendations. Plaintiffs challenge the changes

reflected in the 1990 Amendment by contending that the new

selection procedures violate an 1891 contract between the College

and the Alumni.

C. The 1891 "Contract"1

Dartmouth became embroiled in a dispute with the Alumni

concerning the management of the College in the late 1880s. The

dispute was resolved in 1891 when a committee appointed by the

Alumni Association persuaded the Trustees to accept the following

proposal:

This committee hereby submit to the board the plan in the following redraft of said resolutions, which upon the understanding hereinafter stated they will recommend for adoption by said Association.

1. Resolved. That the Graduates of the College, the Thayer School and the Chandler School, of at least five years' standing, may nominate a suitable person for election to each of the five trusteeships next becoming vacant on the board of Trustees of the College (other than the Governor and President) and for his successors in such Trusteeship.

Because the plaintiffs' claims are based on the alleged 1891 contract, I describe the alleged contract by referring to the historical materials the plaintiffs submitted in opposition to the Trustees' motion to dismiss. See, e.g., John King Lord, A History of Dartmouth College, (1913).

- 3 - 2. And resolved. That whenever any such vacancy shall occur in such trusteeship or the succession therein, the Trustees will take no action to fill the same until the expiration of three months after notice to the secretary of the Alumni of the occurrence of such vacancy, unless a nomination shall be sooner presented by the Alumni to said Trustees for that vacancy.

It is understood that the Trustees will provide for three vacancies on the board at once, and two more before the next Commencement, in June 1892, to be filled as above provided.

3. And resolved. That this plan of nomination shall be taken and held to supersede the plan heretofore adopted in 1876.

Lord, supra at 468. After gaining the Trustees' acceptance, the

Association amended its constitution to accommodate the new

selection procedures. These procedures remained in effect until

the 1990 Amendments were approved.

Plaintiffs argue that the 1891 Trustee selection procedures

constitute a binding contract between the College and the Alumni.

They further claim that the Trustees breached the fiduciary duty

and the duty of good faith and fair dealing that they owe the

Alumni by improperly inducing the Alumni Association to adopt the

1990 changes without first disclosing the existence of the 1891

- 4 - contract.2

ANALYSIS

The Trustees invoke Rule 19 to support their motion to

dismiss. Dismissal for failure to join a party is required under

the rule if four requirements are satisfied. First, the missinq

entity must be "a person who is subject to service of process."

Second, the entity must be a "person to be joined if feasible."

Third, the court must determine that the entity "cannot be made a

party." Finally, the court must find based on the four non­

exclusive factors listed in Rule 19(b) that the proceedinq should

not be continued in "equity and qood conscience" without the

entity. See Puiol v. Shearson American Express, Inc.,

(1st Cir. 1989) (discussinq requirements two and four).3

The plaintiffs also arque that the Trustees are required to take an oath to support the Board's decisions which also violates the Trustees' duty of qood faith and fair dealinq. This claim has no bearinq on the motion to dismiss.

3 The party seekinq dismissal, in this case the Trustees, has the burden of demonstratinq "the nature of the interest possessed by an absent party and that the protection of that interest will be impaired by the [party's] absence." Citizen Band Potawatomi Indian Tribe of Oklahoma v. Collier,

(10th Cir. 1994); see also Makh Indian Tribe v. Verity,

(9th Cir. 1990) (movinq party has burden of persuasion). In addition to the well-pleaded alleqations in the complaint, affidavits and other relevant extra-pleadinq evidence can be used to satisfy the Trustees' burden.

(citinq 5A Charles A.

- 5 - The dispute in this case hinges on whether requirements two

and four of Rule 19 have been satisfied.4 Accordingly, I focus

my analysis on these two requirements.

A. Is the Alumni Association a Person to be Joined if Feasible?

The Trustees argue that the Alumni Association is a person

to be joined if feasible under Rule 19(a)(2)(i) because the

Association "claims an interest relating to the subject of the

action and is so situated that the disposition of the action in

the [Association's] absence may as a practical matter impair or

Wright & Arthur R. Miller, Federal Practice and Procedure, § 1359, at 427 (1990)).

4 Plaintiffs do not dispute the Trustees' claim that the Alumni Association qualifies as a person subject to service of process. The Association is an unincorporated association. Fed. R. Civ. P. 17(b) provides that the capacity of an unincorporated association to sue or be sued is decided by reference to the law of the state in which the district court sits and New Hampshire law permits unincorporated associations to sue or be sued.

(1997). Plaintiffs also concede that the Association cannot be joined as a party. A person cannot be joined under Rule 19(b) if its presence would destroy the court's subject matter juris­ diction. 7 Wright & Miller, supra, § 1610 at 145. Plaintiffs invoke the court's diversity jurisdiction. However, since the citizenship of an unincorporated association is determined for diversity of citizenship purposes based upon the citizenship of each member and it is undisputed that the Association has members in each of the 50 states, the Association cannot be joined as a party without depriving the court of its subject matter jurisdiction. See Jaser v. New York Property Ins. Underwriting Assoc.,

(2d Cir. 1987) .

- 6 - impede the person's ability to protect that interest." According

to the Trustees, the Association has a compelling interest in the

litigation because it has been directly involved in the process

of selecting Trustees since 1891 and the resolution of the

plaintiffs' claims in its absence could adversely affect its

future role in the Trustee selection process. The plaintiffs

respond by contending that their lawsuit concerns only a dispute

between the Alumni and the Trustees. The Association's interest,

they claim, is at best derivative because its role in the trustee

selection process is governed by a separate contract between the

Alumni and the Association. I reject the plaintiffs' argument

for two related reasons. First, without passing on the merits of

the plaintiffs' claim, any contract that the Trustees may have

entered into in 1891 to provide for the election of Alumni

Trustees necessarily involved the Alumni Association. This

conclusion is manifest in the historical materials the plaintiffs

submitted with their opposition to the motion to dismiss. See,

e.g.. Lord, supra, at 466-69 (demonstrating that 1891 Trustee

selection procedures were arrived at through a process of

negotiation between the Trustees and a committee appointed by the

Association). Accordingly, there is no merit to the plaintiffs'

- 7 - claim that the Association was not a party to the 1891

"contract."

Second, as the plaintiffs concede, the Alumni Association

made the 1990 changes possible by accepting the changes and

amending its constitution. The plaintiffs' complaint directly

attacks the Association's authority to approve these changes on

behalf of the Alumni by seeking a declaration that "the September

15, 1990 action [of the Association] had no force and effect, or

to the extent such action eliminated the Alumni's right to select

a new trustee . . ., such action is null and void." Accordingly,

a successful outcome for the plaintiffs would directly impede or

impair the Association's ability to speak on behalf of the Alumni

on this subject. The threat that the plaintiffs' lawsuit poses

to this legitimate interest readily gualifies the Association as

a person to be joined if feasible.

B. Can the Lawsuit Proceed in Equity and Good Conscience Without the Alumni Association?

Once I have determined that an entity meets the reguirements

of Rule 19(a), I must determine "whether in eguity and good

conscience the action should proceed among the parties before it,

or should be dismissed, the absent person being thus regarded as

indispensable." Fed. R. Civ. P. 19(b). In deciding whether an

entity is indispensable, I look to the following four non- exclusive factors: "[F]irst, to what extent a judgment rendered

in the person's absence might be prejudicial to the person or

those already parties; second, the extent to which, by protective

provisions in the judgment, by the shaping of relief, or other

measures, the prejudice can be lessened or avoided; third,

whether a judgment rendered in the person's absence will be

adeguate; [and] fourth, whether the plaintiff will have an

adeguate remedy if the action is dismissed for nonjoinder. See

Fed. R. Civ. P. 19 (b); see also Acton Co., Inc. of Mass. v.

Bachman Foods, Inc.,

(1st Cir. 1982). I

address each factor in turn.

1. Prej udice

The prejudice inguiry under Rule 19(b) is similar to the

analysis reguired by Rule 19(a)(2)(i). I have already determined

that a judgment rendered in the Association's absence could be

prejudicial since in essence the suit challenges the

Association's ability to bind its members, and an adverse

judgment would impair or impede the Association's relationship

with the College. Moreover, the potential prejudice to the

Association cannot be addressed by relying on the Trustees to

represent the interests of the Association. This dispute

ultimately involves the way in which Alumni Trustees are chosen and the Alumni Association's role in their selection. The

complaint charges that the Trustees have dominated and controlled

the Association for a period of years, which ultimately resulted

in the Association changing its method of Trustee selection in a

manner which violates the 1891 Agreement. Given these

allegations, plaintiffs are in no position to also credibly

contend that the Trustees can adeguately represent the interests

of the Association. See Travelers Indem. Co. v. Dinqwell,

, 636 (1st Cir. 1989)(party to lawsuit could not

adeguately protect absent party's interest).

2. Shaping of Relief

A second non-exclusive factor under Rule 19(b) is the extent

to which, by protective provisions in the judgment, by the

shaping of relief or other measures, I can lessen or avoid

prejudice. The relief sought in this case can not be shaped so

that it only derivatively or indirectly affects the Association.

Stripped of its gloss, this suit decides who has the rights to

select Alumni Trustees. Any declaration about the rights of the

Alumni-at-large with respect to either the 1891 Agreement or the

1990 changes will directly affect the Association's relationship

with the College.

- 10 - 3. Adequacy of Judgment if Case Proceeds

Third, I consider whether a judgment rendered in the Alumni

Association's absence will be adequate. In other words, I

examine the impact of proceeding with the case. Here, a judgment

rendered without the Association as a party will not be adequate

since I lack jurisdiction over the Association to fully enforce a

judgment favorable to the plaintiffs. Plaintiffs concede that

the Association currently plays a part in the selection of the

Alumni Trustees. Even if plaintiffs' version of the rights of

the Alumni at large prevails, no adequate remedy can be achieved

without the Association as a party.

4. Adequacy of Remedy if Case Dismissed

Finally, I consider whether the plaintiff will have an

adequate remedy if the action is dismissed for nonjoinder.

Plaintiffs previously litigated and lost a state court lawsuit

against the Alumni Association. Thus, they already had availed

themselves of an alternative forum in which to litigate this

dispute. The fact that they lost that case on the merits does

not take away from the adequacy of state court as an alternative

forum for litigating the dispute the plaintiffs attempt to raise

here.

- 11 - In summary, considering each of the factors listed in Rule

19(b), I conclude that the suit should be dismissed because the

Alumni Association is an indispensable party.

CONCLUSION

For the foregoing reasons, I grant defendants' motion to

dismiss (document no. 5) .5

SO ORDERED.

Paul Barbadoro United States District Judge

July 15, 1997

cc: W. Wright Danenbarger, Esg. Sean M. Gorman, Esg.

5 Because I grant the Trustees' motion to dismiss for failure to join an indispensable party, I need not address the motion to dismiss for lack of subject matter jurisdiction.

- 12 -