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UCD sues U.S. Bank for closing over protests

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From page A1 | May 06, 2012 | 10 Comments

UC Davis filed suit Friday against U.S. Bank, alleging that the bank breached its contract by shutting down its branch after repeated Occupy sit-ins there.

On March 1, U.S. Bank pulled out of a 2009 agreement, worth an estimated $3 million over 10 years, with the money earmarked for student services. Bank officials said UCD had not done enough to end daily protests at the Memorial Union branch.

UCD spokeswoman Claudia Morain said the university is seeking lost revenue in Yolo Superior Court because the bank threatened legal action of its own.

“We did it reluctantly after several months of trying to resolve it and avoid litigation,” she said. “We did it in the best interest of the campus community, which the agreement was intended to support. We remain open to a negotiated solution.”

Teri Charest, a spokesperson for the Minneapolis-based bank, declined comment until its attorneys can review the filing.

Problems for UCD and its banking partner began Jan. 2 when Occupy UC Davis protesters began blocking the branch each day, singling it out as a symbol of the privatization of the university and corporate profits made at the expense of struggling students and families.

Eleven days later, the bank sent a letter of default, accusing UCD of a “severe breach” of the lease.

The bank said it had been forced to hire its own security guard after campus police refused to act (a charge UCD denies), suggesting instead that the bank close its doors and let in one customer at a time.

The bank’s letter said the protesters were “led by a UC Davis faculty member.”

In a reply Feb. 10, UCD said it was not responsible for the actions of protesters. As for the faculty member, English professor Joshua Clover, “conducting a ‘sit-down’ at a bank is not within the course and scope of any faculty member’s employment at UC Davis,” the university says in its complaint.

In its complaint, UCD acknowledges that police were cautious because of the Nov. 18 pepper-spraying of Occupy protesters on the Quad:

“The police were especially careful to avoid escalating conflict. Based on experience, the police formed the opinion that trying to physically remove protesters posed an unacceptable risk of emboldening the protesters and others to act violently, or to cause the situation to deteriorate in other ways that would be more difficult for the police to manage.”

The bank, then, was asking the university to “ignore the professional judgment of the police and to order the physical removal of the protesters, no matter the consequences. … The (university) cannot exercise its governmental authority contrary to the professional judgment of the police just to serve its commercial interest with the bank.”

Under the terms of its deal, UCD had 30 days from the time of the bank’s notice to put things right.

UCD says that after the week of Jan. 13, the protesters instead held their sit-ins in the hallway — solving the bank’s original complaint. U.S. Bank did not send a written notice about protesters just outside its doors, says UCD.

The campus also contends it asked for the bank’s assistance in addressing the protests, suggesting such steps as mediation with protesters, a public relations campaign, allowing employees to be interviewed by police and seeking a restraining order.

UCD says the bank did not cooperate; U.S. Bank says that’s not true.

In a letter dated Feb. 1, UCD officials noted that the campus had formed a “Protest Management Team” of police, student affairs officials and senior administrators that began meeting twice weekly after the Nov. 18 pepper-spraying. A member of the team “negotiated” regularly with protesters outside the branch.

It also told the bank it was consulting with other police departments and the Yolo County District Attorney’s Office.

On Feb. 22, the bank sent a letter to the university complaining that protesters continued to take actions like locking arms and not allowing employees to enter the branch.

“The protesters must be removed so the bank can operate,” wrote attorney Gregory Haworth. “U.S. Bank cannot accept more excuses. Customers and employees need full and unfettered access to the branch without intimidation.

“(UCD has) requested that U.S. Bank not use security forces to gain access to its branch. That request has been honored by the bank. However, while U.S. Bank has stood down, (UCD has) failed to remedy the situation.”

The branch continued to shut down early, day after day. After telling UCD it was ending the deal, U.S. Bank informed its customers in a March 12 letter that it was closing for good.

The DA’s Office has since filed charges against 11 students and one faculty member, Clover, on misdemeanors of obstructing movement on a street or in a public place and conspiracy to commit a misdemeanor. The defendants are due in court for arraignment on Thursday.

U.S. Bank is seeking $1 million in restitution from the protesters.

Assistant District Attorney Michael Cabral has said he plans to offer the protesters a plea deal for community service.

Cabral would be obligated under law to present the request for restitution from the bank or account holders listed as victims. On Friday, he said he had not yet heard back from the bank about its wishes.

Chancellor Linda Katehi and Provost Ralph Hexter have said in a letter to the campus community that UCD will not seek restitution from the protesters.

— Reach Cory Golden at cgolden@davisenterprise.net or (530) 747-8046. Follow him on Twitter at @cory_golden

Cory Golden

Cory Golden

The Enterprise's higher-education and congressional reporter. http://about.me/cory_golden
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Discussion | 10 comments

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  • legal beagleMay 04, 2012 - 7:19 pm

    According to the law of "constructive eviction" UCD has no chance to win this and shouldn't.

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  • RMay 05, 2012 - 1:33 am

    @legal beagle: The bank was engaging in a type of predatory lending, going beyond what was allowed per the contract with UCD, pushing the limits on how it was marketing loans to students. You have to look at the whole picture, and consider the possibility of there being new elements to the case which have not been adjudicated before in the courts.

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  • common senseMay 07, 2012 - 10:39 am

    UCD allowed the "Davis Dozen Idiots" to shut down the US bank on a daily basis. Was the bank really expected to put up with that indefinitely??? I hope the bank prevails in court and Katehi and her cowardly staff lose their jobs. Protesting something like the arrangement between text book publishers and Universities would be far more noble of a cause, but would lack media attention. In my view those protesters were just clueless and hypocritical.

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  • UC Davis sues U.S. Bank for closing over protests they ALLOWEDMay 07, 2012 - 8:27 pm

    [...] UCD sues U.S. Bank for closing over protests [...]

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  • Joseph StalinMay 08, 2012 - 10:42 am

    This person could not have said it any better. I tried to get into the bank but the "Davis Dozen" blocked my entry. We exchanged word and I eventually walked away only to see that there was a police officer standing right behind me the whole time listening to everything that was said. Katehi needs to do her job or resign. At this point I am under the impression that she will do or say anything to keep her job. As for the law suit, UCD will fail miserably which mean more wasted taxpayer dollars as well as student fees. Honestly, they should outlaw protesting on campus, there is no need for it.

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  • UCD AlumnusMay 13, 2012 - 10:33 pm

    Agreed; Katehi is DONE. Your impression is absolutely right, she is shameless in her pathetic attempts to hold on to a job she was never qualified to get in the first place. If she was qualified, she would have handled everything in a completely different manner and this never would have happened. But I disagree with you about the protesters...constitutional right to protest. And I do love our Constitution.

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  • rich mckoneMay 08, 2012 - 11:08 am

    The University passed up a "teaching moment". Instead of referring the faculty member and students to the District Attorney for prosecution, the University should have turned the sit-in into a teaching moment by just requiring each arrested person to just finish a simple sentence: "Even though it will raise my tuition, I was protesting the presence of a Bank on campus because?" I am sure most readers would like to know the response - it would be a real "teaching moment" for most taxpayers!

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  • UCD AlumnusMay 13, 2012 - 10:28 pm

    I love the quote, "The police were especially careful to avoid escalating conflict." Yes, so instead, the UCD Administration, with the blessings of Yudof, file criminal charges against its own students and faculty. This Administration is so lame and inept it defies belief. So the bank shut down...well cry me a river....good for the protesters, now students can get some exercise by walking the two blocks over to Golden One Credit Union!!

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  • UCD Sues U.S. Bank for Closing over Protests | SUPPORT THE DAVIS DOZEN    DROP ALL CHARGESAugust 04, 2012 - 9:37 am

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  • UCD Sues U.S. Bank for Closing over Protests | SUPPORT THE DAVIS DOZEN    DROP ALL CHARGESOctober 20, 2012 - 7:47 pm

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