Cornell, Georgetown, UPenn must face lawsuit over financial aid

By Mike Scarcella

WASHINGTON, Jan 13 (Reuters) - A group of elite U.S. universities including Cornell, Georgetown and the University of Pennsylvania must face a lawsuit claiming they conspired to suppress competition on financial aid and favored wealthy student applicants, a federal judge ruled.

U.S. District Judge Matthew Kennelly in Chicago on Monday rejected the universities' arguments to end the case, ruling that the plaintiffs had shown adequate evidence to proceed towards a trial.

The University of Pennsylvania in a statement said "the claims of this lawsuit remain baseless and unfounded. We look forward to sharing the facts with the jury and to prevailing at trial." Cornell declined to comment. Georgetown did not immediately respond to a request for comment.

A lead lawyer for the plaintiffs, Eric Cramer, said in a statement that they "are pleased that the court foiled yet another attempt by the five remaining university defendants to block a jury trial in this case." The schools "intended to and did benefit themselves at the expense of their students," his co-counsel Ted Normand said.

The 2022 lawsuit said 17 prominent colleges and universities violated U.S. antitrust law over a 20-year span by breaching a pledge not to consider students' finances in making admissions decisions.

More than a dozen universities, including Brown, Yale and Columbia, have agreed to settlements with the plaintiffs worth nearly $320 million. The case was filed on behalf of more than 200,000 current and former students and seeks hundreds of millions of dollars in damages.

The schools that settled and the five remaining defendants have all denied participating in a conspiracy to artificially inflate the cost of enrollment.

Many of the defendant schools were members of the "568 Presidents Group," an affiliation of universities that discusses financial aid principles.

Kennelly said a jury could find there was an agreement among the institutions and that it harmed competition, pointing to evidence that the group’s approach aimed to “avoid bidding wars” between schools.

The court also said the students had adequately defined the contours of a nationwide market for elite, private universities, and that their claims were not brought too late.

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

For plaintiffs: Edward Normand of Freedman Normand Friedland; Robert Gilbert of Gilbert Litigators & Counselors; and Eric Cramer of Berger Montague

For Cornell: Norman Armstrong, Emily Chen and Daniel Laytin of Kirkland & Ellis

For Georgetown: Britt Miller and Daniel Fenske of Mayer Brown

For Penn: Seth Waxman, David Gringer and Alan Schoenfeld of WilmerHale

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