NU Online News Service, Nov. 17, 11:50 a.m.EST

Pennsylvania State University—because it is included among aselect group of schools that are neither public nor private—isstill open to civil ligation.

However, that does not mean roadblocks to civil suit don'tremain.

Questions of the university's exposure to civil litigation haverisen from allegations surrounding former Penn State assistantfootball coach Jerry Sandusky, who has been charged with 40 countsof sexual abuse of boys over a 15-year span.

As prosecutors develop a criminal case against Sandusky and twouniversity officials charged with perjury, civil litigationpossibilities are mulled. A civil case would be filed at theconclusion of the criminal case.

Attorneys, in blogs and as sources in news stories, have weighedin. Most agree that the university will face civil lawsuits.

When asked to comment about the scandal and its implications ingeneral, United Educators said via email that it could not provideany commentary because “Penn State is an owner/member of UnitedEducators.”

As a reciprocal insurance company, United Educators refers toits policyholders as owners and members.

Repeated emails and calls to Penn State were not returned.

Also Read: Penn State Sex Abuse Scandal: From the Start, a Risk ManagementNightmare

Penn State is not a member of the Pennsylvania State System ofHigher Education (PASSHE), a group of 14 state-owned schools,according to a spokesman of the public university system.

Membership here may have provided a measure of immunity underthe Sovereign Immunity Act, which as a general rule, says a stateentity is immune from suit.

“Penn State is not a government entity so it looks as thoughthey wouldn't have protection,” said Joseph J. Santarone Jr. of lawfirm Marshall, Dennehey, Warner, Coleman & Goggin ofPhiladelphia.

Santarone, who has been a part of litigation with PASSHEschools, says caps exist to mitigate damages.

Penn State, however, along with the University of Pittsburgh,Temple University and Lincoln University, is what is known as a“state-related” school, says Kenn Marshall, spokesman forPASSHE.

“I'm not sure any other state has this kind of group of schoolsin the middle [of state and private universities],” he says.

This doesn't mean the quartet does not receive state funding.According to reports, the schools received $560 million in statefunds—about $272 million going to Penn State.

The distinction as a non-public institution also allows PennState to avoid adhering to freedom-of-information laws, saysMarshall.

Ben Andreozzi of Andreozzi & Assoc. in Harrisburg, Pa. isreportedly representing one of the alleged victims of Sandusky.

Andreozzi could not immediately be reached for comment but hisfirm's website provides some insight.

The cause of action is based in federal law, not state law, andalthough Penn State may be afforded some immunity it can still besued by sexual-assault victims, the site says.

“The sexual-assault victim typically must establish that thepublic school or university affirmatively created a danger for thevictim,” Andreozzi's website says. “When an official at a publicschool or university knows of a risk of harm to a victim and isdeliberately indifferent to that risk, that official may be liablein their official capacity with that school oruniversity.”

Santarone says the school's insurer is likely leafing throughpolicy exclusions, including a sexual misconduct exclusion he saysis included in many policies. Suits filed on the grounds ofnegligent supervision, for instance, would likely be covered but towhat extent is at question.

“An insurer may be bound to defend, but that doesn't necessarilymean it has to indemnify,” Santarone says.

A Penn State spokesman tells The Patriot-News the university's insurance will pay for thedefense of Tim Curley, athletic director, and Gary Schultz, vicepresident for finance and business. Both are charged with perjury.The school says Curley has taken an administrative leave andSchultz will retire.

Moody's Investor Services is also interested in learning moreabout Penn State's exposure to civil litigation, placing theuniversity's “Aa1” bond rating on review to assess reputational andfinancial risks from the scandal, including “possible emergingrisks emanating from potential lawsuits/settlements, weaker studentdemand, declines in philanthropic support, changes in staterelationship and significant management or governance changes.”