University to present oral arguments in Robertson lawsuit

Motions for summary judgment scheduled for Nov. 28-29

On Nov. 28-29, attorneys representing Princeton University and four University-designated trustees of the Robertson Foundation will present oral argument before New Jersey Superior Court Judge Neil H. Shuster in support of four motions for partial summary judgment filed by Princeton, as well as a motion to strike plaintiffs' demand for a jury trial. Attorneys for Princeton will also oppose two motions filed by several members of the Robertson family who initiated the litigation in July 2002.

According to Douglas S. Eakeley of Lowenstein Sandler, Princeton's lead counsel, "The Robertson Foundation was formed to support the graduate program of the Woodrow Wilson School of Public and International Affairs. Thanks to that support and the leadership of successive deans and presidents of the school and University, that program is a spectacular success. It is pre-eminent in its field, providing its graduates with a unique preparation for leadership positions in the federal government in particular and the public sector in general, and garnering the recognition and praise of a wide array of current and former government officials. The school is not only healthy, but thriving. So, too, is the financial condition of the foundation: under the stewardship of its investment committee, ably led by University-designated trustee John J.F. Sherrerd, the foundation's assets have grown from $35 million in 1961 to a current market value of $752 million; $200 million of this growth has occurred during the past three years, after the University-designated trustees of the foundation decided to retain the Princeton University Investment Co. (PRINCO) to manage the foundation's assets.

"Through this lawsuit, the Robertson family members are seeking to seize control of the funds that Charles and Marie Robertson chose to donate to Princeton, and to overturn the governance mechanism that Charles and Marie agreed to create that assigns majority control of the board of the foundation to Princeton so that it has the freedom and ability to construct a world-class graduate program," Eakeley noted. "In essence, plaintiffs seek to violate the principle of academic freedom, substituting their judgment for that of the University as to how best to educate its students, recruit and retain faculty, design curriculum, sponsor research and promote an array of other activities -- all of which contribute ultimately to a robust, productive intellectual community."

The motions to be argued were filed with the court earlier this year by both parties. Under New Jersey law, a party is entitled to summary judgment as a matter of law when the pleadings, depositions, answers to interrogatories, admissions and any affidavits establish the absence of any genuine issue of material fact.

The University's motions are as follows:

1. The "sole beneficiary" motion asks the court to declare that Princeton University is and will continue to be the sole beneficiary of the Robertson Foundation, and is and will remain entitled to designate four of the foundation's seven trustees. Such a ruling would be consistent with the foundation's charter, well-established law and the donor's intent. Specifically, the foundation's certificate of incorporation explicitly dedicates the assets and income of the foundation "to and for the use of Princeton University." Despite its name, the Robertson Foundation is not a private foundation, but instead is what the tax code recognizes as a Type 1 "supporting organization" that exists solely to support a particular charitable entity, in this case Princeton University. The law requires that this type of organization must be controlled by the entity it supports, not by the donor. In an application to the Internal Revenue Service in 1970 on behalf of the foundation, Charles Robertson confirmed that the foundation should be classified as a supporting organization because, "since its incorporation, the foundation has been operated exclusively for the benefit of Princeton" and " is controlled by Princeton" and that these arrangements had been "agreed to by the donors." The existence and confirmation of these arrangements were critical to preserve the charitable nature of the Robertson gift and to ensure that decisions about the academic program of the Woodrow Wilson School would remain under the control of the University.

In their complaint filed against Princeton, members of the Robertson family have asked the court to amend the foundation's certificate of incorporation and bylaws to remove the University from any control or involvement with the foundation and to remove the University from its position of being the sole charitable organization that can be supported by the foundation. "The request by the Robertsons' son, William, and the other plaintiffs to remove Princeton from any control or involvement would be a violation of the agreement between the University and the founders of the Robertson Foundation, the structure and provisions of the certificate of incorporation, and the University's reasonable reliance on the continued flow of Robertson Foundation funds to support the Woodrow Wilson School graduate program," Eakeley said.
2. The "PRINCO" motion asks the court to declare that the decision of the foundation's University-designated trustees to retain PRINCO to provide an additional layer of foundation investment management under the supervision of the foundation's investment committee is permitted by the foundation's certificate of incorporation and bylaws and was a valid exercise of their "business judgment." The Robertson Foundation has flourished under PRINCO.

"The retention of PRINCO enabled the foundation to avail itself of a diversity of investment opportunities, level of managerial expertise and quality of service that would not be available from any other manager at a comparable cost," Eakeley said. "Contrary to allegations by the plaintiffs, there is no conflict of interest on the part of the University-designated trustees because their fiduciary duties to both the foundation and the University are aligned, since the sole purpose of the foundation is to support the graduate program of the Woodrow Wilson School within Princeton University."

3. The "11(c)" motion asks the court to declare that the foundation's certificate of incorporation authorizes the foundation to spend realized capital gains as well as other income, consistent with well-settled law.

4. The "laches" motion asks the court to rule that a six-year statute of limitations and/or the analogous equitable doctrine of laches precludes judicial review at trial of five categories of pre-1996 expenditures that were plainly known, or with the exercise of reasonable diligence should have been known, to the plaintiffs and yet went unquestioned by them for decades prior to the filing of this lawsuit. In particular, plaintiffs William Robertson and Robert Halligan have served on the board of the foundation for a combined period of more than 56 years.

5. The "jury demand" motion asks the court to strike now, rather than waiting until the parties are in the midst of trial preparation, an unusual demand (made by plaintiffs long after the filing of their original complaint) to have a jury decide some of the issues in the case while the trial judge would decide other issues.

Meanwhile, one of the Robertson family motions seeks to overturn the governance structure of the foundation (and, by extension, the governance structures of other supporting organizations around the country) and the other deals with several specific historical spending issues related to the foundation.

"Princeton University and its designated representatives look forward to the ultimate resolution of the litigation, so that the University and foundation can focus exclusively on the foundation's true and sole purpose of supporting the Woodrow Wilson School graduate program," Eakeley said. "The University-designated trustees take great pride in the accomplishments of the Robertson Foundation, in the significant improvements that have been made in the foundation's governance procedures in recent years, and in the extraordinary quality of the graduate program of the Woodrow Wilson School. Over the past 45 years, the school has become one of the world's leading centers for teaching and research in public and international affairs, preparing students for governmental and other forms of public service, and both the school and its graduates have had a growing impact on the government, on public policy and on international affairs."

"To cite just three recent examples," Eakeley added, "last spring the school launched a major new program, Scholars in the Nation's Service, to encourage more college juniors and entering graduate students to consider careers in the federal government; this fall the dean of the school, Anne-Marie Slaughter, is chairing an Advisory Committee on Democracy Promotion for Secretary of State Condoleezza Rice; and on Nov. 28, the first day of oral argument in the lawsuit, the school will be hosting a major policy address by U.N. Secretary-General Kofi Annan."

More information about the lawsuit can be found at