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  • The fallout to come from the Larry Nassar scandal will be expansive, from the liability of USA Gymnastics and Michigan State to the future use to non-disclosure agreements.
By Michael McCann
January 19, 2018

The fallout of the USA Gymnastics scandal involving serial child molester Larry Nassar, who served as national medical coordinator for USA Gymnastics from 1996 to 2004 and a professor at Michigan State University from 1997 to 2016, will extend far. This article outlines four ways the fallout could impact sports and the law.

1. Nassar will be going to prison for a long, long time

Nassar, 54, will almost certainly spend the rest of his life in prison. He has already received a 60-year prison sentence for child pornography charges and he will soon face sentencing in two Michigan counties for seven felony counts of criminal sexual conduct and three counts of criminal sexual conduct. All told, he could end up with prison sentences totaling 150 years to 200 years—and it’s possible he could be prosecuted for still other sexual crimes, including in Texas. Of course, for the more than 150 women who accuse Nassar of sexual assault under the perverted guise of “medical treatment”, no amount of prison time can account for the harm he caused.

Nassar has also faced several lawsuits. Currently, he is a co-defendant in a federal lawsuit brought by former gymnast Rachael Denhollander and other women. Denhollander, who in 2016 became the first woman to publicly accuse Nassar of sexual molestation, was 15 years old when Nassar assaulted her. During Denhollander’s appointments at Nassar’s Michigan State office back in 2000, Nassar digitally penetrated her vagina and anus while assuring her it was simply part of a medical treatment. The account provided by Denhollander is tragically similar to those expressed by a number of women who have testified this week in the courtroom of Michigan Circuit Court Judge Rosemarie Aquilina. Judge Aquilina is hearing victim impact statements as part of Nassar’s pre-sentencing hearing. The women have all described various forms of sexual assault at the hands of a doctor whose position of trust and authority enabled him to masquerade grotesque crimes.

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While Nassar faces potential civil liability in Denhollander’s lawsuit, his co-defendants, which include USA Gymnastics and Michigan State, are far more likely to pay the plaintiffs as part of any damages award or a settlement. Nassar’s ability to pay a substantial amount of money is uncertain. He has likely incurred substantial legal fees and, obviously, has no earning potential going forward.

2. USA Gymnastics and Michigan State face the prospect of considerable civil liability

Legal responsibility for Nassar’s crimes doesn’t necessarily end with him. USA Gymnastics and Michigan State both employed Nassar for extensive periods of time. They were legally responsible for supervising his work and investigating allegations of misconduct. Both are defendants in federal and state lawsuits brought by Nassar’s victims, and both could ultimately pay many millions of dollars to Nassar’s victims.

As mentioned above, Rachel Denhollander is leading a federal lawsuit against USA Gymnastics, Michigan State, Nassar and several other defendants. The lawsuit was filed in the U.S. District Court for the Western District of Michigan last January. U.S. District Court Judge Gordon Quist is presiding over the case. The lawsuit charges that USA Gymnastics and Michigan State were grossly negligent in connection to Nassar’s crimes. According to the plaintiffs, USA Gymnastics and Michigan State displayed a “willful disregard for necessary precautions to reasonably protect” them.

To illustrate, one unnamed plaintiff says she complained to Michigan State in 2014 that Nassar had “cupped her buttocks, massaged her breast and vaginal area, and became sexually aroused” as a supposed “treatment” for hip pain. The university, the lawsuit alleges, told the plaintiff “she didn’t understand the ‘nuanced difference’ between sexual assault and appropriate medical procedure” and it dismissed her complaint. In Denhollander’s assessment, USA Gymnastics and Michigan State at times unreasonably failed to detect wrongful conduct. At other times the two institutional defendants didn’t care enough about the young women to stop Nassar’s crimes or, worse, helped to cover up those crimes up.

The defendants are seeking to have the lawsuit dismissed. To that end, Michigan State has retained a highly skilled and prominent attorney: former U.S. Attorney Patrick Fitzgerald. Fitzgerald’s name may be familiar to you. Now a partner at the law firm Skadden Arps, Fitzgerald successfully prosecuted former Illinois governors Rod Blagojevich and George Ryan for corruption. He also became a political celebrity in the mid 2000s as chief investigator into the so-called “Valerie Plame affair.” Fitzgerald’s investigation led to the conviction of Scooter Libby, who had served as chief of staff to Vice President Dick Cheney.

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In Michigan State’s motion to dismiss brief, Fitzgerald contends that Michigan State is immune from Denhollander’s claims on the basis of “sovereign immunity.” Under Michigan law, and the laws of the 49 other states, public entities such as state universities can avail themselves of sovereign immunity, a legal principle that dictates that public entities cannot be sued without providing consent. Fitzgerald further asserts that no established exception to Michigan’s sovereign immunity doctrine is applicable to Denhollander’s lawsuit.

Fitzgerald is likewise dismissive of Denhollander’s claims sounding in Title IX, a federal law that mandates reporting of on-campus sexual crimes. Fitzgerald argues that Title IX doesn’t apply since neither Denhollander nor the other women in the lawsuit were Michigan State students at the time of their assaults. Therefore, according to Fitzgerald, they lack standing to sue Michigan State under Title IX.

To rebut Fitzgerald, Denhollander’s attorneys might argue that even though the plaintiffs weren’t Michigan State students, the fact that a Michigan State professor treated the plaintiffs in an official university capacity while on the university campus ought to be a sufficient nexus for them to have gained Title IX protection.

If Denhollander’s lawsuit isn’t dismissed—and the legal standard for lawsuit to be dismissed is high—there is an excellent chance that it leads to a settlement. USA Gymnastics and Michigan State, along with their officials, likely fear the prospect of pretrial discovery into what they knew about Nassar.

Emails, notes and witness statements could all come to public light. Distinguished academic and professional careers could be destroyed. Even more threating, evidence could surface that leads to criminal charges of USA Gymnastics and Michigan State officials. Look at how the investigation into former Penn State football coach Jerry Sandusky led to criminal charges against Penn State president Graham Spanier. While the Sandusky case was different in many ways, the idea that senior university leadership could become embroiled in a criminal investigation is surely concerning to Michigan State’s leadership.

Both USA Gymnastics and Michigan State, along with their respective insurance companies, are also likely capable of paying the kind of large financial settlement that would be required to settle the case out of court.

3. The disturbing yet nuanced topic of non-disclosure agreements is shaped by the Nassar scandal

In a separate lawsuit filed in Los Angeles Superior Court, retired Olympian gold medalist McKayla Maroney alleges that USA Gymnastics and Michigan State were legally responsible for Nassar sexually abusing her. Nassar, as described by Maroney, repeatedly molested her. In one particularly graphic incident, Nassar inserted his hand into her vagina and anus. She was 15 years at the time of this incident and it occurred prior to a competition in Tokyo, Japan.

Maroney’s lawsuit highlights the issue of non-disclosure agreements in the Nassar scandal. Maroney’s attorney, John Manly, argues that his client was “forced” to a sign a non-disparagement clause and confidentiality provision as part of a 2016 settlement between Maroney and USA Gymnastics. Maroney signed the settlement, Manly writes, because she was “in need of funds to pay for psychological treatment for her worsening psychological condition” caused by Nassar’s abuse. The settlement relieved USA Gymnastics of liability related to Maroney in exchange for a seven-figure payment to Maroney ($1.25 million, according to The Wall Street Journal). The settlement also dictated that if Maroney violated the non-disparagement and confidentiality provisions, she would be contractually obligated to pay USA Gymnastics “over $100,000” in damages. Maroney argues that this settlement is invalid under California law since it is designed to “silence” a known victim of a serial sexual molester. USA Gymnastics disagrees. It insists that Gloria Allred, Maroney’s previous attorney, suggested the settlement.

The possibility of Maroney having to pay USA Gymnastics $100,000 attracted headlines during this week’s sentencing hearing for Nassar. Upon learning that Maroney might have to pay six figures to tell the world what happened to her, supermodel Chrissy Teigen tweeted that she would pay the amount. USA Gymnastics then announced it would not seek to enforce the damages clause if Maroney testified. Maroney’s victim impact statement was read in court on Thursday.

Scott Olson/Getty Images

The idea that a non-disclosure agreement (NDA) can silence a victim of sexual assault is obviously troubling. Over the last year it has attracted headlines in different contexts. NDAs, for instance, played a key role in enabling film producer Harvey Weinstein to allegedly sexually assault his female employees for many years. Upon departing their employment at Miramax and The Weinstein Company, some women would be asked to sign NDAs. Others would be asked to sign them as part of settlements against the company and Weinstein. Unless departing or former employees signed the NDAs, they would be denied financial compensation. This dynamic made repeat sexual misconduct much more likely: when each victim is legally barred from publicly sharing what happened, the perpetrator becomes more capable to victimize someone new.

NDAs also were identified as critical in sexual misconduct allegations against Carolina Panthers owner Jerry Richardson. As reported by SI’s Jon Wertheim and Viv Bernstein, four former female employees accused Richardson of varying and in some cases very odd forms of inappropriate physical contact. They had signed NDAs. Richardson has since pledged to sell the team.

Should NDAs covering sexual misconduct—and in some instances sexual assault—be legally enforceable? It depends on which perspective is applied.

A traditional “freedom of contract” perspective would say yes. This perspective would argue that the employee voluntarily signed the NDA, which conferred a benefit to the employee (money). The employee might also not have been interested in bringing a lawsuit. Doing so would lead to public awareness of the allegation and potentially compromise the employee’s privacy. Also, the law generally recognizes the enforceability of NDAs. So long as they are limited to specific topics and are not overly broad, they are usually deemed lawful. There are a bevy of exceptions, to be sure. They include when a subpoena trumps an NDA or when previously confidential information is made public through the media or a whistleblower. But courts have traditionally enforced NDAs so long as they are reasonably defined and bargained-for by the departing employee and the company.

Especially given developments in recent months, others have begun to firmly disagree with this freedom of contract perspective. As noted above, NDAs can facilitate repeat sexual misconduct, which is undoubtedly a terrible public policy. Legislators have noticed. For instance, New York state senators Martin Malavé Dilan and Brad Hoylman have co-sponsored Senate Bill S6382A. If this bill became law, it would nullify NDAs that “have the purpose or effect of concealing details relating to a claim of discrimination . . . harassment or violation of public policy in employment.” Expect to see other states consider such legislation, especially in light of high-profile controversies like the one involving Maroney.

4. Will the NCAA punish Michigan State in light of the Penn State punishment?

Until the Jerry Sandusky scandal, the NCAA had generally steered clear of imposing sanctions on athletic programs for misconduct arguably outside the scope of conventional sports misconduct. The NCAA had previously limited punishments to things like recruiting scandals and gambling controversies. Sandusky was an altogether different creature. He was a true monster—much like Nassar. He raped many young boys. Everyone would agree that Sandusky’s acts were exponentially worse and factually different than any kind of “sports” misconduct that the NCAA had previously disciplined.

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Yet Penn State employed Sandusky. Also, three former Penn State officials, including the school’s president at the time, would later be convicted of charges for failing to report Sandusky’s abuse. Sandusky’s affiliation with Penn State and the university’s failure to stop his crimes led the NCAA to argue in 2012 that it was within the NCAA’s legal authority to punish the school.

The NCAA constitution does offer sweeping language concerning institutional control. For example, Article 2.1 dictates that, “it is the responsibility of each member institution to control its intercollegiate athletics program in compliance with the rules and regulations of the Association. The institution’s president or chancellor is responsible for the administration of all aspects of the athletics program.” Whether the NCAA ought to have applied this language to Penn State is a different question. The NCAA punished Penn State. It imposed five years of probation, a four-year postseason ban, and a $60 million fine among other penalties (many of these penalties would be substantially reduced in subsequent years).

If the NCAA was justified in punishing Penn State, then Michigan State is poised to fall into a similar category. The extent of the university’s awareness of Nassar’s crimes and the school’s lack of corrective action have not yet been fully explained, but that story will come out—especially with ongoing lawsuits and accompanying pretrial discovery, along with a potential investigation by the Office of the Michigan Attorney General. If Michigan State is revealed to be at fault, and if NCAA is consistent, it would be obligated to punish Michigan State under the Sandusky precedent.

Michael McCann is SI’s legal analyst. He is also an attorney and the Associate Dean for Academic Affairs at the University of New Hampshire School of Law, and co-author with Ed O'Bannon of the forthcoming book Court Justice: The Inside Story of My Battle Against the NCAA.

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