Saturday, July 21, 2007

How Much Did the Jen Harris Settlement Cost Penn State?

Yesterday it was reported in the LATimes that,
Karen Moe Humphreys, a former Olympic gold medal swimmer who became a coach and administrator at UC Berkeley, will receive more than $3.5 million to settle a gender discrimination lawsuit she brought against the university, the UC Board of Regents agreed Thursday.

Humphreys, who worked at UC Berkeley from 1978 until she was laid off in 2004, alleged that she lost her job in retaliation for complaining about the treatment of women by the university's athletic department.

Under the agreement, Humphreys will be reinstated and then retire in January when she reaches 30 years with the university. She said the $3.5 million will go entirely to cover her attorney fees and legal costs.
But earlier this year when former Penn State Lady Lions basketball player Jennifer Harris settled a similar lawsuit which she brought against Penn State, her former coach Rene Portland, university President Graham Spanier, and athletic director Tim Curley the terms of the settlement remained confidential. This is a standard practice at Penn State, which can happen because, as regular readers of this blog surely know, Pennsylvania's Right-To-Know law doesn't cover Penn State and other state-related universities.

It may, nonetheless, be possible to estimate a ballpark figure on the settlement amount when the next Stairs report is issued sometime in the winter or early spring of 2009. In this post, I'll explain how to get an upper bound on the amount the University had to pay Harris and along the way give some upper bounds on past settlement fees the University has paid out, but kept secret.

The each Stair report gives the total legal expenses for Penn State for the previous fiscal year. The report doesn't explain how this number is arrived at but it is reasonable to assume that it is the sum of a several terms including, lawyers fees, court costs, fines, settlement amounts, etc,... These reports also give a list of all large payments for good and services. This happens to include the amount paid to the University's law firm McQuade-Blasko. As you will soon see, the payments to McQuade-Blasko are fairly stable over time, but the total legal expenses vary wildly, as one would expect of court costs, fines, settlement payments, ect,.... Hence by subtracting off the amount paid to McQuade-Blasko from the total legal expenses for a given fiscal year one arrives at, what is likely, an upper bound for settlement payments for the year.

The following table summarizes these expenses.

Fiscal Year Att. Fees Uncat. Total
94-95 $2,379,547 $0 $2,379,547
95-96 $2,698,531 $1,500,766 $4,199,297
96-97 $2,930,614 $956,353 $3,886,967
97-98 $3,041,353 $104,159 $3,145,512
98-99 $3,682,431 $5,158,008 $8,840,439
99-00 $3,506,531 $1,048,853 $4,555,384
00-01 $3,257,627 $494,575 $3,752,202
01-02 $3,016,559 $130,937 $3,147,496
02-03 $3,356,661 $1,847,318 $5,203,979
03-04 $2,794,878 $247,640 $3,042,518
04-05 $3,078,122 $272,207 $3,350,329
05-06 $2,811,812 $2,699,730 $5,511,542

Penn State Legal Exp.

The second column is the payment made to McQuade-Blasko each year, as reported by Penn State to the state. The fourth column is the amount of legal expenses Penn State has reported to the state each year. The third column is the difference of the fourth and second columns. This is the amount of uncategorized legal expenses which Penn State has incurred during each of the fiscal years. The following graph gives a better idea of what is going on here.

The first thing to note on the graph is that the only legal expenses Penn State reported during the 94-95 fiscal year were its attorney fees. This was the fiscal year prior to Spanier's arrival at Penn State. It would be wrong to conclude, without knowledge of legal expenditures in years before 94-95, that Spanier policies were responsible for the subsequent rise in legal costs. It is just as likely that the outgoing president Joab Thomas chose to let his successor deal with any pending legal actions.

In Spanier's first year the uncategorized cost were $1.50 million. That year the University settled a defamation lawsuit against it brought by three professors who were each asking for $5 million. Of course, the terms of the settlement weren't made public. Now we can see that the upper bound on the settlement amount is $1.50 million or $500,000 per plaintiff.

The 96-97 fiscal year saw the uncategorized expenses drop to $0.96 million. The added costs may have been due to a tax settlement between the University and Centre County. In this case, the terms of the settlement were released because it was with a government entity.
The agreement calls for the University to pay about $1 million each year to be divided between State College Borough, Ferguson Township, and Harris Township, as well as the State College Area School District in-lieu of taxes.
The uncategorized expense are in line with the terms of this settlement, but it is not clear that this money would have been reported under legal expenses.

The next fiscal year saw a dramatic drop in the uncategorized expenses to $0.10 million and a search of the Collegian didn't turn up settled lawsuit that year.

The fiscal year 98-99 was a biggie for uncategorized expenses; these expenses shot up to $5.19 million. This one is a mystery to me. I cannot find any lawsuit settlements for that year. There may have been a suit brought against Penn State outside of the Centre Region which was never reported on here. For example, one possibility is that the spike is associated with the disastrous merger , which Spanier once characterized as "truly a national model", between Penn State Hershey Health Center and the Geisinger Health System which was undone the following year. This is all speculation. If you have any idea what caused this spike leave it in the comments.

At the turn of the century, the uncategorized cost were down to $1.05 million. Again I found nada in the way of legal settlement for this fiscal year. Again, little help from the readers would be appreciated. The uncategorized expenses were below a half million for the next two fiscal year and jumped $1.85 million in fiscal year 02-03. Some of that is accounted for by this settlement the terms of which were made public.

Penn State has agreed to an out-of-court settlement with a sexual assault victim who claimed the university did not protect her from harassment and intimidation following her assault in August 1999.

The terms of the settlement, filed in District Court for the Middle District of Pennsylvania this week, awarded $17,500 to the woman who was only identified as "Jane Doe."

There was also this from that year, but no word on any settlement.

A 51-year-old mushroom scientist with a genetic joint defect has accused Penn State of age and/or job discrimination stemming from a 2001 job search, according to court documents filed in U.S. District Court in Pittsburgh.
The next two fiscal years, once again, had rather low uncategorized costs.

In the final fiscal year covered in these reports 05-06 the uncategorized costs went up to $2.70 million which makes it year for the second highest uncategorized costs. The University was sued that year (also here) the former head of the Philosophy Department Mitchell Aboulafia and the suit was settled out of court.
A Penn State professor who claimed he was illegally de moted is settling his case against the university, according to court filings. Mitchell Aboulafia, 54, was the head of the philosophy department from July 2003 until March 2004, when officials in the College of the Liberal Arts took away the leadership position.

As usual the terms were not made public, but word on the street is that Aboulafia did quite well in the settlement. We now know that the upper bound on the settlement is $2.70 million.

That brings me to the end of this little adventure in accountability. Next winter we can try to estimate the what the Harris lawsuit settlement cost the University.

But the more important thing about this exercise is that it illustrates how little useful information the Stairs reports give the citizens of Pennsylvania concerning the operations of Penn State. It took a great deal of sleuthing on my part to put this post together and the whole thing amounts to little more than a bunch of tenuous inferences with gapping holes. That is no way to hold an institution accountable. We need a new Right-To-Know law which will cover Penn State and other state-related universities.

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1 comment:

Anonymous said...

PACER shows at least 8 cases against Penn State terminated in 1998. Remember to search under "Pennsylvania State University", "The Pennsylvania State University", and "Penn State" for all PACER searches in the Middle District.

What about tax records of the university? Payouts might go out in various ways under applicable tax codes, for example, under miscellaneous salary for employment plaintiffs.