Emory University has settled its financial aid price-fixing lawsuit for $18.5 million, according to a legal brief obtained by The Emory Wheel. The University of Chicago settled prior to all other accused universities last year for $13.5 million.
“While Emory continues to believe the plaintiffs’ claims have no merit, we are pleased the litigation is behind us,” Assistant Vice President of University Communications Laura Diamond wrote in a statement to the Wheel.
The lawsuit is premised on arguments that 17 private elite universities were or currently are involved in the 568 Presidents Group, also known as the 568 Cartel. The 568 Presidents Group was formed in 1998, and all institutions in the group must practice need-blind admissions. The group created the Consensus Approach Methodology in 2003, which is a standardized method for universities to calculate an applicant’s family’s ability to pay tuition.
The plaintiffs allege that the 17 universities engaged in price fixing, or artificially inflating the net cost of attendance for students receiving financial aid. Such action would violate antitrust laws.
Emory, alongside the 16 other schools named in the lawsuit, previously tried to dismiss the case. However, an Illinois federal district court judge denied the universities’ motion to dismiss the case on Aug. 15. 2022.
Additionally, Emory, the University of Chicago and Brown University (R.I.) were uniquely involved in the lawsuit because they alleged that they quit the conspiracy. Specifically, Emory joined the Cartel in 1998, implemented the Consensus Approach Methodology in 2003 and allegedly left the Cartel in 2012, according to the lawsuit.
Yale University (Conn.) settled for $18.5 million, Brown settled for $19.5 million, Columbia University (N.Y.) settled for $24 million and Duke University (N.C.) settled for $24 million, according to the brief. Public filings state that Vanderbilt University (Tenn.) has agreed in principle to a settlement but the dollar amount has not been publicized.
Universities named in the lawsuit that have not yet settled are the University of Pennsylvania, Northwestern University (Ill.), Georgetown University (D.C.), California Institute of Technology, Cornell University (N.Y.), University of Notre Dame (Ind.), Massachusetts Institute of Technology, Johns Hopkins University (Md.), Dartmouth College (N.H.) and Rice University (Texas).
Freedman Normand Friedland LLP Partner Ted Normand, one of the lead counsel for the plaintiffs, stated in a Tuesday press release that the settlements are a “significant benefit” for members of the proposed class-action lawsuit.
Gilbert Litigators and Counselors Managing Partner Robert Gilbert, another lead lawyer for the plaintiffs, said that the universities that have not yet settled should do so.
“It is past time for the presidents and governing bodies of the remaining defendants to stand up and do the right thing for their students and alumni, and resolve the overcharges to middle class and working class students that stemmed from the twenty years of collusion on financial aid by elite universities,” Gilbert said.
According to the brief obtained by the Wheel, all 17 universities stated that they would admit students without considering their or their families’ financial circumstances. This allowed the universities to claim antitrust exemption so they could share analysis of financial aid awards.
The plaintiffs also alleged that the universities conspired when awarding financial aid and violated the antitrust exemption by practicing “wealth favoritism” within the admissions process when wealthy families made substantial donations to their respective institutions, according to the brief.
Documents filed at the U.S. District Court in Chicago yesterday state that the plaintiffs used a strategy that increased the settlement amounts of each subsequent agreement to exert pressure on universities that had not yet settled.
Loyola University Chicago School of Law Institute for Consumer Antitrust Studies Director Spencer Waller said that defendants are under “a lot of pressure” to resolve cases quickly. He noted that as part of the settlements, universities can agree to share information with the plaintiffs in exchange for a lower settlement, which is an agreement that may not be available to those who settle later.
“Defendants, in general, try to dismiss a case at the earliest possible time because … that can result in total victory and much lower attorneys fees,” Waller said.
Additionally, Waller said that going to trial could give the universities bad publicity and force the institutions to pay “ buckets of money times three.”
“Our focus has been and always will be to make an Emory education accessible to all talented students, regardless of their financial resources, and we look forward to continuing that mission,” Diamond wrote.
