Sylvia Nasar is suing Columbia

by on March 20, 2013 at 7:57 am in Current Affairs, Law | Permalink

A tenured professor at Columbia’s Graduate School of Journalism and co-director of that school’s business program filed a lawsuit on Tuesday accusing the university of misdirecting $4.5 million in funds over the last decade.

The professor, Sylvia Nasar, who is the John S. and James L. Knight professor of business journalism at Columbia and the author of the book “A Beautiful Mind,” which inspired the movie of the same name, charges in the suit that the university mishandled funds from a $1.5 million endowment provided by the Knight Foundation to improve the school’s teaching of business journalism.

The full story is here, but here is a bit more:

Terms of the agreement called for Columbia to pay the professorship’s salary on its own, and use foundation funds for additional salary and benefits, like research…

In 2000, the university hired Ms. Nasar…According to the lawsuit she was given a base salary, which the university paid for out of Knight Foundation funds, and was asked to pay most of her additional expenses out of her own pocket.

Ms. Nasar said in the suit that over time she spent $174,000 of her own money for research and other expenses. She is asking for punitive damages.

Ms. Nasar said in an interview that in September 2010 she had received an e-mail from the university listing more than $70,000 in what she described as “phantom I.T. charges” — expenses attributed to her that she says she never incurred.

Bill March 20, 2013 at 8:13 am

Good for her.

I’m surprised that she didn’t notice the “Administrative” and “Bureacratic Overhead” charges as well that were taken out of the grant to support the multiple level of Deans, Department , Associate Deans, and other Pooh-Bahs drinking at the trough.

Brian Donohue March 20, 2013 at 8:29 am

Can’t wait for this shoe to drop. Damn- everywhere you look, it’s Augean stables. 99 problems, but finding places to save money ain’t one.

dan1111 March 20, 2013 at 10:13 am

Do you have personal knowledge of this situation? Because the article doesn’t really provide any evidence of which side is in the right.

I am perfectly ready to believe that college administrators waste and misappropriate money. But it is equally easy to believe that a disgruntled professor could file an ill-founded lawsuit.

Bill March 20, 2013 at 4:55 pm

dan111, Please ask yourself this question: If you read a newspaper article, and someone says: “Do you have personal knowledge of this situation?”, you would have to think: well, dah, do you expect me, or for that matter yourself, to “have personal knowledge of the situation” if it is a news item.

Do you wonder what the term “news” means? Hint: It doesn’t mean common or personal knowledge.

dan1111 March 21, 2013 at 3:41 am

My point was only that I don’t see justification in the article for immediately believing one side of the story (“Good for her”).

Rahul March 20, 2013 at 8:23 am

Under US law would she have standing to sue? Isn’t the Knight Foundation the injured party here?

BC March 20, 2013 at 8:38 am

From the NYT article:

“The university and the foundation reached an agreement to forgive Columbia the $4.5 million and release it from its obligation to match the grant. In return, the university promised to spend future income generated by the endowment in ways ‘consistent with the purpose of the chair’.”

Maybe, she can get reimbursed for the 174k of her own money that she claims to have spent.

Bill March 20, 2013 at 9:27 am

Rahul,

That is a very good question. I think the reason she framed the lawsuit as a suit for reimbursement of her expenses explains how she got standing. Of course, she is not damaged if the money is mispent, so what she had to claim was that some part of that money should have been given to her.

With standing, she had the right to conduct discovery, although the University could have tried to limit the scope of discovery to just her issue, discovery is often very broad…information sufficient to disclose OR information which could lead to discovery of relevant information.

Willitts March 20, 2013 at 4:26 pm

It depends on whether the judge allows discovery while ruling on dispositive motions. Aside from lack of standing, the university’s fiduciary duty is to the Foundation, not her. The evidence would have to be both relevant and calculated to result in admissible evidence. The university attorney will likely respond with blanket objections and hope to have the case dismissed.

If I were the judge, at first blush, I would only allow the suit to proceed on the administrative expenses.

I think she’s in it for the ink.

Willitts March 20, 2013 at 9:51 pm

Er, the discovery requests would have to be calculated to lead to the production of admissible evidence. Information must be both relevant and material, not voluminous or prejudicial beyond its probative value, not duplicative. The university will likely object to everything and wait the maximum amount of time to respond to a motion to compel. By then, all of the dispositive motions may be decided in its favor. In my meager experience in civil lawsuits, judges rarely allow discovery during interlocutory appeals.

As Bill said, what are her damages? She accepted a salary offer and it is of no consequence to her which pocket the university takes it from. If she claims she deserved SOMETHING in addition to her base salary, how does she prove how much that something is? The inability to calculate damages is ripe for a dispositive motion of failure to state a claim. Something in this sounds similar in that regard to the Samsung and Apple case.

Willitts March 20, 2013 at 4:11 pm

You are asking the right question as usual Rahul.

Even as a lawyer who serves as a trustee and on boards, I would be hesitant to offer a legal opinion without looking at the form and stipulations of the endowment. If she has standing, it would only extend to the funds which pay her salary. She would likely have no standing to sue for how the university spends the operating funds. A trustee can even spend principal in violation of stipulations in order to fulfill the purpose of the endowment.

This endowment appears to be different than most in that it stipulates the professor salary must come from the university by agreement. The university could likely terminate the professor’s employment contract for lack of funds or give her a meager university salary.

Of anyone who might have standing, she probably has the strongest claim. But she received an offer and accepted it. Could a graduate student sue for lack of a research assistantship opportunity? Probably not.

Bill is correct that discovery may be embarrassing, but it likely won’t result in admissible evidence. Standing is only the first hurdle. The second will be stating a claim upon which relief can be granted. I’m confused about all these administrative expenses.

The trustees have substantial discretion to implement the provisions of the endowment. Leland Stanford is probably rolling in his grave about how his money is being spent.

Rahul March 20, 2013 at 5:06 pm

@Willits, @Bill:

Thanks for elaborating the legal principles.

It’s always interesting to hear from you lawyers. Devil’s in the details!

Willitts March 20, 2013 at 10:17 pm

I left law for financial services so that I’d end up in a slightly cooler level of Hell. :)

I practiced criminal law in my legal career, so I’m only tangentially acquainted with civil law. As a board member and trustee, I’ve faced civil actions but like a well behaved client, I didn’t retain myself as counsel. Besides that, we already had outside counsel. The extent of my advice was limited to facts and financial analysis.

I am curious about the outcome. I’m looking forward to the decision.
On an unrelated note, I was intrigued by Decker v. NEDC. The court showed unanimous deference to properly promulgated agency regulations and interpretations. Delightful as ever, Scalia dissented in part to maintain the right to call the question on the reasonableness of agency rules. More satisfying was Chief Justice Roberts lambasting the victors for successful regulatory capture and excoriating the attorney for the EPA for lately notifying them of the regulatory change. This case is one for the Law and Economics and Public Choice textbooks.

Willitts March 21, 2013 at 12:38 am

Actually, subject matter and personal jurisdiction are the first hurdles, but I presume that her lawyer isn’t a complete retard.

Rahul March 21, 2013 at 2:11 am

My gut feeling is that this will never go to trial/. Nasser is popular. Columbia’s dean’s relatively unknown. The amounts aren’t that big for Columbia to settle. They’ll prefer to settle out of court and let this scandal die.

Nasser’s lawyer may not be a retard but it is very likely that the suit filing was only a pressure tactic.

Willitts March 21, 2013 at 12:49 pm

Again I congratulate you on astute observation and reasoning. This may very well be a nuisance suit or a power play. We started talking about the law and now we are discussing tactics and strategy or meta-law.

It might be settled, but there are cases where a settlement only invites additional claims whereas a dismissal ends them in perpetuity. I trust that the Columbia attorneys are smart enough to do an adequate cost benefit analysis. They might not offer settlement until and unless the motion to dismiss is not granted.

Vivian Darkbloom March 20, 2013 at 8:32 am

The story from the NYT is a bit confusing.

Here’s an interesting tidbit:

“In 2000, the university hired Ms. Nasar, who is a former reporter for The New York Times. ”

Per that story, suit was filed Tuesday, March 18. The story about the suit was published March 19. Those reporters at the NYT are really quick on the ball. Or, my cynical but realistic nature leads me to believe that good Professor Nasar knows how to pull her journalistic strings to gain advantage in a private lawsuit.

Also interesting is that she claims the Foundation “misspent funds”. The only misspending specifically identified in that story was that the University paid her base salary from that fund rather than the general University fund! I would think the Foundation might be asking her to refund more than the $2 million in salary that was improperly paid out from the wrong source.

Vivian Darkbloom March 20, 2013 at 8:41 am

On further reflection, I wonder if the ethics of that are taught in journalism school. If considered ethical, I can imagine a very good cross-disciplinary course (collaboration between the Law and Journalism Schools) would be entitled “How to use the Media and Call in Favors from Old Colleagues in Order to Win Lawsuits and Increase Damage Awards” (a lengthy title, but nonetheless apt course description).

mavery March 20, 2013 at 9:29 am

Wait, wait, wait. Wait. Waaaaaaaaaaaaaaaaaait. WEIGHT.

Are you saying that the sources cited by journalists in stories often have agenda and/or ulterior motives? This is just… I don’t even know how to process it.

zbicyclist March 20, 2013 at 9:56 am

Really, would you want somebody as a chaired professor of business journalism who didn’t know how to get this reported in the newspaper?

Vivian Darkbloom March 20, 2013 at 10:14 am

I think you’ve got it backwards. Presumably, the Chair of the Journalism Department is teaching journalists, not those who are trying to influence them. I would think the Chair would be more skilled in teaching the students the means to avoid those overtures rather than how to get journalists to succumb to them. Apparently, the editors at the NYT and the journalist who agreed to do this favor did not attend that lecture. You seem to be saying that an expert in bribery should be teaching others how to do it effectively do it. In this case, one could assign ethical blame on one or the other party—or more appropriately both. I say this does not make either of them look very good.

In response to mavery, the only shock I have is that this sort of thing is normally done a bit more subtly. Perhaps teaching journalists how to restrict further damage to their professional image by learning to exchange favors in a more subtle manner could be an element in my suggested course.

mavery March 20, 2013 at 10:30 am

Just because someone has an agenda doesn’t mean the story isn’t a story and/or wasn’t accurately reported. Sources for stories always have agendas. It’s up to the reporter to sift through that and report accurately. The fact that the connection between the reporter and the source is obvious here doesn’t change that in any way. You seem to be assuming that because the connection is obvious, corruption and/or incompetence on the part of the reporter is more likely.

Vivian Darkbloom March 20, 2013 at 10:52 am

You don’t have to allege that the story was inaccurate for there to be a “problem”. There is the also the issue of what is newsworthy in the first place, and why. Selecting which stories to write about and how prominently to display them is just as important as how they are written. This, also, is the job of a journalist (I presume). Also, if you are at all interested in ethics—legal, journalistic or otherwise—the appearance of a conflict can itself be a problem, not only “actual conflicts”.

mavery March 20, 2013 at 11:56 am

Sure, but rather than levy any of these specific things, you just said it’s unethical because the source used to be affiliated with the organizations publishing the reports. You didn’t assert that the story wasn’t newsworthy or even that it was in any way inaccurate. Your reason for calling out an entire journalism school, a NYT reporter, and the professor seems entirely due to the fact that the professor worked for the paper over a decade ago. Which is fine if your goal was to be snide and don’t like the NYT to begin with. But don’t act like this is some major failure of journalistic ethics on its face.

Popeye March 20, 2013 at 12:59 pm

Is this story newsworthy? I wonder what Tyler Cowen thinks.

Vivian Darkbloom March 20, 2013 at 1:39 pm

Was this story newsworthy?

You really have to wonder whether the national newspaper, the New York Times, would have run that story at all, or given it the prominence it did, had the plaintiff been an economics professor rather than a journalism professor and former NYT reporter to boot. I think reasonable people would have a hard time imagining the former would have made the paper. At most, they would have run a wire blurb rather than put one of their own journalists on the job. But, hey, as I said; I’m cynical.

quigley March 20, 2013 at 1:41 pm

“There is the also the issue of what is newsworthy in the first place, and why.”

This is in response to Darkbloom (neat name btw).
This story is massively UNDER-reported. Please see below. Kudos to Tyler for highlighting it.

Vivian Darkbloom March 20, 2013 at 2:17 pm

Quigley,

I have no doubt that universities often disregard the terms of bequests that are made to them. If the NYT were really concerned about *that* they would have unleashed one of their investigative reporters to examine the abuse generally and not just give publicity to one of their own in a dispute she’s got primarily over her own remuneration. Again, I’m cynical. The facts suggest that Nasser is not trying to root out abuse; she’s trying to get more money for herself.

As for the name, I have my progenitor on the paternal side to thank for it. I’m of course fortunate, but I had nothing to do with that serendipitous stroke of genius.

quigley March 20, 2013 at 2:51 pm

Vivian Darkbloom: As you may guess from my responses, I’m glad to see the issue being aired. Period.
But don’t Nasar’s and I and the granting agency all have the same interest: that the funds are applied to the purpose that the granting agency intended, namely OUR RESEARCH?

“my progenitor on the paternal side to thank for it. I’m of course fortunate” This sounds like a story unto itself.

Popeye March 20, 2013 at 3:20 pm

Syliva Nasar is pretty well-known. The 2001 Academy Award for Best Picture went to a movie based on her book. Columbia University is pretty well-known. Nasar is accusing them of misdirecting millions of dollars. It’s kind of a big deal.

Although yeah, if Nasar was an economics professor the Times would probably be covering this up right now. They probably felt pretty conflicted about the fact that Nasar has a master’s degree in economics and apparently spent a few years doing research with a Nobel laureate. At the end of the day, her affiliation with the journalism school managed to get the story into print.

Although I wonder if the Times has any connections to anyone else at the journalism school. Because, you know, this is also a story about a journalism school getting sued. On the other hand, Nasar worked for the Times 15-20 years ago.

So many “problems”!

quigley March 20, 2013 at 10:42 am

I’m glad someone is complaining about it. If it was federal money that we were talking would criminal charges be possible?

Research moneys being diverted by academic bureaucracy to support the bureaucracy is a BIG, COMMON problem. Think about the obvious, deep conflict of interest between who investigates these claims, and the punitive injury they can inflict on those who complain about the crime.

Rahul March 20, 2013 at 10:48 am

I don’t think it is as big a problem as you describe. Most federal grants come with tons of stipulations and paperwork that make it very difficult to reassign funds.

Also, most professors wouldn’t take a diversion of their grant money silently.

quigley March 20, 2013 at 11:35 am

I expected such dismissiveness.
I have first-hand knowledge of this at multiple Tier I institutions.
The stipulations in my field are purposely vague because, between the time the grant is written, reviewed, funded, and money actually received takes about 18 months. The science moves much faster than that.

Think about who I’d complain to and what limitations there are on that? Think about how grants are actually dispensed and administered?

I hope Nasar uses this to generate LOTS of publicity.

Willitts March 20, 2013 at 10:26 pm

Your personal feelings about how the university should be spending the money and your fallacious comparison to government fraud, waste and abuse were properly dismissed.

She likely does not have standing. You certainly have none.

Leading cheers for a sports team with your home town name on it is infinitely more rational than having an emotional stake in a case where you have no personal interest, no facts, and no knowledge of the law. My interest is purely academic, and I’m always entertained by novel pleadings. I’m not entertained by armchair avengers.

quigley March 20, 2013 at 10:32 pm

I’m happy to be enlightened but not to be derided. Enlighten me.
When a foundation or a govt agency allocates dollars for specific projects and the institution uses those dollars for other purposes, is that not wrong?

Willitts March 20, 2013 at 10:44 pm

Since we are all taxpayers, we all have an interest in preventing government abuse. We have an interest in justice in cases like Bernie Madoff where he broke criminal laws. This is a civil case, and there have not been any claims of violations of law, only a possible breach of fiduciary responsibility. And this professor is owed no duty of care. It is the Foundation, if anyone, which can claim damages.

While I sincerely respect your interest in generally supporting what is right, you are a mere spectator who doesn’t possess enough information to discern what “right” is. You’ve had some bad experiences, and I will give you the benefit of the doubt on circumstances I know nothing about. In general, you may be right. but law isn’t about sweeping generalities, its about specific facts. finding for the plaintiff does not vindicate the wrongs in your experience. Law is also not always (or even usually) about justice. Aside from unjust laws, the game is rigged for favorites. I sense that part of your antipathy is rooted in a sense that you know better than others how to spend their money. The Foundation entrusted Columbia with the money, not you. I suggest you contact the Foundation and offer tour services.

Willitts March 20, 2013 at 10:33 pm

Oh, and in the interest of full disclosure, I’m a Columbia Law alum. But I lost my unquestioning allegiance to them when I lost my t-shirt. I’m pretty sure my wife used it to clean up baby poop.

quigley March 20, 2013 at 11:15 pm

I agree with much of your statements above and appreciate the tone a lot more. I agree that I don’t know the facts of the case and don’t really care actually. In fact, I’m mostly glad that this issue is getting publicity. My concern is that universities skim more than their F&A rate from foundation and more importantly, federal grants. Do you know this happens? I’ve been a faculty member at two of Columbia’s “peer institutions,” and it’s happened at both places and not just to me.

You’re also right that I’m a scientist and not trained in the law, so what the institutions are doing may be legal but not right. It’s not right because, as I understand it budgets are supposed to be part of the research grant and significant deviation from them is to be reported and approved. This reporting doesn’t happened.

“I sense that part of your antipathy is rooted in a sense that you know better than others how to spend their money.”
This is wrong. My opinion is based in the following. There are rules to be followed, especially with federal grants, and they aren’t being followed. With federal moneys at least two Tier I institutions have received fines been subject to federal oversight and that doesn’t even touch what I’m talking about. I was at Yale when this occurred.

http://news.yale.edu/2008/12/23/yale-and-federal-government-reach-settlement-agreement-research-grant-accounting

I appreciate your knowledge and avoidance of assumptions.

Willitts March 21, 2013 at 12:13 am

For what it’s worth, I agree with you that universities are bloated blobs of worthless administrative fat, pus-oozing sores of pretentious faculty who love nothing more than the sound of their own voices, and whining overgrown infant students who think they are entitled to rule the world because they took classes in humanities, fine arts, drama, English, and ethnic studies.

So there is my true emotional reaction to your thesis that universities are wretched hives of scum and villainy.

I can’t get snarky with my wife because she’ll cut me off, so instead I get snarky with you. :)

It pays to develop a tough hide on the internet. Aside from trolls, the lot of us come here to verbally abuse one another and work on our careers moonlighting as stand-up comedians.

I think I launched enfilade fire into Rahul more than a few times until I learned he was a pleasant fellow who didn’t take snark personally. Now I find myself defending him more than harassing him.

skh.pcola March 21, 2013 at 10:03 am

The fact that there’s such thing as a “professor of business journalism” says more than anything else. The self-perpetuating circlejerk amongst the faux-intellectual elites goes on…and on.

David March 21, 2013 at 2:24 pm

I think people are missing context. Nicholas Lehmann, dean of the Journalism School, just stepped down. The lawsuit was filed right after his replacement, Steve Coll, was announced. Does anyone here really believe, especially after the KPMG audit, that Lehmann wasn’t forced out?

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