Indiana Supreme Court Affirms Summary Judgment in Favor of National Fraternity

Tim Burke, Manley Burke, tburke@manleyburke.com

We are pleased to report that the position of the 23 NPC member groups who joined together in an amicus brief prevailed in Smith v. Delta Tau Delta, et al., Case No. 54S01-1405-CT-356.  On May 28, 2014, the Supreme Court of the State of Indiana, in a unanimous opinion written by the Chief Justice, upheld the Motion for Summary Judgment granted in favor of the national fraternity, Delta Tau Delta.

Johnny Dupree Smith, a pledge of the Delta Tau Delta Fraternity at Wabash College, died of acute alcohol ingestion.  His estate sued the national fraternity, its local chapter, Wabash College and several individuals.  The complaint alleged that Smith had been the victim of hazing and was illegally provided with and forced to consume excessive amounts of alcohol.

The national fraternity argued successfully at the trial court, that as a matter of law, the undisputed facts did not justify the imposition of any liability for Smith’s death on the national fraternity.  The Court of Appeals disagreed and would have sent the case back to the lower court for trial.

In response to Delta Tau Delta’s appeal to the Supreme Court, the plaintiffs argued two issues.  First, that the national fraternity had assumed a duty to protect freshman pledges from the dangers of hazing and excessive alcohol consumption.  Second, that the local chapter was the agent of the national fraternity and the national fraternity was, therefore, subject to vicarious liability for the actions of the officers and representatives of the local chapter.

Summary judgment is not easily granted.  All evidence and inferences that may be drawn from the evidence must be viewed in the light most favorable to the non-moving party.  In this case, the facts had to be interpreted most favorably towards the Estate of Johnny Smith.

National Did Not Assume  A Duty of Care

The Supreme Court first considered whether or not the national fraternity had assumed a duty of care to protect freshman pledges against hazing and the dangers of excessive alcohol consumption.  The court recognized that “to impose liability resulting from breach of assumed duty, it is essential to identify and focus on the specific services undertaken.  Liability attaches only for the failure to exercise reasonable care in conducting the ‘undertaking’.”

The plaintiffs had argued that the national fraternity, by its adoption and promulgation of rules against hazing and its practice of investigating allegations of hazing documented that the national had assumed a duty to protect freshman pledges, including the plaintiffs’ deceased son.

Delta Tau Delta did not dispute the facts relating to its promulgation of rules, circulation of educational materials and ability to punish for violation of its rules, but argued that it lacked any direct oversight and control of individual fraternity members.

The Supreme Court looked at three prior fraternity cases in which it had found that similar facts did not lead to a conclusion that a duty had been assumed.  Publishing posters against date rape and alcohol abuse did not make a national fraternity liable for sexual assault on a guest of a local fraternity.¹  The publishing of an advisory pamphlet regarding alcohol abuse, the conducting of inspections and compiling of reports are insufficient to establish the assumption of a duty to control alcohol consumption by local members.²  Even having a strong disapproval of hazing in charters, bylaws and promotional materials, promoting an online course against hazing and being able to issue and suspend charters or discipline or expel individual members and appoint a local advisor, was insufficient to establish an assumption of duty by a national.³

In this particular case, the court noted that Delta Tau Delta had more involvement with the local chapter than the national had in the Yost case decided earlier this year.  Delta Tau Delta’s National Constitution Bylaws and Membership Responsibility Guideline clearly disapproved of hazing and irresponsible and underage drinking.  The national had an online alcohol education program that all new members must complete during their pledgeship.  National recommended that local chapters elect a House Risk Manager.  The national provided educational materials to that local officer.  National could suspend charters and discipline or expel individual members.  Each local chapter had a Chapter Advisor appointed by a national representative.  That advisor was a deputy of the Arch Chapter, the governing body of the fraternity, and was the custodian of the local chapter’s official documents, secret books and ritual.  The local chapter’s Treasurer was required to report routinely, once per month, to the national regarding its records and accounts receivable.

While the court found the national’s involvement with its local and its efforts to deal with hazing and alcohol abuse to be “seen as more robust and extensive” than in the prior three cases, the Supreme Court found there was no evidence showing the national fraternity had a right to exercise day-to-day oversight and control of the local fraternity and its members.  Rather, the national’s policies and regulations regarding hazing and drinking were educational, but without any power of “preventative control.”

The court called it “commendable” for the national fraternity to engage in such programs but that doing so “did not rise to the level of assuring protection of the freshman pledges from hazing and the misuse of alcohol.”  The court unequivocally stated, “the national fraternity did not have a duty to ensure the safety of the freshman pledges at the local fraternity.”

The Local Chapter Was Not an Agent of the National

The court next looked at plaintiffs’ argument that the local was an agent of the national and therefore the national was vicariously liable for the actions of the local and its members.  To establish an agency relationship, it had to be shown that the local acted on behalf of the national.  The local must consent to act on the national’s behalf and be subject to the national’s control.  In short, both parties had to consent to the relationship.

Plaintiffs had argued that because the national had broad enforcement powers, it had the right to control the local’s activities and alcohol use.  The court noted that those enforcement powers were “remedial only” and that the ability to impose “post conduct sanctions” did not establish the control necessary to create an agency relationship.  Even recognizing that the members of the local fraternity were subject to post conduct punishment, the court noted that, “in their choice of conduct and behavior, the local fraternity and its members were not acting on behalf of the national and were not subject to its control.”

The following analysis by the Supreme Court is worth noting in whole:

The relationship between the national fraternity and the local fraternity involves the national fraternity offering informational resources, organization guidance, common traditions, and its brand to the local fraternity.  Additionally, the national fraternity furthers joint aspirational goals by encouraging individual members’ good behavior and by investigating complaints and reports that affect the health, reputation and stability of local chapters.  The national fraternity has the right to discipline, suspend or revoke its affiliation with the local fraternity or its members, the local fraternity’s every day management and supervision of activities and conduct of its resident members, however, is not undertaken at the direction and control of the national fraternity.  The local fraternity is responsible for electing its own officers without the consent or oversight of the national fraternity.  Local officers are expected to abide by the aspirational goals promulgated by the national fraternity, but are never given the authority to act on behalf of the national fraternity.

This decision and that in the Yost case, which came just two months earlier, makes it clear that educational programs, the promulgation of rules, and punishing for violation of those rules do not in and of themselves, make the national liable for the conduct of the local chapter and its officers or members who violate those rules.  To that extent, this decision is a very important one for national Greek groups.

Lessons Learned From the Decision

Two cautions are important.  First, the fact that the national may not be liable for the wrongdoing does not mean that the fraternity is free and clear.  That is particularly true for those groups where insurance may be obtained as a package providing liability coverage for a national and each of its locals.  In the Smith case, the national is free from liability, but its local chapter remains a defendant in the underlying litigation.  It may yet be found liable.  If it is liable, given that the case is dealing with the death of a young man, the damages could be substantial.  If the insurance is required to pay those damages as a part of its package of insurance coverage, there may well be an impact on future premiums and coverage availability.

Second, the decision in Smith is not a free pass to say that a national fraternity may never be held liable.  In fact, the court recognized that a national fraternity does have a duty of reasonable care in the performance of whatever duties it does assume.  When information and guidance is provided to a chapter, reasonable care must be exercised with regard to the content of that information.

Fraternal Law Partners, a division of Manley Burke, is pleased to have represented the 23 member groups of the National Panhellenic Conference who joined together on the amici curiae brief filed in this case with the Supreme Court of Indiana.  We specifically want to acknowledge the assistance of Jeffrey A. Musser of the Rocap Musser, LLP firm in Indianapolis, Indiana who served as our local counsel and assisted in seeing that the filing with the Indiana Supreme Court were appropriately made.

1 Delta Tau Delta v. Johnson, 712 N.E.2d 968 (Ind. 1999).

2 Foster v. Perdue University Chapter, 567 N.E.2d 865 (Ind. Ct. App. 1991).

3 Yost v. Wabash College, 3 N.E.3d 509 (Ind. 2014).