University presents oral arguments in Robertson lawsuit, Nov. 29

Attorneys representing Princeton and four University-designated trustees of the Robertson Foundation on Wednesday concluded two days of hearings by arguing in support of Princeton's motions for partial summary judgment on two spending issues and a motion to strike a demand by members of the Robertson family for a jury trial.

Attorneys for Princeton also asked New Jersey Superior Court Judge Neil H. Shuster to reject a motion by the members of the Robertson family for summary judgment on another set of spending issues related to the Robertson Foundation.

Kenneth Logan of Simpson Thacher, representing the University, began Wednesday's hearings by arguing in support of Princeton's motion asking the court to declare that the Robertson Foundation's certificate of incorporation authorizes the foundation to spend realized capital gains as well as other income, consistent with well-settled law. The foundation was established in 1961 with a gift of $35 million from Marie Robertson to build and maintain a graduate program at the Woodrow Wilson School of Public and International Affairs.

The plaintiffs argued that the foundation's expenditures should be restricted to dividends and interest earned in its investment portfolio. However, Logan said that article 11(c) of the certificate of incorporation clearly authorizes the foundation to spend realized capital gains in addition to dividends and interest, based on a federal regulation at the time of the foundation's incorporation and current law governing nonprofit organizations.

"The issue is ripe for summary judgment," Logan said.

In a second argument, known as the "laches" motion, Princeton asked 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.

While noting that the University has not admitted misspending, Princeton counsel Gregory Reilly of Lowenstein Sandler argued that the plaintiffs' claims related to these expenditures should be dismissed because their "unreasonable" delay has substantially prejudiced the University's ability to litigate the claims, as key witnesses are deceased and key records are no longer available. Granting the motion also would shorten and simplify a trial by eliminating the need to attempt a year-by-year re-examination of spending issues going back as long as 40 years. Reilly noted that prior to the filing of the lawsuit, none of the family-designated foundation trustees had objected to those expenditures, even though plaintiffs William Robertson and Robert Halligan have served on the foundation's board since 1974 and 1982, respectively.

Reilly added that the plaintiffs have "back loaded" their claims, seeking legally unsupportable "present-valued damages" on expenditures that are in some cases four decades old, giving as one example a $600,000 item that had been escalated to a $9 million claim.

Princeton attorneys also asked the court to strike plaintiffs' demand for a jury trial, which was filed by members of the Robertson family long after they initiated the litigation in July 2002. The plaintiffs added the request for a jury trial after amending their complaint to add new claims against the University.

Nicole Bearce Albano of Lowenstein Sandler said the plaintiffs are not entitled to a jury trial when they fundamentally "allege equitable claims" and "seek equitable relief."

Princeton attorneys also opposed a motion by the Robertson family asking the court to rule that the University "overcharged" the Robertson Foundation more than $18 million with regard to five categories of expenses between 1965 and 2003. Maureen Ruane of Lowenstein Sandler denied the allegation and argued that the motion should be denied because the plantiffs' claims fail to take into full account a complex and long-established series of annual charges and credits between the University and the foundation.

The Robertson family, Ruane said, "wants to take particular items out of context and claim, 'Gotcha!'"

In closing remarks, Douglas S. Eakeley of Lowenstein Sandler, the University's lead counsel, noted that "the certificate of incorporation of the Robertson Foundation is unambiguous in expressing the purpose of the foundation" and it is "absolutely unequivocal" in establishing a "fundamental compact" between the University and the donor under which the University designates four of the seven trustees to safeguard its ability to make long-term commitments to the graduate program of the Woodrow Wilson School and preserve academic freedom.

The Robertson family, he said, wants "to dictate to the dean of the Woodrow Wilson School what to teach, whom to hire, what compensation to pay for recruitment and retention," adding that these are terms that then-President Robert F. Goheen never would have agreed to in accepting the gift from Marie Robertson that established the foundation. He pointed out that the Woodrow Wilson School is an "unmitigated success" led by a dynamic dean who is supported by the president who appointed her. (In his closing remarks, plaintiff's lead attorney Ronald Malone attacked both Princeton President Shirley M. Tilghman and Woodrow Wilson School Dean Anne-Marie Slaughter.)
Eakeley asked the court to honor the compact between the University and Charles and Marie Robertson that has existed for more than four decades and noted that federal tax law does not let "donors and their descendants control" a Type 1 supporting organization such as the Robertson Foundation. The Robertson family, Eakeley pointed out, wants to "narrow the definition of purpose" of the foundation so they can claim that assets have been diverted. He noted that the family trustees do not serve the purpose of the foundation when they oppose the motion on article 11(c) of the certificate of incorporation and seek to limit the foundation's expenditures to dividends and interest. 

He said the dean, the Wilson School and the University "have fulfilled the purpose of the foundation," adding that there is no evidence in the record or law that would warrant the court to sever the relationship between the foundation and the University. "If the court decides there's a triable issue, let's try that issue right now ... so that we can get some justice -- and that is what Princeton University seeks." 

A story on the first day of hearings can be found here. More information about the lawsuit can be found at