LOUISVILLE, Ky. (WDRB) – The University of Louisville is shuffling its legal team in the middle of a complex financial fraud lawsuit against former U of L President James Ramsey.
Campbell Partners, the Birmingham, Alabama firm that had taken the lead in the case since it was filed in April 2018, is parting ways with the university and its affiliated foundation, WDRB has confirmed.
University spokesman John Karman declined to say why U of L made the change.
“Differences sometimes arise in the course of litigation,” Andy Campbell, the firm’s managing partner, said in a phone interview Thursday. He declined to elaborate.
Dinsmore & Shohl, a local firm that has played a secondary role in the case, will take the lead for U of L.
The lawsuit accuses Ramsey, who was pressured to resign from U of L in 2016, and a handful of his former aides of depleting U of L’s endowment, which is housed at the U of L Foundation.
Ramsey and the other defendants spent endowment funds at “an excessive and unsustainable rate” on “speculative” ventures and generous compensation for themselves and other administrators, U of L alleges.
Damages have been estimated at more than $80 million.
Other defendants in the case are Kathleen Smith, Ramsey’s former chief of staff; former U of L chief financial officer Michael Curtin; former U of L Foundation chief financial officer Jason Tomlinson; and former foundation board member Burt Deutsch.
Lawyers for Ramsey and the other defendants say the lawsuit amounts to a second-guessing of decisions that were properly approved by previous university and foundation board members, and that all of the alleged over-spending benefited the university.
Nearly two years in, the case remains bogged down in the evidence-gathering phase, with figures on the U of L side giving depositions over the last year.
U of L has faced some setbacks, however.
Most notably, Jefferson Circuit Judge Judith McDonald-Burkman dismissed U of L’s claims against Stites & Harbison, the law firm that represented the foundation during the Ramsey era.
Burkman ruled in January 2019 that U of L and the foundation – which are jointly pursuing the case – waited too long to file the lawsuit as to their claims against Stites. U of L has appealed that decision.
In deposition questioning, lawyers for the defendants have suggested that U of L may have a malpractice claim against Campbell Partners or other law firms that have advised the university and foundation because of the failure to timely file the lawsuit.
Andy Campbell told WDRB that U of L would have no such claim against his firm, as Campbell Partners didn't get involved in the case until early 2018. Burkman ruled that the claims against Stites should have been filed by Sept. 9, 2017.
The foundation, which is footing the bill for the lawsuit costs, has paid the Campbell firm about $1.5 million in attorney fees and expenses such as travel to Louisville for court hearings and depositions.
The firm was entitled to $250 to $300 per hour for its attorneys’ work plus 20% of any judgment or settlement in the case, according to a May 2018 letter obtained under the Kentucky Open Records Act.
Karman said it’s too soon to say whether Campbell will still be entitled to a portion of any recovery in the case and whether there is any agreement regarding claims that U of L may have against Campbell.
“These issues have not yet been finalized,” Karman said. “The transition is in progress.”
UDPATE, Jan. 24, 2020: This story has been updated to clarify that the suggestion of alleged malpractice claims applies to multiple law firms and to allow Campbell Partners to respond to that issue.
