U. prevails in scholarship lawsuit

A Common Pleas Court Judge yesterday ruled in favor of the University and the city in the long-running Mayor's Scholarship case. In dismissing the suit, Judge Nelson Diaz ruled that none of the plaintiffs had proper standing to sue, holding that only the mayor or a Mayor's Scholar who attended the University could enforce a disputed 1977 city ordinance that mandates the scholarships. Diaz also ruled that the University is required to provide 125 full-tuition scholarships at any given time, as the University contended, and not 125 per year for a total of 500, as was maintained by the Public Interest Law Center, which represented the plaintiffs. But the ruling sharply criticizes the University's handling of the scholarship program, concluding the University underfunded the 125 awards and calling the program at one point "a sham in the name of a scholarship." The suit and the controversy centered around a 110-year old agreement between the city and the University which gave the University more than 46 acres of city land rent-free in exchange for a set number of scholarship. University General Counsel Shelley Green said yesterday she is pleased that the judge decided to rule on the case's substantive issue -- how many scholarships the University was obligated to provide -- although he based his decision on the technical point of standing. "Even though [Diaz] ruled on the basis of standing, he still reached the key issue," she said. President Sheldon Hackney said last night that he is "by and large" pleased with the ruling. "The fundamental points of law were on our side so I feel quite good about it," he said. "We were confident from the beginning that we were right." But Michael Churchill, an attorney for PILCOP, said the ruling is "a far cry from prevailing on the substance" for the University. "I think it's a devastating critique of the way the University has run the program," he said. "Substantitively, even in their interpretation, they haven't complied with it." Churchill, who said he was disappointed by the ruling, called the judge's decision on the standing issue "very bizarre." "Only if you're rich enough to attend the University with an inadequate scholarship are you entitled to sue," he said. "That can't be the ruling." Although Diaz ruled against the plaintiffs in the case, he concludes in the decision that the University underfunded its obligation to provide 125 four-year full tuition scholarships. "The University does not give full scholarships to all Mayor's Scholars but provides five hundred dollar scholarships and a financial aid package based on need which includes loan and work study," the ruling states. Green and the University's outside lawyer Arthur Makadon said they think the judge was "confused" about the composition of Mayor's Scholarships. Green said the University has always maintained that its obligation was to provide 125 scholarships or their financial equivalent, that the scholarships are not loans and that the plaintiffs tried to confuse the issue at trial. "The plaintiffs made every effort to confuse that point and unfortunately the judge was confused on that issue," Green said. Green and Makadon said they will try to clarify the University's obligation for the judge. The ruling seemingly opens the door for current and past Mayor's Scholars who did not receive full-tuition grants to sue the University. "[A]ny Mayor's Scholarship recipient, within the statute of limitations, who was awarded a loan instead of a grant in aid, or paid the cost of tuition out of pocket, or was awarded a Mayor's Scholarship for less than four years should be entitled to a full reimbursement of what he or she has expended for payment of tuition," the ruling states. Diaz also invalidated last October's agreement between the University and city under which the University would voluntarily increase recruitment of Philadelphia students and substitute grants for loans in scholarship packages. But David Cohen, Mayor Ed Rendell's chief of staff, said he hopes the University will continue to fulfill the terms of the October agreement. Hackney said last night that the University will do so "because we think it's right and not because it's required by law." Under the ruling, students who do not live in Philadelphia but attend a high school in the city would be eligible for the scholarships, while students who live in the city but attend high schools outside the city would not be eligible. Churchill said PILCOP will likely appeal the case. He added that PILCOP is preparing to represent "the many students who, even under this opinion, are entitled to reimbursement because they received less than full-tuition scholarships." "We estimate the University owes two and a half million dollars over the last four years alone," he said. Green said the University "does not anticipate a flood of litigation." Cohen said the city thought the University had been underfunding the scholarships, but that the city and University had "agreed to quantify that underfunding and make it up without the interference of the plaintiffs." Cohen said yesterday that he thinks the ruling vindicates the city's position that the University's interpretation was correct in this case. "He basically ruled for the University and the city," he said. "This case didn't belong in court and the judge agreed." Green said she was glad the judge was able to see through what she said were political issues that had no bearing on the case. The ruling notes that the plaintiffs presented "political considerations, racial conflicts, or community struggles . . . in voluminous testimony." "However, this case concerns the interpretation of City Ordinances which arose from an agreement between the Trustees of the University of Pennsylvania and the City of Philadelphia," the ruling states. The case took on political overtones when it became known that former Mayor Wilson Goode and current Mayor Ed Rendell were lining up on opposite sides of the issue. Goode supported the plaintiffs, testifying at the trial on their behalf, and Rendell supported the University's position, at one point calling PILCOP "idiots" during a speech on campus. As he was preparing to leave office early last year, Goode was reportedly ready to bring the city into the suit as a plaintiff, but held off at the request of Rendell. Makadon and Cohen both said yesterday, however, that Goode may not have been as solidly on the plaintiffs' side as he appeared. "[Goode] was on our side," Makadon said. "He had eight years to do something and he never did. What's the deal?" Cohen said Goode told him in a telephone conversation a week before Goode left office that he did not really believe the plaintiffs were right. Goode yesterday denied saying any such thing. "I never had a conversation with him and said that," Goode said. Diaz's ruling brings the case to a close -- at least for now. It was originally filed in October 1991. Diaz threw the case out of court last April, saying the city had to be a party to the lawsuit. PILCOP subsequently had the city added to the suit. The case came to trial in November, lasting just three days.