Harvard says didn't need to notify insurer about Asian discrimination lawsuit

A man walks through Harvard Yard at Harvard University in Cambridge, Massachusetts November 16, 2012. REUTERS/Jessica Rinaldi
  • Zurich American Insurance said Harvard waited too long to tell it about the lawsuit now at the Supreme Court
  • Harvard says the notice was a technicality, the insurer was aware of the high-profile case

(Reuters) - Harvard University did not have to give Zurich American Insurance Co timely notice about an affirmative-action lawsuit filed against it because the insurer “surely knew about” the high-profile case from extensive media coverage and its own underwriting practices, attorneys for the school said in a federal-court filing Monday night.

“The notice requirement is not an escape hatch for insurance companies to avoid liability to policyholders due to technical noncompliance,” Harvard’s lead lawyer Marshall Gilinsky of Anderson Kill told the U.S. District Court in Boston in response to a summary judgment motion by Zurich.

Gilinsky declined to discuss the pending litigation. Zurich’s attorneys did not immediately respond to requests for comment.

The insurance dispute stems from a case filed in November 2014 by Students for Fair Admissions (SFFA), which the U.S. Supreme Court will hear next month. SFFA alleges that Harvard’s undergraduate admissions practices favor Black and Hispanic applicants and discriminate against Asian Americans. SFFA's lawsuit was widely reported by mainstream media and in trade publications.

Harvard has successfully defended its admissions practices so far - but at a cost of more than $25 million, exhausting the limits of its Educational Institution Risk Protector insurance policy from its primary insurer, AIG’s National Union Fire Insurance, the school said in a lawsuit filed against Zurich last year.

The school says secondary insuer Zurich must cover the next $15 million in costs or expenses under its excess insurance policy.

Zurich filed a pretrial motion for judgment last month, saying its excess policy covered only claims that were both “made and reported” between November 2014 and January 2016. SFFA’s 2014 lawsuit was a “claim made” against Harvard, but Zurich said it was not covered because Harvard waited too long to “report” it – that is, to notify Zurich of the claim.

But even under a claims-made policy, actual notice should trump the policy’s deadline for making claims, Harvard responded on Monday.

Harvard admits it did not notify Zurich of SFFA’s lawsuit until May 2017, but says the notice requirement was satisfied because Zurich must have had actual knowledge of SFFA’s lawsuit well before January 2016.

Harvard also has asked the judge to order Zurich to turn over underwriting files and other documents that allegedly will prove the insurer had actual knowledge of SFFA’s lawsuit and priced its renewal policies accordingly. Zurich opposes that motion.

"At a minimum, the circumstances here raise disputed issues of material fact sufficient to defeat the summary judgment that Zurich seeks,” Harvard concluded.

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, Ethan Middlebrooks, and Jade Sobh of Anderson Kill

For Zurich: Andrew Margulis and Andres Avila of Ropers Majeski; Paul Muniz of Donovan Hatem

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