TRENTON, Nov. 28 — The latest chapter in the Robertson lawsuit saga unfolded here yesterday as lawyers for the family and Princeton argued motions before Judge Neil Shuster in Mercer Superior Court.
While attorneys raised almost every issue related to the trial, the trial itself may be months, perhaps even years, away. The proceedings made clear, though, that the acrimony that has characterized this lawsuit — the largest in Princeton's history, in terms of the money at stake — has not abated in the four years since it was filed.
"We believe that when all the evidence is in, your honor will find that [the University] is not and has not been a faithful fiduciary, that this relationship is broken and it cannot be fixed, and that the only thing that will fix it is to sever this relationship," Robertson lead trial counsel Ronald Malone told the judge in his closing remarks.
The proceedings consisted entirely of arguments on three of the seven pending motions for "partial summary judgment," or a pretrial ruling on specific issues. Two of the motions are from the plaintiffs and five are from the University. Attorneys took 45-minute-long turns speaking, supplementing their presentations with PowerPoint slides and video clips of depositions taken last year.
The six attorneys representing each side were cordial but emphatic during the proceedings, trading phrases like "dead wrong" and "not a single caselaw cited." Both lead counsels took time to apologize, though: University lead counsel Douglas Eakeley to the Robertson family for his "occasional overly zealous advocacy," Malone to the judge for the "voluminous" case history and briefs.
The motions argued were, for the most part, significant only in a procedural way, but the small courtroom was packed with journalists, members of the Robertson family and a public relations representative from each side — both of whom distributed their side's version of the story thus far.
Princeton has been embroiled in the high-profile dispute over the $650 million Robertson Foundation endowment since 2002, costing each side of the case more than $15 million each, University spokeswoman Cass Cliatt '96 said.
The lawsuit has provoked nationwide interest, raising questions about donor rights and the fiduciary duties of nonprofit organizations.
The family members allege that Princeton has misused the Foundation's funds by ignoring the intent of the late donors Charles '26 and Marie Robertson, which they say was to place Wilson School graduates in federal government jobs, especially those in foreign policy. The University denies any misuse and says it does a fine job of placing graduates in the public sector.
The situation is complicated by Charles Robertson's insistence — according to his heirs — that his money remain separate from the University's general coffers, a stipulation stemming from his suspicion that "commingling" would lead to misappropriation of the funds. Robertson did not simply give his money to the University as a donation, a lawyer for the family emphasized during the arguments. He instead created a separate foundation, albeit one where the majority of trustees were University-appointed.
The Robertsons charge that the University has used their father's funds for some things that are only tangentially related to the Wilson School's mission and not at all related to the donation's goal.
But University Vice President and Secretary Bob Durkee '69 said in an interview that the Foundation's money is kept in separate accounts that are not mixed with general funds.
Frank Cialone, another attorney working for the Robertsons, said whether accounts were separate is "irrelevant" if the accounts are invested identically. "Princeton gets new money all the time — from donations, and so on," he said in an interview. "The foundation doesn't. It makes a bit of a difference."
The plaintiffs are asking the court to remove the University-appointed trustees from the foundation's board and change its bylaws to allow it to award its money anywhere it chooses. They also seek an itemization of all University expenditures of foundation funds, and reimbursement for any "improper" expenditures, which the plaintiffs estimate at $207 million.
"The remedy here is so far disproportionate to anything they have even alleged, let alone what the underlying facts show," Eakeley said.
Malone and his team endeavored to show that the interests of the foundation and Princeton clash — a point not conceded by the University's attorneys — and that University-appointed members of the foundation's board of trustees are loyal to the University before the foundation.
Another question raised was whether the University has any fiduciary duty to the foundation. Fiduciary duty is the highest standard of care imposed by law.
But the issue given the most attention was one rooted in Charles Robertson's alleged desire to keep his money separate from the University's. In 2001, two of the three members of the foundation's investment committee suggested turning the foundation's investment management over to a professional company.
Attorneys for the University argue that the nearly $500 million endowment was becoming unmanageable for a three-person volunteer committee and needed "daily attention." PRINCO, the University's endowment management company, could better manage the funds, Princeton argued at the time. The company was chosen in good faith, University lawyers said, because it was the best choice and that William Robertson '72, Charles' son, never indicated he wanted to pursue alternatives until after threatening to sue.
Robertson's attorneys countered that the decision was forced on the seven-member foundation board by the four University-appointed members and that the University "dictated this outcome," furthering its own interests. The foundation's investment management was delegated to PRINCO in 2004.
Attorneys from both sides return to court today to argue the remaining motions for summary judgment.
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