The corporation that owns the Beta Theta Pi house sued the school in federal court on Friday, accusing Penn State of scapegoating it for the university's wider drinking and partying culture.
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Penn State banned the chapter in March 2017, after the death of 19-year-old Tim Piazza of Lebanon, New Jersey.
The fraternity corporation says university officials didn't follow proper procedures in banning Beta Theta Pi.
About two dozen members of the fraternity were charged criminally, with most resolved with guilty pleas to alcohol or hazing charges, or entry into a diversion program.
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