In a court filing submitted by NYU, the university called two former federal judges “so-called experts” after the judges expressed support for the professors who sued the university last year.
During summer 2018, NYU was embroiled in a lengthy legal battle against a number of its employees who sued the university on the grounds that their retirement funds had been mismanaged.
The plaintiffs’ claims of mismanagement were rejected last July by Judge Katherine Forrest, who has close ties to NYU. According to former Federal Judge Timothy K. Lewis, if Forrest had ruled against NYU, the case might have cost the school millions of dollars.
Forrest is an NYU alumna who later worked for the university. She also worked at Cravath, Swaine & Moore — a law firm headed by Evan Chesler, an NYU board member — before becoming a district court judge. After closing the case and leaving the bench, Forrest returned to that same firm last summer.
Although Forrest disclosed her relations to the university before the case, plaintiffs said that Forrest presided over the case while considering a partnership at Chesler’s firm.
Both federal judges were paid by the plaintiffs on an hourly basis for their opinions. Judge F.A. Little, Jr. was paid $500 an hour and Lewis was compensated $1,000 an hour.
In their court filings, the judges claim the receipt of substantial fees had no impact on their opinions.
Lewis outlined in his court filing to SDNY that Judge Forrest should have recused herself before the case was submitted.
“Judge Forrest should have disclosed her professional relationship with Mr. Chesler and recused herself once she began to seriously consider returning to Cravath,” Lewis wrote.
Little alleged in his filing that Forrest and Chesler had a close tie.
“Judge Forrest and Mr. Chesler, Chairman of the firm, had a very close working relationship,” Little wrote. “Judge Forrest described the relationship as ‘a great compliment and very challenging and fulfilling’ and they made her ‘feel like a star.’”
NYU claims that the judges’ statements disregard the entire picture and focus only on a few details, calling their allegations “inadmissible” and “assumptions.”
“If not created from whole cloth, these allegations would be improper factual narrative to be disregarded by the Court,” the university wrote in their court filing.
Little included information in his court filing that Chesler was involved in creating the committee that oversees the retirement plans.
“In 2009, the NYU Executive Committee of the Board, which included Mr. Chesler, created the Retirement Plan Committee as fiduciaries to the Plan’s involved in the case,” Little wrote in his court filing.
This is not the first time 403(b) retirement plans, a commonly used plan among employees, have caused controversy — Schlichter and plaintiffs have sued 12 prestigious universities for mismanagement of these retirement plans.
The preeminent attorney in the Employee Retirement Income Security Act excessive fee litigation, Schlichter is a pioneer when it comes to this kind of litigation. Schlichter created the type of lawsuit NYU is currently involved in and that others have used against universities that mismanaged their retirement plans.
NYU was the first major university to challenge allegations, set a trial date and win their case.
In a statement to WSN, university spokesperson John Beckman called the plaintiffs’ motion for a hearing this Wednesday “baseless.”
“Their submission of well-reimbursed opinions from retired judges, who had not fully reviewed the record of the case, does not change the facts, and they lost their case on the facts,” Beckman wrote.
NYU continued to comment on the judges’ opinions, calling them “pieces of advocacy” and mentioning in their court filing that they may have been unethical.
“Judges Little, Jr. and Judge Lewis may have violated their own ethical duties by not undertaking a thorough and impartial review of the record,” NYU wrote in their court filing.
The hearing will take place before the Southern District of New York this Wednesday.
A version of this article appeared in the Monday, Feb. 10, 2019, print edition. Email Jared Peragila at [email protected]