Penn State is expected to pay big in civil suits
Penn State, working aggressively to move past the darkest chapter in its history, is aiming to finalize civil settlements with Jerry Sandusky's child sex abuse victims by the end of the year, the university's chief negotiator told The Citizens' Voice.
The negotiator, attorney Michael K. Rozen, said he is aware of approximately 20 victims who have retained counsel and have filed or plan to file lawsuits holding the university responsible for their abuse. That figure, twice the number of victims mentioned by prosecutors at Sandusky's criminal trial in June, could still grow.
"I don't know how many people there may ultimately be," Rozen said in a telephone interview last Thursday. "I'm only just finding out about several."
No matter the total, Penn State is expected to pay heavily - possibly tens of millions of dollars per victim - to recompense for the sins of Sandusky, the university's former defensive coordinator, and the administrators who have been accused of enabling his wanton behavior.
"The exposure that Penn State has for both its punitive and compensatory damages is substantial," said Joel Feller, the attorney for seven of Sandusky's victims. "In order to make these settlement discussions productive, they have to accept and acknowledge that they are going to have to pay substantial monetary damages to these young men."
Penn State representatives started discussing the potential settlements with attorneys for Sandusky's victims earlier this month, prior to his sentencing Tuesday to 30 to 60 years in prison, and will have met with all of them by later this week, Rozen said.
Rozen and attorneys for several of the victims described the first wave of meetings as "preliminary" and a chance to "get the ball rolling."
No dollar figures have been discussed, they said.
Further, more substantive, meetings are in the process of being scheduled, Feller said.
With 2½ months left in the year, Penn State will only meet its self-imposed deadline if it is "serious and determined" to resolve the cases, Tom Kline, the attorney for Victim 5, said.
"Penn State has very good reason to put the many victim's claims behind them and turn the page and end this sad chapter in its history," Kline said.
Rozen said he did not see meeting the year-end deadline as an "essential requirement" and said the negotiations will extend into 2013 if they are "fruitful" and "need to go longer."
Penn State's willingness to quickly resolve the cases appeared to emanate from its forthright approach in accepting responsibility for Sandusky's abuses.
The university, in July, conceded to the findings of an independent investigation led by former FBI director Louis J. Freeh that found evidence of a high-level cover-up after a former assistant coach, Mike McQueary witnessed Sandusky abusing a boy in a team shower in February 2001.
Former head coach Joe Paterno, according to the internal investigation, dissuaded top administrators from taking McQueary's report to law enforcement even though he had closely monitored a brief university police investigation into a similar episode of abuse involving Sandusky in 1998. That investigation, stemming from another shower incident, did not lead to charges against Sandusky.
Freeh's investigators uncovered handwritten notes in which former university vice president Gary Schultz wondered if the 1998 allegation against Sandusky was an indication of a "Pandora's box" and if "other children" were involved.
Sandusky committed at least three more shower assaults - including the February 2001 episode witnessed by McQueary - and untold other abuses, according to prosecutors and victims' attorneys.
Tom Kline, the attorney for a boy assaulted by Sandusky in a campus shower in August 2001, said Penn State's acceptance of the findings of Freeh and his investigators "goes a long way" in defining the university's "culpability and accepted responsibility."
Penn State's culpability could vary depending on the victim, where the abuse occurred and whether it happened after Penn State officials became aware of Sandusky's abuse.
"The evaluation of what a particular claim may be worth in terms of resolution depends on a whole host of factors," Rozen said. "What are the factors for x, y, or z claimant that result in a resolution at a particular price point? I don't think all of these claims are equal in terms of that."
Rozen said he did not know of "any limitation" placed by the university on the settlement offers. The university's president, Rodney Erickson, has said the victims' compensation would be paid through insurance and not tuition, state funding or private donations.
Penn State retained of Rozen and his law partner, Kenneth R. Feinberg, in September to facilitate the settlement negotiations and avoid a drawn out legal process. Together, Rozen and Feinberg have resolved litigation stemming from the Sept. 11, 2001 terrorist attacks and the 2010 BP oil spill in the Gulf of Mexico.
"For the institution to stand up and say 'let's help everybody get past this,' I think is a wonderful thing," Rozen said.
In the BP case, Feinberg's firm sorted through more than 1 million claims and distributed more than $6 billion in settlement funds. The oil giant set aside funds for the clean up of oil-stained beaches and to restart the tourism-heavy Gulf Coast economy.
Benjamin D. Andreozzi, the attorney for a boy abused on the Penn State campus and on the team's trips to the Outback and Alamo bowls, said the Penn State settlements must include nonmonetary actions, including apologies and changes in policy to ensure no other children are abused on the university campus.
Penn State said last week it had already implemented 40 of the 119 recommendations Freeh made in his report on the internal investigation. They included the establishment of an internal database to track employee misconduct reports, background checks for all new employees and child sex abuse training for university police officers.
"The fact that they hired somebody neutral to come in, find facts and make recommendations is one step that needed to happen," Andreozzi said. "Step No. 2 is going to be a direct acknowledgement to the victims, an apology, 'we let you down, we shouldn't have done this.' Step 3 is let's sit down at the table and talk about we can do to make you whole."