In addition to severe reputational damage, Pennsylvania State University faces the prospect of huge financial exposure from lawsuits by sexual-abuse victims who can credibly charge the university had ample warning that its former assistant football coach preyed on children but did little or nothing to stop it, say trial lawyers who have been following the case.
Particularly troubling for the university, at least from a legal liability standpoint, is that the broad parameters of a civil case already are being vividly laid out by state Attorney General Linda Kelly.
She has charged athletic director Tim Curley and Gary Schultz, university vice president for finance and business, with failure to report the abuses and lying to a grand jury.
They were charged in connection with the attorney general's investigation of longtime assistant football coach Jerry Sandusky, who was arraigned on 40 counts related to sexual abuse that occurred over 15 years.
The grand jury presentment recounts in considerable detail what authorities say were multiple reports of sexual misconduct or, at the very least, questionable behavior provided to Curley and Schultz. And on at least one occasion, alarming information was made known to legendary football coach Joe Paterno and university president Graham Spanier.
Yet, Kelly charged, the university failed to take steps to stop Sandusky.
"I think they are liable. They may not be liable if this activity occurred outside the confines of the university premises, but from what I understand, he [Sandusky] was given wide access to a lot of facilities," said Sol Weiss, a partner in the prominent Center City plaintiffs firm Anapol Schwartz.
"It is a big exposure," Weiss said.
Weiss, whose firm has filed a class action on behalf of youths illegally sentenced in the Luzerne County judicial scandal, likened Penn State's legal liability to that of the Roman Catholic Church, which has been slammed with huge verdicts and criminal prosecutions for failing to root out sexual abuse by priests.
Matt Casey, name partner of the Center City plaintiffs firm of Ross Feller Casey L.L.P., said the university's primary exposure lies in the fact that it appears to have received multiple reports over the years that Sandusky had sexual contact with young boys. Sandusky, who retired in 1999 but held emeritus status, had wide access to university athletic facilities and other areas of the campus.
Casey says the legal issues are relatively simple. The university had known that a dangerous condition existed on its premises but did not take steps to correct it.
"My goodness, they had notice of particularly dangerous conduct as it relates to defenseless 10-year-old children and not only do they not take steps to remedy the condition but they provided him with the means to perpetrate these acts," Casey said.
Casey won an $85 million jury verdict in 2008 for a former University of Pennsylvania medical student who plunged through an open manhole cover on his way to classes, shattering his spine.
Casey says Penn State's financial exposure in the sex-abuse case could be in the tens of millions of dollars.
The grand jury report said Sandusky had initiated sexual contact with young boys he met through a charitable foundation for disadvantaged children he had established, called Second Mile. The sexual activity occurred in university facilities as well as at his home in State College and on trips to football games.
Much of the presentment focuses on a March 1, 2002, incident in which a graduate assistant observed Sandusky engaging in anal sex with a boy in the showers at the Lasch football building on the campus in State College.
The graduate assistant reported the incident to Paterno, who, according to the presentment, told Curley of the abuse by Sandusky in the locker-room shower.
The graduate assistant, according to the presentment, told the same story to both Curley and Schultz. Yet Curley and Schultz later told investigators that it did not seem serious enough to report to police, according to the presentment. Quite apart from the criminal proceedings, plaintiff's lawyers say, the university will have a hard time explaining that in the setting of a civil lawsuit.
Jeff Anderson, a high-profile plaintiffs lawyer based in Minnesota who is representing clients in several lawsuits against the Archdiocese of Philadelphia, says the Penn State scandal bears striking similarities to cases of sexual abuse by priests of young boys that have plagued the church for more than a decade.
"It is sad, just the breadth of misinformation and denial, it is similarly audacious," he said. "The legal exposures is substantial and serious, and they are going to need to be held to a day of reckoning."