Harvard and HPDC Attorneys Square Off Over Prison Investments in Lawsuit Oral Arguments

Attorneys and activists squared off in state court Tuesday over Harvard’s motion to dismiss a lawsuit brought by the Harvard Prison Divestment Campaign over University investments.

In oral arguments in front of Massachusetts Supreme Judicial Court Judge Christopher K. Barry-Smith ’88, the parties sparred over whether the suit against the University — similar to one filed by fossil-fuel divestment activists dismissed in 2014 — will proceed to trial.

The lawsuit, filed in February, accuses the University of two violations of Massachusetts law.

The first count alleges that Harvard violated its fiduciary duty and the Harvard Charter — a 1650 document that deemed the Harvard Corporation responsible for the University’s finances — by refusing to investigate the scope of its investments in the prison industry.

The second count accuses the University of “untrue and misleading advertising” based on Harvard’s promises to reckon with its historical ties to slavery, even as it maintains investments in prisons.

Harvard and HPDC have long disagreed about how much money the University invests in the prison industry. Harvard argued at the time that its investments totalled only $18,000, a drop in the bucket relative to the University’s then-$40.9 billion endowment. However, HPDC has argued that the number is closer to $3 million, counting indirect investments.

Amanda T. Chan and Anna L. Nathanson, both of whom graduated from Harvard Law School in May, and the other plaintiffs — Ismail A. Buffins, a graduate of the Divinity School, and Jarrett Drake and Citlalli Alvarez Almendariz, doctoral students in Anthropology — are appearing pro se in the suit.

Martin F. Murphy, a partner at Foley Hoag LLP, argued on behalf of Harvard for its motion to dismiss the suit.

In attempting to combat the charge of fiduciary violation, Murphy focused his attacks on the plaintiff’s standing to sue. Murphy argued that there are no “meaningful legal distinctions” between this lawsuit and a 2014 lawsuit that also alleged a violation of the Harvard Charter. That lawsuit was ultimately dismissed, with the judge finding that student plaintiffs had no stake in the endowment and lacked standing.

To differentiate the current suit from the failed 2014 attempt, all of the plaintiffs donated to the University, which they say gives them a stake in the University’s finances.

Murphy disagreed, citing legal precedent in Massachusetts that found that donors lacked the ability to sue the charities to which they donated.

He also noted that allowing small groups donors to dictate how the University spends its endowment when there is a “high likelihood” of donors with differing opinions would lead to “absurd results.”

Massachusetts Assistant Attorney General Emily Gabrault — who appeared on behalf of the state’s Attorney General Maura T. Healey ’92, also named as a defendant in the suit, as is required in matters involving charities — backed the University’s position and its motion to dismiss.

Gabrault said in court on Tuesday that under state law, “donors themselves don’t have a specific interest above and beyond the general public.”

While noting the AG’s Office appreciates the plaintiffs’ focus on issues of systemic racism, Gabrault called the lawsuit an “inappropriate forum for that kind of advocacy.”

In response, Chan contended that she and the plaintiffs were not arguing a breach of fiduciary duty, but rather a “contractual claim”: that Harvard is required to give its donors “a seat at the table.”

“Harvard is fully within its rights to invest in lawful slavery if that is what its fidicuiary judgement ultimately decides,” Chan said, referring to Harvard’s prison industry investments. “But at the very minimum, Harvard must also hear plaintiff donors’ moral and financial concerns in good faith.”

On the charge of false advertising, the attorneys clashed over whether there were any advertisements in question and the difference between facts and opinions.

Murphy noted that state law dictates “the actionable statement must be contained in an advertisement.” The statements the suit references include an op-ed by former University President Drew G. Faust and an announcement from University President Lawrence S. Bacow about an initiative to study Harvard’s ties to slavery, not traditional advertisements.

Nathanson fought back by claiming that advertisements are any public announcements that proclaim qualities of a product and have a “wide dissemination.”

Even so, Murphy argued that the plaintiffs failed to prove that they contained “an assertion, representation, or statement of fact that is untrue, deceptive, or misleading.”

Rather, he said, whether or not Harvard has engaged in a “reckoning” with its ties to slavery is “a question of opinion, and not something that can be proved or disproved as a matter of fact.”

Nathanson replied that rather than proving an untrue statement, the plaintiffs only need to prove “a misrepresentation significant enough that it might influence the consumer.”

That misrepresentation comes from investments in the prison industry and the “sham” that is the project on Harvard and slavery, per Nathanson.

At the close of the proceedings, Barry-Smith said he will work to write and deliver his decision “promptly.”

Tuesday’s hearing was conducted fully by Zoom, as have many state hearings during the COVID-19 pandemic, prompting a somewhat unusual question from the judge.

“What is your background on Zoom?” he asked Chan.

“‘Zoom backgrounds for lawyers,’ from Google Images,” Chan replied. “I highly recommend.”

Correction: September 30, 2020

A previous version of this article incorrectly stated that Amanda T. Chan and Anna L. Nathanson are representing themselves and the other plaintiffs. In fact, each of the five plaintiffs appeared pro se.

—Staff writer Ellen M. Burstein can be reached at ellen.burstein@thecrimson.com. Follow her on Twitter @ellenburstein.

—Staff writer Camille G. Caldera can be reached at camille.caldera@thecrimson.com. Follow her on Twitter @camille_caldera.