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8/29/96

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Lawsuit against Stanford University dismissed

STANFORD -- The United States District Court for the Northern District in San Jose has dismissed a private lawsuit that alleged that the university overbilled the federal government for the costs of research projects.

The lawsuit, filed five years ago by Paul Biddle, former contracting officer for the Office of Naval Research at Stanford, was dismissed this week by U.S. District Judge Ronald M. Whyte. (In December 1993, after reviewing Mr. Biddle's claims, the U.S. Department of Justice declined to join his lawsuit.)

Stanford President Gerhard Casper said he was gratified by Judge Whyte's decision.

"This is welcome news after a drawn-out, costly controversy," Casper said.

The court decision issued this week follows Stanford's 1994 settlement with the U.S. government, in which the Office of Naval Research concluded that it did "not have a claim that Stanford engaged in fraud, misrepresentation, or other wrongdoing."

That earlier agreement between the university and the federal government settled all differences over the billing of expenses for federally sponsored research at Stanford from 1981 through 1992. As a part of the settlement, Stanford agreed to pay an additional $1.2 million to the government for that period.

Although heartened by the court's ruling, Casper acknowledged that the controversy has taken a toll.

"The dispute has imposed extraordinary expenses on Stanford and the United States government. It has lasted for more than six years. In its course, the reputation and integrity of individuals and institutions have been sullied," Casper said. "As a member of the legal profession - and on a personal note - I am increasingly concerned by the sensationalism that characterizes so much of our public life.

"A process that causes such extensive damage over unwarranted allegations deserves to be carefully examined."

Statement on the Federal Court Dismissal
of United States of America ex rel. Biddle v. Board of Trustees
of the Leland Stanford, Jr. University

Gerhard Casper, President
August 29, 1996

On August 26, the United States District Court for the Northern District of California dismissed in its entirety a lawsuit filed by Mr. Paul Biddle in 1991 alleging that Stanford overbilled overhead charges on federal research projects. This dismissal terminates the last proceeding related to allegations that were made over six years ago by Mr. Biddle.

I am pleased that this private suit has been dismissed and the unnecessary expense of extended litigation spared.

The court's decision follows Stanford's 1994 settlement with the U.S. government, in which the Office of Naval Research concluded that it did "not have a claim that Stanford engaged in fraud, misrepresentations, or other wrongdoing." The Office of Naval Research, the government agency that oversees Stanford's research contracts with all federal agencies, resolved all disputed accounting matters related to the costs of federally sponsored research for the years 1981-1992. The settlement included an adjustment of billing charges that was well within the range of adjustments which normally occurs during the process of closing the books.

A year earlier, in December 1993, the U.S. Department of Justice had refused to intervene in the very lawsuit that the district court has now dismissed.

This dispute has imposed extraordinary expenses on Stanford and the United States Government. It has lasted for more than six years. In its course, the reputation and integrity of individuals and institutions have been sullied. As a member of the legal profession, and on a personal note, I am increasingly concerned by what these excesses say about our method of resolving disputes and the sensationalism that characterizes so much of our public life.

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