Main Highlights:
- Harvard failed to immediately submit a formal claim to one of its insurance providers for the costs incurred in defending the lawsuit alleging that its admissions rules were unconstitutional.
- The Supreme Court decided to hear both cases after Harvard prevailed in an appeals court and while UNC’s appeal was still unresolved. They’ll be debated on October 31.
- Harvard’s claim for coverage is “dead on arrival” due to its admitting failure to adhere to the notification requirements, they said.
- According to Lat, neither actual nor fictitious alumni, including the lead character in “Legally Blonde,” would support their alma institution in the dispute between Harvard and its insurer.
Harvard is preparing to defend its race-conscious admissions policy before the Supreme Court this month, but in the meanwhile, a federal court in Boston is taking into account a related disagreement resulting from a fumbled insurance claim that may cost the institution $15 million.
Harvard failed to immediately submit a formal claim to one of its insurance providers for the costs incurred in defending the lawsuit alleging that its admissions rules were unconstitutional. Harvard filed a lawsuit against the insurer, Zurich American Insurance when it refused to pay. During this time, the institution revealed that the total cost of its legal fees and costs linked to the admissions case and a related Justice Department probe had exceeded $27 million.
A legal pundit named David Lat said, “One of the best colleges in the country appears to be not excellent at completing its homework.”
Harvard officially notified its main insurance carrier to seek payment of its defence costs days after Students for Fair Admissions sued the university in 2014, claiming that the university’s practice of considering race in its undergraduate admissions decisions was illegal and harmed Asian American applicants. Harvard has already paid $2.5 million toward the policy’s $25 million cap.
But it was a long time after the deadline had gone before Harvard informed Zurich, its excess insurer, who was supposed to pay the next $15 million.
In the lawsuit before the federal judge in Boston, this additional money is in question.
Tom Baker, an attorney and professor of law at the University of Pennsylvania, declared, “Somebody badly screwed up.” “I lecture on this subject. You must provide notice frequently and early, which is one of the lessons you impart to individuals about claims-made policies.
In 2014, Students for Fair Admissions brought a new complaint against the University of North Carolina’s admissions policy. Both cases were tried in court, and Harvard and UNC both won. The Supreme Court decided to hear both cases after Harvard prevailed in an appeals court and while UNC’s appeal was still unresolved. They’ll be debated on October 31.
Edward Blum, a conservative attorney and the founder of Students for Fair Admissions, has brought numerous significant issues involving race and voting to the Supreme Court.
Tax documents show that less than $8 million has been invested by Blum’s firm in the litigation against UNC and Harvard.
In a recent interview, Blum claimed that she was a low-cost, high-volume producer in the field of public interest law. No workers, no bricks, and no mortar.
He added, using the Yiddish word for madness, “I pay myself $48,000 a year for my mishegoss.
There isn’t much information available to the general public regarding the sources of the funds used to support the legal actions brought by Students for Fair Admissions, and Blum would only provide a generic description of the group’s funders.
According to him, “a dozen high-net-worth people and maybe a dozen conservative foundations have provided the majority of our money.” “We have received more than 5,000 individual donations, ranging in size from $5 to occasionally $1,000. Some foundations have come clean about their public backing for this litigation. The majority of those I won’t mention.
In tax returns, Blum attested to reports that his organisation had received gifts totalling $1.5 million from Donors Trust, $500,000 from Searle Freedom Trust, and $250,000 from the Sarah Scaife Foundation. They all back conservative or libertarian causes.
According to a response to a request for public information made by the James G. Martin Center for Academic Renewal, a nonprofit organisation that claims it wants to increase the diversity of views taught at colleges, UNC’s legal costs as of July had surpassed $24 million.
UNC informed the centre that “no state-appropriated or tuition monies are being used.”
The institutions’ legal costs were significant but not unexpected, according to legal experts.
They are extremely big figures, let’s face it, Baker remarked. It doesn’t take much to reach those types of amounts in a hard-fought case, though, in an era where lawyers at top legal firms routinely charge over $1,000 per hour without even batting an eye.
Both of Harvard’s insurance plans covered claims filed against it throughout the 12 months ending in November 2015, provided that they were disclosed to the underwriters by January 2016. The primary insurer must be notified, according to the Zurich policy.
More than a year after the deadline had passed, Harvard did not officially notify Zurich until May 2017.
The case was simple, according to court documents from Zurich’s attorneys. Harvard’s claim for coverage is “dead on arrival” due to its admitting failure to adhere to the notification requirements, they said.
Harvard’s legal team responded by asserting that Zurich “certainly knew” about the affirmative action lawsuit “in the year after it was filed, especially given the enormous, continuous attention that the matter got in the national and local press” and Zurich’s underwriting operations.
The obligation for notification, they continued, “is not an escape route for insurance firms to evade liability to policyholders owing to technical noncompliance.”
That argument was “clever but fallacious,” according to Zurich’s legal counsel, and it was also “outlandish.”
“We do not have anything to offer here, beyond our legal papers,” a Harvard representative stated.
A Zurich representative stated, “We are unable to discuss the matter with you as it is not Zurich’s practice to comment on litigation.”
Zurich’s reluctance to pay, according to Baker, was unpleasant but legally sound.
Taking advantage of pointless technicalities, he continued, “seems like the worst thing insurance firms are often accused of.” However, given the case law’s rigorous application of the claims-made notice reporting requirements, neither would I fault Zurich for making a bid nor would I rule them out.
Lat, the creator of the law and legal profession newsletter Original Jurisdiction continued.
He said that insurance companies aren’t particularly empathetic, especially when they’re attempting to avoid paying claims. However, they have the right to have their contracts enforced by their terms, particularly when the opposing party is a prestigious institution with a sizable legal team and a $50 billion endowment.
According to Lat, neither actual nor fictitious alumni, including the lead character in “Legally Blonde,” would support their alma institution in the dispute between Harvard and its insurer.
It hurts me to say this as a fellow Harvard alum, but this isn’t a complex issue, he added. You don’t have to be Elle Woods to see that the university will probably lose.
