On Aug. 7, the University of Chicago agreed to a $13.5 million settlement in an antitrust lawsuit involving prestigious institutions. Allegations include a cartel-like agreement on financial aid principles and sensitive information exchange.
In a landmark legal case that has stretched over 19 months, the University of Chicago (UChicago) has agreed to a $13.5 million settlement with Plaintiffs who have accused 16 elite universities of violating antitrust laws, according to court documents. The lawsuit filed Jan. 9, 2022, targets several prominent institutions including Brown University, Columbia University, Cornell University, Dartmouth College, Duke University, Georgetown University, Johns Hopkins University, Notre Dame, Vanderbilt University, and Yale University.
According to the court documents, the complaint alleges that these institutions conspired to agree on a common formula and principles regarding financial aid and exchanged competitively sensitive information about financial aid principles, formulas, and pricing.
Under the agreement dated August 7, 2023, UChicago has committed to paying $13.5 million in aggregate cash to the Plaintiffs and the proposed Settlement Class. The funds will be distributed according to a proposed Plan of Allocation, minus expenses such as administrative fees, notice costs, and attorneys' fees. None of the funds will revert to UChicago.
The settlement also entails UChicago's cooperation with the Plaintiffs on specific discovery matters until April 2023. This includes document productions, assistance in understanding UChicago's data, details on financial aid practices, and facilitating interviews and authentication of documents or data during discovery.
UChicago, unique among the defendants for its location and size and having withdrawn from the alleged partnership in 2014, was able to present some defense that most of other defendants didn't, as described in the court documents. The settlement is seen as a way to avoid the risks of summary judgment, trial, and potential appeal, while preserving the ability to recover all damages from the remaining defendants.
According to the court documents, the agreement was reached after extensive negotiations, discovery, and collaboration with experts experienced in antitrust litigation. Both sides consider it an excellent result, and the Plaintiffs have concluded that the proposed cash settlement is in the best interest of the Settlement Class, according to court documents.
The suit continues to spotlight the practices of elite educational institutions, with potential far-reaching implications for financial aid and competitive practices within higher education. The litigation against the remaining 16 defendants promises to be closely watched in the coming months
According to Hyde Park Herald, a spokesperson speaking on behave of the University of Chicago said, “The University of Chicago is committed to removing financial barriers for undergraduate students who are admitted to the College and is proud of the extensive financial aid we offer to students. We look forward to putting this matter behind us and continuing to focus our efforts on expanding access to a transformative undergraduate education.”
