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When a tragedy like the shootings at Virginia Tech happens, families of students killed or injured look for someone to blame. After all, students are supposed to be safe at school. So when unexpected misfortunes happen, schools are sued for a whole host of reasons, from the most serious, such as suicides, to the more frivolous, such as a failure to earn a master's degree.

But in most cases, state colleges and universities are protected by a doctrine known as sovereign immunity, which works together with general liability policies.

General liability covers most any tort issue, or civil case, that might arise, including bodily injury and negligence--the most likely claims families of students killed or injured at Virginia Tech would make should they file lawsuits against the school. However, that doesn't mean the suits will be successful.

For governmental entities--such as cities, counties, and public colleges and universities--sovereign immunity can cover their mistakes, or accidents, as long as they didn't do them on purpose.

It doesn't work the same way for private schools, which are not covered by sovereign immunity because they're not governmental entities. Besides, private schools may opt not to purchase insurance because they can self-insure due to their huge endowments. Harvard University is an example. Still, schools should have excess layer coverage to protect the endowment, points out Mike Foley, vice president and higher education practice leader in Lexington Insurance Co.'s office in Boston.

But for public schools, sovereign immunity practices are governed by state statutes. As Ann Franke, attorney and president of Wise Results, a higher education risk consulting firm in Washington, D.C., points out, "The law is evolving so (schools) may have legal responsibilities for injuries to students that occur on campus or off." It just depends upon which direction the law moves.

"There's a delicate balance, and every year a certain number of cases are tweaked around the edges," says David Anthony, attorney at the Richmond, Va., office of Kaufman & Canoles, and an expert on sovereign immunity.

That could mean that a successful claim from five years ago might not pass the immunity muster today, depending upon how the suit is characterized and how the court interprets the law. Like any law, it has to be tested in the courts, says Joe Perry, vice president for Aon Risk Services in Southfield, Mich.

"Sometimes the government makes mistakes, but the courts won't hold them liable unless the mistakes were intentionally negligent," says Anthony. For example, Virginia Tech could have been faulted for not locking down the campus after the first two students were shot, but there was no intentional negligence because the police were chasing another student they thought had committed the crime. If they had known who the real perpetrator was and chose to do nothing, that would have been a different story entirely.

STATE TORT CLAIMS ACTS DEFINE IMMUNITY

Negligence claims, the most common, are typically addressed by a state's tort claims act. Most states have them. They limit claims or set guidelines on the types of claims and how they can be paid. For example, the Virginia Tort Claims Act requires the plaintiff file its suit within a year of the incident so the locality will have time to investigate the charge.

"(Tort claims acts) vary from state to state, but Virginia is one of the more conservative ones," he says. "They get extremely philosophical and cut the government some slack, but most (states) don't view government that way."

Any other state's tort claims act might approach the issue differently. Sovereign immunity was structured to prevent a plaintiff from attempting to empty a governmental entity's coffers through a gigantic lawsuit, or through filing for costly punitive damages. In general, states don't allow themselves to be held liable for punitive, exemplary, or "pain and suffering" damages. Remember, you can't fight--sue--city hall. That's one of the reasons why most states' statutes have caps, meaning no one can file a claim that goes beyond the cap. In Virginia, the cap is $100,000, but Michigan, for example, has no cap.

Also, most states have exceptions to the immunity, and there are liabilities that aren't covered, such as the operation of cars. As with general liability policies, colleges and universities are expected to carry their own, separate auto coverage, so immunity doesn't apply to those exceptions. Also, any operation that is conducted to raise money, such as a golf course, is known as a "proprietary function" and usually can't claim immunity. (This rule has exceptions too. In one case, a college didn't build its golf course to make money, so its immunity held when a suit was filed after a course accident.)

It's also standard operating procedure for schools to have general liability coverage to protect them from any claims that go beyond the immunity caps, but some schools choose to go without.

"Some self-insure up to the immunity cap," says Lexington's Foley. "Most take some kind of retention, and for limits above, (they) self-insure."

So state schools may opt to carry retentions--as much as $250,000. Foley says, "Some schools believe they'll never get hit (with a lawsuit) for above the cap, so why cover it?"

Perry says others choose to insure from dollar one to keep their premium costs down. "With the larger risk, you should take the retention because you can settle the losses and it would be cheaper than dealing with carriers," Perry says. Some schools also purchase excess liability coverage.

Probably the trickiest kind of immunity issue concerns foreign students and foreign travel. There's a double risk for schools that don't purchase enough general liability for their traveling students or faculty. Many foreign countries offer their own general liability coverage, so John Watson, executive director for Arthur J. Gallagher's higher education practice in the Los Angeles office, advises schools to purchase the protection along with their U.S. liability coverage.

Otherwise, should a claim happen, the school's U.S. liability coverage may not apply, and neither will its sovereign immunity because it didn't have the right kind of coverage. A student injured in a foreign country might file a negligence suit against his school back home.

IMMUNITY'S NOT IRONCLAD

But like any legal issue that periodically wends its way through the courts, even sovereign immunity is not ironclad. In fact, it's usually known as limited sovereign immunity because there frequently are ways to get around the protection or poke holes in the law.

"In most states, as a general rule, sovereign immunity is only bulletproof for lawsuits brought in state court in that institution's home state," says Watson. "Otherwise, there's a high probability that a court in another jurisdiction will invalidate or ignore sovereign immunity."

There's a general assumption that a suit filed in federal court would trump a state's sovereign immunity too, but that's not necessarily true. The 11th Amendment to the Constitution "reaffirms that states possess sovereign immunity and are therefore immune from being sued in federal court without their consent," says the Supreme Court explanation in Hans v. Louisiana.

But Franke points out, " 'Immune from being sued' actually means that, if the state is sued, it can argue its immunity and, if successful, get the case thrown out." There are too many other factors to consider as well, such as whether the claim violates constitutional law--for instance, due process, explains Anthony.

"An attorney can attempt to file a suit in a federal court, but that doesn't mean sovereign immunity will hold," says Foley.

Anthony points out that "lawyers can get creative" and look for allegations that can get around federal or state laws. For example, suits might claim the school was grossly negligent, intentionally negligent, committed acts of bad faith, was guilty of a failure to act, didn't exhibit prudent behavior, breached its duty and should have foreseen the incident. Plaintiffs can also file for bodily injury violations.

Depending on the court, any of those allegations can fly in a lawsuit. Plus, attorneys can go with what Foley calls "venue shopping"--filing a suit in a state other than where the crime occurred, which is a common practice to get around sovereign immunity. For example, if a student who goes to school in New York gets hurt in an accident in a university-owned vehicle in Pennsylvania, the family can file its suit in Pennsylvania because the loss occurred out of state. Foley says in that case New York state entities no longer have immunity.

In the Virginia Tech case, some of the students injured or killed may have lived outside of Virginia, so there are assumptions that suits will be filed in their home states to get around Virginia's sovereign immunity. "It will be an interesting one to follow," says Foley. "It was a horrific loss that occurred in a state that had immunity, but it's likely the immunity will be challenged."

As it stands now, there's no indication of any lawsuit filed regarding the Virginia Tech tragedy. It's a safe bet that no one would file suit against Seung Hui Cho's family because it's likely the family has no appreciable assets, unless the suit is a symbolic act that lets a Virginia Tech family have closure to the heinous crime. "I would bet money that somebody sues rather than nobody sues," says Anthony, but not all 32 families who are affected would do so. He speculates the plaintiff would claim the school was grossly negligent and was intentional in its negligence, or it violated constitutional law.

"You have to get creative to get around (sovereign immunity), and most claims get thrown out, so some kind of settlement can be reached," Anthony adds.

For the school, it might be much cheaper to pay a settlement than spend the money to defend itself through its general liability coverage, even if the charges do go up against sovereign immunity. As one expert put it, "Paying a settlement would be as much political as prudent business."

SUSAN GUREVITZ is a Philadelphia-based freelance writer and editor of a higher education newsletter.

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September 1, 2007

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