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Penn State Could Pay Tens of Millions in Jerry Sandusky Scandal Fallout

Source: Central Daily Times

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Posted on 02 Jul 2012 by Neilson

Jerry SandusksyJerry Sandusky is convicted and behind bars, but the victims who testified against him -- and potentially many more -- could now turn to the civil court system to seek justice.

Penn State is already facing three civil suits related to the Jerry Sandusky scandal, and is preparing for that number to grow. The price tag for legal representation, an internal investigation and crisis management has already reached $12 million, and that doesn't include settling lawsuits.

If the recent priest abuse cases are an indication, resolving claims and lawsuits could cost the university tens of millions of dollars. The Philadelphia priest scandal has brought the diocese there legal bills of more than $11 million. The Catholic Archdiocese of Boston made an $85 million settlement with more than 500 victims.

The university said it will be reaching out to victims and their attorneys, offering them an option of working directly with the university to resolve their claims.

Attorney Kenneth Feinberg, who oversaw the Sept. 11 victims compensation fund, said Penn State's goal will be to bring together as many claims as it can.

"The question is, are they going to provide a generous program that really does encourage people to (participate)," he said.

The alternative is seeing "who wants to go to court and drag this out in a public forum."

A dispute resolution specialist best known for determining how much money the families of those killed in the Sept. 11 terrorist attacks would receive, Feinberg also administered the BP fund after the 2010 oil spill.

There has to be protocol defining who is eligible, he said.

"If you have a compensation program, you can always assume there will be more claims than you think," Feinberg said.

The university isn't saying how much money it plans to have in a compensation fund.

Philadelphia attorney Jonathan Hugg said one question that may come up is whether Penn State is a public institution and protected by sovereign or governmental immunity. While sovereign immunity limits liability for state agencies, Penn State is technically what's known as a state-related university.

"If I were Penn State I would take a hard look at this," Hugg said. "Under the Sovereign Immunity Act, liability is limited to certain types of negligence and a million-dollar per incident cap."

There are exceptions to that -- willful misconduct, for example.

"There is an argument, based on justice, fairness and human rights that these claims ought to be settled expeditiously," Hugg said. "On the other hand, I think there are defenses."

Hugg said he wouldn't be shocked to see the estate of Joe Paterno become the subject of suits as well.

"There are a lot of chapters left in the story," Hugg said.

Penn State President Rodney Erickson said the university won't use state funding or tuition dollars to pay for the scandal. Instead, the university says its insurance policies will cover the costs.

The university is, however, in a legal battle with its liability insurer, Pennsylvania Manufacturers' Association Insurance Co. The Blue Bell-based company doesn't want to pay for costs from a civil suit filed by a man -- initially identified as John Doe -- who said Sandusky molested him.

Still, the university says its policies will pay for the costs.

"The university maintains general liability and directors and officers insurance policies, which are expected to cover defense of claims brought against the university and its officers, employees and trustees," spokesman David La Torre said.

Any legal or other expenses will be paid for through interest revenues from loans made by the university to its self-supporting units.

He said the university isn't commenting on the amount of coverage it has under the policies.

Attorneys for the victims say it's too soon to talk about settling for a specific dollar amount, and that their clients want to expose what went wrong to help prevent it from happening again.

Attorney Jeff Anderson, who represents a man -- first identified as John Doe -- who is suing the university, called the statement by Penn State that it wants to invite victims to participate in a program to resolve their claims "a smart and savvy public relations move."

He said the next step in the civil cases is "excavation" -- asking questions, investigating and gathering information.

"Through that, we can not only force disclosure, but we can force the exposure of the crimes of the past, the misdeeds and failures, institutional or otherwise," Anderson said.

In addition to the client his firm is representing -- not one of the 10 victims identified in the criminal case -- Anderson said another will be filing suit within a few weeks.

Even with Sandusky in prison awaiting sentencing, the legal situation Penn State finds itself in looks like it could continue to grow and worsen. CNN reported Friday night on four emails former President Graham Spanier and former administrators Gary Schultz and Tim Curley allegedly exchanged in 2001 in response to Mike McQueary walking in on Sandusky sexually assaulting a boy in a campus shower.

If the emails are authentic, Spanier and the other administrators agreed to approach Sandusky rather than a state agency. The emails don't refer to Sandusky by name, and they don't discuss details of what they believe Sandusky did.

In one email, Spanier reportedly says he supports going to Sandusky -- referred to in the emails as the "subject" or "person" -- and seeing if he would like professional help, as Curley suggested doing.

Tom Kline, attorney for victim 5, said it's too soon to talk about a settlement with the university. In an interview with CNN Friday night, after the report on the emails, he said they are relevant to the civil litigation.

"Penn State is responsible for their conduct," Kline said. "We are assessing their conduct. I have said that while Penn State has reached out to me and to other victims and their attorneys, the fact of the matter is that we can't begin to talk to Penn State until we have full and complete disclosure.

"And this, I would believe, is the tip of the iceberg."


Comments

 
Rick  Jul 9 2012 12:43PM Report Abuse
Sadly, the cost of this horrendous situaion will nt be borne to any real exent by the perpetrator but by the underpinnings of the university and it will ahve a significant impact on the student body for years to come.
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