In a high-profile case now before the U.S. Supreme Court, a federal judge ruled on Wednesday that Harvard University waited too long to ask Zurich Insurance Group to cover up to $15 million of its expenses from defending its race-conscious admissions policies.
Just two days after the nation’s highest court heard a case involving Harvard that could spell the end of race consideration in college admissions, U.S. District Judge Allison Burroughs in Boston ruled in favor of a unit of Zurich Insurance Group Ltd.
The Ivy League school in Cambridge, Massachusetts, represented by Marshall Gilinsky of Anderson Kill, did not respond to a request for comment.
Harvard sought coverage from its primary insurer, an AIG Inc subsidiary, shortly after a lawsuit was filed in 2014 alleging that the university’s adoption of race-conscious admissions policies that aided Black and Hispanic applicants discriminated against Asian Americans.
The lawsuit alleges that Harvard’s actions violated Title VI of the Civil Rights Act of 1964.
Students for Fair Admissions, a group founded by affirmative action opponent Edward Blum, filed the case. It also filed a case against the University of North Carolina, which the Supreme Court heard alongside Harvard’s on Monday.
In a lawsuit filed last year against Zurich, Harvard claimed that the costs of defending the student group’s challenge and a related government investigation had already exceeded the $25 million limit in AIG’s policy, which had a $2.5 million deductible.
Harvard claimed that defense costs in excess of those limits should have been covered by its secondary insurer Zurich, but the insurer refused, claiming that the policy required Harvard to give notice of a claim by Jan. 30, 2016, but the university did not do so until May 23, 2017.
Harvard’s lawyers argued that Zurich “certainly knew” about the high-profile case and that Zurich’s “technical noncompliance” with the notice requirement should not provide a “escape hatch.”
Burroughs, however, stated in a four-page ruling that “Zurich’s lack of prejudice, constructive, or even actual knowledge would not change Harvard’s obligation to provide notice in full compliance with the terms of the Policy.”
According to tax filings, Harvard’s legal expenses dwarf those of Students for Fair Admissions, which has spent less than $8 million pursuing the cases. UNC reported $24.4 million in expenses through mid-July.
Harvard is represented in the race case by Wilmer Cutler Pickering Hale and Dorr lawyers, including Seth Waxman, who argued in favor of it during Monday’s Supreme Court proceedings.