Harvard says defense costs top $25 million in affirmative action case

A man looks at his mobile phone beside a sign for Harvard University in Cambridge, Massachusetts, U.S., June 18, 2018. REUTERS/Brian Snyder
  • Harvard sues insurer to recover defense costs exceeding $25 million
  • University defending itself against lawsuit by Students for Fair Admissions

(Reuters) - Harvard University has already incurred more than $25 million in legal expenses defending itself against a major lawsuit challenging its consideration of race in undergraduate student admissions, which the U.S. Supreme Court is considering reviewing.

The Ivy League university made that disclosure in a lawsuit it filed on Friday in Boston federal court seeking to force a unit of Zurich Insurance Group Ltd to cover some of the costs of defending itself against Students for Fair Admissions' claims.

Zurich did not immediately respond to a request for comment.

Harvard, which is being represented by lawyers at Wilmer Cutler Pickering Hale and Dorr including Seth Waxman and William Lee in the underlying litigation, declined to comment on the lawsuit.

SFFA, which was founded by anti-affirmative action activist Edward Blum, last year asked the justices to hear its appeal of a ruling by the 1st U.S. Circuit Court of Appeals upholding Harvard's race-conscious admissions.

The lawsuit accused Harvard of discriminating against Asian American applicants by engaging in impermissible "racial balancing" to make it easier for Blacks and Hispanics to win admission at the expense of Asian-American applicants.

The lawsuit contends Harvard's actions violated Title VI of the Civil Rights Act of 1964, which bars racial discrimination under any program receiving federal financial assistance.

The case, should it be taken up by the Supreme Court, would give the court's 6-3 conservative majority a chance to end affirmative action policies used to increase the number of Black and Hispanic students on American campuses.

The justices in June asked the Biden administration's solicitor general to weigh in on whether it should take up the case, which SFFA first filed in 2014.

In Friday's lawsuit, a lawyer for Harvard, Marshall Gilinsky of Anderson Kill, noted that the Justice Department during the Trump administration also opened a related investigation into Harvard's policies.

The school said that the costs of both defending against the lawsuit and the still-pending investigation were covered by a policy sold by AIG that had a limit of $25 million and a deductible of $2.5 million.

Harvard did not say how much it had spent, only that its costs now exceeded $25 million.

Defense costs in excess of those limits were supposed to be covered by Zurich, but the insurer has refused to cover those expenses, which include paying lawyers, expert witnesses and for the U.S. Supreme Court appeal.

Zurich did so on the basis of late notice, Harvard said. The school disputed that allegation, saying the insurer was on notice of its claim no later than January 2016.

The case is President and Fellows of Harvard College v. Zurich American Insurance Co, U.S. District Court, District of Massachusetts, No. 21-cv-11530.

For Harvard: Marshall Gilinsky of Anderson Kill

For Zurich: Unknown

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Nate Raymond reports on the federal judiciary and litigation. He can be reached at nate.raymond@thomsonreuters.com.