Major universities claim antitrust immunity in financial aid case

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Students walk on the campus of Yale University in New Haven, Connecticut November 12, 2015. REUTERS/Shannon Stapleton

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  • Several Ivy League schools and others seek dismissal of lawsuit in Chicago court
  • The plaintiffs argue that the collaboration between the defendant schools is not exempt from antitrust liability

(Reuters) – Nearly 20 universities accused of violating antitrust laws over their student aid practices say they are shielded from liability and have asked a federal judge in Chicago to dismiss a lawsuit in court case filed in January.

Universities such as Georgetown University, Brown University, Columbia University, Yale University, Massachusetts Institute of Technology and Vanderbilt University said in a filing April 15 that federal law allows colleges and universities to discuss and develop “common principles of analysis” for financial aid.

the complaint of a putative class of 170,000 financial aid recipients alleged that schools coordinated to limit aid and individuals were overcharged by hundreds of millions of dollars.

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Lawyers for the schools argued that the exemption “ensures that schools engaged in this collaboration do not face the threat and expense of antitrust litigation, which might otherwise deter the conduct that Congress seeks to encourage.” Lawyers for the universities said the lawsuit suffered from “fatal flaws” and asked U.S. District Judge Matthew Kennelly to dismiss it.

Defense attorneys including Britt Miller of Mayer Brown for Georgetown; Karen Lent of Skadden, Arps, Slate, Meagher & Flom for Columbia; and Eric Mahr of Freshfields Bruckhaus Deringer for MIT did not immediately return a message seeking comment.

The plaintiffs are represented by Berger Montague; Roche Freedman; Gilbert litigators and advisers; and FeganScott.

The lawsuit in federal court in Chicago alleged a “price-fixing cartel designed to reduce or eliminate financial aid as a venue for competition.” Many of the defendant schools are members of the “568 Presidents Group,” an affiliation of universities that discusses financial aid principles.

Robert Gilbert of Gilbert Litigators & Counselors of New York told Reuters on Monday that “we have anticipated the arguments of the defendants and are prepared to respond forcefully because the law is in favor of the plaintiffs.”

The plaintiffs argue that universities are not entitled to the shield of federal law, which grants immunity to “needs-blind” schools. These schools review applications for admission regardless of financial aid. The lawsuit alleged that the defendant universities had “considered the financial circumstances of students or their families in deciding whether or not to admit students.”

Lawyers for the universities said the plaintiffs did not make “specific factual allegations” in support of their claims.

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

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