Unfair competition?: The hard and fast facts of a residential legal battle

Tuesday, May 3rd, 2016 at 10:23 PM
Unfair competition?: The hard and fast facts of a residential legal battle by Anna Ashcraft

Edinboro college apartments, College Park, Darrow Place Partnership, Darrow Place Partnership II and James Manor of Edinboro filed an antitrust lawsuit against the Edinboro University Foundation in May 2015. The lawsuit related to the 2011 change in oncampus residence policy and the construction of the Highlands.

A federal judge recently tossed out the case under the circumstances that the defendants have immunity under the Parker state action immunity doctrine and the Noerr- Pennington immunity doctrine.

The lawsuit in question was first filed against the Edinboro University Foundation, and a few months later (August) they added an amendment against former Edinboro University President Julie Wollman.

The Edinboro University Foundation is a private, nonprofit fundraising organization for Edinboro University. According to its website, “Edinboro University Foundation exists to support Edinboro University. This support includes acquiring, constructing, or otherwise providing buildings, grounds or other suitable facilities, improvements or equipment on the campus of the university for the use or benefit of students of the university.”

According to the court documents provided by the foundation’s attorney, the plaintiffs claimed that Edinboro University of Pennsylvania of the Pennsylvania State System of Higher Education (PASSHE) and the Edinboro University Foundation conspired to “unfairly compete against the plaintiffs and others in the local student housing market.”

Edinboro University was not named as a defendant, instead as a “non-defendant co-conspirator,”

The plaintiffs own a large amount of property (around 400 rental units) in the town of Edinboro surrounding the university.

They claimed that they suffered “severe and ongoing economic harm” and declining occupancy in response to the 2011 amendment to the on-campus resident policy, along with the building and planning of the Highlands a few years earlier. The amendment requires most Edinboro students to live on campus for two years. This is what reportedly caused the off campus housing markets in Edinboro to sue.

According to a report out of GoErie.com, occupancy in these rental units dropped from 759 students in 2011 to 435 in March of 2015.

The plaintiffs claimed the university knowingly conducted anticompetitive behavior against the local landlords. They also claimed the university violated the Sherman Antitrust Act, which is an anti-monopoly statute prohibiting activities that restrict interstate commerce and competition markets.

The plaintiffs also “filed a state law claim for tortuous interference with prospective business relations.”

The plaintiffs claimed the amendment to on-campus residence policy was unlawfully made “purely for financial reasons” with the purpose of ensuring that the Highlands would generate enough revenue.

The Parker doctrine, which is partly the reason the case was tossed out, is the principle laid down by the Supreme Court in which states are immune from federal antitrust law for their actions as sovereigns. In this case, the Parker state action immunity doctrine has immunized or excluded the foundation from antitrust liability conduct because it is affiliated with the state commonwealth in the housing actions.

The Noerr-Pennington doctrine also granted them immunity of governmental power under antitrust laws.

Senior U.S. District Judge Barbara J. Rothstein threw out the case.

“Accordingly, the court finds that the exercise of jurisdiction over the state law claim will not promote judicial economy or efficiency; rather, this claim is better suited for state court… Therefore, the court will exercise its discretion to decline jurisdiction over the state law claim,” the court documents reported.

Rothstein granted the defendants motion to dismiss strictly on the federal level, leaving the lawsuit open on the state level in Erie County Court.

“The decision is welcome news that allows the university to continue to make decisions in the best interest of students,” Jeff Hileman, director of university communications said on behalf of Edinboro University.

According to GoErie.com and plaintiff lawyer Matthew Wolford, an appeal on the federal level is “likely.”

College Park was not able to comment.

Anna Ashcraft is the Managing Editor of Arts for The Spectator.

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