Making Charities Accountable

Critics says limits on lawsuits unfairly protect nonprofit groups

John Hardwicke Jr. says he was molested almost daily during his second year at the American Boychoir School, in

Princeton, N.J., in 1970 and 1971.

Donald B. Edwards, president of the prestigious private school, says he has no reason to doubt that at least some sexual abuse occurred.

But whether Mr. Hardwicke can sue the boarding school for the abuse he endured is a question that is now under consideration by the New Jersey Supreme Court. New Jersey is one of only a handful of states that provide total immunity for charities from lawsuits that charge them with negligence, the legal term for the failure to provide adequate care for others.

A handful of other states allow such lawsuits, but place limits on how much money charities have to pay for harm they caused. In Massachusetts, for example, people who can prove they were hurt by a charity can obtain no more than $20,000. Corporations do not get similar protections in the states.

State measures shielding charities from lawsuits were established to ensure that donations went to charitable activities rather than to legal payments, and they were common throughout the United States roughly a century ago. But most states have eliminated or sharply pared such protections since the 1940s, largely due to court rulings that found that the immunity was unfair to people who suffered at the hands of a charitable organization.

New Jersey’s Battle

The immunity statutes are now under assault in some of the states in which they remain, including New Jersey and Massachusetts, where critics are arguing that the laws are archaic and unjust.

While Mr. Hardwicke tests the strength of New Jersey’s Charitable Immunity Act in court — he is attempting to argue that the school’s involvement in the abuse was intentional, rather than an act of negligence — a bill in the state Legislature would exempt sexual abuse from the act’s protections. The bill has passed the Senate, and advocates think they have enough votes in the General Assembly. Albio Sires, a Democrat who is the speaker of the General Assembly, has not yet scheduled it for a vote.

Only one charity — the New Jersey Catholic Conference — has publicly lobbied to preserve the act without changes.

Critics of charitable-immunity laws say that when the vast majority of the very organizations that theoretically benefit from the laws are reluctant to defend them, it is time for such laws to go.

“It is very much in the interest of charities to oppose charitable immunity,” says Harvey P. Dale, director of the National Center on Philanthropy and the Law at New York University. “In the competition for donations, and fees for service, enlightened charities would want to say, ‘We give you as good or better care than in the for-profit world.’ I don’t think they can do that by saying, “By the way, if you get hurt, screw you.’”

Defenders of immunity statutes argue that they are necessary because charities are far more financially vulnerable than for-profit corporations.

Mr. Edwards, who arrived at American Boychoir in 1999 and has not personally been accused of abuse, says that the school has made a good-faith effort to reach a financial settlement with Mr. Hardwicke. Mr. Edwards says that Mr. Hardwicke told the school’s former president that his real goal was to shut the school down. Keith E. Smith, a lawyer for Mr. Hardwicke, says the settlement offer — reportedly $200,000, although Mr. Smith declined to confirm — was inadequate, and that his client has no ambitions of forcing the school to close. “If a plaintiff’s goal is to put a legitimate charity out of business, I think the school’s attorneys really don’t have any choice but to take advantage of what the law says,” says Mr. Edwards.

Legal Challenge

The Hardwicke case centers on whether New Jersey’s immunity law protects charities from any civil lawsuit, or only from lawsuits in which the charity was charged with negligence, rather than with acting intentionally to cause harm. Mr. Hardwicke, who now lives in rural Maryland, says that his abuse at American Boychoir was coordinated by Donald Hanson, who was the choirmaster, but that he was also attacked by at least three other staff members, including the headmaster, Anthony Edward Battaglia, according to court documents.

Mr. Hanson, who is accused of molesting several students during his 12 years at the school, was not immediately fired when the school learned of the abuse of a student in 1981, some 10 years after Mr. Hardwicke left the school. However, Mr. Hanson was required to move off campus and his contact with students was restricted. The school’s board kept Mr. Hanson on for several more months because firing him would have forced the cancellation of a major tour by the choir, and it believed the financial fallout might have forced the school to close, according to court testimony by school officials.

In March 1982, five months after learning about the sexual abuse, the board accepted Mr. Hanson’s resignation for reasons of “personal health.” The board’s chairman, Stephen N. Howard, wrote a letter to parents praising Mr. Hanson, saying: “His story at the Boychoir School is one of total devotion to the boys and dedication to the best interests of the School.”

Mr. Hanson, who has not responded to the lawsuit or spoken to the news media, apparently lives north of Toronto (he’s a native of Canada), but may have left the country. Mr. Battaglia, the former headmaster, who lives in Fort Myers Beach, Fla., has denied molesting any students.

The school’s actions go beyond mere negligence to reckless indifference to the welfare of students, Mr. Smith says. “Charities should not be permitted to put dollars ahead of the children, particularly when we’re talking about the sexual abuse of our children,” he says.

But Jay H. Greenblatt, the school’s lawyer, says the Hardwicke camp is making a seman-tics argument, and that the Charitable Immunity Act was clearly intended to cover cases like this one.

“If there is fault by the school, it’s in negligently hiring, supervising, and maintaining the staff,” Mr. Greenblatt says. “You’re back to negligence again. It’s a matter of how you want to use the words.”

In January 2003, Judge Jack Sabatino of New Jersey Superior Court sided with the school, writing that the immunity law “insulates charitable organizations from liability for any degree of tortious conduct, no matter how flagrant.”

Following that ruling, Mr. Hardwicke persuaded Lawrence Lessig, a former classmate at American Boychoir, to join his legal team. Mr. Lessig, a well-known Stanford University law professor, argued before a three-judge appellate-court panel that granting immunity to American Boychoir in this case would turn New Jersey into “a haven for sex abuse by charitable institutions.”

In February 2004, the appellate court sided 2-1 in favor of Mr. Hardwicke. “A child’s fundamental right to bodily integrity cannot be found secondary to a charity’s well-being,” the court said.

Legislation Pending

The case was heard by the state’s Supreme Court last November, but the court has not yet issued a ruling. Both sides in the Hardwicke case think the court may be waiting to see whether the Legislature makes changes to the Charitable Immunity Act.

The New Jersey bill would void immunity for churches and charities when negligent hiring or management allowed pedophiles to sexually abuse children.

“These laws were intended to protect institutions from frivolous lawsuits, but certainly not from cases of gross negligence,” says Mark Crawford, who says he was sexually abused by a Catholic clergy member as a boy in New Jersey, is lobbying for the change in the immunity law.

William F. Bolan Jr., executive director of the New Jersey Catholic Conference, which opposes the bill, notes that under current legislation, people who say they were abused can still sue the individual perpetrators. He believes it is unfair to saddle charities and churches with liability for sexual abuse.

“The fault that gives rise to the sexual abuse is not discernable to the employer, since there is no psychological test that would uncover an individual with a proclivity to child sexual abuse,” he says.

Mr. Bolan says he has urged other charities in New Jersey to join him in opposing the legislation, but their executives either “don’t want to stick their heads about the foxhole, or they say, ‘It’s your problem.’”

Such a stance is shortsighted, he believes, because any number of organizations could face the kinds of lawsuits over sexual abuse that now confront the Catholic Church in parishes throughout the country. “Every day that I open a newspaper, I see stories about sexual abuse by someone — cops, teachers, Scout leaders,” Mr. Bolan says.

Mr. Sires, the New Jersey speaker of the Assembly, has waited nearly a year to schedule the immunity legislation for a vote. Joe Donnelly, a spokesman for Mr. Sires, says the bill “is still very much alive” but that some lawmakers want to add a provision that would, after a certain date, prevent people from coming forward with new abuse charges when the abuse occurred decades earlier.

“Everyone is in agreement that all victims that we currently are aware of will be able to have their day in court,” Mr. Donnelly says.

Massachusetts Cases

In Massachusetts, the charitable-immunity law dates to 1876, and was modified by the legislature in 1971 to permit damage awards against charities of no more than $20,000. Bills that would raise the ceiling have failed in recent years, though many legal observers in the state believe the cap is far too low.

“It should be re-examined,” says Marc G. Perlin, associate dean of Suffolk University Law School, in Boston. “There’s no reason that a charitable organization or any other organization should not be liable for its negligence.”

Trial lawyers in Massachusetts have tried to find ways around the cap. Lawyers for the family of Howard Reid, who died in January 2004 after obesity surgery at Boston’s Beth Israel Deaconess Medical Center, are trying to circumvent the cap by arguing that the hospital falsely advertised on the radio and in newspapers that the procedure was safe and effective.

Mr. Reid’s heart stopped beating following a gastric-banding operation, his family says in a lawsuit in which it is asking the hospital to pay $8.5-million in damages. The state’s consumer-protection statute allows people to sue businesses for unfair and deceptive trade practices, and the case is expected to make clear whether individuals can sue nonprofit hospitals under the statute.

David W. White-Lief, a personal-injury lawyer in Boston, says a 2004 decision by the state’s Supreme Judicial Court in another case may have opened the door for consumer-protection claims, but he says it would be a mistake to underestimate the staying power of the law capping damages against charities. “The Massachusetts courts have consistently and vigilantly guarded this immunity, even though they’ve criticized it for being out of touch with the costs of mistakes,” he says.

A year ago, a Superior Court judge in Hampden County, Mass., upheld the $20,000 cap in a case brought by a woman who was abused at age 10 by a former priest in the Catholic Diocese of Worcester. “It is well established that charitable immunity and charitable limitation of damages apply to cases involving negligent hiring and retention,” Judge John A. Agostini wrote.

Mr. Perlin, the law-school dean, says the limits of charitable-immunity penalties are generally more problematic with sexual-abuse cases than with medical malpractice. “The issue becomes a starker one,” Mr. Perlin says. “Unlike a hospital, where doctors have funds, the parties that have been negligent in the sex-abuse cases often don’t have funds.”

Lost Medical Records

The state’s highest court has upheld the damages cap even in some extreme cases. In one closely followed case, the family of a newborn who suffered severe brain damage shortly after birth at Brigham and Women’s Hospital, in 1986, was unable to skirt the cap after the hospital lost medical records during the crucial period when the boy, Dylan Keene, went into septic shock.

The family’s lawyer, Chris A. Milne, had argued that the charitable-immunity cap should be struck in Dylan Keene’s case because the missing records prevented his client from being able to sue the individual doctors and nurses who may have committed malpractice.

Lower courts agreed, removing the cap and awarding the boy $4.1-million. In 2003, the state’s Supreme Judicial Court found the hospital liable for the damage, but ruled that the cap on damages was a mandatory limitation, and reduced the award to $20,000.

When Mr. Keene turned 17, his family decided to place him in a facility, rather than keep him at home, because they feared they could not continue to provide in-home care, in part due to reasons of cost, according to Mr. Milne.

“Why we can’t find some common ground in providing for these families when we have this horrible result is really a tragedy,” Mr. Milne says.

Mr. Dale of New York University says that doing away with the immunity laws would end the negative attention that all nonprofit groups get when people hear about cases like Mr. Keene’s and Mr. Hardwicke’s.

What’s more, he says, the abolition of immunity laws would give charities more incentive to put in place systems that prevent harm in the first place.

“When you create a system that gives you immunity regardless of fault,” Mr. Dale says, “you create a system in which there’s no particular incentive to avoid fault.”