Judge denies U. request to move lawsuit challenging tax-exempt status

The University’s request to have alawsuit moved from Morristown to Trenton was denied by Judge Vito L. Bianco last week. Bianco cited his own familiarity with the case and the lack of an available court room in Trenton as reasons to reject the demand, plaintiff representative Bruce Afran said.

The lawsuit was originally filed in 2011 by four local Princeton residents who challenged the University’s tax-exempt status and nonprofit designation. Among other reasons, plaintiffs argued that the University’s multimillion dollar profits from patent agreements spoke for additional tax demands on 19 properties. These additional tax demands could add up to roughly $2.5 million in supplemental payments, according to town tax records.

Although the University does not pay taxes on most of its properties, it is still by far the largest taxpayer in town. It recently increased its voluntary contribution to $2.75 million.

The case was originally tried in Trenton but moved to Morristown after the original judge retired, University Vice President and Secretary Bob Durkee ’69 said. Durkee said that Judge Bianco acknowledged the logistical benefits of a move since all of the parties, properties and the majority of assigned lawyers are located in Mercer County. Durkee said that Biancoeven offered to drive to Trenton on some occasions to facilitate the commute, which he called a very nice offer.

Afran alleged that Judge Bianco dismissed the University’s appeal in 2013 and claims that Bianco said that the case presents very serious issues for nonprofits all over the country. Afran explained that the University’s request, which was made three years after the case moved to Morristown, suggests an attempt at securing a different judge who might provide a more favorable ruling.

“He’s just inventing that,” Durkee said in response to the allegations. “This isn’t about the judge; this is about the venue.”

According to Afran, the University stated that a change of location would help facilitate the commute for 50 witnesses, although the names and addresses of the witnesses were not disclosed. Durkee could not confirm this allegation.

“Because they didn’t document [the names and addresses of witnesses], my conclusion and our clients’ conclusion was that they were seeking to try their luck with a new judge,” Afran said, adding that the need for so many witnesses was unusual for this kind of case.

Durkee said that a new judge assignment would not have impacted the case in any foreseeable way.

“Who knows whom that would advantage, if anyone?” he said.

Afran said that Judge Bianco is tenured and does not have to worry about being reappointed, which may reduce the chance of his feeling threatened by a powerful entity such as the University.

The University has made another motion to dismiss the case, which will be judged onOct. 10.

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“It’s okay under the law for a school to make a profit on its college operation,” Afran said, noting that the University has made close to a billion dollars so far off from patent agreements. “Making a profit on noneducational commercial activity is a completely different story.”

Durkee said that the University has full confidence in Judge Bianco and probably would have had full confidence in another judge.

“I think we’ve made a compelling argument that the case should be dismissed,” he said.