Michigan State to pay $500M to survivors of Larry Nassar's abuse

Parent Cafe
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@HarvestMoon1 that is the path they started down, but that was challenged in at least one motion to dismiss because Michigan law disallows suing government agencies and employees with 6 exceptions, one of which is medical care and treatment. Had this thing not settled determination would have need to have been made although I think the medical care angle with have withstood in the end, so yes, that is what they sued for, the determination if they could have sued outside of the medical care angle I do not know and was never determined to the best of my knowledge as they entered mediation prior to the challenge being addressed.My guess is if the challenge was won, the lawyers would have refiled to fit Michigan law regarding the exceptions to immunity. Regardless in my opinion settling the claims was in everyone’s best interest. It is being reported that the payouts will be based on age at time of care, numbers of times each gymnast was treated by Nasser etc. so effectively it is all about the medical care. There is speculation in the press if the 30 or so students at MSU who are part of the 300 and who were effectively under the “care” of the university by virtue of their student status will receive greater payouts. There’s really nothing in the settlement that addresses anything much more than the malpractice abuse which kind of tells you where this was heading with the lawyers and insurance companies had the challenge to the law remained in the courts.

I agree this is outside NCAA’s purview and probably nothing will come of it as Nasser was not a team doctor at Michigan State but was a member of the hospital staff and a professor. He was, however, a team doctor for USA gymnastics which is not NCAA territory. I also agree that if a team doctor assaulted students the NCAA would probably have greater interest legally.

From attorney David Mittleman, whose Lansing-area firm represents 111 victims which says pretty much medical malpractice is what made this settlement happen in my opinion.

[quote]
“The age of the abuse, the duration of the abuse,” Manly said, listing the likely factors (of settlement) “Treatment in the future and the past. Have you lost earnings? Are there things about a particular case that are aggravating or mitigating.”

Mittleman said the dates of the assaults will be important. Older abuse probably will be worth less because without the settlement, Michigan State could have been shielded by a statute of limitations.

[quote]

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More than one attorney involved in representing the victims has stated that this is a good outcome for all. Several attorney’s have reported that they “think” the motion to dismiss would have stood and then there would be nothing for the victims except to file differently… All this is in various Michigan media sources who have done an excellent job of reporting…The motion to dismiss (as reported by MLive):

I do think the motion to dismiss illuminates some of the weaknesses in Michigan law…which are being addressed in the Michigan house and Senate which is the place to manage some of the victim’s grievances so that it is state law and applicable to all entities in the state.

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Because MSU attorneys made a desperate attempt to get this case dismissed by making a motion to invoke statutory immunity does not change the nature of the original action or the allegations. And Michigan’s immunity ststute applies to ordinary negligence while gross negligence was alleged and quite evident in this case. There is a difference under the law. Mittlemans statement says absolutely nothing about medical malpractice and the statute of limitations he refers to is the statute for sexual assault claims.

Make no mistake about it. This settlement represents compensation for the sexual assault of hundreds of young women by an employee of MSU.

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“Milee30: Nothing will come from the NCAA because the victims were women and what happened isn’t generally viewed by our society as a big deal. Seriously, that’s the bottom line. Most people view it as a minor violation that these women should just move on from rather than risk costing taxpayers or innocent MSU students more tuition.
I would be willing to bet my first born son that if a team doctor sexually assaulted over 300 male athletes, the NCAA would be involved. No question about it.”

I think this is inaccurate, though it is possibly true (but not 100%, given various personality types) that males are more likely to speak up and to fight back. I still remember my son at 8 or so vehemently protesting to the doctor who was about to ask me to leave so he could do the required sports exam prostate check that, “I have rights. You can’t touch me unless I consent. I HAVE RIGHTS.” My doctor - who had known us for decades, thankfully, - found it hilarious, as it reminded him of his roommate in college who was always saying, “I have rights” but he did mention that sometimes this means a kid has been molested, but since he knew our family is full of attorneys, it would not be at all abnormal for our kid. I have another daughter who would take out anyone who touched her, like Salt in that movie. But everyone isn’t like this.

That said, I don’t think this is about gender at all. It’s about self-protection and preserving reputation of the organization at all costs, exactly what happened when everyone ignored Sandusky for years and years and years, even when he was caught in the shower with a 10 year old boy.

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I wouldn’t be so quick to assume Michigan State’s insurers will pick up the tab for the $500 million. Like many large organizations, Michigan State is partly self-insured: it assumes it has enough funds internally to pay any claims against it and budgets for those losses, but half a billion is an extraordinarily large nut to swallow. It also purchases commercial liability insurance, but the Wall Street Journal obtained a copy of MSU’s primary policy through a Freedom of Information request and reported payouts are capped at $39 million per year for claims based sexual assault. And in the Jerry Sandusky case, at least one of Penn State’s insurers balked at paying anything, arguing the university had knowledge of Sandusky’s offenses and failed to take timely and effective action to prevent their recurrence, placing the matter outside the scope of coverage. MSU interim president John Engler has told reporters he doesn’t know whether MSU will have to deal with similar exclusions.

It’s possible MSU has additional coverage beyond its primary policy, and/or reinsurance to cover some fraction of unexpectedly large losses in its self-insurance program, but similar caps and exclusions might apply, and MSU administrators seem very unclear at this point what kind of insurance payout they can expect, if any. And even if commercial insurers do come through, MSU might face stiff increases in its insurance premiums going forward—especially in light of the fact that the university is facing additional litigation unrelated to Nasser for numerous sexual assaults by football, basketball, and volleyball players and assistant coaches, which plaintiffs say the university did little to investigate or punish, and in some cases allegedly took active steps to cover up.

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I also doubt insurance will cover everything. Although Engler said the companies were part of the mediation for the settlement…seems hard to believe that the insurance companies would participate and then reneg although I suppose they could hold back the payments until the special prosecutor report to see if there are any charges to be found is finished and there’s been no indication of when that will be and the only case that has been announced is Nassar’s boss at the medical school. Engler announced today that the 1% budget cuts that MSU has been doing each year will probably be increased this year for all departments. So I stick with my premise that the settlement fund will come from here, there and everywhere.

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Each 1% cut in MSU’s general fund expenditures would produce $13.7 million in savings. You’d need some pretty deep cuts to get to half a billion dollars that way. And it’s not so easy to enforce across-the-board cuts in a university setting. It’s almost impossible to cut tenured faculty salaries, except through mandatory furloughs—i.e., the fiction that your faculty aren’t working for a certain period, like a week or two, when in fact for most it means just working unpaid for that period. You can get away with that maybe once or twice, but it’s really bad for morale, and it will leave many of your best people looking for exit strategies. You can stop filling vacancies when faculty retire or leave for greener pastures. You can offer inducements for early retirement, but that can be costly in the short term, and those kinds of strategies may leave your faculty depleted, to the detriment of students and sometimes ongoing research operations.

You can’t stiff the electric company or the water department, though you might find some additional efficiencies—but these, too, sometimes require near-term expenditures to produce longer-term savings.

You could cut financial aid. At MSU institutional scholarships and grants account for 10.5% of the total general fund budget (not counting additional FA available from restricted funds, like endowed scholarships). Cutting the FA budget would be a sneaky backdoor way of getting a tuition revenue increase without raising nominal tuition rates. But at present MSU meets only 59% of need, on average. Big cuts in FA might drive away customers. Raising tuition for OOS and international students is also risky, given that MSU already has some of the highest OOS tuition and total COA in the Big Ten, behind only Northwestern and the University of Michigan, both generally perceived to offer a superior product, and both of which provide more FA to OOS students. I’d imagine Michigan State gets a lot of OOS students who can’t get into Michigan or Northwestern, but MSU is in competition with many other Big Ten schools—and of course many outside the Big Ten—that offer a more attractive combination of price and product quality. So if you try to place too much of the burden on OOS and international students, you might end up eating your seed corn, as OOS and international students currently produce more net revenue per student than Michigan residents.

This is not going to be an easy or painless process. I’m sure it’s right that they’ll try to spread the pain around, but an awful lot of people are going to be feeling pain.

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Agree, for me there was never the thought that the settlement would not hurt students and staff. Even if they get 20 percent from various insurance companies and 20 percent from budget cuts, hiring freeze, dropping less lucrative majors etc. that still leaves 60 percent that will have to come from unrestricted funds and the state money they receive. 10 million that was directed for victim health support might be moved to the settlement fund. Directed scholarships from donor giving would remain but hard to say exactly how much non donor directed institutional aid would be siphoned. I doubt Engler will wait a long time to share the plan. He probably already had one going into mediation. It is still a good deal for the uni and the victims in my opinion because the legal costs of 300 individual litigants even if you figure both sides would win some and lose some. This way every litigant has the opportunity to receive some compensation. I think could be more expensive. Not my favorite uni and no MSU grads in the family but it is a top 100 Global uni so will survive. The politics around internationals was going to dent anyway which is going to decrease the Maserati traffic in East Lansing! I just don’t see doom and gloom to be honest. It is not good but then East Lansing isn’t going to sink into a massive hole in the earth. There is less than 5 miles between the campus and the state capital building.

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@bclintonk OK, I know your a UM guy, but what’s the point of emphasizing the superior “product quality” of other schools that will necessarily hurt MSU’s ability to attract OOS at the fees MSU has set? MSU’s rates are set at those levels for a reason; the school believes it can, and does, attract students who can foot the bill… quality students. No it doesn’t have UM or Northwestern’s reputation, but it is a very attractive school to a lot of OOS. It has chosen to make itself more of a Michigan oriented student school, undergrad-wise most notably, to satisfy law makers and its land grant constituents. MSU could easily recruit/attract more OOS students at that higher tuition bill to cover much of settlement payout, particularly in the many states where MSU surpasses the flagship public in quality, but Michigan constituents would howl. But MSU has been steadily increasing American OOS; international students have been declining steadily in recent years.

As horrible as the Nassar scandal has been, and with all the subsequent blunders and/or misstatements (Tom Izzo among the perps), the trustees and, especially, Engler and big-time alumni donor Peter Secchia, Michigan State was smart to quickly settle with these horribly-treated women and girls to get off the front pages. And as sadly as it speaks to America’s twisted priorities, the fact that, despite ex-president Lou Anna Simon was forced out, the fact that the school’s highest profile individuals nationally – Tom Izzo and Mark Dantonio – have appeared to weather the storm, lowers MSU’s negative profile as opposed to Penn State, where legendary football coach Joe Paterno was fired (then sadly died soon after) and president Spanier went to jail was a bigger kick to PSU’s image solar plexus. The $500M will hurt and students will bear much of the brunt tuition-wise, but the school will more than survive being a world top-100 university with world renowned projects like FRIB set to soon go online. Sorry @bclintonk to burst your bubble… MSU will be just fine.

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@Quincy4, my “point” was simply that I don’t think MSU has much room to raise OOS tuition even higher as a solution to its fiscal predicament. Michigan and Northwestern can charge higher tuition both because of their academic reputations and because as wealthier institutions they can afford to be more generous with FA. To the extent MSU is competing with Michigan and Northwestern for OOS students—and there certainly is some overlap—it can set its OOS tuition a notch below theirs and still be in the competition. But MSU is also competing with schools like Wisconsin and Ohio State, schools that are are strong academically (much as it pains me as a Wolverine to say that about OSU) but also have lower OOS tuition. So if MSU raises OOS tuition too much above that of its peer institutions, it risks pricing itself out of that competition. I suppose it’s possible that MSU could maintain OOS enrollment by trading down to a lower caliber of OOS students if it’s losing too many of the stronger students to other Big Ten schools or schools of comparable quality elsewhere, but I think that would be an unfortunate outcome for MSU as well.

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I agree with you @bclintonk if MSU were in any state but Michigan it could garner higher OSS. To have two universities in the Global top 100 is remarkable but MSU will not be able to raise that tuition much. If the yield was going to fall it would have this year and next year and then rebound. I don’t think much had been released other than MSU had it’s highest application cycle and is expecting over 8000 freshmen and they have said Chinese enrollment is down for the fall. The stats of inbound kids has been rising the past decade like many selective unis so the stats of this fall class and next years class would also be evidence of any degradation of the popularity scale.

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@bclintonk a couple things: First, the emphasis shouldn’t be raising OOS tuition, which wasn’t my point – it’s already high — the emphasis could be to increase the percentage of OOS, who pay a much higher tuition than in-staters and, thus, attack the $500M. As you know, the State of Michigan limits the amount all Michigan public Us can raise tuition, which is tied to the annual COL, but I’m not sure how that applies to OOS tuition. But raising OOS tuition isn’t what I was thinking of an would be a non-starter for many other reasons, most of them ethical, than the ones you raise.

Secondly, MSU can, and has historically, attracted OOS from well beyond Big 10 territory – like Cali and Florida – although obviously Big 10 states like Illinois (esp Chicago) and Ohio and New York (both NYC and Buffalo/Western NY) are strong OOS/alumni bases as well. Like I said, the only reason they won’t is because of howling from MSU’s traditional rural, land grant base (this base is more historical as, today, MSU’s actual base is much more suburban and urban than rural) and legislators who, actually, have constantly advocated MSU needs to be MORE Michigan focused in terms of geographical enrollment – but this hasn’t stopped MSU from slowly/quietly increasing the OOS (non-international) percentage in the last decade, largely to pay the bills even before this huge Nassar settlement.

In terms of attractiveness for OOS – the ONLY 2 Big 10 schools that a generally more attractive academically than MSU (to students/parents) are UM and Northwestern. Parents and students don’t just limit themselves to US News rankings when making determinations (esp since MSU scores big in other US and world rankings, anyway) – even if their overriding issue is academics. There’s this thing called “fit” and MSU scores very high with a lot of people, in terms of the combination of academics, the wealth of personalized and/or small college opportunities (with MSU renowned residential colleges and honors programs, etc.) quality housing, campus beauty, cultural base/attractions, city/town setting, fun, networking, school spirit/alumni support, etc, that causes many students/parents to consider MSU along with or over an Ohio State (as an Cleveland area grad from a strong academic HS from the 80s, the only state school that we considered on par with MSU was Miami – things have changed since then when the state, belatedly dropped its open admissions legislation which caused OSU to become as bloated as it is… this hurt an otherwise strong academic school and, since that time, has been more recognized as such), a Maryland or even a Minnesota or Wisconsin … and yes, sometimes UM – more than you’d think. Being a top-100 world ranked school (as well as designated as one of Times Higher Education (THE) magazine’s 50 “powerhouse” world schools, there are few large public US university’s MSU can’t hold its own with recruiting wise.

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@Quincy4, nice sales pitch. (I wasn’t trying to rebut you, by the way, I was merely expressing my own opinion, but whatever).

I’m not questioning that MSU is competitive with Ohio State and most other Big Ten schools in recruiting OOS students. My only point is that it needs to be careful not to price itself out of that competition.

I do, however, think Wisconsin has a leg up, not only due to US News rankings. Wisconsin is a research behemoth, and for that reason it has a sterling international reputation—I’m sure I’ve never seen any international ranking where Wisconsin wasn’t miles ahead of MSU. I think most academics would agree that Wisconsin has stronger faculties in most areas, and Madison is always prominent in any discussion of “great college towns,” where East Lansing is rarely mentioned. But sure, there are “fit” factors that make MSU more appealing to some students.

When it comes to actual OOS recruiting, Wisconsin beats the pants off MSU in key markets like the Chicago area, California, and the Northeast Corridor… Among freshmen entering college in 2014 (the most recent year for which this data set is publicly available) Wisconsin drew more OOS students overall than Michigan State, and pretty much swamped MSU in drawing freshmen from Illinois, California, and the Northeast Corridor from DC to Massachusetts, with the sole exception of Pennsylvania, which was close. MSU drew more from the eastern portion of Big Ten country (Pennsylvania, Ohio, Indiana—I’m excluding Maryland and New Jersey here because they’re too new to the Big Ten). MSU also drew more from the South, including Texas and Florida. Neither drew many students from the Southwest, Mountain West, or Pacific Northwest, but Wisconsin generally drew more from those regions, with some anomalies, e.g., for some reason MSU drew 12 freshmen from Wyoming while Wisconsin drew only one.

I don’t mean this to knock MSU. It’s a good school with some real strengths, and judging by those many of my relatives who went there, its alumni are fiercely loyal, which says to me it must be doing something right. I wish it well through this rough patch.

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@bclintonk, OK fair enough. No need to recount my ‘sales pitch’ for MSU but to reiterate the 2 key points in brief:

  1. MSU is not looking to increase tuition to cover the cost of the Nassar settlement, period. The only thing they could do, as I (and others) speculated, is increasing OSS yield, which they’ve been doing anyway because OSS pay the bills – and those kids tend to come from more well off households who need lesser or no FA.

  2. When judging academic quality students/parents just aren’t solely USN&WR restricted, or any other such rankings, and the difference in such rankings between an MSU or a Purdue, an OSU or an Illinois or a Wisconsin aren’t so great that they consistently knock MSU out of consideration; and I’m not quite how you see Wisconsin – a great research U, absolutely – being “miles ahead” of MSU in international rankings. (ie, the latest THE (Times Higher Ed magazine of London, places UW at 45 and MSU at 80 (and within the top 80 rep-wise), USN&WR Global, UW 29 and MSU 81, and THE has MSU and Wisconsin (and UM) among the 53 “International Powerhouses”. Unless you are UCLA, Berkeley or UM which are all in/around the top 20 in the world, when you say “top 100” that raises eyebrows and distinctions within glaze over in parents/student’s psyche… I’ve seen it over and over. I mean UW should out-recruit MSU in Chicago since it’s literally right up the road; MSU is 2 states over, semi separated by the lake and somewhat farther.

MSU’s biggest reputation problem is what it always has been: UM. The fact it’s so close to UM – a huge school with a big, big rep in a medium sized state, causes many parents and students who don’t know of the school to overlook it and not even realize it’s there. But MSU’s large pipeline of loyal alum and paid recruiters scattered around the country and esp in traditional hot spots for the school, like Chicago, NYC, LA, DC and Buffalo… to name a few, get’s the school’s name out there. (some have joked that due to all the MSU and UM T-shirts, licence plates, stickers and other school stuff, the city should be Chicago, Michigan, not Illinois). … and, of course, having big time sports teams never hurts either. The school generally has the rep of (UCLA aside) the best no. 2 state school in the nation, certainly among land grants… good enough to be the no. 1 most places…

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@Quincy4 - Fact check PSU. Spanier didn’t go to jail. He is free on bail pending appeal.

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@pilot2012 My bad. Good catch; thanks.

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The two situations are different so in my mind while the civil liability issues are the same the potential criminal issues are very different at the two unis. Local police and prosecutors were involved in investigating Nasser and declined to prosecute. To me that was the biggest failure. The second was when his boss did not follow through.