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Government Likely to Retry Overlap in District Court

By Eric Richard
Contributing Editor

Despite heavy pressure from various groups and continuing talks with MIT's counsel, the U.S. Justice Department appears resolved to take the Overlap antitrust case back to the U.S. District Court in Philadelphia, unless the case can be settled out of court.

Bruce Pierson, a trial attorney handling the case for the Justice Department, said, "If the case is not settled, we will have the district court decide ... under the full rule of reason." The full rule of reason standard requires the court to consider the full economic and social implications of the Overlap Group meetings.

However, Justice Department Public Affairs Spokesman Daniel Hamilton simply said that the case was still under review by the department and declined to comment further.

"If it is back in the district court, our position is a new look at Overlap from the ground up that will require new evidence and new thinking about how Overlap needs to be looked at," said Thane D. Scott, attorney for MIT. "We are hopeful that the fresh look will lead to Overlap being upheld."

Scott said that he will stress the benefits of the Overlap Group meetings, in which MIT and 23 other colleges met to discuss financial aid awards to students. In 1991, the Justice Department filed a suit against the Overlap Group claiming that the group colluded, for example, by agreeing on levels of need-based aid.

"I do know that as a result of the government litigation, it has been much, much harder for other schools to sustain need-blind admissions and need-based aid. If the government proceeds, I expect that evidence to be a substantial part of the next round," Scott said.

Pierson said MIT had previously asked U.S. Attorney General Janet Reno to dismiss the case. But approximately two weeks ago, Associate Attorney General Webster Hubble decided that the Justice Department would not drop the case against MIT, and this decision was then communicated in a letter to MIT's counsel, according to Pierson.

Scott declined to comment on the specific letter, but seemed hopeful that an agreement could still be reached. MIT has been continuing to talk to the Justice Department and urging them to "give a fresh look at the Overlap case," Scott said.

Case remanded to district court

In late September, the 3rd U.S. Circuit Court of Appeals in Philadelphia ordered the district court to rehear the Overlap case in a 2-1 ruling, saying that the lower court had only taken a "quick look" at any social and economic arguments presented by MIT. The appeals court said that the district court was obliged to more fully investigate the "procompetitive and noneconomic justifications proffered by MIT."

After this September decision, support for MIT's position across the country was expressed in editorials in New York Times, The Boston Globe, and The Washington Post suggesting that the Justice Department should dismiss the case.

A. Leon Higginbotham Jr., retired chief justice of the 3rd U.S. Circuit Court of Appeals, wrote U.S. Attorney General Reno for a meeting at which he and other supporters of MIT could present their case. According to his office, Higginbotham was able to meet with Reno and present to her a memorandum detailing his position.

"There has been a great deal of support for MIT's position nationwide," Scott said. "Many schools and government officials are very sensitive to the values incorporated in need-blind admissions and need-based aid."

The Justice Department had until Oct. 15 to petition for a rehearing before the full appeals court, but did not. Pierson said that rehearings are "usually not too successful."

Currently, both sides have until Dec. 16 to file appeals to the U.S. Supreme Court, Scott said.

"If neither side appeals by late December, the only course of legal action that is open to the Justice Department is to proceed in the district court," said Scott.