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The Courts Education The Almighty Buck

Harvard Students Move Fossil Fuel Stock Fight To Court 203

Posted by samzenpus from the don't-take-the-law-into-your-own-hands-you-take-them-to-court dept.
mdsolar writes A group of Harvard students, frustrated by the university's refusal to shed fossil fuel stocks from its investment portfolios, is looking beyond protests and resolutions to a new form of pressure: the courts. The seven law students and undergraduates filed a lawsuit on Wednesday in Suffolk County Superior Court in Massachusetts against the president and fellows of Harvard College, among others, for what they call "mismanagement of charitable funds." The 11-page complaint, with 167 pages of supporting exhibits, asks the court to compel divestment on behalf of the students and "future generations."
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Harvard Students Move Fossil Fuel Stock Fight To Court More

Harvard Students Move Fossil Fuel Stock Fight To Court

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  • Owning stock (Score:3)

    by Dan East ( 318230 ) on Thursday November 20, 2014 @11:06PM (#48431299) Journal

    Is it common stock or non-voting? If common stock then I would think they would want the school to have a vote in what the energy companies do. Regardless, if it's a wise investment that is generating profit, then it really doesn't matter. It's not like selling the stock is going to hurt the company or the stock value. I guess some people just can't sleep at night over these kinds of things.

    • Alumni politics. (Score:4, Interesting)

      by khasim ( 1285 ) <brandioch.conner@gmail.com> on Friday November 21, 2014 @12:09AM (#48431563)

      There are, probably, several alumni who are employed by those companies who would not want to see the publicity of their high prestige alma mater taking a public stand against their business.

      Sorry, kids. Part of the attraction of Harvard is the business/political connections it gives you.

      • Harvard got into a shitload of trouble in the 1960s when students found, by tracing ownership through layers of flse front corporations, that Harvard University was one the largest and filthiest of Boston's slum lords. Seems they ended up having to mend their ways wrt real estate management or lose some of the endowments and prestige they like to flaunt.

        Perhaps this law suit will go the same way. It would benefit the USA and the world in general if a wedge could be driven between academia and Corporate Ame

        • But that's not what these kids are doing - they aren't complaining that their school is invested in corporations, they're whining about which corporations the school invests in, because they, personally, disagree with that corporation's business model.

          Let's just pray none of them are studying Constitutional law, since they obviously don't understand what rights private entities maintain.

          • Let's just pray none of them are studying Constitutional law, since they obviously don't understand what rights private entities maintain.

            It's just more eco-bullying, plain and simple. I, for one, am sick and tired of these deluded incompetents trying to bully others who demonstrably understand more about it than they do.

    • Re: (Score:3)

      by guises ( 2423402 )

      It's not like selling the stock is going to hurt the company or the stock value.

      Not the stock value, but it can certainly hurt the company. Ending Apartheid is the usual example of a social goal which was aided by divestment. Here's [nytimes.com] a little blurb explaining how that works.

    • Divestment is a legitimate technique of opposing that which is morally objectionable. Divestment campaigns were led against South Africa's highly-profitable aparthied businesses. Did it hurt the value of South African diamond mines? Possibly not in isolation, but as part of a series of similar campaigns aparthied has ended.

      Fossil fuel industries do need to exist, but investing in big energy companies today is like investing in the mob. More drilling in high-risk areas, deregulation, and lower fuel taxes

      • You do understand the invested money doesn't actually go into the company's coffers, right?

        • Actually it does: http://en.wikipedia.org/wiki/D... [wikipedia.org]

          If you buy a share in a company, you increase the capital available to that company.

          • Re: (Score:2)

            by bws111 ( 1216812 )

            No, you do not increase the capital available to the company. The only time that is true is if the company is issuing new shares, which is rare. Most of the time when you buy a stock you are buying from an existing shareholder and the company gets nothing at all from that transaction.

            • At a very minimum, creating a market for the stock creates a very real demand for ownership in said stock. Divesting decreases the value of existing stocks (including those owned by the company), and buying increases the value. To argue this point is foolish.

              If you want to make the point that divestment is a useless gesture, you should first acquaint yourself with the reasoning behind this nonviolent strategy for achieving political and social change:
              http://www.fossilfreestanford.... [fossilfreestanford.org]
              http://gofossilfree.or [gofossilfree.org]

              • Re: (Score:2)

                by bws111 ( 1216812 )

                Nobody said buying and selling do not influence the price of the stock, that is just a strawman you created. What you can't seem to grasp is that the price of the stock has no practical effect on the COMPANY. The price of the stock only affects the SHAREHOLDERS. And companies generally don't 'own' their own stock, they buy it and then cancel it. This drives the price of the stock UP.

                And again, nobody said divestiture was not useful for acheiving political and social change, another strawman you built.

    • It's probably a classic case of people not knowing the slightest thing about economics. Unless it's an IPO or something similar, when you buy stock you're just buying it from another investor who wants to sell theirs. The most damage you'll do to the company by selling your stock is lowering their stock price, and it's not clear from TFS if they actually own enough to actually make a noticeable impact (guessing not).

  • The anti-tobacco fight is just about over, as is the one over asbestos/mesothelioma. The new generation of lawyers will be getting obscenely rich fighting large investment funds over their investing in fuel companies.

  • Standing (Score:5, Insightful)

    by phantomfive ( 622387 ) on Thursday November 20, 2014 @11:13PM (#48431325) Journal
    This quote from the end of the article says it all:

    "Lee Goldstein, a clinical instructor in the Harvard Law School legal aid bureau, said that the issue of whether the students were legally qualified to sue, known as standing, could be fatal to the students’ suit, as it was to the earlier suit brought by Mr. Bonifaz and others."

    "could be" is a way of putting it politely.

    • You bet! It is pretty much stupid they could have conceived the idea they have some sort of right to decide how the Harvard's investments portfolios should be managed.

    • Re:Standing (Score:4, Interesting)

      by schnell ( 163007 ) <me@schnelBLUEl.net minus berry> on Friday November 21, 2014 @12:31AM (#48431635) Homepage

      the issue of whether the students were legally qualified to sue, known as standing, could be fatal to the studentsâ(TM) suit

      Precisely this. The whole case is in an idealistic sense understandable - if you are in college and you aren't challenging the real or imagined injustices of the world in some way, you're missing the whole point of being young enough to still be self-absorbed and righteous, but not old enough to be in the real world. But from a practical view, it's just a bunch of overprivileged Harvard kids looking for something to protest and wasting the time of our overburdened court system in the process. My 18-year-old me would applaud them but my current 40-year-old self thinks they should shut the f**k up and go do something useful instead.

      Disclaimer: I know several Harvard alumni and count a few of them as my friends. I am probably unfairly biased against Harvard since in my experience these alums are (sorry friends) not noticeably smarter than everyone else - in some cases less so - in a way that justifies a Harvard degree being an automatic ticket to wealth and insider access. Which, unfortunately, it is.

      • Re:Standing (Score:5, Insightful)

        by Oligonicella ( 659917 ) on Friday November 21, 2014 @02:16AM (#48431937)

        They're hypocrites. If they don't like the policies the college has concerning investment, why are *they* investing in the college instead of finding another? They want to force the college to divest but they don't have the gonads to divest themselves.

    • Re: (Score:3)

      by richlv ( 778496 )

      the publicity alone might be worth the effort.
      it's one thing to say "they complained" or "the yes men got them" - "sued" seems to capture news-entertainment people in the usa a bit more

      • the publicity alone might be worth the effort.

        Well, they certainly got some publicity....what sort of message do you think people are getting from this action?

    • There are two aspects of the Harvard Charter which may give standing. First, the endowment has a specific purpose: "be for the advancement and education of youth, in all manner of good literature, arts, and sciences." And, good sciences say that investing in fossil fuels is a bad idea. Second, the Harvard Corporation is established so that it may be sued: "and also may sue and plead, or be sued and impleaded by the name aforesaid, in all Courts and places of judicature, within the jurisdiction aforesaid.

      • Re: (Score:2)

        by debrain ( 29228 )

        There are two aspects of the Harvard Charter which may give standing. First, the endowment has a specific purpose: "be for the advancement and education of youth, in all manner of good literature, arts, and sciences." And, good sciences say that investing in fossil fuels is a bad idea. Second, the Harvard Corporation is established so that it may be sued: "and also may sue and plead, or be sued and impleaded by the name aforesaid, in all Courts and places of judicature, within the jurisdiction aforesaid." http://library.harvard.edu/uni [harvard.edu]... So, disagreements about the endowment are supposed to be settled in court.

        These are probably relevant, but may not be the ticket.

        Standing is a question of *who can sue* (it is rather literal - you have a right to stand up at Court and be heard).

        As you note, the charter gives a purpose, a *why*, deviation from which may give rise to liability. But the question is who can enforce. Does the Charter exist to protect the students? Faculty? The institution itself? Its property? Who is harmed by deviation from the Charter?

        A relevant phrase might be "that may conduce to the education of

        • The Harvard Moto, Varitas, may give standing through the good sciences clause. One is not teaching good sciences if embroiled in fossil fuel interests. Students have an interest is being taught well.

          • Since when does a motto count as legal justification? If that's the case, my new motto is "everyone must pay me and kiss my ass, all the time."

          • Re: (Score:2)

            by debrain ( 29228 )

            It does seem to be a bit of a conflict of interest, doesn't it?

            • It is worth looking at history too. Harvard divested to help end apartheid based in part on student effort. Since Harvard considers student interests in that case, they may well be required to do so again.

      • Re: (Score:2)

        by bws111 ( 1216812 )

        To have 'standing' you must have personally been harmed by the action. The students were not harmed. They have no standing.

        Now, maybe a DONOR could sue the endowment if the money was used in a way other than what the donor intended. And don't say 'the students should make a donation, then sue', because they already know how the money is being used, and if they are stupid enough to give money anyway that is their own problem.

      • That's probably open to interpretation. I could just as well read it in such as way as to construe the meaning to suggest that the profits from the endowment be used for the advancement science. In that regard one could argue that there's no obligation not to invest in something that is found to be morally objectionable and one could even argue that part of the endowment be used to fund research into reducing emissions from the burning of fossil fuels.

        Science doesn't say much of anything about how to inv

    • Re: (Score:3)

      by debrain ( 29228 )

      That said, rule #1 of litigating is: You never know what a judge will say.

      Litigation is, pretty much, learning a thousand ways why a stranger can, contrary to your expectations, agree or disagree with you.

      The question of standing is non-trivial, and can include questions of contract, equity and wrongful interference (tort). Not having thought it out, but purely an example: these kids may argue their reputation tied to the university, and the university using fossil fuels could harm their future prospects. I

    • This quote from the end of the article says it all:

      "Lee Goldstein, a clinical instructor in the Harvard Law School legal aid bureau, said that the issue of whether the students were legally qualified to sue, known as standing, could be fatal to the students’ suit, as it was to the earlier suit brought by Mr. Bonifaz and others."

      "could be" is a way of putting it politely.

      "could be" is a way for lawyers to charge more hours.

  • The only thing worse than a lawyer (Score:5, Insightful)

    by thegarbz ( 1787294 ) on Thursday November 20, 2014 @11:23PM (#48431379)

    The only thing worse than a lawyer is a law student, they think they can use the courts for anything.

    • Re: (Score:3)

      by Kaenneth ( 82978 )

      A lawyers wife.

    • The only thing worse than a lawyer is a law student, they think they can use the courts for anything.

      You're assuming they're wrong.

      One uses the tools available to accomplish a given goal.

  • I'd like to see (Score:4, Funny)

    by Vinegar Joe ( 998110 ) on Thursday November 20, 2014 @11:28PM (#48431393)

    The entire Harvard faculty, student body and alumni sent to Syria where they can sue ISIS.

  • Comment removed (Score:4, Insightful)

    by account_deleted ( 4530225 ) on Thursday November 20, 2014 @11:30PM (#48431419)
    Comment removed based on user account deletion

  • Sell everything (Score:2, Insightful)

    by Anonymous Coward

    There isn't a company on earth that's not both (i) dependent on fossil fuels and (ii) encouraging their use, either directly or indirectly.

  • Can other students sue this group? (Score:5, Insightful)

    by schneidafunk ( 795759 ) on Thursday November 20, 2014 @11:43PM (#48431467)

    What happens if the investments in fossil fuel companies turn out the be the most profitable and the school loses money?

    As Harvard's president said "the endowment is a resource, not an instrument to impel social or political change"

    • Furthermore, it wouldn't work and shows a lack of understanding about how the stock market works.

      Imagine, as a thought experiment, if 90% of the people who owned Exxon stock sold it all. And no one else bought it because of principle. Exxon would continue to function, exactly as it is now, except the remaining 10% would get massive dividends.

      So if they want to achieve something, and not just be activists, then they should get an education.

      • Re: (Score:2, Insightful)

        by LordLimecat ( 1103839 )

        Imagine, as a thought experiment, if 90% of the people who owned Exxon stock sold it all. And no one else bought it because of principle

        Er, if 90% sell it, someone has to buy it.

      • Imagine, as a thought experiment, if 90% of the people who owned Exxon stock sold it all. And no one else bought it because of principle. Exxon would continue to function, exactly as it is now, except the remaining 10% would get massive dividends.

        True. Moreover, if 90% of the stock was suddenly put up for sale "at market" with no significant buyers (assuming potential buyers would shun it as a matter of principle), the price would plummet to near zero, well below even the cash assets of the company. The

        • If you want to influence the direction of a company, you would want to own as much of its stock as possible, not get rid of it. If you are extremely wealthy, you can just buy all of the company's shares and have total control over its direction.

          Bingo. A 'responsible' party owning 10% of Exxon could be the difference between Exxon having executives who are mustache-twirling villains and having a responsible board that has the company investing heavily into renewable technology to position itself for the inevitable decline of oil.

    • The students are social justice warriors. Everything is an instrument to impel social or political change to SJWs. Those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

  • Turn off the electricity to the dorms (Score:5, Insightful)

    by sasquatch989 ( 2663479 ) on Thursday November 20, 2014 @11:57PM (#48431519)

    Every night from 9pm-5am turn off the electricty. Better yet, random rolling blackouts. Let them know what it's like to live somewhere where energy has to be rationed. Kids take it for granted

  • The University will ask for a JMOL, the judge will grant it.
    Then he will assign the costs to the students. Talk about student debt. Smart.

    Just more occupier mentaility.

  • It's November and 1L students have been in class for a while.

    HLS should teach vocabulary on the first day of class to 1Ls - particularly the meaning of the words "frivolous" and "standing". Sad that these students managed to get an undergraduate degree without understanding the meaning of those words and their applicability to lawsuits.

    OTH, maybe they will learn a lot from this experience as the judge laughs uncontrollably and the entire courtroom joins in. Oh, and sanctions them. Hopefully they get a judge

  • This should be fun to watch.

    *gets more popcorn*

  • Other than the IPO, the shares belong to other investors, right?

  • I'm not sure there's anything particularly new about taking a grievance to court, however I daresay its warmer than marching around waving placards in the snow.

  • This just proves that you can be book smart and still be completely stupid and clueless as to how the real world works.

  • Since Harvard students apparently need it put simply:
    "Is it actually your money?"
    "No?"
    "Then shut the fuck up."

  • They're better off waiting until after they graduate and get asked for money for the endowment to make their move. While the endowment will survive for a long time, it's also used to help balance budgets for any of the other Harvard schools (Harvard Med, for example, does some heavy drawing when grant money runs low). That means that they still rely on new money coming in, and that's when graduates can start banding together and saying "we'll contribute when you divest". That will get the message across

  • If you sell the stock, somebody has to buy it. You've now spread the problem of owning this filth to other people. Better to keep it sequestered in your enlightened hands, where it can't blight any further lives.

  • Unless these students contributed said charitable funds, they have no legal standing on their use.

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