Darmouth College and the Town of Hanover, NH, A Dystopian Partnership

Sean Callan, Manley Burke, sean.callan@manleyburke.com

At a recent administrative zoning hearing, Dartmouth Assistant General Counsel Kevin O’Leary testified that Dartmouth College may de-recognize any organization for any reason or no reason.

“…we are entitled through whatever process we want to decide whether we are going to continue to have a relationship with an organization or not.  That’s a right we have.”

As Dartmouth is a private college, Mr. O’Leary is correct subject to limited exceptions.  The issue is to what extent the admittedly arbitrary decisions of a private actor may properly form the basis for a municipal zoning determination.

Like many college towns, Hanover has a zoning ordinance that recognizes chapter house use only where the chapter is recognized by the local college, in this case Dartmouth.  At a glance, this kind of ordinance appears to be an unlawful delegation of municipal authority to a private actor.  However, the facts of a recent case show the dangers of such a construct in detail.  The record as established in New Hampshire Alpha of SAE Trust v. Town of Hanover, and Town of Hanover Zoning Board of Adjustment, (Docket No. 16-CV-283) (the “SAE” case) demonstrates a level of cooperation, coordination and communication between the Town of Hanover and Dartmouth to an extent not previously understood.  The SAE case starkly demonstrates how a private college and a college town joined forces to effectively condemn a chapter house without just compensation.

Decided on August 3, 2017, the SAE case involved the de-recognition of the SAE chapter at Dartmouth College and the subsequent revocation of the house corporation’s zoning permit under the Town of Hanover zoning ordinance.  In February, 2016, the College learned that SAE’s national fraternity suspended the charter of the SAE Dartmouth chapter.  As a result, the College revoked its recognition of the SAE chapter as a student organization.  The College then informed Hanover that the SAE chapter was no longer a recognized student organization.

Within a week, Hanover issued a notice informing the SAE house corporation that it could not continue to use the chapter house as a “student residence”.  Under the Hanover zoning ordinance, a “student residence” is defined in part as follows:  “A building designed for and occupied by students and operated in conjunction with another institutional use . . .” In Hanover’s view, the other “institutional use” referred to the College.¹  Accordingly, because the College revoked its recognition of the SAE chapter, the chapter house was no longer “operated in conjunction with another institutional use” and therefore unlawful.

The SAE house corporation appealed to the Hanover Zoning Board of Adjustment (“ZBA”).  The appeal centered on the idea that the chapter house use was a lawful, non-conforming use.  At the public hearing, the house corporation adduced evidence that it had never operated in conjunction with the College thus establishing the non-conforming nature of its use.  No one appeared in opposition or adduced any facts contrary to the evidence submitted by the house corporation.  The Town notified Dartmouth of the hearing date and its right to appear and produce evidence, but it declined to do so.  Accordingly, the ZBA sustained the appeal, reversing the issuance of the zoning violation notice.  The written decision would follow.

What happened next was extraordinary.

Apparently, the ZBA was unhappy issuing the decision the law required.  On April 18, 2016, prior to the ZBA issuing its written decision, ZBA member Bernie Waugh sent an email to the Zoning Administrator, urging the Zoning Administrator to send the ZBA’s written decision to the College so that it would be aware of its “chance to ask for a rehearing.”

Later that day, the ZBA published a decision granting SAE’s appeal, finding that its use of the chapter house as a “student residence” was a lawful non-conforming use.  The ZBA itself then noted that “it is conceivable that contrary evidence could be adduced if a party with standing to request a rehearing (such as the College itself) were to present such evidence.”

The College followed the ZBA’s direction by requesting a rehearing.  The house corporation objected to no avail.  The ZBA then held a public rehearing on June 23, 2016.

Appearing at the rehearing, the College produced evidence that it had provided services to fraternities generally and to the SAE chapter in particular prior to the effective date of the “student residence” ordinance (1976).  The house corporation adduced contrary evidence.  Unsurprisingly, the ZBA reversed itself, affirmed the issuance of the zoning violation and denied the house corporation’s appeal.  The house corporation then filed its own motion for rehearing which the ZBA predictably denied.

The house corporation then filed an appeal of the ZBA decision in the Grafton Superior Court.  The appeal rested on numerous grounds including administrative appeal of the decision, error in allowing the re-hearing, error in the evaluation of the evidence of non-conforming use, deprivation of procedural and substantive due process, deprivation of equal protection, that the decision effected a taking requiring just compensation, and failure to use “administrative gloss” to define ambiguous terms in the ordinance.  The Court dealt with many of these claims by simply pointing to the decision of the New Hampshire Supreme Court in Dartmouth Corp. of Alpha Delta v. Town of  Hanover, _  N.H. _,  159 A.3d 359 (2017) (the “AD case”).

The AD case is another case also arising from the application of the Hanover zoning ordinance to a Dartmouth fraternity.  In that case, Hanover revoked AD’s zoning permit upon de-recognition by the College.  AD appealed all the way to the New Hampshire Supreme Court without success.  However, there are significant factual and legal differences between the AD case and the SAE case.  While the AD case may bear on the SAE case, the AD case is not dispositive of the SAE case.

That aside, the Court in the SAE case failed to deal with perhaps the strongest attack on the Hanover zoning ordinance – the unconstitutional delegation of zoning power to a private entity.  Under Hanover’s interpretation of the ordinance, the lawfulness of a use as a “student residence” lies squarely on the determination of a third-party private actor, namely Dartmouth College.

The house corporation advanced this unconstitutional delegation argument on appeal, but the Grafton Superior Court simply ignored it.  The Court made no ruling at all on this issue while denying the house corporation’s appeal.  The house corporation has moved for reconsideration on this issue, amongst others.  However, the unlawful delegation argument, in this case in particular, seems very promising.

As noted at the outset of this article, the record established at the ZBA pointedly demonstrates the problem with this type of delegation of power.  Dartmouth Assistant General Counsel Kevin O’Leary conclusively argued that the College may de-recognize any organization for any reason or no reason.  This is the definition of plenary authority that may be wielded in an arbitrary way.

However, the Town of Hanover, as a governmental entity, has no similar plenary authority.  The Town cannot refuse zoning approval through “whatever process [it] wants”.  The Town may not act arbitrarily.  However, by offloading its zoning authority to Dartmouth College, the Town neatly avoids the Constitutional limits on its governmental power.

Making the ultimate decision in the SAE case even more suspect is the location of the SAE chapter house.  The chapter house itself is an island within the campus of Dartmouth College.  So with respect to this particular property, Dartmouth is not only an adjoining landowner, but also the most likely, if not the only, potential purchaser of the SAE chapter house.  In giving Dartmouth the power to revoke the house corporation’s zoning permit, the Town of Hanover delegated its zoning power to a private entity with hopeless economic conflicts of interest.  Hanover may as well have given Dartmouth College the deed.²

The regulatory intersection between the Town and the College creates an impossible situation.  On the one hand, the Town delegates the determination of the lawfulness of use to the College, an entity that not only admits in can wield that power without limits, but stridently asserts its right to do so.  Moreover, the College has obvious economic interests that can be protected through the arbitrary exercise of the vast power delegated it by the Town of Hanover.

For its part, the College disavows any responsibility for the actions of the Town.  Mr. O’Leary’s full testimony on the point quoted at the outset of this article is as follows:

“…we are entitled through whatever process we want to decide whether we are going to continue to have a relationship with an organization or not.  That’s a right we have.

The effect that that decision has on that organization’s other rights, whether it’s a right to have, to run a student residence, to run a student business or to do any number of things is not for us to say.  It’s up, in this case, up to the Town to say.”

That is an interesting statement given the Town’s history in these kinds of zoning cases.  The interpretation and enforcement of the Hanover zoning ordinance as reflected in the SAE case and the AD case is new.  The College de-recognized many chapters between 1976 and 2015 when AD lost recognition, yet not one of those previously de-recognized chapters lost its zoning permit.  Indeed, when a zoning issue did arise, the Town and the ZBA routinely recognized the chapters as lawful, non-conforming uses.

Between 1976 and 2015, something changed.  Given that the Zoning Administrator now is the same person that previously recognized chapter houses as non-conforming uses, it seems unlikely that the Hanover zoning office changed its mind.  Indeed, that same Zoning Administrator wrote on October 14, 2011, in reference to another de-recognition case, as follows:

“[c]ollege de-recognition does not erase the pre-existing, legal, non-conforming use of a property (in this case the use as a fraternity).”

We may never fully understand why the Town of Hanover suddenly reversed course in its interpretation and enforcement of the Hanover zoning ordinance.  What we can see, however, is that Dartmouth is the direct beneficiary of the change.  Indeed, Dartmouth counted on it.  In the recently issued “Report of the Presidential Steering Committee for Moving Dartmouth Forward”, the Committee stated as follows:

Further, with respect to any organizations in privately-owned residences that are derecognized, the College should be prepared to (1) report the derecognized House to the Town of Hanover, to ensure compliance with any applicable zoning or other laws and (2) acquire their facilities and repurpose them for the College’s residential, social and academic purposes.

Accordingly, this is not a paranoid extrapolation from seemingly related but unrehearsed events.  This is Dartmouth policy.

With Hanover requiring Dartmouth approval to operate within the zoning district surrounding the College, the College effectively controls the entire district.  If a landowner loses favor with Dartmouth, that owner will lose its permit to operate, suffering economic destruction in the process.  The only realistic possible purchaser of such an impaired property is Dartmouth itself.  This construct creates an effective municipality of Dartmouth College, complete with the power of condemnation, yet unburdened by any Constitutional restraint on the exercise of municipal power.

The SAE case is not over.  Any truly impartial review of this zoning scheme must conclude that the Hanover zoning ordinance, as interpreted and enforced, is an invalid delegation of power to Dartmouth College.  For now, we hold out hope that the Grafton County Superior Court gives this issue the full attention it deserves.  We will keep our readers posted.

1 The ordinance defines “institution” as “[f]acilities primarily engaged in public services including, but not limited to, education, research, health, and public worship.”  As a private school with an annual cost of attendance exceeding $67,000 per year, it is not at all clear that Dartmouth provides any “public services”, educational or otherwise.

2 Since the Court determined that no taking occurred, there will be no just compensation paid to the house corporation.  The ultimate sales price will be determined by a market of one – Dartmouth College.