College Students Fight Dining Hall Monopolies

BIRMINGHAM, Ala. (CN) – Students say in a class action that the University of Alabama at Tuscaloosa has given Aramark Educational Services “unfettered dominion and control over on-campus dining” by awarding it a monopoly on dining services, which “robs the students of the benefits of free choice in the marketplace.” Students filed similar class actions against UA Birmingham and Sodexo, and Auburn University and Compass Group USA dba Chartwells.

     All three class actions were filed in Jefferson County Court, Birmingham.
     In the complaint against Aramark and UA Tuscaloosa, students say that in the mid-1990s the university hired consultants to help expand its dining services. The report found that area restaurants were competing for students’ food dollars, so the consultants recommended the university implement a “mandatory food services fee” for all fulltime students.
     So the school granted Aramark “exclusive control over the food and dining services” at the university, creating an “illegal restraint of trade,” and “illegal price fixing arrangement,” leaving students with “restricted food options on campus,” according to the complaint.
     Lead plaintiffs David Vandenberg and Elizabeth Beene, formerly students at UA Tuscaloosa, say that as a condition of enrollment, they had to pay “mandatory sums for Dining Dollars,” in addition to tuition. They say they were given debit cards that could be used only at campus dining facilities and vending machines, all of which were controlled by Aramark.
     The class claims the Crimson Tide’s debit cards are “free of regulation, disclosure requirements and other restrictions generally imposed on banks.” If a student does not redeem all of his or her dollars by the end of the year, the money is “rolled over” to “Bama Cash” that can be redeemed only at certain locations, according to the complaint.
     Vandenberg and Beene say they “did not want or request Dining Dollars” and that because of the “anti-competitive conduct … the prices were generally higher than off-campus food vendors and the selection and quality were poorer.”
     In 2009, based on student enrollment and the $300 per semester mandatory charge, the Dining Dollars program made $14 million, in a scheme “structured to produce income for the university and guaranteed sales for Aramark unfettered by competition.”
     The University of Alabama is a state agency, and its actions violate the state constitution and state laws because the state is prohibited “from being interested in any private or corporate enterprise,” the classes claim.
     The plaintiffs in all three cases are represented by G. Daniel Evans of Birmingham.

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