The Robertson Foundation lawsuit has cost the University and the Robertson family more than $7 million in total, making the case the most expensive in the University's history.
University General Counsel Peter McDonough said in an interview that the University has spent "an excess of $2 million" on the 27-month-old case.
The Robertsons have spent over $5 million, according to a review of the tax forms of the Banbury Fund, the Robertson family's $41 million private foundation that has footed the plaintiff's bill, and interviews with William Robertson '72, the chief plaintiff and president of the Fund.
Since the plaintiffs — Robertson, his sisters Katherine Ernst and Anne Meier and cousin Robert Halligan — sued in July 2002 for control of the Wilson School's $600 million endowment, both sides have devoted an increasing number of hours and lawyers to the case.
"Given the amount at stake, the number of depositions and number of lawyers involved, the costs of the case don't surprise me," said Tom Cunniff '89, an attorney at the local firm Fox Rothschild.
Prior to the suit, McDonough said the most the University spent on a single case was roughly half a million dollars on the 1990 negligence suit of B.J. Miller '93, who nearly electrocuted himself on top of the Dinky after drinking at a fraternity party and several eating clubs.
"The University happily tends to not have big or expensive cases," McDonough said. "We tend to have cases that arise out of occasional injuries because we have a large property and large number of employees."
Miller's case was settled outside of court "to avoid hefty legal fees," McDonough told Princeton Alumni Weekly after the settlement.
But a settlement is far-off in the Robertson suit and its multi-million dollar costs continue to rise.
Each side is blaming the other for the high cost of the case, currently in its fact discovery phase. During this period, the two parties exchange documents and take depositions or testimonies of witnesses.
The University asserts that the family is driving up costs by taking more than 40 depositions. The plaintiffs allege that University counsel is delaying the case by fighting every one of their motions in court.
Nonetheless, both sides will spend for at least four more months until the discovery phase ends and the case goes to trial, tentatively set to occur in February 2006.
"The Robertson case is unique to the University and to most institutions because it's so broad in scope and very quickly gets extraordinarily expensive," McDonough said.
The defendants are the University, President Tilghman and the University trustees who sit on the board of the Robertson Foundation, established in 1961 by Charles '26 and Marie Robertson to support the Wilson School's graduate program.
The Robertsons claim the University has misspent more than $100 million of the family's donation on projects unrelated to the gift's purpose: training students for careers in government service. While the University denies their claims, the family is not backing down in effort or money.
"The lawsuit is like anything else: if you want a real result, you simply want to spend the money," Robertson said.
Last month, New Jersey Superior Court Judge Neil Shuster upheld the Robertson family's right to add charges of fraud and misrepresentation against the University. Shuster's ruling allows the court to grant monetary damages to the Robertson family if they succeed in their attempt to wrest control of the $600 million endowment from the Wilson School.
A review of the number of lawyers and billing rates of the firms involved, tax records of the Robertsons' family fund and interviews with outside lawyers gave a better understanding of the case's expenses.
Teams of lawyers
Four lawyers at two different firms — three at San Francisco's Shartsis, Friese and Ginsburg and one at Princeton's Saul Ewing — represent the Robertsons.
But only one local firm, Lowenstein Sandler, represents the University. Two partners, two senior associates and a number of juniors and paralegals work the case.
Douglas Eakeley, a partner at Lowenstein Sandler and the University's chief counsel, also works with McDonough and two other University lawyers.
"The case currently takes more of my time than any other complex litigation for which I am responsible," said Eakeley, who worked with McDonough earlier in his career.
But Eakeley added that the case accounts for fewer than 50 percent of all his work. "It is by no means all-consuming, but certainly substantial," he said.
Robertson said he talks to his lawyers nearly daily. The lead trial lawyer is Ronald Malone, a partner at Shartsis, Friese and Ginsburg who has litigated over a billion dollars worth of donor intent cases.
"Even though the Robertsons are on the East Coast, they came to me because of my reputation in the charitable trust area," Malone said.
Malone's team works closely with Seth Lapidow, a partner at Saul Ewing, to examine thousands of pages of records, most of which the University has provided.
"The Robertson suit currently takes up more than 50 percent of my time and is one of the most important donor intent cases in the history of philanthropy," Malone said.
"The family is adamant that their parents' intent not be trampled on and are prepared to spend whatever is reasonably necessary to do a first rate job, whether it's two or five or 10 million — doesn't matter," Malone added.
Hours adding up
Both sides said preparing for and taking depositions is the most timeconsuming aspect of almost every civil case.
Forty depositions have already been recorded, 38 by the plaintiffs and two by the University, with about 25 more to go, Lapidow said. The plaintiffs will take 23 of the remaining 25 depositions.
Robertson family lawyers took their first deposition of former University Vice President and Secretary Tom Wright '62 in January 2003 when Wright submitted a statement supporting the University's motion to dismiss the case. The deposition process formally started almost a year later in December.
Lawyers spend considerable time reviewing large volumes of documents, selecting and preparing witnesses for questioning by the other side and the actual taking of depositions.
"Normally depositions last for most of a work day while others take only a few hours and some go on for multiple days," Lapidow said.
For example, the testimony of President Emeritus Robert Goheen '40 was recorded over six days for four hours each day because of Goheen's old age, Lapidow said.
As the hours add up, the costs multiply for the Robertsons and the University.
"Generally speaking, litigation expenses rise in proportion to the complexity of the issues, the size of the stakes involved and the zealousness of the parties," Lapidow explained.
Saul Ewing charges $270 to $505 per hour spent on a case for partners and $150 to $270 for associates, according to a December 2003 survey conducted by the National Law Journal.
Lowenstein Sandler offers similar yet slightly higher billing rates: $285 to $535 per hour for partners and $150 to $325 for associates, the journal reported.
University lawyers, on the other hand, are paid an annual salary and not by the hour like most law offices. The University's Office of the General Counsel maintains a budget for legal fees of outside counsel that is determined in consultation with the treasurer and Priorities Committee.
The Robertson family paid a total of $846,328 in 2002 to Shartsis, Friese & Ginsburg and Pellettieri, Rabstein & Altman, Lapidow's old firm, according to tax records for the Banbury Fund.
In 2003, they spent three times that amount — $2,487,734 — on legal services and $62,674 on public relations. Robertson said in an interview that the family has spent a comparable amount on the case this year.
Shifting the blame
The Robertson family and University lawyers are blaming each other for the lawsuit's high price tag.
"Litigation is generally speaking expensive, but the way the plaintiffs are litigating this case, by taking depositions of over 40 witnesses, is very demanding and expensive," Eakeley said.
"We think this scorched earth approach in the litigation is intended to drive up the costs," he added.
In addition, Eakeley said that the Robertsons are using more personnel than the University.
For the deposition of Stephen Oxman '67 and Peter Wendell '72, University-designated trustees of the Robertson Foundation, the Robertson family had two lawyers present versus the University's one, Eakeley said.
Lapidow countered that the University's opposition to every one of the plaintiffs' motions has caused both sides to spend more.
"The University fighting us every step of the way makes for a very expensive battle," he said.
In June, the University opposed the plaintiffs' request to amend their original complaint, which Eakeley called "an abusive publicity ploy."
Earlier in the case, University lawyers asked the court for increased confidentiality in the case and to delay entering the discovery phase.
Despite the court battle the University has fought, Eakeley said the lawsuit's expenses should go toward furthering education at the University.
"Would you rather spend money on educating students and funding research or spending it on lawyers?" Eakeley asked. "Not even lawyers like spending money on lawyers."
More time, more money
The fact discovery phase of the case will conclude Feb. 28, and Eakeley has said the University will then ask to court to dispose of the case on a summary judgment motion.
If the University's bid is unsuccessful, the two sides will continue to provide documents to the other party and interview expert witnesses until July, when the expert discovery phase of the case ends.
Shuster then will hear arguments about whether the lawsuit should proceed to a trial in February 2006.
"One of the things I've learned in 20 plus years of litigating is that there is a direct relationship between how long a case goes on and its costs," McDonough said. "If the case continues for a lengthy time and even if not much more is done in the case, it is apt to continue to be expensive."
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