Whatever About the Rule of Law: Naming Rights and Sleeping Watchdogs
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I have written often about gifts that result in naming rights in this space. What I find most interesting is the many varied ways in which these issues are resolved. What I find most troubling is that the resolution seems to depend on who's alive at the time the institution wants to change the name rather than the rule of law.
The rule of lawis the legal principle that a nation should be governed by law, as opposed to arbitrary decisions (or the indecision) of individual government officials. The rule of law is one of the basic foundations of our country. Our government officers (president, Congress, Supreme Court) all pledge to uphold the Constitution upon assuming office. This is an oath to affirm the rule of law as opposed to the rule of any human leader. In the settlement of any dispute, I look for the implementation of rule of law. In too many instances, I do not see any application of the law. Here is one more example.
In May of this year, the Hofheinz family filed a petition to make the University of Houston keep the Hofheinz Pavilion name. Their simple request was to ask the court to require the university to “honor its original agreement,” contained in a $1.5 million gift in 1969. The university wanted to offer naming rights as part of its fundraising program for a $60 million project to renovate the Hofheinz Pavilion basketball arena.
The Hofheinz family lawyer argued that the original gift instrument had no end date and therefore holds for as long as the original building exists—renovation or not. He questioned the university’s honor in going against their word as established by the original donation. What really seems to be a big issue, however, is that the Hofheinz family only learned of the intended name change in media reports.
Fast-forward to late this summer, and we learn that the university and the Hofheinz family have reached agreement on a solution to the naming rights issue. The family has agreed to a name change at the arena in exchange for a number of other concessions and name changes at the university. Everyone seems happy.
Except I wonder what the law is in this area. Didn’t the original gift create a contractual relationship between the university and a donor who has since passed away? Does the law say that the donor’s children have the right to change the contract he made with the university? I am pretty sure it does not.
As I have pointed out in other blog posts, the recipient is a public charity and it is the state’s attorney general who is responsible for enforcing contracts entered into with public charities. The concept that the state will enforce donation language, bequests, trust language, etc., is an important cornerstone in philanthropy.
In this case, the Hofheinz children believe they have extracted a reasonable compromise from the university. What part of the law gives the Hofheinz children this right and power? And what if this had happened 25 years from now, and there were no Hofheinz children alive to protest and negotiate a compromise? The name of the arena would have been changed without any of the compromise Hofheinz-named places being so named.
Where is the Texas Attorney General in this case? Where is the public official responsible for enforcing the rule of law? Conspicuously absent, once again.
