Major universities assert antitrust immunity in financial aid case

Students walk on the campus of Yale University in New Haven, Connecticut November 12, 2015. REUTERS/Shannon Stapleton

(Reuters) – Nearly 20 universities accused of violating antitrust laws over their student aid practices assert they are immune from liability and have asked a Chicago federal judge to dismiss a lawsuit filed in January.

Universities including Georgetown University, Brown University, Columbia University, Yale University, Massachusetts Institute of Technology and Vanderbilt University said in a filing on April 15 that federal law permits colleges and universities to discuss and develop “common principles of analysis” for financial aid.

The complaint from a putative class of 170,000 financial aid recipients alleged the schools coordinated to limit aid and that the individuals were overcharged hundreds of millions of dollars.

Lawyers for the schools argued the exemption “ensures that schools engaged in this collaboration do not face the threat and expense of antitrust litigation, which might otherwise deter the conduct Congress sought to encourage.” The universities’ lawyers said the complaint suffers from “fatal flaws” and asked U.S. District Judge Matthew Kennelly to throw it out.

Defense lawyers including Mayer Brown’s Britt Miller for Georgetown; Karen Lent of Skadden, Arps, Slate, Meagher & Flom for Columbia; and Eric Mahr of Freshfields Bruckhaus Deringer for MIT did not immediately return a message seeking comment.

The plaintiffs are represented by the firms Berger Montague; Roche Freedman; Gilbert Litigators & Counselors; and FeganScott.

The lawsuit filed in Chicago federal court alleged a “price-fixing cartel that is designed to reduce or eliminate financial aid as a locus of competition.” Many of the defendant schools are members of the “568 Presidents Group,” an affiliation of universities that discusses financial aid principles.

Robert Gilbert of New York’s Gilbert Litigators & Counselors told Reuters on Monday that “we anticipated defendants’ arguments and are prepared to respond forcefully, as the law is in plaintiffs’ favor.”

The plaintiffs contend the universities are not entitled to the federal law shield, which provides immunity to “need-blind” schools. Such schools consider admissions applications without regard to financial assistance. The complaint alleged defendant universities had “considered the financial circumstances of students or their families in deciding whether to admit students.”

Lawyers for the universities said the plaintiffs had failed to make “specific factual allegations” supporting their claims.

The case is Henry v. Brown University et al, U.S. District Court for the Northern District of Illinois, No. 1:22-cv-00125.

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