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Penn State's Liability in Sandusky Case Could Tighten the Budget Belt

by on June 27, 2012 6:45 AM

What makes Penn State liable in wake of the Jerry Sandusky verdict, one victim’s attorney said, is that Sandusky was like a dangerous dog.

And “Penn State had knowledge he was a dangerous dog,” he said.

The university faced suspicions a child predator was showering with young boys in its facilities at least three times, and yet, it continued. In fact, Sandusky was seen working out in the Lasch Football Building the week before his arrest in early November.

Now he’s sitting in a jail cell at Centre County Correctional Facility awaiting his life sentence. If only that was the end of it . . .

Penn State is now on trial. Civil suits are coming, and really, it comes down to this, according to one law expert: If there was knowledge a crime was committed, it’s almost a slam dunk there’s civil liability as well. At the heart of all this are questions many Penn Staters long for. Who knew what and when?

“If I’m the attorney for Penn State, am I gonna risk pushing a court to a ruling on that point,” he said, “or is prudence gonna dictate that I sit down with these people and try to settle this up right now?”

It looks like, at the least, any claim after the 2001 Lasch Building shower incident is in play. A legal source said the fact that criminal charges were filed against Tim Curley and Gary Schultz and probable cause was shown at their preliminary hearing last December makes for a strong civil case.

Penn State’s first known knowledge — at least publicly — of Sandusky’s behavior is in 1998, when a boy said he was abused in a shower. Penn State Police conducted an investigation, but no charges were filed at the time.

“There are a couple victims because of the timetable who might not be found civilly liable,” Wes Oliver, an associate professor at Widener University School of Law, said on a recent taping of Pennsylvania Cable Network’s “Journalists Roundtable.”

“But it’s in Penn State’s PR interest to go ahead and settle this across the board and make this case go away.”

So, what’s it going to cost?

Some settlements in the Catholic Church sex scandal are in the low millions. And earlier this month, an Erie jury awarded a man $8.65 million after he said he was sexually assaulted by a 14-year-old foster child placed in his parents' adoptive home when he was 9 years old.

Safe to assume, we’re talking millions. How Penn State plans on paying for this is something to keep an eye on going forward. Penn State has spent more than $10 million in legal and consulting fees since the scandal broke in November.

Penn State has said legal and other expenses not covered by insurance are expected to be funded from interest revenues related to loans made by the university to its self-supporting units.

But the university and its insurance carrier are currently tangled up in court battling over how much coverage it should receive.

“God only knows,” said the law expert. “Are they going to be able to go to the legislature? I doubt the legislature would be very amenable to such a thing. The money to try to make this work is gonna have to come from somewhere if they go the settlement route, if they try to resolve the matter within a short period of time.

“Dollars spent for this are not gonna be dollars spent on other things. There’s gonna have to be some hard budgetary decisions.”

Moments after Sandusky’s verdict was cheered on the courthouse steps, Penn State released a statement saying it will “invite victims” to settle civil litigation against the university.

Victim No. 5 is one, his attorney, Tom Kline said. Ben Andreozzi, who represents victim No. 4, testified during the trial that he and his client haven’t even discussed a civil suit.

But the school is nonetheless anticipating a wave of suits, be them actual victims or men looking to hop on the gravy train and dip into an entity with deep enough pockets to carry a $4.1 billion budget around its waist the last year.

Of course, civil liability may not even be the least of the school's concerns at this point.

Penn State was issued a fresh batch of subpoenas in the spring, including president Rodney Erickson, who has yet to testify in front of the grand jury, according to a Penn State spokesman.

More charges could be forthcoming. The attorney general's office reportedly recovered emails that show former president Graham Spanier was involved in the decision to not alert authorities of the 2001 allegation that led to perjury charges for Curley and Schultz and brought down Hall of Fame football coach Joe Paterno.

Then there’s the matter of Louis Freeh and his team that has interviewed hundreds since launching an independent investigation last fall looking into the missteps that occurred and what changes should be made in wake of the Sandusky child sex abuse scandal.

The report is expected to come out later this summer. It will be released to the public, university’s Board of Trustees and officials at the same time.

“I’m waiting to see the Freeh report because Penn State hired a well-respected former FBI director and has promised us, promised that they’ll come clean,” Kline said. “So now I wanna see just how clean they come and what we have.”

Said a legal source: “Penn State understands they’re liable. It’s just a matter of trying to control the damages. I would not wanna be in their shoes right now.”

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Nate Mink covers Penn State football and news for StateCollege.com. He's on Twitter as @MinkNate.
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