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Will Penn State Make A Good Faith Effort To Settle Civil Suits?

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Now that the Freeh Report has been released, there is speculation about whether Penn State will try to settle any civil lawsuits. What do you think?

Below is an article in the July 16, 2012 Legal Intelligencer.

Penn State's board of trustees admitted July 12 it "failed" in its oversight obligations regarding the Sandusky scandal. Louis B. Freeh, the former FBI director and judge hired to investigate the university's handling of former assistant football coach Jerry Sandusky, placed the bulk of the blame on the board and directly on four of the university's top leaders who he said "concealed" facts to avoid bad publicity.

Ben Present and Gina Passarella

Penn State's board of trustees admitted July 12 it "failed" in its oversight obligations regarding the Sandusky scandal. Louis B. Freeh, the former FBI director and judge hired to investigate the university's handling of former assistant football coach Jerry Sandusky, placed the bulk of the blame on the board and directly on four of the university's top leaders who he said "concealed" facts to avoid bad publicity.

So what do Freeh's findings and the university's response mean for the civil litigation that could come, and has already been brought against, the university?

"Settle all the cases immediately," said Philadelphia plaintiffs attorney Ken Rothweiler, when asked what he would do if he represented the university.

"A jury in a courtroom could give any one of these kids … there's no ceiling," added Rothweiler, who is not involved in any of the cases. "You're talking about verdicts that could be some of the highest in Pennsylvania history."

Rothweiler said perhaps not all of the claims against the university and Sandusky's charity, The Second Mile, would settle — he had one in mind that he expects to go to trial.

However, the consensus among attorneys has for some time been this: The university will want to settle things quickly and quietly.

Attorneys converged on multiples of $1 million, if not tens of millions, in terms of what victims could claim.

Well before Freeh's report came out, attorneys told The Legal they thought it would be a launching pad for proving the university enabled Sandusky to continue his sexual crimes.

Now with the report public, along with its many findings and recommendations, those sentiments have only been bolstered, attorneys said.

"Penn State put their reputation or what they perceived to be their reputation in front of the safety of children," said Laura Feldman of the Philadelphia Trial Lawyers Association, after having seen the report.

If Feldman represented the university?

"I'd tell them they need to be very, very concerned about the outcome of these matters."

Feldman, Rothweiler and other attorneys interviewed by The Legal said any verdict against the university would come with punitive damages.

As Rothweiler put it: It's the "perfect punitive damages case" where the highest level of the institution "did absolutely nothing."

Former Assistant U.S. Attorney Barry Gross handles white-collar defense and corporate investigations as a partner at Drinker Biddle & Reath. While many corporations never issue a public report about their internal investigations, he said Penn State didn't really have that option.

"An argument could be made it lays an outline for the plaintiffs to sue Penn State on behalf of these kids who are abused, but that outline is probably out there anyhow," Gross said. "So I don't know that it makes that much difference."

All of the evidence found in the report would have been discoverable in civil litigation anyway, he said.

"If there is liability, it's already there," he said.

But Gross added the report may speed up the resolution of the civil cases.

"This is the type of case that I would assume the lawyers representing Penn State would try to move on quickly," Gross said. "I would think the longer this case lingers the more difficult it is for the institution."

In the long run, Gross said, the report will be a good thing for the university despite whatever it might suggest about any potential liabilities against the school. He said the school took the longer view.

"Penn State viewed this, I'm sure, as they have much larger concerns than trying to defend these lawsuits," Gross said. "To their credit, the trustees realized that even if this exposed some really damning type of evidence, it's more important to get to the bottom of this and put these controls in."

The report, which the university received at the same time as the public, revealed that Penn State head football coach Joe Paterno, along with three of the university's top administrators, knew about abuse allegations against Sandusky as far back as 1998, but "repeatedly concealed critical facts" from police, the public and the university's board as the ex-coach continued to molest children.

When the issue arose again in 2001 with another report of abuse, Paterno, former university president Graham Spanier, former athletic director Tim Curley and former vice president of business and finance Gary Schultz all let the allegations stop at their desks, the report showed.

"The [instances] after 2001 … what are they going to say?" said Anapol Schwartz attorney Stephen J. Pokiniewski Jr., referring to the university.

Pokiniewski said that the university is going to have to look at each case specifically, taking an approach that places victims' well-being at the forefront and is carefully vetted for appearing too concerned with publicity — a concern that Freeh's report said university officials appeared to have considered when concealing allegations against Sandusky.

"You're going to have to talk about compensation that is not only appropriate for what they've gone through, but also for their future," Pokiniewski said. "They're going to have the treatment records."

"You can imagine there's going to be a huge pain and suffering component," he added.

Tom Kline of Kline & Specter represents Victim 5. He said after Freeh's press conference last week that the report comes with the imprimatur of a former judge. Kline said Freeh essentially did Kline's preliminary discovery for the civil litigation.

Matthew Casey of Ross Feller Casey represents several victims, including Victims 3, 7 and 10. He said it didn't go unnoticed that in his report Freeh, a former judge, used the words "concealment" and "shocking," which both come out of Pennsylvania law.

Pokiniewski said the university may have some viable defenses to raise regarding claims before 2001, saying there may be a "significant causation issue." But he questioned whether any juror would consider them "because they'd be overwhelmed with the failings and shortcomings" of the university.

Ultimately, authorities — including the police, the Department of Public Welfare and the Centre County District Attorney's Office — investigated the 1998 incident and decided not to press charges. The assistant district attorney who led that investigation in 1998 declined to be interviewed by Freeh or his investigators, according to Freeh.

Defense counsel for Penn State would have to consider that "'we have these technical arguments that are strong, but will any juror take a moment to consider them?'" Pokiniewski said.

The university has indicated it wants to settle the matters privately and quickly.

Reached Friday, a university spokesman said the university would not comment on litigation.

James A. Keller of Saul Ewing represents the university and was not available for comment.

No more than an hour after Sandusky was convicted on 45 of 48 counts of child sex abuse last month, Penn State issued a release signed by university President Rodney Erickson announcing a "program" to resolve claims "privately, expeditiously and fairly."

However, Pokiniewski said he expected the Catholic Church to offer large settlements when it first faced similar accusations, but noted the church took several cases to trial.

"You would have thought they would have been in the same position," he said, referring to the church. "But look how little they've given and how they continue to fight these lawsuits."

Ben Present can be contacted at 215-557-2315 or bpresent@alm.com. Follow him on Twitter @BPresentTLI.

Gina Passarella can be contacted at 215-557-2494 or at gpassarella@alm.com. Follow her on Twitter @GPassarellaTLI

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  1. Clara says:
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    How will these people prove they were victims thus entitled?