What Penn State’s Leaders Can Learn From the BP Oil Spill

The law, lawyers, and the court.
July 9 2012 4:12 PM

Penn State’s Disaster Cleanup

What the university can learn from the BP oil spill.

(Continued from Page 1)

The next step is to design some clear criteria for proving eligibility for compensation. This won’t be easy. Obviously, Sandusky didn’t commit his vile acts in public. Any compensation program based on exposure to a tortious act is bound to turn up a number of “false positives”—people who will say they were injured but weren’t. The 9/11 Victim Compensation Fund, for example, uncovered 35 cases of fraud, but since most of the original fund’s compensation went to the families of those killed, lying was easily detected (no death certificate). There’s no such obvious expedient toward the truth here; young men can simply lie about having been abused.

But people also get away with lying in the judicial system. The key is to put objective requirements for eligibility into place. For those who haven’t testified in the criminal case, we might start with simply requiring the claimant to show that Sandusky had spent time alone with the claimant. Other safeguards may be appropriate. And perhaps the concern with fraud is overstated in this case—there’s obviously an intense personal disincentive to cast oneself as the victim of abuse, notwithstanding the possibility of a payday.

Then we’re left with what we might call the $64,000 question: How much should people be compensated for their harm? One of the hallmarks of compensation funds is the flattening out of damage awards—sometimes into a one-size-fits-all model, and other times into a chart for payments based on a small number of variables, with claimants paid according to where they fall on that chart.

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In this case, compensation might start with actual out-of-pocket expenses (counseling costs, hospitalization, lost wages if proved) and then continue by paying each claimant an amount for emotional distress based on the period of time during which the abuse took place. I know this sounds creepy, but there are only two other alternatives. The first is to mete out ad hoc awards that depend on how sympathetic and credible a particular victim happens to be; in other words, to rely to an extent on the tort model. The second is to give everyone the same amount for emotional distress, which is a more defensible option. But whatever the compensation, it should be generous. I’m sure Penn State will remember that the default is tort liability, with the substantial possibility of nasty punitive damages awarded against the university if a cover-up can be established.

The two other benefits of this kind of claim resolutions system are related: It can design very flexible remedies, like providing counseling and occupational support, and it can remain open and available to victims for a long period of time. The fund that’s created to compensate should be endowed with enough money to keep it running for years, maybe even more than a decade, probably outlasting the original special master.

The final piece of this complex puzzle involves the question of opt-outs. Often, as with the 9/11 fund, victims reached a point of irrevocable decision: By choosing to go through the administrative process, the claimant waived the right to sue in court. Forcing that decision made sense there, because the fund amounted to government largesse (in part because it had nothing to do with the government’s liability). It’s not a good idea to force that choice here. Let the claimant go through the process, and, if he is not satisfied with the result, he can try the tort system. Most won’t.

An artist recently rubbed Jerry Sandusky’s image out of a mural in downtown State College, replacing the creep with Dora McQuaid, a Penn State alumna who is a poet and an advocate against sexual violence.  But the school has a lot more cleaning up to do. If Penn State handles this right, they could still do a lot of good.

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