Learn more about Peltz-Steele v. UMass Faculty Federation at Court Listener (complaint) and the Liberty Justice Center. The case is now on appeal in the First Circuit as no. 22-1466 (PACER paywall). Please direct media inquiries to Kristen Williamson.

Sunday, September 27, 2020

UMass Dartmouth settles Title IX suit to tune of $70k; tax liability momentarily muddles settlement

In a case that wrapped up in July, UMass Dartmouth (my employer) settled a pro se lawsuit by a former male student who challenged disciplinary action as improperly gender-motivated under Title IX.  UMass Dartmouth agreed to pay the plaintiff $70,000, but the settlement record was muddled by plaintiff's concern over tax liability.

This case intersects with academic freedom and the First Amendment.  Notwithstanding partisan politics, Department of Education Title IX regulations revised in May were meant to rein in universities running roughshod over the civil rights of accused persons, even if with the laudable purpose of protecting the civil rights of complainants.  The issue was brought to the fore recently with the suspension of a Yale law professor (disclosure: a well liked professor of mine in law school, when he was a visitor at Duke) amid a Title IX investigation.  Skeptical observers have wondered whether the professor's long-held position championing respondent rights under Title IX is an irony or impetus in the case.  We'll likely hear more about Title IX due process, or the lack thereof, in connection with the nomination of Judge Amy Coney Barrett to the U.S. Supreme Court.

Marine science school at UMass Dartmouth
(Ogandzyuk CC BY-SA 4.0)
I have potential conflicts going both ways in the UMass case.  I believe that the university's Title IX office has seriously abused the rights of accused persons on our campus (me included; I was cleared); the superseded regulations are to blame in part.  At the same time, at least one administrator named in this matter is someone with whom I have worked productively before, and I think well of her based on that unrelated experience.

So I'm going to step aside and let Connecticut law firm Pullman & Comley, via JD Supra, offer facts and commentary on this case.  I've reduced to initials the names of the plaintiff and one administrator here, as not to exacerbate any adverse reputational impact on either of them.  Appropriately in my opinion, the plaintiff lost a bid in trial court to proceed pseudonymously.  These names, and more names and details, including other implicated administrators at UMass Dartmouth, are readily available to the interested reader through links, court records, and news coverage.

One would be hard-pressed to find more egregious allegations than those in [JH]. The plaintiff, [JH], is a disabled veteran who enrolled at the University to pursue a doctorate in Oceanography. [JH] had a prior criminal conviction, which he disclosed, but he was assured that it would be kept confidential. [JH] maintained a 4.0 GPA during his first year of graduate studies and was recruited by Duke University’s Marine Lab for a summer internship. In May 2016, however, near the end of [JH's] first year, Assistant Vice Chancellor [CC] summoned him to a meeting, accused him of “‘fraudulently disclosing his [criminal] history in his application’” and claimed “that several individuals ‘had recently filed formal complaints regarding [his] misconduct, which created a hostile learning environment.’”

[CC] allegedly declined to provide specifics of these complaints other than that they had been received as early as December 2015—which, if true, would suggest a certain lack of investigatory alacrity on the University’s part—but told [JH] that if he withdrew from the school, he would not be subjected to a Title IX investigation and his criminal history would be kept confidential. [JH] declined to withdraw and, in what would prove a pivotal, albeit alleged, statement, [CC] “threated [sic] to ‘get his kind.’” He was immediately suspended, and [CC] subsequently ordered the Dean of [JH's] degree program “‘to hold an unprecedented all hands meeting with compulsory attendance” [end-quote, sic] regarding [JH]. Within a week, every faculty and staff member and student in his program was aware of his criminal record and the pending Title IX investigation. Furthermore, during the course of that inquiry, the University’s Title IX office allegedly approached two female students and asked them to file complaints against [JH], both of whom declined.

On August 30, 2016, the University informed [JH] that it could not substantiate any violations of either school policies or Title IX. Nonetheless, it issued him a written sanction, limited his interactions with other students, confined him to “a remote, supervised workspace,” removed his faculty thesis advisor, and changed his matriculation status to a non-thesis degree candidate, an outcome that would seem analogous to a criminal defendant being found not guilty but still being sentenced.

As Pullman & Comley further observed, courts "routinely dismiss[] claims that the challenged discipline was driven by the student’s gender in violation of Title IX," so the court's refusal to do so in fall 2019 was remarkable.  JH's case appeared bound for trial, but the parties exchanged emails in settlement negotiation in the winter and spring.

That's where the case took an odd turn, worth note for the litigation student.  In an email exchange on February 3 and 4, 2020, the university accepted the plaintiff's offer to settle for $70,000.  Apparently, the plaintiff learned subsequently that the settlement sum would be taxable.  On March 4, 2020, he emailed university counsel to counteroffer a higher sum, $100,000, to help cover his tax liability, which he calculated at $33,250.

The university declined and moved the court to enforce the $70,000 agreement.  Finding no fraud, duress, or mistake, the court refused to cut the plaintiff a break for being pro se (docket no. 92, electronic order; I suspect the fellow might be or have been a lawyer, but can't confirm that).  The court entered judgment accordingly, but the final settlement agreement, exhibit 1 to the judgment, was not entered into the case file.

Even had JH been represented, I have heard many a story of clients not advised of the tax consequences of settlement.  I emphasize the point, and what should be the lawyer's obligation, every year to my 1L students in Torts.  There's no tax break, moreover, for attorneys' fees.  A plaintiff who has to pay a hefty contingency fee, and then costs, and then taxes, can end up winning a lawsuit and owing money.  Further complicating matters, the taxability of lawsuit winnings is not always clear and might require a tax lawyer to sort out.  Ain't America great?

Anyway, the settlement in JH v. UMass Dartmouth does not look good for the university, especially in a time when faculty and staff are being burdened with pay cuts to keep the university solvent.

The case is [JH] v. University of Massachusetts Dartmouth, No. 1:19-cv-10705 (D. Mass. July 23, 2020), Judge Richard G. Stearns presiding.

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