A recent AP post reports: "Officials at Duquesne University in Pittsburgh are upset that best-selling author John Grisham mentions the school in connection with a fictional gang rape in his latest novel. Grisham's The Associate deals with a character who attended the private Catholic college and was involved in a drunken rape scene in an off-campus apartment in 2003. Duquesne University spokeswoman Rose Ravasio said it's unfortunate Grisham 'chose to use our name and associate it with a fictional incident of this nature.' Grisham told the Pittsburgh Post-Gazette that he chose the school because he saw it once, and has been to Pittsburgh for Steelers and Pirates games. The novel contains several other references to Pittsburgh."
Should writers not use the real names of places in their writing? Making up names of things isn't new to any genre of literature (see Wikipedia's Index: Lists of Fictional Things). How might it matter one way or another?